Wednesday, August 13, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1930.92.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

On Tuesday the Dow kind of meandered about all day looking for a direction but never finding one and ending down just nine points.  It appears that the Dog Days of Summer are now upon us.  But I'll take that over airplane crashes and Putinoia any day.  So let's go right to the charts and see what we can make of Wednesday.  Woof woof!

The technicals

The Dow:  Intraday, the Dow's gyrations on Monday were about as ho-hum as it gets.  But the resulting candle was a clear spinning top, and following Monday's tall inverted hammer that now makes two reversal indicators in a row.  And whenever we get that, that considerably increases the chance that we will see a move lower.  Mediating that is the fact that the indicators have yet to hit overbought, though they're getting close.  But the stochastic still shows no signs of even starting to form a bearish crossover, so it's a conundrum.  Overall though, the candlestick evidence looks pretty compelling.

The VIX:  Last night I expected the VIX to test its 200 day MA again on Tuesday and it pretty much did, hitting 13.76, just above 13.64.  But the 0.70% loss formed a perfect spinning top and drove the indicators oversold.  So with the MA now apparently support, a reversal candle and oversold indicators, I have to wonder if we're not going higher on Wednesday..

Market index futures: Tonight all three futures are higher at 12:30 AM EDT with ES up 0.08%.    ES also put in a spinning top on Tuesday warning of a reversal and calling its descending RTC exit into question.  It also started the indicators moving lower before ever reaching overbought.  We now have a reversal warning, though one which requires confirmation.

ES daily pivot: Tonight the ES daily pivot dips from 1932.25 to 1930.92.  That's just enough to put ES back above the new pivot and keep this indicator bullish.

Dollar index:  On Tuesday the dollar gave us a red marubozu but because of the big gap up at the open, it actually closed higher, by all of 0.02%.  Still, a move like this just looks bearish.

Euro: I was skeptical about the euro's chances of moving higher on Tuesday and it did indeed continue lower, this time to 1.3369 on a hammer.  The euro keeps finding support in the 1.3341 area and another test of this is not out of the question on Wednesday though the close is in question given the choppy nature of the trade lately.

Transportation:  On Tuesday a small star signaled the failure of Monday's bullish RTC exit.  With indicators now close to overbought, one really has to wonder if there's any gas at all left in the tank to continue higher here 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       6       4      4           3       0.692    639 
August     2       4      0           1       0.429   -201

     And the winner is...

Tonight is kind of a mixed bag as one might expect after a pair of low-volume August dog days.  The overall impression to me is ever so slightly bearish but not really enough for me to go out on a limb and call it so.  Therefore, I'll have to wait for some confirmations of all those dojis and in the meantime I call Wednesday uncertain.

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.

No comments:

Post a Comment

Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.