Thursday, March 13, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1863.50.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Well the SPX barely squeaked out a gain on Wednesday but my calls are for the Dow and that did end down just a bit, so I was right.  But now we've got some more interesting patterns to mull over as the snow flies outside tonight, so let's get right to it.

The technicals (daily)

The Dow: On Wednesday the Dow put in a tall hammer after two days of declines.  We remain in a descending RTC with a bearish stochastic crossover so this is just a suggestion of a reversal, but one which requires confirmation.

The VIXAfter breaking through its 200 day MA on Tuesday, the VIX motored on higher Wednesday, bounced off its upper BB - and then crashed right back through the MA to finish 0ff 2.23%.  This is the mother of all dark cloud covers so although RSI is oversold, the candle plus the MA breakdown suggest a lower VIX on Thursday.

Market index futures: Tonight all three futures are higher at 12:38 AM EDT with ES up by a respectable 0.27%.  Wednesday gave us a nice-looking green hammer at the lower end of Tuesday's dump and the overnight seems to be confirming that, so this chart now looks bullish again.

ES daily pivot: Tonight the pivot drops from 1870.17  to 1863.50.  That move plus the overnight gains in ES combined to put it comfortably above the new pivot so this indicator now turns bullish.

Dollar index: The dollar broke support at 54.27 on Wednesday to finish 0.15% lower on a spinning top that nearly hit the lower BB.  So Thursday might go higher but the dollar has just been bouncing all over the place lately so I'm not committing to that in the absence of any better signals..

Euro: Foo - that pesky euro.  I thought it was going lower Wednesday but instead it put in a big bullish engulfing candle that just touched its upper BB.  Indicators are not quite overbought but the new overnight is continuing significantly higher, to levels not seen since October 2011 in fact.  So at this point one can't really call for a move lower on Thursday.

Transportation: Like the Dow, the trans put in a hammer on Wednesday but this was a nice fat green one with a main body as a bullish engulfing pattern that pretty much canceled Tuesday's bearish trigger.  So although the indicators remain quite overbought, the trans don't seem too interested in selling off here.

Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
February   5       2      2           1       0.750    107

March      7       0      1           0       1.000    587

     And the winner is...

tonight we're seeing a bunch of reversal candles and futures showing non-trivial gains.  Add in a VIX that failed to capitalize on a 200 MA breakthrough and that sends me out on a limb to call Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

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