Thursday, June 26, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence
  • ES pivot 1946.67.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader stands aside.

The counter-trend call has been exceptionally risky all year so far, given the market's reluctance to pull back more than two days in a row, if that.  And Wednesday was no exception as once again the buyers appeared after Tuesday's dump to rescue an otherwise weak looking chart.  So let's see where that leaves Thursday.

The technicals

The Dow:  So the Dow just laughed at Tuesday's tall red marubozu and retraced about a third of it on Wednesday.  That actually sent RSI back higher though the stochastic continues lower.  The action is nonetheless a bearish RTC trigger.  Bottom line though - this one is too tough to call.

The VIX: Huh - go figure - the VIX was looking all set yo move higher last night, but noooo... instead it dropped .4.45% on a classic dark cloud cover.  We're still in a rising RTC but with RSI having shifted lower, I'm changing my mind and now claiming the VIX goes lower on Thursday.

Market index futures: Tonight all three futures are a wee bit higher at 12:20 AM EDT with ES up 0.03%.  And just like all the other charts, ES fooled me by putting in a green bullish piercing pattern on Wednesday.  The indicators remain overbought, but that doesn't seem to count for much lately.  The overnight seems to be confirming a move higher, at least so far.

ES daily pivot: Tonight the ES daily pivot ticks down from 1947.67 to 1946.67.  We popped back up over the old number earlier Wednesday and remain above the new pivot so this indicator now turns bullish.

Dollar index:  Boy when you're wrong, you're wrong.  I missed the dollar too on Wednesday as instead of going higher it dropped 0.16%, but on a hammer that rested against the lower BB.  With indicators now rather oversold, I'm going to give it another shot and claim once again that the dollar is going higher.

Euro: At least I had the good sense last night to take a pass on the euro which did finally break out of its week-long trading range - and it was higher, in fact just touching its 200 day MA before closing at 1.3631.  With that we remain in a choppy but rising RTC so despite overbought indicators, I think we're good to go until the next assault on the 200 MA.

Transportation:  And so (sigh) finally I missed the trans too.  They did not go lower but instead came roaring back on Wednesday with a big 0.88% advance for a bullish engulfing pattern.  That leaves the stochastic stalled and potentially about to reverse for a bullish crossover from a high level which would be good for a day or two of higher.  So just forget everything I said about the trans going lower.  Doh!


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       6      3           2       0.625    210

     And the winner is...

What a difference a say makes.  An outsized drop in the VIX on Wednesday coupled with reversal candles on other charts make me now think that we'll see Thursday higher.

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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