Friday, May 23, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1889.00.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.
Quote of the Day
  "The stock market is in a particularly moronic phase of its life right now"
                                   - Jim Cramer


Poor Mr. Market, who just gets no respect.  At least we managed two consecutive up days in a row, even if Thursday was just 10 points for the Dow.  So as the madcap month of May merrily marches on, let's see now how the week before Memorial Day might end.

The technicals

The Dow: After a big gain on Wednesday the Dow put in a small spinning top on Thursday, warning of - surprise - a reversal for Friday.  Against that we have a second day outside the descending RTC and that's a bullish trigger.  Also the stochastic now clearly has a bullish crossover.  So overall I'd say this chart is still looking higher for Friday..

The VIX: The weirdness just continues as the VIX put in yet another day of positive correlation with the market, gaining 1.01% on Thursday.  This isn't all that big a surprise considering the strength of support at 12 and the fact that we touched the lower BB on Wednesday.  Anyway, Thursday's clear hammer is a bullish sign for Friday.

Market index futures: Tonight all three futures are higher at 12: AM EDT with ES up %.  ES made it two in a row with a small gain on Thursday that brought it near resistance at 1895.    But the indicators are not yet overbought and the upper BB is at 1896, so there's still some room to run left here.  The overnight action so far seems to support this idea.

ES daily pivot: Tonight the ES daily pivot rises from 1879.33 to 1889.00.  After being above the old number all day Thursday we remain above the new pivot, and although it's not by as much this indicator remains bullish.

Dollar index:  Ah, that tall inverted hammer on Wednesday sure fooled me.  The dollar did not go lower on Thursday but gained 0.19% to continue a week-long uptrend.  This move also formed a bullish stochastic crossover so it now looks like there might be some more upside available here.

Euro: At least I got the euro right which continued its recent slump on Thursday to close at 1.3650.  That consolidated our bearish crossover from a low level which is usually good for a day or two of declines.  And with the 200 day MA at 1.3627 now in easy striking distance, I expect the euro to take a peek at that number on Friday (and possibly bounce off).

Transportation: Well I missed the trans too which did not go lower on Thursday, gaining instead a decent 0.53% for another record close.  This comes even as the indicators were descending off overbought. With two white soldiers and an upper BB now at 7972, the way seems clear for at least a bit more upside on Friday.


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      9       3      5           0       0.750    482

May        5       6      4           0       0.455   -112

     And the winner is...

With a big holiday coming up next week, I expect trading to be on the light and choppy side Friday as the big players helicopter off to the Hamptons or guide their Gulfstreams to the Bahamas for the long weekend.  But with some bullish signs on the charts and no negative ones, I'm just going to call Friday higher.  Happy Memorial Day to all and see you again Monday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,500 after four trades in 2014, starting with $100,000.  We are now 4 for 4 total, 2 for 2 long, 2 for 2 short.  Tonight we stand aside.

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