Tuesday, August 19, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1964.08.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Last night the technicals looked fairly bearish.  But the futures looked bullish - quite bullish in fact.  And one thing I've learned about trading is never to discount the futures action in the dead of night.  After all, they're called futures for a reason.  It doesn't always work but it's a pretty good percentage play.  In the end, I decided to call Monday higher on that basis and I'm glad I did, as the Dow finished with an impressive 176 point pop.  So with that out of the way, we continue on to Tuesday.

[Once again, Google's Blogspot spell checker remains on strike for some unknown reason, so I apologize in advance for any typos I may have missed].

The technicals

The Dow: On Monday the Dow rocketed up right out the gate and never looked back.  The 1.06% green marubozu took us clear to the other side (the good side) of the rising RTC, thus saving a pending bearish setup and the indicators all returned to extreme overbought readings..With no resistance now til 16,933 I think there's still room to run here on Tuesday.

The VIX: After a jump on Friday featuring a failed attempt to breach the 200 day MA, the VIX came right back down 6.31% on Monday for a nice bearish inside harami (admittedly not the most reliable of reversal candles).  Still, the recent failure of the VIX to get much going despite extreme oversold readings and all sorts of geopolitical jitters has to make one wonder if theVIX packs the gear to march any higher on Tuesday.
Market index futures: Tonight all three futures are higher at 12:20 AM EDT with ES up 0.10%.  On Monday ES totally non-confirmed Friday's star with a nice move higher to remain inside a rising RTC,  Indicators have hit the overbought-broken region where they lose their predictive power so there's really nothing left bearish on this chart at all for Tuesday.

ES daily pivot: Tonight the ES daily pivot jumps from 1950.25  to 1964.08.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  Last night I refrained form calling this chart lower - good thing too because it put in a nice 0.20% gap-up green marubozu on Monday.  That said, indicators continue to wander around in No Man's Land between overbought ansd oversold and the dollar continue to search for direction, so no call here tonight.

Euro: On Monday the euro gave up all of Friday's gains and then some to end at 1.3363, right around weekly support.  Indicators ar ejust barely oversold and there's really no trend to speak of so I guess I'd expect just more sideways motion here on Tuesday.

Transportation:  The trans did even better than the Dow on Monday with a big 1.71% green marubozu to bring us back to the center of the rising RTC.  Indicators are now all broken at overbought and have lost their predictive power.  There is no more resistance until 8530 at the upper BB so it looks like this one still has considerable room to run.


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     4       5      1           1       0.500    -14

     And the winner is...

On Monday the market rejected a number of bearish reversal signs in a big way and ES continues to exhibit some positive pin action in the overnight.  With a bunch of positive candles now on the books and no new reversal warnings in sight, all I can do is shrug and call Tuesday higher again.  Of coursse, the usual caveat about geopolitical headline risk remains in full force.

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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