Thursday, December 4, 2014

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher, low confidence.
  • ES pivot 2070.58.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Tuesday night's technicals played out nicely on Wednesday, despite the release of the Blah Book and another Speech of Nothing by the Empty Suit.  Net net, the Dow gained another 33 points which we'll take.  So on we go to Thursday with the reminder that this is the last post of the week as I have an unfortunate appointment that requires me to get up at the ungodly hour of 7 AM on Friday.

The technicals

The Dow: On Wednesday the Dow continued its march into record territory stopping just short of its upper BB at 17,940.  So modulo the RSI which stubbornly refuses to come off overbought for six weeks now, there's still really nothing bearish going on here.

The VIX: Last night I wrote "this one looks like more downside to come on Wednesday."  And sure enough, the VIX fell another 2.96%.  We're now near support and the lower BB both at 11.97 but with a fresh bearish stochastic crossover there still seems to be a bit more downside available here.

Market index futures: Tonight, all three futures are, like last night, just barely higher at 12: 15AM EST with ES up just two ticks. ES had a good day Wednesday but still could not break through resistance at 2075.  It did put in a bullish stochastic crossover but the overnight pin action isn't looking too hot.  In fact it's looking a bit tired.

ES daily pivot: Tonight the ES daily pivot rises from 2061.58 to 2070.58.   We're still above the new pivot so this indicator continues bullish.

Dollar index:  Tuesday's close above the upper BB did not faze the dollar which simply continued its march higher on Wednesday trading entirely above the BB.  We're now back to July 2010 for the last time we were at these levels and still no end in sight;  Heck we're still not even overbought yet so there's still more upside here.

Euro: And as the dollar rose the euro fell yet again giving up support at 1.2380 like it wasn't there to close under their lower BB.  We're now sitting right on multi-year support and the euro is way oversold so it's do or die here.  There's good reasons for the euro to find support here but the candles don't agree to that at all.  And pending that, I have to call this one lower yet again.

Transportation:  And finally on Wednesday the trans retraced more of Monday's big swoon to gain a decent 0.79% with a two white soldiers pattern.  With the stochastic positioning itself for a bullish crossover there now seems to be more upside potential than downside risk 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    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38

December   2       0      0           1       1.000     84

     And the winner is...

A nice recent two day run has brought the market right back to record resistance levels and while all the charts continue to look fairly bullish, they're feeling a bit tired to me.  My impression is that there's still a bit more room to run higher but we're in for a pause while we regroup for another attack at further new highs.  So I'm a bit reluctantly calling Thursday higher though I'm not expecting much.

Reminder - there will be no post Thursday night, so I'll see you again next Sunday night as usual.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

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