Tuesday, November 4, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain..
  • ES pivot 2012.42.  Holding below is bearish
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

The markets turned in a lackluster session on Monday that caused my conditional call to miss, but just barely, since both the Dow and SPX closed lower though ES remained above it pivot all day long.  I think that reflects most people just sitting on their hands waiting for Tuesday's election results.  Still, we got some interesting candles on Monday so let's light them up and see what's what.

The technicals

The Dow:  Last night I wrote "That's been the trend for weeks now - one or two up followed by one small down day."  And wouldn't you know it, that's exactly what we got on Monday - a 24 point dip on a small red spinning top following two days of big gains.  However, now we have finally touched the upper BB and it looks like the Dow may be running out of steam at these lofty levels.  Technically, we've got a reversal sign here, though one which requires confirmation.

The VIX:  The VIX showed some unexpected strength on Monday, gapping back above its 200 day MA with a 5% pop that still leaves the indicators oversold.  This makes a completed morning star and leads me to think there's more upside to come..

Market index futures: Tonight all three futures are barely lower at 12:09 AM EDT with ES down  just 0.02%. On Monday ES put in a classic star reversal warning right at the top of Friday's big run-up.  And the new overnight seems to be confirming that so this one's looking lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises from 2005.00 to 2012.42.  That gain is enough to leave ES below the new pivot so this indicator turns bearish.

Dollar index:  The dollar continued its unstoppable ways Monday with its third gap-up candle in a row to trade entirely above it supper BB and its highest close since September 2010. And while we're on the monthly chart I'll note that we haven't been this overbought this long since back then and that ended with a massive dollar sell-off.  I'd not be going long the dollar for the long term from here.

Euro: And the euro on Monday just dribbled down its lower BB to leave its indicators all flat on the floor.  Nothing to see here - move along

Transportation: On Monday the trans put in a small 0.14% gain but the real story was the candle, a classic hanging man.  Indicators are back to overbought  and we traded outside the rising RTC for a bearish trigger, so this chart now looks 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    6       6      3           1       0.538    271
November   0       1      0           0       0.000      0

     And the winner is...

The days around Election Day are generally bullish.  But there seems to be some growing uncertainty about the outcome so I think the hand-sitting will just continue on Tuesday as we wait for the results to come in.  So tonight we have no choice but to call Tuesday uncertain.  Although I must say that technically, this market is looking toppy to me.

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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