Wednesday depends on ES pivot

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

• Wednesday higher only if ES remains above its pivot, else lower..
• ES pivot 2079.42.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader closed.

Recap

And so we come to the end of another trip around the sun.  One more day to call it a year and perhaps the trickiest one of all to call.  But we'll give it a shot anyway and see what's what.  Just a reminder, this is the last post of the week as I'm taking Friday off.  So a very Happy New Year to all and we'll see you again Sunday night.

The technicals

The Dow:  After three days of dojis, the Dow lost 55 points on Tuesday to trade outside its rising RTC for a bearish trigger.  Remember when RSI hit 100 last Friday?  Well that was that.  With all the indicators coming back to life and headed lower but still overbought, this chart looks lower.

The VIX:  After finding support right on its 200 day MA last week with a hammer, the VIX popped back to 15 on Monday and then rose another 5.71% on Tuesday but with a doji star.  Purely technically, this reversal warning is overshadowed by z newly completed bullish stochastic crossover and an RSI that has clearly bottomed and begun moving higher.  So there could me more upside here on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:57 AM EST with ES up  0.19%  But ES had a bad day Tuesday with its biggest loss since the 16th, falling out of its rising RTC for a  bearish setup.  Add falling indicators and a bearish stochastic crossover and this chart looks lower.

ES daily pivot: Tonight the ES daily pivot falls from 2083.50 to 2079.42.   That drop was enough to put us just above the new pivot, so this indicators is bullish.

Dollar index:  After hitting another multi-year high on Monday, the dollar took a break on Tuesday with a little hanging man, down 0.24%.  But the prevailing trend continues higher, though I'm not so sure about Wednesday.  We might see a bit more downside here.

Euro:  Meanwhile the euro has exited its descending RTC for a bullish trigger and peeled away from its lower BB.  The indicators remain highly oversold but have begun moving higher so with a star on Tuesday there's a decent chance of a higher euro Wednesday.

Transportation:  On Tuesday the trans traded outside their rising RTC for a bearish setup on a red spinning top.  Indicators remain highly overbought and resistance around 9234 seems to be holding for now so I'd say this one seems to have more downside risk than upside potential.

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   5       3      6           1       0.600    241

     And the winner is...

Hmm - the last day of the year is historically bearish as the tax loss sellers do their thing and technically, all the charts are looking bearish tonight.  The only thing that bothers me is that the futures are all higher and I never like to go against the futures.  So I'm going to make a conditional call, given the proximity of ES to its pivot as I write.  IF ES can remain about its pivot by mid-morning Wednesday, we'll close higher, and if not, then lower.  That's all she wrote.  Happy New Year!

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.  The ESFT is now closed for 2014 so those are our final numbers.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 2083.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well Monday was just about what one would expect for the last Monday of the year - the Dow was down a bit, the SPX was up a bit, ho hum.  In fact I don't expect much action until Wednesday when the tax-loss sellers show up, assuming that is that they even do show up this year given the fact that we're going out on record highs.  But anyway, I'm thinking we'll see even less volume on Tuesday and therefore there's little point in trying to call the market either higher or lower..  So I will just save everybody some time, skip the chart by chart run-down, cut to the chase, and call Tuesday uncertain right 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   5       3      5           1       0.600    241

     And the winner is...

 The technicals matter little for Tuesday.  By this point what we should be more concerned about is checking on the stores of champagne and caviar for Wednesday night.  So the call is simply Tuesday 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.  The ESFT is now closed for 2014 so those are our final numbers.

Monday higher

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

• Monday higher, low confidence.
• ES pivot 2001.33.  Holding above is bullish.  Now running the "H5" contract.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

My my, Santa just kept right on delivering the toys as the rally marched on in a week that wasn't quite as boring as I'd expected, especially with the Dow crossing 18,000 for the first time.  I'm dating myself but I remember when it crossed one thousand for the first time.  So here we are facing the end of yet another year.  I'd take this week off too with another holiday on Thursday but I'd like to at least check on how things finally wrap up.  I won't bother posting Thursday night for Friday though.  But for now it's on to Monday.

The technicals

The Dow:  Last week the Dow continued a slow crawl into record territory on low volume that left all the indicators at extreme overbought levels.  How does 100 for RSI sound?  And Friday traded just outside the long rising RTC for a bearish setup.  Still, with the holiday last week and the end of the year upon us one must take these charts with a grain of salt.  Let's call it a reversal warning but one which requires confirmation.

The VIX:  Meanwhile the VIX continued its slide last week to find support exactly on its 200 day MA at 14.00.  Support continued Friday giving us a pair of doji stars.  With extremely oversold indicators and a stochastic in good position for a bullish crossover any time now, this one looks ready to move higher.

Market index futures: Tonight, all three futures are higher at 12:56 AM EST with ES up  0.08%  ES like everything else last week continued higher into record territory, hitting impossibly overbought levels RSI=99.68).  So the indicators are now all broken and useless.  We still have a tight rising RTC and the upper BB continues to float away, now at 2115.84.  So until I see a bearish sign, I guess I just have to think this one will continue higher.

ES daily pivot: Tonight the ES daily pivot rises from 2079.75 to 2083.83.  We remain above the new pivot so this indicator continues bullish.  Reminder - we're now (obviously) tracking the "H5" contract.

Dollar index:  The dollar spent last week in a holding pattern.  It did peel off its upper BB though and with highly overbought indicators, the next logical direction from here is lower.

Euro:  The euro tried to rally at the start of December but ultimately failed only to resume its march to the cellar and closing at 1.2185 on Friday.  On a monthly basis, that's the lowest close since April 2006.  With 2010 and 2012 monthly support now broken I'd have to say we're looking at a visit to a patriotic 1.1776 before too long.

Transportation:  The trans have been rallying steadily since the 12/17 bottom.  Although all the indicators are now as impossibly overbought here as everywhere else, there's no reason not to believe the trans won't take a look at their upper BB at 9285 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    6       6      3           1       0.538    271 
November   4       4      5           0       0.444     38
December   5       2      5           1       0.750    256

     And the winner is...

Of course it's now the last week of the year and a holiday week at that and they can be tricky.  However, seeing no bearish signs on the charts tonight, all I can do is call Monday higher.

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.  I think we're probably done for the year and I'm considering dropping this feature next year - I'm just not feeling the love.