Friday uncertain

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

• Friday uncertain.
• ES pivot 1839.42.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night I wrote "I'll just creep out to the very end of the limb and nervously call Thursday higher."  Well, looks like the limb snapped out from under me as the Dow dove an ugly 267 points to finish near session lows.  There was just something about last night I couldn't quite put my finger on.  Too bad too, because it seems like I always pick the really bad days to be wrong.  I'm still trying to sort this out.  Going over last night's charts in retrospect I still don't see any technical signs of this kind of dump.  But from the chatter on CNBC, it sounded like no one else had a clue either.  Oh well, such is the nature of the beast.  So we'll see how this changes the picture as we head to the end of the week.

The technicals

The Dow: On Thursday the Dow plunged all the way to its lower BB in a move that left the indicators oversold and the stochastic threaded out lying on the floor.  Wednesday's bullish RTC setup was canceled in a big way.  OBV kept rising though and money flow was actually higher.  I have to think that if nothing else we're due for a DCB here on Friday.

The VIX:  On Thursday the VIX resumed its love affair with its 200 day MA, shooting right back above it with a big 15% pop.  That lef the indicators overbought but the stochastic is now totally confused and threaded out.  We're also still short of the upper BB so it isn't clear that there still isn't at least a bit more room to run on Friday.

Market index futures: Tonight, all three futures are higher at 12:23 AM EDT, with ES up by 0.11%.  ES had a dreadful day on Thursday, plunging all the way to its lower BB with a dark cloud cover.  But even that didn't drive the indicators much lower than they were on Wednesday.  And the modest move higher in the overnight suggests the possibility of at least a DCB on Friday as traders figure out that Thursday' move was overdone.

ES daily pivot: Tonight the pivot dives from 1858.33 to 1839.42. We're still under the new pivot so this indicator remains bearish.

Dollar index: Last night's chart looked bearish to me though it wasn't the bottoming day I thought.  It was just down, another 0.13%.  The dollar stopped right on support just above its lower BB with oversold indicators.  So I'm going to be a bit more conservative and simply claim that I think the downside form here is limited.  It may or not be a bottoming day on Friday.

Euro: At least I got this much right.  Last night I wrote "it looks like there's more upside left on Thursday" and indeed the euro continued its climb ending at 1.3889, making it a four day winning streak.  Ad now being in a strong uptrend with no resistance til the upper BB at 1.3933, I see no reason why the euro won't hit that level Real Soon Now.  It is in fact continuing to inch higher in the overnight so far.

Transportation: The trans really got hammered on Thursday, giving up all of Wednesday's gains and then some, and canceling the bullish setup with a bearish engulfing pattern.  The indicators all turned downward though they're not yet oversold.  We're near support at 7412 now so Friday could be a bottoming day. 

Accuracy:

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     12       3      6           0       0.800    431
April      4       1      2           0       0.800    196

   
     And the winner is...

With Mr. Market seemingly having picked up a bad case of the jitters, it's tough to make any iron-clad predictions.  I still have no good explanation for what happened on Thursday and that bothers me.  Therefore, I want to step back and let the market sort itself out.  So I'm just going to call Friday uncertain and see what happens.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account now rises to $105,625 after two trades in 2014.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 1858.33.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The technicals worked out nicely on Wednesday and the Fed minutes were just the icing on the cake as the Dow had a tasty 181 point pop.  We also confirmed the SPX's support at 1850.  That's about all there is to say about that so let's move on as always to the nightly charts and see where Thursday's headed.

The technicals

The Dow: The Dow on Wednesday finished at session highs for a jolly green marubozu that confirmed Tuesday's reversal candle and more than retraced all of Monday's dive.  It also gave us a bullish setup on an admittedly short descending RTC,  The stochastic continues to move into position nicely for a bullish crossover and the indicators are still less than halfway to overbought so this chart now looks bullish.

The VIX:  Last night I wrote that I was going to "guess that the VIX is going lower on Wednesday."  Good guess, because the VIX fell 7.19% and sliced right back through its 200 day MA with a gap-down two black crows.  This left the stochastic ever so close to a bearish crossover with RSI and momentum continuing to decline, never even having reached overbought.  There's weak support at 13.61 and stronger support at 12.94 and I would not be surprised to see at least one of those levels hit on Thursday.

Market index futures: Tonight, all three futures are barely lower at 12:15 AM EDT, with ES down by a single tick - call it essentially flat.  Wednesday's tall green marubozu provided a bullish RTC setup as well as a bullish stochastic crossover.  However, money flow has not been rising over the past two days and the lack of pin action tonight makes me wonder if we're not in for a pause on Thursday.

ES daily pivot: Tonight the pivot jumps from 1841.58 to 1858.33.  And even that big move still leaves ES above the new pivot, just less so.  But this indicator is still bullish for Thursday.

Dollar index: ore downside is not out of the question.Last night I wrote "more downside is not out of the question" for the dollar and indeed the dollar lost another 0.35% on Wednesday.  That leaves it close to support at 54.05 and its lower BB at 54.02.  Even so, the indicators have only just gone oversold and the stochastic is nowhere near forming a bullish crossover.  The failure to even attempt filling Tuesday's gap down is also bearish.  But with support near, Thursday might be a bottoming day.

Euro: Tuesday's resistance proved futile to the euro as it just motored higher on Wednesday, and then right through the next resistance at 1.3835.  With three white soldiers now marching ahead, indicators still not overbought, and a new rising RTC established, it looks like there's more upside left on Thursday.

Transportation: I didn't want to commit to this one last night and it's too bad because the trans had their best day in over a month on Wednesday, up 1.64% with a big green marubozu that bent the stochastic around almost into a bullish crossover and gave us a bullish setup on  descending RTC exit.  So with rising indicators I have to think we're going higher again on Thursday.

Accuracy:

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     12       3      6           0       0.800    431
April      4       0      2           0       1.000    463

   
     And the winner is...

Tonight, all of the charts seem to be pointing higher except for the futures, and I wonder why.  I'm always reluctant to go against the futures but with everything else lining up I guess I'll just creep out to the very end of the limb and nervously call Thursday higher.  I'm not expecting a big move like we had Wednesday though.

ES Fantasy Trader

Finally the ESFT makes a second trade in 2014 and we have a winner.  I surely left a bunch of money on the table Wednesday but I decided I didn't want to face the headline risk ahead of the Fed minutes.  I'd rather leave a little behind than watch my existing profits evaporate.  Anyway, 5.25 points overnight is nothing to sneeze at.  Reminder - I post these trades live on my Twitter feed @nightowltrader.

SLD    10    false    ES    JUN14 Futures     1851.25    USD    GLOBEX    11:54:58
BOT    10    false    ES    JUN14 Futures     1846.00    USD    GLOBEX    APR 8 19:55:11

Portfolio stats:  the account now rises to $105,625 after two trades in 2014.  We are now 2 for 2 total, 2 for 2 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 1841.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader going long at1846.00.

Recap

Humph, now that I can finally see again, it's time to take on the markets.  Interesting doji day on Tuesday.  The talking heads on CNBC were in total disagreement all day about what this means, even more so than usual.  So let's simply forget them and go straight to the source - the charts.

The technicals

The Dow: So on Tuesday the Dow put in a classic spinning top reversal candle after two straight tall red marubozus.  I went back through to the end of 2012 and found five other instances of this.  And all five times the Dow was higher the next day.  The indicators are falling but not yet overbought and the stochastic is moving lower but not yet in position for a bullish crossover.  Still, the historical evidence is compelling.

The VIX:  On Monday (which I missed because I couldn't see anything) the VIX took a big pop back up over its 200 day MA.  But on Tuesday, it put in a big bearish engulfing pattern that , while it remained above the 200 MA, augers ill for the VIX.  With the stochastic now higher than lower and the RSI turning lower, I'd go out on a limb and guess that the VIX is going lower on Wednesday.  So sez I.

Market index futures: Tonight, all three futures are a bit higher at 12:28  AM EDT, with ES up by all of one tick.  .On Tuesday ES put in a nice green spinning top that nearly touched the lower BB.  OBV and money flow have now turned upward and the stochastic has flattened around in preparation for a bullish crossover.  The overnight is confirming a reversal, so far anyway so I am now cautiously optimistic about ES's chances for Wednesday.

ES daily pivot: Tonight the pivot drops from 1844.75 to 1841.58.  After bumping along the old pivot all evening that now leaves us four points above the new one, so this indicator turns nominally bullish.

Dollar index: Whoa!  On Tuesday the dollar just fell out of bed with a huge gap-down 0.65% loss.  That was enough to take the indicators right off overbought.  And the chart now looks inverted exponential so you have to think a reversal is coming soon.  And we did stop right on support at 54.28 ($USDUPX).  But holy moly, there's no reversal sign here so ore downside is not out of the question.

Euro: On Tuesday the euro posted an orderly gain to 1.3793, establishing a new rising RTC.  But it stopped right at resistance.

Transportation: And a nice doji star from the trans on Monday giving us a reversal hint here too.  I'd like to see the stochastic on board though, which it isn't yet.  So I'll have to settle for a wait & see on this one.

Accuracy:

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     12       3      6           0       0.800    431
April      3       0      2           0       1.000    282

   
     And the winner is...

Tonight we're seeing a number of positive reversal signs in the charts enough in fact for me to call Wednesday 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 go long at 1846.00.

Nightowl canceled tonight

I'm sorry everyone, but I just have to cancel tonight's post.  I had my annual appointment with my opthalmologist today and right now I still can't see jack.  Just typing this much is an effort.  I'll update the performance chart but that's about it.  We'll resume on Tuesday night once I have recovered my customary super owl vision.  Right now, I'd be afraid of seeing the wrong numbers.

Accuracy:

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     12       3      6           0       0.800    431
April      3       0      2           0       1.000    282

   

Monday lower

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

• Monday lower, low confidence.
• ES pivot 1869.42.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last Friday was one of those days I was glad I called uncertain as I wasn't expecting a 160 point dump in the Dow.  This move changes the picture once again so let's get right to the charts for Monday.

The technicals

The Dow: On Friday the Dow just crashed right out of its rising RTC for a big bearish setup, a fresh bearish stochastic crossover and indicators that are all headed lower now.  So this is looking pretty bearish for Monday.

The VIX:  Last Thursday night I wrote "the VIX looks higher for Friday" and sure enough the VIX gained 4.41% for a second bullish engulfing candle in a row and a developing megaphone pattern, a fairly rare sight.  We also traded outside the descending RTC for a bullish trigger and got a completed bullish stochastic crossover.  So the VIX looks ready to move higher again on Monday.

Market index futures: Tonight, all three futures are modestly lower at 12:45 AM EDT, with ES down by 0.09%.  The ES story was pretty much the same as the Dow on Friday - bearish RTC setup, bearish stochastic crossover, descending indicators.  All looking bearish.

ES daily pivot: Tonight the pivot falls from 1882.00 to 1869.42.  We remain below the new pivot so this indicator sis bearish for Monday.

Dollar index: Last Thursday night I wrote "further upside is limited from here."  And indeed on Friday the dollar hit its upper BB early on and then it was all downhill from there, ending the day with a  small loss.  That was a classic dark cloud cover.  ALong with overbought indicators the dolalr is now looking lower for Monday.

Euro: On Friday the euro put is a sort of spinning top that tested the lower BB.  But the overnight is having none of that and is continuing lower.  With the lower BB dropping away and the stochastic nowhere near a bullish crossover, it looks like more downside in store on Monday.  This of course means either this call or the dollar call is wrong..  At the moment I have more faith in the dollar going lower.

Transportation: The trans were hit hard on Friday and like the Dow fell out of their rising RTC for a bearish setup along with a bearish stochastic crossover.  So we're looking lower here again.

Accuracy:

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     12       3      6           0       0.800    431
April      2       0      2           0       1.000    115 

   
     And the winner is...

With Friday's uncertainty out of the way I've got to say that the charts tonight are looking rather bearish, even after Friday's big drop.  So I'm just going to call 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.