Tuesday, April 22, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1862.17Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Last night I said that the logical call was for Monday higher.  Well logic prevailed as it usually does and Putinoia was held at bay long enough for the Dow gain 41 points.  Now let's see where logic might lead us on Tuesday.  Bring on the charts! (clap clap!)

The technicals

The Dow:  Last night I punted on this chart in the face of a red spinning top.  Turns out that reversal warning was canceled with a respectable 0.25% advance.  That managed to clear resistance at 16,439 and kept us inside a rising RTC.  Indicators are still not yet at overbought though the RSI has actually looked to have topped and the stochastic is curving over for a bearish stochastic crossover.So at this point this chart continues to look bullish though there's a flashing yellow caution light on now.

The VIX:  Wow - this is weird.  Last night I mentioned a rare side by side white lines pattern in the dollar index (see below).  And on Monday we got a nearly identical side by side black lines in the VIX.  So as the dollar was bullish, this is bearish, supported by indicators that are still not yet oversold.  With support still not til 13, I'd say the VIX is going to take a peek at that number on Tuesday.

Market index futures: Tonight  the futures are mixed at 12:26 EDT, with YM down 0.02%, NQ up 0.07% and ES dead even.   ES is now on a strong five day winning streak that has finally just pushed the indicators to overbought.  We need to continue moving higher now to avoid a bearish RTC exit.  Also, the stochastic is flattening out in preparation for a bearish crossover in the next few days, but not quite yet.  So for now this chart continues bullish, though the tide seems to be turning.

ES daily pivot: Tonight the ES daily pivot rises from 1856.33 to 1862.17.  Once again we remain above the new pivot so once again this indicator is bullish.

Dollar index: Last night I mentioned an unusual pattern - the side by side white lines.  And sure enough, they paid off with a 0.16% gap-up gain for the dollar on Monday.  That pulls the dollar into overbought territory but the stochastic has yet to start positioning for a bearish crossover.  With 2/3 of that big down gap from two weeks ago yet to be filled I have to think there's more upside left here for Tuesday.

Euro: I thought the euro would move sideways for a bit but instead it broke to the downside on Monday to close at 1.3794 after briefly touching its lower BB.  That left the indicators quite oversold and suggests that a reversal is on the way - if not Tuesday then more likely Wednesday.

Transportation: Last night I wrote of the trans "I'd say we're headed up to take look-see [at 7713]". Well at 7691 for a high, I'd say we got within shouting distance.  That bumps out winning streak to five, and leaves resistance at 7700 and the upper BB at 7735.  Indicators are still not overbought yet so it looks like there's still enough gas in the tank to take a run at at least one of those numbers on Tuesday.


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      7       2      3           0       0.778    342

     And the winner is...

We still don't have any clear bearish signs on the charts tonight though we are starting to have a few hints of reversals.  It's not clear to me how much upside is left.  At this point, it looks like Tuesday could be a doji day.  Accordingly, I'm just going to call it uncertain.

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 in view of the "uncertain" call.

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