Monday, September 29, 2014

Monday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher only if ES stays above pivot, else lower.
  • ES pivot 1970.58Bouncing off is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Sometimes it seems like my best calls happen when I'm the most nervous and I was very nervous indeed last Thursday night calling Friday higher after such a big tumble int he market.  But it paid off nicely in the end as the Dow rallied hard on uh, I think it was housing numbers (who can remember that far back) to end the day with  a handy 167 point advance.  Now let's see if we can make any sense of this coming week.  Bring on the dancing charts! (clap clap!)

The technicals

The Dow: The Dow has now alternated down/up for four straight days now but despite this remains in a shallow downtrend.  The only notable difference tonight is that we're close to making a bullish stochastic crossover, though none of the other indicators is oversold yet.  So despite the 1% gain on Friday, I'm going to need more signs than that to call the Dow higher on Monday.

The VIX:  I was too cautious last Thursday night, worrying that the VIX might not hold to its normal "bust the upper BB then retreat" paradigm.  But down it went after all, losing 5% on Friday with a dark cloud cover that also provided a bearish stochastic crossover and closed (just) back under its upper BB.  This makes me want to think the VIX goes lower on Monday, yes it does.

Market index futures: Tonight all three futures are lower at 12:17 AM EDT with ES down  0.28%.  ES remains in a descending RTC despite Friday's gain.  Its indicators are all broken oversold so there's little to go on here other than the new overnight which seems to be guiding lower.

ES daily pivot: Tonight the ES daily pivot barely budges from 1970.25 to 1970.58.  With the drift lower int he overnight that now leaves ES sitting exactly on the new pivot so this indicator is very much in play.

Dollar index:  Last Thursday the dollar was giving an ominous red reversal candle but it all came to nought on Friday as it resumed its long-running uptrend, up another 0.54% to hit its upper BB and remain in its rising RTC.  There's really nothing bearish on this chart tonight.

Euro: And of course the euro took yet another step lower on Friday on its march to zero to hit levels not seen since November 2012 now. With that gone, there's now no support til 1.2410.  We remain in a steep descending RTC, the indicators are all lying flat on the floor and there's absolutely nothing bullish about this chart tonight.

Transportation: On Friday the trans had a decent day, up 0.54% to just touch their upper BB and remain in a solid rising RTC.  Indicators are now broken overbought so we need to wait a day and see if we're going to bounce off the BB or start crawling up it.  That's just how it is sometimes.


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  6       6      4           1       0.538    376

     And the winner is...

Well that wasn't much of a chart dance I must say.  There's not a whole lot to go on here.  But as I write, ES is testing its new pivot and for the moment it seems to be holding.  So this is a perfect setup to make a conditional call: if ES can remain above its pivot by mid-morning Monday, we close higher.  But if it breaks below in the wee hours and stays there by the same time, then we close lower.

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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