Tuesday, September 2, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1999.17.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

I hope everyone had a relaxing Labor Day weekend.  Now it's time to get back to the grind.  I do have half a mind though to just take the rest of the week off, it being holiday-shortened and all.  But this holiday coming at the start of the month is different, so we might as well run the charts, though most of them are rather out of date by now.  Perhaps I'll take Wednesday off.  That's the nice part about being retired - I can make my own holidays whenever I want.

The technicals

The Dow:  So last Friday, if anyone remembers that far back, the Dow alternated between gains and losses before ending up all of 19 points.  It was a good day to call "uncertain", and with the puny volume, an even better day to spend in the back yard on the chaise lounge sipping Pina Colada. Technically though, we now have two whole days outside the rising RTC so that's a bearish trigger.  And the candles sort out as spinning top, and then two hanging men.  Indicators remain oversold and the stochastic just gave us a bearish crossover, so I have to think this chart looks bearish on Tuesday.

The VIX:  When last seen, the VIX confirmed last Thursday's inverted hammer with a 0.58% drop on  - wait for it, another inverted hammer.  We do though have a bullish trigger on an RTC exit, analogous to the Dow, so with indicators rising off oversold it looks like more upside from here..

Market index futures: Tonight all three futures are higher at 12:32 AM EDT with ES up 0.05%.  Last week, ES put in three consecutive dojis but still zig-zagged higher even as the world around it appeared to be going to pot.  Friday finished strong and we now have 2000 below us as support.  But like some other charts, we've exited a rising RTC for a bearish trigger.  This chart just doesn't look particularly bullish to me tonight.

ES daily pivot: Tonight the ES daily pivot rises from 1994.58 to 1999.17.  We are now above the new pivot so this indicator turns bullish.

Dollar index:  Last Friday the dollar convincingly put an end to what looked like a trend change by gaining 0.32%, largely due, I suspect to geopolitical issues.  With indicators remaining overbought, it's not clear that there;s much upside left on Tuesday, though that's far from clear.

Euro: And the euro took a corresponding dive on Friday to close at 1.3135, a level we haven't seen in a year.  And the new overnight does nothing to change that.  With no reversal signs here, the euro just looks set to keep going lower.

Transportation:  The trans have now clearly topped, a week ago and on Friday, non-confirmed Thursday's hammer with a small spinning top on a meaningless 0.03% gain.  We've been losing ground slowly here for a week now and indicators are finally oversold but the stochastic hasn't yet gotten into position for a bullish crossover so this chart is a toss-up for Tuesday .


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

     And the winner is...

The first day of most months has a bullish bias, but not particularly in September.  And while August gets a bad rap for the market, my experience is that in the last 10 years, September and October have been far worse.  Tonight we're in a difficult spot because most of the charts are three days old now and they were generated on very light volume on top of that.  So while they in general do not look particularly bullish the futures, which are current, seem to be guiding higher and the developing candle is in fact a nice bullish engulfing pattern.  So I'm going to go out on a limb and called Tuesday higher.  We'll see.

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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