Monday, April 7, 2014

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, low confidence.
  • ES pivot 1869.42Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Last Friday was one of those days I was glad I called uncertain as I wasn't expecting a 160 point dump in the Dow.  This move changes the picture once again so let's get right to the charts for Monday.

The technicals

The Dow: On Friday the Dow just crashed right out of its rising RTC for a big bearish setup, a fresh bearish stochastic crossover and indicators that are all headed lower now.  So this is looking pretty bearish for Monday.

The VIXLast Thursday night I wrote "the VIX looks higher for Friday" and sure enough the VIX gained 4.41% for a second bullish engulfing candle in a row and a developing megaphone pattern, a fairly rare sight.  We also traded outside the descending RTC for a bullish trigger and got a completed bullish stochastic crossover.  So the VIX looks ready to move higher again on Monday.

Market index futures: Tonight, all three futures are modestly lower at 12:45 AM EDT, with ES down by 0.09%.  The ES story was pretty much the same as the Dow on Friday - bearish RTC setup, bearish stochastic crossover, descending indicators.  All looking bearish.

ES daily pivot: Tonight the pivot falls from 1882.00 to 1869.42.  We remain below the new pivot so this indicator sis bearish for Monday.

Dollar index: Last Thursday night I wrote "further upside is limited from here."  And indeed on Friday the dollar hit its upper BB early on and then it was all downhill from there, ending the day with a  small loss.  That was a classic dark cloud cover.  ALong with overbought indicators the dolalr is now looking lower for Monday.

Euro: On Friday the euro put is a sort of spinning top that tested the lower BB.  But the overnight is having none of that and is continuing lower.  With the lower BB dropping away and the stochastic nowhere near a bullish crossover, it looks like more downside in store on Monday.  This of course means either this call or the dollar call is wrong..  At the moment I have more faith in the dollar going lower.

Transportation: The trans were hit hard on Friday and like the Dow fell out of their rising RTC for a bearish setup along with a bearish stochastic crossover.  So we're looking lower here again.


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     12       3      6           0       0.800    431
April      2       0      2           0       1.000    115 

     And the winner is...

With Friday's uncertainty out of the way I've got to say that the charts tonight are looking rather bearish, even after Friday's big drop.  So I'm just going to call Monday 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.

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.