Friday lower

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

• Friday lower, low confidence.
• ES pivot 1979.00.  Holding above is bullish.
• Next week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Hmm - last night's conditional call worked - if you're going by the SPX.  ES broke above the pivot at 4 AM Thursday and the SPX finished up 0.05%.  Unfortunately, my benchmark is the Dow and a random dip in the closing minutes caused a three point loss on the day there.  Oh well - it's still not a bad theory.  So now we move on the Friday as we approach the end of July.

The technicals

The Dow:  The Dow remains in its summer doldrums, putting in a small spinning top on Thursday that means very little.  If you squint real hard, you can sort of see a rising triangle going on.  But honestly, yet again, there's not much meat to chew on here.

The VIX:  And there's also little clarity in the VIX which gained 2.78% on Thursday, rejecting Wednesday's doji.  At least here we do have something of a downtrend going and we remain inside this RTC.  Remember the other day how I noted an 8-day pattern between bottoms here lately?  Thursday was day 6.  So in the absence of anything better, I think the VIX could still go lower for a day or two.

Market index futures: Tonight all three futures are lower at 12:24 AM EDT with ES down  0.08%.  On Thursday ES gave us a perfect doji star that just touched its upper BB before backing off.  The new overnight so far seems to be confirming that and the indicators seem to be waking up a bit, all having turned downwards simultaneously just shot of reaching overbought.  We're also right on the edge of the rising RTC for a bearish setup, and the overall tenor of this chart is now leaning bearish.

ES daily pivot: Tonight the ES daily pivot ticks up from 1979.00 to 1981.08.  We've now dipped back below that so this indicator now turns bearish.

Dollar index:  Last night I wrote "you just can't call this one lower yet" and it's a good thing too because eon Thursday the dollar continued to crawl up its upper BB, gaining  0.06% in the process.  With three white soldiers and indicators broken at overbought, there's still nothing bearish about this chart.

Euro: The euro remains similarly undecided, putting in a nice star on Thursday centered about Wednesday' action.  The lower trend remains lower but for the past two days we're just looking for a direction.  The fact that we've finally peeled off the lower BB could be interpreted as bullish but that remains to be seen.

Transportation: And finally on Thursday the trans were similarly afflicted with nothing-itis, dropping a mere 0.02% on a small lopsided spinning top.  We remain inside a decent rising RTC, indicators are just barely coming off overbought, so the net takeaway is only mildly bearish here..

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      10      3           2       0.500    132 July       4       2      3           3       0.778    293

     And the winner is...

The market is still not really giving many good directional signals, but tonight I'm seeing just enough of a bearish edge, particularly in the VIX and the futures, to cautiously call Friday lower.  That's all she wrote.  See you again next 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 depends on ES pivot

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

• Thursday higher if ES remains above pivot, else lower.
• ES pivot 1979.00.  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well I still think my VIX idea for calling Wednesday higher was a good one, and the SPX did in fact gain 0.18%.  Unfortunately, I base my calls on the Dow and that closed down 0.16%, so that counts as a miss, though only by 27 points.  So we just move on to the closing week of July and see what Thursday may bring.

The technicals

The Dow: On Wednesday the Dow took a dump out the gate and never recovered, though the damage was limited.  The resulting fat hanging man reinforces the week-long resistance just above 17K.    And that's about all the guidance we get since the indicators remain completely opaque.  If anything, there's now a slight bias lower, but that remains to be seen.

The VIX:  My whole thesis last night was posited on the assumption that the VIX would go lower on Wednesday and surprise - it did!  Down almost 6% on a spindly gap-down star.  That's a reversal candle right there but with the odd randomness of the charts lately, it's hard to tell.  Still, I think there's a chance of a move higher on Thursday.

Market index futures: Tonight ES and YM are lower at 1:11 AM EDT with ES down  0.06%.  ES had a decent day on Wednesday, just touching its upper BB before falling back a bit.  But that may have been the third rail and the overnight is making no further headway.  Indicators continue indecisive.  The new candle is forming as a bearish inverted hammer, but again, it's only half-baked.  So all in all, another ambiguous night.

ES daily pivot: Tonight the ES daily pivot rises from 1973.58 to 1979.00.  After bumping along just below the new pivot, ES seems to be making an attempt as I write to break above.  That would be bullish.

Dollar index:  Darn - I was sure the dollar was going higher on Wednesday but it had other ideas - down 0.096%on a stubby little candle that crawled up the upper BB.  Indicators remain extremely overbought but without a reversal candle or RTC exit, you just can't call this one lower yet.

Euro: At least I got this one right last night, and I did say I had more confidence in this than my dollar forecast.  The euro continued lower from Tuesday's dump, closing below its lower BB at 1.3459 as the indicators reach extreme oversold.  So the selling appears to be getting played out and the overnight seems to support that idea.  I'd look for a move higher pretty soon.

Transportation: Well here's some bullish divergence, Dow theory-size - maybe.  The trans gained 0.16% on a day the Dow was down by the same amount.  But the candle was a fat hanging man high above Tuesday's close.  With indicators now overbought, this doesn't inspire a lot of confidence for 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       4       1      3           3       0.875    296

     And the winner is...

Mr. Market seems to be suffering a sort of existential malaise at the moment.  The charts are in the doldrums and there' still not much to go on.  With ES hugging the new pivot though, that give me the opportunity to make one of my famous patented conditional calls: if ES stays above the pivot by mid-morning Thursday, we close higher.  Otherwise, we close 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.

Wednesday higher

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

• Wednesday higher, low confidence.
• ES pivot 1973.58.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I was ready to call Tuesday higher just because the past fours days have alternated directions.  But that seemed too easy.  Turns out that was it after all as the Dow gained 62 points on Tuesday for no apparent reason.  Now let's see if this action created any more clarity as we go into Wednesday.

The technicals

The Dow: This is really the Brownian Motion Market, as we alternate between gains and losses for no apparent reason.  Great for the day traders - not so great for the swing traders.  And sadly, there's not much that stands out about Tuesday's green candle, or about the indicators which continue to hover between overbought and oversold..  Breaking the previous two days highs is de facto bullish, I guess, but other than that, there's still not much to chew on here.

The VIX: I wouldn't commit to this chart last night either, as there was no way to see Tuesday's  gap down 4.45% loss, but on a green candle, coming.. The 5 minute chart is even stranger with a big gap down at the open followed by a lot of noodling around and then a big pop at 4:10 PM - what was that all about?  So technically, I guess this is a bullish chart, but who knows.  VVIX did hit its 200 day MA on Tuesday so if you believe in that, a bounce off it could move the VIX higher on Wednesday.  But that's pretty speculative at this point.

Market index futures: Tonight all three futures are dead even at 12:24 AM EDT.  FWIW, the trend has been for a slow drift higher all evening.  Resistance at 1976 remained intact on Tuesday despite a nice rally in ES that rejected the hanging manning thingy from Monday.  So with the indicators still wandering around between overbought and oversold, we have once again little to go on tonight. 

ES daily pivot: Tonight the ES daily pivot ticks up from 1965.58  to 1973.58.  Once again we remain above the new pivot so this indicator continues bullish.

Dollar index:  And another chart with gappage, as the dollar took a monster 0.30% pop on Tuesday to break it supper BB and close just below it.  Indicators remain highly overbought and the dollar respects its upper BB pretty well, so on that basis I call it lower on Wednesday.

Euro: While it wasn't a gap down the euro still cratered on Tuesday with a big red marubozu to close way under it slower BB at 1.3468 (who do we appreciate). The indicators are now extremely oversold, my guess that the break would be higher is trashed, support back to February is broken, and the 200 week MA is coming into view.  Yikes - things aren't looking good in euro-land.  But either this or my dollar call is wrong, since they can't both go lower.  Overall, I'm more confident about this one.

Transportation: The trans outperformed the Dow on Tuesday by a factor of four with a tall green marubozu that saved the rising RTC while leaving the indicators still just barely overbought.  With the rejection of Monday's spinning top, this chart now looks bullish.  Unless the up/down/up pattern holds, in which case Wednesday will go down.

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      10      3           2       0.500    132 July       4       0      3           3       1.000    323

     And the winner is...

Gosh, I just can't call this damn market uncertain three nights in a row, so here's what I'm gonna do.  I note that the VIX has been bottoming at regular intervals every 8 or 9 sessions since the beginning of June.  If this pattern holds, then the VIX should move lower for around four more days, and that would imply a market move higher.  'S all I've got, but hey, it's a theory.  So I'll go waay out on my speculative limb and call the market higher Wednesday.

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 uncertain

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

• Tuesday uncertain.
• ES pivot 1965.58.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Very odd.  Last night I called Monday as uncertain and even after seeing how it turned out, we've gotten no further clarification.  Perhaps the nightly chart run-down will help.

The technicals

The Dow: The Dow now seems to be in down/up/down mode, where it changes direction daily as Monday marked the fourth day in a row where the market closed in the opposite direction from the day before.  But on Monday we got a hanging man.. Or since there's no trend running, something to that effect.  Indicators remain stalled below overbought.  There's just nothing here to grasp, perhaps reflecting the uncertainty going on in the world at the moment.

The VIX:  Huh - so much for Friday's bearish harami.  On Monday the VIX moved right back up again gaining 6%, but on a lopsided star implying yet more uncertainty.  Indicators here too are wavering between overbought and oversold.  So perhaps my technicals skills just aren't up to it, but I see nothing of predictive value on this chart right now.

Market index futures: Tonight all three futures are higher at 12:22 AM EDT with ES up 0.09%.  ES was unable to capitalize on Friday's big move and instead put in a hanging man on Monday.  That now gives us four days in a row of lower highs  This is just a low information content, lackluster chart.  Ugh.  If I had something more intelligent to say about it, I would have.

ES daily pivot: Tonight the ES daily pivot rises from 1962.75 to 1965.58.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  On Monday the dollar pretty much remained in a now four day consolidation area, gaining 0.04% but on a red candle.  Indicators remain highly overbought and with four dojis in a row now, I still have to think this one goes lower soon.

Euro: And the euro remained stuck in its own consolidation area with a spinning top too. We remain oversold so when the break comes my guess it is will be higher.  Until then, it's more sideways action ahead.

Transportation: Last night I wrote "we still have a strong resistance area around 8390" and the trans did not in fact have the gas in the tank to motor through that level, falling instead back to 8361.  The lopsided spinning top is a reversal warning, but not a good one and we remain just inside a rising RTC.  I think Tuesday should bring more clarity to this chart.

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      10      3           2       0.500    132
July       4       0      2           3       1.000    323

     And the winner is...

Once again, the market seems to be treading water, perhaps waiting for some resolution to the fighting in the Middle East and the Russian sanction saga.  Until then, I'm just not feeling the love, baby and I think it's better to just sit this one out.  Accordingly, the call is Tuesday uncertain.

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 uncertain

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

• Monday uncertain.
• ES pivot 1962.75.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Right at the open last Friday, ES began knocking on the door of the daily pivot.  Then at 0:45 AM, it just took off and that was that.  Once again, my conditional call worked (though it doesn't always).  Now we move on, as always to another new week.

The technicals

The Dow: On Friday, the Dow gained a handy 123 points to recoup most of Thursday's losses and regain the 17K level.  Interestingly though, all this action was outside the rising RTC so that's technically a bearish trigger.  Equally importantly, it formed a bearish stochastic crossover.  So this big move wasn't necessarily good news.  The Dow to me appears to be low on mojo at these levels.

The VIX: Last Thursday night I wasn't willing to commit to anything more than "possibly a move lower" in the VIX on Friday.  Turned out to be a good possibility as the VIX  cratered 17%, gapping right back down through the 200 day MA and upper BB it blasted above a day earlier.  The net result is a bearish inside harami so in the absence of any overextended indicators, I have to guess the VIX goes lower again Monday.  A similar move in VVIX supports this idea.

Market index futures: Tonight all three futures are lower at 12:22 AM EDT with ES down  0.05%.  On Friday ES gave us a nominally bullish candle, barely bullish engulfing but unable to crack resistance at 1972.

ES daily pivot: Tonight the ES daily pivot ticks up from 1959.33 to 1962.75.  That still leaves ES reasonably above the new pivot so this indicator continues bullish.  Indicators have turned lower so there really isn't any clear direction here right now.

Dollar index:  I called the dollar lower for Friday and that was just barely wrong as the dollar now seems to be consolidating in the 54.76 area (on $USDUPX) floating just above its 200 day MA.  But with three dojis in a row, indicators now highly overbought, and a good bearish stochastic crossover in place, I'm going to call it lower once again.  Hey, I have to be right sooner or later.

Euro: And the euro is pretty much the mirror image of the dollar with a tall star on Friday and oversold indicators.  The new overnight is trading higher outside a short descending RTC so I'll guess we could go higher on Monday.

Transportation: My best hope here last Thursday was for a DCB. Instead, the trans took off, retracing all of Thursday's losses and then some for a bullish engulfing pattern that closed right on the upper BB.  That much is good news, but we still have a strong resistance area around 8390 to breach and after Friday's big 1.28% pop, it's not clear that there remains enough gas in the tank to move much higher on Monday.

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      10      3           2       0.500    132  July       4       0      1           3       1.000    323

     And the winner is...

Maybe it's the geopolitical news, maybe the dog days of summer are starting to bark, but I'm not getting a good read on things tonight.  There's a lot of drifting going on and it's hard to extrapolate from that.  So I'm just going to punt and call Monday uncertain.  It may be time to gear up for a summer vacation.

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.