Friday uncertain

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

• Friday uncertain.
• ES pivot 2037.08.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

On Thursday we got a big rally early on that faded as the day progressed and made for some interesting candles so let's take a look as we wind up the second week of December.

The technicals

The Dow:  Thursday's action gave the Dow a big inverted hammer that is generally quite bullish.  Of course Tuesday's hammer was also supposed to be bullish but that flopped big time on Wednesday.  But now we're actually finally oversold and have now touched the lower BB two days running.  So this chart is at least hinting at more upside.

The VIX:  The VIX gained another 8.36% on Thursday as it continued climbing its upper BB in a move reminiscent of two months ago.  VVIX spiked even more, right up to its resistance at 134 and is now highly overbought.  I'd say the VIX is due to come back down soon but can't say if it will be on Friday.

Market index futures: Tonight, all three futures are lower at 12:18 AM EST with ES down 0.17%. 
lower   We got a giant bullish inverted hammer on Thursday off the lower BB along with indicators now quite oversold, so there's at least a suggestion of a move higher here on Friday.

ES daily pivot: Tonight the ES daily pivot ticks up from 2036.58 to 2037.08.   But we remain below the new pivot so this indicator remains bearish.

Dollar index: A nice 0.45% gain in the dollar Thursday  along with a stochastic gearing up for a bullish crossover points to higher here on Friday.

Euro:  The euro fell on Thursday on a dark cloud cover.  With a stochastic close to forming a bearish crossover, a bearish RTC setup, and a drift lower in the overnight, this one looks lower on Friday.

Transportation:  The trans have now put in three days of higher lows and their stochastic is getting ready for a bullish crossover.  But they're not yet out of their descending RTC so there's still something of a falling knife 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       4      5           0       0.444     38
December   3       2      2           1       0.667   -192

     And the winner is...

Tonight we're getting a number of bullish reversal candles in the charts but unfortunately they really require confirmation.  I ignored that Tuesday night and paid for it big time on Wednesday.  So we're not making that mistake again.  I get the impression that the market is being more highly news-driven than usual lately, with the price of oil being the obvious culprit.  So much as I'd like to call it, I'm afraid I have to take a pass again tonight and just call Friday uncertain.  We just don't quite have enough factors lined up to make the bullish call, though I do think that's where the bias seems to be tonight.

That's all she wrote.  See you again Sunday night.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 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 2036.58.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

My my, how quickly one can go from hero to zero.  The technicals didn't really look at all bearish last night so I said we'd go higher and yet here we are with the Dow tanking 268 points on Wednesday to finish near session lower.  All we can do is say ouch, take the heat, and move on.  One bad day does not a career make.  So with this interesting development, let's see how the picture changes for Thursday.

The technicals

The Dow:  Huh - well so much for the impressive hammer candle on Tuesday.  Wednesday's big red marubozu made it look like an extra from the Wizard of Oz.  This big dump wiped out a month of gains in one day and closed under the lower BB but even at that did not drive the indicators oversold.  So in the absence of any reversal signs at all, I can only call this one lower again.

The VIX:  On Wednesday the VIX failed to complete an incipient evening star in a big way with a massive 24.45% explosion for its biggest gain since early October back when, yeah I can't remember what earth-shaking news caused that spike either.  Anyway we traded entirely above the upper BB which is quite unusual and the indicators are now back to overbought.  But as in early October when that condition went on for three more days, there's no guarantee of coming back to earth on Thursday.

Market index futures: Tonight, all three futures are higher at 12:33 AM EST with ES up  0.17%. On Wednesday ES took a big dump that stopped right on its lower BB, (finally) drove the indicators oversold (remember when I was complaining recently about how long we'd been overbought?), and started the stochastic curving around for a bullish crossover.  So is the selling done?  Well unlike last night, we're seeing some positive pin action in the overnight and we've also finally hit oversold.  Also the stochastic is flattening out so that's all a lot better than last night.

ES daily pivot: Tonight the ES daily pivot dives from 2051.00 to 2036.58.   But even after that fall, and even with a rise in ES overnight we're still below the new pivot so this indicator continues to be bearish.

Dollar index:  Ho hum - the dollar, like everything else did not respect Tuesday's reversal signs instead falling 0.46% to finally come off overbought.  With the hammer failure, there are no bullish signs here.

Euro:  At least I got something right when last night I wrote "there's more upside potential than downside risk here on Wednesday" as the euro continued what is now a three day uptrend to close at 1.2443.  With indicators still a ways from overbought, there's nothing to suggest anything but higher again here on Thursday.

Transportation: As with the Dow, on Wednesday the trans ignored Tuesday's hammer and tanked another 1.35% to close below their own lower BB.  With a new steep and sharp descending RTC now in place  and indicators yet to reach oversold, there are no bullish signs here 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  6       6      5           2       0.571    376 
October    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   3       2      1           1       0.667   -192

     And the winner is...

Wednesday's further losses helped clear the air some and actually strengthened the case for a reversal but I'm done trying to catch this particular falling knife.  I made the risky call last night and got my head handed to me.  Tonight we play it safe and simply call Thursday uncertain.  I am expecting a rally any day now - I just don't know for sure if Thursday is it.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Wednesday higher

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

• Wednesday higher, low confidence..
• ES pivot 2051.00.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The sell-off continued Tuesday with the Dow down big time again right out the gate until Mr. Market figured out that maybe the world wasn't coming to an end after all.   We then spent the rest of the day slowly slogging uphill to finish still down but only by 51 points.  The chart implications are interesting so let's get right to them.

The technicals

The Dow:  On Tuesday the Dow drew a textbook perfect classic hammer candle iif ever I saw one.  Thing is though, it was also a bearish RTC trigger along with a completed bearish stochastic crossover and indicators only just now off overbought.  So who ya gonna believe/  Hmmm...  Moving on...

The VIX:  THis is perhaps the best chart of the day.  ON Tuesday the VIX began with a huge gap up, only to spend the rest of the day sagging lower.  The end result was still a 4.79% gain but on a tall red marubozu, evening star-style.  This trade was entirely above the upper BB and as I always say, the VIX never likes to spend much time at those altitudes.  So my best guess is we're looking for lower here on Wednesday.  That's supported by VVIX which is quite overbought and put in a big gap-up doji on Tuesday for 2/3 of an evening star.

Market index futures: Tonight, all three futures are lower at 12:15 AM EST with ES down 0.09%. On Tuesday ES, like everything else, put in a very tall hammer that came close to its lower BB and caused RSI to bottom before hitting oversold.  This is an excellent reversal sign.  I'd be happier though if we were seeing some positive pin action in the overnight.

ES daily pivot: Tonight the ES daily pivot drops from 2063.58 to 2051.00.   That was more than enough to put us back above the new pivot despite a sag in the overnight so this indicator turns bullish.

Dollar index:  Last night I wrote "this one looks lower on Tuesday."  And indeed it was as the bearish engulfing pattern asserted itself.   Another gap-down hammer here makes a good case that we could see a move higher on Wednesday.

Euro:  And of course as the dollar weakened the euro gained on Tuesday, though not with an inverted hammer.  But it did just barely managed to squeak out a bullish RTC setup and with a rising stochastic and indicators just off oversold I'd say there's more upside potential than downside risk here on Wednesday.

Transportation: And finally on Tuesday the trans put in an even bigger hammer than the Dow did.  A gap-down hammer like this that punches through the lower BB is quite unusual and an excellent reversal sign.  Enough that I'm calling this one higher on Wednesday even though we've yet to hit oversold.

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       4      5           0       0.444     38
December   3       1      1           1       0.800     76

     And the winner is...

Whew - we've got a boiler factory-worth of hammers on the charts tonight!  More than I think I've ever seen.  That's quite a powerful reversal sign.  In addition, the SPX Hi-Lo index is now down to 66 - not screamingly low but still lower than the last reversal we saw on December 1st.  And the NYSE A/D line has stopped putting in lower lows and lower highs, so that's always a good sign.  The only real problems I've got tonight are that 1, I'd prefer seeing ES moving higher rather than even a bit lower and 2. while we have a lot of reversal candles, they're not supported by the indicators which have yet to hit oversold.

I guess I'm just going to have to close my eyes, shinny waaay out on the limb and nervously call Wednesday higher.  I could be wrong.  Lord knows I am often enough.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 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 2063.58.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well fancy that.  Mr. Market didn't give a hoot when we learned that Japan had fallen into recession.  But let the price of oil keep falling, or was it the bad numbers form China, and holy moly it's the end of the world with the Dow down 106 points for its biggest drop since October 22nd..  I'm glad I called Monday uncertain because I sure wasn't expecting that.  The Night Owl, with my big REIT and core energy exposures also really took it on the chin on Monday for my biggest loss of the year.  Ugh.  But we just have to keep on keeping on so let's see where Tuesday's going now.

The technicals

The Dow: The Dow took a big hit on Monday with its energy components leading the way lower.  A mid afternoon rally still left us down 0.59% for a red candle that just broke the latest rising RTC for a bearish setup.  With overbought indicators and  a bearish stochastic crossover too, this chart looks lower for Tuesday.

The VIX: The VIX had a big day, rocketing 20.22% in a gap-up candle that blasted right back up through its 200 day MA as convincingly as it fell back under it last week.  It also just touched its upper BB at 14.56 before falling back a bit.  And with all this commotion, VVIX also took a big leap trading almost entirely above its own upper BB leaving it highly overbought.  Unfortunately none of this implies an immediate pullback.  We've seen all too often how there can be more follow-through on days like Monday.

Market index futures: Tonight, all three futures are lower at 1:49 AM EST with ES down a non-trivial0.24%.  After three tepid days, ES took a decidedly bearish turn on Monday with a wicked drop back to 2060.  That's a bearish trigger, RTC-wise and also a completed bearish stochastic crossover.  Technically, this one just looks continued lower.  And the overnight seems to be supporting that with continued downward pressure.  With no support until 2050, there's still some room to run lower.  One good thing though - the indicators are finally well off overbought.

ES daily pivot: Tonight the ES daily pivot drops from 2074.50 to 2063.58.   After three tepid days, ES took a decidedly bearish turn on Monday with a wicked drop back to 2060.  That's a bearish trigger, RTC-wise and also a completed bearish stochastic crossover.  Technically, this one just looks continued lower.  Only thing is that the overnight isn't supporting that.  Possibly a DCB, who knows.  But one must be wary of contrary signs in the overnight.  I always figure that there's someone out there who knows more than me (not too hard to do).

Dollar index: On Monday the dollar put in a dark cloud cover to lose 0.35%.   Trading above its upper BB and with highly overbought indicators, this one looks lower on Tuesday.

Euro:  And also on Monday the euro put in a bullish piercing pattern, for what it's worth (and I suspect not much) as it continues its inexorable march to the basement.  We're sitting exactly on the lows of 2012 right now.  It's do or die for the euro.  Any more losses and we're back to 1.2227 from July 2010.

Transportation: On Monday the trans pconfirmed Friday's inverted hammer with a big 1.30% fall.  You'd think lower oil would help the trans.  Go figure.  That gives us a bearish RTC exit and a bearish stochastic crossover.  Anyway, this one looks 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       4      5           0       0.444     38
December   2       1      1           1       0.750     25


     And the winner is...

After a bunch of dojis last night warning of a reversal, I opted to wait for confirmation, given how risky the bearish call has been all year.  Well we got that confirmation on Monday.  And technically, the charts just look bearish tonight so the call is for Tuesday lower.  I'll be happy, as always, to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.

Monday uncertain

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

• Monday uncertain.
• ES pivot 2074.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

We regrettably had to take last Friday off but in the end if was no big deal.  The market was up a bit and no major resistance or support lines were breached.  As it turns out I'm still running a bit behind so while I've done all the usual analysis, tonight I'll just present the results and skip the individual charts.  It's the Reader's Digest Condensed Night Owl.  I am planning to be fully caught up by Monday night.

The technicals

ES daily pivot: Tonight the ES daily pivot rises from 2070.17 to 2074.50.  That move combined with a basically flat overnight leaves ES less than one point above its new pivot.  So that's still bullish but not by much.

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       4      5           0       0.444     38
December   2       1      0           1       0.750     25

     And the winner is...

Tonight there's a whole bunch of dojis in the charts indicating a fair amount of uncertainty, perhaps over some weak numbers out of Asia.  In any case, there's not really enough direction to call the market either higher or lower tonight so we'll just have to settle for Monday uncertain.

ES Fantasy Trader

Portfolio stats:  the account now stands at $110,500 after ten trades in 2014, starting with $100,000.  We are now 7 for 10 total, 5 for 5 long, 2 for 4 short, and one push.  Tonight we stand aside.