Thursday higher if ES breaks over pivot

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

• Thursday higher if ES breaks above pivot, else lower.
  
• ES pivot 1582.92.  Breaking above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Once again, the ES pivot held the key to the market.  It fell through just before the open ad never looked back.  The result was a 139 point tumble for the Dow and a equally bad 15 down for the SPX on Wednesday.  Tonight we face a tricky situation and I'm not sure the charts will be of much use for Thursday, but let's do a quick run-down anyway. 
 
The technicals (daily)

The Dow: The technicals worked great for the Dow on Wednesday.  A bearish hanging man and RTC exit both on Tuesday plus a highly overbought RSI, and bada bing, down we went, right back into last week's consolidation area.  RSI has now clearly peaked and the stochastic has executed its bearish crossover.  With a chart like this, more downside seems to be coming.

The VIX:  Interestingly though, while the market was off nearly a whole percent, the reaction of the VIX was fairly muted, as it gained only 7.17% on Wednesday.  I'd normally expect a bigger move than that.  In any event, this move was enough to break the VIX out of its week-long trading range, form a bottom in the indicators at oversold, and form a bullish stochastic crossover.  SO this chart looks ready to move higher again on Thursday.

Market index futures:Tonight all three futures are higher, by non-trivial amounts for a change, at 1:20 AM EDT with ES up by 0.24%.  The big drop in ES on Wednesday took it decisively out of its rising RTC for a bearish setup.  I'd say odds are good that this trend (from April 18th) is over.  We also have indicators now descending from overbought and a newly completed bearish stochastic crossover.  So on a daily basis, this chart would appear to have more room to run lower on Thursday.

ES daily pivot: Tonight the pivot drops from 1589.25  to 1582.92.  Unfortunately, even with ES drifting higher in the overnight, this drop in the pivot was not enough to bring us above it, so this remains a bearish sign.

Dollar index: On Wednesday the dollar took another big gap down, losing 0.35% on an inverted hammer that stopped right at the 200 day MA.  The last two times this happened (both last year), it provided support once, and the dollar fell right through the other time.  But this time we're more oversold than then so I wouldn't be surprised to see the dollar bounce off the 200 MA on Thursday.  I note too that the dollar exited its descending RTC on the left side, an unusual move that often signals a bottom.

Euro: I really thought the euro was looking lower for Wednesday.  Instead, it continued on up to actually close above its upper BB at 1.3200.  That helped drive RSI more overbought.  But a sell off that began mid-afternoon Wednesday is continuing in the overnight, now down 0.31%.  A combination of upper BB hit, overbought indicators, a stochastic about to form a bearish crossover, OBV turning lower, and a break under its pivot all make me think the euro is headed lower on Thursday.  This would sync with my call for a higher dollar.

Transportation: I needn't have hesitated in calling the trans lower last night as they more than doubled the Dow's losses, falling 2.32% on Wednesday.  This provided a bearish RTC setup, a bearish stochastic crossover, ad drove RSI halfway back to oversold from Tuesday's reading of 100.  With this chart cycling again, it looks like it could move lower again on Thursday.

Sentiment: Once again it's time (actually it was time two nights ago) 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   6/9

 10  3/4        29         39        -      -   1518   6/10

 11  3/11       41         26        +      +   1551   7/11

 12  3/18       41         37        +      +   1561   8/12

 13  3/25       31         38        +      -   1557   8/13

 14  4/1        38         38        +      x   1569   9/14

 15  4/8        32         50        -      -   1553 

 16  4/15       33         50        +      -   1589

 17  4/22       19         63        -      -   1555

 18  4/29       33         58        -      -   1582 

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 that was correct.  However, the poll as a whole was exactly tied, so there's no winner there.   We therefore continue the year with an accuracy of 9  for 14, or 64%.   The poll as a whole remains at 8  for 13 or 62%.

This week we see a small retreat in bearish sentiment from last week's two year record highs, and a larger bump in bullish sentiment as more people come off the sidelines.  But the majority remains bearish, and I'm with them, based on my reading of 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   3      4      5           6        0.692    131
March      5      7      5           2        0.500    121 
April      7      5      5           3        0.667    328
May        0      0      0           1        1.000      0

     And the winner is...

Everything's still looking pretty bearish tonight, with the one exception of the futures.  I've learned to be very cautious when the futures start moving contrary to the general technical direction in the overnight.  It usually means something's up.  And what's up in this case, I believe, is the expectation of ECB rate cuts, plus who knows what else Super Mario might say Thursday morning.  With this wild card on the table, it would be imprudent of me to make a flat-out call lower (which is what I would otherwise do), so we're going conditional again: if ES breaks above its pivot by mid-morning Thursday, we'll close higher, else lower.

ES Fantasy Trade

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again in view of the conditional  call.

Wednesday higher if ES stays above pivot

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

• Wednesday higher if ES stays above pivot, else lower.
  
• ES pivot 1589.25.  Breaking below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night we called for a higher close if ES could stay above its pivot by mid-morning.  Well after a brief failed test below that level off the open, ES broke right back above at 10:40 AM and the market did indeed finish higher, with the Dow gaining 21 points.  QED.  Now on to Wednesday, where we seek out the logic in the charts to arrive at an indisputable conclusion.

The technicals (daily)

The Dow: The Dow's small advance on Tuesday gave us a classic hanging man and also exited the rising RTC for bearish setup.  RSI and the stochastic are both quite high right now, though the later still isn't in position for a bearish crossover.  So let's just say the current trend is in jeopardy but it's still too soon to call it done.

The VIX:  The VIX lost 1.39% on Tuesday and is now clearly channeling between 13.5 and 13.9.  Being as we're now at the bottom end of that range with quite oversold indicators and an RSI that seemed to have now bottomed, Wednesday would seem to favor a move higher here.

Market index futures:Tonight the futures are mixed again at 1:05 AM EDT with ES down by 0.03% but NQ up 0.05% and YM up 0.02%.  Call it basically unchanged, so no guidance here.

ES daily pivot: Tonight the pivot rises from 1584.75  to 1589.25.  Like last night, ES remains above the new pivot even after that jump, so this predictor remains bullish.  Tuesday's daily ES candle though formed a hanging man but remained inside the rising RTC.  Indicators are now quite overbought, but we've seen this year that they can stay that way for a long time before the market goes lower.  So there's really not that much in the way of bearishness on this chart.

Dollar index: The dollar is back in its normal inverse correlation with the market, dropping a big 0.48% following Monday's big losses.  This has now driven the indicators oversold and brought us back to support from earlier in April at 56.12 on the $USDUPX.  Given that the dollar also touched its lower BB on Tuesday, I'd say it's due for a reversal soon - either Wednesday or Thursday..

Euro: Last night I wrote "I'd look for continued upside on Tuesday." and that's exactly what happened with the euro accelerating its gains to close now at 1.3166 and just touching its upper BB intraday.  In fact this chart is looking like an exponential run-up and we know how those always end.  Indeed, the overnight is now forming a bearish shooting star..  With overbought indicators, I'd say the euro is looking ready to roll over.

Transportation: The trans on Tuesday advanced nicely, up 0.45%.  While this formed a hanging man, it also kept us right in the middle of the RTC.  Meanwhile RSI is pegged at 100 for the second day in a row.  But recall that RSI spent four days in a row on 100 back in January while the trans continued higher, and that all ended with only a single day decline.  So like the Dow, it's too soon to call   top here.


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      7      5           2        0.500    121 
April      7      5      5           3        0.667    328

     And the winner is...

Technically, I'm seeing a number of dojis warning of reversals and a number of charts sitting on BB extremes.  On the other hand, there are no good clear reversal warnings out there right now.  Add to the mix the fact that Wednesday is the first day of May, and that's historically very strong.  And it's also a Fed day.  Because there's no clear-cut direction, I'm going to make another conditional call.  If ES can stay above its pivot of 1589.25 by mid-morning, then we'll get a higher close Wednesday.  If on the other hand, we break below the pivot in convincing fashion by the 10:45 AM'ish area, we close lower Wednesday.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again in view of the conditional  call.

Tuesday lower if ES pivot broken

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

• Tuesday lower if ES breaks under its pivot, else higher.
  
• ES pivot 1584.75.  Breaking below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Sigh - I called the market lower for Friday and ti went higher, but I was just a little wrong.  Then on Monday I did the same thing, but this time I was very wrong, to the tune of a 106 point pop in the Dow.  But this is the kind of mistake I don't mind since I'm always net long, so I ended up making money anyway.  And at least I had the sense to avoid going short in the ESFT.  Now let's see how Monday's action changes the map for Tuesday.

The technicals (daily)

The Dow: What a difference a day makes.  Sunday night the Dow was looking ready to roll over.  But Monday's tall green marubozu was enough to bring us all the way back into the rising RTC and thereby canceling the bearish setup.  It also canceled the incipient bearish stochastic crossover.  The indicators now seem to be headed back to the state they were in for much of the last quarter - completely pegged on overbought and therefore meaningless.  With the upper BB now at 14,879 and resistance at the same level, it looks like the Dow may be on its way to check it out.

The VIX:  Monday was another odd day for the VIX.  On a day when the Dow gained 0.72%, the VIX was also up, and also by almost the same amount, 0.73%.  But the candle was a star, the third in four days.  RSI is now very low and the stochastic just squeaked out a bullish crossover, so there's a chance for more upside on Tuesday.

Market index futures:Tonight the futures are mixed at 1:08 AM EDT with ES down by 0.05% but both NQ and YM up by 0.04%.  There's little guidance from this sort of flat-lining in the overnight, but Monday's decent green marubozu put ES back into the center of its rising RTC with a decent bullish engulfing pattern.  It also canceled what looked like a new bearish stochastic crossover.  My only concern is that we're sitting right at resistance from April 11th/12th.  Tuesday is make or break for ES.  Pass Go and we're headed for the upper BB at 1599.  But a loss would exit the rising RTC and put an end to the uptrend.  At the moment I have no way to tell which one it will be.

ES daily pivot: Tonight the pivot jumps from 1577.17  to 1584.75.  And even with that pop, ES is still above the new pivot, though only by a few points.  Still, it's bullish as long as we don't break below.

Dollar index: Wow - I sure didn't see this one coming.  The bottom fell out of the dollar on Monday as it gapped down 0.45% to end with a small inverted hammer.  But even this drop leaves it not yet oversold and still above its lower BB.  Still, the tendency for the dollar after big gap-down days has been to refill the gap immediately and that's what I'm expecting here on Tuesday.

Euro: I was at least right about the euro moving higher as it gapped up to close at 1.3101 to exit a descending RTC for a bullish trigger.  The indicators continue to rise off oversold and the overnight is just wandering aimlessly, so I'd look for continued upside on Tuesday.

Transportation: On Monday the trans, which had been very close to the edge of their rising RTC, scored a 0.56% gain to get right back into the middle of the channel.  Like the Dow, the indicators are now pegged at overbought and so provide no guidance.  Resistance is close by at 6184. The trans have been making lower highs for two months now.  If we can get through this level, we have a good shot at visiting the upper BB is at 6209.  Either way, there's no immediate reversal signs on this chart right now.


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      7      5           2        0.500    121 
April      7      5      5           2        0.643    328

     And the winner is...

The last day of the month is often historically bullish, but not for April.  However, the charts are looking less bearish than last night, not more so.  But a lot of them also finished Monday right at key resistance levels with overextended indicators so it's not clear if they have enough gas in the tank to punch through without a rest first.  Because of this uncertainty, I'm going to make a conditional call: if ES breaks below its pivot of 1684.75 by mid-morning, we close Tuesday lower.  If ES stays above, then it's Tuesday higher.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again in view of the conditional  call.

Monday lower

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

• Monday lower, low confidence.
  
• ES pivot 1577.17.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Photo analogy of the week

Hey porcupine!

Why you numbskull!

You've seen it, you can't unsee it.  OK, this is very unsettling.  Apparently, a slim majority of Americans elected the ghost of Moe Howard, leader of The Three Stooges,  to run the greatest country on earth.  Not once, but twice.  Nyuk nyuk nyuk.  Listen you mugs - it is left as an exercise to the reader to decide if Joe Biden looks more like Larry or Curley.  Loser gets Harry Reid.  Woo woo woo!

Recap

OK, all silliness aside, I know I called for the Dow to close lower on Friday and that was wrong, but only by 12 points.  In any case, both the SPX and Nasdaq did close lower, so it wasn't a bad miss.  On small-range days, it's always possible for that sort of thing to happen.  Now let's see where Monday may be headed.

The technicals (daily)

The Dow: Friday's small gains were just not quite enough to prevent a bearish setup on a rising RTC exit.  However, the indicators are still rising and the stochastic is still a ways from even starting a bearish crossover, so it's too early to call the Dow lower, especially considering the green candle on Friday.

The VIX:  The VIX fell on Friday but only lost 0.07% on a red candle hanging above Thursday's perfect doji.  Frustratingly, that sort of action neither confirms nor disproves the doji.  We're simply left with the indicators  which are now officially oversold and a stochastic very near to forming a bullish crossover.  I'd \say the VIX is due for a bounce here, if not Monday then even more likely on Tuesday.

Market index futures:Tonight the futures are mixed at 12:56 AM EDT with NQ up 0.07%, YM just barely down 0.01% and ES down by just 0.05 %.  On Friday, ES lost almost enough to exit its rising RTC.  In the Sunday overnight, it has done that, so that becomes a bearish setup - unless ES can manage a gain up to 1582.50 on Monday.  The indicators are now rather overbought and the stochastic has now just completed a bearish crossover.  Thursday night I said this chart looked toppy.  Friday's losses confirmed that.  On Sunday night, I see no signs of a move higher so things continue to look bearish.

ES daily pivot: Tonight the pivot inches up from 1580.25  to 1577.17.  The lackluster overnight action leaves us below the new pivot, though only by a point and a half.  This is one of these cases where ES is going to have to break through the resistance offered by the pivot if it hopes to move higher on Monday.  As it stands, it's a negative sign.

Dollar index: Th3 dollar dropped 0.32% on Friday on a small harami cross.  This is a bullish reversal sign.  However, the indicators are a bit out of sync here, being as they're still descending off overbought.  So let's just say there's a possibility of a higher dollar on Monday, but not a certainty.

Euro: Last Thursday night I wrote "other signs seem to suggest more upside for the euro on Friday".  And that's just what we got, with the euro closing at 1.3033 to break out of its descending RTC for a bullish setup.  The Sunday overnight is trading higher, up 0.18% already after a gap-up open.  With indicators just coming off oversold and a freshly completed bullish stochastic crossover, I'm looking for more gains here on Monday.  Note once again that this conflicts with my guess for a higher dollar - if I had to bet, I'd bet on the euro moving higher.

Transportation: On Friday the trans gained a puny 0.08% on a spinning top.  This keeps us in a rising RTC but also drove RSI to very overbought (97.03).  And the stochastic is starting to flatten out in preparation for a bearish crossover, possibly by mid-week.  But this isn't immediately bearish so we'll need to watch Monday for confirmation of Friday's doji.


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      7      5           2        0.500    121 
April      7      4      5           2        0.692    434

     And the winner is...

Tonight I'm not getting a real good read from the charts either way.  The overall feeling is more bearish than bullish though and there's no major economic news coming out to prop things up so I'm going to go out on a limb and call Monday lower.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again  because I'm not quite ready to pull the trigger.  I think tomorrow will be a more reliable entry point.

Friday lower

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

• Friday lower, low confidence.
  
• ES pivot 1580.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

A mid-afternoon swoon was not enough to keep my call for a higher close from coming true as the Dow finished Thursday with a modest 25 point advance.  We even made it through an entire day without any machine-induced panics, unlike yesterday's bad case of bot-ulism.  Well the CBOE seemed to be having some trouble getting in gear but that was apparently just run of the mill system bugs.  So let's move right on to Friday and see what new surprises the charts have in store for us.

The technicals (daily)

The Dow: Although the Dow finished in the green it did it with a bearish looking inverted hammer.  It still keeps us in the rising RTC but RSI turned lower and the stochastic climbed some more on Thursday.  This isn't yet a convincing bearish reversal sign, but it is at least a flashing caution light.

The VIX:  And adding to the general malaise, the VIX on Thursday produced a perfect long-legged doji, closing up just 0.01 points on the day.  And this star traded outside the steep descending RTC for a bullish setup.  The stochastic here is also getting into position for a bullish setup so I'd expect a higher VIX soon, and quite possibly as early as Friday.

Market index futures: Tonight all three futures are lower at 1:01 AM EDT with ES down by 0.21%.  Solid gains on Thursday kept ES in it rising RTC and we nearly hit the upper BB at 1591 intraday.  But the overnight is moving lower, RSI is now overbought, OBV has turned lower, and the stochastic is just about to form a bearish crossover.  This chart is definitely looking toppy to me tonight.

ES daily pivot: Tonight the pivot rises from 1574.58  to 1580.25..It wasn't a big gain, but combined with ES's move lower in the overnight so far, we are now below the new pivot - not by much but still a bearish sign.

Dollar index: Last night the dollar was looking a bit confused and Thursday bore that out.  We lost 0.22% but did it on a tall gap-down green candle.  That was enough to exit the rising RTC in a convincing fashion for a bearish setup and drive RSI officially overbought..  It also gave us a newly completed bearish stochastic crossover, so I'd say things are looking lower for the buck on Friday..

Euro: And another long-legged doji on Thursday, this time with the euro closing virtually unchanged.  This kept it inside a descending RTC, however the overnight is trading higher and has now exited the RTC for a bullish setup.  RSI has also bottomed at oversold.  The stochastic remains lying on the floor in a heap but the other signs seem to suggest more upside for the euro on Friday.

Transportation: The trans seemed to run out of gas a bit on Thursday, managing to eke out just a 0.08% gain with an odd half-spinning top, half inverted hammer thingie.  It remains in the rising RTC but it also caused RSI to peak at overbought ad moved the stochastic closer to forming a bearish crossover, possibly in a day or two.


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      7      5           2        0.500    121 
April      7      3      5           2        0.750    446

     And the winner is...

It's not a screaming bear alarm tonight, but rather an army of dojis all popping out at once and that's enough to give one pause.  I'll also note that the market has begun oscillating again in swing trader-friendly fashion after spending most of the year so far in overextended trends that refused to break.  And we are right now at the peak of one of those cycles.  The last two were on 4/2 and 4/12, so we're about due.  I'm really sort of on the fence tonight about this but the preponderance of evidence seems to suggest we're about ready to roll over, so I'm going to vote for a lower close Friday.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again - I'm just not feeling the love.

Thursday higher

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

• Thursday higher, low confidence.
  
• ES pivot 1574.58.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

After a long period earlier this year where the oscillators weren't it seems that the market is getting back into the swing of things.  On Wednesday the SPX gained a whopping 0.0 points while the Dow lost 43, so there goes my call for the day.  What is the meaning of this sudden onset of dojiosity?  The charts will surely explain it, so let's take a peek.

The technicals (daily)

The Dow: Wednesday's loss was almost but not quite a dark cloud cover.  And the close still keeps us well inside a rising RTC.  And with indicators continuing to rise off oversold it's too early to call this the start of a downtrend.  The chart doesn't really look as bad as a 43 point down day might seem.

The VIX:  On Wednesday the VIX put in a baby star, up just 0.96%.  That keeps it in a descending RTC and keeps the indicators falling towards oversold.  The stochastic is also still several days away from being in position to form a bullish crossover so I'd say the reversal indication is weak and requires confirmation.  I'm guessing the VIX will not be able to capitalize on this star on Thursday.

Market index futures:Tonight all three futures are higher at 12:42 AM EDT with ES up by 0.11%.  ES put in a tiny little star on Wednesday which keeps it well inside its rising RTC.  And the modest gains in the overnight are non-confirming that doji.  And while RSI has now turned lower before ever reaching overbought, the stochastic continues to rise but is still not in position to begin a bearish crossover.  So with no resistance until the 1584 area it looks like there's still a bit of gas left in the particular tank for Thursday.

ES daily pivot: Tonight the pivot rises again from 1566.42  to 1574.58.  But even with this jump ES remains above the new pivot for a continuing bullish indication.

Dollar index: After Tuesday's hanging man the dollar gave us an inverted hanging man on Wednesday, losing 0l19% in the process.  But it wasn't enough to exit the rising RTC.  The indicators are now in overbought-broken mode so no help there.  With two days of vacillation and limited guidance, it's too tough to determine where this chart is going on Thursday..

Euro: On Wednesday the euro gave us a nice green hammer that drove RSI oversold.  The overnight seems to be confirming that and is now up 0.15% to just barely exit the descending RTC for a bullish setup.  So this chart looks ready to move higher on Thursday.  If so, that would imply a lower dollar, which is certainly plausible given the two dojis there.

Transportation: Once again, we have a divergence between the Dow, down 0.29% on Wednesday, and the trans which advanced 0.62%.  This keeps them in a rising RTC and while RSI has just gone overbought, the stochastic is still a ways from forming a bearish crossover.  So I'd say more upside is possible here 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      5      7      5           2        0.500    121 
April      6      3      5           2        0.727    421

     And the winner is...

I know my call last night didn't worm out too well but I'm still seeing the same forces at work tonight.  Rather than shifting my view because of Wednesday's failure, I'm going to stick to my guns.  I note the trans on a roll, the VIX in no hurry to rise, the TLT stuck in consolidation mode, a rising euro, and futures holding onto gains.  So I may regret this, but I'm going to call Thursday higher.

ES Fantasy Trader

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again, for the same reasons as last night.

Wednesday higher

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

• Wednesday higher, medium confidence.
  
• ES pivot 1566.42.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

ES, 5 minute bars

And this, folks is why I never use stop orders on either my ESFT ES fantasy trading account or in my real trading account.  I'll bet there's a lot of people kicking themselves tonight who got stopped out of trades or investments they should have hung onto.  And this is just the disgraceful sort of thing that makes people think the market is rigged.  I think the SEC should investigate and that Twitter should reimburse people for their losses.  Of course, one might argue that anyone who makes their trading decisions from a Twitter news stream deserves what they get.  I wonder if any trades are going to be busted as a result of this hack.  And I really wish that they catch whoever was behind this and put them away for a long long time.

I find it interesting though that this mini-crash stopped at the 200 period MA on the dot (the dashed orange line).  Don't tell me this number isn't heavily programmed into all the bots.

So aside from some more market shenanigans, overall Tuesday played out quite nicely.  The technicals played out well and the housing news that I'd been afraid of last night didn't hinder another positive day that saw the Dow close up 152.  So is this the end or is there a rally in store?  We head right back to the table and figure out where to plunk down out hard-earned cash on Wednesday.

The technicals (daily)

The Dow: Today's big green marubozu provided a descending RTC exit for a bullish setup, though I'd just about call this one a trigger in its own right.  Add in an RSI that has now bottomed at oversold and a newly completed bullish stochastic crossover and it looks like there's definitely more room to run here on Wednesday.

The VIX:  Last night I wrote "it's certainly possible we might see another [red candle] on Tuesday."  And sure enough, the VIX went down again, this time losing another 6.32%.  The candle is a tall inverted hammer, but that's only due to that Twitter nonsense, so I completely discount that.  Removing that spike leaves just an ordinary red candle.  And with no nearby support, indicators continuing to decline, and a steep descending RTC now established, it looks like the VIX could go lower still on Wednesday.

Market index futures: Tonight all three futures are higher at 12:27 AM EDT with ES up by 0.11%.  This chart now has a lot going for it.  On Tuesday we got a bullish three white soldiers pattern, a descending RTC exit for a bullish trigger, a new rising RTC, all the indicators rising smoothly off oversold, an upper BB still 13 points away, and positive follow-through in the overnight.  What's not to like?

ES daily pivot: Tonight the pivot jumps from 1553.25  to 1566.42.  But even with that, ES remains above the new pivot by nearly 10 points, so that's a bullish sign.

Dollar index: The dollar gapped up 0.44% on Tuesday for a stubby hanging man and a stochastic that's flattening out for a bearish crossover.  But we remain solidly in a rising RTC and are still under the upper BB so it's premature to call the dollar lower just yet.  Maybe by the end of the week though.

Euro: After a few complicated days, the euro took a decided drop on Tuesday to close at 1.2995, its lowest level since April 8th.  But this move wasn't enough to call a new trend and the indicators continue to lack direction, so I'm taking a second pass in a row on this chart.  We might see a small move higher on Wednesday, but that's just idle speculation.

Transportation: Monday was the bullish RTC trigger and Tuesday was the payoff, with a 0.28% gain for the trans.  This gives us a new rising RTC rising indicators, and no nearby resistance so I'd say we could move higher again on Wednesday.


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      7      5           2        0.500    121 
April      6      2      5           2        0.800    464

     And the winner is...

Things are still looking reasonably bullish tonight and I'm still not seeing any bearish reversal signs.  And it doesn't look like we're really all that over-extended yet, so I'm just going to vote for another close higher Wednesday.

ES Fantasy Trader
 
Today we booked a decent profit on Sunday night's long.  In this case, patience definitely paid off.  I was briefly considering bailing out around mid-day Monday when I had a few thousand in profit, and then began to doubt myself when that all evaporated and the trade went in the hole.  But we bounced nicely on Tuesday  for a handy 19 point gain.

Portfolio stats: the account now rises to $107,750 after 11 trades (9 for 11 total, 4 for 4 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside, because while I am expecting more upside, I think we've already caught the majority of this move which makes the risk/reward of going for the rest of it unacceptable in my book.

SLD    10    false    ES    JUN13 Futures     1572.75    USD    GLOBEX    11:28:34    
BOT    10    false    ES    JUN13 Futures     1553.75    USD    GLOBEX    APR 22 01:14:18   

Tuesday uncertain

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

• Tuesday uncertain.
  
• ES pivot 1553.25.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader remains long at 1553.75.

Recap

It wasn't looking good early on when the Dow headed south right out the gate on Monday, but then Mr. Market must have read the Night Owl and realized that I called the close higher, so at 10:35 AM we reversed course and finished the day up 20 points.  Sometimes you just have to stick with your convictions.  Now let's see if logic will prevail on Tuesday as we scour the charts in search of truth.

The technicals (daily)

The Dow: On Monday the Dow gave us another tall doji, very nearly a hammer.  This closed just short of a descending RTC exit, so no bullish setup here just yet.  However, RSI went oversold and the stochastic is now just about to form a bullish crossover.  So overall, this chart is looking fairly bullish now.

The VIX:  Last night I wrote "this chart looks ready to move lower again" and so it did, dropping another 3.87% on Monday.  That move was enough to complete a bearish stochastic crossover and keep the VIX below its 200 day MA.  So with two red candles in a row, it's certainly possible we might see another one on Tuesday.

Market index futures:Tonight all three futures are lower at 1:08 AM EDT with ES down by 0.22%.  Monday's green candle provided a bullish RTC setup and a completed bullish stochastic crossover.  So technically that looks positive, but we've been drifting lower all evening so far.

ES daily pivot: Tonight the pivot rises from 1544.50  to 1553.25.  This gain combined with ES drifting lower now puts ES below the new pivot.  However, it just took a stab at moving back above, right at 1 AM, but that was rejected.  Failing to break above would be a bearish sign.

Dollar index: I thought the dollar might move higher Monday but instead it lost all of 0.03%.  But the resulting candle was a dark cloud cover and we got a stochastic just about to form a bearish crossover.  So now I'm thinking the dollar goes lower on Tuesday.

Euro: The euro seems to have lost its mojo and has been noodling about aimlessly for three days now.  The indicators suggest the next move should be higher, but who knows.  I'm taking a pass on this chart tonight.

Transportation: On Monday the trans gained 0.29%, outperforming the Dow again with a spinning top that also provided a descending RTC bullish trigger.  We also now have a completed bullish stochastic crossover so this chart continues to look positive for Tuesday.

Sentiment: Once again it's time (actually it was time two nights ago) 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   6/9

 10  3/4        29         39        -      -   1518   6/10

 11  3/11       41         26        +      +   1551   7/11

 12  3/18       41         37        +      +   1561   8/12

 13  3/25       31         38        +      -   1557   8/13

 14  4/1        38         38        +      x   1569

 15  4/8        32         50        -      -   1553 

 16  4/15       33         50        +      -   1589

 17  4/22       19         63        -      -   1555

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 that was a miss for me (though only by two points), but the majority of the poll which voted bearish was correct..   We therefore continue the year with an accuracy of 8  for 13, or 62%.   The poll as a whole though improves to 9 for 13, or 69%.

This week we see something quite extraordinary.  Bullish sentiment was chopped nearly in half from a week ago to its lowest level of the year  while bearish sentiment jumped to its highest level in two years.  I'll admit I switched my vote back to bearish this week but this makes me nervous.  The TickerSense poll participants are admittedly better than average, but when readings hit these sorts of extremes I have to wonder if that isn't a contrarian bullish indicator.  I guess we'll see in a month.

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      7      5           2        0.500    121 
April      6      2      4           2        0.800    464
 
     And the winner is...

Technically, the charts continue to look bullish tonight but there's some more housing news coming out on Tuesday.  And judging by the effect that Monday's news had on the market, I'm not sure I want to stand in front of that particular bus.  I think the bias remains positive, but tonight the Night Owl is going to do the Chicken Dance and call Tuesday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $98,250 after 10 trades (8 for 10 total, 3 for 3 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we remain long at 1553.75.  I don't think this upward move is quite played out yet.

Monday higher

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

• Monday higher, medium confidence.
  
• ES pivot 1544.50.  Holding above is bullish..
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader going long at 1553.75.

Recap

If you recall last Thursday night I said we'd go higher Friday if the ES pivot held.  Well ES made one half-hearted attempt to bust below it at 9:45 AM but that didn't last long and after that it was just up, up and away.  The Dow finished up just 0.07% mostly because IBM was the lead anchor in the room.  The SPX ended with a nice 0.88% gain.  So once again, the pivot prevails.  But that was then, what about Monday?  We now challenge the charts to stand and deliver.

The technicals (daily)

The Dow: So the Dow was up just a little but in so doing it formed a nice almost-dragonfly doji.  We saw one of these  to the downside last week and it worked out nicely.  With the indicators now very nearly oversold and the stochastic closing in a a bullish crossover, there's at least a suggestion of a reversal here.  It might be stronger once we exit the descending RTC though, possibly in a day or two.

The VIX:  Thursday night I wrote "the VIX rarely spends this long above its upper BB before falling back.  It's now definitely due. "  And sure enough, bada-bing, on Friday it came right back down, losing 14.75% and falling right back through its 200 day MA for the second time in four days.  That also provided a rising RTC exit for a bearish setup and left the stochastic on the brink of a bearish crossover.  Barring any sudden news on Monday that the Bank of Cyprus is going to issue new bonds denominated in Greek yogurt cups, this chart looks ready to move lower again.

Market index futures: Tonight all three futures are non-trivially higher at 1: 00 AM EDT with ES up by 0.47%.  ES on Friday gave us a very solid gain on a something that looks like a bullish piercing pattern, only offset with the green candle higher than the red one.  The name of this escapes me at the moment, but I believe it's bullish too.  We're also getting some nice follow-through in the overnight which so far is well outside the descending RTC for a bullish setup.  And the stochastic has now just completed a bullish crossover.  So this chart is looking to be in pretty decent shape for Monday.

ES daily pivot: Tonight the pivot rises from 1539.42  to 1544.50.  That still leaves us a good 10 points above the new pivot so that's a good bullish sign for Monday.

Dollar index: Last Thursday night I wrote "with indicators continuing to rise, I have to vote again for the dollar to move higher on Friday".  And after some hesitation Thursday, the dollar posted a 0.20% gain on Friday to confirm the descending RTC bullish trigger.  With that plus indicators now rising sharply, the dollar looks poised for more upside again on Monday..

Euro: It was an unusual day on Friday - both the dollar and the euro rose.  And while I called them both higher, I was sure one of those calls would be wrong.  But I was wrong, because I was right (if you follow me).  It was a small gain on a tall inverted hammer, but a gain nonetheless.  And the upside has resumed in the Sunday overnight, now up 0.07%.  With the stochastic ever so close to a bullish crossover and a three-day winning streak in progress, I'm again calling both the dollar and the euro higher on Monday.  And like I said on Thursday, one of those calls is probably wrong - unless the two currencies move in sync again.

Transportation: Once again, the trans greatly outperformed the Dow on Friday, even after accounting for IBM's big flop.  Their 1.51% gain brought them right back to where they were three days earlier.  Of course, that now established 6042 as some fair resistance but with the indicators now way off overbought and the stochastic about to form a bullish crossover, there's clearly some gas available in the tank to attempt a breakout on Monday.  Friday's pop also provided a descending RTC exit for a bullish setup.


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      7      5           2        0.500    121 
April      5      2      4           2        0.778    444

     And the winner is...

With Dr. Copper giving us a descending RTC breakout on Friday, plus some guy on CNBC telling us copper no longer matters (that's always a sure sign, isn't it?) the TLT looking toppy, the trans looking ready to rise, the pivot on the upside, the SPX Hi-Low indicator only up to 90 and continuing to rise, and both the futures and currencies guiding higher, the only logical course is to call Monday higher.

I'll readily admit I'm not feeling particularly bullish after the lousy week I had last week (down 3.16%, my worst week in over a year) but I'm not here to push my feelings, only to analyze charts and make observations.  And right now I'm observing a lot of positive signs on the daily charts.  QED.

ES Fantasy Trader

Portfolio stats: the account remains at $98,250 after 10 trades (8 for 10 total, 3 for 3 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we go long at 1553.75.  Reminder - you can follow these trades live on Twitter @nightowltrader.  I won't flood your feed with chatter - just the entries and exits as I make them.