Tuesday, March 11, 2014

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower, low confidence.
  • ES pivot 1873.92.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Denial of the Day

I want to take this opportunity to tell the world that there is absolutely no truth whatsoever to the rumors going around that I am the inventor of Bitcoin.  I categorically deny having anything to do with it anymore.  And if any reporter from the AP wants to interview  me, I'm available any day you choose.    There's a real nice sushi joint just down the street.


The market's recent rise has been pretty much straight up - with a smattering of down days here and thee.  Was Monday one of them or is this the start of the Paul Farrellocalypse?  The nice thing about the charts is that they never get all hyped up over Internet ramblings.  So let's see what this voice of reason has to say about Tuesday now.

The technicals (daily)

The Dow: On Monday the Dow lost 34 points on an interesting hanging man.  Alone, that's a reversal sign.  Trading entirely outside the latest rising RTC that's a bearish setup.  With a failure to bust 16,463 and overbought indicators, that's a big "hmmm".  With an inverted hammer touching the upper BB and then a hanging man, methinks Mr. M. is trying to tell us something here... and it's lower.

The VIXLast night I wrote "the VIX looks ready to move higher Monday".  And it did - sorta, gaining a scant 0.64% in an advance that was stymied by its 200 day MA, a barrier that proved too tough to pierce.  So rebuffed like this, the VIX now looks less than energetic.  I doubt it will be able to punch through the MA on Tuesday, though a modest gain is also not out of the question.

Market index futures: Tonight all three futures are modestly lower at 12:51 AM EDT with ES down by 0.09%.  ES has been vacillating around the 1877 area for three days now, unable to either make any headway nor fall away.  While we remain in a rising RTC, the indicators have slowly started moving down off overbought, a bearish sign.  There's not really all that much to go on here, but if I had to guess, I'd cautiously suggest that ES is more interested in moving lower next.

ES daily pivot: Tonight the pivot drops from 1878.25  to 1873.92.  We're now back above the new pivot thanks only to that so this indicator turns bullish again, if only by default.

Dollar index: Friday's spinning top for the dollar resolved as a reversal with Monday gaining 0.05%.  With the indicators now oversold and the stochastic about to execute a bullish crossover, I vote for a higher dollar Tuesday..

Euro: The euro is looking tired after last Thursday's monster pop.  Unable for the second day in a row to capitalize on that it put in an anemic doji that didn't come close to Friday's high.  The new overnight started higher in a valiant effort to forge ahead but to no avail.

Transportation: The trans equivocated big time on Monday with a long-legged doji whose top failed to break Friday's high.  It also left us right outside the rising RTC for a bearish setup.  And with overbought indicators, this is a good warning of lower to come.

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      5       0      1           0       1.000    509

     And the winner is...

Things are looking a bit toppy to me tonight and the charts all seem to be low on mojo, particularly the futures.  There are now some bearish signs out there and while they're not especially compelling, they're just enough to make me go out on a limb and call Tuesday lower.

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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