Friday, September 26, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 1970.25Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Wow - I'm sure glad I called Thursday as "uncertain" because I certainly wasn't expecting a 264 point cratering from the Dow, thanks largely I believe to some sour grapes in Rome from a retiring member of the Fed who should have retired a while ago and also should at least have the good sense to just shut up.  OK, so now we continue to thread our way through this mine field hoping just to get to Saturday still in one piece.

The technicals

The Dow:  On Thursday the Dow pretty much just went down, stopping only because the bell finally rang on its biggest red marubozu since the bloodbath of  July 31st.  OK, well it also stopped right on its lower BB.  And even after a 1.54% drubbing, we're still not oversold.  The picture has changed once again, as it seems to do on a daily basis this week.  So now everything looks bearish.  One thing is clear - with ongoing oscillations becoming increasingly violent, this system can't go on forever like this - it has to end sooner or later.

The VIX:  To quote that noted stock market sage Gomer Pyle "Surprise, surprise, surprise!".  After slicing back down through its 200 day MA on Wednesday, the VIX didn't even slice back through the other way on Thursday - it just gapped up right over it to put in its biggest one day jump since the aforementioned July 31st.  And its still not yet overbought, though it did puncture the upper BB in a big way with a big dark cloud cover.  But these sorts of patterns seem to invite more, in violation of my rule that the VIX rarely spend more than a day or two above its upper BB cf. the end of July.  So while I'd like to call the VIX lower Friday, there's still a possibility for further gains here.

Market index futures: Tonight all three futures are, dare I say it actually higher at 1:26 AM EDT with ES up 0.10%.  On Thursday ES got pummeled along with everything else, giving up support at 1973 in a way that made the Maginot Line look strong.  The only ray of hope here is the overnight, which is causing the stochastic to curve around very nearly into position for a bullish crossover.

ES daily pivot: Tonight the ES daily pivot dives from 1984.33 to 1970.25.  Even after that, ES remains below the new pivot so this indicator continues bearish.

Dollar index:  Meanwhile, super-dollar gained another 0.17% on Thursday yo nearly touch its upper BB but on a red gap-up candle. We're now at levels not seen since July 2013  Thursday's semi-evening star is a reversal warning but this is one bus you wouldn't have wanted to be standing in front of all year long.

Euro: And so also the poor downtrodden euro continued its slow swirl down the toilet of currencies, closing this time at 1.2755, its lowest weekly close since November 2012.  The indicators remain stomped to a pulp, OBV continues to decline, even though it hit -213,000 on Thursday.  Bottom line, move along, nothing to see here, next stop, bargain basement.

Transportation:  Like the Dow on Thursday the trans took a big 1.39% dump with a red marubozu that stopped right on their lower BB.  The descending RTC is alive, we're still not oversold, there's no sign of a reversal.  End of story.


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     8       7      2           2       0.588     81

September  5       6      4           1       0.500    209

     And the winner is...

After a false alarm breakout on Wednesday the SPX Hi-Lo indicator fell back into reversal territory on Thursday with a 35 reading.  All the charts are suggesting more downside though - except for ES and the VIX.  This is a tough one.Hmmm - OK well I think I'm going to go with ES, or even simply the recent down/up/down pattern which simplistic as it may sound would suggest that Friday go up.  So I'm going waaay out on a limb and calling Friday higher.  That's all she wrote.  See you again Sunday night!

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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