Tuesday, March 18, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1850.33.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

The luck o' the Irish smiled on the Street on Monday and had the traders dancing a jig as the Dow piled on the green to the tune of 182 points.  Apparently, all thoughts of Putinoia were dispelled to snap a five day losing streak.  So with all the standard Irish cliches out of the way, let's continue our hunt for the pot o' gold (OK, just one more) as we rack up the charts for Tuesday.

The technicals (daily)

The Dow: Last night the Dow was giving early warning signals of wanting to reverse but I decided to wait for confirmation, thereby giving up a few points.  But hey, I really wasn't expecting a pop like this.  In any case, we've got the confirmation now.  While we're still in a descending RTC, RSI has now bottomed and the stochastic is now very close to executing a bullish crossover.  The only thing is that the Dow has been taking a breather lately on the day after a big push so we may not see much higher on Tuesday.

The VIXLast night I wrote of the VIX, "what blasts up, always comes down"And sure enough, the VIX gapped down over 12% on Monday to complete a bearish evening star.  Indicators now peaked at overbought and bearish stochastic about to execute - looking bearish here for Tuesday.

Market index futures: Tonight all three futures are modestly higher at 12:47 AM EDT with ES up by 0.08%.  Monday's jump in ES very nearly took it out of its descending RTC and in fact the new overnight candle is currently outside which would be a bullish setup if it holds.  Also, we now have a completed bullish stochastic crossover and RSI is just off oversold.  So this chart is now confirmed bullish.

ES daily pivot: Tonight the pivot rises from 1844.00  to 1850.33.  After breaking above the old number early Monday we remain above the new pivot so this indicator continues bullish.

Dollar index: Last night I wrote "there's no indication that this downtrend is over yet" and indeed we dropped another 0.06% on Monday even as RSI looks to have bottomed.  But the descending RSI remains intact and I think, so does the downtrend.  This is one trend you don't want to fight.

Euro: The euro is finally starting to show signs of breaking out of its congestion area with a narrow spinning top on Monday.  The overnight is continuing higher and just caused a bullish stochastic crossover form a high level - always good for a day or two of moving higher.

Transportation: On Monday the trans confirmed last Friday's star with a nice gain.That now turns this chart bullish.

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      8       1      2           0       0.900    399

     And the winner is...

On Monday we got some of the bullish confirmations of last Friday's dojis that I was looking for.  Also, this week is historically quite bullish, so all in all I'm just going to call Tuesday 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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