Friday higher

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

• Friday higher, low confidence.
• ES pivot 1970.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Wow - I'm sure glad I called Thursday as "uncertain" because I certainly wasn't expecting a 264 point cratering from the Dow, thanks largely I believe to some sour grapes in Rome from a retiring member of the Fed who should have retired a while ago and also should at least have the good sense to just shut up.  OK, so now we continue to thread our way through this mine field hoping just to get to Saturday still in one piece.

The technicals

The Dow:  On Thursday the Dow pretty much just went down, stopping only because the bell finally rang on its biggest red marubozu since the bloodbath of  July 31st.  OK, well it also stopped right on its lower BB.  And even after a 1.54% drubbing, we're still not oversold.  The picture has changed once again, as it seems to do on a daily basis this week.  So now everything looks bearish.  One thing is clear - with ongoing oscillations becoming increasingly violent, this system can't go on forever like this - it has to end sooner or later.

The VIX:  To quote that noted stock market sage Gomer Pyle "Surprise, surprise, surprise!".  After slicing back down through its 200 day MA on Wednesday, the VIX didn't even slice back through the other way on Thursday - it just gapped up right over it to put in its biggest one day jump since the aforementioned July 31st.  And its still not yet overbought, though it did puncture the upper BB in a big way with a big dark cloud cover.  But these sorts of patterns seem to invite more, in violation of my rule that the VIX rarely spend more than a day or two above its upper BB cf. the end of July.  So while I'd like to call the VIX lower Friday, there's still a possibility for further gains here.

Market index futures: Tonight all three futures are, dare I say it actually higher at 1:26 AM EDT with ES up 0.10%.  On Thursday ES got pummeled along with everything else, giving up support at 1973 in a way that made the Maginot Line look strong.  The only ray of hope here is the overnight, which is causing the stochastic to curve around very nearly into position for a bullish crossover.

ES daily pivot: Tonight the ES daily pivot dives from 1984.33 to 1970.25.  Even after that, ES remains below the new pivot so this indicator continues bearish.

Dollar index:  Meanwhile, super-dollar gained another 0.17% on Thursday yo nearly touch its upper BB but on a red gap-up candle. We're now at levels not seen since July 2013  Thursday's semi-evening star is a reversal warning but this is one bus you wouldn't have wanted to be standing in front of all year long.

Euro: And so also the poor downtrodden euro continued its slow swirl down the toilet of currencies, closing this time at 1.2755, its lowest weekly close since November 2012.  The indicators remain stomped to a pulp, OBV continues to decline, even though it hit -213,000 on Thursday.  Bottom line, move along, nothing to see here, next stop, bargain basement.

Transportation:  Like the Dow on Thursday the trans took a big 1.39% dump with a red marubozu that stopped right on their lower BB.  The descending RTC is alive, we're still not oversold, there's no sign of a reversal.  End of story.

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  5       6      4           1       0.500    209

     And the winner is...

After a false alarm breakout on Wednesday the SPX Hi-Lo indicator fell back into reversal territory on Thursday with a 35 reading.  All the charts are suggesting more downside though - except for ES and the VIX.  This is a tough one.Hmmm - OK well I think I'm going to go with ES, or even simply the recent down/up/down pattern which simplistic as it may sound would suggest that Friday go up.  So I'm going waaay out on a limb and calling 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 uncertain

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

• Thursday uncertain.
• ES pivot 1976.17.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I mentioned the SPX Hi-Lo indicator being quite low and how that's always a good reversal indicator.  Well it was indeed, as the Dow popped 154 points on Wednesday.  That changes the picture, so let's look at the charts and figure out just what this means for Thursday.

Ebay Scam Alert

Ebay counterfeit 32 GB USB flash drive sold by world_fw_goal

The Night Owl likes to think of herself as pretty savvy in matters technical, but she just fell for the old counterfeit USB flash drive scam.  A 32 GB USB stick from China for $10.17 seemed like a pretty good deal.  Turned out to be too good to be true.  The drive came with a little sticker that said "32GB".  But when I loaded it with large files, only the first three read back OK.  The rest were called unreadable.  There was a reason for that.

The scum who sold it to me used an 8 GB drive and hacked the controller so it reported 32 GB when doing a Properties or even when formatting.  But any bits written to it past 8 GB simply vanished into space with no error reported on writing.  Files listed fine in the directory - they just weren't there.  Check it out:  You can clearly see the "32GB" sticker on the case, and the label "JYX1403218GB" on the chip itself.  That's the manufacturer code JYX, the date code 14/03/21 ... and the actual capacity of the chip: 8GB.

 Upon doing some research, it seems that the vast majority of flash RAM devices sold on Ebay are counterfeit, especially those from China.  Yet another reason not to do business with the Chicoms and to doubt every words they say.  I don't want to name any names, but the initials of this criminal from China are world_fw_goal.  I've asked Ebay to shut him down and I'll be filing a police report too.  It's not a big deal in the grand scheme of things but it really ticks me off.

The technicals

The Dow:  On Wednesday the Dow  put in a big green almost-marubozu for a bullish engulfing candle that popped out of a short descending RTC for a bullish setup.  While the indicators are still not yet oversold this was enough to send them higher.  We retook the `17,145 (now) resistance level so this chart now turns bullish.

The VIX: Last night I wrote "I'd not be surprised to see the VIX move lower after this one" and it did just that in a big way with the VIX shedding 11.12% on Wednesday completing the mother of all evening stars and slicing right back down through its 200 day MA.  That also sent the indicators lower before ever hitting overbought.  So this chart now looks continued bearish.

Market index futures: Tonight all three futures are lower at 12:33 AM EDT with ES down  0.10%.     Like the Dow, on Wednesday ES put in a big bullish engulfing candle that was enough to send th3e stochastic around close to a bullish crossover.  But we remain in a descending RTC so this all has to be taken with a grain of salt, particularly with ES sagging in the overnight.

ES daily pivot: Tonight the ES daily pivot rises from 1976.17 to 1984.33.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  The dollar continued its stair step motion higher on Wednesday after a three day pause for its highest close since ... yes, November of 2010. That leaves the dollar at its upper BB on the monthly chart.  So if it's going to reverse, the time is near.  Unfortunately, there's still no sign of that on the daily.

Euro: Meanwhile the euro remained in its long running rush to the basement on Wednesday, closing at 1.2787, its lowest level in over a year and with no end in sight.The indicators are all broken at oversold and the descending RTC remains intact so there's still no bullish signs on this chart.

Transportation: In an impressive turnabout, after looking quite bearish last night, on Wednesday the trans gained an impressive 0.69% on a big bullish piercing pattern. Big enough in fact to punch out of a very steep descending RTC for a bullish setup.  With the stochastic now curving around for a bullish crossover, this one looks bullish for 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     8       7      2           2       0.588     81  September  5       6      3           1       0.500    209

     And the winner is...

What a difference a day makes.  While the charts suddenly look pretty bullish overall tonight, I'm concerned about the usual tendency of the market to pause after big moves.  I'd not be surprised to see some sort of doji day on Thursday.  Accordingly, the call of choice is simply for Thursday 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.

Wednesday depends on ES pivot

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

• Wednesday higher only if ES pivot passed, else lower..
• ES pivot 1976.17.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

As expected, the Dow continued lower on Tuesday for its second triple digit loss in a row, for whatever reason, and there were plenty of them if you watched TV or followed the blogosphere.  What's nice about the charts is that they're always the same and they don't lie.  So we consult them once again to determine the fate of Wednesday now.

The technicals

The Dow:  On Tuesday the Dow plunged 117 points to form a two black crows pattern and a bearish RTC trigger.  The bearish stochastic crossover is now complete, we're only just off overbought and support at 17,145 collapsed without a whimper.  So on the face of it, with no reversal signs in sight this chart continues to look bearish.

VIX daily

The VIX: Wow - this one deserves a chart.  Take a look at the VIX for Tuesday.  After barely cracking the 200 day MA on Monday, the VIX rocketed up 9% on a big gap up for the mother of all hanging men.  This both opened and closed entirely above its upper BB.  And like I always say, the VIX rarely tarries at these levels.  So although the indicators aren't yet overbought and technically we do have a bullish trigger on the RTC (the three parallel descending lines), this pattern looks a lot more bearish than bullish to me.  I'd not be surprised to see the VIX move lower after this one.
.
Market index futures: Tonight all three futures are higher at 12: 27 AM EDT with ES up 0.11%.  On Tuesday, ES gave us two  black crows and a bearish RTC trigger.  Support at 1973 held, more or less and the new overnight seems to be attempting to make a stand of sorts right along the lower BB.  We're still not oversold, bu getting close.  While this chart may have a bit more downside left, I get the impression that the bulk of the selling is over, at least for now.

ES daily pivot: Tonight the ES daily pivot tanks again from 1990.58 to 1976.17.  And despite that big drop, ES remains below the new pivot, though now at least it's by less than two points.  Being this close puts the pivot in play and raises the possibility that ES may try to break above, but for now, this indicator remains bearish.

Dollar index:  After a star on Monday the dollar confirmed it with a 0.10% drop on Tuesday,albeit on a tall green candle.  After exiting a rising RTC two weeks ago, the dollar seems to be struggling for direction and I'm not calling it tonight.

Euro: Meanwhile the euro continues to find support at 1.2841 with a small inverted hammer on Tuesday.  That was good for a bullish stochastic crossover but we remain inside a descending RTC.  The dollar conflict is reflected here and this chart is also too tough to call tonight.

Transportation: One worse than the Dow, the trans now give us Three Black Crows cawing their way down with a steep descent to 8445. Friday's record close looks a long way off now.  Support at 8464 also gave way, the lower BB isn't til 8374 we're still not oversold yet.  So technically this chart remains bearish in a big way.

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  5       6      3           0       0.400    209

     And the winner is...

Most of the charts remain bearish tonight but two are suggesting reversals, and they're important ones: the VIX and ES.  I also checked my favorite bottom-finder, the SPX Hi-Lo indicator and it hit 29.41 on Tuesday.  It's only been lower than that three times in the last six months and every time, the bottom was in within a day or two.  But it's still a bit premature to definitively call Wednesday higher.  So I'm going to do a conditional call: if ES can break above its pivot by mid-morning on Wednesday, we close higher.  If it remains below though, we close 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, medium confidence.
• ES pivot 1990.58  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The markets had a bad day on Monday as expected.  Tonight I'm once again running late so this will be another Readers Digest Condensed Night Owl.  I did all the research, but I'm skipping the detailed chart run down.  We'll do that again next edition.

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  4       6      3           0       0.400     92

     And the winner is...

Despite all the damage that was done Monday, it wasn't enough to drive anything oversold nor form any bullish stochastic crossovers.  The technicals continue to look bearish despite what looks like an attempt at a DCB in ES  at 1 AM as I write.  So overall, the only call I can make here is for Tuesday lower.  I'll be happy to be proven wrong.

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 lower

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

• Monday lower, medium confidence.
• ES pivot 2005.50.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Friday began with a big pop as the market reacted to the Scotland vote.  Then Mr. Market got a bad case of buyer's remorse and gave up all those gains by 1 PM.  Then a small afternoon rally helped recover some of the day's gains.  And there was a last minute sell-off, who knows why five minutes before the bell.  By the end, after all that excitement the Dow managed a paltry 14 points.  But then it was triple-witching and all.  So now with that out of the way, let's see where the new week is headed.  To the chart-pole, Robin!

The technicals

The Dow: The Dow's Friday fade left us with a tall inverted hammer that traded entirely above its upper BB and exited the left side of the rising RTC, overbought indicators, and a stochastic on the verge of a bearish crossover.  It's not clear how much of that is op-ex related but I don't like the looks of it.  I cal this chart bearish now.

The VIX: On Friday the VIX gained 0.67% on a bullish piercing pattern.  We remain in a descending RTC and haven't quite reached support or oversold levels, but there's at least a suggestion of a move higher here Monday.  VVIX, which formed a spinning top sitting right on its 200 day MA supports that idea.

Market index futures: Tonight all three futures are lower at 12:37 AM EDT with ES down  a significant 0.55%.  We've not seen a drop this big in the wee hours for quite some time.  But Friday gave us a long-legged doji centered on the upper BB and the new overnight has broken support at 2000,  fallen way out of the rising RTC for a bearish setup and a clearly completed bearish stochastic crossover.  All the indicators have now turned lower and RSI has come off overbought.  That all spells lower for Monday in my book.

ES daily pivot: Tonight the ES daily pivot rises from 2001.42 to 2005.50.   We now find ourselves considerably below the new pivot so this indicator turns bearish.

Dollar index:  The mighty dollar seems unstoppable, gapping up on Friday to a level not seen in over a year.  That completed a bullish stochastic crossover but the candle is a hanging man in evening star position.  So this chart is conflicted and I won't call it.

Euro: The euro has now alternated between up and down for six straight sessions .  Friday's down move closed at 1 2844, like the dollar a level not seen in over a year.  But it's now very close to some strong multi-year support and the overnight seems to be respecting that so there's at least a chance of a move higher here on Monday.

Transportation: In a bit of bearish divergence on Friday, the trans lost 0.49% on a bearish engulfing pattern that bounced off the upper BB and sent all the indicators lower from overbought.  And the stochastic is now on the verge of a bearish crossover.  This chart looks bearish too.

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  3       6      3           0       0.333    -15

     And the winner is...

I'm hearing the growls of bears getting louder on the charts tonight, enough to just go ahead and call Monday 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. It's a shame too because it looks like a good chance for a lower close on Monday.  I'm just worried that we missed the boat on this trade.  And multi-day shorts have been quite risky all year long.