Friday higher

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

• Friday higher, low confidence.
• ES pivot 2014.33.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well it was a nice theory with just one problem - it was wrong.  Apparently, the Election Day pop wasn't just a fluke and the Dow managed to add on another 70 points on Thursday for yet another record close.  So we were wrong.  Oh well.  That's what I get for trying to outsmart Mr. Market.  Now let's get back to the pure technicals and figure out Friday.

The technicals

The Dow:  With Tuesday's doji left in the dust, we now have two white soldiers who are marching on relentlessly ever higher with another 0.40% gain on  Thursday..We remain in a rising RTC, the indicators remain uselessly overbought so I won't try to game this one - this chart just looks continued bullish.

The VIX:  As I definitely didn't expect, the VIX broke under its 200 day MA on Thursday after a vain attempt to push higher, ending down 3.53%.  Unlike some other charts, the VIX rarely recovers quickly from a 200 MA breakdown.  So with indicators not yet oversold and no support til 12.67 (the lower BB is way down at 9.82), there's nothing here to prevent more downside..

Market index futures: Tonight all three futures are higher at 12:35 AM EST with ES up 0.15%.  On Thursday ES just kept marching higher with Monday and Tuesday's reversal warnings just a faint memory.  The indicators are all locked back in broken overbought mode so there's really no bearish signs on this chart tonight.

ES daily pivot: Tonight the ES daily pivot rises from 2014.33 to 2022.67.  That puts us back above the new pivot so this indicator returns to bullish.

Dollar index:   On Thursday the dollar put in a giant green bullish engulfing marubozu for a huge 0.65% gain.This now leaves us at multi-year resistance from August and September 2010.  I can't help but notice that the monthly stochastic is about to form a bearish crossover.  This upward push can't go on forever.  But right now it doesn't look like the top will come on Friday.

Euro: And on Thursday the euro continued its headlong rush down the toilet with a big loss to end at 1.2390. We're now closing in on mutlti-year support at 1.2300.  The monthly RSI has now hit 3.85 but lest you think that is wildly oversold, recall that back in June 2010, it hit zero - that's zip, zilch,  nada, square root of nothing - right before going on a year-long tear.  Just sayin...

Transportation:  The trans had a great day Thursday, handily outperforming the Dow with a big 1.28% green marubozu for another record close here too.  There's just nothing bearish on this chart 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     8       7      2           2       0.588     81
September  6       6      5           2       0.571    376
October    6       6      3           1       0.538    271
November   1       2      1           0       0.333     31

     And the winner is...

OK, no more second-guessing Mr. Market for me!  Tonight the charts pretty much all look reasonably bullish so that's my 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.

Thursday lower

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

• Thursday lower, low confidence.
• ES pivot 2014.33.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Oops - looks like I forgot to hit the "Publish" button - again.  Sigh.  But I really did write that post very late Tuesday night, so my call for a higher close Wednesday was correct.  And the Election Proximity factor held true to form.  So now that we've gotten rid of a bunch of pesky socialists, let's see what the charts might have in store for Thursday.

The technicals

The Dow:  After looking ready to roll over, the Dow took a 101 point victory lap after the elections to stave off a bearish RTC exit and score another record close.  Indicators are right back to pegged on overbought and there's no bearish signs here..

The VIX:  On Wednesday the VIX confirmed Tuesday's inverted hammer with a 4.84% decline that stopped right on its 200 day MA at 14.11 with a gravestone doji.  So there's some support here now.  But will it hold on Thursday?  That's not at all clear.

Market index futures: Tonight all three futures are lower at 12:44 AM EDT with ES down  0.27%.  Es had a nice day on Wednesday along with everything else, but the new overnight seems to be doing some retrenching.  It's now just under the rising RTC for a bearish setup and the indicators are now slowly moving off extreme overbought, so this one looks lower.

ES daily pivot: Tonight the ES daily pivot rises from 2004.83 to 2014.33.   That move, plus a sagging ES puts us back below the new pivot so this indicator is now back to bearish.

Dollar index:  On Wednesday the dollar was right back to its relentless march higher  It's now climbing its monthly upper BB and is approaching some 2010 resistance.  But for the short term, we now have a gap up doji for 2/3 of an evening star so caution is in order.

Euro: The euro on Wednesday once again found support at 1.2484 but seems unable to make much of it.  We've now exited the descending RTC for a bullish trigger but I think instead a bit of consolidation looks more likely.

Transportation: The trans hit another record close of their own on Wednesday but on a hanging man that's at least a possible reversal sign.

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    6       6      3           1       0.538    271
November   1       1      1           0       0.500    101

     And the winner is...

OK, so the market's had its post-election pop and now it looks like it's time to get down to reality.  We're seeing a number of reversal signs on the charts, enough in fact for me to call Thursday lower.

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.

Wednesday higher

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

• Wednesday higher, medium confidence.
• ES pivot 2004.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

This is about why I called Tuesday as "uncertain": Dow up just 18 and the SPX down 5.7.  Everyone was clearly waiting for the results of Tuesday's elections.  One of the advantages of being a Night Owl is that we can now see those results and it's pretty clear that Mr. Market likes them.  We'll run down the charts as usual, but it looks like Wednesday is pretty much a foregone conclusion at this point.

The technicals

The Dow:  From a purely technical point of view, the Dow is now looking very toppy, with highly overbought indicators and a duet of dojis that have bounced off the upper BB leaving 17,400 as serious resistance.. We remain inside the rising RTC for now but all it will take is a close 50 points lower on Wednesday to initiate a bearish setup.

The VIX:  On Tuesday the VIX posted a strange gap-up inverted hammer that might count as a reversal candle but I think it reflects more just ongoing uncertainty than anything else.  This should all resolve on Wednesday..

Market index futures: Tonight all three futures are higher at 12:21 AM EDT with ES up 0.24%.   On Tuesday ES confirmed Monday's star with a hanging man.  The indicators are still pretty much broken overbought but the stochastic has been fading lately.  All in all this chart seems to have more downside risk than upside potential.

ES daily pivot: Tonight the ES daily pivot drops from 2012.42 to 2004.83.   That's enough to put ES back above its pivot so this indicator now turns bullish.

Dollar index:  Add this chart to the reversal warnings.  On Tuesday the dollar lost 0.37% to fall back below its upper BB on something of an evening star pattern.  That was also enough to trade entirely outside a steep rising RTC so this chart now looks pretty bearish.

Euro: Similarly, the euro on Tuesday traded outside its descending RTC for a bullish setup and bounced off its lower BB with oversold indicators.  This all looks like a good setup for a higher euro on Wednesday.

Transportation: Like the Dow, the trans on Tuesday put in an inverted hammer that, following Monday's hanging man makes two reversal warnings in a row.  The index is no doubt being buoyed by declining oil prices but it looks toppy short-term to me.

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    6       6      3           1       0.538    271
November   0       1      1           0       0.000      0
     And the winner is...

Tonight looks like one of those nights where the news trumps the technicals, which frankly don't look so hot.  And the days surrounding election day are typically bullish anyway so I'm just going to ignore the reversal signs in the charts (possibly at my own peril) and call Wednesday 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.

Tuesday uncertain

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

• Tuesday uncertain..
• ES pivot 2012.42.  Holding below is bearish
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The markets turned in a lackluster session on Monday that caused my conditional call to miss, but just barely, since both the Dow and SPX closed lower though ES remained above it pivot all day long.  I think that reflects most people just sitting on their hands waiting for Tuesday's election results.  Still, we got some interesting candles on Monday so let's light them up and see what's what.

The technicals

The Dow:  Last night I wrote "That's been the trend for weeks now - one or two up followed by one small down day."  And wouldn't you know it, that's exactly what we got on Monday - a 24 point dip on a small red spinning top following two days of big gains.  However, now we have finally touched the upper BB and it looks like the Dow may be running out of steam at these lofty levels.  Technically, we've got a reversal sign here, though one which requires confirmation.

The VIX:  The VIX showed some unexpected strength on Monday, gapping back above its 200 day MA with a 5% pop that still leaves the indicators oversold.  This makes a completed morning star and leads me to think there's more upside to come..

Market index futures: Tonight all three futures are barely lower at 12:09 AM EDT with ES down  just 0.02%. On Monday ES put in a classic star reversal warning right at the top of Friday's big run-up.  And the new overnight seems to be confirming that so this one's looking lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises from 2005.00 to 2012.42.  That gain is enough to leave ES below the new pivot so this indicator turns bearish.

Dollar index:  The dollar continued its unstoppable ways Monday with its third gap-up candle in a row to trade entirely above it supper BB and its highest close since September 2010. And while we're on the monthly chart I'll note that we haven't been this overbought this long since back then and that ended with a massive dollar sell-off.  I'd not be going long the dollar for the long term from here.

Euro: And the euro on Monday just dribbled down its lower BB to leave its indicators all flat on the floor.  Nothing to see here - move along

Transportation: On Monday the trans put in a small 0.14% gain but the real story was the candle, a classic hanging man.  Indicators are back to overbought  and we traded outside the rising RTC for a bearish trigger, 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  6       6      5           2       0.571    376
October    6       6      3           1       0.538    271
November   0       1      0           0       0.000      0

     And the winner is...

The days around Election Day are generally bullish.  But there seems to be some growing uncertainty about the outcome so I think the hand-sitting will just continue on Tuesday as we wait for the results to come in.  So tonight we have no choice but to call Tuesday uncertain.  Although I must say that technically, this market is looking toppy to me.

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.

Monday depends on ES pivot

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

• Monday higher only if ES remains above its pivot, else lower.
• ES pivot 2005.00.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

SPX +1.17% on Halloween, yum!

Ah so!  On Friday the Bank of Japan handed Mr. Market a big Halloween treat in the form of a nearly 200 point gain in the Dow to close out the spooky month of October in style.  Domo arigato!

We now leave the annual period of negative seasonality and look forward to the market's historically best six months.  So let's head back to the charts as we digest our NSRGY Crunch bars and HSY Kisses to see where Monday's going.

The technicals

The Dow: The Dow rallied hard on Friday with a pretty broad-based advance on higher than normal volume.  .Last Thursday night I wrote "I think there's still some room left here to touch the upper BB Friday.".  And that's exactly what happened.  We even closed 35 points above the upper BB with a nice green marubozu for another new record.  The indicators all remain broken at highly overbought but we remain well inside a long rising RTC.  With no bearish signs the only question is, is there still enough gas in the tank after two big days to keep climbing?  I'm not so sure.  The last ten out of ten times we hit the upper BB, there was a pullback within one or two days.

The VIX:  On Friday  the VIX broke its support at 14.39 and went on to just break under its 200 day MA at 14.08 with an inverted hammer.  With indicators back to oversold, I expect the VIX to linger in this neighborhood for a day or two.

Market index futures: Tonight all three futures are lower at 12:35 AM EDT with ES down  0.14%.  ES obviously had a great day Friday and very nearly hit its upper BB on a tall green marubozu to stay in a rising RTC.  We're in a long overbought stretch but after a while that becomes meaningless.  However, the overnight is showing some signs of weakness

ES daily pivot: Tonight the ES daily pivot rockets from 1980.67 to 2005.00.  But even that jump still leaves ES above the new pivot so this indicator is still bullish.

Dollar index:  Well the dollar fooled me on Friday by not completing what looked like an evening star.  Instead it gapped up again to trade entirely above its upper BB. Holy greenback, Batman!  I had to back out to the monthly chart to find the last time we were at these lofty levels - it was September 2010!  And while we're there, the dollr is forming a monthly bearish stochastic crossover.  But back on the daily level, we now have at least a suggestion of a possible move lower on Monday.

Euro: And of course the euro kept a three day losing streak going on Friday to make it four in a row, down to 1.2478 - its lowest since August 2012. With support at 1.2529 gone, the euro now seems to want to keep dribbling down its lower BB.  There are certainly no bullish signs on this chart tonight.

Transportation: Even with the Dow's outstanding performance Friday the trans still managed to outdo that with a 1.44% gain that totally quashed what looked like the end of an uptrend.  This big green marubozu turns this chart right back to bullish again.

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    6       6      3           1       0.538    271

     And the winner is...

The first week of November is historically quite bullish and the Sunday night charts all do indeed seem to support that.  But on Sunday night we're looking at two day old data with the exception of the futures, and they seem to suggest we may be in for a pause.  That's been the trend for weeks now - one or two up followed by one small down day.

Still, I feel funny calling for a lower close given the absence of outright bearish signals.  So this seem like a good night to make a conditional call: if ES manages to remain above its pivot by mid-morning Monday we'll close higher.  If it breaks under, we close lower.  So sez I.

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.