Wednesday, July 16, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1967.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Mr. Market got spooked by Auntie Janet Tuesday morning, even though she didn't really say anything anyone didn't already know.  It looked like my call for a higher close was a goner there but the Dow battled back and we squeaked out a 6 point win by the bell.  So now we wend our way to Wednesday.

The technicals

The Dow: With all the hoo-hah surrounding the news on Tuesday, the Dow ended up with a perfect star.  Its upper shadow pierced the upper BB for the second day in a row.  Continuing resistance at the 17,070 level is a concern and we now have a reversal candle.  But the indicators have yet to hit overbought.  So this is a warning that requires confirmation and regrettably, no call here..

The VIX: Well the VIX fooled me - I thought it would go higher but perhaps thanks to Auntie Y., it gained 1.18%.  Of more importance is that the pattern was clearly bullish engulfing.  OTOH, the second day outside a rising RTC is a bearish trigger. we have a new bearish stochastic crossover, and the indicators remain overbought.  So that's pretty much a wash - no call here either.

Market index futures: Tonight the futures are mixed at 12:40 AM EDT with ES down 0.04% but YM up 0.04% - not much to go on.  On Tuesday ES put in a wide-ranging spinning top in dark cloud cover position.  That said the indicators continue to rise off oversold.  So we have a conflict here too and that means no call on this chart either.

ES daily pivot: Tonight the ES daily pivot dips from 1969.17 to 1967.67.  That leaves ES just below the new pivot so this indicator is now bearish - barely.

Dollar index:  I didn't call this chart last night and I'm glad of it because I sure didn't expect a big 0.27% pop in the dollar on Tuesday, its biggest gain since May 8th. That was enough to send the indicators on their way from oversold towards overbought, and we very nearly hit the 200 day MA.  I'd expect a test of that number on Wednesday.

Euro: And so of course the euro had a bad day on Tuesday, putting in a big red marubozu that broke support down to 1.3571. It also drove all the indicators lower and with the lower BB at 1.3556 beckoning, I wouldn't be surprised to see the euro hit that on Wednesday.

Transportation: After testing their upper BB on Monday the trans managed to close right on it on Tuesday with an impressive 0.38% gain.  That leaves the rising RTC intact and the indicators still aren't yet overbought.  But having hit the BB, I'd expect a bounce off it on Wednesday.


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       3       0      0           2       1.000    162

     And the winner is...

Tonight the charts are quite conflicted.  We've got reversal warnings, and candlesticks that disagree with indicators all over the place.  I've been scratching my head over this one for a while now without coming to any conclusions so I guess the only thing left to do is shrug and call Wednesday uncertain.

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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