Tuesday, June 17, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1934.58.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader going long at 1939.50..

Well on Monday the Dow actually spent more time in negative territory than positive, so I think the call for a lower close wasn't all that bad.  It's just a little bitty push in the last ten minutes that caused a positive close - all of five points.  So basically, we just meandered about aimlessly all day.  War in Iraq, Fed jitters, phase of the moon, whatever.  Who knows, who cares.  That's why I stick to the technicals.  Se now let's see what TA has to say about Tuesday.

The technicals

The Dow: So the Dow finished Monday with a little wishy-washy spinning top sitting at the high of last Friday's green candle.  There's little directional info from this.  Of more import is that it took the indicators lower, to nearly oversold and it move us close to the right edge of the descending RTC , from whence bullish setups occur.  So the general takeaway here is vaguely bullish..

The VIX: It's lucky I didn't try calling this chart last night because we got  another one of those weird days where the VIX is up (3.86%) but the rest of the market is up too.  And this one came in the form of a gap-up doji star, for 2/3 of an evening star.   And with indicators nearly overbought, and having just touched the upper BB on Monday, I'd lay better than even odds that the VIX goes lower on Tuesday.

Market index futures: Tonight all three futures are higher at 12:41 AM EDT with ES up 0.13%.  On Monday ES put in a slightly lopsided green spinning top indicating indecision.  But the overnight seems to be providing some resolution as it is trading entirely outside the descending RTC for a bullish setup.  And the stochastic is about to produce a bullish crossover too.  OBV is rising and money flow has stopped declining.  So all in all, this chart looks bullish to me.

ES daily pivot: Tonight the ES daily pivot ticks up from 1933.08 to 1934.58.  Having broken back above the pivot earlier Monday, we remain above the new number so this indicator is bullish.

Dollar index:  Last night I wrote "I'm going out on a limb and claim the dollar goes lower on Monday."  And I guess I picked a sturdy limb because the dollar dropped 0.22% on Monday with a move that sliced right through the 200 day MA like buttah.  With a completed bearish stochastic crossover and a serious descending RTC going, this chart still has room to run lower.  There's a modicum of support at 54.68 (on $USDUPX) but plenty of ballast to push lower.

Euro: And last night I wrote "I'd look for a move higher on Monday".  And so it was, after three days of alternating down/up/down, on Monday the euro (surprise) went higher, to close at 1.3572, its best finish in a week.  The bearish RTC is officially kaput, a bullish stochastic crossover is complete, and the indicators are rising.  However, the overnight is moving lower, so possibly something happened this evening that may drag the euro lower on news.  Technically though it looks higher.

Transportation: After an exponential run-down last week, the trans are still ringing (in the electrical engineering sense) in the aftermath.  After a gain on Friday, we got a 0.25% drop on Monday.  This is still a search for equilibrium.  It also sent the indicators back lower towards oversold.  And despite the almost dark cloud cover implications of the candle, the stochastic is curving around to form a bullish crossover, maybe in a couple of days.  So this chart is looking for direction but I'd not be surprised by a move higher.


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       5       3      2           2       0.625    134

     And the winner is...

It looks to me like we're seeing some good reversal signs tonight.  I'm not expecting a big move on Tuesday ahead of the Fed, but it does look like enough to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $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 go long at 1939.50.  I just missed getting in at the .25 too - dang.  I'm basically liking the bullish RTC exit and bullish stochastic crossover in ES.  That is a good high-probability play.  Win or lose, we'll exit on Tuesday as I don't want to be playing ahead of the Fed.

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