Friday, October 3, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, medium confidence.
  • ES pivot 1947.17Holding above is bullish.
  • Next week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader going long at 1942.50.

As that noted stock trader Maxwell Smart used to say, "Missed it by that much!'.  When I got up this morning at the crack of 11 AM, I couldn't believe my eyes - I called the Dow higher, how could it be down 150?!  Then things got worse.  And then surprise, surprise, they got better.  And better.  Until finally the Dow went positive after all.  But we finally managed to snatch defeat from the jaws of victory in the closing minutes as the Dow ended all of 3.66 points lower.  Now both the Nasdaq and SPX did end higher, but my calls are for the Dow, so that's a miss.  But it all made for some interesting charting, so let's get right to it.

The technicals

The Dow:  When it was all over, the Dow put in a giant classic textbook doji star, trading almost entirely below the lower BB.  For my money, reversal signals don't get any better than this.  We remain in a descending RTC but this is one heckuva great reversal sign for Friday.

The VIX:  .Last night I wrote that the VIX "looks ready to move lower" and so it did, down 3.29% on Thursday on a tall inverted hammer.  Indicators are now just off overbought so I'd have to guess there's more room to run lower here on Friday.

Market index futures: Tonight all three futures are higher at 12:22 AM EDT with ES up 0.21%.  Like the rest of the market, ES put in a tall doji star on Thursday and hit oversold.  The new overnight seems to be confirming it and is just exiting the descending RTC for a bullish setup.  This chart finally looks bullish to me.

ES daily pivot: Tonight the ES daily pivot drops from 1947.17 to 1934.17.  This latest fall, combined with a rising ES, finally puts us back above the new pivot so this indicator now turns bullish.

Dollar index:  Wow - is the dollar's mega-run finally over?  Could be, as the dollar lost a big 0.44% on Thursday to fall out of its latest rising RTC for a bearish setup. We do remain inside a much longer rising RTC all the way back to July but with long overbought indicators, it's looking suspiciously like the dollar may be in for some short-term retrenching.  So sez I.

Euro: And even more amazingly, the euro actually managed to put in a gain on Thursday to close at 1.2681, right on the edge of its descending RTC. Indicators remain oversold and the stochastic is bending around for an imminent bullish crossover   So I'd say the euro might have more upside in store on Friday and that would square with my call for a lower dollar.

Transportation:  And finally in some impressive bullish divergence, the trans gained a healthy 0.81% on a day the Dow basically flatlined. With a green hammer hugging the lower BB and oversold indicators, this chart really looks ready for more upside.


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      5           2       0.571    376
October    0       1      0           1       0.500     -4

     And the winner is...

I think tonight we're finally seeing some really good reversal signs of a a higher quality than last night.  Enough so that I'm again going to just go ahead and call 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 go long at 1942.50 having finally found what I would consider to be just about the perfect setup for my system.  They don't get much better than this.  Reminder: you can follow these trades live on Twitter @nightowltrader.


  1. Could you please say if you are opening or closing a trade when you tweet? I thought you went short when you sold 10 Es @ 11:30? I missed the buy tweet
    THANKS Mac

    1. If I'm opening a trade, I say either "Going long" or "Going short". If I'm exiting a long position, I say "Sold (or sometimes "SLD") ..." If I'm exiting a short trade, I say "Covered ...". Sorry for any confusion.


Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.