Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1841.00.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

It was a close one on Thursday as the Dow meandered close to the unchanged line but ultimately it did end down a bit saving my call for a lower close.  As we continue this trendless trading, can we perhaps finally glean some direction from the charts for Friday?  No telling unless we take a look ...

The technicals (daily)

The Dow: So just as on Wednesday we moved from the lower end of the trading range to the upper, on Thursday we dropped right back down again.  In fact, if you squint a bit you can sort of see a developing megaphone.  Thursday's big doji star certainly seems to suggest that Friday may head right back up again.  But Thursday's action was still not the break we're looking for.  So for the time being, we're stuck in the 16,270 - 16,367 range.

The VIX:  I thought the VIX might finally be able to capitalize on a big one day gain but it was not to be as it came right back down again on Thursday, off 2% to break its 200 day MA again - now 12 times in 14 days.  With predominately sideways action here, there's just no telling where we're going next.

Market index futures: Tonight all three futures are higher at 12:39 AM EDT with ES up by 0.22%.  On Thursday ES remained in its vaguely descending RTC with a small red spinning top.  But these have not been worth much lately.  We did test an important support level at 1839 and it held.  And the overnight so far seems to be confirming the doji, so we now have at least a suggestion of a move higher on Friday, albeit one that requires confirmation.  We also do not yet have a bullish stochastic crossover.

ES daily pivot: Tonight the pivot falls again from 1850.92  to 1841.00.  That drop combined with ES's gain in the overnight finally puts us back above the new pivot so this indicator now turns bullish.

Dollar index: The dollar continues its bizarre march higher backwards with a third straight gain on a red candle.  I thought we were going lower but it was not to be.  I just don't get this chart.

Euro: Last night I wrote "the selling may not be over yet:" and it wasn't s the euro put in a third red candle in a row.  We now have a new descending RTC going here and no indication of a reversal yet, despite now having entered oversold territory.

Transportation: Last night I wrote "DCB or at least a doji is possible on Thursday here.".  Well the cat did not bounce but we did get a nice hammer that left the trans oversold.  SO there's at least a hint of a reversal here, though one which requires confirmation.


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     11       3      5           0       0.786    296

     And the winner is...

Tonight I'm starting to see signs that a move higher is coming, but they're signs that require confirmation.  It would be premature to call the market higher just yet, but it would also not be prudent to be going short at these levels.  So I guess again I just have to call Friday uncertain.  We should have more clarity after the bell rings.  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, medium confidence..
  
• ES pivot 1850.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

So the pattern continues - with the Dow going from the upper edge of its recent trading range to the lower in one day.  It's actually oddly reminiscent of the pattern we were seeing exactly one year ago.  That one didn't end until Aprils 1st with a break higher.  We now consult the charts for a clue to Thursday as March grinds on to a close.

The technicals (daily)

The Dow: Last night I wrote "from recent experience, the only thing you can think is that Wednesday will move lower".  Well I guess never discount the power of experience as the Dow did indeed move lower on Wednesday by a good 99 points.  And with a bearish engulfing pattern at that.  That was also enough to finally complete the bearish stochastic crossover too.  And with indicators now moving lower and money flow (which Dr. Steenbarger just recently mentioned again - that's where I first learned about this) moving lower, this chart now looks bearish.

The VIX:  Last night I wrote of the VIX "the next logical move would seem to be higher.".  So never discount the power of logic either as the VIX also rose a solid 6.5% on Wednesday.  And moved right back through its 200 day MA yet again for the 11th visit in 13 days.  This time though we're still oversold with an new bullish stochastic crossover so there seems to be some gas in the tank for continued higher on Thursday.  A nice bullish engulfing pattern in VVIX supports this idea.

Market index futures: Tonight all three futures are higher at 12:57 AM EDT with ES up by 0.15%.  ON Wednesday ES put in a red candle that broke support at 1850 and also gave us a bearish RTC setup.  And even at that we're not yet oversold so it's not clear what significance to attach to the overnight gain.  It may simply be a reaction to the sell off that began at 3 PM Wednesday.  In any case, this chart is now looking bearish.  Note also that money flow has been declining three straight days now, another bearish sign.

ES daily pivot: Tonight the pivot drops from 1857.25  to 1850.92. Despite this, we are still below the new pivot by a good five points so this indicator remains bearish.

Dollar index: On Wednesday the dollar put in a funny red hanging man that actually was a 0.10% gain..  But the overall gestalt here remains bearish.

Euro: Last night I wrote that the euro chart seemed to "suggest lower for Wednesday".  And it was a good suggestion as the euro fell to 1.3789, its third straight day of lower highs.  That also formed a bearish stochastic crossover from an oversold position and that's a bearish sign indeed.  So the selling may not be over yet.  And the pin action in the overnight in fact continues lower.

Transportation: Last night I refused to guess on this chart which is good since the trans took a 1.58% dive on Wednesday that I wasn't expecting.  That was enough to send the indicators oversold but not enough to even start a bullish stochastic crossover.  But because of the magnitude of this drop, a DCB or at least a doji is possible on Thursday 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     10       3      5           0       0.759    291

     And the winner is...

Unlike the past few days when it was hard to get a clear reading on the charts, tonight we're seeing a number of bearish signs, enough in fact to call Thursday lower.

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 uncertain

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

• Wednesday uncertain.
  
• ES pivot 1857.25.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Parable of the Day

"Give a man a technical chart and he'll be confused today.  Teach a man technical analysis and he'll be confused for the rest of his life."

                          - The Night Owl
Recap

Mr. Market's acute case of indecision rolls on with Tuesday's 91 point gain being just barely over the upper end of the recent trading range.  A trend!  My kingdom for a trend!  Will Wednesday finally be the day?  Perhaps the charts have a clue.

The technicals (daily)

The Dow: I had kind of informally drawn the upper end of the Dow's recent range at 16,350.  Does Tuesday's close of 16,368 represent a breach of that?  Ehhh, probably not.  All it did was jack the indicators further into overbought territory.   And the stochastic has both its lines on top of each other.  So from recent experience, the only thing you can think is that Wednesday will move lower.  That's hardly an insightful observation but it's all I've got tonight.

The VIX:  On Tuesday the VIX dropped through its 200 day MA again, touching it for the 10th time in 12 days.  That leaves us right at a support level at 14 with oversold indicators.  With this inverted hammer, the next logical move would seem to be higher.

Market index futures: Tonight all three futures are higher at 12:18 AM EDT with ES up by 0.12%.  On Tuesday ES gave us some confirmation of Monday's spinning top, such as it was, in the form of a green bullish engulfing candle.  And the new overnight is continuing higher with the stochastic swinging back around into position for a bullish crossover at a high level.  So this chart now looks bullish.

ES daily pivot: Tonight the pivot rises from 1852.25  to 1857.25.  We remain above the new pivot so this indicator remains positive.

Dollar index: Last night I thought the dollar was going lower on Tuesday.  Well the candle was indeed red, but the close was up - all of 0.01%.  This did give us a bearish stochastic crossover though so I'm going to stick to my guns and claim that the dollar's going lower on Wednesday.  This time for sure :-).

Euro: On Tuesday the euro put in a tall tall hanging man that would seem to suggest lower for Wednesday, even though the indicators remain oversold.  And the overnight action is in fact continuing lower, down 0.10% so far.

Transportation: And finally on Tuesday the trans tried to break out of their recent slide, gaining half a percent but remaining inside a descending RTC.  We now almost have a new bullish stochastic crossover, but not quite so this chart remains frustratingly opaque tonight.


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     10       3      4           0       0.759    291

     And the winner is...

Tonight we're facing a mixed picture.  The futures are looking higher but the Dow and the VIX are guiding lower.  The only really clear chart we've got now is Dr. Copper, who looks to have finally bottomed.  When and if that translates to broader market gains remains to be seen.  And as Dr. Steenbarger observed today, SPY money flow has been declining for a month now, a trend also in evidence in the Dow, though not as bad.

So bottom line, there's too much conflict in the charts tonight to make any sort of rational judgement.  Therefore once again I have to call Wednesday uncertain.  It means leaving money on the table, but I'd rather miss the bus once in a while than get on the wrong one.

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 uncertain

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

• Tuesday uncertain.
  
• ES pivot 1852.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

After an early plunge Monday morning, the Dow spent the rest of the way clawing its way back to break even - and almost made it, thus just barely saving my call for a lower close.  All of which leaves us in an awkward spot, so let's see if the charts can clarify any of this for Tuesday.

The technicals (daily)

The Dow: So the Dow gave us a perfect spinning top on Monday.  But coming as it does in a trendless environment, it's anybody's guess as to whether this is warning of a move higher or lower.  And with no RTC and indicators still neither overbought nor oversold, we continue to just drift sideways, so no call here.

The VIX:  On Monday the VIX continued playing with its 200 day MA putting in a big inverted hammer that has zero predictive power.  The stochastic is lying flat on the floor and there's no RTC at all.  We are right on the MA and exactly halfway between BB's so I have no way of telling which way this chart is going next.

Market index futures: Tonight all three futures are higher at 1:28 AM EDT with ES up by 0.15%.  ES gave us a broad spinning top on Monday to go with a completed bearish stochastic crossover.  The new overnight candle is developing as a bullish harami but it's never prudent to read too much into a half-baked candle.  We in fact have a bearish RTC setup, though the channel is a bit broader than I like to see (it has a Pearson's of 0.857).  So overall, this chart remains generally bearish.

ES daily pivot: Tonight the pivot drops from 1863.08  to 1852.25.  That drop, coupled with the overnight rise in ES briefly put it back above the new pivot but as I write it just dipped back under and that is a fairly bearish sign.

Dollar index: On Monday the dollar completed its bearish tri-star thingy with a 0.23% drop that also formed a bearish stochastic crossover.  This all spells lower for the dollar on Tuesday..

Euro: On Monday the euro put in a gain big enough to pop it out of its descending RTC (as I mentioned last night) for a bullish setup.  With a now completed bullish stochastic crossover, one would think the euro continues higher on Tuesday.

Transportation: On Monday the trans continued their lazy drift lower with a star doji.  But indicators still aren't down to oversold so there really isn't much bullish impetus visible here at the moment.


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     10       3      3           0       0.759    291

     And the winner is...

The charts aren't particularly clear tonight.  The tendency, such as it is, remains bearish.  However the SPX Hi-Lo index's MACD has just crossed the zero line moving upward and that's usually a good bullish sign.  But overall I'm just not getting a good read on this market so I'm going to once again have to call Tuesday 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.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1863.08.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

With quadruple witching now out of the way, perhaps we can get back to doing some technical analysis again.  So let's see what the charts have in store for us on Monday.

The technicals (daily)

The Dow: In typical op-ex fashion, the Dow put in one weird-looking candle last Friday, this one being basically a big gravestone doji / inverted hammer affair that nearly touched the upper BB at its peak.  In the end it curved the stochastic around the very nearly make a bearish crossover.  In any event, this looks bearish for Monday.

The VIX:  And so the VIX had a funny candle too.  It putin a tall green candle but only ended 3.31% higher due to a gap-down open.  And that took it right through its 200 day MA again - now the eighth time in ten sessions!  And like the Dow, we now almost have a bullish stochastic crossover.  But with the VIX's recent attraction to the 200 MA, it's hard to tell if it can put two consecutive green candles together.

Market index futures: Tonight all three futures are just barely at 12:30 AM EDT with ES up by just one tick.  ES has now finished four straight days of alternating up and downs, all remaining in the 1851-1867 range.  Right now we're in the middle of that.  And without an RTC or other good technical guidance, this chart is too hard to call.

ES daily pivot: Tonight the pivot rises from 1859.08  to 1863.08.  This jump puts us back below the new pivot, so this indicator turns bearish.

Dollar index: Recall that last Thursday the dollar left us hanging with a big gap-up star that seemed to portend an evening star.  Well Friday was just about that, but the candle was closer to a tri-star than the classic evening star.  No matter - the pattern is still bearish.  I'd guess the dollar goes lower again on Monday.

Euro: Meanwhile, the euro did some bullish basing on Friday.  The small gain int he overnight so far is causing a bullish stochastic crossover and we're hanging on the edge of the descending RTC about to get a bullish setup.  With RSI hooking up from oversold, it looks likely that the euro goes higher on Monday.

Transportation: Last Friday the trans continued what's now looking like a slow drift lower, losing 0.36%.  And unlike the near misses in the Dow and the VIX, we did get a completed bearish stochastic crossover here.  So in the absence of any other indicators, this chart now looks officially bearish.


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      3           0       0.750    265

     And the winner is...

Hmm - tonight most of the signs seem to be bearish, not all that much but still I can't really call it any other way than Monday lower.

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.