Friday lower

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

• Friday lower, low confidence
• ES pivot 1945.83.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader stands aside.

Recap

Dang - wrong again!  Though I have to say I believe that the technical analysis was correct last night and the only reason the Dow finished lwo\\ower was because of some gaseous Fed-head who evidently felt the need to spout off on interest rates.  Well that's the fundamental limitation of TA - you can't account for headline risk.  Well at least the damage was limited, so let's see if we can't finish off the week with a win.

The technicals

The Dow: On Thursday the Dow put in a tall hanging man, though I'd take this with a grain of salt since I believe that was largely driven by one-off news, or opinion, actually..  And the candle could also be viewed as a hammer, depending on your time frame.  And with the indicators all now in No-Man's Land between overbought and oversold, this chart just isn't telling me much.

The VIX: And as usual, the VIX was pretty much a mirror image of the Dow, up just 0.35% with a funny inverted hammer off the bottom of Wednesday trade.  That still leaves us in a rising RTC with rising indicators, but this candle seems to have taken the mojo out of the sails of the VIX, as it were.  I'd call the trade at the lower end of Wednesday's dark cloud cover to be a confirmation of sorts, so I'm leaning toward calling the VIX lower on Friday, but it's by no means certain.

Market index futures: Tonight all three futures are lower at 12: 37 AM EDT with ES down 0.21%.  ES was unable to break through increasingly strong resistance at 1950 on Wednesday, settling instead for a tall doji star.  The indicators have just come off overbought and are drifting lower so this chart looks bearish.  The overnight action seems to be confirming that so far.

ES daily pivot: Tonight the ES daily pivot dips from 1946.67 to 1945.83.  And ES dipped below the old number just before midnight so this indicator is once again bearish.  However, we're close enough that ES might try a breakout on Friday.

Dollar index:  Sigh - I was wrong about the dollar too last night - it moved up 0.02%, not lower. But it did it on a tall inverted hammer tht really looks quit bearish.  Indicators are now back to oversold but we remain in a long-running descending RTC, so now I can't call this chart higher for Friday.

Euro: The euro on Thursday continued its choppy rise with a tall red hanging man ending with a slight gain above Wednesday.  But the indicators have now peaked at overbought and the 200 MA now seems to be out of reach, so further downside is not out of the question for Friday.

Transportation: And finally another wishy-washy chart out of the trans which dropped a scant 0.18% on Wednesday with a tall hanging man of their own.  Sitting at the top of Wednesday's candle though and with indicators continuing lower, this pattern looks a bit more bearish than anything, but it's really not crystal clear.

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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8       7      3           2       0.588    189

     And the winner is...

The daily calls haven't been working too well lately, but that's to be expected when you get daily moves of  just15 points or 21 point in the Dow.  Tonight, the charts look bearish again, so I'll just have to call Friday lower.  That's all, she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  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 1946.67.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader stands aside.

Recap

The counter-trend call has been exceptionally risky all year so far, given the market's reluctance to pull back more than two days in a row, if that.  And Wednesday was no exception as once again the buyers appeared after Tuesday's dump to rescue an otherwise weak looking chart.  So let's see where that leaves Thursday.

The technicals

The Dow:  So the Dow just laughed at Tuesday's tall red marubozu and retraced about a third of it on Wednesday.  That actually sent RSI back higher though the stochastic continues lower.  The action is nonetheless a bearish RTC trigger.  Bottom line though - this one is too tough to call.

The VIX: Huh - go figure - the VIX was looking all set yo move higher last night, but noooo... instead it dropped .4.45% on a classic dark cloud cover.  We're still in a rising RTC but with RSI having shifted lower, I'm changing my mind and now claiming the VIX goes lower on Thursday.

Market index futures: Tonight all three futures are a wee bit higher at 12:20 AM EDT with ES up 0.03%.  And just like all the other charts, ES fooled me by putting in a green bullish piercing pattern on Wednesday.  The indicators remain overbought, but that doesn't seem to count for much lately.  The overnight seems to be confirming a move higher, at least so far.

ES daily pivot: Tonight the ES daily pivot ticks down from 1947.67 to 1946.67.  We popped back up over the old number earlier Wednesday and remain above the new pivot so this indicator now turns bullish.

Dollar index:  Boy when you're wrong, you're wrong.  I missed the dollar too on Wednesday as instead of going higher it dropped 0.16%, but on a hammer that rested against the lower BB.  With indicators now rather oversold, I'm going to give it another shot and claim once again that the dollar is going higher.

Euro: At least I had the good sense last night to take a pass on the euro which did finally break out of its week-long trading range - and it was higher, in fact just touching its 200 day MA before closing at 1.3631.  With that we remain in a choppy but rising RTC so despite overbought indicators, I think we're good to go until the next assault on the 200 MA.

Transportation:  And so (sigh) finally I missed the trans too.  They did not go lower but instead came roaring back on Wednesday with a big 0.88% advance for a bullish engulfing pattern.  That leaves the stochastic stalled and potentially about to reverse for a bullish crossover from a high level which would be good for a day or two of higher.  So just forget everything I said about the trans going lower.  Doh!

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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8       6      3           2       0.625    210

     And the winner is...

What a difference a say makes.  An outsized drop in the VIX on Wednesday coupled with reversal candles on other charts make me now think that we'll see Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday lower

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

• Wednesday lower, low confidence
• ES pivot 1947.67.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader stands aside.

Recap

Huh - when I got up this morning at the crack of 11 AM I had to wonder how I could have been so wrong in calling Tuesday lower.  But not to worry as Mr. Market must have not liked his lunch and we went on a 119 point exponential cascade lower for the rest of the day, thus saving my call.  Now of course we have to figure out if this was a one-off or if there's more on the way.  The charts, as usual, tell all.

The technicals

The Dow: On Tuesday the Dow took its biggest dump in a month, off 0.70% on a tall red marubozu.  This (finally) sent the indicators off overbought, confirmed a bearish stochastic crossover, and exited the rising RTC for a bearish setup.  So with the 17,000 level rebuffed in a big way, this chart just looks lower.

The VIX:  Last night I wrote that I was "calling the VIX higher again on Tuesday.". And lucky thing too since the VIX rocketed up 10.7% on a jolly green giant marubozu for its biggest gain since April 10th.  This nicely confirms a bullish stochastic crossover, starts the indicators moving off oversold, and establishes a new rising RTC.  That all spells bullish in my book.

Market index futures: Tonight all three futures are lower at 12:49 AM EDT with ES down  0.13%.  Last night I wrote that "this looks like a chart ready to move lower".  And it was a good look as ES fell out of its rising RTC for a bearish setup, confirmed a bearish stochastic crossover and sent the indicators lower off overbought.  Those are all bearish, so this chart continues to look lower for Wednesday, and the overnight is seeming to confirm that so far.

ES daily pivot: Tonight the ES daily pivot drops from 1954.25 to 1947.67.  We remain well under the new pivot so this indicators stays bearish.

Dollar index:  Last night I didn't think the dollar was going higher but ti did anyway, though only by 0.07%.  That was good for a bullish engulfing pattern, to the extent that such small moves can be considered predictive.  Still, having just touched the lower BB on Tuesday and bounced off, I'd have to guess that Wednesday goes higher again.

Euro:  Last night I wouldn't commit to this chart which is just as well since it ended on a perfect doji - open at 1.3607, close at 1.3606.  So we continue the now four days in a row consolidation as we wait for the indecision to resolve.  And no, I'm still not guessing this one.

Transportation: Last night I wrote simply enough, "this chart now looks lower.".  Well down 0.85% is pretty lower to me.  This move gave us a bearish stochastic crossover, moved the indicators off max overbought, and made a bearish RTC trigger.  So this looks like it still has room to run lower.

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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8       5      3           2       0.667    259
     And the winner is...

Tuesday finally provided the break that we'd been waiting for for three days.  This has now tipped the scales to bearish, technically speaking.  Therefore the logical call is for Wednesday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday lower

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

• Tuesday lower, low confidence
• ES pivot 1954.25.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader stands aside.

Recap

Ooh, close but no cigar.  I called Monday higher but the market meandered just ever so slightly underwater most of the day and we ended with the Dow down all of 10 points.  Now the Naz was up a whopping 0.64, but the call is for the Dow so this was a miss.  Not a bad one, fortunately.  So we continue to teeter on the brink.  Will Tuesday bring any resolution?  Let's check the charts as we do every night.

The technicals

The Dow: Jeez - we now have three reversal candle sin a row here - a hanging man, an inverted hanging man and on Monday yet another hanging man.  The indicators remain extremely overbought, the stochastic keeps us in antici...........pation of a bearish crossover and yet the market refuses to break lower.  It's looking like we'll need a bearish RTC exit before we get any downside action going here and for the time being, that ain't happening..

The VIX: Ahh, el VIXmo.  The chart which is el mucho importanto.  Last night I wrote "my guess is that the VIX is due to rise on Monday" although I then qualified that with some hedging.  Well it all turned out to be right as the VIX rose 1.20% on Monday, but on a gap-up red candle.. So we now have a bullish stochastic crossover by the slimmest of margins (the %K moved above the %D by a giant 0.01) and an oversold RSI.  But the chart looks like 2/3 of an evening star.  Duh-ya!  It would seem like a coin-toss but I'm going with the indicators here and calling the VIX higher again on Tuesday.

Market index futures: Tonight all three futures are lower at 12:27 AM EDT with ES down  0.12%.  On Monday ES had a canonical doji star.  Along with highly overbought indicators and a just-completed bearish stochastic crossover, this looks like a chart ready to move lower.  Note that the overnight is trading outside the rising RTC and that's a bearish setup.  The overnight supports this idea so far with a gap-down doji star.

ES daily pivot: Tonight the ES daily pivot rises from 1952.75 to 1954.25.  We fell below the pivot on Monday and remain below the new number so this indicator turns bearish.

Dollar index:  Dang!  I blew the dollar too last night.  It did not go higher but instead fell 0.13% on Monday with a gap down red candle that now looks like a bearish evening star.  That keeps the dollar in a long-running descending RTC and despite oversold indicators I see no sign here of a move higher.

Euro: Last night I wrote "the euro appears to have found a new trading range about the 1.3605 level" and guess what - hey Mikey, he likes it, as the euro spent Monday trudging over the exact same ground with a second spinning top in a row.  Meanwhile the indicators are drifting higher into overbought so my guess is that the break, when it comes will be lower.

Transportation: Oops!  Last night I thought the trans were going higher but instead they shifted into reverse for a 0.52% drop.Dow theorists take note!  This move also left us outside the rising RTC for a bearish setup, the stochastic curving around for a bearish stochastic crossover, and the indicators all overbought.  And the resistance I mentioned last night at 8222 proved insurmountable.  So this chart now looks lower.

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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       7       5      3           2       0.643    140
     And the winner is...

We had some signs of a move lower last night but I chose to go with the futures instead, much to my chagrin.  Tonight the charts are turning more definitively bearish so I feel a bit better about calling Tuesday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday higher

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

• Monday higher, low confidence
• ES pivot 1952.75.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader stands aside.

Recap

Huh - well that's interesting.  I thought for sure we weere going lower last Friday but the day was decidedly bullish, even good for another record close for the Dow.  And yet there appear to be some storm clouds gathering on the horizon.  For the rest of the forecast, read on.

The technicals

The Dow: So we gained 26 point in the Dow on Friday.  But the interesting part is that they came on a tall inverted hammer.  Following Thursday's hanging man, that makes two reversal candles in a row.. Interestingly, we had an inverted hammer at the last triple witching and the next day was lower.  And right now even though we're not officially overbought, we're closer to it than we were last time.  So that leaves me cautiously bearish, a caution derived from the fact that we still remain in a rising RTC.

The VIX:  Now here's a bigger sign for caution.  On Friday the VIX gained 2.17% on a day when the broader market was also higher..  The candle was bullish engulfing in a big way and it also exited the descending RTC for a bullish setup.  All that's missing now is oversold indicators and we're pretty close to that.  VVIX is in a similar boat so my guess is that the VIX is due to rise on Monday.  Note though that VVIX remains in a downtrend, so I'm not all that confident on the VIX going higher.

Market index futures: Tonight all three futures are higher at 1:17 AM EDT with ES up a decent 0.20%.  With a now six day winning streak going, ES is getting pretty overextended.  RSI is now 100 - it doesn't go any higher.  And the stochastic has curved around and is on the cusp of a bearish crossover.  And yet this chart's mojo seems undiminished.  With the upper BB now at 1963, ES appears more than casually interested in taking a peek.  And that might be the catalyst for letting a bit of gas out of this bubble.

ES daily pivot: Tonight the ES daily pivot ticks up from 1948.83 to 1952.75.  So we remain above the new pivot and this indicator remains bullish.

Dollar index:  Last Thursday night I mused "we have to wonder if Friday might now come in higher."  And so it did, up 0.06% on an admittedly red spinning top that nonetheless completed a bullish morning star.  Having now hit the lower BB and with indicators fairly oversold I have to think the next move is higher again.

Euro: I wouldn't call the euro last Thursday night and it's just as well, since it ended by pretty much covering the same ground as Thursday but with a small loss on a wide-ranging spinning top.  It did however cause the indicators to peak and start lower just before hitting overbought. But for the time being, the euro appears to have found a new trading range about the 1.3605 level.

Transportation: Last Friday the trans non-confirmed Thursday's spinning top with a 0.21% advance to very near resistance at 8222.  Indicators however are still not yet overbought so in the absence of any outright bearish signs I have to say this chart remains bullish.

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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       7       4      3           2       0.692    150

     And the winner is...

Tonight we're seeing a bit of a mixed picture.  It's always difficult on Sunday night because a lot of the data is now two days old.    But like the old saying goes, one of the several things you can't fight on the Street is the tape.  And right now the tape just keeps moving higher.  So although the VIX looks poised to move higher, the futures are also moving higher in the overnight in a non-trivial manner.  And so I'm going with that (and a lack of bearish signs in the Dow and trans) and calling Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.