Friday, November 7, 2014

Friday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher, low confidence.
  • ES pivot 2014.33.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Well it was a nice theory with just one problem - it was wrong.  Apparently, the Election Day pop wasn't just a fluke and the Dow managed to add on another 70 points on Thursday for yet another record close.  So we were wrong.  Oh well.  That's what I get for trying to outsmart Mr. Market.  Now let's get back to the pure technicals and figure out Friday.

The technicals

The Dow:  With Tuesday's doji left in the dust, we now have two white soldiers who are marching on relentlessly ever higher with another 0.40% gain on  Thursday..We remain in a rising RTC, the indicators remain uselessly overbought so I won't try to game this one - this chart just looks continued bullish.

The VIX:  As I definitely didn't expect, the VIX broke under its 200 day MA on Thursday after a vain attempt to push higher, ending down 3.53%.  Unlike some other charts, the VIX rarely recovers quickly from a 200 MA breakdown.  So with indicators not yet oversold and no support til 12.67 (the lower BB is way down at 9.82), there's nothing here to prevent more downside..

Market index futures: Tonight all three futures are higher at 12:35 AM EST with ES up 0.15%.  On Thursday ES just kept marching higher with Monday and Tuesday's reversal warnings just a faint memory.  The indicators are all locked back in broken overbought mode so there's really no bearish signs on this chart tonight.

ES daily pivot: Tonight the ES daily pivot rises from 2014.33 to 2022.67.  That puts us back above the new pivot so this indicator returns to bullish.

Dollar index:   On Thursday the dollar put in a giant green bullish engulfing marubozu for a huge 0.65% gain.This now leaves us at multi-year resistance from August and September 2010.  I can't help but notice that the monthly stochastic is about to form a bearish crossover.  This upward push can't go on forever.  But right now it doesn't look like the top will come on Friday.

Euro: And on Thursday the euro continued its headlong rush down the toilet with a big loss to end at 1.2390. We're now closing in on mutlti-year support at 1.2300.  The monthly RSI has now hit 3.85 but lest you think that is wildly oversold, recall that back in June 2010, it hit zero - that's zip, zilch,  nada, square root of nothing - right before going on a year-long tear.  Just sayin...

Transportation:  The trans had a great day Thursday, handily outperforming the Dow with a big 1.28% green marubozu for another record close here too.  There's just nothing bearish on this chart now.


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    6       6      3           1       0.538    271
November   1       2      1           0       0.333     31

     And the winner is...

OK, no more second-guessing Mr. Market for me!  Tonight the charts pretty much all look reasonably bullish so that's my 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.

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