Thursday, August 14, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1940.67.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Last night, it was looking like it could go either way.  The double doji suggested a move lower, but the indicators did not support that.  In the end, the break was to the upside with the Dow gaining 91 points.

The technicals

The Dow: The Dow non-confirmed two days worth of dojis on Wednesday with a nice 0.55% pop ending near the high of the day.  This had the effect of confirming the recent bullish RTC exit (I was wrong to doubt the RTC exit strategy) and establishing a new rising RTC.  There is no resistance now until 16,724 which is the 50% retracement of last week's big dump and also a natural resistance line.  The 200 day MA served a a nice trampoline for the Dow and I think we can forget it for now.  So with the indicators still not yet overbought and no bearish candles in sight, I'd say the Dow looks higher again for Thursday.

The VIX: OK, I'll admit it - the VIX fooled me.  I thought it could go higher on Wednesday but instead it simply cratered right though its 200 day MA with a gap down marubozu/inverted hammer for an 8.7% loss.  This was enough to send the indicators oversold though the stochastic still has a ways to go before curving around for a bullish crossover.. Near term support is sort of indeterminate but we are now clearly in a strong descending RTC so there's nothing bullish about this chart for Thursday.

Market index futures: Tonight all three futures are barely higher at 12:21 AM EDT with ES up just one tick.  Call it essentially flat.  On Wednesday ES totally rejected last night's spinning top with a decent advance to 1945.  We're now entering overbought territory and the stochastic is way up there and flattening out for a bearish crossover.  We have now retraced 50% of last week's big dump but ES looks to be running out of gas around this point.  This looks like one of those nights to hold but not go short - yet.

ES daily pivot: Tonight the ES daily pivot rises from 1930.92  to 1940.67.  Once again we remain above the new pivot so this indicator  continues bullish.

Dollar index:  The dollar continued its random walk on Wednesday, up this time 0.13% but on a long-legged star.  Indicators remain in no-man's land between oversold and overbought so I have no idea where this one's going next.

Euro:  Last night I thought the euro might want to take another peek at 1.3341 on Wednesday.  Turns out we got down to 1.3344 - close enough - before recovering for a long-legged star. The overall trend though continues lower and the overnight is confirming that.

Transportation: Last night's star was totally rejected as the trans gained a decent 0.68% on Wednesday.  That leaves us in a rising RTC with indicators still not yet overbought.  With no bearish signals in sight, I'd have to say this one looks bullish for Thursday.


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       6       4      4           3       0.692    639  August     2       4      1           1       0.429   -201

     And the winner is...

Tonight we're seeing a resolution of some uncertainty last night in the upward direction.   That leaves use with largely bullish patterns in place though we're nearing levels where a reversal might kick in.  Still on the whole I think the best call in for Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

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