Wednesday, December 31, 2014

Wednesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher only if ES remains above its pivot, else lower..
  • ES pivot 2079.42.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader closed.

And so we come to the end of another trip around the sun.  One more day to call it a year and perhaps the trickiest one of all to call.  But we'll give it a shot anyway and see what's what.  Just a reminder, this is the last post of the week as I'm taking Friday off.  So a very Happy New Year to all and we'll see you again Sunday night.

The technicals

The Dow:  After three days of dojis, the Dow lost 55 points on Tuesday to trade outside its rising RTC for a bearish trigger.  Remember when RSI hit 100 last Friday?  Well that was that.  With all the indicators coming back to life and headed lower but still overbought, this chart looks lower.

The VIX:  After finding support right on its 200 day MA last week with a hammer, the VIX popped back to 15 on Monday and then rose another 5.71% on Tuesday but with a doji star.  Purely technically, this reversal warning is overshadowed by z newly completed bullish stochastic crossover and an RSI that has clearly bottomed and begun moving higher.  So there could me more upside here on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:57 AM EST with ES up  0.19%  But ES had a bad day Tuesday with its biggest loss since the 16th, falling out of its rising RTC for a  bearish setup.  Add falling indicators and a bearish stochastic crossover and this chart looks lower.

ES daily pivot: Tonight the ES daily pivot falls from 2083.50 to 2079.42.   That drop was enough to put us just above the new pivot, so this indicators is bullish.

Dollar index:  After hitting another multi-year high on Monday, the dollar took a break on Tuesday with a little hanging man, down 0.24%.  But the prevailing trend continues higher, though I'm not so sure about Wednesday.  We might see a bit more downside here.

Euro:  Meanwhile the euro has exited its descending RTC for a bullish trigger and peeled away from its lower BB.  The indicators remain highly oversold but have begun moving higher so with a star on Tuesday there's a decent chance of a higher euro Wednesday.

Transportation:  On Tuesday the trans traded outside their rising RTC for a bearish setup on a red spinning top.  Indicators remain highly overbought and resistance around 9234 seems to be holding for now so I'd say this one seems to have more downside risk than upside potential.


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   5       3      6           1       0.600    241

     And the winner is...

Hmm - the last day of the year is historically bearish as the tax loss sellers do their thing and technically, all the charts are looking bearish tonight.  The only thing that bothers me is that the futures are all higher and I never like to go against the futures.  So I'm going to make a conditional call, given the proximity of ES to its pivot as I write.  IF ES can remain about its pivot by mid-morning Wednesday, we'll close higher, and if not, then lower.  That's all she wrote.  Happy New Year!

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.  The ESFT is now closed for 2014 so those are our final numbers.


  1. Wonderful, Blessed New Year and Cheers to the new trading opportunities that 2015 will surely bring. Have a happy, peaceful and prosperous 2015. Bonne année!!!


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