Tuesday higher

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

• Tuesday higher, low confidence.
• ES pivot 1817.00.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Hmm - interesting.  Last night I suspected we were nearing a reversal at some point this week but I didn't think it would come on Monday, hence I went with the patterns I saw which suggested lower.  Turns out we got our reversal after all, ostensibly on some economic news - whatever.  As I said last night, I'm always glad to be proven wrong on a bearish call since I'm always net long.  So the underlying thesis worked out but the timing was a bit off.  But then calling the bottom is probably the hardest thing to do - even more than calling tops.  So now we have to ask whether this reversal's got legs or if it's just another fakeout breakout like we got last Wednesday.  To the charts!

The technicals

The Dow: Just last night I talked about the pivot.  Had I been awake at 9:30 AM on Monday I would have seen the Dow jump above its daily pivot right out the gate.  And that was all it took as we finished with a nice 146 point pop that completely erased Friday losses.  The candle is sort of piercing line meets engulfing pattern but bouncing off the lower BB as it did, it sure looks bullish to me.  RSI looks to have bottomed and the 16K round number support was never even threatened.  So suddenly this chart turns bullish.

The VIX:  Last night I wrote "it looks like a lower VIX is coming soon" and it came sooner than I thought, down 5.4% on Monday on a big (and unusual) gravestone doji.  For my money, this completes the bearish evening star from Friday and with indicators still overbought, I now think there's more downside to come here on Tuesday.

Market index futures: Tonight, all three futures are higher at 12:18  AM EDT, with ES up by 0.07%.  On Monday ES put in a class bullish piercing pattern and money flow turned higher for the first time since April 3rd.  The stochastic is still pretty jumbled but after two days closing and then opening under the lower BB, this chart now looks positive to me.

ES daily pivot: Tonight the pivot inches up from 1817.00 to 1818.58.  Thanks to its amazing late afternoon rally, ES is now well above the new pivot so this indicator is bullish.

Dollar index: On Monday the dollar had a big gap-up but small range day that was enough to generate a nice bullish stochastic crossover.  These big yawning gaps always want refilling though some I'm going to guess that some sort of gravitational attraction will pull the dollar back modestly on Tuesday.  Longer term though, we now have a completed bullish RTC trigger so I'm looking for higher later this week.

Euro: And on Monday the euro took a dump, falling out of its rising RTC for a bearish setup and a bearish stochastic crossover.  With indicators still overbought, I claim there's more downside left here on Tuesday.

Transportation: On Monday the trans posted a somewhat less impressive gain than the Dow with a little inside harami spinning top.  Having also bounced off their lower BB with oversold indicators, this chart now has a suggestion of a move higher.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      4       2      3           0       0.667     50

   
     And the winner is...

Both the SPX Hi-LO index and the NYSE A/D line rebounded nicely on Monday.  And we're seeing more concrete reversal signs of a move higher tonight than last night.  The VIX in particular is teetering on its upper BB and seems more likely to move lower than higher from here.  I think I missed Monday by not having enough conviction in my position so tonight I'm just going  say I believe that we see Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 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 1817.00.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

The selling simply continued on Friday as no one wanted to stay long the weekend with a weak-looking technical picture.  Someone on CNBC also mentioned tax selling.  I was thinking tax-loss selling, but that's supposed to happen in December.  Then I realized he meant people simply selling stocks to raise cash to pay their taxes.  Do people really  do that?  I mean wait til the last second to sell?    There maybe something to that as I went back and checked the week before April 15th.  Going back three years, yup sure enough, the market goes lower.  Something to think about next year.  Now things get complicated as we enter a holiday-shortened week.

The technicals

The Dow: Friday's action took the Dow down to and actually below its lower BB.  Indicators are now quite oversold though not extremely so.  We broke support at 16,066 and all that remains now is the hard number at 16K even.  The 200 day MA at 15,752 is coming into view as the ultimate backstop but I don't think we'll get there this week.  Still, there's no immediate reversal sign on this chart so it continues to look bearish.

The VIX:  On the other hand, there is a reversal sign on the VIX.  On Friday the VIX gained 7.27% but did it on a gap-up spinning top to form 2/3 of a classic bearish evening star.  Reinforcing this is the fact that the VIX crossed its upper BB and even closed above it.  Once again I state that the VIX rarely spends more than a day or two above its upper BB before retreating.  Indicators are now quite overbought so it looks like a lower VIX is coming soon, though maybe not perhaps as soon as Monday.

Market index futures: Tonight, all three futures are lower at 12:28 AM EDT, with ES down by 0.15%.  ES, like the Dow put in two nasty down days to end last week.  And there seems to be no end in sight.  OBV is decidedly negative and continues to fall, and money flow has been decreasing since April 3rd.  And what was an incipient bullish stochastic crossover was short-circuited so while the indicators are now oversold, there's no sign of a turn-around.  The only ray of hope here is that the developing candle is looking like a spinning top reversal but it's generally poor practice to read too much into a half-baked candle.  ES also has no support until the round-number 1800 level, and then 1797.

ES daily pivot: Tonight the pivot tumbles again from 1839.42 to 1817.00. Even with this big drop we're still beneath the new pivot so this indicator remains bearish.  I was asked today by a reader about my use of the pivot.  There's a good introduction to pivots here: https://en.wikipedia.org/wiki/Pivot_point.  This is a concept I can thank Dr. Steenbarger for s well as many other insights into the market.  I'm afraid my use of the pivot is pretty simple, some might say simplistic, but it works for me.

I really have just two basic rules.  Price moving above the pivot from below is a bullish sign, and vice-versa.  And the second rule is that you should watch out during a trending pattern for the stock or whatever to get too far extended from the pivot as that can signal a reversal.  I guess it's just a fancy way of saying "reversion to mean" but the pivot gives you a nice anchor for where that mean should be considered to be.

I also have what I call a "conditional forecast" that uses the ES pivot.  Sometimes if ES is close to its pivot in the wee hours of the night, I'll take a guess that the market will close in the direction of the pivot crossing if it makes one before mid-morning the next day.  So if we're above the pivot and stay above, that's bullish.  But if we break down under the pivot, the market will close lower.  It doesn't always work, but it works often enough to be useful.

Dollar index: The dollar on Friday posted a 0.09% gain on a red candle.  But that was enough toe just exit the descending RTC for a bullish setup, while driving RSI down to very oversold and leaving the stochastic on the floor flat as a pancake.  With support holding it looks like we have a hint of a reversal, but on that requires confirmation on Monday.

Euro: And on Friday the euro put in a classic doji star right at the top of Thursday's green marubozu after four straight days of gains.  The overnight is seeming to confirm this doji, trading sharply lower and creating a bearish stochastic crossover, and making Monday look like a loser for the euro.

Transportation: On Friday the trans pretty much reflected the Dow so the same comments apply here too - oversold but no immediate reversal in sight.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      4       1      3           0       0.800    196

   
     And the winner is...

The SPX Hi-Lo indicator I use comes from stockcharts.com and they're showing a reading of zero tonight which I'm pretty sure is wrong.  I think it's more like 35 which is still pretty low but frustratingly not low enough to be a major reversal sign.  Also the NYSE A/D line continues to put in lower highs and lower lows - a bearish sign.  And the Morningstar Market Fair Value Index has now fallen to 1.01, its lowest level since January 27th (on the way down) - and that wasn't the bottom back then either.  There's only a tiny smattering of hope in the charts tonight making me think we might see a reversal later this week but I don't think it's going to be Monday, hence I'm regrettably calling Monday lower.  I'll be happy to be proven wrong since I'm always net long.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 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 1839.42.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night I wrote "I'll just creep out to the very end of the limb and nervously call Thursday higher."  Well, looks like the limb snapped out from under me as the Dow dove an ugly 267 points to finish near session lows.  There was just something about last night I couldn't quite put my finger on.  Too bad too, because it seems like I always pick the really bad days to be wrong.  I'm still trying to sort this out.  Going over last night's charts in retrospect I still don't see any technical signs of this kind of dump.  But from the chatter on CNBC, it sounded like no one else had a clue either.  Oh well, such is the nature of the beast.  So we'll see how this changes the picture as we head to the end of the week.

The technicals

The Dow: On Thursday the Dow plunged all the way to its lower BB in a move that left the indicators oversold and the stochastic threaded out lying on the floor.  Wednesday's bullish RTC setup was canceled in a big way.  OBV kept rising though and money flow was actually higher.  I have to think that if nothing else we're due for a DCB here on Friday.

The VIX:  On Thursday the VIX resumed its love affair with its 200 day MA, shooting right back above it with a big 15% pop.  That lef the indicators overbought but the stochastic is now totally confused and threaded out.  We're also still short of the upper BB so it isn't clear that there still isn't at least a bit more room to run on Friday.

Market index futures: Tonight, all three futures are higher at 12:23 AM EDT, with ES up by 0.11%.  ES had a dreadful day on Thursday, plunging all the way to its lower BB with a dark cloud cover.  But even that didn't drive the indicators much lower than they were on Wednesday.  And the modest move higher in the overnight suggests the possibility of at least a DCB on Friday as traders figure out that Thursday' move was overdone.

ES daily pivot: Tonight the pivot dives from 1858.33 to 1839.42. We're still under the new pivot so this indicator remains bearish.

Dollar index: Last night's chart looked bearish to me though it wasn't the bottoming day I thought.  It was just down, another 0.13%.  The dollar stopped right on support just above its lower BB with oversold indicators.  So I'm going to be a bit more conservative and simply claim that I think the downside form here is limited.  It may or not be a bottoming day on Friday.

Euro: At least I got this much right.  Last night I wrote "it looks like there's more upside left on Thursday" and indeed the euro continued its climb ending at 1.3889, making it a four day winning streak.  Ad now being in a strong uptrend with no resistance til the upper BB at 1.3933, I see no reason why the euro won't hit that level Real Soon Now.  It is in fact continuing to inch higher in the overnight so far.

Transportation: The trans really got hammered on Thursday, giving up all of Wednesday's gains and then some, and canceling the bullish setup with a bearish engulfing pattern.  The indicators all turned downward though they're not yet oversold.  We're near support at 7412 now so Friday could be a bottoming day. 

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      4       1      2           0       0.800    196

   
     And the winner is...

With Mr. Market seemingly having picked up a bad case of the jitters, it's tough to make any iron-clad predictions.  I still have no good explanation for what happened on Thursday and that bothers me.  Therefore, I want to step back and let the market sort itself out.  So I'm just going to call Friday uncertain and see what happens.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account now rises to $105,625 after two trades in 2014.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 1858.33.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The technicals worked out nicely on Wednesday and the Fed minutes were just the icing on the cake as the Dow had a tasty 181 point pop.  We also confirmed the SPX's support at 1850.  That's about all there is to say about that so let's move on as always to the nightly charts and see where Thursday's headed.

The technicals

The Dow: The Dow on Wednesday finished at session highs for a jolly green marubozu that confirmed Tuesday's reversal candle and more than retraced all of Monday's dive.  It also gave us a bullish setup on an admittedly short descending RTC,  The stochastic continues to move into position nicely for a bullish crossover and the indicators are still less than halfway to overbought so this chart now looks bullish.

The VIX:  Last night I wrote that I was going to "guess that the VIX is going lower on Wednesday."  Good guess, because the VIX fell 7.19% and sliced right back through its 200 day MA with a gap-down two black crows.  This left the stochastic ever so close to a bearish crossover with RSI and momentum continuing to decline, never even having reached overbought.  There's weak support at 13.61 and stronger support at 12.94 and I would not be surprised to see at least one of those levels hit on Thursday.

Market index futures: Tonight, all three futures are barely lower at 12:15 AM EDT, with ES down by a single tick - call it essentially flat.  Wednesday's tall green marubozu provided a bullish RTC setup as well as a bullish stochastic crossover.  However, money flow has not been rising over the past two days and the lack of pin action tonight makes me wonder if we're not in for a pause on Thursday.

ES daily pivot: Tonight the pivot jumps from 1841.58 to 1858.33.  And even that big move still leaves ES above the new pivot, just less so.  But this indicator is still bullish for Thursday.

Dollar index: ore downside is not out of the question.Last night I wrote "more downside is not out of the question" for the dollar and indeed the dollar lost another 0.35% on Wednesday.  That leaves it close to support at 54.05 and its lower BB at 54.02.  Even so, the indicators have only just gone oversold and the stochastic is nowhere near forming a bullish crossover.  The failure to even attempt filling Tuesday's gap down is also bearish.  But with support near, Thursday might be a bottoming day.

Euro: Tuesday's resistance proved futile to the euro as it just motored higher on Wednesday, and then right through the next resistance at 1.3835.  With three white soldiers now marching ahead, indicators still not overbought, and a new rising RTC established, it looks like there's more upside left on Thursday.

Transportation: I didn't want to commit to this one last night and it's too bad because the trans had their best day in over a month on Wednesday, up 1.64% with a big green marubozu that bent the stochastic around almost into a bullish crossover and gave us a bullish setup on  descending RTC exit.  So with rising indicators I have to think we're going higher again on Thursday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      4       0      2           0       1.000    463

   
     And the winner is...

Tonight, all of the charts seem to be pointing higher except for the futures, and I wonder why.  I'm always reluctant to go against the futures but with everything else lining up I guess I'll just creep out to the very end of the limb and nervously call Thursday higher.  I'm not expecting a big move like we had Wednesday though.

ES Fantasy Trader

Finally the ESFT makes a second trade in 2014 and we have a winner.  I surely left a bunch of money on the table Wednesday but I decided I didn't want to face the headline risk ahead of the Fed minutes.  I'd rather leave a little behind than watch my existing profits evaporate.  Anyway, 5.25 points overnight is nothing to sneeze at.  Reminder - I post these trades live on my Twitter feed @nightowltrader.

SLD    10    false    ES    JUN14 Futures     1851.25    USD    GLOBEX    11:54:58
BOT    10    false    ES    JUN14 Futures     1846.00    USD    GLOBEX    APR 8 19:55:11

Portfolio stats:  the account now rises to $105,625 after two trades in 2014.  We are now 2 for 2 total, 2 for 2 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 1841.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader going long at1846.00.

Recap

Humph, now that I can finally see again, it's time to take on the markets.  Interesting doji day on Tuesday.  The talking heads on CNBC were in total disagreement all day about what this means, even more so than usual.  So let's simply forget them and go straight to the source - the charts.

The technicals

The Dow: So on Tuesday the Dow put in a classic spinning top reversal candle after two straight tall red marubozus.  I went back through to the end of 2012 and found five other instances of this.  And all five times the Dow was higher the next day.  The indicators are falling but not yet overbought and the stochastic is moving lower but not yet in position for a bullish crossover.  Still, the historical evidence is compelling.

The VIX:  On Monday (which I missed because I couldn't see anything) the VIX took a big pop back up over its 200 day MA.  But on Tuesday, it put in a big bearish engulfing pattern that , while it remained above the 200 MA, augers ill for the VIX.  With the stochastic now higher than lower and the RSI turning lower, I'd go out on a limb and guess that the VIX is going lower on Wednesday.  So sez I.

Market index futures: Tonight, all three futures are a bit higher at 12:28  AM EDT, with ES up by all of one tick.  .On Tuesday ES put in a nice green spinning top that nearly touched the lower BB.  OBV and money flow have now turned upward and the stochastic has flattened around in preparation for a bullish crossover.  The overnight is confirming a reversal, so far anyway so I am now cautiously optimistic about ES's chances for Wednesday.

ES daily pivot: Tonight the pivot drops from 1844.75 to 1841.58.  After bumping along the old pivot all evening that now leaves us four points above the new one, so this indicator turns nominally bullish.

Dollar index: Whoa!  On Tuesday the dollar just fell out of bed with a huge gap-down 0.65% loss.  That was enough to take the indicators right off overbought.  And the chart now looks inverted exponential so you have to think a reversal is coming soon.  And we did stop right on support at 54.28 ($USDUPX).  But holy moly, there's no reversal sign here so ore downside is not out of the question.

Euro: On Tuesday the euro posted an orderly gain to 1.3793, establishing a new rising RTC.  But it stopped right at resistance.

Transportation: And a nice doji star from the trans on Monday giving us a reversal hint here too.  I'd like to see the stochastic on board though, which it isn't yet.  So I'll have to settle for a wait & see on this one.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      3       0      2           0       1.000    282

   
     And the winner is...

Tonight we're seeing a number of positive reversal signs in the charts enough in fact for me to call Wednesday 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 go long at 1846.00.

Nightowl canceled tonight

I'm sorry everyone, but I just have to cancel tonight's post.  I had my annual appointment with my opthalmologist today and right now I still can't see jack.  Just typing this much is an effort.  I'll update the performance chart but that's about it.  We'll resume on Tuesday night once I have recovered my customary super owl vision.  Right now, I'd be afraid of seeing the wrong numbers.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      3       0      2           0       1.000    282

   

Monday lower

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

• Monday lower, low confidence.
• ES pivot 1869.42.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last Friday was one of those days I was glad I called uncertain as I wasn't expecting a 160 point dump in the Dow.  This move changes the picture once again so let's get right to the charts for Monday.

The technicals

The Dow: On Friday the Dow just crashed right out of its rising RTC for a big bearish setup, a fresh bearish stochastic crossover and indicators that are all headed lower now.  So this is looking pretty bearish for Monday.

The VIX:  Last Thursday night I wrote "the VIX looks higher for Friday" and sure enough the VIX gained 4.41% for a second bullish engulfing candle in a row and a developing megaphone pattern, a fairly rare sight.  We also traded outside the descending RTC for a bullish trigger and got a completed bullish stochastic crossover.  So the VIX looks ready to move higher again on Monday.

Market index futures: Tonight, all three futures are modestly lower at 12:45 AM EDT, with ES down by 0.09%.  The ES story was pretty much the same as the Dow on Friday - bearish RTC setup, bearish stochastic crossover, descending indicators.  All looking bearish.

ES daily pivot: Tonight the pivot falls from 1882.00 to 1869.42.  We remain below the new pivot so this indicator sis bearish for Monday.

Dollar index: Last Thursday night I wrote "further upside is limited from here."  And indeed on Friday the dollar hit its upper BB early on and then it was all downhill from there, ending the day with a  small loss.  That was a classic dark cloud cover.  ALong with overbought indicators the dolalr is now looking lower for Monday.

Euro: On Friday the euro put is a sort of spinning top that tested the lower BB.  But the overnight is having none of that and is continuing lower.  With the lower BB dropping away and the stochastic nowhere near a bullish crossover, it looks like more downside in store on Monday.  This of course means either this call or the dollar call is wrong..  At the moment I have more faith in the dollar going lower.

Transportation: The trans were hit hard on Friday and like the Dow fell out of their rising RTC for a bearish setup along with a bearish stochastic crossover.  So we're looking lower here again.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      2       0      2           0       1.000    115 

   
     And the winner is...

With Friday's uncertainty out of the way I've got to say that the charts tonight are looking rather bearish, even after Friday's big drop.  So I'm just going to call 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 1882.00.  Holding above is bullish.
• Next week bias lower technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I called Thursday uncertain writing that "A doji day is possible".  Well check it out folks: Dow down 0.45 points on a perfect doji star.  'Nuff said, lest I commit one of the traders' deadly sins - hubris.  Let's just say that Thursday's outcome was about as uncertain as they come.  But this now leaves us in a quandary - whither Friday?  We once again appeal to the charts for, if not outright salvation, then at least some meager sense of direction.

The technicals

The Dow: So the Dow is now in a nearly perfect rising RTC (Pearson's = 0.980).  Thursday's doji touched its upper BB for the third day in a row before retreating to the aforementioned doji.  RSI is now overbought, though not extremely so.  The stochastic continues to curve around for a bearish crossover, though not there yet.  Money flow continues higher though momentum has turned lower.  So where does that leaves us?  Shoot - uncertain again.  We have more reversal warnings now but they all require confirmation.  It would be foolhardy to call a top based on the evidence so far.

The VIX:  In an interesting bit of divergence, the VIX on THursday rose 2.14%, as the Dow did nothing.  That was good for a bullish RTC setup as well as moving the stochastic very close to a bullish crossover.  The candle is also clearly bullish engulfing so all things considered, the VIX looks higher for Friday.

Market index futures: Tonight, all three futures are higher at 12:29 AM EDT, with ES up by 0.13%.  Wednesday gave us a doji just like the Dow and it remained inside a rising RTC.  SO far, the new candle is trading higher which is bullish.  But it's also trading outside the rising RTC which is a bearish setup.  But this RTC is so tight (Pearson's = 0.998) I'm inclined to cut it some slack, so we'll take this bearish setup with a grain of salt - for now.  Of more concern is the stochastic which is now just a smidge aways from making a bearish crossover.  And of course the RSI is now highly overbought.  So it's possible that this chart is now moving on rumors of Friday's jobs numbers coming out BTE.  We'll have to see.

ES daily pivot: Tonight the pivot barely ticks up from 1881.83 to 1882.00.  After breaking above the old pivot Thursday afternoon, we remain above the new one so this indicator remains bullish.

Dollar index:On Thursday teh dollar just laughed at the resistance that concerned me last night, blasting right through to ring the upper BB bell at 54.86.  The dollar has been very good about respecting its upper bB lately so given the overbought nature of the indicators I have to think that further upside is limited from here.

Euro: I missed the dollar but last night I wrote "the euro's three day winning streak may be over.".  And indeed it was, with the euro falling all the way back to 1.3742 after barely bouncing off its lower BB.  That completed a bearish crossover from a low level making me think the selling isn't over yet.

Transportation: Here's one of the more telling charts du jour.  I thought we'd go higher, but on Thursday the trans lost 0.16% on a classic spinning top sitting right on the upper BB.  With the stochastic moving into position for a bearish crossover, this chart is now ringing the bear alarm.  Roar!

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      2       0      1           0       1.000    115    
     And the winner is...

We've had a nice run this week but tonight we're seeing a virtual army of dojis on the charts giving a warning of a reversal.  The technical bias is now rather bearish, certainly much more so than last night.  However, I expect Friday to be news-driven by jobs numbers.  Since I have no way of telling that, I can only call Friday uncertain.  But I'd definitely not be going long at these levels.  That's all she wrote.  See you again next 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 uncertain

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

• Thursday uncertain.
• ES pivot 1881.83.  Breaking below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

W aell we managed to squeak out another winner on Wednesday with modest 40 point gain in the Dow.  So with a four day winning streak going, when will the reversal come?  (And it inevitably must come).  Will it be Thursday?  Silence!  Let the charts speak!

The technicals

The Dow: The bears tried to draw the Dow down right after lunch on Wednesday (as they have successfully done for a number of days recently) but this time the bulls would not be denied and they motored on to end near session highs.  So thus our three white soldiers found a new recruit.  We now have a whole squad of white soldiers marching ever higher and rappelling up the upper BB on their way to record territory.  In fact all that stopped it on Wednesday was the previous record high, which we matched within a tenth of a point.  So we ask the same question as last night - does the Dow have the mojo to continue higher?  While the indicators are now all overbought, they're still nowhere near as overbought as the last time we were at these oxygen-mask levels (12/31/13).  So I'm going to have to cautiously say, yes, we could conceivably still go higher from here.

The VIX:  Last night I wrote that with "the lower BB not til 12.79, the VIX just might want to take a look at that level on Wednesday".  Well it didn't quite make it but it got a bit closer with a 0.08% loss.  Now we're near the lower BB with a perfect spinning top and oversold indicators, so the case for a reversal becomes stronger.  But still not quite strong enough that we don't have to wait for confirmation.   VVIX isn't much help here either, implying still lower to come.  So tonight I just take a pass.

Market index futures: Tonight the futures are mixed at 12:42  EDT with ES down  0.04% but YM up just 0.01%. Call it basically flat.  After another day of gains that took ES right to its upper BB, it looks like the tide is beginning to turn.  The futures are not running higher at this hour as they have been recently, the stochastic is starting to level off in anticipation of a bearish crossover rand OBV has peaked.  I'd say after a nice four day winning streak, this chart is turning bearish.

ES daily pivot: Tonight the pivot rises once again, this time from 1872.92  to 1881.83.  Unlike recent nights, this leaves us on the bubble with ES banging down against the pivot.  This is barely bullish, and only as long as we can remain above.

Dollar index: I took a pass on the dollar last night and I'm glad of it because I wasn't expecting a 0.15% gain on Wednesday.  That puts us right back to resistance with overbought indicators.  So the best bet here is a move lower on Thursday.

Euro: On Wednesday the euro took a big dump to fall right out of its rising RTC for a bearish setup. that caused the stochastic to curve over setting up for a bearish crossover.  It appears the euros' three day winning streak may be over.

Transportation: Last night I wrote that the trans had "a bit more room to run Wednesday".  Well they took a big bit with a 0.66% gain that latched onto the upper BB in a big way.  Indicators are now overbought but the stochastic has yet to even suggest a bearish crossover might be coming.  So this one continues to look bullish.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      2       0      0           0       1.000    115 
   
     And the winner is...

Tonight we're starting to see some signs that the recent rally is running out of gas.  There are some technical topping indications but they're not outright bearish at this point.  So the best I can do is to call Thursday uncertain but with a bearish bias.  I'd certainly not be going long at these levels.  A doji day is possible.

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 1872.92.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

It was nice to start off the month and the new quarter with a win as the technicals paid off, no fooling, helped out by some good job numbers.  The leaves us at an interesting juncture so we return to the charts to plot our course forward to Wednesday.

The technicals (daily)

The Dow: Last night I wrote "with the upper BB still at 16,516, I'd say it's entirely possible to see further upside on Tuesday" and how about that, the Dow poked through the upper BB before closing just below it.  That leaves us with a bullish three white soldiers but a conundrum having hit the upper BB.  Do we bounce off or start climbing it?  The high-level bullish stochastic crossover is playing out well, money flow is rising, and RSI has only now just barely gone overbought.  And having easily cleared resistance (finally) at 16,462, it sure looks like we could see yet another day of gains on Wednesday.

The VIX:  I didn't want to take a stand on th3e VIX last night because it was sitting on very strong support with a spinning top.  Well the support just melted away on Wednesday as the VIX dropped 5.62% to 13.10.  And with a completed bearish stochastic crossover from a low level and the lower BB not til 12.79, the VIX just might want to take a look at that level on Wednesday.

Market index futures: Tonight all three futures are higher at 12:32 AM EDT with ES up by 0.17%.  We now have three white soldiers in ES too and a bullish RTC trigger.  RSI has just hit overbought but the stochastic continues rising as does money flow, so that's all bullish.  Also the overnight is continuing higher.  The only question is if it will bounce off the upper BB it just hit.  I don't think we're sufficiently overbought for that to happen immediately.

ES daily pivot: Tonight the pivot rises once again  from 1862.50  to 1872.92.  Just like last night, we remain above the new pivot so this indicator stays positive.

Dollar index: the dollar continued its weird ways on Tuesday, this time dropping 0.01% on a green hammer.  This chart is pretty indecisive tonight so I'll just leave it at that..

Euro: There's a bit more clarity in the euro, which rose again on Tuesday for its own three white soldiers.  The bullish stochastic crossover is complete, we have a new rising RTC and momentum is rising but the indicators are not yet overbought.  So I say we go higher yet again on Wednesday.

Transportation: The trans had another very good day Tuesday, doubling the Dow's gains and hitting their own upper BB exiting a descending RTC with a bullish trigger.  Indicators are still not overbought suggesting at least a bit more room to run Wednesday, especially since we cleared resistance at 7592.


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
April      1       0      0           0       1.000     75    

     And the winner is...

After three nice up days, I start to get at least a bit cautious about calling for more, but honestly I'm just not seeing any bearish reversal signs in the charts tonight.  So logic dictates a call of Wednesday 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.