Friday, July 11, 2014

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1957.08.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Oink oink oink - it seems the PIGS are at it again.  Or so one would be led to believe, as some announcement from a bank in Portugal caused the Dow to dive 160 points right out the gate on Thursday.  Or whatever.  Mr. Market subsequently thought better of it but still ended the day down 71 points.  This is precisely the sort of thing that technical analysis cannot anticipate.  Oh well - stuff happens.  We will not dwell on this and instead move directly on to Friday.

The technicals

The Dow: Wednesday's Kafkaesque action  ended up with a big hammer that ultimately respected support around 16,916.  But with no good RTC running and with indicators still closer to overbought than oversold, this is a reversal warning that needs confirmation.  So we take a pass on this chart tonight..

The VIX: And the porkers spoiled my VIX prediction too, killing the evening star with an 8% gap up hanging man that blasted right through the upper BB.  Of course, that's a better reversal sign than anything since the VIX rarely spend more than a day or two above its upper BB.  With indicators now nearly overbought, an upper BB hit, and a big gap up, I'll once again claim that the VIX goes lower on Friday..

Market index futures: Tonight ES and YM are just barely lower at 12:18 AM EDT with ES down  a single tick, or 0.01%.  On Thursday we got a fat hammer that nonetheless remained in a descending RTC, so like the Dow, we need confirmation  before calling this one higher.

ES daily pivot: Tonight the ES daily pivot drops from 1964.58 to 1957.08.  As last night, we are once again hugging the new pivot, in this case just barely above it, so we get no good prediction here tonight.  To remain bullish, ES will have to bounce off the pivot.

Dollar index:  And more funniness with the dollar too as it put in a skinny spinning top exactly in the center of Wednesday big drop.  This is indecision on top of indecision.  The overall RTC remains descending though, so that would seem to be the preferred direction on Friday.

Euro: On Thursday the euro gave up all of Wednesday's gains and then some to fall out of its rising RTC for a bearish setup.  And though we remain oversold the overnight is trending lower again so this chart looks still lower for Friday.

Transportation: On Thursday the trans took just half the hit of the Dow, and on a nice tall doji that curve the stochastic close to forming a bullish crossover.  With three days of higher lows going, this one looks like it has more upside potential than downside risk on Friday.


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       1       0      0           1       1.000     44

     And the winner is...

Thursday's action did little to resolve last night's muddled charts.  If anything the situation is even more conflicted tonight.  So all I can realistically do is reluctantly call Friday uncertain.  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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