Friday higher

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

• Friday higher, low confidence.
• ES pivot 1993.83.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Arrgh - I said Wednesday would go lower, so it went higher.  Then I said Thursday would go higher, so it went lower!   Admittedly the big drop was early on and the Dow spent the rest of the day climbing back out of that hole.  If only the bell rang at 4:30 instead of 4 we might have made it.  And the SPX did end in the green, but my forecast is for the Dow.  Such are the perils of forecasting days with small changes.  Let's move on to Friday and see if we can end the week with a win.

The technicals

The Dow: On Thursday the Dow handed us a tall skinny hammer, and a better one than we saw on Wednesday.  It is interesting to note that in nine of the last ten days we've seen candles where the shadows were longer, sometimes much longer than the real bodies clearly demonstrating some powerful indecision. I've made a new descending RTC back to 9/5 and we're still in that.  Also, while the indicators continue to fall, they're not yet oversold.  So this chart still doesn't look very bullish to me.

The VIX: Now this is interesting.  We got some divergence here as the VIX fell 0.62% on a day that the Dow was down too..It's not a major one but the candle is strongly bearish engulfing, and an early retest of the 200 day MA failed, and we closed out of the rising RTC for a bearish trigger.  And we're on the verge of a bearish stochastic crossover.  To me, this all looks like more downside for the VIX on Friday.

Market index futures: Tonight all three futures are slightly higher at 12:30 AM EDT with ES up 0.04%. On Thursday ES broke out of a short descending RTC with a green tomahawk for a bullish setup, confirmed with a bullish stochastic crossover.  The other indicators are also rising and the overnight is trading modestly higher, so I'd have to say this chart looks at least a bit bullish for Friday.

ES daily pivot: Tonight the ES daily pivot ticks up from 1990.92 to 1993.83.  We remain above the new pivot so this indicator continues bullish.

Dollar index:  On Thursday the dollar put in a decent hammer but coming below Wednesday's spinning top as it did, the net effect as absolutely unchanged. The only thing is that it closed outside the rising RTC and that's a bearish trigger.  Could it be that the dollar's uptrend is over?

Euro: Last night I mentioned 1.2902 as support for the euro and that's just about where it traded around on Thursday, closing slightly higher at1.2924 on a long-legged spinning top.  Interestingly, it looks like the euro is now forming a symmetrical triangle as we've been putting in lower highs and higher lows for four days now.  That would suggest that the next break will be lower - again.

Transportation: Last night I wrote "the trans look ready to move higher on Thursday" and so they did.  In another bit of divergence the trans jumped 0.40% on a day the Dow was down with a tall green marubozu that confirmed Wednesday's hammer in a big way. That left the indicators in disarray with RSI and the stochastic moving lower, but money flow, OBV, and momentum turning higher.  Overall, this chart seems to look bullish to me tonight.

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     8       7      2           2       0.588     81
September  1       4      1           0       0.200    -34

     And the winner is...

The glimmers of optimism that appeared on the charts last night are starting to crystallize a bit tonight.  In particular, the VIX, the futures, and the trans look positive.  Also, the SPX Hi-Lo index appears to have bottomed and that's always a positive sign.  Therefore, I will once again call Friday higher.  I guess I have to be right eventually.  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 1990.92.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well I did say last night that I thought  Wednesday might be a hammer day.  And although I also thought we'd end lower (but didn't), the Dow did in fact put in a fat hammer that ended 55 points higher.  Unfortunately, that sort of throws a monkey wrench in my downtrend thesis so let's see if maybe the charts for Thursday can help sort this all out.

The technicals

The Dow:  Things were looking good for my call lower early on but come 11 AM the Dow rallied back hard to finish up 0.32% retracing half of Tuesday's losses.  That leaves us in a quandary because the descending RTC is now totally invalidated, and RSI is rising while the stochastic is falling.  This isn't a pattern I'm familiar with so we'd best just let it go at that.  No call here.

The VIX:  Last night I wrote "I'd lay better than even odds that the VIX actually goes lower on Wednesday" and I feel sorry for the sucker who took that bet because the VIX did in fact fall 4.59% on Wednesday on a big bearish inside harami after a brief retest of the 200 day MA (which failed).  That also dropped us out of the rising RTC fore a bearish setup and with indicators still oversold, this chart looks good for more downside on Thursday.

Market index futures: Tonight all three futures are slightly lower at 12:20 AM EDT with ES down  0.08%.  On Wednesday ES gave us a stubby hammer that almost (but not quite) bumped out of the descending RTC.  Indicators are wandering about in No Man's Land (between overbought and oversold).  So we have a reversal warning, but one which requires confirmation.

ES daily pivot: Tonight the ES daily pivot dips from 1992.00 to 1990.92.  That was enough to put ES back above the new pivot so this indicator now turns bullish.

Dollar index:  Last night I said of the dollar, "I'll believe it goes lower when I see it and not before".  Good thing too, because the dollar rose another 0.02% on Wednesday.  We do now have two spinning tops in a row, with Wednesday's a bit lower than Tuesday's.  It's also hanging right on the edge of the rising RTC.  The indicators remain broken at overbought so once again I'm skeptical that this uptrend is over..

Euro: The euro made a vain attempt to rally on Wednesday, ending about where it began, at 1.2902 which is becoming new support.  Meanwhile we remain in a long-running descending RTC and I still see no sign of that ending.

Transportation: I missed this call too (though not by that much), with the trans actually rising 0.08% on Wednesday.  And we did get a classic hammer here, though the indicators are still just off overbought and the stochastic is coming off a bearish crossover.  But I'll go with the candle here and claim that the trans look ready to move higher 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      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     8       7      2           2       0.588     81 September  1       3      1           0       0.250    -14

     And the winner is...

Tonight there are several signs of a possible reversal on Thursday, specifically from the VIX, the futures and the trans.  The conservative approach would be to wait for confirmat4ion, but I'm feeling wild and crazy so I'll just go ahead and call 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 lower

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

• Wednesday lower, low confidence.
• ES pivot 1992.00.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

This time the technicals paid off as the Dow lost a non-trivial 98 points on Tuesday.  That changes the picture somewhat so let's take a closer look at where Wednesday is headed.

The technicals

The Dow: Well it looks like what the Dow gave us was a classic "fake-out breakout".  Two days above the descending RTC made a bullish trigger, but on Tuesday the Dow collapsed right back through the RTC and out the other end.  That also short-circuited the new bullish stochastic crossover and sent all the indicators back lower.  Net-net, this chart suddenly looks bearish again..

The VIX:  On Tuesday the VIX had its best day since 8/15 with a tall green candle that finished up 6.64% to stop exactly on its 200 day MA and just shy of its upper BB.  With the VIX now fairly overbought and the natural resistance of the 200 MA, and its propensity to bounce off the upper BB, I'd lay better than even odds that the VIX actually goes lower on Wednesday..

Market index futures: Tonight all three futures are lower at 12:16 AM EDT with ES down  0.14%.  After two down days in a row, ES has now hit oversold though the stochastic is not yet lining up for a bullish crossover.  There's support at 1982 and with indicators now oversold, I don't think there's much downside left, though a reversal doesn't seem to be immediately at hand.  IN any case, the overnight continues to guide lower.

ES daily pivot: Tonight the ES daily pivot drops from 2000.42 to 1992.00.  We remain below the new pivot so this indicator continues bearish.

Dollar index:  The dollar continued its ride into the stratosphere on Tuesday with a 0.05% gain.  While that's a small spinning top, I pay scant attention to this given the unstoppable nature of the dollar lately. If you look at the weekly chart, you'll see that the weekly RSI of the dollar has been pegged at 100 for three straight weeks now.  That's fairly amazing.  In the meantime, the dollar remains in a long-running rising RTC and I'll believe it goes lower when I see it and not before.

Euro: And on Tuesday the euro put in a small spinning top, just like the one it made on Friday.  And that one was followed by another drop  The euro now has no support until 1.2811, though it is forming a hammer on the weekly chart so I'd be careful about going short at these levels.

Transportation: After a dark cloud cover on Monday the trans confirmed that with a 0.69% fall on Tuesday to drop right out of the rising RTC for a bearish setup and a bearish stochastic crossover.  Indicators remain overbought so this chart now looks bearish.

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     8       7      2           2       0.588     81
September  1       2      1           0       0.333     41

     And the winner is...

Tonight the general gestalt of the charts is fairly negative, though with signs of an impending turnaround.   The SPX Hi-Lo indicator has come off 100 but at 86 is not yet at a level from which reversals are a sure thing.  Wednesday just might be a hammer-style doji day.  But I haven't quite the hubris to be that specific, so I will simply settle for calling Wednesday lower.

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 lower

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

• Tuesday lower, low confidence.
• ES pivot 2000.50.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Our call for a higher Monday never really got off the ground as the Dow bobbed about on Monday, always just a bit underwater.  Though the Nasdaq did have a small gain - but that's the Nasdaq.  Turns out this was one of those days when that pesky thing called Real Life (TM) interfered with my writing time so tonight we're presenting the Trader's Digest Condensed Version of the Night Owl.  Rest assured I still looked at the charts, I'm just not writing about them.

The technicals

ES daily pivot: Tonight the ES daily pivot ticks down from 2000.67 to 2000.50.  Unfortunately, we're now below the new pivot so this indicator turns bearish.

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     8       7      2           2       0.588     81 September  0       2      1           0       0.000    -57

     And the winner is...

We cut right to the chase: what looked like a breakout on Friday is now looking more like just an expansion of a trading range.  Things a looking a bit gloomier all around tonight than last, so I think that warrants a call for Tuesday lower.

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 2000.67.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well we took last Friday off and wouldn't you know it, that was the day the Dow finally decided to break out of its week-long doldrums on improved volume with a nice 68 point advance and almost a new record high.  Now perhaps with all the players back in town we can do some technical analysis for real.  So let's see whither the charts for Monday.

The technicals

The Dow: Finally, after days of indecision, we've got some meat here to chew on as the Dow put in its best close in a month and broke out from its week-long sideways action.  This clearly broke out of a shallow but narrow descending RTC for a bullish setup and formed a bullish stochastic crossover..So I have to think this chart has more upside left for Monday.

The VIX:  And the VIX in mirror-image to the Dow meanwhile fell out of its rising RTC with a 4.35% drop for a bearish setup and a bearish stochastic crossover.  So with RSI descending but still overbought, it looks like there's more downside left here on Monday..

Market index futures: Tonight all three futures are lower at 12:29 AM EDT with ES down  0.09%.  Like the Dow, on Friday ES broke out of consolidation for a record close.  However, the new overnight is cooking up a dark cloud cover, though the stochastic just completed a bullish crossover.  With this much conflict, I can't offer an opinion on this chart tonight.

ES daily pivot: Tonight the ES daily pivot ticks up from 1999.50 to 2000.67.  Despite a slow drift lower in the overnight we remain above the new pivot so this indicator is now bullish.

Dollar index:  After blasting through its upper BB on a big gap up last Thursday, the dollar gave 0.09% of it back on Friday, though on green a harami that was just enough to remain in the rising RTC.  So while the uptrend remains intact, this pattern is too tough for me tonight - pass.

Euro: And after last Thursday's big dump, the euro put in a small DCB on Friday in the form of a spinning top.  But that's being non-confirmed in the Sunday overnight as the euro resumes its march to the cellar, now down to 1.2937, an area of weak support from the past two days.There simply continues to be nothing bullish about this chart.

Transportation: The trans had a very nice day last Friday with another record close at 8602.  That leaves them oversold but the stochastic is not yet forming a bearish crossover and the upper BB is still a ways off at 8652.  It makes sense that the trans will try to hit that level before reversing.

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     8       7      2           2       0.588     81
September  0       1      1           0       0.000    -31

     And the winner is...

The charts are not unanimous tonight but the bulk of the analysis is positive.  So with the futures down a bit, I'm going way out on a limb and calling Monday 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.