Thursday, September 4, 2014

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 2002.00.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Ah - this was the result I was waiting for.  Persistance paid off on Wednesday and although it was a nail-biter into the close, the Dow did end higher, if only by 11 points after bouncing right off its pivot at 3:02 PM.  So with that out of the way, the holiday-shortened week meanders on and we look to Thursday for some action.

The technicals

The Dow: The Dow's meager 0.06% gain on Wednesday belied the candle - a giant .(and rare) gravestone doji coming after a downtrend.  But the indicators remain confused and the stochastic continues to decline.  So with this conflict I'm afraid I have to let this chart pass tonight.

The VIX:  And on Wednesday the VIX did not decline as expected, gaining instead 0.90%. on a bullish engulfing pattern following Tuesday huge gravestone doji.  So with indicators now overbought and the stochastic having just barely formed a bearish crossover, I'll say once again, I think the VIX looks lower from here.

Market index futures: Tonight all three futures are essentially flat at 12:06 AM EDT with ES and YM both down down one tick but NQ up 0.01%.  Overall, ES continues to be range-bound, bouncing around the 1999 level.  Wednesday saw a big intraday push above 2000 but it was ultimately rejected.  So this chart continues to crawl sideways and that's all I have to say about that.  OK, just one more thing - the overall appearance at the moment is a tad on the bearish side.

ES daily pivot: Tonight the ES daily pivot rises from 1999.58 to 2002.00.  This marks another new record - the first time the ES pivot has surpassed 2000.  But that leaves ES below the new number so this indicator is now back to bearish.

Dollar index:  Last night I wrote "my guess would have to be that the dollar goes lower on Wednesday" and it did, down 0.15% on a tall inverted hammer.  To me that satisfies the basic evening star pattern and with indicators remaining overbought, and a still considerable gap remaining below, I'd hazard that the selling isn't over yet.

Euro: Well whadaya know about that - the euro actually ended up for a change, closing at 1.3146 on Wednesday to confirm Tuesday's star. That sends all the indicators higher, now just off oversold and with the overnight teetering on the edge of the descending RTC for a bullish setup, it looks like maybe, just maybe the euro could go higher again on Thursday.

Transportation:  I got so excited by the trans' big gain on Tuesday that I completely forgot the old maxim that the market likes to take a pause after large run-ups, and that's just what happened on Wednesday with the trans giving up 0.23% on Tuesday's rocketship.  But that barely makes a dent in the larger picture.  We now have a completed bullish stochastic crossover  and a bullish RTC exit.  But we have to balance that against a spinning top, so it's a wash.  No call here tonight.


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  1       1      0           0       0.500    -20

     And the winner is...

Tonight I see a general lack of direction in the charts and I'm just not feelin' the love, baby.  So therefore the only clear course of action is to call Thursday uncertain.  My overall impression is vaguely bearish, but not enough to make a formal call that way.

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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