Monday uncertain

• Monday uncertain, small positive bias..
  
• ES pivot 1510.50.  Holding above is bullish..
• Rest week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

On Friday in the absence of any major market moving news, the technicals reasserted themselves and we got the results I'd been expecting Thursday night with the Dow gaining 120 points.  We now get set for a full week of trading and crunch the numbers to see which way Monday might go.

The technicals (daily)

The Dow: Friday's big move was significant because it not only reclaimed the 14K level (just barely) but also just edged out of a new developing descending RTC.  And it puts us right back to where we've been all month long, either opening or closing very close to 14K.  So just when it looked like a pullback might be getting underway, we're back to where we started.  Those two down days last week did take us almost to oversold levels though, providing more space for another run to the upside.  But with the weekly chart now showing three dojis in a row, it looks like the most likely scenario is more sideways action for a while.

The VIX:  Notice how well the VIX worked out on Friday.  Thursday night I pointed out how the VIX had spent two days touching its upper BB and how it rarely did that more than two days.  Well on Friday it obliged us by dropping 6.90% to confirm Thursday's inverted hammer.  With a red candle in and indicators having peaked at overbought, I'd say more downside is likely from here.

Market index futures:Tonight all three futures are just barely higher at 1:06 AM EST with ES up by 0.05%.  The ES daily chart continues to resemble the Dow, so those comments again apply here - an incipient breakdown seems to be stalled but with such a big move up on Friday, we might be in for some consolidation on Monday.  I will note the increased volume on Friday indicating conviction buying and a newly completed bullish stochastic crossover - always a positive sign.

ES daily pivot: Tonight the pivot rises from 1501.92  to 1510.50.  We were so far above on Friday that even with relatively flat trading in the overnight, we remain above the new pivot, a bullish sign.

Dollar index:The dollar put in a small 0.04% gain on Friday on an inverted hammer.  With indicators now quite overbought (RSI = 97.9), I wouldn't be surprised to see a move lower here on Monday.  The dollar also has a large unfilled gap from last week waiting to be retraced. .

Euro: While the euro didn't move higher on Friday as I had expected, instead putting in a spinning top, it is moving higher in the Sunday overnight where it is already up 0.17%.  While we remain in a descending RTC, it's a fairly wide one (so not very good) and the euro has just broken above its daily pivot so I'd say it might just continue higher on Monday.

Transportation:The trans did quite well on Friday with a 1.16% gain giving us a bullish engulfing pattern and causing the indicators to hook up from nearly oversold levels. The pattern all year though has been for big one-day gains  to be followed by some retrenchment, so a small loss isn't out of the question here on Monday.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      3      3           5        0.727    152

     And the winner is...

All in all, the charts aren't looking too bearish tonight but with the big move we had on Friday, we might need a day or so to digest those gains.  So my expectation is for an uncertain Monday but with a small positive bias. his isn't a bull market or a bear market - it's a crab market as we continue to crawl sideways.

ES Fantasy Trader

Well we had the right idea going long last Thursday night but got in just a bit too late and out a bit too early.  The net result was a meager 0.75 point gain.  Still, that beats a loss of any size so I'll take it.

Portfolio stats: the account remains at $99,125 after 6 trades (5 for 6 total, 2 for 2 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we're standing aside again.

    SLD    10    false    ES    MAR13 Futures     1506.00    USD    GLOBEX    FEB 22 11:05:05    0001f4e5.5126f867.01.01        20.10    null
    BOT    10    false    ES    MAR13 Futures     1505.25    USD    GLOBEX    FEB 22 01:11:27    0001f4e5.5126ae88.01.01        20.10    null
 

Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1501.92.  Holding above is bullish..
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader going long at 1505.25.

Recap

The market continued lower on Thursday but the damage was relatively muted compared to Wednesday.  Is this a sign of a bounce on Friday?  Let's check the charts.

The technicals (daily)

The Dow: The Dow lost 47 points on Thursday while putting in a hammer whose tail just about touched the lower BB.  I have found that to be a good sign that a reversal is coming in a day or two, cf. 12/31/12, 11/15/12, and 7/24/12 to name three.

The VIX:  And while the Dow put in a hammer, the VIX put in an inverted hammer whose peak was way above its upper BB as it drove further into overbought territory.  I find this to be a good indicator of a move lower within a day or two.  Like I always say, the VIX rarely stays at its upper BB longer than a day or two.  Thursday marked day two.

Market index futures:Tonight all three futures are higher at 1:05 AM EST with ES up by 0.28%.  Like the Dow, ES gave us a hammer today and the stochastic moved into position to generate a bullish crossover.  The hourly chart is also looking more favorable right now.

ES daily pivot: Tonight the pivot drops from 1514.50  to 1501.92. This drop combined with ES trending higher switched us back above the pivot right at midnight, so that now becomes bullish.

Dollar index:And like the other charts, the dollar also gave us a clear doji, this one a classic hanging man that gapped way up over its upper BB and above its 200 day MA.  It's also now quite extended from its pivot so there are definite signs here pointing to a lower dollar for Friday. .

Euro: I'm sure glad I decided to wait for confirmation before calling this chart higher last night as the euro had a second big down day n Thursday with a tall red marubozu that took it down below its lower BB at 1.3219.  But now the overnight is giving me the signal I was looking for, with a nice 0.31% gap-up bounce off the lows.  This bodes well for a higher euro on Friday.

Transportation:The trans chart pretty much mimicked the Dow on Thursday so the same comments apply.  Additionally, the trans finished at a support level of 5675.  There's some chance here of a move higher of Friday.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      3      3           5        0.667     32

     And the winner is...

Tonight, for the first time in a while I'm seeing numerous technical signs of a reversal - hammers and hanging men galore at or beyond various BB's.  Also, this Friday is historically bullish and with no major economic news coming out to torpedo my call, I'm going out on a limb and saying that Friday's closing higher.

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we're going to take a flyer and go long at 1505.25.

Thursday uncertain

• Thursday uncertain.
  
• ES pivot 1514.50.  Holding below is bearish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

It sure seemed to me like the technicals were pointing higher for Wednesday, but the Fed minutes torpedoed that idea right quick and the Dow sank a nasty 108 points, the instant the news came out.  Oh well - such are the perils of technical analysis.  I did mention that as a possibility last night.  So let's just get back up, dust ourselves off and see what Thursday might have in store - technically that is.

The technicals (daily)

The Dow: On Wednesday the Dow of course tanked 0.77% after the Fed minutes came out and announced that, gosh I really don't know, Madonna had a love child with Tiger Woods or something.  For whatever reason, Mr. Market sold 'em hard and that was that.  We ended at session lows but oddly enough that still keeps us inside a congestion channel that now runs back 10 days.  It also drove the indicators from overbought very nearly to oversold in one day.  So despite this triple digit dump, there's still no trend in sight.

The VIX:  Well if I didn't see the Dow losing 100+ points on Wednesday I sure didn't see a 19.25% skyrocket in the VIX!  We went from nearly the lower BB all the way clear to the upper BB in one day.  And from oversold straight to overbought.  I don't think I've ever seen anything like this before.  One thing though - whenever the VIX has really big up moves that hit the upper BB, usually the next day is lower, and that's what I'm now expecting.

Market index futures: Tonight all three futures are lower at 1: 07 AM EST with ES down by 0.08%.  Wednesday's move in ES dumped us right back out of both rising RTC channels I'm following, so we're right back to a bearish setup.  But the overnight pin action seems to be suggesting more of a DCB in the works than continued lower.  Still, that's not a given and there's no way (at least none I can see) of calling this chart higher just from what we have now.

ES daily pivot: Tonight the pivot dives from 1524.08  to 1514.50..We broke below the old number at 11 AM Wednesday and remain underwater by a fair amount - a pretty bearish sign.

Dollar index:Like all the other charts tonight, the dollar put in a big move, this one to the upside by a giant 0.76% on a tall marubozu that just blasted through its upper BB and continued on clear to its 200 day MA at 55.85, where it was finally stopped. .It also leaves us quite overbought.  The last time we were in this situation (11/09/12), the 200 day MA proved to be formidable resistance.  The dollar spent a week fighting it before finally giving up.  I don't see why this time should be any different so I'm skeptical there's much further upside left for the dollar.

Euro: And as the dollar rose, the euro fell, though not by nearly as much.  But Wednesday's losses are continuing in the overnight with the euro just now hitting its lower BB at 1.3238.  While the lower BB could provide some support, it doesn't always, and since the developing candle pattern is quite negative we need to see confirmation on this chart too before calling a move higher for the euro.

Transportation:What a difference a day makes.  We went from the trans looking quite bullish last night to quite bearish on Wednesday night.  We retraced all of Tuesday's big gains and then some with a bearish engulfing pattern than punched right out the bottom of the rising RTC for a bearish setup.  And although the indicators all finally came off extreme overbought levels,they're still less than halfway to oversold.  But we had a similar situation on January 30th and the next day the trans bounced right back.  It's frustrating, but even after a big move like this, we still have to wait for further confirmation of a trend change.


Accuracy (daily calls):


Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      3      3           4        0.667     32

     And the winner is...

This market continues to confound with one curveball after another.  It seems to me that today's move was out of proportion to the trigger (speculation about what the Fed may or may not do in March).  Then a bunch of people who've been just waiting to sell for a long time now just used that as an excuse to unload their positions.  To me, that doesn't sound like the start of a protracted leg down - but I could be wrong.  I will note though that the Dow hasn't had more than two losing days in a row all year long so far and we just had a big one.  My guess is that we'll either see a DCB or a doji on Thursday and because I can't be sure, I just have to call Thursday uncertain.  Either way, I think the shorting opportunity here has come and gone.

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside. 

Wednesday higher

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

• Wednesday uncertain.
  
• ES pivot 1524.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

I'll be honest (heck, I'm always honest) - I sure didn't see today's 54 point gain coming in the Dow.  In fact I couldn't figure out just where we were going.  But at least it wasn't (for once) yet another doji and that just might have some implications for Wednesday.  Let's get out our magnifying glasses and see what those might be, eh Watson?

The technicals (daily)

The Dow: Today's gain may have been "only" 54 points, but I think it was 54 important points.  First off, it was a marubozu, the first time in three days we haven't seen a doji.  Second, we recaptured 14K.  And third, today's close of 14,036 also finally broke through the resistance at 14,012 that's been bedeviling us all month long.  Now it did just barely push us into overbought territory with an RSI at 70.29, but it also formed a bullish stochastic crossover from a high level and those are often good for a day or two of further gains.  It's still too early to declare this a breakout, but this chart is now looking more bullish than it was last night.

The VIX:  Last night I wrote "I see no reason we can't revisit [support at 12.41]".  Well not only did we revisit that today but we kept right on going, ending at 12.31.  So support at 12.41 is now history and the next stop is the lower BB at 11.83.  Often, the VIX likes to touch its lower BB before heading higher and I think that's what's going to happen here.  It's worth adding that the VIX is now back to levels not seen since April 2007 and is in the middle of the range it stayed in between 2004 and 2007.  And note what happened to the market during that time - not a whole lot, and certainly not a crash.

Market index futures:Tonight all three futures are just barely higher at 1:09 AM EST with ES up by 0.03%.  Today's tall green marubozu, the biggest since February 5th, kept us from falling out of both rising RTC's I discussed yesterday.  It also broke through the upper BB, and that's a bit concerning, because ES has been respecting the upper BB quite well all year.  But one more day higher here is not at all out of the question as this chart isn't looking bearish, candlestick-wise.

ES daily pivot: Tonight the pivot rises from 1516.67  to 1524.08.. We were above before and remain above the new number despite this jump, so that's a positive sign for Wednesday.

Dollar index:The dollar meanwhile has established a new trading range around the 55.44 level on the $USDUPX.It's been putting higher highs in for three days now but always gets dragged back down to close near that number.  With no real trend in sight, I can only guess we're in for more of the same.

Euro: On Tuesday the euro gave us a bullish engulfing candle and the overnight trading is confirming that, up 0.18% so far.  It's looking like the euro's downtrend that began this month, is over.

Transportation:Last Friday's doji was pulverized by the trans on Tuesday as they posted a 1.25% gain, the biggest of the current rally, to remain in their rising RTC and outperforming the Dow.  I see nothing bearish on this chart.

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

Wk.# Week   % Bullish  % Bearish  NightOwl Poll SPX  Accuracy

  1  12/31      40         48        -      -   1402   0/1

  2  1/7        47         30        +      +   1466   1/2

  3  1/14       52         15        +      +   1472   2/3

  4  1/22       50         21        +      +   1486   3/4

  5  1/28       44         26        +      +   1503

  6  2/5        40         36        +      +   1513

  7  2/11       43         25        +      +   1518

  8  2/19       21         43        -      -   1520

  

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  The "Poll" column is how the majority of participants voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that I voted bullish four weeks ago, so both I and the majority were correct.   We therefore continue the year with an accuracy of 3 for 4, or 75%. 

And also this week I switched my vote from positive to negative after six consecutive bullish  weeks.  And apparently I was on the same wavelength as a bunch of other people, as we saw the biggest shift from bullish to bearish I've seen since I started tracking these numbers over a year ago.  It was literally a mirror image as we went from 43 to 25 bullish to 43 to 21 bearish.  I'm not sure why everyone else switched, but I based my call on my reading of regression trend channels in the weekly and monthly SPX charts.

Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      2      3           4        0.714    140

     And the winner is...

I still think the Dow is getting ready to take a look at its all-time high of 14,198 - that's just 162 points away now.  And I don't think we're going to see a pullback until that happens.  With the trans flying high, the euro's downtrend arrested, and the VIX having fallen and can't get up, the only logical call here is for Wednesday higher.  Of course with housing starts, PPI, and Fed minutes all coming out on Wednesday, that could all change, but technically I'm not seeing a pullback quite yet.  On the other hand, I'm not seeing a lot of gas in the tank for a real big move higher right away either.


ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside. 

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1517.58.  Breaking below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

[My apologies - this article didn't publish at 2 AM - here it is now.]

Recap

Ah, this market simply continues to confound.  Just when I thought my ascending triangle in the Dow had broken down, we get an 8 point up day on Friday.  The "channeling" icon over there on the right has been up so long I think it's stuck.  Now we have another holiday-shortened week to contemplate.

Oh, and lest I forget, let me point out that the Night Owl turned three yesterday.  I can't believe it's been that long already.  Many thanks to all my readers for continuing to tune in to the late-nite rantings emanating from my fevered brain.  So let's see what we can do now with Tuesday.

The technicals (daily)

The Dow: Foo - we continue to be stymied by 14,013 on the top and supported around 13,970 from below.  We now have two hanging-man type candles in a row, but in the absence of a preceding trend, they don't mean much.  In fact, I'm not getting any sort of read off this chart, so I moved out to the weekly chart.  There, we find that we have two dojis in a row, we're quite overbought and have exited a weekly rising RTC, so that's all looking rather bearish.

The VIX:  The VIX continues to be stuck in the toilet, closing just under its support line of 12.5 on Friday with a star.  But the lower BB continues to fall away, now down to 11.85 and we remain in a descending RTC, though it is admittedly fairly wide with a Pearson's of just 0.793.  Still, I see nothing here to suggest a big pop in the VIX on Tuesday.

Market index futures:Tonight all three futures are higher at 1:33 AM EST with ES up by 0.07%.  There continues to be really nothing going on here.  We've got five straight sideways candles now.  The only real effect is to inch use closer to the edge of the rising RTC.  I 'm running two of these channels right now, one from 2.4 and the other, longer trend from 1/8.  We've actually now exited the shorter one for a bearish setup there but remain inside the longer one.  Overall though, I'm not seeing much on this chart.

ES daily pivot: Tonight the pivot inches up from 1516.42  to 1517.58.  But the overnight action so far is enough to keep us just barely above the new number, so we'll have to watch for a break under on Tuesday - that would be bearish.

Dollar index:I called for a lower dollar on Friday.  What we got was a fat little spinning top almost identical to Thursday's but sitting in a dark cloud configuration near the upper BB.  So there's a suggestion of a move lower on Tuesday, but nothing really definitive.

Euro: The euro continues to find buyers at 1.3326 and has now given us three dojis in a row as it trades mostly just sideways.  Even in the Monday overnight, it's up all of 0.01%.  Absolutely no guidance here either.

Transportation:On Friday the trans gave us a tall spindly doji but it remained it the rising RTC.  But with RSI now up to 93, there's at least a hint of a reversal here.  On the other hand, momentum has been quite strong all year so far, so I'm not giving much credence to these sorts of indications at the moment.  I've said it before and I say it again - show me the top.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      2      3           3        0.714    140

     And the winner is...

Zzzz, zzz, zzzz.  Huh?  Oh, sorry, I guess I must have dozed off there.   These charts are literally putting me to sleep.  It just looks like we continue to remain stuck in this holding pattern with very little indication of wanting to move either way.  About all I can make of this is that this sideways motion will continue until it ends and therefore all I can do is call Tuesday uncertain.  If we break convincingly below the ES pivot by morning, that increases the odds of a lower close.

ES Fantasy Trader


Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside. 

Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1516.42.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well Thursday ended up being a "noise" day.  You can draw whatever conclusions you want from a Dow lower by 9.5 points and SPX up all of one point, and they don't amount to a hill 'o beans.  I guess technically my conditional call for Thursday was wrong, because ES didn't regain its pivot until just after noon, though once it did we did finish higher on the day (right, by 0.07%).  So, bottom line, the market remains in some strange sort of limbo, with neither side able to pull it their way.  And with options expiration coming right up, it's not clear that the charts will have any answers either but we'll run them down anyway, just in case.

The technicals (daily)

The Dow: I'll admit I'm not sure what to make of today's action.We did trade outside the rising line defining the ascending triangle, so that could be viewed as bearish.  But with this doji-type candle, it indicates that the bulls just seem to keep coming back despite the best effort of the bears to knock 'em lower.  With the indicators all middling, the stochastic threaded out, and no RTC channel, there is really no guidance at all on this chart.  However, if you move out to the weekly chart, it's looking fairly bearish, with last week's hanging man trading outside a rising RTC for a bearish setup and this week forming a spinning top so far.

The VIX:  The VIX situation is just as confused.  We took a big pop out the gate and then gave it all back by the end of the day to finish down 2.47% leaving the VIX just above its support line at 12.50 and still in a descending RTC.  About the only take-away here is that you can't look for a big move lower in the market with the VIX at these levels.

Market index futures:Tonight all three futures are lower at 1:00 AM EST with ES down by 0.20%.  Although ES put in a green candle on Thursday and remains inside it rising RTC, it has been having trouble making headway past 1518 the past three days and the overnight candle is forming up as a bearish engulfing pattern.  Overall, this is the weakest looking chart of the bunch.

ES daily pivot: Tonight the pivot dips from 1517.42  to 1516.42. We broke under the old number at 10:45 PM but ES now seems to be interested in revisiting its pivot.  When ES is rising and just half a point below the pivot, it merits watching.  You know the drill - break-through, bullish, rejection, bearish.

Dollar index:The dollar remains in a declining RTC despite today's 0.46% advance, and with indicators still overbought, I have to think it has more downside on Friday. .

Euro: Last night I wrote "This makes me cautious about calling the euro higher Thursday" and that caution proved justified as the euro put in a big red marubozu on Thursday to return to its descending RTC, thus canceling the bullish setup.  It's trying to perk up a bit in the overnight but who really knows.  This chart is not looking very bullish to me.

Transportation:In an interesting divergence, the trans finished up 0.31% on Thursday to remain in their rising RTC.  It did form a hanging man, but five of the last 11 candle shave been reversal signs and none of them has panned out.  So until I see the trans exit the rising RTC, I'm not calling them lower.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      2      2           3        0.714    140

     And the winner is...

With options expiration coming up and such lackluster action lately, there's no point in making a call for Friday.  I'll simply note that Friday is historically fairly weak.  However, I'll also note that if ES breaks above its pivot, we could close higher, but anything beyond that is just pure speculation.  So I'm just going to call Friday uncertain.

ES Fantasy Trader


Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside. 

Thursday lower unless ES pivot regained

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

• Thursday lower unless ES pivot regained.
  
• ES pivot 1517.42.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

After dribbling lower most of the day, the bulls staged a furious last minute rally but it wasn't quite enough to save my call for a higher Wednesday, with the Dow ending down 36 points.  I did mention the risks of Mr. Market not liking Comrade Stalibama's State of the Soviet address last night and it turns out he got all dyspeptic over El Supremo's call for a big hike in the minimum wage.  That sent Mickey-D's down and we were done.  Now the S&P and the Nasdaq did both finish positive, but my call is for the Dow, so it's a miss.  Still, I think the fundamental thesis held - there was no major breakdown on Wednesday.  Now let's see whither might Thursday go.

The technicals (daily)

The Dow: Today's action marked the second day in a row we were stopped by resistance at the 14,012 level (the top of the ascending triangle).  However, we once again put in a higher low, so the triangle remains intact.  This is still not a bearish-looking chart.

The VIX:  I'll admit I was surprised by the VIX's 2.69% pop today, even if the resulting spinning top is less than convincing.  We're officially oversold and the stochastic seems to be on the verge of setting up a bullish crossover, but we also remain well inside the descending RTC, so it's too early to call this downtrend over.  And the spinning top does admit the possibility of continued lower on Thursday.  This one is too tough  to call - we'll need confirmation.

Market index futures:Tonight all three futures are ever so slightly lower at 1:20 AM EST with ES down by just one tick, or 0.02%.  Wednesday's candle was yet another doji, bur these have been coming regularly all year so far and mostly meant nothing.  So we remain in the rising RTC and the overnight is providing little guidance so far.  True, we're quite overbought, but we've been even more overbought this year and kept going higher.  I'll need to see some confirmation on Thursday before calling ES lower from here.

ES daily pivot: Tonight the pivot rises from 1514.58  to 1517.42.   After spending most of Wednesday comfortably above the pivot, we broke under as I write this, just as the Asian markets closed.  It's only half a point so far, but it's still a bearish sign and will have to be watched Thursday morning.

Dollar index:While the dollar did open lower on Wednesday, as I figured, it eventually recovered all its losses, ending up just 0.01% .on a stubby spinning top.  But it was enough to drive the indicators off  overbought and cause a bearish stochastic crossover.  So despite the green candle on Wednesday, I've got to go with a lower dollar on Thursday.

Euro: On Wednesday the euro put in a spindly long-legged doji sitting just outside its descending RTC for a bullish setup.  However, it's losing ground in the overnight, down 0.10% so far.  This makes me cautious about calling the euro higher Thursday, though that's what I'd expect if the dollar does move lower.

Transportation:The trans on Wednesday provided the most bullish chart, gaining 0.38% in a move that was significant mainly because it negated the two preceding dojis and kept us right in the middle of a rising RTC back to January 31st.  It did drive the indicators to overbought, but the indicators haven't been very useful lately as the trans continue to do nothing but go up.  So in the absence of a bearish candle about all that leaves is more upside.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      2      2           3        0.714    140

     And the winner is...

With ES having just fallen below its pivot, but with few bearish signs on the rest of the charts, I think the logical course tonight is another conditional call.  If, by mid-morning Thursday (say 10:30 - 11-ish), ES has not broken back over 1517.42, then we close lower,  If it does, we close higher.  This has been a frustrating rally as every time we get some sort of bearish technical sign, nothing comes of it.  So I'm reluctant to go all-out bearish, particularly in an op-ex week until I see clear evidence of a top, and I haven't seen it yet.

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside.  I really want to go long here, but with those nagging overbought indicators, I'm just a bit reluctant.

Wednesday higher

• Wednesday higher, low confidence.
  
• ES pivot 1514.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I was tempted to call Tuesday higher but finally decided not to partly because I had called Monday higher and was wrong.  I guess I was just a day early as the Dow gained 47 points to recapture the 14K level.  To quote Gen. Burkhalter, "What is the meaning of this?"  We now interrogate the charts for answers.

The technicals (daily)

The Dow: Yesterday I posted my vision of an ascending triangle and observed it was within a day or two of breaking.  We got the break Tuesday with a close of 14,019 just above the top horizontal line I drew at 14,010.  Some may scoff at this as not being too significant, but if you draw a smaller triangle, one going only back five days instead of eight, the breakout line is at 13,990.  Either way, today's 47 point move isn't bad, considering the range narrowing we've seen recently.  And oddly enough, we're still not overbought.  RSI in fact went down today, now at 51.  If this is indeed the breakout, and I'm going to guess it is, then we're going to take a look at the 2007 highs in short order - we're not that far away now.

The VIX:  Last night I wrote "I'm not really seeing any bullish impulse here" and indeed there weren't as the VIX dropped another 2.32% Tuesday, breaking its short-term support.  Next support is at 12.41 and being as we remain in a descending RTC with indicators still not oversold, I see no reason we can't revisit that level.  If that falls, then we're going to the lower BB, now down to 12.03.  This, of course, is all good for stocks.

Market index futures: Tonight all three futures are higher at 1:16 AM EST with ES up by 0.07%.  With another green candle on Tuesday, ES remains solidly inside a rising RTC that now goes back to January 8th.  We're getting quite overbought, but the indicators have been none too reliable all year so far here.  We're been overbought more often than not but continue to go higher.  Fed money, sector rotation, PPT, whatever the reason, I'm still not seeing a top here.

ES daily pivot: Tonight the pivot inches up from 1513.25  to 1514.58.  We were higher before and remain higher now, so that's bullish.  And, at least at the moment, ES is showing no particular interest in checking out the new level, so that's all bullish.

Dollar index:On Tuesday the dollar confirmed Monday's evening star with a 0.28% drop that caused the indicators to peak at overbought and just gave us a bearish stochastic crossover. It also left us on the edge of the rising RTC for a bearish setup.  I'd say the dollar's moving lower again on Wednesday.

Euro: And the euro chart seems to confirm that with a decent gain on Tuesday that took it almost to the edge of its descending RTC, causing its indicators to bottom on oversold and gave us a bullish stochastic crossover.  That all looks good for more euro upside on Wednesday.

Transportation:I was hesitating on the trans last night because of yesterday's doji, but instead of confirmation Tuesday, they gave us - another doji and another tiny loss of 0.04%.  But that has the effect of nudging us closer to the edge of the rising RTC and bringing the indicators off overbought.  With resistance at 5912 proving to be tough, the trans may be headed lower soon, but once again, it's still too early to call a top here.

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

Wk.# Week   % Bullish  % Bearish  NightOwl Poll SPX  Accuracy

  1  12/31      40         48        -      -   1402   0/1

  2  1/7        47         30        +      +   1466   1/2

  3  1/14       52         15        +      +   1472   2/3

  4  1/22       50         21        +      +   1486

  5  1/28       44         26        +      +   1503

  6  2/5        40         36        +      +   1513

  7  2/11       43         25        +      +   1518

  

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  The "Poll" column is how the majority of participants voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that I voted bullish four weeks ago, so both I and the majority were correct.   We therefore continue the year with an accuracy of 2 for 3, or 67%. 

Interestingly, bearish sentiment took a big drop this week while bullish only gained three points as a number of participants apparently moved to the sidelines.  One might be tempted to view this as contrarian bearish, but note that bearish sentiment dropped to 15% in week 3, and yet here we are in week 7,  46 SPX points higher.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   2      1      2           3        0.833    176

     And the winner is...

The picture isn't totally clarified tonight, but the weight of evidence seems to be in the bulls' favor - the futures, the pivot, the currencies, the VIX - all looking positive.  The Dow in particular is looking especially strong right here.  The worst thing I can see is that the trans may be taking a break, but that's hardly conclusive evidence of an imminent top.  So unless Mr. Market finds something in Comrade Stalibama's State of the Soviet address tonight he doesn't like come morning, I see no real reason why we can't go higher Wednesday.  Traders of the world, unite!  Forward!

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we just continue to stand aside.  I really want to go long here, but with those nagging overbought indicators, I'm just a bit reluctant.

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1513.25.  Holding below is bearish .
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Ho hum.  Same old same old.  With just a 22 point loss (which I'll admit I wasn't expecting), the Dow remains stuck in a narrow range that just seems to drone on and on.  Ho hum.  What's it going to take to get this market off of top dead center?  Let's set the choke and see if we can't get these charts to turn over.

The technicals (daily)

Dow daily

The Dow: At first glance a yawner, I think today's small range is instead really bringing into focus an ascending triangle pattern here.  Take a look and see if you don't agree.  I know, there's that one tail sticking down from three days ago, but if you go by opening and closing prices, this looks really good.   And since these are generally bullish patterns, I'd say that we very well may be looking at some higher prices soon.  This triangle is just about finished, like within a day or two.  Meanwhile the indicators have still yet to reach overbought, so there's potentially still some gas in the tank.  Despite today's 22 point loss, this chart's not looking bearish to me right now.

The VIX:  And as if to underscore that, on a day when the Dow fell, the VIX did too, losing 0.61% to close back below 13 and remain in a descending RTC.  Indicators still not oversold yet.  At least I got this one right.  The VIX is now right at support though, so we're going to have to wait and see if it sinks through that on Tuesday.  No reason why it can't, as I'm not really seeing any bullish impulse here.

Market index futures:Tonight all three futures are lower at 1:42 AM EST with ES down by 0.20%.  On Monday, ES gave us a doji star just above last Friday's green marubozu.  Not quite an evening star though and we remain in the rising RTC.  That said, the overnight action seems to be confirming the doji so far, so this chart is now looking a bit on the bearish side.

ES daily pivot: Tonight the pivot rises from 1510.42  to 1513.25.  This, combined with the overnight sag we're seeing now puts ES below the new pivot, a bearish sign.

Dollar index:I was hesitating on calling the dollar lower for Monday and I'm glad I did, since it gained 0.09% on a bearish evening star.  Coupled with now quite overbought indicators and touching its upper BB for the third straight day, it now looks like we have a better shot at moving lower on Tuesday.

Euro: I always like to check the euro chart independently to see if it agrees with my dollar call.  After a small gain on Monday, the euro opened its new candle higher but has been losing ground ever since, now at 1.3389.  It also remains in a descending RTC.  However, it's now oversold and its stochastic is in prime position to form a bullish crossover.  I think it's due to move higher any day now - if not Tuesday then even more likely on Wednesday.

Transportation:The trans put in a doji on Monday, losing just 0.04%.  So we now have a reversal warning  and overbought indicators but remain in a rising RTC.  Thing is the trans have been so powerful lately, I really want confirmation of this doji before calling them lower.  So we need to see how this one goes on Tuesday.  For the time being, it's not bearish yet.


Accuracy (daily calls):

Month    right  wrong  no call  conditional  batting   Dow                                                                      average  points

January    5      7      6           3       0.533    -101
February   2      1      1           3       0.833     176

     And the winner is...

The charts are not looking particularly bearish to me tonight as op-ex week grinds on.  Kind of like last night.  But my bullish call then didn't work out so hot tonight and I always hate to go against what the futures are telling me in the overnight.  On the other hand, we have that Dow triangle and a VIX in the toilet.  The overall picture seems to be a reflection of the general wayward movement of the market recently, so with no real handle to grab on to, I'm just going to punt and call Tuesday uncertain.  I know J-Trader's going all-in short here, and I admire and respect that, but personally I'm not seeing it.  I could be wrong.

ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 for 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight with no clear direction we're going to stand aside once again and will continue to do so until I see a trend developing one way or the other.

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1510.42.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

There were a few reversal signs last Thursday night but most of the technicals seemed at least mildly bullish so I called Friday higher and that's what we got - a 49 point advance in the Dow.  That was the good news.  The bad news is that we remain stuck in what is now a 10 day trading range.  When will it all end?  Or more to the point, how will it all end?  Read on...

The technicals (daily)

The Dow: The Dow continues its down-up-down-up yo-yo-ing.  The only discernible trend, if you can call ti that is that its been making higher lows for the last three days.  But we remain stalled in the face of strong resistance just above 14K.  The indicators have actually come off overbought in the past week so there might be some room to run - if Mr. Market can ever find first gear.  Bottom line, there's still no direction on this chart.  But if we don't get moving soon, it's beginning to look more like a topping process than simple consolidation.

The VIX:  The VIX gapped down on Friday to finish just above 13, breaking six month support and remaining in a descending RTC.  With no further support til 12.50, a lower BB at 12.14, and indicators still not yet oversold, I'd guess that we might move lower again on Monday.

Market index futures:Tonight all three futures are barely up at 1:03 AM EST with YM and NQ both up just 0.04% and ES dead flat.  This follows the recent pattern.and feels more like the dog days of August than the middle of winter.  We did however put in a strong showing on Friday to keep ES at the upper end of its rising RTC.  And with indicators still not yet overbought and the upper BB continuing to run away, now at 1522.46, logic would seem to indicate that there's still more upside possible here on Monday.  ES (and SPX) seems to be gearing up for a run at the all-time ES high of 1576 from October 2007.

ES daily pivot: Tonight the pivot rises from 1503.58  to 1510.42. Despite this, we remain above the new number, though just by two points.  But as long as we don't break under, it's bullish.

Dollar index:After a big gain last Thursday, the dollar tacked on another 0.07% to touch its upper BB and move to overbought levels. .The dollar hasn't really been respecting its upper BB too well lately, so while the caution flag is out, it's still to early to call a move lower.  I'll be looking to Monday for some clarification.

Euro: The euro continued its recent plunge on Friday, contrary to my expectations.  But I might have been just a day early as it is up 0.11% in the Sunday overnight trade.  Still, there's no definitive sign yet that the euro slump is over - the indicators still aren't even oversold yet.

Transportation:The trans have now retraced all of their losses and then some from that one big down day January 30th, establishing a new rising RTC.  However, Friday's 0.41% gain drove them into overbought territory.  There's still no reversal sign in the candles though so it's too early to call a top here - more upside possible Monday.


Accuracy (daily calls):
Month    right  wrong  no call  conditional  batting   Dow                                                                      average  points

January    5      7      6           3       0.533    -101
February   2      0      1           3       1.000     198

     And the winner is...

Tonight the technicals are looking a lot like they were last Thursday night - some reversal warnings but no strong pull either up or down.  It's also an op-ex week and a pre-holiday one at that, with all the usual brou-ha that implies.  But I guess the logical course is the same as last Thursday - in the absence of clear bearish signs, the thing to do is keep following the trend and call Monday higher.  I'd be more comfortable if I had a better reason for saying that, but you gotta play the hand you're dealt.


ES Fantasy Trader

Portfolio stats: the account remains at $98,750 after 5 trades (4 for 5 total, 1 for 1 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight with no clear direction we're going to stand aside once again and will continue to do so until I see a trend developing one way or the other.