Tuesday higher

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

• Tuesday higher, low confidence.
• ES pivot 1862.50.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Hyper-trading news release

Tue. April 1, 2014 (AP)

Chicago based derivatives exchange operator CME Group Inc said on Tuesday it will launch an innovative new trading platform beginning in April in a bid to boost trading volume.  Called LPT, or Linear Predictive Trading, this product is designed to appeal to high frequency traders looking for ever narrower edges to beat the competition.  To achieve the ultimate in execution speed, LPT actually executes trades before they are placed, thereby saving at least 20 milliseconds per trade.  "This technological breakthrough ushers in a new era in trading" said CME spokesman Emmett Brown.  "No longer will traders have to wait for trades to be executed to get results.  With LPT we are quite literally taking trading back to the future."

Recap

On Monday the technicals worked nicely as the Dow registered a handy 135 point pop.  Now as we begin a new month and a new quarter, what can we expect?  Let us query the charts as we do every night.

The technicals (daily)

The Dow: I'd say the Dow's big move Monday constituted a breakout of sorts from our recent trading range, finally cracking the 16,375 barrier.  In fact, we moved right on up to the next resistance level, right at 16,457.  So the question is, do we have enough gs in the tank to move higher?  Well we note that  the last time we were here, on March 7th, the indicators were quite overbought and the stochastic had just given a bearish crossover.  This time though, the indicators are still not overbought and the stochastic has e=actually executed a bullish crossover form a high level - something that's often good for another day or two of gains.  And with the upper BB still at 16,516, I'd say it's entirely possible to see further upside on Tuesday here.

The VIX:  I missed this one, thinking the VIX would go higher on Monday which it did not.  In fact Friday's spinning top was non-confirmed - by another spinning top, this one near recent support of 13.76.  We haven't been below that since January 22nd, so it would appear that caution is in order.  With a reversal suggestion here, I'd just have so say wait and see.

Market index futures: Tonight the futures are higher at 12:41 AM EDT with ES up by 0.08%.  Like the other charts, on Monday ES popped out of its descending RTC for a bullish setup while the completed bullish stochastic crossover marched on.  This all left us exactly on strong resistance at 1866.  Can we move higher this time?  Well the indicators are a lot less overbought now than the last time we tried so there does seem to be some gas in the tank for a push higher from here.  So far at least the pin action in the overnight seems to suggest  that ES has the mojo for at least a modest push higher on Tuesday.

ES daily pivot: Tonight the pivot rises again from 1850.50  to 1862.50. And once again we remain above the new pivot so this indicator stays bullish.

Dollar index: Last night the dollar looked like it might go lower - just like it looked the previous three days but didn't.  But I guess the fourth time's the charm as the $ finally dropped 0.10% on Monday to fall out of a razor-sharp rising RTC for a bearish setup.  With indicators coming off overbought, I think it's possible we could see more downside on Tuesday.

Euro: And on Monday the euro had the usual mirror image of the dollar, popping up out of its descending RTC for a  bullish setup with a bullish stochastic crossover.  So I'd say it looks good for a higher euro on Tuesday.

Transportation: Last night I wrote "it looks like further gains are a possibility here on Monday" and indeed the trans had an excellent day, doubling the performance of the Dow with a jolly green marubozu that popped right out of their descending RTC for a bullish setup.  With a completed  bullish stochastic crossover and solidly rising indicators, it looks like we could see still more gains on Tuesday.

Performance:

With the first quarter in the books, here are my 2014 YTD trading results so far, compared to the Dow, my benchmark:


        Trading   Dow
Jan.     0.50%  -5.30%
Feb.     3.94%  -1.94%
Mar.     6.01%  -0.72%

Again, my trading goals, in ascending order of difficulty, are:

1. Don't lose money.
2. Make money.
3. Beat the Dow.
4. Get a return around 30%.

So far this year I'm doing reasonably well, though a bit short of that elusive 30%.

Accuracy (daily calls): 

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

     And the winner is...

Tonight we're seeing mostly bullish signs with a few caution lights.  However, the first of April is traditionally a very good day marketwise, no fooling, so we're going to go with history and call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1850.50.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

On uncertainty

Last week we were honored by a visit from Dr. Brett Steenbarger who commented on our occasional use of the call "uncertain" in this blog, here.  When I first started tracking my daily accuracy, it was either right or wrong, higher or lower.  After a while, I realized that sometimes it's not possible to meaningfully call the direction of the market.  Uncertainty comes in three basic forms.

First is the case of headline risk.  No technical analysis can prepare you for an earthquake in Japan or an unexpected Fed announcement.

The second case is when I expect the market to close nearly unchanged - a doji.  Technical analysis can tell you if the market's going higher or lower, but it can't slice finely enough to distinguish between a four point gain and a two point loss.  There's little point in calling such a day higher or lower.

And the third case is when I simply don't have a clue.  It sometimes happens that some of the technical indicators I use are bullish while others are bearish or just in a strange indeterminate state.  Maybe someone else is smart enough to figure out those days, but I'm not so it becomes an "uncertain" call.

But Dr. Steenbarger's comments got me thinking about the ways we can use uncertainty to improve our forecasting skills.  I'll write more about this later this week.  I try to keep the Night Owl short enough to keep from boring my readers to death and I'm afraid we're already over our daily limit.  So without further ado, let's move on.

Recap

Last Friday the market remained it its now six day long trading range seemingly unable to break out over 16,380 nor fall below 16,275.  So the big "X" remains firmly in place in our swing trend box as we move on to the first day of a new week and the last day of the month and the quarter.  Should be interesting...

The technicals (daily)

The Dow: On Friday the Dow bounced off its support once again, confirming Thursday's doji with a 59 point gain.  The indecision in my call for the day was reflected in the RSI which rose closer to overbought and the stochastic which continued falling towards oversold.  With an inverted hammer on the books ending smack in the middle of our recent range, this chart is no closer to resolution than it was last Friday.  So we wait some more for some answers.

The VIX:  nd on Friday the VIX dropped 1.44% to form a perfect spinning top, another candle that requires confirmation.  And yet another day where we touched the 200 day MA, now an amazing 13 or the last 15 days.  So being at the lower end of our recent range  with a rising stochastic and RSi closer to oversold than overbought, it looks like the next logical move is higher on Monday.

Market index futures: Tonight all three futures are higher at 12;41 AM EDT with ES up by a healthy 0.36%.  On Friday ES confirmed Thursday's spinning top reversal with a bullish one white soldier.  And the new candle has opened with a big gap up that was enough to take it just out of the descending RTC for a bullish setup (so far).  It has also formed a bullish stochastic crossover so this chart is now looking decidedly positive for Monday.

ES daily pivot: Tonight the pivot jumps from 1841.00  to 1850.50.  Despite this big gain we remain above the new pivot thanks to  a big gap up in ES as trading opened Sunday evening so this indicator remains  bullish.

Dollar index: On Friday the dollar continued its odd backward march higher, marking the fourth day in a row where it put in a red candle that nonetheless resulted in a daily gain.  This one was a nice hanging man.  So with RSI now just overbought we have a hint of a reversal though I'm not stick my neck out for this one.  It's entirely possible we visit the upper BB, at 54.79 (recall this is $USDUPX) first..

Euro: And on Friday the euro gave us a green hammer after three days of decline that took RSI off oversold.  The new overnight is trading up a bit just outside the descending RTC so there's a hint of a move higher here on Monday, though one that requires confirmation.  The overnight has just broken above its pivot but the trading is pretty flat at the moment.

Transportation: Perhaps the most clear chart of last Friday, the trans gained half a percent with an inverted hammer that confirmed Thursday's regular hammer and caused RSI to bottom at oversold.  The stochastic is now positioned to form a bullish crossover so it looks like further gains a a possibility here on Monday.


Accuracy (daily calls):

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     11       3      6           0       0.786    296

     And the winner is...

The last trading day of March is historically not so hot, but we're now seeing some definite reversal signs in the charts.  I'll note too that Dr. Copper is feeling much better since bottoming on the 20th  and even crossed his 200 day MA to the upside on Friday.  The SPX Hi-Lo index has also moved back to 100.  So all in all I think I'll go out on the limb and call Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.  This is one of those nights where the opportunity was right at the open.  By now, I'm afraid the bus has sailed.

Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1841.00.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

It was a close one on Thursday as the Dow meandered close to the unchanged line but ultimately it did end down a bit saving my call for a lower close.  As we continue this trendless trading, can we perhaps finally glean some direction from the charts for Friday?  No telling unless we take a look ...

The technicals (daily)

The Dow: So just as on Wednesday we moved from the lower end of the trading range to the upper, on Thursday we dropped right back down again.  In fact, if you squint a bit you can sort of see a developing megaphone.  Thursday's big doji star certainly seems to suggest that Friday may head right back up again.  But Thursday's action was still not the break we're looking for.  So for the time being, we're stuck in the 16,270 - 16,367 range.

The VIX:  I thought the VIX might finally be able to capitalize on a big one day gain but it was not to be as it came right back down again on Thursday, off 2% to break its 200 day MA again - now 12 times in 14 days.  With predominately sideways action here, there's just no telling where we're going next.

Market index futures: Tonight all three futures are higher at 12:39 AM EDT with ES up by 0.22%.  On Thursday ES remained in its vaguely descending RTC with a small red spinning top.  But these have not been worth much lately.  We did test an important support level at 1839 and it held.  And the overnight so far seems to be confirming the doji, so we now have at least a suggestion of a move higher on Friday, albeit one that requires confirmation.  We also do not yet have a bullish stochastic crossover.

ES daily pivot: Tonight the pivot falls again from 1850.92  to 1841.00.  That drop combined with ES's gain in the overnight finally puts us back above the new pivot so this indicator now turns bullish.

Dollar index: The dollar continues its bizarre march higher backwards with a third straight gain on a red candle.  I thought we were going lower but it was not to be.  I just don't get this chart.

Euro: Last night I wrote "the selling may not be over yet:" and it wasn't s the euro put in a third red candle in a row.  We now have a new descending RTC going here and no indication of a reversal yet, despite now having entered oversold territory.

Transportation: Last night I wrote "DCB or at least a doji is possible on Thursday here.".  Well the cat did not bounce but we did get a nice hammer that left the trans oversold.  SO there's at least a hint of a reversal here, though one which requires confirmation.


Accuracy (daily calls):

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     11       3      5           0       0.786    296

     And the winner is...

Tonight I'm starting to see signs that a move higher is coming, but they're signs that require confirmation.  It would be premature to call the market higher just yet, but it would also not be prudent to be going short at these levels.  So I guess again I just have to call Friday uncertain.  We should have more clarity after the bell rings.  Have a great weekend and see you again Sunday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Thursday lower

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

• Thursday lower, medium confidence..
  
• ES pivot 1850.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

So the pattern continues - with the Dow going from the upper edge of its recent trading range to the lower in one day.  It's actually oddly reminiscent of the pattern we were seeing exactly one year ago.  That one didn't end until Aprils 1st with a break higher.  We now consult the charts for a clue to Thursday as March grinds on to a close.

The technicals (daily)

The Dow: Last night I wrote "from recent experience, the only thing you can think is that Wednesday will move lower".  Well I guess never discount the power of experience as the Dow did indeed move lower on Wednesday by a good 99 points.  And with a bearish engulfing pattern at that.  That was also enough to finally complete the bearish stochastic crossover too.  And with indicators now moving lower and money flow (which Dr. Steenbarger just recently mentioned again - that's where I first learned about this) moving lower, this chart now looks bearish.

The VIX:  Last night I wrote of the VIX "the next logical move would seem to be higher.".  So never discount the power of logic either as the VIX also rose a solid 6.5% on Wednesday.  And moved right back through its 200 day MA yet again for the 11th visit in 13 days.  This time though we're still oversold with an new bullish stochastic crossover so there seems to be some gas in the tank for continued higher on Thursday.  A nice bullish engulfing pattern in VVIX supports this idea.

Market index futures: Tonight all three futures are higher at 12:57 AM EDT with ES up by 0.15%.  ON Wednesday ES put in a red candle that broke support at 1850 and also gave us a bearish RTC setup.  And even at that we're not yet oversold so it's not clear what significance to attach to the overnight gain.  It may simply be a reaction to the sell off that began at 3 PM Wednesday.  In any case, this chart is now looking bearish.  Note also that money flow has been declining three straight days now, another bearish sign.

ES daily pivot: Tonight the pivot drops from 1857.25  to 1850.92. Despite this, we are still below the new pivot by a good five points so this indicator remains bearish.

Dollar index: On Wednesday the dollar put in a funny red hanging man that actually was a 0.10% gain..  But the overall gestalt here remains bearish.

Euro: Last night I wrote that the euro chart seemed to "suggest lower for Wednesday".  And it was a good suggestion as the euro fell to 1.3789, its third straight day of lower highs.  That also formed a bearish stochastic crossover from an oversold position and that's a bearish sign indeed.  So the selling may not be over yet.  And the pin action in the overnight in fact continues lower.

Transportation: Last night I refused to guess on this chart which is good since the trans took a 1.58% dive on Wednesday that I wasn't expecting.  That was enough to send the indicators oversold but not enough to even start a bullish stochastic crossover.  But because of the magnitude of this drop, a DCB or at least a doji is possible on Thursday here.


Accuracy (daily calls):

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     10       3      5           0       0.759    291

     And the winner is...

Unlike the past few days when it was hard to get a clear reading on the charts, tonight we're seeing a number of bearish signs, enough in fact to call Thursday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1857.25.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Parable of the Day

"Give a man a technical chart and he'll be confused today.  Teach a man technical analysis and he'll be confused for the rest of his life."

                          - The Night Owl
Recap

Mr. Market's acute case of indecision rolls on with Tuesday's 91 point gain being just barely over the upper end of the recent trading range.  A trend!  My kingdom for a trend!  Will Wednesday finally be the day?  Perhaps the charts have a clue.

The technicals (daily)

The Dow: I had kind of informally drawn the upper end of the Dow's recent range at 16,350.  Does Tuesday's close of 16,368 represent a breach of that?  Ehhh, probably not.  All it did was jack the indicators further into overbought territory.   And the stochastic has both its lines on top of each other.  So from recent experience, the only thing you can think is that Wednesday will move lower.  That's hardly an insightful observation but it's all I've got tonight.

The VIX:  On Tuesday the VIX dropped through its 200 day MA again, touching it for the 10th time in 12 days.  That leaves us right at a support level at 14 with oversold indicators.  With this inverted hammer, the next logical move would seem to be higher.

Market index futures: Tonight all three futures are higher at 12:18 AM EDT with ES up by 0.12%.  On Tuesday ES gave us some confirmation of Monday's spinning top, such as it was, in the form of a green bullish engulfing candle.  And the new overnight is continuing higher with the stochastic swinging back around into position for a bullish crossover at a high level.  So this chart now looks bullish.

ES daily pivot: Tonight the pivot rises from 1852.25  to 1857.25.  We remain above the new pivot so this indicator remains positive.

Dollar index: Last night I thought the dollar was going lower on Tuesday.  Well the candle was indeed red, but the close was up - all of 0.01%.  This did give us a bearish stochastic crossover though so I'm going to stick to my guns and claim that the dollar's going lower on Wednesday.  This time for sure :-).

Euro: On Tuesday the euro put in a tall tall hanging man that would seem to suggest lower for Wednesday, even though the indicators remain oversold.  And the overnight action is in fact continuing lower, down 0.10% so far.

Transportation: And finally on Tuesday the trans tried to break out of their recent slide, gaining half a percent but remaining inside a descending RTC.  We now almost have a new bullish stochastic crossover, but not quite so this chart remains frustratingly opaque tonight.


Accuracy (daily calls): 

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     10       3      4           0       0.759    291

     And the winner is...

Tonight we're facing a mixed picture.  The futures are looking higher but the Dow and the VIX are guiding lower.  The only really clear chart we've got now is Dr. Copper, who looks to have finally bottomed.  When and if that translates to broader market gains remains to be seen.  And as Dr. Steenbarger observed today, SPY money flow has been declining for a month now, a trend also in evidence in the Dow, though not as bad.

So bottom line, there's too much conflict in the charts tonight to make any sort of rational judgement.  Therefore once again I have to call Wednesday uncertain.  It means leaving money on the table, but I'd rather miss the bus once in a while than get on the wrong one.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1852.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

After an early plunge Monday morning, the Dow spent the rest of the way clawing its way back to break even - and almost made it, thus just barely saving my call for a lower close.  All of which leaves us in an awkward spot, so let's see if the charts can clarify any of this for Tuesday.

The technicals (daily)

The Dow: So the Dow gave us a perfect spinning top on Monday.  But coming as it does in a trendless environment, it's anybody's guess as to whether this is warning of a move higher or lower.  And with no RTC and indicators still neither overbought nor oversold, we continue to just drift sideways, so no call here.

The VIX:  On Monday the VIX continued playing with its 200 day MA putting in a big inverted hammer that has zero predictive power.  The stochastic is lying flat on the floor and there's no RTC at all.  We are right on the MA and exactly halfway between BB's so I have no way of telling which way this chart is going next.

Market index futures: Tonight all three futures are higher at 1:28 AM EDT with ES up by 0.15%.  ES gave us a broad spinning top on Monday to go with a completed bearish stochastic crossover.  The new overnight candle is developing as a bullish harami but it's never prudent to read too much into a half-baked candle.  We in fact have a bearish RTC setup, though the channel is a bit broader than I like to see (it has a Pearson's of 0.857).  So overall, this chart remains generally bearish.

ES daily pivot: Tonight the pivot drops from 1863.08  to 1852.25.  That drop, coupled with the overnight rise in ES briefly put it back above the new pivot but as I write it just dipped back under and that is a fairly bearish sign.

Dollar index: On Monday the dollar completed its bearish tri-star thingy with a 0.23% drop that also formed a bearish stochastic crossover.  This all spells lower for the dollar on Tuesday..

Euro: On Monday the euro put in a gain big enough to pop it out of its descending RTC (as I mentioned last night) for a bullish setup.  With a now completed bullish stochastic crossover, one would think the euro continues higher on Tuesday.

Transportation: On Monday the trans continued their lazy drift lower with a star doji.  But indicators still aren't down to oversold so there really isn't much bullish impetus visible here at the moment.


Accuracy (daily calls): 

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     10       3      3           0       0.759    291

     And the winner is...

The charts aren't particularly clear tonight.  The tendency, such as it is, remains bearish.  However the SPX Hi-Lo index's MACD has just crossed the zero line moving upward and that's usually a good bullish sign.  But overall I'm just not getting a good read on this market so I'm going to once again have to call Tuesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1863.08.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

With quadruple witching now out of the way, perhaps we can get back to doing some technical analysis again.  So let's see what the charts have in store for us on Monday.

The technicals (daily)

The Dow: In typical op-ex fashion, the Dow put in one weird-looking candle last Friday, this one being basically a big gravestone doji / inverted hammer affair that nearly touched the upper BB at its peak.  In the end it curved the stochastic around the very nearly make a bearish crossover.  In any event, this looks bearish for Monday.

The VIX:  And so the VIX had a funny candle too.  It putin a tall green candle but only ended 3.31% higher due to a gap-down open.  And that took it right through its 200 day MA again - now the eighth time in ten sessions!  And like the Dow, we now almost have a bullish stochastic crossover.  But with the VIX's recent attraction to the 200 MA, it's hard to tell if it can put two consecutive green candles together.

Market index futures: Tonight all three futures are just barely at 12:30 AM EDT with ES up by just one tick.  ES has now finished four straight days of alternating up and downs, all remaining in the 1851-1867 range.  Right now we're in the middle of that.  And without an RTC or other good technical guidance, this chart is too hard to call.

ES daily pivot: Tonight the pivot rises from 1859.08  to 1863.08.  This jump puts us back below the new pivot, so this indicator turns bearish.

Dollar index: Recall that last Thursday the dollar left us hanging with a big gap-up star that seemed to portend an evening star.  Well Friday was just about that, but the candle was closer to a tri-star than the classic evening star.  No matter - the pattern is still bearish.  I'd guess the dollar goes lower again on Monday.

Euro: Meanwhile, the euro did some bullish basing on Friday.  The small gain int he overnight so far is causing a bullish stochastic crossover and we're hanging on the edge of the descending RTC about to get a bullish setup.  With RSI hooking up from oversold, it looks likely that the euro goes higher on Monday.

Transportation: Last Friday the trans continued what's now looking like a slow drift lower, losing 0.36%.  And unlike the near misses in the Dow and the VIX, we did get a completed bearish stochastic crossover here.  So in the absence of any other indicators, this chart now looks officially bearish.


Accuracy (daily calls): 

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      9       3      3           0       0.750    265

     And the winner is...

Hmm - tonight most of the signs seem to be bearish, not all that much but still I can't really call it any other way than Monday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1859.08 - switching to "M" contract.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

So Tuesday night I called the market higher and it went lower.  Then last night I called it lower, so naturally it went higher.  Arrgh!  I hate getting whipsawed like that.  Oh well - one can't dwell on such things.  Let's see if we can at least get it right for the end of the week.

The technicals (daily)

The Dow: On Thursday the Dow retraced almost all of the losses from Wednesday which retraced all of the gains from Tuesday.  Up down up, who know where this one is going.  I'm surprised the VIX isn't higher.  And speaking of ...

The VIX:  The VIX can't figure out what it's doing either.  After Wednesday's bullish harami, Thursday gave us a bearish engulfing candle that once again cut back under the 200 day MA.  We're 7 for 9 crossing the MA now.  So this chart too makes no sense to me.

Market index futures: Tonight with futures expirations looming we switch to the "M" contracts.  The futures are mixed at 12:46 AM EDT with ES down by just one tick but YM up 0.02%.  The entire overnight so far has been basically flat.  There's a big tug-o-war going on between the bulls and bears and no indication yet of a winner.  If I had to guess, I'd say Friday would go lower just because Thursday was higher - not exactly a very profound sort of analysis.

ES daily pivot: Tonight the pivot rises from 1853.92  to 1859.08.  We remain above the new pivot, so this one is bullish.

Dollar index: On Thursday the dollar extended its big run-up from Wednesday with a 0.27% gap up doji to form 2/3 of an evening star.  But we need confirmation of this pattern on Friday..

Euro: And of course the euro extended its losses on Thursday, finally falling out of its long-running rising RTC for a bearish setup.  Indicators have just gone oversold but there's no good sign of a move higher here at the moment.

Transportation: In a bit of bearish divergence, the trans dropped on Thursday as the Dow rose, giving us a dragonfly doji that sent the  stochastic bending around to almost make a bearish crossover.  But nothing definite here either.


Accuracy (daily calls):

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      9       3      2           0       0.750    265

     And the winner is...

It is rare that I see the charts as opaque as they are tonight.  I don't know if it's the Fed, or China, or Putinoia but Mr. Market just doesn't seem to know which way he wants to go.  And neither do I.  Accordingly, I can only call Friday uncertain.  >shrug<  Have a great weekend and see you again Sunday night.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Thursday lower

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

• Thursday lower, low confidence.
  
• ES pivot 1861.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well I sure wasn't expecting a triple digit dive from the Dow after Wednesday's Fed meeting.   What Aunt Janet had to say honestly didn't sound all that bad to me.  But Mr. Market clearly doesn't care what I think and he took a petulant tumble in the wake of the 2 PM announcement.  Go figure.  This is why I make it my policy to never call Fed days, and this is exactly what I get for breaking my own rules.  Doh.  At least we're still here to enjoy another revolution around the planet, so let's take advantage of that to call Thursday.

The technicals (daily)

The Dow: What a difference a day makes.  Our two white soldiers beat a hasty retreat on Wednesday and are now hunkered down in a foxhole as a 114 point drop in the Dow formed a bearish dark cloud cover.  So now this chart looks bearish.

The VIX:  After breaking down through its 200 day MA, the VIX just as quickly broke back above on Wednesday, its sixth trip in eight days now.  The candle is vaguely bullish harami but interestingly VVIX was lower on Wednesday, albeit on a  long-legged doji.  So overall this one is too hard to call.

Market index futures: Tonight all three futures are lower at 12:41 AM EDT with ES down by 0.31%.  Like the Dow, the pattern in ES has suddenly turned bearish and the overnight is confirming this.  What looked like a nice bullish stochastic crossover last night actually seems ready to fold over into a bearish one.  So this chart too looks bearish now.

ES daily pivot: Tonight the pivot drops from 1865.75  to 1861.25.  We fell below the pivot Wednesday afternoon and remain below the new number as ES continues drifting lower in the overnight so this indicator is now bearish.

Dollar index: The dollar had a Fed-induced spike on Wednesday, jumping 0.74% to pop out of its long-running descending RTC for a bullish setup.  Indicators are now rising and nowhere near overbought so there still plenty of room to run here..

Euro: And of course the euro took a corresponding dump on Monday though it narrowly missed falling out of its descending RTC.  The overnight seems to have found some support, so we could see a DCB or relief rally here on Thursday.

Transportation: The trans weren't hurt as much as the Dow on Wednesday with a vague harami but also a bullish stochastic crossover remaining intact.  So this one is also too tough to call.


Accuracy (daily calls): 

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      9       2      2           0       0.818    374

     And the winner is...

This is why I despise Fed days.  One short speech and my entire technical thesis flew out the window.  And there doesn't seem to have been much in the way of second thoughts in the wake of Wednesday afernoon's announcement so I'm going to guess that the selling is not over yet and that we close Thursday lower.  Being net long, I'll be happy to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  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 1865.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

"I vill require ze Czechoslovakian boy's desk too!"

Huh - on Tuesday the market appeared to be relieved by Adolf Putin's pronouncement that now that he had annexed the Sudetenland, uh I mean the Crimea, he had no further designs on the rest of Czechoslovakia, uh I mean Ukraine.  And clearly Neville Obama is sleeping easier now.  Isn't it nice to have Peace in Our Time.  Of course this time it's different.  Or is it?

One way or the other, we continue on our never-ending quest to sniff out the market's daily direction, using the charts as our guide.  Next on the agenda - Wednesday.

The technicals (daily)

The Dow: With two white soldiers marching valiantly onward backed by a bullish stochastic crossover and indicators rising off oversold, this chart now looks like it's headed for a retest of the 16,462 resistance line again soon.

The VIX:  Last night I wrote "looking bearish here for Tuesday".  And indeed it was, with the VIX dropping another 7.16% on a gap-down candle that dove right back through the 200 day MA again, its fifth visit there in the last seven sessions.  Adding a fresh bearish stochastic crossover and indicators now moving lower off overbought and this chart still looks bearish for Wednesday.

Market index futures: Tonight all three futures are barely higher at 12:37 AM EDT with YM up just 0.04% and ES, well it just turned flat as I write.  The bullish RTC setup I wrote about last night came through on Tuesday giving us two white soldiers on this chart too.  With rising indicators, a nicely completed bullish stochastic crossover and no resistance til 1878 and it looks like there's still some upside left here.

ES daily pivot: Tonight the pivot rises again from 1850.33  to 1865.75.  Despite this big gain, we still remain above the new pivot so this indicator remains positive.

Dollar index: On Tuesday the dollar posted a tiny gain but it remains mired in a descending RTC that goes all the way back to the end of January.  And there's still no sign that it's over yet.

Euro: And on Tuesday the euro gave us a second doji star in a row.  And yet it continues to drift slowly higher.  Like the dollar's ongoing slump, there's no reason to think the euro is going to reverse any time soon.

Transportation: The trans posted some decent gains on Tuesday that brought the, right back to the 7595 resistance area, a sticking point all month long so far.  Will Wednesday be the charm?  Hmm - could be - unlike all those other failed attempts to move higher, this time we're equipped with a fresh bullish stochastic crossover and indicators that are still well off overbought.  So I have to think there's more upside left there.


Accuracy (daily calls):

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      9       1      2           0       0.900    488

     And the winner is...

I generally don't call Fed days because of the headline risk involved but the consensus seems to be that the market will like what Aunt Janet has to say.  And this week is historically bullish anyway.  And the technicals are all lining up bullish so I guess I'll just go out on a limb and call Wednesday higher.  But I'll be watching closely at 2 PM.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1850.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The luck o' the Irish smiled on the Street on Monday and had the traders dancing a jig as the Dow piled on the green to the tune of 182 points.  Apparently, all thoughts of Putinoia were dispelled to snap a five day losing streak.  So with all the standard Irish cliches out of the way, let's continue our hunt for the pot o' gold (OK, just one more) as we rack up the charts for Tuesday.

The technicals (daily)

The Dow: Last night the Dow was giving early warning signals of wanting to reverse but I decided to wait for confirmation, thereby giving up a few points.  But hey, I really wasn't expecting a pop like this.  In any case, we've got the confirmation now.  While we're still in a descending RTC, RSI has now bottomed and the stochastic is now very close to executing a bullish crossover.  The only thing is that the Dow has been taking a breather lately on the day after a big push so we may not see much higher on Tuesday.

The VIX:  Last night I wrote of the VIX, "what blasts up, always comes down".  And sure enough, the VIX gapped down over 12% on Monday to complete a bearish evening star.  Indicators now peaked at overbought and bearish stochastic about to execute - looking bearish here for Tuesday.

Market index futures: Tonight all three futures are modestly higher at 12:47 AM EDT with ES up by 0.08%.  Monday's jump in ES very nearly took it out of its descending RTC and in fact the new overnight candle is currently outside which would be a bullish setup if it holds.  Also, we now have a completed bullish stochastic crossover and RSI is just off oversold.  So this chart is now confirmed bullish.

ES daily pivot: Tonight the pivot rises from 1844.00  to 1850.33.  After breaking above the old number early Monday we remain above the new pivot so this indicator continues bullish.

Dollar index: Last night I wrote "there's no indication that this downtrend is over yet" and indeed we dropped another 0.06% on Monday even as RSI looks to have bottomed.  But the descending RSI remains intact and I think, so does the downtrend.  This is one trend you don't want to fight.

Euro: The euro is finally starting to show signs of breaking out of its congestion area with a narrow spinning top on Monday.  The overnight is continuing higher and just caused a bullish stochastic crossover form a high level - always good for a day or two of moving higher.

Transportation: On Monday the trans confirmed last Friday's star with a nice gain.That now turns this chart bullish.


Accuracy (daily calls):

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      8       1      2           0       0.900    399

     And the winner is...

On Monday we got some of the bullish confirmations of last Friday's dojis that I was looking for.  Also, this week is historically quite bullish, so all in all I'm just going to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.

Monday uncertain

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

• Monday uncertain.
  
• ES pivot 1844.00 .  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well it looks like Friday's post somehow never made it out (probably because I uh, forgot to hit "Publish" (doh!)).  That's what I get for not bothering to read my own blog.  Sigh.  FWIW, I was calling the day lower and that's what we got.  Now let's see where Monday is going and we'll try to make sure this gets blasted out to the Webiverse on time.

The technicals (daily)

The Dow: OK, so despite last Thursday's big dump we did not get a DCB on Friday, continuing instead even lower.  That drove RSI well into oversold, though at 19 not extremely so.  Same goes for the stochastic - still not ready to commit to a bullish crossover.  The only stopping point I see now is the lower BB at 15,985.  The support at the even 16K level may be of as little help as it was the last time we dove under (ie. none).

The VIX:  After blasting through its 200 day MA on Thursday and its upper BB too, on Friday the VIX just kept right on going, fueled by Putin, fake Chinese economic numbers (they're all fake), the phase of the moon, and whatever for a 10% gain.  That took it from oversold to overbought in just one day, a rare occasion.  That also puts the chart of the last five days in a classic exponential and we all know what that means - what blasts up, always comes down.  While we don't actually have a reversal candle here at the moment, you can bet it won't be long in coming.

Market index futures: Tonight all three futures are vaguely flat at 12:38 AM EDT with YM down by just 0.01% and ES dead even.  On Friday ES gave us a nice dragonfly doji.  Coming as it did after a down week, this is a pretty good reversal indicator.  The indicators are now quite oversold though the stochastic looks to be still a day away from a bullish crossover, so we really need confirmation of this doji on Monday.

ES daily pivot: Tonight the pivot drops from 1854.42  to 1844.00 even.  We remain below the new pivot so this indicator remains bearish.

Dollar index: The dollar remains in a month and a half long descending RTC and while the indicators are now quite oversold, there's no indication that this downtrend is over yet..

Euro: And so of course the euro is in a corresponding rising RTC.  After being unable to clear 1.3904 for three days, the overnight seems to be gearing up for another attack.  With the upper BB now at 1.3944, that level is not out of reach.

Transportation: The trans lost just a bit on Friday for a doji star.  This would suggest a reversal but the indicators are not yet on board so we have to wait for confirmation here.


Accuracy (daily calls):

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      8       1      1           0       0.900    399

     And the winner is...

Tonight the technicals are shows some decent reversal signs but they all require confirmation and I'm not quite willing to go out on that limb just yet, particularly after Sunday's Anschluss vote in the Crimea.  Since this came as a complete surprise to absolutely no one, it may not move the markets on Monday but there are other signs that the bottom may not quite be in yet.  The SPX Hi-Lo indicator isn't all that low yet, though the NYSE A/D line has stopped making lower highs and lower lows.  So it definitely doesn't look bearish to me but it's not quite bullish enough for me to call it higher, so that only leaves one choice: Monday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $103,000 after the first trade of 2014.  We are now 1 for 1 total, 1 for 1 long, 0 for 0 short.  Tonight we stand aside.