Monday, January 5, 2015

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, low confidence
  • ES pivot 2050.75.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader closed.

Well 2014 is in the books, all the confetti has been swept up, and I hope everyone had a happy New Year holiday.  Now it's time to get back to work as we start the first full week of 2015.  So let's get right to it.

The technicals

The Dow:  The Dow snapped a four day losing streak on Friday to start off the new year with a doji star.  Indicators are still falling though and have not yet hit oversold so this warning requires confirmation.  Absent that we remain in a downtrend.

The VIX:  The VIX put in a similar star on Friday, down over 7% but its own indicators are frustratingly not yet overbought  so there's no clear reversal here either.

Market index futures: Tonight, all three futures are lower at 1:01 AM EST with ES down 0.06%  ES now has a three black crows pattern going, and while RSI has gone oversold, the indicators continue falling so this chart looks rather bearish tonight.

ES daily pivot: Tonight the ES daily pivot falls from 2062.00 to 2050.75.  We're under that number and drifting lower in the overnight so this indicator looks bearish.

Dollar index:  On Friday the dollar broke out of its holiday week doldrums with a big pop clear to its upper BB and its highest close since July 2010.  We might get a pause here on Monday but the larger uptrend remains very much intact.

Euro:  Meanwhile the euro resumed its march to the basement with another big leg lower Friday to close at 1.2043.  And it's already gapping down almost as much as that loss in the overnight, blasting right through 1.2000 and now to 1.1945.  Four years of monthly support are now gone.  The last month that closed this low was February 2006!  And there's still no sign of an end to the current slide.  Next support is 1.1763, a number I'd not be surprised to see fairly soon.

Transportation:  And on Friday we got a tall red spinning top  here for a 0.45% loss.  This is a fairly bearish chart having just completed a bearish RTC trigger and with indicators that are falling but still overbought.

 Performance:  My trading account ended 2014 up 11.91%.  This beat my benchmark of the Dow which gained only 7.52% but was not as good as my results in 2013 when I gained 22.94%.  Part of this was due to the fact that I traded less in 2014 due to other time commitments.  Still, I can't really complain about a 12% gain.


Here are the final numbers for 2014.  You can see that on my daily calls for a higher or lower close, I was right about 60% of the time.  I had only one losing month and captured a total of 2795 Dow points

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    5      10      6           0       0.333
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           2       0.700    241

Mean       7       5.4    4.4         1       0.597
Total                                                 2795

     And the winner is...

Hmmm, I don't know.  Sunday nights are always the hardest to call, and the Sunday after a holiday even harder due to the lack of fresh data.  I will say that I have put a new chart on my radar this year - ZQ, the 30 day Fed funds interest rate futures.  They've been in a descending RTC since October 15th but just last Friday broke barely above for a bullish setup.  And the market has been in a very high inverse correlation with this chart for a year now.

So this chart has me concerned.  And given that we don't have any solid reversal signs other than some dojis that aren't backed up by indicators, I'm just going to have to go out on a limb and call Monday lower.

ES Fantasy Trader

I'm not going to do the ES Fantasy Trader in 2015.  I'm thinking of tracking a single stock instead.  We'll see.

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