Friday, July 25, 2014

Friday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower, low confidence.
  • ES pivot 1979.00.  Holding above is bullish.
  • Next week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Hmm - last night's conditional call worked - if you're going by the SPX.  ES broke above the pivot at 4 AM Thursday and the SPX finished up 0.05%.  Unfortunately, my benchmark is the Dow and a random dip in the closing minutes caused a three point loss on the day there.  Oh well - it's still not a bad theory.  So now we move on the Friday as we approach the end of July.

The technicals

The Dow:  The Dow remains in its summer doldrums, putting in a small spinning top on Thursday that means very little.  If you squint real hard, you can sort of see a rising triangle going on.  But honestly, yet again, there's not much meat to chew on here.

The VIX:  And there's also little clarity in the VIX which gained 2.78% on Thursday, rejecting Wednesday's doji.  At least here we do have something of a downtrend going and we remain inside this RTC.  Remember the other day how I noted an 8-day pattern between bottoms here lately?  Thursday was day 6.  So in the absence of anything better, I think the VIX could still go lower for a day or two.

Market index futures: Tonight all three futures are lower at 12:24 AM EDT with ES down  0.08%.  On Thursday ES gave us a perfect doji star that just touched its upper BB before backing off.  The new overnight so far seems to be confirming that and the indicators seem to be waking up a bit, all having turned downwards simultaneously just shot of reaching overbought.  We're also right on the edge of the rising RTC for a bearish setup, and the overall tenor of this chart is now leaning bearish.

ES daily pivot: Tonight the ES daily pivot ticks up from 1979.00 to 1981.08.  We've now dipped back below that so this indicator now turns bearish.

Dollar index:  Last night I wrote "you just can't call this one lower yet" and it's a good thing too because eon Thursday the dollar continued to crawl up its upper BB, gaining  0.06% in the process.  With three white soldiers and indicators broken at overbought, there's still nothing bearish about this chart.

Euro: The euro remains similarly undecided, putting in a nice star on Thursday centered about Wednesday' action.  The lower trend remains lower but for the past two days we're just looking for a direction.  The fact that we've finally peeled off the lower BB could be interpreted as bullish but that remains to be seen.

Transportation: And finally on Thursday the trans were similarly afflicted with nothing-itis, dropping a mere 0.02% on a small lopsided spinning top.  We remain inside a decent rising RTC, indicators are just barely coming off overbought, so the net takeaway is only mildly bearish here..


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      10      3           2       0.500    132
July       4       2      3           3       0.778    293

     And the winner is...

The market is still not really giving many good directional signals, but tonight I'm seeing just enough of a bearish edge, particularly in the VIX and the futures, to cautiously call Friday lower.  That's all she wrote.  See you again next 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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