Friday

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

• Friday higher, low confidence.
• ES pivot 1950.17.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The technicals played out exactly as expected on Thursday with some modest but non-trivial gains in the Dow as Putinoia continued to abate.  So now let's see how the week might end as we check the charts for Friday.

The technicals

The Dow: I called the Dow higher for Thursday because Wednesday non-confirmed Tuesday's star and there were no other bearish signs in sight.  That's all it took, and we gained a respectable 62 points out of it.

The VIX:  Last night I wrote "there's nothing bullish about this chart for Thursday".   And indeed there wasn't as the VIX fell another 3.72% to remain in a now fairly long running descending RTC and confirming the break under the 200 day MA.  But indicators are now quite oversold and the steochastic has just started to creep around in preparation for a bullish crosover - perhaps early next week.  Meantime, there's no support til 11.53 and without a reversal candle I'd have to say the VIX isn't done going lower yet.

Market index futures: Tonight all three futures are higher at 12:23 AM EDT with ES up just one tick, exactly where we were last night at this time.   ES had a decent day Thursday and remains nicely inside a rising RTC.  However, the indicators have reached overbought and the stochastic is starting to flatten out in preparation for a bearish crossover, though we're not there yet.  Still, in the absence of any bearish candles, I'd have to say this one still has some room to run.

ES daily pivot: Tonight the ES daily pivot ticks up from 1940.67 to 1950.17.  We're still above the new pivot, though by less than the previous night for the second day in a row.  Nevertheless, it's enough to call this indicator bullish.

Dollar index:  On Thursday the dollar continued its mysterious ways, this time losing all of 0.01% but on a decent size hanging mannish looking thing that doesn't really do much to confirm or disconfirm Wednesday's doji.  The stochastic continues to rise and RSI continues to fall - and I continue to be confused.

Euro: On Thursday the euro pretty much put in a rerun of Wednesday with a second tall star that closed at 1.3368.  So the uncertainty simply continues here - this one is anybody's guess for Friday.

Transportation:  Dow Theorists take note - the trans continued to outperform the Dow on Thursday, up another 0.66% to remain easily inside a rising RTC.  Indicators have now hit overbought and the stochastic has just started to flatten out before a bearish crossover but there's still no immediate reversal signs here so this chart just looks higher again 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132 July       6       4      4           3       0.692    639
August     3       4      1           1       0.500   -139

     And the winner is...

It looks like we may be nearing a short-term top soon, like in the early part of next week, but we're not there yet.  Though the indicators all are starting to show signs of being overextended, there aren'y yet any reversal signs in either the candles or RTC's.  Therefore, I'll jsut have to cautiously call Friday higher.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 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 1940.67.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night, it was looking like it could go either way.  The double doji suggested a move lower, but the indicators did not support that.  In the end, the break was to the upside with the Dow gaining 91 points.

The technicals

The Dow: The Dow non-confirmed two days worth of dojis on Wednesday with a nice 0.55% pop ending near the high of the day.  This had the effect of confirming the recent bullish RTC exit (I was wrong to doubt the RTC exit strategy) and establishing a new rising RTC.  There is no resistance now until 16,724 which is the 50% retracement of last week's big dump and also a natural resistance line.  The 200 day MA served a a nice trampoline for the Dow and I think we can forget it for now.  So with the indicators still not yet overbought and no bearish candles in sight, I'd say the Dow looks higher again for Thursday.

The VIX: OK, I'll admit it - the VIX fooled me.  I thought it could go higher on Wednesday but instead it simply cratered right though its 200 day MA with a gap down marubozu/inverted hammer for an 8.7% loss.  This was enough to send the indicators oversold though the stochastic still has a ways to go before curving around for a bullish crossover.. Near term support is sort of indeterminate but we are now clearly in a strong descending RTC so there's nothing bullish about this chart for Thursday.

Market index futures: Tonight all three futures are barely higher at 12:21 AM EDT with ES up just one tick.  Call it essentially flat.  On Wednesday ES totally rejected last night's spinning top with a decent advance to 1945.  We're now entering overbought territory and the stochastic is way up there and flattening out for a bearish crossover.  We have now retraced 50% of last week's big dump but ES looks to be running out of gas around this point.  This looks like one of those nights to hold but not go short - yet.

ES daily pivot: Tonight the ES daily pivot rises from 1930.92  to 1940.67.  Once again we remain above the new pivot so this indicator  continues bullish.

Dollar index:  The dollar continued its random walk on Wednesday, up this time 0.13% but on a long-legged star.  Indicators remain in no-man's land between oversold and overbought so I have no idea where this one's going next.

Euro:  Last night I thought the euro might want to take another peek at 1.3341 on Wednesday.  Turns out we got down to 1.3344 - close enough - before recovering for a long-legged star. The overall trend though continues lower and the overnight is confirming that.

Transportation: Last night's star was totally rejected as the trans gained a decent 0.68% on Wednesday.  That leaves us in a rising RTC with indicators still not yet overbought.  With no bearish signals in sight, I'd have to say this one looks bullish 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       6       4      4           3       0.692    639  August     2       4      1           1       0.429   -201

     And the winner is...

Tonight we're seeing a resolution of some uncertainty last night in the upward direction.   That leaves use with largely bullish patterns in place though we're nearing levels where a reversal might kick in.  Still on the whole I think the best call in for Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday uncertain

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

• Wednesday uncertain.
• ES pivot 1930.92.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

On Tuesday the Dow kind of meandered about all day looking for a direction but never finding one and ending down just nine points.  It appears that the Dog Days of Summer are now upon us.  But I'll take that over airplane crashes and Putinoia any day.  So let's go right to the charts and see what we can make of Wednesday.  Woof woof!

The technicals

The Dow:  Intraday, the Dow's gyrations on Monday were about as ho-hum as it gets.  But the resulting candle was a clear spinning top, and following Monday's tall inverted hammer that now makes two reversal indicators in a row.  And whenever we get that, that considerably increases the chance that we will see a move lower.  Mediating that is the fact that the indicators have yet to hit overbought, though they're getting close.  But the stochastic still shows no signs of even starting to form a bearish crossover, so it's a conundrum.  Overall though, the candlestick evidence looks pretty compelling.

The VIX:  Last night I expected the VIX to test its 200 day MA again on Tuesday and it pretty much did, hitting 13.76, just above 13.64.  But the 0.70% loss formed a perfect spinning top and drove the indicators oversold.  So with the MA now apparently support, a reversal candle and oversold indicators, I have to wonder if we're not going higher on Wednesday..

Market index futures: Tonight all three futures are higher at 12:30 AM EDT with ES up 0.08%.    ES also put in a spinning top on Tuesday warning of a reversal and calling its descending RTC exit into question.  It also started the indicators moving lower before ever reaching overbought.  We now have a reversal warning, though one which requires confirmation.

ES daily pivot: Tonight the ES daily pivot dips from 1932.25 to 1930.92.  That's just enough to put ES back above the new pivot and keep this indicator bullish.

Dollar index:  On Tuesday the dollar gave us a red marubozu but because of the big gap up at the open, it actually closed higher, by all of 0.02%.  Still, a move like this just looks bearish.

Euro: I was skeptical about the euro's chances of moving higher on Tuesday and it did indeed continue lower, this time to 1.3369 on a hammer.  The euro keeps finding support in the 1.3341 area and another test of this is not out of the question on Wednesday though the close is in question given the choppy nature of the trade lately.

Transportation:  On Tuesday a small star signaled the failure of Monday's bullish RTC exit.  With indicators now close to overbought, one really has to wonder if there's any gas at all left in the tank to continue higher here on Wednesday.

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       6       4      4           3       0.692    639 
August     2       4      0           1       0.429   -201

     And the winner is...

Tonight is kind of a mixed bag as one might expect after a pair of low-volume August dog days.  The overall impression to me is ever so slightly bearish but not really enough for me to go out on a limb and call it so.  Therefore, I'll have to wait for some confirmations of all those dojis and in the meantime I call Wednesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday higher

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

• Tuesday higher, low confidence.
• ES pivot 1932.25.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well Monday played out according to the technicals nicely enough although the Dow did sag a bit into the close.  Still, a 16 point advance after Friday's big run-up isn't bad.  So now let's figure out whither Tuesday.

The technicals

The Dow: The daily candle on the Dow isn't quite as nice as I'd like to see - an inverted hammer.  However, it did trade entirely outside the descending RTC so that trend is most likely now over.  And the indicators continue to rise smartly off oversold towards overbought.  But I can't really give the Dow the green light here right now - not with that reversal candle hanging there.  We need confirmation on Tuesday.  I might have just been a pause at the 15,571 resistance level but we'll have to see.

The VIX: Last night I wrote "this chart looks like it has more downside for Monday."  And it sure did with the VIX down another 10% on a fat gap-down hammer that nearly touched the 200 day MA which is now serving as support at 13.63.  But with the indicators continuing lower but still not yet oversold and VVIX in a similar spot, I'd expect the VIX to at least take a second look at its 200 MA on Tuesday.

Market index futures: Tonight all three futures are higher at 12:13 AM EDT with ES up 0.10%.   ES did quite well on Monday, exiting its descending RTC for a clear bullish setup.  The recent downtrend is now over.  Indicators are now more than halfway from oversold to overbought but there's still no bearish signs on this chart.

ES daily pivot: Tonight the ES daily pivot jumps from 1914.08 to 1932.25.   Even after that big move, we're still above the new pivot so this indicator remains bullish.

Dollar index:  Last night we noted the development of a rare bullish tri-star pattern in the dollar.  Well it didn't quite work out.  While day three was in fact higher, it wasn't a star.  But the 0.10% gain could certainly be viewed as confirmation of Friday's tall star so my bet here would be for continued higher on Tuesday.

Euro: Well I figured the euro was going to pause on Monday.  But it actually sank, retracing half of Friday's gains to end at 1.3384.  That still leaves it just outside of the descending RTC nominally for a bullish trigger.  But it's not clear that that's going to come off since the indicators remain mixed and the overnight doesn't seem to have much mojo going.

Transportation: On Monday the trans continued to outperform the Dow in a big way (+0.79% to 0.10%) with a tall gap-up stubby inverted hammer. Indicators though are all still just coming off oversold and with Monday's action being a descending RTC bullish trigger, I'd have to say that there's more upside left to come 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639 August     2       3      0           1       0.500   -193

     And the winner is...

Despite the Dow looking a bit tired on Monday, there are generally bullish technical signs across the charts tonight, and certainly an absence of bearish signs so the only logical course is to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 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 1914.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last Friday was a textbook example of how headline risk can torpedo the technicals.  Late Thursday night there was news out that the Empty Suit was going to drop some bombs on a bunch of religious lunatics in Syria, and the futures weren't liking it.  But then lo and behold, come Friday morning, Adolf Putin announced the end of war games (which he had already said on Monday that they were going to end on Friday) and boom - the market shot up like a skyrocket.  Go figure.  Not that I'm complaining since I'm always net long, but none of this action made much sense to me.  Technically though, it provided us with some fresh meat to chew on, so pass the charts as we take on Monday.

The technicals

The Dow:  Friday's big jump for the Dow finally got the indicators off the floor, reinforced the bounce off the 200 day MA as support and even just managed to exit the recent wicked descending RTC for a bullish setup.  That makes tonight the first inkling of bullishness we've seen since July 23rd..

The VIX:  And the VIX was down 5.34% on Friday to form a bearish harami and a bearish stochastic crossover.  With its upper BB now history, this chart looks like it has more downside for Monday..

Market index futures: Tonight all three futures are higher at 12:42 AM EDT with ES up a respectable 0.21%.  On Friday ES had a good day with a vaguely bullish engulfing candle that just missed exiting its descending RTC for a bullish setup.  However the overnight is trading outside the RTC and that is a bullish setup.  We've also got indicators coming off oversold and a completed bullish stochastic crossover so this chart looks bullish to me tonight.

ES daily pivot: Tonight the ES daily pivot finally rises from 1910.25 to 1914.08.  We're well above the new pivot so this indicator is now bullish.

Dollar index:  On Friday the dollar put in a gap down star for a 0.19% loss.  This is 2/3 of a fairly rare pattern called a bullish tri-star.  A gap-up star Monday would confirm that.  We need to wait for that anyway, given Friday's star.

Euro: The euro had a big day on Friday, closing at 1.3413 to exit a week-long descending RTC for a bullish setup.  The indicators are mixed though and the overnight is running lower so it's not clear the euro isn't just going to take a rest on Monday.

Transportation:  And finally the trans did even better than the Dow on Friday, up 1.26% in a move that woke up their indicators, confirmed Thursday's spinning top, and jumped right out of their descending RTC for a strong bullish setup.  This one looks bullish 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639
August     1       3      0           1       0.400   -209

     And the winner is...

Tonight we're getting some fairly decent bullish technical signs from the charts, enough in fact to simply call Monday higher.  But given the continuing unrest around the globe, it will take just one bit of bad news to send the market back down again.  We live in crazy times.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.