Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1541.75.  Breaking above is bullish.
• Rest of the week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Interesting day, Tuesday was.  First it looked like we were going higher, then we spent most of the afternoon underwater, and by the time the bell rang and all the shouting was over, the Dow finished  all of 3.75 points higher than it opened.  Pre-Fed jitters I suppose.  So with the understanding that Wednesday is Fed day, let's see what sort of backdrop the charts might provide.

The technicals (daily)

The Dow: Technically, the Dow gave us a textbook doji on Tuesday,  Coming after two days of losses, and remembering what I said the other day about the Dow not having had more than two consecutive down days since December, this one is worth paying some attention to.  On the other hand, today's action provided a bearish RTC trigger, meaning the long-running uptrend that began on February 26th is now over.  And the indicators continue to look bearish, so there's no clear path here.

The VIX:  Instead of filling Monday's big gap up, on Tuesday the VIX took an even bigger jump (intraday at least) to end 7,71% higher.  This provided a bullish RTC trigger.  So along with rising indicators, there's no reason why the VIX could not continue higher on Wednesday.  Well, there is one reason - the VIX is now quite extended from its pivot at 13.19.  Whenever this happens, very often it will try to revert towards the pivot the next day.  So another chart with contradictory messages.

Market index futures:Tonight the futures are mixed at 1:00 AM EDT with ES down by 0.08%, YM down 0.03% but NQ up 0.02%..  ES formed a bearish engulfing pattern on Tuesday and gave us a new descending RTC beginning from 3/14.  That said, the indicators have now traveled most of the way from overbought to oversold so it's not clear how much downside is left here.

ES daily pivot: Tonight the pivot inches down from 1542.92  to 1541.75.   ES has been drifting higher all evening long, and although we remain below the new pivot, it's only by one point.  ES has already investigated the pivot shortly after midnight and I'd expect a few more tries to break above before dawn.

Dollar index: The dollar posted some strong gains on Tuesday, up 0.38% in a move that seems to have negated the recent bearish RTC trigger.  Indeed, we instead got a bullish stochastic crossover and with three rising candles in a row, the dollar could move higher again on Wednesday..

Euro: Last night I proposed that the euro wanted to take a look at its 200 day MA.  Well on Tuesday it did just that, breaking below intraday before recovering to close just above it at 1.2884.  It continues to flirt with it in the overnight, and with a lack of any serious bullish indications, it just might punch through the 200 MA on Wednesday.

Transportation: The trans continued drifting ever so slightly lower on Tuesday, down 0.19% on another doji.  The indicators remain overbought but are now moving lower.  However, we are still inside a rising RTC, so it's still too eaerly to call this uptrend over.  But a close below 6220 on Wednesday could do it.

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   4/5

  6  2/5        40         36        +      +   1513   5/6

  7  2/11       43         25        +      +   1518   6/7

  8  2/19       21         43        -      -   1520   6/8

  9  2/25       30         52        -      -   1516

 10  3/4        29         39        -      -   1518

 11  3/11       41         26        +      +   1551  

 12  3/18       41         37        +      +   1561

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 bearish four weeks ago, so both I and the majority were wrong.   We therefore continue the year with an accuracy of 6  for 8, or 75%. 

This week we see that bullish sentiment remained exactly unchanged while bearish sentiment rose 11 points.  No doubt some people are seeing signs of a top   But despite a lackluster performance the past few days, it's still not registering on the monthly SPX chart, so I'm going to have to continue to vote on the positive side.
 
Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      4      3           0        0.556    270

     And the winner is...

Tonight, the technicals are painting a fairly confusing picture full of mixed messages.  This no doubt reflects market uncertainty ahead of the Fed and renewed worries about Europe.  Because of this, I am simply going to declare Wednesday uncertain.  One can only do so much crystal ball gazing before one's eyeball begin to glaze over.  My unofficial guess though is that unless the Fed makes some pronouncement the market hates, we just might close higher.

ES Fantasy Trader

Last night's short trade worked out OK to the tune of 2.75 points.  Not a home run perhaps, and I did get out a tad too soon, but I'll take it nonetheless.
 Portfolio stats: the account rises to $94,000 after 9 trades (7 for 9 total, 3 for 3 longs, 4 for 6 short) starting from $100,000 on 1/1/13.  Tonight westand aside.  We never trade ahead of Fed days.

BOT    10    false    ES    JUN13 Futures     1544.75    USD    GLOBEX    10:51:09   
SLD    10    false    ES    JUN13 Futures     1547.50    USD    GLOBEX    02:13:26     

Tuesday lower

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

• Tuesday lower, medium confidence.
  
• ES pivot 1542.92.  Holding above is bullish.
• Rest of the week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader going short at 1547.50.

Recap

That's right - that's about what I figured.  A big dump out the gate followed by a retracement.  I'll admit I was surprised that we retraced the entire loss by mid-afternoon, but the sellers came back in by the end of the day to save my call for a lower close Monday.  Now that we've got the Great Cyprus Bank Catastrophe out of the way, let's get back to reality and see what's on deck for Tuesday.  Batter up!

The technicals (daily)

The Dow: If you blinked, you missed it.  The Dow cratered in the opening minute and then spent most of the rest of the day retracing before giving back some of those gains for a 62 point loss on Monday.  A great day to day trade, swing trade, not so much.  But the net result, was a second hanging man in a row,this one falling outside the rising RTC (finally) for a bearish setup.  The failure of the Dow to hang on to its intraday recovery is a bit concerning.

The VIX:  As you might expect on the weekend news, the VIX shot up 18.23% Monday to form a great big gap-up evening star doji.  But it also exited its latest descending RTC for a bullish setup and the indicators are all now rising off oversold.  With the evening star only 2/3 complete, we need to see if the VIX is going to fill the gap or continue higher on Tuesday.  Unfortunately, there's no call here tonight.

Market index futures:Tonight all three futures are just barely higher at 2:05 AM EDT with ES up by 0.02% or a single tick.  Monday's ES candle was a spindly spinning top that fell outside its rising RTC for a bearish setup.  The overnight so far isn't showing much enthusiasm for moving higher and with the indicators having now exited overbought and continuing to move lower, the momentum seems to be turning bearish here.

ES daily pivot: Tonight the pivot falls from 1553.75  to 1542.92. .Mostly because of this, we're now above the new pivot, so that's bullish, and by a reasonable six points.

Dollar index: On Monday the dollar gave us a completed morning doji star.  But that is at odds with the recent rising RTC exit.  So those two cancel each other and there's no call for this chart.  Maybe the euro will be a bit more clear..

Euro: Hmmm, not really.  On Monday the euro slipped a bit, not nearly as much as you might have expected after the Cyprus news.  It continues to trade mostly sideways though something of a shallow downtrend is forming after two consecutive closes below support at 1.3000.  The euro may be getting ready to test its 200 day MA at 1.2862.

Transportation: Like the Dow, the trans gave us a second hanging man on Monday for a 0.33% loss.  Unlike the Dow, it wasn't enough to bounce it out of its rising RTC.  It's also important to note that the trans have not put together a string of more than two losing sessions in a row since last December 28th.  So it's still premature to call this uptrend over.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      5      3      3           0        0.625    274

     And the winner is...

There's a lot of uncertainty out there tonight with dojis galore all over the place.  But we've also gotten a few significant RTC exits indicating that various trends may now be over.  So far they're just setups.  For a trigger, they'd need to continue outside the channel one more day.  But the overall feel is shifting from bullish to bearish.  So with Dr. Copper taking a dump, TLT moving higher, the currencies dropping, and the ES stochastic falling, I'm going to go way out on a limb and call Tuesday lower.  I might be a day early, but this looks more logical than a move higher at this point.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we go short at 1547.50.  I may live to regret it, because I've not been doing well on the short side lately, but perhaps this one will do the trick.

Monday lower

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

• Monday lower, medium confidence.
  
• ES pivot 1553.75.  Holding below is bearish
• Rest of the week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Hah - so much for my intuition of a "technically higher" Friday  I'm glad I called it uncertain, as the Dow ended the day down 25 points.  Such are the vagaries of triple-witching day, I guess.  Well the past is done - let's move straight on to Monday now.

The technicals (daily)

Tonight, there's absolutely no point in doing my usual chart run-down because it seems that Atlas shrugged over in Cyprus over the weekend.  This whole bank deposit tax business is a perfect example of two things: first, the limits of technical analysis and second, that when bad things happen, they're usually unexpected.  I mean, Cyprus??  Really?

So right now at 12:50 AM EDT and with ES down a whopping 12 points in just a few hours and continuing lower as I write, I think it's pretty safe to say we're going to see a big gap down at the open Monday morning while everyone runs around like chickens with their heads cut off.  Then when the dust settles and everyone sees that the world is in fact not coming to an end (not just yet anyway) we'll get the inevitable bounce.  The only question is how fast that happens.

Recall the similar hand-wringing over the Italian elections a few weeks ago - more European antics.  That lasted all of what, two days?  But the market's just been looking for an excuse to pull back for a while now and this pseudo-calamity looks like it should fit the bill nicely.  So it could possibly take a few days to bring the indicators back down to oversold.  Should be an interesting week anyway.

Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      3      3           0        0.571    212

     And the winner is...

Well tonight, it's pretty clearly the bears.  I'm looking for a big gap-down opening, then some retracement but overall lower Monday anyway.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside mainly because I think most of the damage has already been done.  Timing is, as they say, everything, and this boat sailed at 6 PM on the open.  By 1 AM it's just too late to hop aboard.  I'd not want to go short here and then discover that the market has retraced by the time I get up on Monday.

Friday uncertain though technically bullish

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

• Friday uncertain, though technically bullish.
  
• ES pivot 1554.08.  Holding above is bullish
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

The market made quick work of two days of dojis as the Dow climbed once again on Thursday, this time adding on another 84 points to make it ten in a row now and yet another all-time record high close.  And so the party roars on.  So are any guests edging nervously towards the doors yet?  Doesn't look like it but let's check the charts for exit signs anyway - one never knows.

The technicals (daily)

The Dow: Thursday's 0.58% gain canceled the reversal warnings of two days of dojis here.  This is precisely why I refused to call a top the past two nights.  You don't catch the falling knife, and you also don't go for the, what's the opposite of a falling knife, a rising skyrocket?  All this green marubozu accomplished was to make this chart look bullish again and keep us right in the middle of a now 13 day long rising RTC.  One good thing about this - the longer RTC's go on, the easier it becomes to spot the exit - and we're nowhere near there yet.

The VIX:  Last night I wasn't ready to call the VIX lower again on Thursday, but that's where it went anyway, down another 4.48% in a move that averted an exit from the descending RTC.  Given this, and with no bullish pattern in sight and all support now gone, it would not surprise me at all if the VIX didn't visit its lower BB at 10.07 Real Soon Now.

Market index futures:Tonight all three futures are higher at 1:00 AM EDT with ES up by 0.06%.  The strong performance of ES on Thursday helped avert a rising RTC bearish exit.  In fact, tonight's candle is about the same as last night's at this hour - sitting right on the edge of the RTC.  But still no sign of a breakdown yet.

ES daily pivot: Tonight the pivot inches up from 1547.83 to 1554.08.  Once again, above before, above after, looking bullish.  Nothing new here.

Dollar index: On Thursday the dollar took a  substantial 0.34% hit.to close outside its rising RTC for a bearish setup.  As its indicators continue to slowly slide lower, it looks like we could see continued lower here on Friday.

Euro: The Big Sleep award of the week goes to the euro, which is still mired in a tight band centered about 1.3000 going back ten sessions now.  With the overnight inching higher after Thursday's early losses, it looks like just more sideways action here on Friday.

Transportation: And finally, the trans continue to outperform the Dow as they climb their upper BB.  Dow Theorists take note.  And the pause we got last week only dipped the indicators a little, thus putting some more gas iback into the tank.  So this chart is once again looking bullish.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      3      2           0        0.571    212

     And the winner is...

Thursday held true to its historical role of outperforming, but Friday is triple-witching and much more problematic.  While the charts have all turned fairly bullish once again, I hesitate to call Friday higher because of all the expirations going on on Friday.  There's also a number of economic news items coming out that could move the market.  So while the market looks higher technically, in the real world I just have to call Friday uncertain.  I'd still not be putting on any shorts here just yet.  Best to stick with the long pants until the model struts the catwalk.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend, as well as the inherent risks around triple-witching.

Thursday uncertain

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

• Thursday uncertain.
  
• ES pivot 1547.83.  No guidance.  Now using  M contract..
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

Yawn - another snoozer of a day on Wall St. Wednesday.  I guess my call of "uncertain" was about right, with just tiny moves in all three major averages.  I'm trying to think of something new to say but I'm afraid it's just deja vu all over again.  There is literally almost nothing changed between last night and tonight.  But I'll make a few comments anyway for your reading amusement.

The technicals (daily)

The Dow: The Dow put in a carbon copy doji on Wednesday but remains in the rising RTC, overbought indicators, you know the drill.  These two dojis might be a sign that the Dow's streak is starting to run out of gas, or they may not.  In the face of so much momentum, we need confirmation before calling a top here.

The VIX:  While the VIX dropped 3.59% on Wednesday, that still keeps in inside a consolidation area centered about 12.  All today did was nudge us closer to the edge of the descending RTC for a potential bullish setup - but not yet.

Market index futures: Tonight the futures are mixed at 1:29 AM EDT with ES down by 0.05%, YM down 0.04% but NQ up 0.02%.  Another overnight of little movement and even less guidance..  We got a second hanging man on Wednesday but it remains inside a long-running rising RTC.  But we are finally on the edge.  Any move lower on Thursday would signal a bearish setup and a possible sign that this uptrend is over.  Indeed ES has been unable to make any headway above 1551 for there days now.  But there still isnt' much direction on the daily chart.

ES daily pivot: Tonight the pivot inches up from 1546.67  to 1547.83.  We were above before and remain higher, so that's bullish, although not by much.  Still ES doesn't seem too interested in testing the pivot right now.  Reminder - we're on the M contract now.

Dollar index: On Wednesday the dollar narrowly averted a rising RTC exit with a 0.37% gain.that suggests its upward trend that began way back on February 1st is not over yet.

Euro: And the euro fell out of its recent range, dropping below 1.3000 for the first time since last December 10th.  Last week's bullish RTC exit has apparently come to naught, and with continuing lower in the overnight, a lower close Thursday is a definite possibility.

Transportation: Perhaps the most (heck the only) interesting chart of the day, the trans resumed their march higher on Wednesday, gaining an outsized 1.63% that belied the Dow's flat-lining.  This popped the trans out of their recent consolidation range, stopping only at the upper BB of 6237.  But there's nothing here to suggest anything but further upside in the cards.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      3      2           0        0.571    212

     And the winner is...

So there you have it - same old same old.  And just like last night, there's not much meat to chew on here so I'm just going to have to declare Thursday uncertain.  Seems like everyone's waiting for the big pullback now.  I suppose that with the Dow's winning streak now at nine, it's got to come sooner or later, but I'm just not seeing it quite yet.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend..

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1552.58.  No guidance.  Switching to M contract on Wednesday..
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside

Recap

A late afternoon rally on Tuesday saved the day for the Dow, ending with a win of just under three points.  And while the SPX did end the day lower my call was for the Dow, so that's a miss though not by much.  Too bad the session didn't end three minutes sooner.  I think the basic premise was correct though.  ES dropped below the pivot at 11 AM and was unable to regain it for the rest of the session.  Now let's move on as we continue to wend our way through op-ex week.

The technicals (daily)

The Dow: It was a bumpy small range day on Tuesday that left the Dow's winning streak unbroken, just barely, now at eight straight.  But the resulting doji was the first reversal sign we've seen since February 28th.  That one flopped, but this time we are much more overbought so although we remain solidly inside a rising RTC, I'd pay some attention to this one.  With an RSI at 100 for two days running now, this chart is now looking a bit toppy.

The VIX:  On Tuesday the VIX recovered some of its losses from Monday to close at 12.27.  And while it remains quite oversold, it now faces resistance at 12.3.  And as long as we remain in a descending RTC, it's too early to call the VIX higher.

Market index futures:Tonight all three futures are barely lower at 12:55 AM EDT with ES down by 0.03%.  On Tuesday ES gave us a red hanging man but one that remained inside the rising RTC.  The overnight action is teetering on the edge of this RTC, so we may or may not get a bearish setup on Wednesday.  Just eyeballing it though, this chart, like the Dow, is starting to look toppy to me.

Reminder - I will be switching to the "M" futures contracts on Wednesday, so the numbers will change.

ES daily pivot: Tonight the pivot just barely ticks down from 1552.92  to 1552.58..  After a brief and failed effort to break over the pivot earlier Tuesday evening, we're back below the new number, though just barely.  This is one of those cases where ES is just threading about the pivot looking for a direction.  In situations like this there really isn't any guidance.

Dollar index: Like many other charts on Tuesday, the dollar gave us a doji with a tiny 0.02% gain.  That took it right to the edge of its rising RTC.  One more day of sideways action will give us a bearish setup. With the indicators having peaked at overbought and momentum slowing, it looks like the dollar is poised to move lower too..

Euro: Last night I had nothing really to say about this chart and that's just what the euro delivered on Tuesday - a real yawner as the currency remains range-bound between 1.3000 and 1.3050.  With the overnight action smack in the middle of that range, once again, there's nothing to see here.

Transportation: After Monday's small green spinning top, the trans on Tuesday gave us a bigger red spinning top.  As we remain quite overbought and having now exited the rising RTC, the trans are looking ready to move lower.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      3      1           0        0.571    212

     And the winner is...

According to The Stock Traders Alamanc, March op-ex week is historically strong, and improves as the week goes on.  However, the charts are starting to look a bit toppy to me  But we've seen so many of these one-day declines come to naught so far this year that I'm unwilling to call the market lower on that basis alone.  So with a pretty wishy-washy environment and in the absence of any definitive read one way or another, I'm going to just declare Wednesday uncertain.  My vague guess is that we might see a bit of  down day Wednesday followed by a stronger finish to the rest of the week.

ES Fantasy Trader


Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in the absence of any apparent good overnight trend..

Tuesday lower if ES pivot fails

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

• Tuesday lower if we break under ES pivot, else higher.
  
• ES pivot 1547.75.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1538.25.

Recap

And the hits just keep coming.  The Dow is now on a seven session tear, even longer than the one we got back in January.  They say what goes up must come down, but they never say when.  Let's see if we can't get the charts to tell us.

The technicals (daily)

The Dow: At the risk of sounding like a broken record, this is the third night in a row where all the factors are unchanged.  Just look at last night's analysis and that's it.  Rising RTC, overbought indicators, you know the drill.  So once again, no bears in sight.

The VIX:  While Monday's 0.35% gain in the Dow may have been unremarkable, the VIX took an impressive 8.18% dive on a deep red marubozu to end at 11.56.  I had to back out all the way to the monthly chart to find the last time the VIX was this low - February 2007.  And at this level, it's at the lower end of the range it sat in from 2004 through 2006.  But unlike then the lower BB now just continues to fall away, now down to 6.15!  And while we're looking at the monthly chart, I'll note that so far, March is forming a big bearish engulfing pattern.  I want to say that the VIX has nowhere to go but up from here, and yet I'm not seeing it right now.

Market index futures:Tonight all three futures are lower at 1:14 AM EDT with ES down by 0.08%.  However, like last night, the moves are slight and there's little guidance from the overnight action.  The decent gain in the daily ES though keeps us locked in the rising RTC and climbing the upper BB.  ES is going to have to close below 1547 on Tuesday to initiate even a bearish setup.  With the positive bias of March op-ex week, that seems unlikely.

ES daily pivot: Tonight the pivot rises again from 1547.75  to 1552.92. This now leaves us less than two points above the new pivot, putting it into play.   Unlike last night, the gradual drift lower since around9:30 PM suggests that ES might have some interest in visiting this level.  But it remains bullish unless we break under.

Dollar index: The dollar gave back most of Friday's gains on Monday, dropping 0.18%.on a bearish dark cloud cover.  Nevertheless, we remain in a rising RTC so we need some confirmation on Tuesday before declaring this uptrend over.

Euro: Meanwhile the euro continued its consolidation in the 1.3000-1.3050 neighborhood.  A small gain on Monday, a small retracement in the new overnight, nothing to see here.

Transportation: After a big gain on Friday, the trans put in a small spinning top on Monday, at least warning of a reversal with a tepid 0.12% gain.  But with such strong upward momentum, I hesitate to call them lower on just that basis.

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   4/5

  6  2/5        40         36        +      +   1513   5/6

  7  2/11       43         25        +      +   1518   6/7

  8  2/19       21         43        -      -   1520

  9  2/25       30         52        -      -   1516

 10  3/4        29         39        -      -   1518

 11  3/11       41         26        +      +   1551     

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 again correct.   We therefore continue the year with an accuracy of 6  for 7, or 86%. 

And this week I switched my vote from bearish to bullish.   That keeps me in sync with the majority of the poll, which flipped from 29-36 bullish-bearish to 41-26.  My shift was due to the change in the weekly and monthly SPX candles which are now looking quite bullish following the recent run-up.



Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      2      1           0        0.667    215

     And the winner is...

Little has changed tonight compared to last night.  But I'm becoming a bit concerned about the failure of the trans to make any real headway past 6150 in a week now and at seven straight, this rally is starting to get a little long in the tooth.  We've also got the futures drifting lower tonight and that's different.  Yet there's still no real bearish signs to speak of so I'm going to make a conditional call: if ES remains above its pivot of 1552.92, then we'll close higher Tuesday.  But if ES breaks convincingly below it by mid-morning, we close lower.

ES Fantasy Trader

Today we took a nasty 13.5 point loss following another unproductive round of tape-fighting.

Portfolio stats: the account drops to $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we simply stand aside  and do some head-scratching.

BOT    10    false    ES    MAR13 Futures     1553.00    USD    GLOBEX    12:15:26
SLD    10    false    ES    MAR13 Futures     1538.50    USD    GLOBEX    MAR 7 01:10:51 

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1547.75.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader remains short at 1538.25.

Recap

And so the long bubble-up goes on unabated.  On Friday the Dow gained another 68 points to extend its winning streak to six in a row on the heels of some decent jobs numbers.  Can we make it a lucky seven?  We roll the charts and see what tumbles for Monday.

The technicals (daily)

The Dow: The three white soldiers I mentioned last week just keep right on marching.  In fact, they're been joined by three more.  We now have a whole platoon intent on taking the Dow to new heights.  In fact, nothing has changed on Sunday night from last Thursday night.  Same rising RTC, same broken overbought indicators, same lack of any bearish signs.  So I can only draw the same conclusion - this chart looks bullish.

The VIX:  In contrast, there are a few bullish signs on the daily VIX which dropped another 3.59% on Friday.  This brought it to 12.59 just above its last year-long support level of 12.40.  But the candle was a classic gravestone doji.  And the stochastic is close to forming a bullish crossover from quite oversold levels.  So though we should wait for confirmation, there is at least a suggestion here of a higher VIX on Monday.

Market index futures:Tonight the futures are mixed at 1:05 AM EDT with ES dead flat, NQ down 0.02% and YM up by 0.08%.  So no guidance there.  And little else new here - the daily chart remains locked into its rising RTC and the indicators are all pegged at overbought (RSI is now 100).  And yet still no sign of a pullback.  But remember that ES spent most of January equally overbought without pulling back.  So I guess it ain't over til it's over.

ES daily pivot: Tonight the pivot inches up from 1541.92  to 1547.75.  Once again, we were above the old pivot and remain above the new one, though only by two points, so the pivot is definitely in play on Monday.  But as long as we remain above, it's a positive sign.

Dollar index: After a big drop Thursday, the dollar put in en equally big gain on Friday to remain inside a rising RTC now going back to February 1st.  The indicators have been overbought almost constantly since that time so they're now useless. The only pattern, if there is one, is that since that date, the dollar has paused tow of the last three times it made big one day gains.  But here too, in the absence of any real bearish signs, it is premature to call the dollar's recent run over.

Euro: And while the dollar rose, the euro sank on Friday, giving back almost all of its gains from last Thursday.  But that still kept it out of the descending RTC, so that's now a bullish trigger.  But one has to wonder if there's a bullet in the gun, because the euro is moving lower in the overnight, trading just under its pivot at 1.3031 and showing no interest in challenging it.  My best guess is that the euro will trade around that level on Monday.

Transportation: After a fake-out breakdown on Wednesday and Thursday, the trans regained all their lost ground on Friday with a 1.02% green marubozu that out performed the Dow.  It also marked the first time they were able to close above 5875, last week's resistance line.  However, Friday's close wasn't enough to regain the rising RTC, so that's a bearish trigger despite the green candle.  And the indicators have all peaked at overbought re begun moving lower.  It's not clear that the trans will be able to advance further from here, but their performance has been unstoppable so far this year and this is one bus I don't want to stand in front of.  So I'm going to wait until I see a move lower before declaring this uptrend over.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      3      2      1           0        0.600    165

     And the winner is...

It's really getting almost nerve-wracking.  There's really only one shred of hope for the bears tonight in the form of the VIX and that one's not all that great.  So in the absence of anything more substantial, and with the Monday of March op-ex week being historically strong, logic dictates a call of Monday higher.


ES Fantasy Trader

Portfolio stats: the account remains $99,375 after 7 trades (6 for 7 total, 3 for 3 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we remain short at 1538.25 and take the heat.  I'm giving this one one more day to come in and then I'm giving up on it.  That'[s what I get for trying to play the counter-trend hero and not waiting for a regression trend exit.

Friday higher

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

• Friday higher, low confidence.
  
• ES pivot 1541.92.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader remains short at 1538.25.

Recap

Much to my surprise, the Dow's rise continued unabated on Thursday, gaining another 33 points.  With the Dow now up five in a row and three consecutive record closes, how long can this go on?  I'm beginning to wonder myself.  We now interview the charts for their opinions.

The technicals (daily)

The Dow: Thursday's 0.23% advance keeps the Dow squarely inside its rising RTC and all the indicators pegged at overbought.  It's looking a lot like January all over again.  And the last three days weren't even reversal candles.  I must say I see nothing bearish on this chart at all.

The VIX:  And as the Dow rose, the VIX fell, this time down 3.47%, giving up support at 13.50.  The VIX has no support now until 12.45.  And the lower BB is all the way down to 10.44.  I see nothing on this chart to prevent it from moving lower on Friday.

Market index futures:Tonight all three futures are slightly higher at 12:50 AM EST with ES up by 0.05%. On Thursday ES completely canceled Wednesday's spindly doji and instead continued its relentless climb up the upper BB, now at 1547.35.  The developing candle for Friday is looking like a hanging man, but the night is young and reversal signs from ES have been worth bupkiss lately, so we'll take that one with a grain of salt.  I do note that RSI has begun moving lower, now down to 92.42.  So there's at least a hint of interest in moving lower here, but not much more than that.

ES daily pivot: Tonight the pivot inches up from 1540.258  to 1541.92. Despite some wandering in the evening hours, ES remains above the new pivot, so that's a bullish sign.  But it's only by a point and a half, so we'll need to watch for signs of a breakdown here.

Dollar index:I blew this one too last night.  The dollar ignored the morning star and dropped 0.47% on Thursday to close almost on the edge of the rising RTC.  With the last five days now looking like congestion more than anything else, we'll want to see if we move lower on Friday, which would signal a bearish RTC setup

Euro: Meanwhile, the euro took a big bounce on Thursday, leaping right out of its descending RTC for a bullish setup with a bullish engulfing pattern.  The euro now looks poised to move higher on Friday.

Transportation:At least I got this one right when I wrote last night "there's a good chance of this chart going lower on Thursday."  And so it did, down 0.48%.  Not much perhaps, but still a divergence on a day when the Dow was up.  It also closed outside the rising RTC for a bearish setup and gave us a completed bearish stochastic crossover.  So I'd say odds are good for lower here again on Friday.


Accuracy (daily calls):

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      2      2      1           0        0.500     97

     And the winner is...

I almost hate to say it, being as I'm short the ESFT and holding some SPXS for real, but the charts really don't look as bad tonight as they did last night.  The ability of the market to rise on Thursday in the face of mild negative signs makes me think that there's still more upside available, given the improved technicals.  Therefore, I'm calling Friday higher.

ES Fantasy Trader

Portfolio stats: the account remains $99,375 after 7 trades (6 for 7 total, 3 for 3 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we remain short at 1538.25 and take the heat.

Thursday lower

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

• Thursday lower, low confidence.
  
• ES pivot 1540.25.  Holding below is bearish.
• Friday bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader going short at 1538.25.

Recap

My play last night was to not get too excited over the record high Dow close and just to treat it as another technical day - and that worked out quite nicely as the Dow finished up another 42 points.  But with four up in a row into uncharted (literally) territory, can we make it five of a kind?  Faites vos jeux, rien ne vas plus!  At the risk of mixing our gambling metaphors, let's see if the little ball stops on red or black on Thursday.

The technicals (daily)

The Dow: The Dow continued it ascent into the stratosphere on Wednesday with another green candle and now gives us a bullish three white soldiers pattern that continues to crawl along the upper BB.  And volume has been increasing for the past three days.  However, we're now quite overbought and the stochastic may be getting ready to set up a bearish crossover.  On the other hand, we had a similar situation for most of January and that did nothing but go straight up.  But we remain inside the rising RTC and I have to say I still don't see any sign of a pullback on this chart.

The VIX:  Here's an unusual divergence, as the VIX actually rose 0.37% while the Dow and SPX gained too.  That's unusual.  Although the gain was small, it formed a bullish engulfing pattern against Tuesday's morning star and closed back above support of 13.50.  With indicators now as oversold as the last few times the VIX has bottomed and the futures posting similar gains, we could definitely see more upside from the VIX on Thursday.

Market index futures: Tonight all three futures are mixed at 1:05 AM EST with ES down by 0.05%, NQ up 0.04% and YM dead flat.. Unlike the past two nights, this is looking like a bit of uncertainty.  And that's reflected in Wednesday's candle, which was a short evening star that traded outside the rising RTC for a bearish setup.  The new candle is forming as a bearish engulfing pattern consuming the star and confirming the signal.  We also now have a bearish crossover from the stochastic, just barely.   So all in all, this chart is looking much weaker than last night.

ES daily pivot: Tonight the pivot rises again from 1534.75  to 1540.25.  This bump combined with ES drifting lower in the overnight now leaves us below the new pivot, so that becomes a bearish sign.

Dollar index:The dollar remains firmly inside it rising RTC as Wednesday's 0.44% gain broke a three day slide and completed a bullish three candle morning star pattern.  So despite overbought indicators, we could see the dollar continue to move higher.

Euro: And as the dollar rose the euro fell on Wednesday, keeping it inside its descending RTC.  While it is rising in the overnight that's off a gap down earlier this evening, so it's not clear that the euro is really interested in moving higher just yet.  The day-to-day moves of the euro have been sort of herky-jerky lately anyway.

Transportation:Here's another divergence, with the trans dropping 0.42% even as the Dow advanced 0.30% on Wednesday.  And they gave us a red inverted hammer.  And the indicators are getting more overbought, and the stochastic is about to make a bearish crossover.  I'm now thinking that there's a good chance of this chart going lower on Thursday.


Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      2      1      1           0        0.667    130

     And the winner is...

Tonight it's sort of looking like Mr. Market is running out of steam.  There are some bearish signs starting to pop up, especially in the futures and the VIX, enough in fact to make me call Thursday lower.  I also took out a position in SPXS as a hedge on Wednesday afternoon.

ES Fantasy Trader

Portfolio stats: the account remains $99,375 after 7 trades (6 for 7 total, 3 for 3 longs, 3 for 4 short) starting from $100,000 on 1/1/13.  Tonight we're going short at 1538.25.  I think if this trade isn't successful on Thursday, it stands a chance of coming through on Friday.