Wednesday, November 12, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 2035.50.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Zzz...zzz...zz...  huh?  Huh, did the bell ring already?  Boy, what a snoozer Tuesday was with the Dow ending with a gain of all of one whole point.  What's up with that?  Let's see what the charts have to say about it for Wednesday.

The technicals

The Dow: The Dow's tiny little star on Tuesday is hanging right on the edge of a long-running rising RTC.  And with indicators stuck on crazy-overbought, this is a reversal warning that's got my attention..

The VIX: Interestingly, the VIX which last night looked like nothing but lower Tuesday on a three black crows, instead put in a small bullish inside harami.  With indicators remaining oversold, this one now seems to be giving a bullish reversal warning.

Market index futures: Tonight all three futures are lower at 12:42 AM EST with ES down  0.15%.  We got a doji in ES on Tuesday too, so a note of caution is appropriate here.  The overnight action so far seems to support that idea,

ES daily pivot: Tonight the ES daily pivot ticks up from 2030.00 to 2035.50.  For the first time in a while, that now leaves ES back under the new pivot so this indicator turns bearish.

Dollar index:  The dollar seems to be having some trouble advancing lately.  After w whole week of bouncing about, Tuesday's 0.22% loss calls the current rising RTC into question as we sit right on the very edge.  Hmmm...

Euro: Meanwhile the euro looks to be putting in an ascending triangle.  With indicators only just now off oversold, it looks like we may be in for a bullish breakout here in the next day or two.

Transportation:  Like the Dow, the trans on Tuesday put in a perfect star doji.  While a pause might be expected after Monday's big run-up,I note that RSI has now hit 96.5.  But we still need confirmation.  Note that just two days ago (last Thursday) we were in a nearly identical situation - (little star following a big gain)and yet the next day was up again.  So it's still a bit premature to call this one lower yet though I'd not be going long right about 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   4       2      1           0       0.667     91

     And the winner is...

We're starting to see a number of dojis on the charts all warning of a short term top.  Unfortunately, they all require confirmation and the counter-trend calls have been risky all year long.  Accordingly I will have to be satisfied to simply call Wednesday uncertain.  Though if I absolutely had to hazard a guess, I'd say it looks lower.  I'd definitely not be going long tonight.

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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