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.

Thursday higher

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

• Thursday lower, low confidence.
  
• ES pivot 1863.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well the SPX barely squeaked out a gain on Wednesday but my calls are for the Dow and that did end down just a bit, so I was right.  But now we've got some more interesting patterns to mull over as the snow flies outside tonight, so let's get right to it.

The technicals (daily)

The Dow: On Wednesday the Dow put in a tall hammer after two days of declines.  We remain in a descending RTC with a bearish stochastic crossover so this is just a suggestion of a reversal, but one which requires confirmation.

The VIX:  After breaking through its 200 day MA on Tuesday, the VIX motored on higher Wednesday, bounced off its upper BB - and then crashed right back through the MA to finish 0ff 2.23%.  This is the mother of all dark cloud covers so although RSI is oversold, the candle plus the MA breakdown suggest a lower VIX on Thursday.

Market index futures: Tonight all three futures are higher at 12:38 AM EDT with ES up by a respectable 0.27%.  Wednesday gave us a nice-looking green hammer at the lower end of Tuesday's dump and the overnight seems to be confirming that, so this chart now looks bullish again.

ES daily pivot: Tonight the pivot drops from 1870.17  to 1863.50.  That move plus the overnight gains in ES combined to put it comfortably above the new pivot so this indicator now turns bullish.

Dollar index: The dollar broke support at 54.27 on Wednesday to finish 0.15% lower on a spinning top that nearly hit the lower BB.  So Thursday might go higher but the dollar has just been bouncing all over the place lately so I'm not committing to that in the absence of any better signals..

Euro: Foo - that pesky euro.  I thought it was going lower Wednesday but instead it put in a big bullish engulfing candle that just touched its upper BB.  Indicators are not quite overbought but the new overnight is continuing significantly higher, to levels not seen since October 2011 in fact.  So at this point one can't really call for a move lower on Thursday.

Transportation: Like the Dow, the trans put in a hammer on Wednesday but this was a nice fat green one with a main body as a bullish engulfing pattern that pretty much canceled Tuesday's bearish trigger.  So although the indicators remain quite overbought, the trans don't seem too interested in selling off 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      7       0      1           0       1.000    587

     And the winner is...

tonight we're seeing a bunch of reversal candles and futures showing non-trivial gains.  Add in a VIX that failed to capitalize on a 200 MA breakthrough and that sends me out on a limb to call Thursday 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.

Wednesday lower

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

• Wednesday lower, low confidence.
  
• ES pivot 1870.17.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

My idea that the break after three doji days would be lower played out nicely as the Dow lost 67 points on Tuesday.  It was in fact an interesting move, as we shall see shortly upon exploring the charts tonight.

The technicals (daily)

The Dow: The Dow confirmed last night's hanging man by dropping 67 points on Tuesday and thus giving a bearish RTC trigger.  We also got, not surprisingly, a bearish stochastic crossover to go with indicators now moving off overbought.  So this chart continues to look bearish.

The VIX:  On Tuesday the VIX took another crack at its 200 day MA at 14.69 and this time managed to close above it, just barely.  VVIX was up too, but on a red hanging man.  This pattern may or may not have any follow-through.  With the VIX bouncing around and no RTC going now, this one is too tough for me.

Market index futures: Tonight all three futures are a tad lower at 12:37 AM EDT with ES down by 0.05%.  Last night I wrote that "ES is more interested in moving lower next" after three days of noodling around indecisively.  Well that's what happened alright and it dropped ES out of its rising RTC on Tuesday for a bearish setup.  Indicators continue to move lower just off overbought so overall this chart now looks bearish.

ES daily pivot: Tonight the pivot drops from 1873.92  to 1870.17.  We remain below the new pivot so this indicator continues bearish.

Dollar index: On Tuesday the dollar tried to  extend its momentum from the past two days but ultimately failed, ending down just 0.05% but on a tall red candle.  This dark cloud cover-like candle is de facto bearish but the indicators remain just off oversold moving higher, so this one isn't clear at all.

Euro:Meanwhile the euro put in a nice hanging man on Tuesday as it broke away from its upper BB and formed a bearish stochastic crossover.   With the overnight guiding decidedly lower, it looks bearish for the euro on Wednesday.

Transportation: The trans dropped, like the Dow on Tuesday confirming a red spinning top ... with another red spinning top.  But this one was also a bearish RTC trigger and with the indicators now clearly topped at overbought, this chart looks 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      6       0      1           0       1.000    576

     And the winner is...

Hmm - I'd like to say I see some bullish signs tonight, but I don't.  And the NYSE A/D line has been putting in lower highs and lower lows for six days now, a bearish sign.  And the SPX Hi-Lo index has not spiked lower, a move that usually precedes bottoms.  And the TLT appears to have bottomed on a bullish RTC trigger.  And Dr. Copper crashed through his 200 day MA on Tuesday continuing a three day waterfall lower.  So much as I don't like to say it, the signs all seem to be pointing toWednesday 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.

Tuesday lower

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

• Tuesday lower, low confidence.
  
• ES pivot 1873.92.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Denial of the Day

I want to take this opportunity to tell the world that there is absolutely no truth whatsoever to the rumors going around that I am the inventor of Bitcoin.  I categorically deny having anything to do with it anymore.  And if any reporter from the AP wants to interview  me, I'm available any day you choose.    There's a real nice sushi joint just down the street.

Recap

The market's recent rise has been pretty much straight up - with a smattering of down days here and thee.  Was Monday one of them or is this the start of the Paul Farrellocalypse?  The nice thing about the charts is that they never get all hyped up over Internet ramblings.  So let's see what this voice of reason has to say about Tuesday now.

The technicals (daily)

The Dow: On Monday the Dow lost 34 points on an interesting hanging man.  Alone, that's a reversal sign.  Trading entirely outside the latest rising RTC that's a bearish setup.  With a failure to bust 16,463 and overbought indicators, that's a big "hmmm".  With an inverted hammer touching the upper BB and then a hanging man, methinks Mr. M. is trying to tell us something here... and it's lower.

The VIX:  Last night I wrote "the VIX looks ready to move higher Monday".  And it did - sorta, gaining a scant 0.64% in an advance that was stymied by its 200 day MA, a barrier that proved too tough to pierce.  So rebuffed like this, the VIX now looks less than energetic.  I doubt it will be able to punch through the MA on Tuesday, though a modest gain is also not out of the question.


Market index futures: Tonight all three futures are modestly lower at 12:51 AM EDT with ES down by 0.09%.  ES has been vacillating around the 1877 area for three days now, unable to either make any headway nor fall away.  While we remain in a rising RTC, the indicators have slowly started moving down off overbought, a bearish sign.  There's not really all that much to go on here, but if I had to guess, I'd cautiously suggest that ES is more interested in moving lower next.

ES daily pivot: Tonight the pivot drops from 1878.25  to 1873.92.  We're now back above the new pivot thanks only to that so this indicator turns bullish again, if only by default.

Dollar index: Friday's spinning top for the dollar resolved as a reversal with Monday gaining 0.05%.  With the indicators now oversold and the stochastic about to execute a bullish crossover, I vote for a higher dollar Tuesday..

Euro: The euro is looking tired after last Thursday's monster pop.  Unable for the second day in a row to capitalize on that it put in an anemic doji that didn't come close to Friday's high.  The new overnight started higher in a valiant effort to forge ahead but to no avail.

Transportation: The trans equivocated big time on Monday with a long-legged doji whose top failed to break Friday's high.  It also left us right outside the rising RTC for a bearish setup.  And with overbought indicators, this is a good warning of lower to come.


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      5       0      1           0       1.000    509

     And the winner is...

Things are looking a bit toppy to me tonight and the charts all seem to be low on mojo, particularly the futures.  There are now some bearish signs out there and while they're not especially compelling, they're just enough to make me go out on a limb and call Tuesday 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.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1878.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

The trend continues to be our friend, even as I don't see much reason to call the ,market higher.  But the fact that it's been going higher seems to suffice.  We now turn out attention to the charts as we attempt to sniff out those pesky bears to see when and if they're going to come out of hibernation.  Will it be Monday?  Read on...

The technicals (daily)

The Dow: On Friday the Dow gained 31 points with a green spinning top that ended teetering right on the edge of its rising RTC, close to but not quite a bearish setup after nearly hitting its upper BB.  That also brought the stochastic close to but not quite a bearish crossover.  So we now have some warnings of a reversal, but they frustratingly enough all require confirmation.  Se we have to wait and see how Monday plays out on this one.

The VIX:  Meanwhile. the VIX put in a funny green candle that traded mostly below Thursday's for a net 0.70% loss.  We're now right at support and the stochastic is trying to set u a bullish crossover but jut like the Dow, this one is only a suggestion of a reversal.  Nevertheless if I had to guess I'd say the VIX looks ready to move higher Monday.  A pop in VVIX back above its 200 day MA supports this notion.

Market index futures: Tonight all three futures are lower at 12:41 AM EDT with ES down by 0.25%. On Friday ES put in a long-legged doji that just tapped the upper BB.  The overnight action seems to be confirming that doji and is forming a bearish stochastic crossover.  So although we do remain in a rising RTC, the outlook for Monday is bearish.

ES daily pivot: Tonight the pivot rises from 1876.08  to 1878.25.  We moved below the old number Sunday evening and remain below the new pivot so this indicator turns bearish for the first time in a while.

Dollar index: On Friday the dollar put in something of a DCB after Thursday big dump.  The resulting spinning top indicates indecision..

Euro: And after last Thursday's big jump for the euro, on Friday it made an inverted hammer above its upper BB.  Despite this, it is continuing higher in the Sunday evening trade, so there's not any really bearish signs here for Monday.

Transportation: On Friday the trans gave us something of an inverted hammer that remained inside the rising RTC and pushed indicators further overbought while bouncing off the upper BB.  This could be a reversal sign, but 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      4       0      1           0       1.000    475

     And the winner is...

All last week I was calling for higher closes less on bullish signs and more on a lack of bearish signs.  Well it looks like tonight we're finally seeing some.  And Dr. Copper took a big dump on Friday.  So I'm going to go ahead and 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.