Wednesday, April 16, 2014

Wednesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher, low confidence.
  • ES pivot 1830.92Holding above is bullish.
  • Thursday bias higher technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Whee!  Who needs Disneyland when we've got the stock market, which took us on a wild roller coaster ride on Tuesday.  First it was up, then it was down, then it was up again - it's almost enough to make me start daytrading.  Blame it on Putinoia, on op-ex, on the holiday week, whatever.  The technicals came through and that's all that counts.  So with just two more days to go in this week, let's see what Wednesday has in store, chartwise.

The technicals

The Dow: Last night I wrote "suddenly this chart turns bullish".  I was mentally writing my excuses for being so badly wrong around lunch time Tuesday but then a fierce afternoon rally saved the day.  Whew!  This left us with a fat hanging man and a bullish, if somewhat sketchy RTC setup.  We're still only just coming off oversold on the indicators and a bounce off the lower BB so I have to think there's still more upside left here.

The VIXLast night I wrote (I need an acronym for this, like LNIW) "there's more downside to come here on Tuesday".  And the VIX obliged, dropping 3.10% on an inverted hammer that just barely gets us off overbought and completes a bearish stochastic crossover.  Note how once again, the VIX wasn't able to hang onto its upper BB.  A tip of the Hatlo hat - they'll do it every time.  With the bearish evening star confirmed, it looks like there's still more downside on the way for Wednesday.

Market index futures: Tonight, all three futures are higher at 12: 22 AM EDT, with ES up by a respectable 0.30%.  Monday's bullish piercing pattern in ES paid off nicely on Tuesday giving us two white soldiers marching higher.  And we're getting some decent pin action in the overnight with a move that pulls ES out of a wide descending RTC back to April 4th for a bullish setup.  The indicators all continue rising so this chart continues looking bullish tonight.

ES daily pivot: Tonight the pivot jumps from 1818.58  to 1830.92. The monster Tuesday afternoon rally has placed us well above the new pivot so this indicator remains quite bullish for Wednesday.

Dollar index: Last night I was looking for some sort of gap-filling for the dollar but mentioned that lower was possible at some point this week.  Well we rose 0.10% on Tuesday but did it with a red hanging man.  That leaves the chart (bearish) in conflict with the oversold indicators and bullish stochastic crossover.  I think I'm goring to go with the candlesticks and claim the dollar's going lower on Wednesday.

Euro: Last night I wrote about the euro, "there's more downside left here on Tuesday" and so there was, with the euro ending at 1.3808 with a red spinning top.  The indicators are now falling off overbought with the lone exception of money flow which is rising.  And we're up 0.07% in the overnight, just crossing above the pivot.  But that all leaves this chart too conflicted to call tonight.

Transportation: Last night I wrote "this chart now has a suggestion of a move higher".  And it was an excellent suggestion indeed as the trans rose 0.86% on Tuesday, completing a bullish stochastic crossover and exiting their descending RTC for a bullish setup.  This chart is now looking solidly bullish, you betcha.


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      5       2      3           0       0.714    139

     And the winner is...

We went a bit out on a limb last night by calling Tuesday higher based primarily on reversal signs.  But tonight we've seen those signs confirmed so I feel a bit better calling Wednesday higher.  Of course with things possibly heating up in the Ukraine, this could change quickly.  Unfortunately, my bug in the Kremlin seems to be out of order at the moment, so we'll have to go with just the technicals.

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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