Thursday, October 9, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 1947.92.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Yup - that's why I called Wednesday "uncertain".  There was nothing in the technicals (that I could see anyway) that presaged a275 point pop in the Dow.  That recouped all of Tuesday's losses, and Monday's too leaving us pretty much back to square one.  Perhaps the charts can point the direction to square two (ie. Thursday) now.  Let's take a look.

The technicals

The Dow:  On Wednesday the Dow was nothing but up, up and away with a 1.64% gain giving us a very rare black and white narabi pattern as Tuesday's and Wednesday's candles were nearly identical, first red, then green.  These commonly indicate continuation in the direction of the second candle, so this one is bullish.

Wednesday's advance was halted by resistance at 17K but with the indicators still only just barely off oversold, it would appear that there might be enough mojo left to break this on Thursday - assuming the wild oscillating up/down thing doesn't continue.

The VIX:  Now here's an interesting clue.  While the Dow pretty much mirror-imaged Tuesday's trading the VIX took a big hit on Wednesday, down12.15% on the mother of all bearish engulfing patterns.  It went about 3/4 of the way from the upper BB to the lower in one shot/  And that still didn't send the indicators oversold..  One thing I've noticed about the VIX lately - one big fall begets another.  And with no resistance now til 14.53, I wouldn't be surprised to see the VIX visit this number on Thursday.

Market index futures: Tonight all three futures are higher at 12:29 AM EDT with ES up 0.14%.  ES had a great day Wednesday, even better than the Dow with a big bullish engulfing pattern made even more impressive by the positive overnight pin action.  The indicators seem to be sorting themselves out and are now all pointed higher with a ways to go yet before hitting overbought so this chart looks bullish to me.

ES daily pivot: Tonight the ES daily pivot jumps from 1936.17 to 1947.92.  We remain well above the new pivot so this indicator turns bullish.

Dollar index:  Last night I said the short term looked lower for the dollar and it was indeed, with a big 0.43% loss on Wednesday to remain inside a new descending RTC.  Indicators are now falling nicely but still not oversold so it's not out of the question that there's more downside left here for Thursday.

Euro: The euro chart is even more interesting.Tuesday's gain was a bullish RTC trigger on a short falling RTC (to 9/16).  Wednesday's gain was a bullish setup on a much longer falling RTC (to 8/15).  And with rising indicators confirming this, it looks like the euro has bottomed, at least for now, and has more upside left on Thursday.

Transportation: The trans on Wednesday wasn't quite as stellar as the Dow but still managed a respectable 0.95% gain and interestingly on a big hammer.  That's a decent bullish reversal sign.  The indicators are all in disarray probably because of all the wild swings lately, but just looking at it I'd say there's a good chance of going higher on Thursday here.


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    1       2      2           1       0.500    187

     And the winner is...

Tonight the charts are all looking fairly bullish so I'm going with that and calling Thursday higher, though I'm certainly not expecting as big a run as we saw Wednesday.

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 a bit too wild for me.

No comments:

Post a Comment

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.