Friday, October 31, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence..
  • ES pivot 1980.58.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Well my computer upgrade took a day longer than planned but in the end it was worth it.  I now have a more stable and robust system than before.  In the meantime, we missed a few interesting market gyrations but that's the way it goes sometimes.  Now let's see if the market will close out the spooky month of October with a treat or a trick.

The technicals

The Dow: The Dow had a great day Thursday (admittedly largely to a big pop in V) and remains in a now two-week long rising RTC and nearly hitting its upper BB.  Indicators remain broken overbought.  I think there's still some room left here to touch the upper BB Friday.

The VIX:  the VIX dropped 4.16% Thursday with a bearish engulfing candle but continues to find support at the 200 day MA at14.07.  With no clear trend here, more sideways action seem to be in order.

Market index futures: Tonight all three futures are higher at 12:32 AM EDT with ES up 0.13%.  ES had a good day Thursday with a big green candle that disconfirmed Wednesday's spinning top to remain in a rising RTC.  The overnight continues higher and it looks like ES wants to visit its upper BB at 2016, maybe early next week.

ES daily pivot: Tonight the ES daily pivot ticks up from 1973.33 to 1980.58.  We remain comfortably above the new pivot so this indicator remains bullish.

Dollar index:  On Thursday the dollar had a gap-up pop to just ding its upper BB and start 2/3 of an evening star.  With overbought indicators and nearby resistance, I don't think the dollar has much more gas in the tank here.

Euro: The euro has resumed its slow march lower with another drop to1.2616, just touching its lower BB on Friday intraday.  The overnight is continuing lower so it doesn't look very good for the euro on Friday.

Transportation: In a second day of bearish divergence, the trans lost 0.96% on a day the rest of the market did great. After touching its upper BB we now have two hanging men in a row, q bearish stochastic crossover and an exit of the rising RTC for a bearish setup so this chart looks continued lower 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  6       6      5           2       0.571    376
October    5       6      3           1       0.500     76

     And the winner is...

With Russell rebalancing Friday, it's sure to be a wild ride and anything could happen.  But the last day of October is historically fairly bullish and I'm not seeing much bearish on the charts with the lone exception of the trans, so I'm going to risk it and call Friday higher.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.


  1. What is your opinion? SP500 futures up 1.18% overnight! (till now 9:00 CET). This is most unusual. Moreover after the Fed announcement. It seems like a buying climax. I’ll be attentive at signs of weakness, expecting intraday records and a bull trap. Certainly not going short but with stop loss very tight.

    1. Oddly enough, a mere 30 minutes after I posted "Friday higher" the Bank 'o Japan announced easing and ES just took off. Ah so! Arigato, BOJ. Ka-ching!


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