Tuesday, December 16, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1996.92.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.

Ugh - I picked another bad day to be wrong - a really bad day.  It is now apparent, even to me that this market is entirely oil-driven.  The technicals did appear to be going my way out the gate but then some noise about Libyan oil tankers or something appeared and it was back to the same old same old.  We'll take a quick look at the charts but mostly for entertainment value - it's not clear that you can do much predicting in the current bizarro market environment.

The technicals

The Dow: The aforementioned Dow looked like it was headed higher on Monday but then everything went off the rails quickly enough for yet another loss.  This is now looking just like the middle of October, minus the 200 day MA breakdown.  That one ended with a star, a hammer, and then another still lower star.  We've yet to see anything comparable, so with my hands dripping with blood from catching the falling knife, I now claim there's no end in sight to the slaughter.  Perhaps the 200 day MA at 16,858 can save us.

The VIX:   This is weird.  It felt really bad on Monday and yet the VIX was actually down 3.13%, on a giant spinning top, and green of all things.  But finally, after two big reversal warnings, we have a bearish stochastic crossover.  So I will once again (sight) claim that the VIX is ready to move lower.

Market index futures: Tonight, all three futures are higher at 12:38 AM EST with ES up  0.20%. ES put in a good spinning top reversal candle on Monday but we've now seen three god such candles in the past week and each one was followed by another nasty leg down.  So I'm done playing that game regardless of the advance in the overnighit.

ES daily pivot: Tonight the ES daily pivot ticks up from 2008.67 to 1996.92.   That still leaves ES just barely below the new pivot, though it just made a failed attempt to break above just after midnight.  Until we see a definite move on this, this indicator remains bearish.

Dollar index: On Monday the mighty dollar gained another 0.1% to arrest what looked like a swan dive off the first of the month.  Never mind that the dollar used to be worth 360 yen when I was little (and I'm not that old).  The dollar's recent uptrend remains intact.  The buck is also quite oversold and on the verge of a bullish crossover so I'd say it's looking higher on Tuesday.

Euro:  Meanwhile the euro put in a classic dark cloud cover on Monday and traded outside the rising RTC for a bearish trigger.  The stochastic is quite close to a bearish crossover the indicators remains quite overbought, and so this chart looks lower on Tuesday.

Transportation:  Well here's an interesting bit of bullish divergence.  With the Dow down 100 points, on Monday the trans gained a non-trivial 0.23% on a really big doji star.  And more importantly, it traded outside the descending RTC for a bullish setup.  This is my best clue that a reversal is at hand.  Oh, and with a highly oversold stochastic just about to form a bullish crossover.


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   3       3      3           1       0.571   -292

     And the winner is...

I think I'm pretty much done for the year.  I'm ready to take my 9.59% YTD profit, declare victory, and go home.  While there are technical reversal signs on the charts, I don't think they're going to matter as much as what oil does on Tuesday.  And that chart has been putting in a series of waterfall lows for days now.  Until we see a reversal in oil, this market will just keep going lower.  And yet I'm concerned about getting whipsawed now so I'm just going to call Tuesday uncertain

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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