Tuesday, March 4, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1841.58.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Like shooting fish in a barrel.  You didn't have to be Carnac to see where the market was going on Monday - straight down.  Now we're left with the aftermath.  Mr. Market has a notoriously short attention span, so unless we see Putin's tanks rolling through the streets of Kiev on Tuesday, it's likely that he'll forget all about it (not to trivialize what's going on there).

The technicals (daily)

The Dow: So the Dow came off its lows by the end of Monday to form a fat hanging man.  It was enough to close just outside the latest rising RTC for a bearish setup and a bearish stochastic crossover.  So on the face of it, this chart is now technically bearish though one might want to take this with a grain of salt as with all news-related sell-offs.

The VIXThe VIX meanwhile of course blasted off with a huge 14.29%  gap-up bang.  But the result was a nascent bearish evening star and although we have a new bullish stochastic crossover, in such cases one must be wary of gap-filling.  In fact, I'd give better than even odds of a move lower on Tuesday than higher.

Market index futures: Tonight all three futures are higher at 12:38 AM EST with ES up by 0.24%.  On Monday ES traded entirely outside its rising RTC for a bearish setup with a sort of hammerish-spinning top thing.  But the overnight is forming as a bullish one white soldier that suggests the selling may be done at least for now.

ES daily pivot: Tonight the pivot dives from 1856.42  to 1841.58.  ANd that move combined with an overnight rise in ES was enough to drive it above its new pivot, thus turning this indicator bullish.

Dollar index: On Monday the dollar rebounded after gapping down all the way to its lower BB last Friday.  But with a bearish stochastic crossover, it's not clear the dollar can continue these gains on Tuesday.

Euro: On Monday the euro gave up most, but not all of Friday's gains with a classic bearish harami that suggests Tuesday lower.   The lack of action Monday night remaining below the pivot supports this idea.

Transportation: The trans also took a hit on Monday, though not as bad as the Dow to form a red hanging man that canceled Friday's bullish RTC trigger.  And given the lack of trendiness here recently, I'm just not feeling the love.

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      1       0      0           0       1.000    154

     And the winner is...

Well the market took its expected incipient disaster hit on Monday.  Nevertheless, the world did not come to an end and the Ukrainian situation is beginning to look more like a chess match than a steel cage death match.  If so, Monday's losses look a bit overdone and we might see something of a DCB cum relief rally on Tuesday.  The VIX in particular is looking ripe for a fall so I'm going to go a bit out on the limb and call Tuesday higher.  Of course if any real shooting starts, that could all go south in a hurry.

ES Fantasy Trader

Portfolio stats:  the account remains at $100,000 as we wait for the right moment to enter our first trade of the year.  While I do think we're going lower on Friday, I still don't have a good enough edge to warrant going short just yet, so we'll just stand aside again.  There's no rush.

No comments:

Post a Comment

Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.