Wednesday, March 12, 2014

Wednesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower, low confidence.
  • ES pivot 1870.17.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

My idea that the break after three doji days would be lower played out nicely as the Dow lost 67 points on Tuesday.  It was in fact an interesting move, as we shall see shortly upon exploring the charts tonight.

The technicals (daily)

The Dow: The Dow confirmed last night's hanging man by dropping 67 points on Tuesday and thus giving a bearish RTC trigger.  We also got, not surprisingly, a bearish stochastic crossover to go with indicators now moving off overbought.  So this chart continues to look bearish.

The VIXOn Tuesday the VIX took another crack at its 200 day MA at 14.69 and this time managed to close above it, just barely.  VVIX was up too, but on a red hanging man.  This pattern may or may not have any follow-through.  With the VIX bouncing around and no RTC going now, this one is too tough for me.

Market index futures: Tonight all three futures are a tad lower at 12:37 AM EDT with ES down by 0.05%.  Last night I wrote that "ES is more interested in moving lower next" after three days of noodling around indecisively.  Well that's what happened alright and it dropped ES out of its rising RTC on Tuesday for a bearish setup.  Indicators continue to move lower just off overbought so overall this chart now looks bearish.

ES daily pivot: Tonight the pivot drops from 1873.92  to 1870.17.  We remain below the new pivot so this indicator continues bearish.

Dollar index: On Tuesday the dollar tried to  extend its momentum from the past two days but ultimately failed, ending down just 0.05% but on a tall red candle.  This dark cloud cover-like candle is de facto bearish but the indicators remain just off oversold moving higher, so this one isn't clear at all.

Euro:Meanwhile the euro put in a nice hanging man on Tuesday as it broke away from its upper BB and formed a bearish stochastic crossover.   With the overnight guiding decidedly lower, it looks bearish for the euro on Wednesday.

Transportation: The trans dropped, like the Dow on Tuesday confirming a red spinning top ... with another red spinning top.  But this one was also a bearish RTC trigger and with the indicators now clearly topped at overbought, this chart looks bearish.

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      6       0      1           0       1.000    576

     And the winner is...

Hmm - I'd like to say I see some bullish signs tonight, but I don't.  And the NYSE A/D line has been putting in lower highs and lower lows for six days now, a bearish sign.  And the SPX Hi-Lo index has not spiked lower, a move that usually precedes bottoms.  And the TLT appears to have bottomed on a bullish RTC trigger.  And Dr. Copper crashed through his 200 day MA on Tuesday continuing a three day waterfall lower.  So much as I don't like to say it, the signs all seem to be pointing toWednesday 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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