Thursday, April 17, 2014

Thursday lower unless ES pivot passed

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower if ES stays below pivot, else higher.
  • ES pivot 1850.08Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Well once again the technicals prevailed as my call for a higher Wednesday came to pass.  Putinoia was held at bay and whatever it was that Aunt Janet said didn't seem to bother Mr. Market much.  Now we come to an oddball day indeed - the end of a holiday-shortened week and also op-ex.  Hmm - can the charts point the way out of this conundrum?  Let's take a look.

The technicals

The Dow: After Wednesday's gains we now have a nominally bullish three white soldiers going.  But I will observe that each day's gains have been smaller than the day before.  This may be a function of the approaching holiday, waning buying interest, or both.  Nonetheless we now have a good rising RTC going, along with rising indicators so this chart remains bullish until proven otherwise.

The VIXLast night I wrote of the VIX "there's still more downside on the way for Wednesday".  And was there ever, with the VIX falling out of bed in a big 9.16% gap down that sliced right back through its 200 day MA.  With a completed bearish stochastic crossover, 200 MA cross, falling indicators that are still a ways from oversold and only halfway to the lower BB, I still don't think the VIX is done falling.

Market index futures: Tonight, all three futures are lower at 12:52 AM EDT, with ES down by 0.18%.

ES daily pivot: Tonight the pivot rises again from 1830.92  to 1850.08. This bump combined with ES's sag now leaves us below the new pivot so this indicator turns bearish.  ES gave us a three white soldiers pattern on Wednesday and remains in a new rising RTC.  However, it appears to be running out of gas after such a nice three day run and the indicators seem to have peaked before even hitting overbought.  It's looking like ES may be taking a breather on Thursday.

Dollar index: Last night I wrote "the dollar's going lower on Wednesday." and it did, just barely, down 0.01% but on a green candle.  With a completed bullish stochastic crossover and rising indicators, I'm now thinking the dollar could move higher on Thursday.

Euro: I didn't call the euro last night which is just as well since it put in an inverted hammer on Wednesday for a fractional gain.  But it seems to be getting into gear in the overnight, up 0;3% so far which is bending the stochastic around to nearly form a bullish crossover.  Money flow continues to rise and we now have a bullish RTC trigger so I'd say the euro's moving higher on Thursday.

Transportation: Last night I wrote "This chart is now looking solidly bullish".  Well I'd say a solid green marubozu for a 1.67% gain on Wednesday counts as pretty bullish in my book.  This move solidified the bullish stochastic crossover, sent the indicators rising off oversold, and gave us a bullish RTC trigger.  This chart remains bullish except for the fact that we closed right as resistance on Wednesday.  But there does seem to be some gas in the tank to motor higher from here Thursday.


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      6       2      3           0       0.750    301

     And the winner is...

Tonight most of the technicals are bullish, with the lone exception of the futures.  And why might that be?  Well it's a funny week, with a holiday on Friday and op-ex on a Thursday.  Traders might not want to be long over a long weekend while in the grips of Putinoia, possible invasions from Mars, and all the other things that they're always worrying about.  So this looks like a good time to make a conditional call: if ES remains below its pivot by mid-morning Thursday, we close lower.  But if ES breaks above the pivot and stays there by mid-morning, we close higher.  Hey it's worth a shot.  Happy Easter egg hunting and see you again Sunday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside.

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