Monday, October 13, 2014

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, low confidence.
  • ES pivot 1906.25.  Holding below is bearish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias lower.
  • ES Fantasy Trader standing aside.

Last Friday's losses did some important technical damage.  I'm short on time tonight and I'm having some serious computer issues (as in random BSOD serious) but but I do want to quickly review the highlights before the next crash (of my computer that is, not the market - though that may be coming too).  With another op-ex week coming up and a sort-of holiday on Monday, things will no doubt be, uh, interesting this week.

The technicals

The Dow:  The Dow broke its up/down/up pattern Friday with two triple digit losses in a row.  But the really bad part is that it busted right through its 200 day MA without even trying to bounce off like it did back in August.  And while the indicators continue moving lower, they are, amazingly enough still not oversold.  This chart isn't looking good, Jack.

The VIX:  Meanwhile, it is clear that Mr. Market is now completely off his meds, with the VIX adding another 13% on Friday to close at 21.24, its highest weekly close since December 2012.  It also blasted through its 200 week MA in a way we haven't seen since August 2011, back when we had that huge crisis around, uh, yeah well I can't remember either.  The bad thing is that one took months to sort out and this is starting to look a lot like then.  Not so good.

Market index futures: Tonight all three futures are lower at 1:01 AM EDT with ES down  0.51%.  ES also just broke through its 200 day MA in the Sunday overnight and is also not yet oversold.  Not looking good here.

ES daily pivot: Tonight the ES daily pivot dives from 1936.25 to 1906.25.  We remain well below the new pivot so this indicator remains firmly bearish.


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    2       3      2           1       0.500    -33

    And the winner is...

There's no question tonight - the only call I can make is Monday lower.  And with the VIX above 20, I'm now curtailing my trading activities.  I'm starting to really not like the looks of things here.

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 - this roller coaster is still a bit too wild for me.

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