Friday, November 14, 2014

Friday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher only is ES stays above its pivot, else lower..
  • ES pivot 2034.83.  Breaking above is bullish, below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well we're not quite 100% tonight but I'm feeling good enough to put together my usual collection of random rants that pass for market forecasting.  So on Thursday we got yet another doji on yet another small range day.  There was some talking head on CNBC Wednesday talking about consolidation.  I was thinking more like topping but after Thursday I'm starting to think maybe he's right.  Let's let the charts decide.

The technicals

The Dow: The Dow now has three dojis in a row: a star, a hanging man and Thursdya' spinning top.  Notably, we're two days outside the rising RTC now and that's a canonical bearish trigger.  With RSI at 99.01, who ya gonna believe - some talking head on CNBC, or me?  I'm still thinking this looks toppy.

The VIX: And notably, the VIX on Thursday gained nearly 6% on a bullish piercing pattern that tested the 200 day MA.  Despite Wednesday's decline, the week-long trend is vaguely higher and given the oversold conditions, this isnt' what I'd call consolidation.  It looks more like the VIX will want to revisit the MA on Friday.

Market index futures: Tonight, all three futures are slightly higher at 12: EST with ES up 0.04%.  On Thursday ES put in a perfect star.  Consolidation or top?  Well we traded outside the rising RTC for a bearish setup and indicators remain oversold.  There's little clue it he overnight as to Friday's direction.    Perhaps we're in for more sideways motion.

ES daily pivot: Tonight the ES daily pivot ticks up from 2033.33 to 2034.83.  That now leaves ES essentially right on top of the new pivot.  So that puts the pivot in play.  A break above is bullish and below is bearish.

Dollar index: If there's any consolidation to be found, it's in the dollar which on Thursday went nowhere.  We've now seen 59.04 ($USDUPX) for size straight days now.  However, the dollar has now exited a month-long rising RTC for a bearish trigger so with declining indicators I'd say there's more downside to coming on Friday.

Euro:  And as the dollar slowly slides, the euro continues to drive slowly higher.  We've barely moved over the past week but it was enough to bring the indicators off oversold.  Still the only reasonably forecast here is for more sideways action until we get a breakout - and I don't see that coming on Friday.

Transportation:  The trans is always a good indicator and on Thursday we got 0.20%'s worth of bearish divergence form the Dow. with a small red hanging man that closed right on the rising RTC for a bearish setup.  Indicators remain highly overbought here too so the next move seem to be logically lower from here.

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   4       2      2           0       0.667     91

     And the winner is...

While we're seeing some bearish signs cropping up in the charts, I'm not yet seeing confirmation form the futures.  In fact with ES sitting right on its pivot, this is an ideal time for a conditional call.  If ES move above its pivot and remains there by mid-morning Friday, we'll close higher.  Otherwise, if ES breaks under and stays there, we close lower.  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, November 13, 2014

Thursday

I'm very sorry but I'm afraid I can't do the Night Owl tonight due to some unexpected medical issues.  Nothing grave, but I'm really not feeling so hot tonight.  We'll see what Thursday brings.

Wednesday, November 12, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 2035.50.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Zzz...zzz...zz...  huh?  Huh, did the bell ring already?  Boy, what a snoozer Tuesday was with the Dow ending with a gain of all of one whole point.  What's up with that?  Let's see what the charts have to say about it for Wednesday.

The technicals

The Dow: The Dow's tiny little star on Tuesday is hanging right on the edge of a long-running rising RTC.  And with indicators stuck on crazy-overbought, this is a reversal warning that's got my attention..

The VIX: Interestingly, the VIX which last night looked like nothing but lower Tuesday on a three black crows, instead put in a small bullish inside harami.  With indicators remaining oversold, this one now seems to be giving a bullish reversal warning.

Market index futures: Tonight all three futures are lower at 12:42 AM EST with ES down  0.15%.  We got a doji in ES on Tuesday too, so a note of caution is appropriate here.  The overnight action so far seems to support that idea,

ES daily pivot: Tonight the ES daily pivot ticks up from 2030.00 to 2035.50.  For the first time in a while, that now leaves ES back under the new pivot so this indicator turns bearish.

Dollar index:  The dollar seems to be having some trouble advancing lately.  After w whole week of bouncing about, Tuesday's 0.22% loss calls the current rising RTC into question as we sit right on the very edge.  Hmmm...

Euro: Meanwhile the euro looks to be putting in an ascending triangle.  With indicators only just now off oversold, it looks like we may be in for a bullish breakout here in the next day or two.

Transportation:  Like the Dow, the trans on Tuesday put in a perfect star doji.  While a pause might be expected after Monday's big run-up,I note that RSI has now hit 96.5.  But we still need confirmation.  Note that just two days ago (last Thursday) we were in a nearly identical situation - (little star following a big gain)and yet the next day was up again.  So it's still a bit premature to call this one lower yet though I'd not be going long right about 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   4       2      1           0       0.667     91

     And the winner is...

We're starting to see a number of dojis on the charts all warning of a short term top.  Unfortunately, they all require confirmation and the counter-trend calls have been risky all year long.  Accordingly I will have to be satisfied to simply call Wednesday uncertain.  Though if I absolutely had to hazard a guess, I'd say it looks lower.  I'd definitely not be going long tonight.

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, November 11, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 2030.00.  Holding above is bullish.
  • Rest of week bias higher technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well Monday played out about as expected with a modest 40 point gain for the Dow.  So now let's see how the day's charts look to predict Tuesday's close.

The technicals

The Dow:  On Monday the Dow rejected Friday's hanging man (this is why we always require confirmation of those reversal candles).. We remain inside a long-running rising RTC, the indicators remain broken overbought, nothing to see here, move along.

The VIX:  Since breaking under its 200 day MA three days ago, the VIX has been stuck in a steep descending RTC.  With another 3.43% decline on Monday and no support til .11.78 there seems to be still more room to run lower here.

Market index futures: Tonight all three futures are higher again at 12:18 AM EDT with ES up a respectable 0.21%.  

ES daily pivot: Tonight the ES daily pivot rises again from 2026.67 to 2030.00.  Once again we're above the new pivot so once again this indicator is positive.  ES also rejected a spinning top reversal warning Monday opting instead for a nice green candle to remain solidly inside a now long-running rising RTC.  And the overnight seems to be continuing on the same track.  We remain in record territory but still nowhere near the upper BB so there's really no bearish signs at all here tonight.

Dollar index:  After a dark cloud cover on Friday, the dollar did indeed put in a lower candle on Monday but because it closed above Friday's close, it ws green for a 0.21% gain.  Still, with indicators now looking to have peaked at overbought, lower looks more likely from here than higher.

Euro: Meanwhile, the euro continues its random descent into the basement with another ed candle to close at 1.2425 on Monday for a dark cloud cover.  There's still support around 1.2385 but I'd bet the euro is going to wan to revisit that level very shortly.

Transportation:  And finally on Monday the trans outperformed the Dow in a big way, up a big 1.33% to the Dow's 0.23% - Dow Theorists take note.This chart continues to look nothing but bullish.

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   3       2      1           0       0.600     90

     And the winner is...

Once again, with the charts continuing to look pretty healthy and in the absence of any bearish signs, I just have to call Tuesday 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.

Monday, November 10, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence.
  • ES pivot 2026.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Friday was interesting not so much for the net change (which wasn't much) but for the candles it produced.  So let's take a peep and start predicting Monday.

The technicals

The Dow:  The Dow's paltry 19 point gain on Friday belied the classic hanging man it produced.  This is a fair reversal warning that gains credibility by virtue of its close proximity to the right edge of the rising RTC as well as the indicators, which re due to be coming off overbought any day now..

The VIX:  But comparatively, the VIX had a big decline Friday down another 4% after breaking under its 200 day MA.  We've now hit oversold but with no support til .11.80 I'd say there's still a fair amount of downside available here.

Market index futures: Tonight all three futures are higher at 12:20 AM EST with ES up 0.11%.  On Friday ES also put in a reversal warning in the form of a little star with indicators that have been quite overbought for a  l o n g  time.  Nevertheless, we remain in a rising RTC and the Sunday overnight pin action looks positive, so I can't call a reversal here yet.

ES daily pivot: Tonight the ES daily pivot rises again from 2022.67 to 2026.67.  After a quick failed test a little while ago, ES managed to remain above its new pivot so this indicator remains bullish.

Dollar index:  The dollar remains rather overbought but on Friday it lost a big 0.46% on a classic dark cloud cover.  This is quite a bearish candle indeed so my money's on a lower dollar  Monday.

Euro: And of course to complement the dollar's bearish pattern on Friday we got a nice bullish piercing pattern form the euro.  Along with oversold indicators that makes this chart look bullish for Monday.

Transportation: IN  bit of bearish divergence on Friday the trans fell just 0.04% but that made a nice little star reversal warning.  With  OBV having apparently topped, this could mean lower on Monday.  With these record closes, it's hard to tell.

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   2       2      1           0       0.500     50

     And the winner is...

The charts generally seem to be continuing bullish tonight, and enough so that the logical call is for 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.