Friday lower

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

• Friday lower, medium confidence.
• ES pivot 1873.08.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader going short at 1871.50.

Recap

Well that sure was weird.  In more than 10 years of observing the markets on a daily basis I've never seen this.  On Thursday the Dow closed exactly unchanged - down to 1/100th of a point.  This is like flipping a coin and having it land on edge.  Now here's the problem - last night I called the Dow higher.  Well it didn't close higher but it also didn't close lower.  So was I right or was I wrong?  I guess we'll just go by Blackjack rules and call it a push.  IN my defense, I'll point out that both the Nasdaq and SPX did close higher.  Ah well - no point dwelling on it - let's move on to see what Friday might have in store.

The technicals

The Dow: Last night I called this the "ah-choo" market - the sneeze waiting to happen but won't.  Well Thursday was just one more "ahh..." as the Dow formed a textbook-perfect doji.  With largely sideways motion for two days now and indicators still extremely oversold, the logical next direction remains lower.  Oh, and Thursday's trade was a bearish RTC setup.

The VIX:  Last night I said there was still no clear reversal here and while the VIX did gain 036% it did it on  a long-legged doji that simply reflects more uncertainty.  Which way this chart goes on Friday is anybody's guess.

Market index futures: Tonight  all three futures are lower at 12:34 EDT with ES down 0.07%.  ES followed Wednesday's doji with a red hanging man in dark cloud cover position.  In addition, we've finally gotten the bearish stochastic crossover I've been waiting for.  Also, the overnight is trading outside the rising RTC and that's a bearish setup.  ES would need to close above 1879.50 on Friday to cancel this.  Indicators remain highly overbought and we've been seeing some bearish divergence in both OBV and money flow which have been dropping for three days now even as ES moved higher.  To me, this all spells lower for Friday

ES daily pivot: Tonight the ES daily pivot drops for the first time in a while, from 1873.75 to 1873.08.   And we are now below the new pivot so this indicator has turned bearish.

Dollar index: Last night I called the dollar bearish and it did lose 0.07% on Thursday, but did it with a spinning top that doesn't prove much by itself.  However, with indicators now having officially topped at overbought and a newly completed bearish stochastic crossover, I'd say there's more downside to come on Friday.

Euro: Ah, it's dojis galore tonight with one more from the euro on Thursday.  Coming higher than Wednesday, it now leaves the euro in a clear, if choppy uptrend.  With a completed bullish stochastic crossover, and rising indicators not yet overbought, I'd say the euro's looking higher for Friday.

Transportation: If there's any guidance in the charts tonight, it comes from the trans which on Thursday dropped 0.42% from highly overbought levels.  That was enough to exit the rising RTC with a bearish setup and send both money flow and OBV lower.  At this point I'm willing to claim that the trans are looking lower on Friday.

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      7       2      4           0       0.778    342

     And the winner is...

The number of bearish signs I'm seeing across the board has increased since last night, and the signs are becoming more unambiguous.  The market is now looking pretty toppy to me and seems to be ready to roll over.  Accordingly, we're just going to call Friday lower and call it a week.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we go short at 1871.50.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 1873.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well that's really odd, my entire post for Wednesday seems to have simply vanished into the ether without a trace.  When I hit "Publish" I kind of expect something to happen.  Oh well.  For the record, my call was for Wednesday as uncertain, which proved to be about right as the Dow lost just 13 points.  I also mentioned how the market was feeling toppy.  So let's see now if that's still the case or if we can motor higher on Thursday.  Assuming I can actually get this stuff out onto the web.  Thanks a lot Google - you big dorks.

The technicals

The Dow: OK, so this looks like an "ah-choo" market now.  You know how it is when you need to sneeze but maybe you don't and you just go "ah... ah... ah..." and everyone is waiting for the "choo"?  Well that's what this is.  We exited the rising RTC on Wednesday - unless you redraw it to account for Monday's gains, in which case we're now still inside.  Doh!  Meanwhile RSI keeps going higher, now up to 94.55.  And the stochastic has just crossover to bearish - if you can call a %K of 92.07 vs. a %D of 92.37 a crossover.  We are now literally teetering on the edge of a trend reversal but the break just doesn't seem to want to happen.

The VIX:  The VIX is no help resolving this mess either.  It did gain 0.61% on Wednesday but did it with a big gravestone doji.  We're near support and the indicators are all oversold but there is still no clear reversal here.

Market index futures: Tonight  all three futures are higher at 1:06 AM EDT with ES up 0.28%.  A perfect doji star for ES on Wednesday warns of a reversal, a notion supported by extremely overbought indicators and a stochastic that's ready to do a bearish crossover (but hasn't yet).  But the new overnight is not confirming the reversal and we do remain in a rising RTC so it is premature to calla  top right here, particularly with no resistance til 1884.

ES daily pivot: Tonight the ES daily pivot rises from 1871.17 to 1873.75.  We remain above the new pivot so this indicator is still bullish.

Dollar index: The dollar continues its weird antics, this time by losing 0.07% for a third consecutive loss on three consecutive green candles.  I don't even know the candlestick name for this - three white soldiers marching backwards?  In any event, there's a now-completed bearish stochastic crossover and indicators having peaked at overbought so let's just say this chart now looks officially bearish.

Euro: And the euro, which earlier this week looked ready to break down, climbed right back into its tight range about 1.3816.  There is though a completed bullish stochastic crossover and indicators just barely off oversold, so it looks bullish for Thursday.

Transportation: And finally in an interesting bit of bullish divergence, the trans on Wednesday gained 0.10% to the Dow's 0.08% loss.  However, that came on a spinning top that left RSI at 100 - it doesn't get any more overbought than that.  We also have a stochastic that just barely squeaked out a bearish crossover.  But both OBV and money flow continue to rise.  So this chart is somewhat conflicted but I'd say we have a good warning of a move lower now.

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      7       2      4           0       0.778    342


     And the winner is...

Tonight we're once again seeing some classical reversal signs but Mr. Market is having none of it.  It may be a case where positive economic news just keeps on propping up the market enough to stave off the pullback that seems overdue.  So having learned my lesson about fighting trends, I'm just going to go way out on a limb and call Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside because we had a big pop right at the close on Wednesday.  That was the time to open a trade, not late at night.  The timing was just off on this one.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1862.17.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night I said that the logical call was for Monday higher.  Well logic prevailed as it usually does and Putinoia was held at bay long enough for the Dow gain 41 points.  Now let's see where logic might lead us on Tuesday.  Bring on the charts! (clap clap!)

The technicals

The Dow:  Last night I punted on this chart in the face of a red spinning top.  Turns out that reversal warning was canceled with a respectable 0.25% advance.  That managed to clear resistance at 16,439 and kept us inside a rising RTC.  Indicators are still not yet at overbought though the RSI has actually looked to have topped and the stochastic is curving over for a bearish stochastic crossover.So at this point this chart continues to look bullish though there's a flashing yellow caution light on now.

The VIX:  Wow - this is weird.  Last night I mentioned a rare side by side white lines pattern in the dollar index (see below).  And on Monday we got a nearly identical side by side black lines in the VIX.  So as the dollar was bullish, this is bearish, supported by indicators that are still not yet oversold.  With support still not til 13, I'd say the VIX is going to take a peek at that number on Tuesday.

Market index futures: Tonight  the futures are mixed at 12:26 EDT, with YM down 0.02%, NQ up 0.07% and ES dead even.   ES is now on a strong five day winning streak that has finally just pushed the indicators to overbought.  We need to continue moving higher now to avoid a bearish RTC exit.  Also, the stochastic is flattening out in preparation for a bearish crossover in the next few days, but not quite yet.  So for now this chart continues bullish, though the tide seems to be turning.

ES daily pivot: Tonight the ES daily pivot rises from 1856.33 to 1862.17.  Once again we remain above the new pivot so once again this indicator is bullish.

Dollar index: Last night I mentioned an unusual pattern - the side by side white lines.  And sure enough, they paid off with a 0.16% gap-up gain for the dollar on Monday.  That pulls the dollar into overbought territory but the stochastic has yet to start positioning for a bearish crossover.  With 2/3 of that big down gap from two weeks ago yet to be filled I have to think there's more upside left here for Tuesday.

Euro: I thought the euro would move sideways for a bit but instead it broke to the downside on Monday to close at 1.3794 after briefly touching its lower BB.  That left the indicators quite oversold and suggests that a reversal is on the way - if not Tuesday then more likely Wednesday.

Transportation: Last night I wrote of the trans "I'd say we're headed up to take look-see [at 7713]". Well at 7691 for a high, I'd say we got within shouting distance.  That bumps out winning streak to five, and leaves resistance at 7700 and the upper BB at 7735.  Indicators are still not overbought yet so it looks like there's still enough gas in the tank to take a run at at least one of those numbers on Tuesday.

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      7       2      3           0       0.778    342


     And the winner is...

We still don't have any clear bearish signs on the charts tonight though we are starting to have a few hints of reversals.  It's not clear to me how much upside is left.  At this point, it looks like Tuesday could be a doji day.  Accordingly, I'm just going to call it uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside in view of the "uncertain" call.

Monday higher

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

• Monday higher, low confidence.
• ES pivot 1856.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Hmm - last Wednesday night I said Thursday would close lower unless ES broke above its pivot.  Well, ES did just that early Thursday morning and the SPX did indeed close higher.  However, my forecast is for the Dow and that closed lower.  On the other hand, that was entirely attributable to a sudden collapse in IBM, so I think the basic premise was still correct.  I'm sort of conflicted as to whether to call this right or wrong.  I think (since I make the rules) we'll just call this one a push and move on to Monday where hopefully we can get back into a normal market rhythm, but without the blues.

The technicals

The Dow: Last Thursday the Dow gave us a small spinning top, at least hinting at a reversal after a nice three day run.  But we remain in a rising RTC and the indicators are not yet overbought, so this one requires confirmation.  Can't say for sure right now.

The VIX:  And the VIX continued its plunge on Thursday, down another 5.78% and unable to reclaim the 200 day MA.  There's support just above 13 and I think we're going to test that on Monday.  No real reversal signs here yet.

Market index futures: Tonight all three futures are higher at 12:34 AM EDT, with ES up by 0.11%.  ES continues to look bullish after a fourth green candle in a row on Thursday.  There's no resistance til 1865 and with indicators not yet overbought I see no reason why we can't hit that number on Monday.

ES daily pivot: Tonight the pivot rises again from 1850.08  to 1856.33.  We remain above the new pivot so this indicator sis now bullish.

Dollar index: The dollar just doesn't want to retrace last week's big gap up and put in an unusual pattern - side by side white lines.  That is bullish, and the rising indicators support that.

Euro: The euro has been finding support at 1.3812 for four days now after a failed breakout attempt on Thursday.  It looks like we're in for some sideways action here for a day or two.

Transportation: And finally the trans motored on higher Thursday to extend their streak to four.  Indicators continued climbing and with no resistance til 7713 (which is also the upper BB) I'd say we're headed up to take look-see there.


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      6       2      3           0       0.750    301

     And the winner is...

Tonight the charts continue to look bullish and in the absence of any reversal signs the logical call is simply for Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside.