Monday lower

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

• Monday lower, low confidence.
• ES pivot 1400.00.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader going short at 1399.00.

Recap

I hope everyone had a tasty and relaxing Thanksgiving.  We skipped Friday's rump session that soared 173 points because, well who knows why the Dow did that.  But my last call was for Wednesday lower and that ended up being wrong by 49 points.  But now it's Sunday night and time to get back to the markets, so let's run down the charts.
The technicals (daily)

The Dow: Black Friday was all green for the Dow as it popped 1.35% to retake the 13K psychological support level.  And even that wasn't enough to send this index to overbought levels.  So there's really nothing negative on this chart tonight.

The VIX:  In an interesting bit of divergence, while the Dow jumped on Friday, the VIX declined, but only by 1.11%, and that was on a green candle.  And after spending three days playing tag with its lower BB, Friday's action broke away.  And finally, the stochastic on Friday just eked out a bullish crossover.  All that spells a higher VIX on Monday.

Market index futures: Tonight all three futures are down at 1:30 AM EST with ES lower by a non-trivial 0.43%.  After Friday's big gains, this move still keeps us well inside the current rising RTC but it also leaves us highly overbought and with a stochastic that just formed a bearish crossover.  This is definitely the weakest looking chart of the evening.

ES daily pivot: Tonight the pivot drops jumps 1385.00  to 1400.00 even.As I write this, ES just spent about half an hour playing with this new level and now looks to be breaking below it, a bearish sign.

Dollar index: The dollar took a big gap down on Friday, losing 0.90% and that was enough to drive it oversold.  We're also getting close to the lower BB but there's still no immediate reversal in sight here.

Euro: After getting hung up on the 200 day MA last Wednesday, the euro had its best day since September 7th jumping all the way to its upper BB at 1.3008 and driving its indicators well into oversold territory..  After a run like that, a pullback is to be expected and that is indeed what we're seeing in the Sunday overnight, now back to 1.2958.  The stochastic also seems to be setting up for a bearish crossover so I'd say the euro looks like it may take a breather on Monday.

Transportation: After small gains last Wednesday and a big 1./09% boost on Friday, the trans are now in a clear rising RTC and are still a good ways from being overbought.  The only negative here is some resistance at 5060 but all in all this chart looks pretty good.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   6      4      4           0        .600     200

     And the winner is...

With the big gains we saw on Friday for no particularly good reason, I'd expect a bit of profit taking come Monday.  That feeling seems to be reflected in the current state of both ES and the currencies where we have some incipient bearish technical indicators.  And while the SPX Hi-Lo index isn't quite pegged yet, at 93.55 it's signaling some serious overboughtedness (is that a word?).  Finally, there's a historic bullish bias to the last week of this month, but it doesn't particularly apply to month.  So all things considered, I'm going to just go ahead and say, Monday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $197,750 after 71 trades (56 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we go short at 1399.00.

Wednesday lower

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

• Wednesday lower, low confidence.
• ES pivot 1382.58.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias up.
• ES Fantasy Trader standing aside.

Recap

Last night I called today as "uncertain" because I was expecting a doji.  With the Dow finishing down 7, and the SPX up less than one point, I'd say that qualifies as a doji.  Nothing to see here, so moving right along we turn our attention to what Wednesday might have in store.

The technicals (daily)

The Dow: Today's candle was a dragonfly doji and after Monday's big move, this could signal a reversal.  But it requires confirmation so I'm not making too much out of today's action here.

The VIX:  And as the Dow made a dragonfly doji, the VIX did the opposite with a gravestone doji, posting its second close in a row below its lower BB.  The VIX rarely spends more than two days at levels like this and its indicators are also quite oversold now, so I'd say it is likely to move higher on Wednesday.

Market index futures: Tonight all three futures are down at 1:00 AM EST with ES lower by a significant 0.36%, a move largely in response to the news out of Euope about Greece.  While ES was the best performing chart of the day, managing to actually post some small gains, it's given it all back in the overnight so far on a developing bearish engulfing pattern.  ES is really looking pretty much out of gas right now.

ES daily pivot: Tonight the pivot rises from 1375.83 to 1382.58.  That move, plus the decline in ES caused it to break under the new pivot right at midnight, a bearish sign.

Dollar index: The dollar gained 0.10% today on a bullish piercing pattern.  However, its indicators are not yet oversold and its stochastic is nowhere near forming a bullish crossover.  So I'd say this chart is also giving us a warning of a reversal but not an exact date.

Euro: And for the second day in a row the euro was unable to break resistance at its 200 day mA, now at 1.2817, putting in a spinning top.  But the news here is the overnight action, no doubt in response to the Euro-ministers can-kicking on Greece.  The euro tumbled this evening from 1.2813 to 1.2755 right now, a move that is bringing RSI down off overbought and moving the stochastic into position for a bearish crossover.  I'll be looking for lower here on Wednesday.

Transportation: And you can add the trans to the list of dojis today, dropping just 0.77 points and reflecting the indecision elsewhere.  Another chart that requires confirmation.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.  Here's the updated cumulative list for this year:

Wk.# Week   % Bullish  % Bearish  NightOwl SPX  Accuracy

  1  1/3        46         21        +     1258   1/1

  2  1/9        56         37        +     1278   2/2

  3  1/17       41         33        +     1289   3/3

  4  1/23       46         32        +     1315   4/4

  5  1/30       48         31        +     1316   5/5

  6  2/6        56         30        +     1345   6/6

  7  2/13       48         31        +     1343   7/7

  8  2/21       44         32        +     1361   8/8

  9  2/27       48         24        +     1366   9/9

 10  3/5        43         26        +     1370  10/10

 11  3/12       46         32        +     1371  11/11

 12  3/19       46         29        +     1404  11/12

 13  3/26       39         29        +     1397  11/13

 14  4/2        42         21        +     1408  11/14

 15  4/9        25         46        -     1398  12/15

 16  4/16       26         48        -     1370  13/16
 17  4/23       30         48        -     1379  14/17

 18  4/30       44         32        +     1403  14/18

 19  5/7        23         50        -     1350  15/19

 20  5/14       32         44        -     1353  16/20

 21  5/21       30         52        -     1295  16/21

 22  5/29       35         42        -     1318  16/22

 23  6/4        32         48        -     1278  16/23

 24  6/11       28         40        -     1326  16/24

 25  6/18       39         26        -     1343  16/25

 26  6/25       38         46        -     1335  16/26

 27  7/2        41         40        -     1362  16/27

 28  7/9        42         38        -     1355  16/28

 29  7/16       44         32        -     1357  16/29

 30  7/23       33         42        -     1363  16/30

 31  7/30       43         22        +     1386  17/31

 32  8/6        52         28        +     1391  18/32

 33  8/13       43         21        +     1406  19/33

 34  8/20       46         31        +     1418  20/34

 35  8/27       39         29        +     1411  21/35

 36  9/4        31         38        +     1407  22/36

 37  9/10       54         29        +     1438  23/37

 38  9/17       63         22        +     1466  23/38

 39  9/24       52         30        +     1460  23/39

 40  10/1       39         39        -     1441  24/40

 41  10/8       52         34        +     1461  24/41

 42  10/15      41         32        -     1429  25/42

 43  10/22      38         41        -     1433  26/43

 44  10/29      36         43        -     1412

 45  11/5       44         33        -     1414

 46  11/12      38         46        -     1380 

 47  11/19      52         34        +     1360

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that my bearish call on 10/22 was right, the S&P now being lower than then. I'm using the column "Accuracy" to track my calls.  So now with just five weeks to go in 2012, I'm 26 for 43 or 60%.

For the record, I switched my vote from bearish to bullish, staying in sync with the majority for the second week in a row.  In fact, this week saw the highest bullish reading since October 8th.  No doubt people are counting on the Santa Calus rally to kick in along with some kind of resolution to the fiscal cliff.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   6      3      4           0        .667     249

     And the winner is...

While I wasn't seeing any real bearish signs in the charts last night, tonight I am.  We ended up with a lot of dojis singaling uncertainty.  And tonight's news out of Europe may be the push the markets need to roll over.  With Wednesday being the day before Thanksgiving, market participation is likely to be below average, so we might see some exaggerated moves.  In any event, right now I'm not feeling the love, so I'm calling Wednesday lower.

And with the markets closed on Thursday plus half of Friday, let me wish a Happy Thanksgiving to all my readers.  See you again on Sunday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $197,750 after 71 trades (56 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we stand aside because of the impending holiday.  I don't want to risk getting trapped on the wrong side of a trade potentially until next week.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1375.83.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias up.
• ES Fantasy Trader standing aside.

Recap

Today we got the rally I was looking for and then some with the Dow jumping 208 points on a mixture of housing numbers and more blather from politicians about how the fiscal cliff might be averted.  And notice how well the SPX Hi-Lo indicator played out.  Recall that way back last Thursday night I wrote "the SPX Hi-Lo index fell back to 8.33 today, a level from which rallies pretty much always follow. "

Whatever, I'll take it.  Now let's see how the rest of this holiday-shortened week might play out.

The technicals (daily)

The Dow: Today's big pop gave us the bullish RTC trigger confirming last Friday's bullish setup.  It also brought the indicators all the way out of oversold and on the path towards overbought.  And the rally stopped right in the 12,816 area that marked congestion last week.  So while technically, this chart looks good, note that more often than not, a big up day is followed by a small doji day.  The fact that this is a holiday week increases the liklihood of that.

The VIX:  I wasn't ready to call the VIX lower for Monday, but it responded to the bearish weekly chart by gapping down another 7.13% to close at 15.24, below its lower BB.  It also drove the indicators more oversold.  Interestingly, this is the first time we've touched the lower BB since June.  Back then, we had two more days lower and then a big jump.  So I'd say that further downside for the VIX is limited from here, though it may not begin rising immediately on Tuesday.

Market index futures: Tonight all three futures are down just a bit at 1:00 AM EST with ES lower by 0.05%.  ES put in a tall green marubozu today that significantly sliced right through the 200 day MA in a move reminiscent of the end of last May.  It also provided us with a bullish RTC trigger and brought us off oversold.  However, what I said about the Dow holds here too: after a big move up, watch for ES to take at least a one day breather.

ES daily pivot: Tonight the pivot jumps from 1353.50 to 1375.83.  With ES little changed in the overnight, this now puts us a lot closer to the new number, but unless we break under it, that's still bullish.

Dollar index: Last night I wrote "I'd say the dollar is ready to move lower" and today it finally did, losing 0.48% in a move that gapped down back below its 200 day MA and putting some distance from it for the first time in six sessions.  But even that left the indicators still just in overbought territory so I'd say the dollar could move lower again Tuesday.

Euro: Today the euro negated Friday's bearish engulfing pattern with a big gain that stopped just short of its 200 day MA, closing at 1.2811  Then after gapping down at the open this evening, it began climbing again and it's current level of 1.2803 is just enough to get it back into the new rising RTC.  Today's gains did bring us into overbought territory but without a reversal candle or RTC trigger, I'd hesitate to call the euro lower just yet.

Transportation: Recall that last night we had two reversal candles on the trans: a doji followed by a strong hammer.  And today the hammer came down as the trans jumped 1.89%.  But even that was only enough to bearly get us off oversold so I'd say we still have a fair bit of room to run on Tuesday.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   5      3      4           0        .625     249

     And the winner is...

Although there are still no real bearish signs in the charts again tonight, I'll note that the two days leading up to Thanksgiving are historically fairly weak, and given the big run we had on Monday the pattern has been for the market to take a pause the following day.  So I'm going to call Tuesday uncertain, not because I can't tell which way we're trending but because I'm expecting a small-range doji day.  I'll bet a lot of traders are already wrapping things up if not simply taking the whole week off.

ES Fantasy Trader

Patience was rewarded again today and although I only took a slim 0.75 point profit, it felt like a much bigger win since I was down over $13,000 at one point on Friday  Still, this trade had run its course so I decided not to press my luck.

Portfolio stats:  the account now rises to $197,750 after 71 trades (56 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we stand aside.  I don't think there's much of an edge here and I'm not expecting any big moves on Tuesday anyway.

SLD    10    false    ES    DEC12 Futures     1377.00    USD    GLOBEX    11:04:17   
BOT    10    false    ES    DEC12 Futures     1376.25    USD    GLOBEX    NOV 14 00:52:49   

Monday higher

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

• Monday higher, low confidence.
• ES pivot 1353.50.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias up.
• ES Fantasy Trader remaining long at 1376.25.

Recap

Well the Dow finally eked out its first meaningful gain in seven session on Friday.  I'd been waiting for this, though it's not clear whether this rally was technical or generated by Boehner's comments to the press.   Either way, it was good news for the markets.  So let's see now how this takes us into another holiday-shortened week as we get ready for Turkey Day.

The technicals (daily)

The Dow: After hitting an RSI of practically zero as I noted last week, the Dow finally closed up 46 points on Friday.  It doesn't seem like much but it was enough to form a bullish engulfing candle and bring the indicators (finally) off their extreme oversold levels.  And even more importantly, it brought the Dow out of its new descending RTC that I drew after last week's dojis, for a bullish setup.  So overall, this chart's not looking too bad tonight.

The VIX:  After an inverted hammer warning just above the 200 day MA on Thursday, the VIX gave it up on Friday dropping 8.78% to return near the bottom of its recent range.  With no obvious trends, this chart is unclear tonight.  However, the weekly chart is now looking rather bearish for the VIX.

Market index futures: Tonight all three futures are up at 1: 41 AM EST with ES higher by 0.22%.  On Friday ES gave us a powerful hammer that just managed to close outside its descending RTC for a bullish setup.  With good follow-through in the overnight and indicators that have now clearly bottomed at oversold, I'm liking the looks of this chart for Monday.

ES daily pivot: Tonight the pivot rises from 1351.83 to 1353.50.  We broke above the old number after Boehner's comments on Friday and remain above in the overnight tonight, so that's all a good sign.

Dollar index: On Friday the dollar gave us an inverted hammer sitting right on its 200 day MA/  Coupled with very highly overbought indicators, I'd say the dollar is ready to move lower this week.

Euro: And also on Friday the euro gave up its earlier gains, somewhat to my surprise, with a bearish engulfing candle.  However, in the Sunday overnight, it is climbing again and at 1.2768 is high enough to regain the rising RTC.  With indicators still rising, I'd say the euro's going higher on Monday.

Transportation: After a doji on Thursday, the trans gave us another reversal candle in the form of a classic hammer on Friday.  With both of these trading outside the long-running descending RTC, we now have a good bottoming sign.  I'd wager the trans are going higher this week.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   4      3      4           0        .571      41

     And the winner is...

Tonight, the general tone of the charts is all positive.  And with Emperor Nerobama making positive noises from Bangkok, a visit to which he apparently thought was more important that our fiscal problems back home, I'm not seeing any real reason to be bearish tonight.  So I'm calling Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $197,375 after 70 trades (55 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we remain long at 1376.25.  I still have hopes for this trade.

Friday higher if pivot passed

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

• Friday higher if pivot passed, else lower.
• ES pivot 1351.83.  Holding below is bearish.
• Next week bias higher technically.
• Monthly outlook: bias down.
• ES Fantasy Trader remaining long at 1376.25.

Recap

Today we finally got something different.  Instead of a steady sell-off, we got a market kind of hunting for direction.  And although it went down again, at least the losses were tempered.  But we got faked out like this just three days ago.  Is this a turn around or just a breather before the selling resumes?  We weigh the evidence in the charts.  (And Blogspot's spell checker is broken again, so I apologize in advance for any typos I might have missed).

The technicals (daily)

The Dow: The Dow lost just 29 points on a spinning top.  At least that's a reversal sign but one that requires confirmation.  Meanwhile, the indicators are more oversold than anything all year, including the end of that month-long slide in May.  RSI is now 0.57 and the stochastic is lying flat on the floor.  This is so overextended that I can't imagine not getting some sort of up move soon.  I just don't know if it will be Friday.

The VIX:  Meanwhile,t eh VIX posted  a small gain of 0.39% but that was just enough to keep it above its 200 day MA and complete a bullish crossover.  So it now has support and rising indicators.  I'd say it's possible the VIX could move higher again on Friday.

Market index futures: Tonight all three futures are down at 1:26 AM EST with ES lower by 0.13%.  Like the other charts, ES is now highly oversold with an RSI of just 6.59.  But it remains inside a descending RTC  and although it gave us a reversal candle in the form of a spinning top today, in this environment I need confirmation before calling ES higher.

ES daily pivot: Tonight the pivot drops again  from 1361.42 to 1351.83.  The situation is remarkbly to what we had last night at this time - below the old pivot, then still below the new number but by much less.  Still, until we see ES actually break over the pivot, it doesn't matter how close it gets - it's still bearish.

Dollar index: The dollar stubbornly refuses to go down, poking back over the 200 day MA again today before closing exactly on it at 55.87 with a bearish hanging man.  That's two reversal signs in two days - the dollar has to come down eventually.  It just seems to be out of gas right here.

Euro: Last night I wrote simply "higher euro on Thursday" and that's just what happened today as the curvy E posted another solid gain for a bullish trigger.  We can now officially declare the downtrend over.  The currency is fairly directionless in the overnight so far but the trend is now up.

Transportation: After Wednesday's big dump, today the trans formed a gap-down spinning top good for another 0.24% loss.  However, that was just enough to send it back out of the descending RTC for a bullish setup.  We're also very close to support at 4892 now and the oindicators are now quite oversold with RSI dropping to 10.85.  We're so oversold now that a reversal has to happen soon, but having gotten faked out two days ago I'm not going to believe it until I get some confirmation of today's doji.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   4      3      4           0        .571      41

     And the winner is...

The charts all keep getting more and more oversold but we somehow continue moving lower.  But this has to end sometime and Friday being option expiration might just do the trick.  The Dow is up seven of the last nine on this day.  Also the SPX Hi-Lo index fell back to8.33 today, a level from which rallies pretty much always follow.  We're clearly overdue for a rally.  I'd like to say it's coming on Friday but I just can't.  So tonight I'm going to make a conditional call: if ES can manage to get above its pivot and stay there by mid morning, then we'll have Friday higher.  If not, then lower again.

ES Fantasy Trader

Portfolio stats:  the account remains at $197,375 after 70 trades (55 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we remain long at 1376.25.

Thursday lower

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

• Thursday lower, low confidence.
• ES pivot 1361.42.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias down.
• ES Fantasy Trader remaining long at 1376.25.

Recap

Ugh.  Boy, when I blow em, I blow em bad.  The stock market did not go up today.  In fact it went down.  Way down.  With the Dow posting a sickening 185 point loss, really for no other reason that I can think of other than the fact that Mr. Market simply does not like Mr. Obama, and with good cause.  It's not looking good, folks.  We'll go over the charts again tonight, but more out of force of habit than anything else.  Right now it's looking like we're already plunging over the Fiscal Cliff.

The technicals (daily)

The Dow: Today's ugly 1.45% loss, when I was expecting a gain, left the Dow at 12,571, just ever so short of the 12,556 point I mentioned last night as being the cut-off for a bullish trigger.  So technically, now we have that.  But it really feels more like jumping out the window time than bullish trigger time.  And there's absolutely nothing in the recent candles to suggest any sort of turnaround on this chart.

The VIX:  After posting two days of odd declines in the face of stagnating markets, today the VIX took off, gaining 7.63% on a green marubozu that broke back over the 200 day MA with a convincing bullish engulfing pattern and a bullish RTC setup.  With a stochastic now getting ready for a bullish crossover, all signs point to a VIX that could go higher again on Thursday.

Market index futures: Tonight all three futures are up at 1:00 AM EST with ES higher by 0.18%.  But ES is now in a pattern of rising in the overnight only to collapse as the following day goes on, so I'm not getting too excited about this move.  And of course Wednesday's miserable dump didn't help matters any, slicing right through the 200 day MA.  The only good thing here is that the indicators are now quite oversold.  RSI stands at 6.23.  And OBV is actually moving up now, indicating money flowing in.

ES daily pivot: Tonight the pivot drops from 1374.33  to 1361.42.  This still leaves ES under the new pivot but only by six points now.  Still, we'll need to see it mount an attack on this number by morning to make me feel the love.

Dollar index: The dollar did indeed move lower today, if only by 0.05% but that didn't help anyone.  Still, it broke back under the 200 day MA with a doji and left the indicators now finally coming off overbought.  I'd say the dollar could go lower from here.  The conventional wisdom is that this helps stocks.  Now I'm not so sure.

Euro: Last night I wrote "If the euro can manage a close above 1.2732 on Wednesday, that will be a bullish setup."  Well despite the US averages cratering, the euro finished easily above that, closing at 1.2750.  In daily candles, we now have, small doji star, big doji, RTC breakout.  And the overnight is trading higher again.  To me that spells higher euro on Thursday as it's now looking like the nearly month-long downtrend may be over.  I'll note here also that the Swiss franc is tracing a similar move but it even more bullish right now.  These are good signs.

Transportation: And as if the drop in the Dow wasn't bad enough today, the trans were simply obliterated with a 2.55% plummet down to 4926 that punched right through the lower BB and dove right back into the declining RTC leaving the indicators all in oversold-broken mode.  So now there's no telling when a turn-around might happen.  Like Jim Cramer likes to say "Nothing can go lower than zero".


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   3      3      4           0        .500      12

     And the winner is...

Today's sell-off had a hint of panic to it and that's what I like to see.  It's real easy to go "Oh my God!", throw up your hands in despair, and sell everything.  Been there, done that, got my head handed to me.  Because generally when you start getting that feeling, that's exactly the time to buy, not sell.  What's the old saying about the time to buy is when there's blood running in the streets?  Well, I'm seeing a lot of red lately.

Note too that the SPX Hi-Lo index now stands at a meager 19.  Every time we've hit these levels this year, a rally followed soon after.  We hit 19 on July 25th and SPX rallied hard the next two days running.  So while it's tempting to throw in the towel after an awful November since you-know-who got elected, we're going to hang tough and take the heat.  That's part of being a successful trader.

I think that right now we're at a point where it's too late to go short but still too early to go long and I'm not interested in catching this particular falling knife.  So while I do see a few encouraging signs in the currencies tonight, that just hasn't been working lately so I'm simply going to go with the majority and call Thursday lower.  I'll be delighted to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account remains at $197,375 after 70 trades (55 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we take the heat and remain long at 1376.25.

Wednesday higher

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

• Wednesday higher, low confidence.
• ES pivot 1374.33.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias down.
• ES Fantasy Trader going long at 1376.25.

Recap

Today continued a recent pattern now six days long of early gains evaporating into the close as the market continues to search for reasons to move higher while the bears continue having problems pushing it lower.  Which way will this tug-o-war resolve?  We bring out the loupe and pore over  the charts for clues.

The technicals (daily)

The Dow: The Dow lost 59 today, giving up its recent support around 12,815.  But it also gave us an inverted hammer and that makes three reversal candles in a row now.  But today's was different - it traded entirely outside the descending RTC fore a bullish setup.  If the Dow closes above 12,556 on Wednesday (which seems likely) then it will be a bullish trigger.  Today's loss did delay the bullish stochastic crossover, but the indicators are still pretty oversold.  So despite  another losing day, I'm starting to see signs of a bounce here.

The VIX:  Once again we got the unusual situation of the VIX declining along with the major averages, this time dropping 0.18%.  The VIX now has support right at today's close of 16.65 but the indicators are only halfway from overbought to oversold so I'd say that there's a good chance for still lower from here on Wednesday.

Market index futures: Tonight all three futures are up at 1:20 AM EDT with ES higher by 0.38%.  It tested its 200 day MA today for the second time in three days and passed the test, though just barely, closing just one point above it.  The gap-up gains in the overnight are encouraging though and the indicators remain oversold.

ES daily pivot: Tonight the pivot drops from 1377.50 to 1374.33.  This, coupled with the evening climb in ES sent us back above the pivot right at midnight, so this becomes a positive sign.

Dollar index: Today the $USDUPX climbed above its 200 day MA intraday before dropping back exactly to it with a 0.04% gain on a weak looking red spinning top.  This doesn't look like the sort of move that will power higher above the MA and with the indicators remaining quite oversold, I'm going to again call for the dollar to move lower on Wednesday now.

Euro: After getting hammered relentlessly for nearly a month now, the euro appears like it may be putting in a bottom with a small doji on Monday and a taller one today that kept it above the 1.2700 level.  And it's actually rising in the overnight, now at 1.2721.  This is enough to put it very close to the edge of that long descending RTC.  If the euro can manage a close above 1.2732 on Wednesday, that will be a bullish setup.

Transportation: I was expecting a move higher here on Tuesday but instead the trans dropped 0.07% on a long spindly doji.  But I think the bullish stochastic crossover that just completed is more significant so I'll go ahead and guess that we ight see the trans move higher on Wednesday.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.  Here's the updated cumulative list for this year:

Wk.# Week   % Bullish  % Bearish  NightOwl SPX  Accuracy

  1  1/3        46         21        +     1258   1/1

  2  1/9        56         37        +     1278   2/2

  3  1/17       41         33        +     1289   3/3

  4  1/23       46         32        +     1315   4/4

  5  1/30       48         31        +     1316   5/5

  6  2/6        56         30        +     1345   6/6

  7  2/13       48         31        +     1343   7/7

  8  2/21       44         32        +     1361   8/8

  9  2/27       48         24        +     1366   9/9

 10  3/5        43         26        +     1370  10/10

 11  3/12       46         32        +     1371  11/11

 12  3/19       46         29        +     1404  11/12

 13  3/26       39         29        +     1397  11/13

 14  4/2        42         21        +     1408  11/14

 15  4/9        25         46        -     1398  12/15

 16  4/16       26         48        -     1370  13/16
 17  4/23       30         48        -     1379  14/17

 18  4/30       44         32        +     1403  14/18

 19  5/7        23         50        -     1350  15/19

 20  5/14       32         44        -     1353  16/20

 21  5/21       30         52        -     1295  16/21

 22  5/29       35         42        -     1318  16/22

 23  6/4        32         48        -     1278  16/23

 24  6/11       28         40        -     1326  16/24

 25  6/18       39         26        -     1343  16/25

 26  6/25       38         46        -     1335  16/26

 27  7/2        41         40        -     1362  16/27

 28  7/9        42         38        -     1355  16/28

 29  7/16       44         32        -     1357  16/29

 30  7/23       33         42        -     1363  16/30

 31  7/30       43         22        +     1386  17/31

 32  8/6        52         28        +     1391  18/32

 33  8/13       43         21        +     1406  19/33

 34  8/20       46         31        +     1418  20/34

 35  8/27       39         29        +     1411  21/35

 36  9/4        31         38        +     1407  22/36

 37  9/10       54         29        +     1438  23/37

 38  9/17       63         22        +     1466  23/38

 39  9/24       52         30        +     1460  23/39

 40  10/1       39         39        -     1441  24/40

 41  10/8       52         34        +     1461  24/41

 42  10/15      41         32        -     1429  25/42

 43  10/22      38         41        -     1433

 44  10/29      36         43        -     1412

 45  11/5       44         33        -     1414

 46  11/12      38         46        -     1380

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that my bearish call on 10/15 was right, the S&P now being lower than then. I'm using the column "Accuracy" to track my calls.  So now with 7 weeks to go in 2012, I'm 25 for 42 or 60%.

For the record, once again I voted bearish based on my reading of the weekly and monthly SPX charts.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   3      2      4           0        .600     197

     And the winner is...

Despite today's modest losses, the charts continue to look poised for some gains, with dojis abounding.  And tonight we're not riding a negative wave in the futures.  Also, the currencies (and copper too) are looking like they may be finding a bottom.  And Wednesday is historically the strongest day of a historically bullish week.  So I think I'm going to go out on a limb and call for Wednesday higher.

ES Fantasy Trader


Mindful of the market's recent tendency for early gains to evaporate as the day goes on, I decided to ring the register on last night's long trade just before lunch today for a respectable 6.25 point profit.  Turns out it was a good move as it was all downhill from there. Portfolio stats:  the account now rises to $197,375 after 70 trades (55 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we go long at 1376.25.

Reminder: you can track these trades live on Twitter @nightowltrader.

SLD    11    false    ES    DEC12 Futures     1384.50    USD    GLOBEX    11:22:45 
BOT    10    false    ES    DEC12 Futures     1378.25    USD    GLOBEX    NOV 12 01:28:17     

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1377.50.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias down.
• ES Fantasy Trader remaining long at 1378.25.

Recap

On Veteran's Day, the Dow put in a pretty directionless session, swinging between small gains and losses to finally end either up one point or down a third of a point depending on how close after 4 PM you looked.  But that still provided the charts with one more data point so let's see what that may mean for Tuesday.

The technicals (daily)

The Dow: Today's perfect doji mirrored Friday's.  And like heads, two dojis are better than one, so I still think the Dow's due to move higher.

The VIX:  Compared to the lackluster moves of all three major averages, the VIX took a big loss today.  I was expecting a move lower, but I didn't think it would be down 10.37%.  This tall red marubozu sliced back under the 200 day MA and completed a bearish stochastic crossover suggesting more downside to come.

Market index futures: Tonight all three futures are down at 1: 38AM EST with ES lower by a non-trivial 0.62% in the overnight after putting in a modest gain for the day.  We actually broke under the 200 day MA at 1370.18 about an hour ago.  At 1369.50 as I write, ES is on the bubble.  The indicators are all oversold now but what's not clear is whether the MA will act as support or if the bots will notice the breach and sell 'em off on Tuesday.

ES daily pivot: Tonight the pivot bumps up from 1375.75 to 1377.50.  We fell below the pivot at 7 PM and are still below, a bearish sign.

Dollar index: No $USDUPX chart tonight.

Euro: Nothing new in euroland either, as the currency continued its slide down the descending RTC unabated.  This streak is now closing in on the slump that lasted the whole month of May.  And still no end in sight.

Transportation: Also diverging from the Dow, the trans today put in a 0.80% gain on a bullish engulfing candle that also just broke out of the descending RTC for a bullish setup.  And the stochastic is now oversold and appears to be lining up for a bullish crossover.  I was figuring a bounce off the lower BB, but we never even came close.  After today's move, I'd guess there's more upside in store here.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   3      2      3           0        .600     197

     And the winner is...

As befits a low-volume holiday session, the charts are somewhat conflicted tonight, but I think the overall theme of being due for a bounce remains basically intact, with the Dow, VIX and trans all looking good.  However, I am quite concerned about the moves in ES and the euro in the overnight, so that's tempering my enthusiasm for Tuesday.  Therefore, I am simply going to call Tuesday uncertain.  If we don't go up on Tuesday, then the odds look better for a bump on Wednesday.

ES Fantasy Trader

Portfolio stats:  the account remains at $194,250 after 69 trades (54 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we're staying long at 1378.25 from last night.  This trade has sort of been weaving above and below break-even all day, but I think it has more upside on Tuesday.

Monday higher

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

• Monday higher, medium confidence.
• ES pivot 1375.75.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias down.
• ES Fantasy Trader going long at 1378.25.

Recap

Last Friday got off to a nice start and things were looking fairly good - that is until Emperor Nerobama had to open up his mouth.  His speech managed to erase all the gains and send the Dow back into the red, though it finally managed to eke out a meager four points by day's end.  There's a sure-fire day-trading strategy for you - watch for when Obama's going to give his next speech and then short the heck out of ES, right around the time he says "Good afternoon".  But right now it's night time and that means chart time, so let's go.

The technicals (daily)

The Dow: Friday finally gave us a reversal candle in the form of a clear doji star.  With the stochastic looking ready to start a bullish crossover, this chart's starting to look like last week's wave of post-election selling may be over.

The VIX: And while the VIX gained 0.65% on Friday, it did it with a tall hanging man.  And that's the second one in a row, which strengthens the case for a reversal  The VIX has some resistance in the 18.70 area so I'm thinking the next move is likely lower.

Market index futures: Tonight all three futures are up at 1: 24AM EDT with ES higher by 0.16%.  The interesting thing on this chart is that Friday gave us a classic doji star.  But not just that, ES took an intraday peek below the 200 day MA and apparently did not like what it saw.  This sent the indicators at last into oversold territory and the overnight action just gave us a bullish crossover from the stochastic.  I'm liking this chart more than I have in several days now.

ES daily pivot: Tonight the pivot drops from 1381.75  to 1375.75.  The good news here is that ES has been trending higher since around 8 PM, so we broke above the new pivot at midnight.  So far, that seems to be holding, so that's a positive sign.

Dollar index: On Friday, the dollar posted a second hanging man as its attempts to move higher were blocked by the 200 day MA at 55.88 on the $USDUPX.  And the indicators are back to very overbought.  I still think the dollar is due to move lower and Monday would be as good a time as any.

Euro: Still no end to the euro's continuing decline, remaining in a descending RTC from October 17th.We're up a bit in the overnight, but that hasn't been paying off lately so until we manage to exit this RTC, I say the euro's continuing lower, though some action tonight out of Greece on their budget could provide a bounce here on Monday.

Transportation: And finally, the trans on Friday posted their third consecutive losing day, although the losses have been getting smaller as we go, dropping 0.71% this time.  This helped the indicators all move closer to oversold but they're still not there yet.  Next stop, if I had to guess, would be the lower BB at 4978, then maybe a bounce off it.


Accuracy (daily calls): 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

April      7      9      2                    .438
May       10      7      3           2        .632  
June       8      6      6           1        .600     632
July      11      2      6           1        .857     917
August     8      6      8           1        .600     -78
September  8      6      5           0        .571     -19 
October    8      5      8           0        .615     208
November   3      1      3           0        .750     197

     And the winner is...

November op-ex week tends to be fairly bullish historically, and gets better as the week goes on.  And the charts tonight are finally pointing to a possible rally.  Also, Dr. Copper has reached a strong support line and the TLT's looking toppy.  Add it all up and I'm betting Monday's higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $194,250 after 69 trades (54 wins, 15 losses) starting from $100,000 on 1/1/12.  Tonight we're going long at 1378.25.  I'm liking the setup with ES not really having taken off yet but with what looks like a decent edge (finally) developing for Monday.