Friday higher

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

• Friday higher, low confidence..
• ES pivot 1980.58.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well my computer upgrade took a day longer than planned but in the end it was worth it.  I now have a more stable and robust system than before.  In the meantime, we missed a few interesting market gyrations but that's the way it goes sometimes.  Now let's see if the market will close out the spooky month of October with a treat or a trick.

The technicals

The Dow: The Dow had a great day Thursday (admittedly largely to a big pop in V) and remains in a now two-week long rising RTC and nearly hitting its upper BB.  Indicators remain broken overbought.  I think there's still some room left here to touch the upper BB Friday.

The VIX:  the VIX dropped 4.16% Thursday with a bearish engulfing candle but continues to find support at the 200 day MA at14.07.  With no clear trend here, more sideways action seem to be in order.

Market index futures: Tonight all three futures are higher at 12:32 AM EDT with ES up 0.13%.  ES had a good day Thursday with a big green candle that disconfirmed Wednesday's spinning top to remain in a rising RTC.  The overnight continues higher and it looks like ES wants to visit its upper BB at 2016, maybe early next week.

ES daily pivot: Tonight the ES daily pivot ticks up from 1973.33 to 1980.58.  We remain comfortably above the new pivot so this indicator remains bullish.

Dollar index:  On Thursday the dollar had a gap-up pop to just ding its upper BB and start 2/3 of an evening star.  With overbought indicators and nearby resistance, I don't think the dollar has much more gas in the tank here.

Euro: The euro has resumed its slow march lower with another drop to1.2616, just touching its lower BB on Friday intraday.  The overnight is continuing lower so it doesn't look very good for the euro on Friday.

Transportation: In a second day of bearish divergence, the trans lost 0.96% on a day the rest of the market did great. After touching its upper BB we now have two hanging men in a row, q bearish stochastic crossover and an exit of the rising RTC for a bearish setup so this chart looks continued lower 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  6       6      5           2       0.571    376
October    5       6      3           1       0.500     76

     And the winner is...

With Russell rebalancing Friday, it's sure to be a wild ride and anything could happen.  But the last day of October is historically fairly bullish and I'm not seeing much bearish on the charts with the lone exception of the trans, so I'm going to risk it and call Friday higher.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.

Update

Just a quick update tonight.  My main PC is now back and running better than ever.  I now have four times the disk space, faster drives, and a RAID-1 array which is good insurance against a drive failure.

The bad news is that it took a lot longer than expected, partly because they didn't even start working on it until Tuesday afternoon.  Then we learned I needed a new power supply.  Then we found that the fan on the graphics card was dead.  Finding a new fan proved to be easier than a new graphics card, since I'm running dual DVI displays and for some unknown reason, all the new cards now come with only one DVI and one HDMI port.

Bottom line, I didn't get any work done on Wednesday.  Normal publication of The Night Owl resumes Thursday evening.

Upgrades

The Night Owl is down while my PC is in the shop getting a major upgrade (we're going to an all RAID setup with new much larger and faster disks).  So I'm afraid tonight's post is canceled.

And since I always call Fed days as "uncertain" out of policy, I may not post Tuesday night either.  I'm not expecting too much action Tuesday anyway so it seems like a good time to do this.

Either way, we should be back to the normal schedule by Wednesday night.  Happy trading!

Monday higher

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

• Monday higher, low confidence.
• ES pivot 1950.92.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last Thursday's break back up over the 200 day MA was all the Dow needed to post a 128 point advance on Friday, despite what looked like a fair number of bearish signs to me.  As the spooky month of October enters its final week, we'll try to redeem ourselves by getting Monday right.

The technicals

The Dow: The Dow last Friday was completely uninterested in the overbought indicators or the incipient bearish stochastic crossover as it simply kept going higher.  We remain in a rising RTC and the upper BB is still along way off.  So now I'm going to ignore the overbought indicators as hazard a guess that there's still more upside available here, especially in the absence of a reversal candle..

The VIX: On Friday the VIX fell another 2.54% on an inverted hammer but support around .16.15 held.  With indicators remaining quit oversold and the stochastic flat on the floor with nowhere to go but up, it still seems to me like the next move here is likely higher than lower.

Market index futures: Tonight all three futures are higher at 12:28 AM EDT with ES up 0.08%.  On Friday ES just continued higher, remaining inside a rising RTC with the indicators all broken now at extreme overbought levels. We stopped right at resistance at 1961 so the $64K question is can we push on through.  The overnight seems to suggest that might be possible - at least as it looks late Sunday night.

ES daily pivot: Tonight the ES daily pivot rises from 1941.50 to 1950.92.  We're now above the new pivot so this indicator turns bullish.

Dollar index:  On Friday the dollar gave up 0.15% on a tall doji star which coming in below Thrusday' candle has the look of a reversal lower.  However, the indicators are still not overbought so I will defer on this one.

Euro: After a star on Thursday the euro confirmed it Friday with an inverted hammer from oversold levels.  It's gapping up in the new overnight and trading outside the descending RTC for a bullish setup so this one looks higher on Monday.

Transportation: The trans have now completely refilled (and then some) the V left by the collapse of the first half of this month.Friday's 0.97% gain outperformed the Dow and cleared resistance at 8489.  We remain in a strong rising RTC and the indicators are all broken at overbought so there's no reason not to call this one higher again 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       6       4      4           3       0.692    639
August     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376
October    5       7      3           1       0.462    -52

     And the winner is...

Most of the charts look reasonably bullish tonight.  The only one that concerns me is the VIX, which looks ready to move higher, though given its inverted hammer, perhaps I'm worrying too much.  OK then, I'm just going to go with the flow and call Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $121,625 after nine trades in 2014, starting with $100,000.  We are now 7 for 9 total, 5 for 5 long, 2 for 3 short, and one push.  Tonight we stand aside.