Friday, June 6, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1933.42.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Well after four consecutive days of dojis we finally got the break I was waiting for.  Only to my surprise, it was to the upside, not lower.  Blame it on the ECB or whatever, but this market seems determined to keep pushing into record territory.  I reluctantly had to let go of my ES hedge - let's go to the charts now to figure out if that was a good decision or not for Friday.

The technicals

The Dow: With Thursday's breakout, the Dow made it exactly to its upper BB on the dot, at 16,848 on a big green marubozu for yet another record close.  That was enough to curve the stochastic back around for a bullish crossover from a high level.  And with both money flow and OBV continuing to move higher,.it looks like there's more upside on the way.

The VIX: Last night I opined that "we just might get a lower VIX Thursday."  So at least I was right about something, as the VIX dropped 3.31% to fall right out of a short rising RTC and confirm Wednesday's spinning top in a big way.  With indicators still just barely overbought, it looks like more downside is possible Friday.

Market index futures: Tonight all three futures are higher at 1:04 AM EDT with ES up 0.13%.  Like the other charts on Thursday, ES finally broke out of its recent range to the upside, also closing on its upper BB.  RSI is now maxed out at 100 but both money flow and OBV continue to rise strongly.  That, plus a decent performance in the overnight demonstrate that there's still enough gas in the tank for another push higher on Friday.

ES daily pivot: Tonight the ES daily pivot jumps from 1922.92 to 1933.42.  We remain considerably above the new pivot so this indicator looks nothing but bullish.

Dollar index:  I was badly wrong about the dollar on Thursday.  Unable to capitalize on its 200 day MA breakout after an early spike, it was all downhill and it came crashing right back through the aforesaid MA for a 0.38% loss.  This is the mother of all bearish engulfing patterns and with indicators still only just off overbought, I'd say there's still room to run lower Friday.

Euro: At least I was right when I said the euro would get in gear on Thursday as it put in a giant hammer that finally broke it out of its seven day trading range and right on through its 200 day MA.  With that plus rising indicators, the euro looks higher again on Friday.

Transportation: Wednesday's doji was confirmed on Thursday forming a big morning star pattern and canceling the bearish RTC exit.  Indicators remain overbought but money flow and OBV have both turned around and are moving higher now so this chart now looks bullish.


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        6       7      6           0       0.462    -67
June       2       1      1           0       0.667     35

     And the winner is...

With Thursday finally having given the market the kick it's been waiting for, the charts are now looking bullish so I'm just calling Friday higher, though probably not as much as Thursday.  See you again Sunday night!

ES Fantasy Trader

Well I gambled and lost as ES took the less likely option and broke to the upside.  I closed out my ES trade around mid-day on Thursday for an unfortunate 18.75 point loss and our first loser of the year.  I figured that the market had spoken, and there was no point in standing in front of this train any longer.  I also got out of my SH, taking an annoying 41 cent loss.  At least I can just view that as an insurance premium paid at a point where my account was hitting record highs and I didn't want to give any of it back in the event of a reversal.  Turns out it went even higher since then so I can't really complain.

BOT    10    false    ES    JUN14 Futures     1939.00    USD    GLOBEX    13:08:39
SLD    10    false    ES    JUN14 Futures     1920.25    USD    GLOBEX    JUN 4 00:18:21

Portfolio stats:  the account now falls to $112,125 after six trades in 2014, starting with $100,000.  We are now 4 for 6 total, 2 for 2 long, 2 for 3 short, and one push.  Tonight we stand aside.  I'm worried that while we may go higher on Friday, a good part of that move is already in.

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