Tuesday, July 15, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1969.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

There was certainly enough warning last night of a breakout and it came in the form of a 112 point pop in the Dow to start off the week smartly.  The chart was interesting, so let's see what this bodes for Tuesday.

The technicals

The Dow: On Monday the Dow just zoomed out the gate for a rocket ship that didn't stop til it hit the upper BB at 17,076.. That also happens to be latest resistance.  It was good for a new record intraday high, reclaimed the 17K level, exited the descending RTC in a big way for a bullish trigger, and formed a bullish stochastic crossover.  That all spells bullish in my book though after such a big one-day move, a day of consolidation might be in order.

The VIX: Last night I wrote "the odds seem to favor a move lower here on Monday.".  .And they were good odds indeed as the VIX gapped down 2.15% in a mirror image of the Dow to fall out of its rising RTC for a bearish setup, and form a bearish stochastic crossover.  With no near-term support and a lower BB a mile away still, this one looks like it has room to run lower.

Market index futures: Tonight all three futures are higher at 12: 21 AM EDT with ES up 0.06%.  On Monday, ES like the Dow shot up out of a descending RTC for a bullish trigger.  But it came nowhere near its upper BB and its new bullish stochastic crossover is very well-defined.  The overnight pin-action is positive and this chart in general continues to look bullish.

ES daily pivot: Tonight the ES daily pivot jumps from 1959.67 to 1969.17.  Once again we remain above the new pivot, though admittedly not nearly as much as last night.  Still, that leaves this indicator bullish.

Dollar index:  Last night I wrote "this chart is too tough to call" and on Monday the dollar put in something of a fat inverted hammer to finish exactly unchanged. And tonight brings no clarity at all.  This chart remains highly conflicted and where it goes on Tuesday is anybody's guess.

Euro: After Friday's star, I took a shot in the dark that the euro would fall on Monday but it did not, posting instead a spinning top that closed up a bit at 1.3622.  That makes two reversal candles in a row, with no reversal.  And with the indicators stuck halfway between overbought and oversold and the chart itself halfway between BB's, this chart like the dollar is too vague to call.

Transportation: The trans had a similarly good day on Monday, up 0.71% to touch their upper BB just like the Dow. But the size of the upper shadow here makes me wonder if there might not be at least a bit of a pullback on Tuesday.


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       2       0      0           2       1.000    156

     And the winner is...

It's not unanimous, but I'm once again seeing enough bullish signs in the charts tonight to call Tuesday 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.


  1. Michelle,

    So much of trading is about confidence isn't it? We can make 10 right calls in a row, but we need the confidence to actually pull the trigger.



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