Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1859.08 - switching to "M" contract.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

So Tuesday night I called the market higher and it went lower.  Then last night I called it lower, so naturally it went higher.  Arrgh!  I hate getting whipsawed like that.  Oh well - one can't dwell on such things.  Let's see if we can at least get it right for the end of the week.

The technicals (daily)

The Dow: On Thursday the Dow retraced almost all of the losses from Wednesday which retraced all of the gains from Tuesday.  Up down up, who know where this one is going.  I'm surprised the VIX isn't higher.  And speaking of ...

The VIX:  The VIX can't figure out what it's doing either.  After Wednesday's bullish harami, Thursday gave us a bearish engulfing candle that once again cut back under the 200 day MA.  We're 7 for 9 crossing the MA now.  So this chart too makes no sense to me.

Market index futures: Tonight with futures expirations looming we switch to the "M" contracts.  The futures are mixed at 12:46 AM EDT with ES down by just one tick but YM up 0.02%.  The entire overnight so far has been basically flat.  There's a big tug-o-war going on between the bulls and bears and no indication yet of a winner.  If I had to guess, I'd say Friday would go lower just because Thursday was higher - not exactly a very profound sort of analysis.

ES daily pivot: Tonight the pivot rises from 1853.92  to 1859.08.  We remain above the new pivot, so this one is bullish.

Dollar index: On Thursday the dollar extended its big run-up from Wednesday with a 0.27% gap up doji to form 2/3 of an evening star.  But we need confirmation of this pattern on Friday..

Euro: And of course the euro extended its losses on Thursday, finally falling out of its long-running rising RTC for a bearish setup.  Indicators have just gone oversold but there's no good sign of a move higher here at the moment.

Transportation: In a bit of bearish divergence, the trans dropped on Thursday as the Dow rose, giving us a dragonfly doji that sent the  stochastic bending around to almost make a bearish crossover.  But nothing definite here either.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March      9       3      2           0       0.750    265

     And the winner is...

It is rare that I see the charts as opaque as they are tonight.  I don't know if it's the Fed, or China, or Putinoia but Mr. Market just doesn't seem to know which way he wants to go.  And neither do I.  Accordingly, I can only call Friday uncertain.  >shrug<  Have a great weekend and see you again Sunday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Thursday lower

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

• Thursday lower, low confidence.
  
• ES pivot 1861.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well I sure wasn't expecting a triple digit dive from the Dow after Wednesday's Fed meeting.   What Aunt Janet had to say honestly didn't sound all that bad to me.  But Mr. Market clearly doesn't care what I think and he took a petulant tumble in the wake of the 2 PM announcement.  Go figure.  This is why I make it my policy to never call Fed days, and this is exactly what I get for breaking my own rules.  Doh.  At least we're still here to enjoy another revolution around the planet, so let's take advantage of that to call Thursday.

The technicals (daily)

The Dow: What a difference a day makes.  Our two white soldiers beat a hasty retreat on Wednesday and are now hunkered down in a foxhole as a 114 point drop in the Dow formed a bearish dark cloud cover.  So now this chart looks bearish.

The VIX:  After breaking down through its 200 day MA, the VIX just as quickly broke back above on Wednesday, its sixth trip in eight days now.  The candle is vaguely bullish harami but interestingly VVIX was lower on Wednesday, albeit on a  long-legged doji.  So overall this one is too hard to call.

Market index futures: Tonight all three futures are lower at 12:41 AM EDT with ES down by 0.31%.  Like the Dow, the pattern in ES has suddenly turned bearish and the overnight is confirming this.  What looked like a nice bullish stochastic crossover last night actually seems ready to fold over into a bearish one.  So this chart too looks bearish now.

ES daily pivot: Tonight the pivot drops from 1865.75  to 1861.25.  We fell below the pivot Wednesday afternoon and remain below the new number as ES continues drifting lower in the overnight so this indicator is now bearish.

Dollar index: The dollar had a Fed-induced spike on Wednesday, jumping 0.74% to pop out of its long-running descending RTC for a bullish setup.  Indicators are now rising and nowhere near overbought so there still plenty of room to run here..

Euro: And of course the euro took a corresponding dump on Monday though it narrowly missed falling out of its descending RTC.  The overnight seems to have found some support, so we could see a DCB or relief rally here on Thursday.

Transportation: The trans weren't hurt as much as the Dow on Wednesday with a vague harami but also a bullish stochastic crossover remaining intact.  So this one is also too tough to call.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March      9       2      2           0       0.818    374

     And the winner is...

This is why I despise Fed days.  One short speech and my entire technical thesis flew out the window.  And there doesn't seem to have been much in the way of second thoughts in the wake of Wednesday afernoon's announcement so I'm going to guess that the selling is not over yet and that we close Thursday lower.  Being net long, I'll be happy to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Wednesday higher

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

• Wednesday higher, low confidence.
  
• ES pivot 1865.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

"I vill require ze Czechoslovakian boy's desk too!"

Huh - on Tuesday the market appeared to be relieved by Adolf Putin's pronouncement that now that he had annexed the Sudetenland, uh I mean the Crimea, he had no further designs on the rest of Czechoslovakia, uh I mean Ukraine.  And clearly Neville Obama is sleeping easier now.  Isn't it nice to have Peace in Our Time.  Of course this time it's different.  Or is it?

One way or the other, we continue on our never-ending quest to sniff out the market's daily direction, using the charts as our guide.  Next on the agenda - Wednesday.

The technicals (daily)

The Dow: With two white soldiers marching valiantly onward backed by a bullish stochastic crossover and indicators rising off oversold, this chart now looks like it's headed for a retest of the 16,462 resistance line again soon.

The VIX:  Last night I wrote "looking bearish here for Tuesday".  And indeed it was, with the VIX dropping another 7.16% on a gap-down candle that dove right back through the 200 day MA again, its fifth visit there in the last seven sessions.  Adding a fresh bearish stochastic crossover and indicators now moving lower off overbought and this chart still looks bearish for Wednesday.

Market index futures: Tonight all three futures are barely higher at 12:37 AM EDT with YM up just 0.04% and ES, well it just turned flat as I write.  The bullish RTC setup I wrote about last night came through on Tuesday giving us two white soldiers on this chart too.  With rising indicators, a nicely completed bullish stochastic crossover and no resistance til 1878 and it looks like there's still some upside left here.

ES daily pivot: Tonight the pivot rises again from 1850.33  to 1865.75.  Despite this big gain, we still remain above the new pivot so this indicator remains positive.

Dollar index: On Tuesday the dollar posted a tiny gain but it remains mired in a descending RTC that goes all the way back to the end of January.  And there's still no sign that it's over yet.

Euro: And on Tuesday the euro gave us a second doji star in a row.  And yet it continues to drift slowly higher.  Like the dollar's ongoing slump, there's no reason to think the euro is going to reverse any time soon.

Transportation: The trans posted some decent gains on Tuesday that brought the, right back to the 7595 resistance area, a sticking point all month long so far.  Will Wednesday be the charm?  Hmm - could be - unlike all those other failed attempts to move higher, this time we're equipped with a fresh bullish stochastic crossover and indicators that are still well off overbought.  So I have to think there's more upside left there.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March      9       1      2           0       0.900    488

     And the winner is...

I generally don't call Fed days because of the headline risk involved but the consensus seems to be that the market will like what Aunt Janet has to say.  And this week is historically bullish anyway.  And the technicals are all lining up bullish so I guess I'll just go out on a limb and call Wednesday higher.  But I'll be watching closely at 2 PM.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1850.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The luck o' the Irish smiled on the Street on Monday and had the traders dancing a jig as the Dow piled on the green to the tune of 182 points.  Apparently, all thoughts of Putinoia were dispelled to snap a five day losing streak.  So with all the standard Irish cliches out of the way, let's continue our hunt for the pot o' gold (OK, just one more) as we rack up the charts for Tuesday.

The technicals (daily)

The Dow: Last night the Dow was giving early warning signals of wanting to reverse but I decided to wait for confirmation, thereby giving up a few points.  But hey, I really wasn't expecting a pop like this.  In any case, we've got the confirmation now.  While we're still in a descending RTC, RSI has now bottomed and the stochastic is now very close to executing a bullish crossover.  The only thing is that the Dow has been taking a breather lately on the day after a big push so we may not see much higher on Tuesday.

The VIX:  Last night I wrote of the VIX, "what blasts up, always comes down".  And sure enough, the VIX gapped down over 12% on Monday to complete a bearish evening star.  Indicators now peaked at overbought and bearish stochastic about to execute - looking bearish here for Tuesday.

Market index futures: Tonight all three futures are modestly higher at 12:47 AM EDT with ES up by 0.08%.  Monday's jump in ES very nearly took it out of its descending RTC and in fact the new overnight candle is currently outside which would be a bullish setup if it holds.  Also, we now have a completed bullish stochastic crossover and RSI is just off oversold.  So this chart is now confirmed bullish.

ES daily pivot: Tonight the pivot rises from 1844.00  to 1850.33.  After breaking above the old number early Monday we remain above the new pivot so this indicator continues bullish.

Dollar index: Last night I wrote "there's no indication that this downtrend is over yet" and indeed we dropped another 0.06% on Monday even as RSI looks to have bottomed.  But the descending RSI remains intact and I think, so does the downtrend.  This is one trend you don't want to fight.

Euro: The euro is finally starting to show signs of breaking out of its congestion area with a narrow spinning top on Monday.  The overnight is continuing higher and just caused a bullish stochastic crossover form a high level - always good for a day or two of moving higher.

Transportation: On Monday the trans confirmed last Friday's star with a nice gain.That now turns this chart bullish.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March      8       1      2           0       0.900    399

     And the winner is...

On Monday we got some of the bullish confirmations of last Friday's dojis that I was looking for.  Also, this week is historically quite bullish, so all in all I'm just going to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Monday uncertain

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

• Monday uncertain.
  
• ES pivot 1844.00 .  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well it looks like Friday's post somehow never made it out (probably because I uh, forgot to hit "Publish" (doh!)).  That's what I get for not bothering to read my own blog.  Sigh.  FWIW, I was calling the day lower and that's what we got.  Now let's see where Monday is going and we'll try to make sure this gets blasted out to the Webiverse on time.

The technicals (daily)

The Dow: OK, so despite last Thursday's big dump we did not get a DCB on Friday, continuing instead even lower.  That drove RSI well into oversold, though at 19 not extremely so.  Same goes for the stochastic - still not ready to commit to a bullish crossover.  The only stopping point I see now is the lower BB at 15,985.  The support at the even 16K level may be of as little help as it was the last time we dove under (ie. none).

The VIX:  After blasting through its 200 day MA on Thursday and its upper BB too, on Friday the VIX just kept right on going, fueled by Putin, fake Chinese economic numbers (they're all fake), the phase of the moon, and whatever for a 10% gain.  That took it from oversold to overbought in just one day, a rare occasion.  That also puts the chart of the last five days in a classic exponential and we all know what that means - what blasts up, always comes down.  While we don't actually have a reversal candle here at the moment, you can bet it won't be long in coming.

Market index futures: Tonight all three futures are vaguely flat at 12:38 AM EDT with YM down by just 0.01% and ES dead even.  On Friday ES gave us a nice dragonfly doji.  Coming as it did after a down week, this is a pretty good reversal indicator.  The indicators are now quite oversold though the stochastic looks to be still a day away from a bullish crossover, so we really need confirmation of this doji on Monday.

ES daily pivot: Tonight the pivot drops from 1854.42  to 1844.00 even.  We remain below the new pivot so this indicator remains bearish.

Dollar index: The dollar remains in a month and a half long descending RTC and while the indicators are now quite oversold, there's no indication that this downtrend is over yet..

Euro: And so of course the euro is in a corresponding rising RTC.  After being unable to clear 1.3904 for three days, the overnight seems to be gearing up for another attack.  With the upper BB now at 1.3944, that level is not out of reach.

Transportation: The trans lost just a bit on Friday for a doji star.  This would suggest a reversal but the indicators are not yet on board so we have to wait for confirmation here.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March      8       1      1           0       0.900    399

     And the winner is...

Tonight the technicals are shows some decent reversal signs but they all require confirmation and I'm not quite willing to go out on that limb just yet, particularly after Sunday's Anschluss vote in the Crimea.  Since this came as a complete surprise to absolutely no one, it may not move the markets on Monday but there are other signs that the bottom may not quite be in yet.  The SPX Hi-Lo indicator isn't all that low yet, though the NYSE A/D line has stopped making lower highs and lower lows.  So it definitely doesn't look bearish to me but it's not quite bullish enough for me to call it higher, so that only leaves one choice: Monday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.