Thursday, September 25, 2014

Thursday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 1976.17.  Holding below is bearish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Last night I mentioned the SPX Hi-Lo indicator being quite low and how that's always a good reversal indicator.  Well it was indeed, as the Dow popped 154 points on Wednesday.  That changes the picture, so let's look at the charts and figure out just what this means for Thursday.

Ebay Scam Alert

Ebay counterfeit 32 GB USB flash drive sold by world_fw_goal
The Night Owl likes to think of herself as pretty savvy in matters technical, but she just fell for the old counterfeit USB flash drive scam.  A 32 GB USB stick from China for $10.17 seemed like a pretty good deal.  Turned out to be too good to be true.  The drive came with a little sticker that said "32GB".  But when I loaded it with large files, only the first three read back OK.  The rest were called unreadable.  There was a reason for that.

The scum who sold it to me used an 8 GB drive and hacked the controller so it reported 32 GB when doing a Properties or even when formatting.  But any bits written to it past 8 GB simply vanished into space with no error reported on writing.  Files listed fine in the directory - they just weren't there.  Check it out:  You can clearly see the "32GB" sticker on the case, and the label "JYX1403218GB" on the chip itself.  That's the manufacturer code JYX, the date code 14/03/21 ... and the actual capacity of the chip: 8GB.

 Upon doing some research, it seems that the vast majority of flash RAM devices sold on Ebay are counterfeit, especially those from China.  Yet another reason not to do business with the Chicoms and to doubt every words they say.  I don't want to name any names, but the initials of this criminal from China are world_fw_goal.  I've asked Ebay to shut him down and I'll be filing a police report too.  It's not a big deal in the grand scheme of things but it really ticks me off.

The technicals

The Dow:  On Wednesday the Dow  put in a big green almost-marubozu for a bullish engulfing candle that popped out of a short descending RTC for a bullish setup.  While the indicators are still not yet oversold this was enough to send them higher.  We retook the `17,145 (now) resistance level so this chart now turns bullish.

The VIX: Last night I wrote "I'd not be surprised to see the VIX move lower after this one" and it did just that in a big way with the VIX shedding 11.12% on Wednesday completing the mother of all evening stars and slicing right back down through its 200 day MA.  That also sent the indicators lower before ever hitting overbought.  So this chart now looks continued bearish.

Market index futures: Tonight all three futures are lower at 12:33 AM EDT with ES down  0.10%.     Like the Dow, on Wednesday ES put in a big bullish engulfing candle that was enough to send th3e stochastic around close to a bullish crossover.  But we remain in a descending RTC so this all has to be taken with a grain of salt, particularly with ES sagging in the overnight.

ES daily pivot: Tonight the ES daily pivot rises from 1976.17 to 1984.33.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  The dollar continued its stair step motion higher on Wednesday after a three day pause for its highest close since ... yes, November of 2010. That leaves the dollar at its upper BB on the monthly chart.  So if it's going to reverse, the time is near.  Unfortunately, there's still no sign of that on the daily.

Euro: Meanwhile the euro remained in its long running rush to the basement on Wednesday, closing at 1.2787, its lowest level in over a year and with no end in sight.The indicators are all broken at oversold and the descending RTC remains intact so there's still no bullish signs on this chart.

Transportation: In an impressive turnabout, after looking quite bearish last night, on Wednesday the trans gained an impressive 0.69% on a big bullish piercing pattern. Big enough in fact to punch out of a very steep descending RTC for a bullish setup.  With the stochastic now curving around for a bullish crossover, this one looks bullish for Friday.


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      3           1       0.500    209

     And the winner is...

What a difference a day makes.  While the charts suddenly look pretty bullish overall tonight, I'm concerned about the usual tendency of the market to pause after big moves.  I'd not be surprised to see some sort of doji day on Thursday.  Accordingly, the call of choice is simply for Thursday 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.

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