Thursday, July 10, 2014

Thursday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher if ES hold above pivot, else lower.
  • ES pivot 1964.58.  Breaking above is bullish, below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

It looks like last night's conditional call worked again.  It doesn't always, but it's a pretty good percentage.  The market defied what was looking like a pretty grim candlestick setup with the Dow gaining a decent 79 points.  So onward as always, this time to tackle Thursday.

The technicals

The Dow: Last night the Dow put in a bearish RTC trigger.  But that's not a 100% guarantee and indeed on Wednesday despite a bearish stochastic crossover, the Dow managed a bullish inside harami.  Just recently off overbought, one now has to wonder if the next leg isn't upwards.

The VIX: One could be excused for being skeptical of an evening star on Monday, and with good reason, since Tuesday just gapped higher again.  But the pattern asserted itself on Wednesday with a 2.75% drop int eh VIX, thus finally giving us a valid evening star.  With indicators almost overbought, that's good enough, so this chart looks like it has ample room to run lower..

Market index futures: Tonight all three futures are lower at 12: 13 AM EDT with ES down  0.14%.  On Wednesday ES gave us something of a bullish piercing line but in the context of a descending RTC and falling indicators.  The negative overnight pin action so far seems to support the idea that this vague downtrend may have more downside left to it.

ES daily pivot: Tonight the ES daily pivot ticks up from 1961.33 to 1964.58.  That leaves ES sitting exactly on top of the new pivot.  So we may glean some information from whichever direction ES decides to come down on overnight.  For now, it's a toss-up.

Dollar index:  Last night I wrote "I have to think there's more downside available here" - and it was good thinking too because the dollar lost  0.22% on Wednesday to trigger a bearish stochastic crossover.  With indicators continuing to move off overbought, this chart looks lower again.

Euro: Last night I wrote "this chart just looks higher still on Wednesday.".  'Nuff said as the euro posted its biggest gain in two weeks to close at 1.3649.  The prior descending RTC is now officially kaput and a new rising RTC is in effect.

Transportation: Last night there was a clear bullish reversal hammer - but also bearish indicators, so I refused to get involved.  Turns out the charts won as the hammer was confirmed on Wednesday with a nice 0.54% gain, thus canceling the bearish RTC trigger.  So this chart once again looks bullish.


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...

Tonight the charts are as vague as I've seen them in quite a while, epitomized by ES sitting smack dab on top of its pivot.  This situation simply cries out for another conditional call.  Wednesday's worked out well, though it's definitely never a sure thing.  But we'll go ahead and say that if ES decides to move above the pivot and stays there by mid-morning Thursday, we close higher.  And conversely, if it moves under the pivot, we close lower.

ES Fantasy Trader


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