Wednesday, March 19, 2014

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher, low confidence.
  • ES pivot 1865.75.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

"I vill require ze Czechoslovakian boy's desk too!"
Huh - on Tuesday the market appeared to be relieved by Adolf Putin's pronouncement that now that he had annexed the Sudetenland, uh I mean the Crimea, he had no further designs on the rest of Czechoslovakia, uh I mean Ukraine.  And clearly Neville Obama is sleeping easier now.  Isn't it nice to have Peace in Our Time.  Of course this time it's different.  Or is it?

One way or the other, we continue on our never-ending quest to sniff out the market's daily direction, using the charts as our guide.  Next on the agenda - Wednesday.

The technicals (daily)

The Dow: With two white soldiers marching valiantly onward backed by a bullish stochastic crossover and indicators rising off oversold, this chart now looks like it's headed for a retest of the 16,462 resistance line again soon.

The VIXLast night I wrote "looking bearish here for Tuesday".  And indeed it was, with the VIX dropping another 7.16% on a gap-down candle that dove right back through the 200 day MA again, its fifth visit there in the last seven sessions.  Adding a fresh bearish stochastic crossover and indicators now moving lower off overbought and this chart still looks bearish for Wednesday.

Market index futures: Tonight all three futures are barely higher at 12:37 AM EDT with YM up just 0.04% and ES, well it just turned flat as I write.  The bullish RTC setup I wrote about last night came through on Tuesday giving us two white soldiers on this chart too.  With rising indicators, a nicely completed bullish stochastic crossover and no resistance til 1878 and it looks like there's still some upside left here.

ES daily pivot: Tonight the pivot rises again from 1850.33  to 1865.75.  Despite this big gain, we still remain above the new pivot so this indicator remains positive.

Dollar index: On Tuesday the dollar posted a tiny gain but it remains mired in a descending RTC that goes all the way back to the end of January.  And there's still no sign that it's over yet.

Euro: And on Tuesday the euro gave us a second doji star in a row.  And yet it continues to drift slowly higher.  Like the dollar's ongoing slump, there's no reason to think the euro is going to reverse any time soon.

Transportation: The trans posted some decent gains on Tuesday that brought the, right back to the 7595 resistance area, a sticking point all month long so far.  Will Wednesday be the charm?  Hmm - could be - unlike all those other failed attempts to move higher, this time we're equipped with a fresh bullish stochastic crossover and indicators that are still well off overbought.  So I have to think there's more upside left there.

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      9       1      2           0       0.900    488

     And the winner is...

I generally don't call Fed days because of the headline risk involved but the consensus seems to be that the market will like what Aunt Janet has to say.  And this week is historically bullish anyway.  And the technicals are all lining up bullish so I guess I'll just go out on a limb and call Wednesday higher.  But I'll be watching closely at 2 PM.

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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