Friday, June 27, 2014

Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower, low confidence
  • ES pivot 1945.83.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader stands aside.

Dang - wrong again!  Though I have to say I believe that the technical analysis was correct last night and the only reason the Dow finished lwo\\ower was because of some gaseous Fed-head who evidently felt the need to spout off on interest rates.  Well that's the fundamental limitation of TA - you can't account for headline risk.  Well at least the damage was limited, so let's see if we can't finish off the week with a win.

The technicals

The Dow: On Thursday the Dow put in a tall hanging man, though I'd take this with a grain of salt since I believe that was largely driven by one-off news, or opinion, actually..  And the candle could also be viewed as a hammer, depending on your time frame.  And with the indicators all now in No-Man's Land between overbought and oversold, this chart just isn't telling me much.

The VIX: And as usual, the VIX was pretty much a mirror image of the Dow, up just 0.35% with a funny inverted hammer off the bottom of Wednesday trade.  That still leaves us in a rising RTC with rising indicators, but this candle seems to have taken the mojo out of the sails of the VIX, as it were.  I'd call the trade at the lower end of Wednesday's dark cloud cover to be a confirmation of sorts, so I'm leaning toward calling the VIX lower on Friday, but it's by no means certain.

Market index futures: Tonight all three futures are lower at 12: 37 AM EDT with ES down 0.21%.  ES was unable to break through increasingly strong resistance at 1950 on Wednesday, settling instead for a tall doji star.  The indicators have just come off overbought and are drifting lower so this chart looks bearish.  The overnight action seems to be confirming that so far.

ES daily pivot: Tonight the ES daily pivot dips from 1946.67 to 1945.83.  And ES dipped below the old number just before midnight so this indicator is once again bearish.  However, we're close enough that ES might try a breakout on Friday.

Dollar index:  Sigh - I was wrong about the dollar too last night - it moved up 0.02%, not lower. But it did it on a tall inverted hammer tht really looks quit bearish.  Indicators are now back to oversold but we remain in a long-running descending RTC, so now I can't call this chart higher for Friday.

Euro: The euro on Thursday continued its choppy rise with a tall red hanging man ending with a slight gain above Wednesday.  But the indicators have now peaked at overbought and the 200 MA now seems to be out of reach, so further downside is not out of the question for Friday.

Transportation: And finally another wishy-washy chart out of the trans which dropped a scant 0.18% on Wednesday with a tall hanging man of their own.  Sitting at the top of Wednesday's candle though and with indicators continuing lower, this pattern looks a bit more bearish than anything, but it's really not crystal clear.


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       8       7      3           2       0.588    189

     And the winner is...

The daily calls haven't been working too well lately, but that's to be expected when you get daily moves of  just15 points or 21 point in the Dow.  Tonight, the charts look bearish again, so I'll just have to call Friday lower.  That's all, she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

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