Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Friday higher, low confidence.
  
• ES pivot 1838.17.  Dropping below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Ouch!  Another day, another miss for the Night Owl.  Clearly the current market does not agree with my forecasting style.  I guess it just proves the old adage that everyone's hot until they're not.  Tonight we retrench and try to figure out what's going on with Mr. Market this month that has me stymied.

The technicals (daily)

The Dow: I'm afraid I have no technical explanation for Thursday's 65 point drop in the Dow.  In fact the action all year so far has been pretty herky-jerky as the market tries to find a direction.  I'm happy to admit I haven't a clue.

The VIX:  At least I was right about the VIX being at a turning point when I wrote last night "I'd be very surprised if the VIX had much more downside left to it" as the VIX rose 2.04% on Thursday confirming the hammer.  But form here I'm kind of at a loss - the stochastic has stopped oscillating, we're between BB's and there's no decent RTC to follow.  Even VVIX is in the same boat.  So I'm stumped on this chart too.

Market index futures: Tonight all three futures are higher at 12:48 AM EST with ES up by 0.10%.  Thursday's candle was something of a dark cloud cover but it remained inside the rising RTC and the indicators are basically just wandering aimlessly.  There is really not much to go on here for Friday.

ES daily pivot: Tonight the pivot barely dips from 1839.58  to 1838.17.  There isn't even any clarity here as the overnight drift higher in ES has glued itself right on the new pivot.  Sitting on the fence like that, this indicator is neither bullish nor bearish.

Dollar index: At least we have a pattern here.  On Thursday the dollar lost 0.15% on a bearish engulfing pattern that basically completes an evening star.   Also RSI and momentum are now falling but we have a rising stochastic.  It's not often the indicators don't even agree with each other nut that just emphasizes the nervous nature of the markets right now.  I'm not calling this one.

Euro: Same deal with the euro, three up then two right back down.  Then a gain Thursday to leave us right in the middle of that entire range.  No idea.

Transportation: After touching their upper BB on Wednesday, the trans dropped 0.63% on Thursday giving up all of Wednesday's gains and then some.  But that just leaves us a 7456, a level we've seen every day for the past five sessions.  RSI is overbought, but only a little.  The only thing I see here is a bearish RTC setup but it's not really much to go on.  So no call here either.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      6      4           0       0.143     -315

     And the winner is...

Wow - it's rare that I can't find some indication of market direction from any of my favorite charts but tonight is one of those times.  I'm completely shut out here, and on top of everything else it's op-ex Friday so all I can do is call Friday uncertain.  And with next Monday being a holiday, we'll see you again Monday night rather than Sunday.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Thursday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday higher, low confidence.
  
• ES pivot 1839.58.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

This is very odd.  It's feeling like the summer of 2011 or whenever it was with the Greek/European debt catastrophe all over again with wild opposite triple digit swings in the Dow every day - but this time the VIX isn't in the stratosphere, it's down in the dumps.  Huh?  I'm not gonna lie (why do people always tell you they're not going to lie - do you otherwise expect they would?), I've been at this for 10 years now and I don't remember another situation like we've got now.  I don't get it.  If someone can explain these market moves to me, I'm all ears.  Meanwhile, we'll just hit the charts again even though that doesn't seem to be very productive lately.

The technicals (daily)

The Dow: After retracing Tuesday's big dump on Wednesday, the Dow continued on higher on Thursday to put us right back in last week's congestion zone.  It's like this week never even happened.  But there were some technical effects.  We shot right out of the descending RTC for a bullish setup and we got a bullish stochastic crossover.  RSI is now off oversold so with two white soldiers this chart now officially looks bullish.

The VIX:  The VIX has been a bit squirrely lately too.  It ended Wednesday exactly unchanged on a tall hammer tacked on to the bottom of Tuesday's big drop.  That leaves the VIX right about at almost year-long support.  With the stochastic about to form a bullish crossover I'd be very surprised if the VIX had much more downside left to it at these levels.

Market index futures: Tonight all three futures are modestly higher  at 12:41 AM EST with ES up by 0.05%. ES is now in a new rising RTC and I'm impressed that it has the chops to continue higher at all after two days of decent gains.  In fact we're now above last months' record close of 1841 and the upper BB isn't til 1851.  And with two white soldiers and indicators not yet overbought, this chart looks continued bullish.

ES daily pivot: Tonight the pivot jumps from 1826.67  to 1839.58.  But we were so far above the old number that even with a flat overnight, we're still above the new pivot, so this remains bullish.

Dollar index: At least I can still get something right - last night I wrote "this chart is now looking mildly bullish.".  That proved to be something of an understatement as the dollar put in 2/3 of an evening star with a big gap-up inverted hammer that peaked at recent resistance just below its upper BB.  And yet it also caused a bullish stochastic crossover.  Thusly conflicted, we're not calling this chart tonight.

Euro: And I got the euro right too when I said last night "it's looking bearish for Wednesday."  The euro put in a big red candle to finish at 1.3599.  That was enough to get indicators off overbought, create a bearish stochastic crossover, and drop it out of its rising RTC for a bearish setup.  We are however seeing a 0.11% gain in the overnight but it's not clear how long that can hang on.  I'm going to guess it won't.

Transportation: After some yo-yo action the past three days, the trans resumed their march into record territory on Wednesday, hitting the upper BB in the process and moving the indicators overbought, moving right back into their rising RTC.  That all looks bullish to me and I don't yet see a reversal sign here.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.

Wk.# Week   % Bullish  % Bearish  NightOwl Poll SPX  Accuracy Poll

 

  1  12/31      40         48        -      -   1402   0/1

  2  1/7        47         30        +      +   1466   1/2

  3  1/14       52         15        +      +   1472   2/3

  4  1/22       50         21        +      +   1486   3/4

  5  1/28       44         26        +      +   1503   4/5

  6  2/5        40         36        +      +   1513   5/6

  7  2/11       43         25        +      +   1518   6/7

  8  2/19       21         43        -      -   1520   6/8

  9  2/25       30         52        -      -   1516   6/9

 10  3/4        29         39        -      -   1518   6/10

 11  3/11       41         26        +      +   1551   7/11

 12  3/18       41         37        +      +   1561   8/12

 13  3/25       31         38        +      -   1557   8/13    9/13

 14  4/1        38         38        +      x   1569   9/14    9/13

 15  4/8        32         50        -      -   1553   9/15    9/14

 16  4/15       33         50        +      -   1589   10/16   9/15

 17  4/22       19         63        -      -   1555   10/17   9/16

 18  4/29       33         58        -      -   1582   10/18   9/17

 19  5/6        50         31        +      +   1614   11/19  10/18

 20  5/13       37         37        +      x   1634   12/20  10/18

 21  5/20       50         25        +      +   1667   12/21  10/19

 22  5/28       37         33        +      +   1650   12/22  10/20

 23  6/3        29         38        -      -   1631   13/23  11/21

 24  6/10       38         38        +      x   1643   13/24  11/21

 25  6/17       32         40        +      -   1627   14/25  11/22

 26  6/24       13         46        -      -   1592   14/26  11/23

 27  7/1        25         42        -      -   1606   14/27  11/24

 28  7/8        42         29        +      +   1632   15/28  12/25

 29  7/15       48         22        +      +   1680   16/29  13/26

 30  7/22       42         19        +      +   1692   16/30  13/27

 31  7/29       39         17        +      +   1692   16/31  13/28

 32  8/5        46         27        +      +   1710   16/32  13/29

 33  8/12       32         41        -      -   1691   17/33  14/30

 34  8/19       23         54        -      -   1656   17/34  14/31

 35  8/26       23         50        -      -   1664   17/35  14/32

 36  9/3        21         54        -      -   1633   17/36  14/33

 37  9/9        35         30        +      +   1655   18/37  15/34

  28 9/16       40         28        +      +   1688   19/38  16/35

 39 9/23        52         36        +      +   1710   20/39  17/36

 40 9/30        39         43        +      -   1692   21/40  17/37

 41 10/7        30         33        +      -   1691   22/41  17/38

 42 10/14       48         22        +      +   1703   23/42  18/39

 43 10/21       57         30        +      +   1745   24/43  19/40

 44 10/28       59         19        +      +   1760   25/44  20/41

 45 11/4        42         25        +      +   1762   26/45  21/42

 46 11/11       39         39        +      x   1771   27/46  21/42

 47 11/18       52         30        +      +   1798   27/47  21/43

 48 11/25       58         29        +      +   1805   28/48  22/44

 49 12/2        56         26        +      +   1806   29/49  23/45

 50 12/9        55         30        +      +   1805   30/50  24/46

 51 12/16       30         43        +      -   1775   31/51  24/47

 52 12/23       38         29        +      +   1818 

  2014

 01 12/30       50         23        +      +   1841

 02  1/6        40         44        +      -   1831 

 03  1/13       ??         ??        +      ?   1842

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  The "Poll" column is how the majority of participants voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that I voted bullish four weeks ago, but the majority of the poll voted bearish so I was right and they were wrong.  Therefore with just one week left to go, the Night Owl continues 2013 with an accuracy of 31 for 51, or 61%.   And the poll as a whole dropped a bit to 24 for 47 or 51%.   Next week we'll be able to fill in the last remaining blank for 2013 and come up with the final numbers for the year.

This week we see that Ticker Sense has not updated the poll, even though the week is almost over (I'm not sure what's up with that) , so I have no new numbers to report other than the fact that I personally voted bullish once again this week.  The last time I voted bearish was last September 3rd and for the life of me I'm still not seeing any reversal signs on either the weekly or monthly SPX charts.

Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      5      4           0       0.167     -250

     And the winner is...

I almost hate to make any call anymore having been so wrong this month, but the technicals do look bullish to me tonight so for whatever that's worth I'm going waay out on the limb and calling Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday uncertain.
  
• ES pivot 1826.67.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Arrgh!  Tuesday's 116 point pop in the Dow helped propel the Night Owl to my worst prediction performance ever, now an abysmal 0.167 average for the month so far.  At least I resisted the temptation to go short last night.  But trading is a game of persistence if nothing else.  I'm reminded of the time I went to Vegas to play blackjack, played a perfect basic strategy and still lost five hands in a row thus wiping me out.  Fortunately, I'm a bit better bankrolled here today so we soldier on to see if we can finally get one right for Wednesday.

The technicals (daily)

The Dow: The Dow recouped more than half of Monday's losses on Tuesday.  In fact it was almost exactly a perfect 0.618 Fibonacci retracement, if you're into that sort of thing.  This tall green marubozu is bullish ad it brought the stochastic very close to a bullish crossover.  The other indicators have also bottomed at oversold so this chart suddenly turns bullish again.

The VIX:  Meanwhile, I was wrong about the VIX which dropped 7.53% on Tuesday.  The bullish RTC trigger failed to produce and we now have a bearish harami.  But indicators remain just off oversold.  I've been burned so badly with this chart this month I'm not touching this one tonight.

Market index futures: Tonight all three futures are basically unchanged at 12:44 AM EST with both ES and NQ dead even and YM up just 0.03%   We got a big retracement in ES on Tuesday leaving us back in the congestion zone form last week.  The indicators are kind of bouncing around in No Man's Land between oversold and overbought, so no help there.  This chart is too tough for me.

ES daily pivot: Tonight the pivot rises from 1821.08  to 1826.67.  This move, plus the ES's rise above the pivot at 10 AM on Tuesday leaves this indicator bullish tonight.

Dollar index: And I missed the dollar call for Wednesday too as it put in a small gain for a bullish harami.  The stochastic is now down to levels from which bullish crossover start so I'd say this chart is now looking mildly bullish.

Euro: Amazingly, I managed to get both the dollar and the euro wrong for Tuesday, as the euro posted  a tiny gain on a second doji in a row.  But maybe I was just a day early because the euro is now falling hard in the overnight, down 0.28% so far.  So now it's looking bearish for Wednesday.

Transportation: The trans are now in yo-yo mode with a big 1.29% nearly erasing Monday's losses and after all that action leaving us just about where Friday closed.  It's not making much sense, technically so I have no opinion here.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      5      3           0       0.167     -250

     And the winner is...

I really really wish that the people from the Fed would just shut up outside of Fed meeting days.  It really throws a big monkey wrench in the technicals.  And having been wrong, what, now four days in a row, I'm outta here - Wednesday uncertain.  That's all she wrote.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday lower, low confidence.
  
• ES pivot 1821.08.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Wow, I am really glad I called Monday as "uncertain", because I sure didn't expect a 179 point plunge in the Dow.  Apparently, just when we thought Mr. Market had gotten over his taperphobia, turns out he hadn't.  Thanks a lot, Lockhart.  These are the sorts of days that technical analysis just can't help - fact of life, oh well.  So let's move on and see how Tuesday will shape up, technically-wise.

The technicals (daily)

The Dow: Monday's big dump did some technical damage to the Dow.  It solidified the descending RTC and put a definitive end to the wishy-washy action of the past week.  It also drove the indicators just barely into oversold but none of this is a reversal sign so this chart continues to look bearish.

The VIX:  And as the Dow dropped, the VIX shot up nearly 10% on Monday in a move that exited the descending RTC in a big way for a bullish setup.  It also caused a bullish stochastic crossover and caused RTC to bottom at oversold.  So this chart's now looking bullish.

Market index futures: Tonight all three futures are marginally lower at 1:25 AM EST with ES dead flat but both YM and NQ down 0.06%.  ES took a big hit on Monday with a giant red candle that sliced clear through the rising RTC for a bearish setup and formed a bearish stochastic crossover.  While the overnight seems to be stabilizing a bit at this hour, there's really nothing technically bullish on this chart right now.

ES daily pivot: Tonight the pivot dives from 1835.50  to 1821.08.  And even that move wasn't enough to put ES back above the new pivot, so this indicator is still bearish tonight, by a fair amount.

Dollar index: Last night I wrote "this chart remains bearish" and the dollar indeed lost another 0.18% on Monday to establish a new descending RTC and set the indicators moving off overbought towards oversold.  With two black soldiers, this chart still remains bearish.

Euro: The euro did not mirror the dollar on Monday, putting in instead a lopsided spinning top and unable to make any headway past resistance at 1.3686.  With indicators nearly overbought and the overnight moving lower and just dipping below the pivot, this chart looks bearish.  Of course that means either this call is wrong, or my dollar call is wrong - can't help it - that's just how these two charts look to me.

Transportation: Last night I mentioned that the trans looked to be going exponential and said "a top just has to be coming soon".  And that's exactly what happened - the trans rose until 11 AM when they hit their upper BB and then boom, down in flames for a 1.40% loss.  Those pesky exponentials get you every time.  So we now have an RTC exit for a bearish setup, a bearish engulfing candle, indicators turning back down and a stochastic getting set for a bearish crossover.  So this chart looks distinctly negative now.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      4      3           0       0.200     -134

     And the winner is...

After such a sudden and unexpected move down I really want to say we have a DCB coming but I just can't ignore the fact that all the charts are now looking pretty ugly.  On the bright side, Monday's move brought us very quickly a lot closer to being oversold, but for now all I'm seeing is Tuesday lower.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.

Monday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday uncertain.
  
• ES pivot 1835.50.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

January is not a kind month to the Night Owl.  Last year was the only month I had a negative prediction ratio and so far this year is starting out no different.  Though both the SPX and Nasdaq were higher on Friday, the Dow was not, so that counts as a miss.  With a disappointing jobs number now behind us, let us consult the charts once again to see whither goeth Monday.

The technicals (daily)

The Dow: It is possible to draw a descending RTC for the Dow from the high on December 31st, but it's not a very good one (Pearson's = just 0.786).  If anything the Dow found support, once again in the 16,426 area.  Indicators continue to drift lower but are not yet down to oversold.  The candle was a spinning top, the second in a row so who knows.  Overall, it looks weakly bearish but I'm tired of getting burned so no call here tonight.

The VIX:  At least I nailed this one when I wrote last Thursday "the VIX is headed down on Friday".  And we got some more divergence as it dropped 5.82% while the SPX gained just 0.23% and the Dow was actually lower.  At 12.14, the VIX is now right on some pretty decent support and has now gone oversold.  The stochastic is not quite yet ready for a bullish crossover and VVIX looks to be in no hurry to move higher.  So overall, no reversal sign here quite yet, though we're definitely getting close.  Monday could be a bottoming day for the VIX.

Market index futures: Tonight all three futures are lower at 12:13 AM EST with ES down by a non-trivial 0.22%.  After three consecutive days of dojis, ES is starting to feel toppy here.  The Sunday overnight candle is developing as bearish engulfing and OBV has just turned lower.  RSI is nearly overbought and the stochastic is flattening out for a bearish crossover.  I'm not feeling the love here tonight.

ES daily pivot: Tonight the pivot rises from 1832.08  to 1835.50.  Unfortunately, the overnight dip in ES combined with the gain in the pivot dropped us below the new number right at midnight so this indicator turns bearish.

Dollar index: Last Thursday night I wrote about the dollar that  "the next logical move is lower".  .And logic prevailed as the buck dropped a big 0.47% on Friday with a tall red marubozu that peaked all the indicators on overbought.  It also gave use a bearish stochastic crossover so with the usual caveats about the possibility of a DCB after such a big one-day move, this chart remains bearish.

Euro: And last Thursday night I also wrote "the euro looks higher for Friday".  And it was indeed with a big payoff from Thursday's RTC bullish trigger.   And it's continuing higher in the Sunday overnight.  With a nicely-completed bullish stochastic crossover and indicators still only halfway to overbought, I see further upside for the euro.

Transportation: The trans ended last week remarkably with a 1.17% gain that trounced the Dow's 0.05% loss.  In fact the damn things are going quite exponential and have very nearly hit their upper BB at 7488.  Even at that, they're still not yet overbought.  You'd think this would be bullish for the Dow but whatever cross-currents are operating right now are beyond me - I don't get it.  In any case, it's quite remarkable.  I don't know how much higher the trans can go from here.  A top just has to be coming soon.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    1      4      2           0       0.200     -134

     And the winner is...

Tonight we have the Dow continuing its conflicted course, the VIX possibly bottoming, the futures looking bearish but the trans looking quite bullish.  After getting burned so often this month so far and with these sorts of conflicting signals, I'm just going to have to call Monday uncertain.

ES Fantasy Trader

Portfolio stats:  the account continues the new year at $100,000 as we wait for the right moment to enter our first trade of 2014.