Thursday, November 6, 2014

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 2014.33.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Oops - looks like I forgot to hit the "Publish" button - again.  Sigh.  But I really did write that post very late Tuesday night, so my call for a higher close Wednesday was correct.  And the Election Proximity factor held true to form.  So now that we've gotten rid of a bunch of pesky socialists, let's see what the charts might have in store for Thursday.

The technicals

The Dow:  After looking ready to roll over, the Dow took a 101 point victory lap after the elections to stave off a bearish RTC exit and score another record close.  Indicators are right back to pegged on overbought and there's no bearish signs here..

The VIX:  On Wednesday the VIX confirmed Tuesday's inverted hammer with a 4.84% decline that stopped right on its 200 day MA at 14.11 with a gravestone doji.  So there's some support here now.  But will it hold on Thursday?  That's not at all clear.

Market index futures: Tonight all three futures are lower at 12:44 AM EDT with ES down  0.27%.  Es had a nice day on Wednesday along with everything else, but the new overnight seems to be doing some retrenching.  It's now just under the rising RTC for a bearish setup and the indicators are now slowly moving off extreme overbought, so this one looks lower.

ES daily pivot: Tonight the ES daily pivot rises from 2004.83 to 2014.33.   That move, plus a sagging ES puts us back below the new pivot so this indicator is now back to bearish.

Dollar index:  On Wednesday the dollar was right back to its relentless march higher  It's now climbing its monthly upper BB and is approaching some 2010 resistance.  But for the short term, we now have a gap up doji for 2/3 of an evening star so caution is in order.

Euro: The euro on Wednesday once again found support at 1.2484 but seems unable to make much of it.  We've now exited the descending RTC for a bullish trigger but I think instead a bit of consolidation looks more likely.

Transportation: The trans hit another record close of their own on Wednesday but on a hanging man that's at least a possible reversal sign.


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       1      1           0       0.500    101

     And the winner is...

OK, so the market's had its post-election pop and now it looks like it's time to get down to reality.  We're seeing a number of reversal signs on the charts, enough in fact for me to call Thursday lower.

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. Hi, I'm just wondering what the major factor was for calling today down? Is it the candlestick plots? If so, what in particular?

    thanks, Russ

    1. Two things - the indicators all looked to be starting to move lower off overbought and that generally presages a decline. Also, I decided the partly discount Wednesday's camdle as a news-driven reflex action rather than a continuation of the uptrend - in retrospect, that was probably a mistake. And thirdly, ES wasn't looking too happy around the time I wrote the blog (12:30 AM). As luck would have it, about a half hour later, ES broke back above its pivot and the rest, as they say, is history. The ES pivot is always a great indicator to watch. I'm not sure why - perhaps it's just programmed into all the bots.


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