Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1614.50.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Wow - after an ugly start that was beginning to look like deja vu all over again, Mr. Market reversed course and finished Thursday up 80 Dow points with a roller coaster of a rally that began right after lunch and climbed straight into the close.  The ES pivot lay didn't quite work out but we'll take the gain anyway.  Now let's figure out where Friday is headed.

The technicals (daily)

The Dow: Thursday's gain kept alive the Dow's streak of no more than two down in a row so far this year.  We tested support at the lower BB for the second day and once again it held.  This also had the effect of moving the indicators back up off oversold and forming a bullish stochastic crossover.  So technically this chart is in lots better shape tonight than 24 hours ago.

The VIX:  At last!  I'd been waiting to the VIX to come down for two days now and it finally obliged on Thursday, dropping 4.97% on a big bearish engulfing candle closing under its upper BB.  The indicators remain overbought even after this move but they have begun coming down a bit so this chart looks ready for more downside on Friday.

Market index futures: Tonight all three futures are basically flat at 1:48 AM EDT with ES down by just 0.02% or one tick.  Like the Dow, ES tested its support at the lower BB on Thursday and it held, finishing with a bullish green hammer.  We're still in a descending RTC but we now have a bullish stochastic crossover.  The action of the past two weeks has taken some froth out of the market and I believe the stage is now set for at least a couple of days of advances.

ES daily pivot: Tonight the ticks down from 1615.25  to 1614.50.  We broke above the pivot at 3:25 PM Thursday and remain above the new number by a decent six points, so that remains a positive sign.

Dollar index: The dollar took a major hit on Thursday, diving a whopping 1.30% on the $USDUPX, its biggest daily loss since, well a long time.  I scrolled back a year on my chart and couldn't find anything near this big.  This dump was stopped only by the 200 day MA which was breached intraday but ultimately held.  With the dollar now this extended form its pivot I'd expect a reversal soon, though it might not be on Friday - there's still a bit of room to run lower..

Euro: And of course the euro posted outsized gains on Thursday to complement the dollar's drop, busting right through its upper BB and negating Wednesday's doji.  After a gain this size while the indicators are already overbought, I'd expect at least a bit of retracing on Friday.  This increases my confidence that the dollar will turn on Friday too.

Transportation:After underperforming the Dow yesterday, on Thursday the trans handily outperformed, gaining nearly a percent on increased volume to the Dow's half a percent.  The indicators have also bottomed at oversold and the stochastic looks to be finishing off a scalloped bottom if not a classic bullish crossover.  So although we remain in a descending RTC, the technicals favor more upside here on Friday.

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. Actually, due to my being away last week, we're missing a week so we'll have to make do without it until I can find the missing data.

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

  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   9/15

 16  4/15       33         50        +      -   1589   10/16   9/16

 17  4/22       19         63        -      -   1555   10/17   9/17

 18  4/29       33         58        -      -   1582   10/18   9/18

 19  5/6        50         31        +      +   1614   11/19  10/19

 20  5/13       37         37        +      x   1634

 21  5/20       50         25        +      +   1667 

 22  5/28       ??         ??        +      ?   1650

 23  6/3        29         38        -      -   1631

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 both the majority and I voted bullish four weeks ago, so we were both right.   Therefore we  continue the year with an accuracy of 11  for 19, or 58%.   The poll as a whole meanwhile  rises to 10  for 19 or 53%.

This week I and the majority of participants switched our votes to bearish.  I can't speak for the others but I did so based on some bearish looking 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        3      4      6           4        0.636     85
June       1      2      1           0        0.333     62

     And the winner is...

The technicals tonight look poised for further gains, but I'm afraid that some weaker than expected jobs numbers on Friday may put a damper on the party.  Without a way to know for sure how that's going to shake out, I have no choice but to call Friday uncertain, though again, I believe there's a modest positive bias at work now.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside on the "uncertain" call.

Thursday higher if ES pivot passed

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

• Thursday higher only if ES pivot passed, else lower.
  
• ES pivot 1615.25.  Breaking above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Ugh - another dismal day on Wall St. as the Dow posted its second triple digit loss in four days.  Was today's 217 point dump a washout or is there more in store?  Let's sift through the wreckage in search of clues for a direction on Thursday as this miserable week grinds on.

The technicals (daily)

The Dow: Wednesday's close of 14,961 was actually under the lower BB at 14,999.  I note that the last four times this has happened, all the way back to November 2012, the Dow bounced within two days.  This was true even when the Dow was not very oversold, just like now.  On the downside, this tall red marubozu is no reversal candle.  However, as I noted last Thursday night, every time the Dow has had a big dump, it retraced about 50% the next day.  That happened Friday as well as the other four times we saw that this year.  So I think there's at least some expectation the bears might take a rest on Thursday.

The VIX:  The VIX greatly surprised me on Wednesday by not falling back after spending three days on its upper BB.  In fact, almost the entire candle traded above the upper BB on Wednesday.  This is starting to feel like last December when we had a seven day run above the BB that didn't end until an exponential blow-off.  We're not quite there yet but the indicators are now quite overbought and while it's been  a nice run, I wouldn't be going long the VIX here.

Market index futures: Tonight all three futures are higher at 1:35 AM EDT with ES up by 0.31%.  After a tall red marubozu on Wednesday that closed way under its lower BB, ES seems to be looking for some sort of bounce in the overnight.    With the indicators now fairly oversold and momentum turning higher for the first time since May 13th, this chart looks ready for a relief rally.

ES daily pivot: Tonight the pivot dives from 1632.83   to 1615.25.   After spending Wednesday in the Marianas Trench, ES has been drifting higher since the close and is now in striking distance of the pivot, by just two points.  A break above would be the first bullish sign here in several days.

Dollar index: The dollar remains stuck in a downtrend and Wednesday's 0.23% loss negated Tuesday's inverted hammer.  Instead, we got a long-legged doji, so once again there's a reversal suggestion for Thursday but one that requires confirmation.  The indicators are certainly sufficiently oversold to support this notion.

Euro: After a spinning top of indecision on Tuesday, the euro proceeded to give us a pure doji of indecision on Wednesday sitting just barely above the previous candle.  So far at least, it doesn't seem to be getting confirmed as the euro continues to rise in the overnight.  Inf act at 1.3101 we are now near the upper BB at 1.3124.  With indicators now fairly overbought, my expectation is for the euro to touch its upper BB on Thursday and then reverse course.  That would sync with my call for a higher dollar.

Transportation: Once again the trans underperformed the Dow, putting in a very weak performance with a 1.90% loss on Wednesday that closed a good 50 points below their lower BB.  This also drove the indicators very oversold and caused the stochastic to begin moving higher, albeit not with a bullish crossover.  And while we remain solidly in a descending RTC, there's at least some sign that we could see a pause in the selling or a DCB 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      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       1      1      1           0        0.500     62

     And the winner is...

Technically, it's looking like we're about due for some sort of bounce, relief rally or whatever on Thursday.  However, there are a bunch of jobs numbers coming out and I think that's what's going to drive the market rather than the technicals.  So I'm going to delegate some of the work of prediction to the ES pivot and make a conditional call.  I claim that if ES can retake its pivot and stay there by mid-morning, then we close Thursday higher.  But if we bounce back off the pivot, then it's game over, Thursday lower.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside on the conditional  call.

Wednesday uncertain

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

• Wednesday uncertain.
  
• ES pivot 1632.83 .  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well we were on track for some modest gains early Monday until yet another Fed Head opened their mouth and torpedoed the Dow which ended the day with a 76 point loss.  Sometimes you just can't win for losing.  Oh well - on we go to Wednesday.

The technicals (daily)

The Dow: After retracing last Friday's dump on Monday, the Dow proceeded to retrace the retracement on Tuesday, giving back 50% of those gains if you know what I mean and I'm not even sure I do.  The net effect was to keep us in a descending RTC that has a surprisingly high Pearson's of 0.905 despite looking more like a staircase than a slope.  But it drove us closer to the bullish breakout side and drove the stochastic further oversold.  Still, the candle was a spinning top and that's about what this action is leaving my head - spinning.  This one's too tough to call.

The VIX:  The VIX OTOH sent a clearer message on Tuesday, putting in a second tall bearish inverted hammer that peaked above the upper BB intraday but finally closed below it.  With the indicators remaining quite overbought, I still think the VIX is due to move lower on Wednesday.

Market index futures: Tonight all three futures are lower at 1:31 AM EDT with ES down by 0.11%.  Like the Dow, ES gave us a spinning top on Tuesday spanning the range of Monday's candle.  It also brought the indicators closed, but not quite to oversold.  Given this indecision, I moved to the weekly chart and surprisingly, there's not much help there either.   While the last two candles are rather bearish, we remain in a long-running rising weekly RTC (back to last November) so despite all the recent losses, we still can't call the current trend over.

ES daily pivot: Tonight the pivot inches up from 1632.00 to 1632.83. But with listless overnight action we remain below the new pivot so that's bearish.

Dollar index: The dollar remains in a descending RTC despite posting a small advance with a bullish inverted hammer that made the indicators bottom out and just managed a bullish stochastic crossover.  So I think we could see a move higher here on Wednesday..

Euro: We didn't get the euro decline I was expecting on Tuesday, but the small spinning top does indicate some indecision here.  However, the overnight continues to drift higher and we do remain in a rising RTC so I'm not going to fall for that one twice in a row - I'll say the euro goes higher on Wednesday.  But that means either that's wrong or my dollar call is wrong - they won't both go up.  At the moment, I'm a bit more confident in the dollar than the euro.  We'll see.

Transportation: If there are any trends right now, they're in the trans which remain stuck in a descending RTC.  Tuesday's 0.49% loss canceled Monday's doji and while touching the lower BB before closing just a bit higher than it.   This also drove the indicators further into oversold.  Still, there's no immediate sign of a reversal here now, though I think one is possible by 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      5      7      5           2        0.500    121 
April      7      5      5           3        0.667    328
May        3      4      6           4        0.636     85
June       1      1      0           0        0.500     62

     And the winner is...

I have to confess I'm not getting a good read on these charts tonight.  My overall bias is tending more towards the bearish and the first week in June is historically quite weak.  OTOH, we've got the VIX that is clearly looking ready to move lower and that one is usually a high probability play.  So bottom line, maybe I've been getting too much of that Florida sun so with all this herky-jerky action lately I'm just going to throw my hands up and call Wednesday uncertain.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside on the "uncertain" call.

Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1632.00 .  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Last night I noted that recently "big one day drops have been followed by something like a 50% retracement."  And that's just what we saw on Monday with the Dow regaining just a bit more than half of Friday's losses in a 138 point rebound.  So now let's move on to Tuesday.

The technicals (daily)

The Dow: Monday's retracement caused the indicators to begin rising from oversold and also set up the stochastic for a bullish crossover.  The Dow also regained its pivot in the closing hour so I am cautiously optimistic about this chart for Tuesday.

The VIX:  On Monday the VIX gave us a big bearish inverted hammer, very nearly a gravestone doji with a close above the upper BB.  That marks the second day in a row for a close there which means we're about due to see the VIX fall.  The VIX's last three excursions above the 200 MA have been fairly brief and I expect this time to follow suit.

Market index futures: Tonight the futures are mixed at 1:33 AM EDT with both ES and YM down by 0.03% but NQ up 0.03%. ES gave us a bullish hammer on Monday.  Combined with oversold indicators and no negative follow-through in the overnight so far means we have a shot at moving higher on Tuesday.

ES daily pivot: Tonight the pivot drops from 1637.75 to 1632.00 even.  This move, plus the slow upward drift of ES since 6 PM has put it back above the new pivot, so this now becomes a bullish sign.

Dollar index: On Monday the dollar gave us a classic hammer that along with oversold indicators and a new bullish stochastic crossover makes me think that we could see more upside on Tuesday..

Euro: As fast as the euro fell through its 200 day MA on Friday, it zoomed right back above on Monday, closing at 1.3073, its highest level since May 9th.  This move drove the indicators overbought and left the stochastic right on the cusp of a bearish crossover.  With a 0.11% decline in the overnight, I wouldn't be surprised to see the euro move lower on Tuesday.  That also syncs with my higher dollar theory.

Transportation: On Monday the trans formed a perfect doji that tested the lower BB before bouncing.  It also left the indicators quite oversold and just managed to squeak out a bullish stochastic crossover.  While we remain in a descending RTC here, there is at least some suggestion of a reversal on Tuesday.


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        3      4      6           4        0.636     85
June       1      0      0           0        1.000    138

     And the winner is...

We've been seeing a lot of choppy action in the past week so this is a tricky one.  The safe move would be to simply call Tuesday uncertain, but I'm seeing enough bullish signs in the charts tonight to warrant a call instead of Tuesday higher.  And that's my final answer.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside in view of all the choppiness.  I'd rather watch this from the sidelines than get my head chopped off.

Monday higher

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

• Monday higher, low confidence.
  
• ES pivot 1637.75.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

OK, the Night Owl has been travelling and I took a week off, so there's not much point in doing a recap.  I will simply point out that I was right about last Tuesday going higher and we all know the rest of the week was stinkola.   You know the drill so without further ado, let's move on to another week.  We're back, baby!

The Night Owl Gets Taken

But first - yes, the Night Owl fell victim to a scam last week, so I thought I'd share the experience with you.  Now normally I pride myself on being pretty world-wise and savvy.  When I get emails from the Chief of Police of Nigeria promising me $10,000,000, I just click Delete.  But last week I got scammed and I'm still steaming.  How did this happen?

Well, I always flew between New York and Florida in Business Class on Airtran.  Last year Airtran was acquired by Southwest Airlines.  I went to the Airtran website last week and was redirected to Southwest.  I looked up my favorite flight there and found a range of fares, from $198, which presumably entitled you to travel in the hold, to $463 which was advertised as "Business Select".  So naturally, that's what I chose.  The price was about $20 higher that my last trip on Airtran but I figured, it's inflation.

So you probably already know what's coming.  I get to the gate, I get on the plane. I look around the corner, and I'm like "Uh, where's Business Class?"  There isn't any.  It's simply Steerage Class from row 1 to infinity.  And of course by this point it's too late to do anything about it.  I wasn't going to get back off the plane after getting up extra early to catch this flight.

So after spending 2 1/2 hours with my knees up against my chin seated next to a disturbing assortment of Twelfth Night characters, I'm done.  I called Southwest "Customer Relations" and their attitude was basically "tough luck pal, we delivered everything we advertised".  Well I beg to differ - offering a fare called "Business Select" sure sounds like Business Class to me.  Last I looked, the word "select" meant "choose" or "choice", not "non-existent".  So realizing that it was a lost cause arguing with someone who obviously couldn't care less, I hung up and proceeded to file a dispute with Visa.  We'll see where that leads.

In the meantime, I am apparently the last person on the planet who did not know that Southwest operates nothing but Steerage Class on all their flights.  Given that, it strikes me as fraudulent advertising to promote something called "Business Select" when all it does it give you a free drink coupon and the same tiny cramped seating everyone else gets.  That was the most expensive drink I ever had in my life, and it's not sitting well.  Needless to say, my first flight on Southwest was also my last.  Stay tuned for updates.

The technicals (daily)

The Dow: Uh OK so anyway back to the markets.  Last Friday's ugly 209 point rout in the Dow on high volume drove the indicators oversold for the first time since April 22nd.  (And that day proved to be a bottom).  OTOH, the weekly chart is looking just plain ugly.  It' still quite overbought and features an inverted hammer for a bearish RTC trigger.  Ugh.  So with that, no daily reversal candle, and no support til the lower BB at 14,946 I have to say this ain't looking good for Monday.  The only thing that might help is the recent pattern where big one day drops have been followed by something like a 50% retracement.

The VIX:  On the other hand, the VIX on Friday took a giant leap, not for mankind but for the bulls, by blasting right through its 200 day MA and its upper BB in one fell swoop to close at 16.30, the highest level since April.  And once again, as I always say, the VIX rarely spends more than a day or two above its upper BB before falling back.  So with that number at 15.38, I'm looking for a lower VIX on Monday.  Especially given how overbought its indicators are now.

Market index futures: Tonight all three futures are higher at 1:29 AM EDT with ES up by 0.18%.  Big one-day drops in ES have tended to be followed by gains, cf. April 15/16. And along those lines we note that Friday's close of 1629 left ES quite extended below the pivot.  Whenever that happens, look for a retracement of some sort.  The failure of any negative pin action to appear at this late hour of the night is encouraging.

ES daily pivot: Tonight the pivot crashes from 1651.75  to 1637.75.  . We were way below the old number, and even with this big drop we remain below, so that's a bearish sign.

Dollar index: The dollar has been zig-zagging its way lower for a week now until Friday's bullish harami, also in thte form of a spinning top.  Momentum and RSI have now turned higher and the stochastic is fairly oversold, so I'd say there's a chance (though not a certainty) of the dollar moving higher Monday.

Euro: Late last week the euro tried and failed to cross its 200 day MA.  It's trying again as I write but with the indicators now overbought it's not clear how much gas is left in the tank, particularly given Friday's dark cloud cover-ish candle.  If the euro cannot crack the 200 MA, it's going lower on Monday.  I realize that's not a prediction, but this chart isn't crystal clear tonight

Transportation: Friday saw a 0.82% drop in the trans, notably less than the Dow's 1.36%.  This drove them quite oversold (RSI=9.67) on a bullish inverted hammer.  That said, we fell through the pivot on Friday afternoon and remain well inside a descending RTC.  And with the lower BB still not until 6231, I think there may be a bit more downside left here before moving higher.


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        3      4      6           4        0.636     85

     And the winner is...

There are some signs, though not a lot, of a reversal coming over the next few days.  But one thing I think is that the late-day sell-off on Friday made the charts look worse technically than they would otherwise be, and this was complicated by the fact that Friday was the end of the month.  So for all the triple digit loss on the Dow, the SPX Hi-Lo index hasn't budged and remains on 100 - check it out at stockcharts.com here.  And of course, Monday is the first trading day of June, and that's historically pretty good.  So call me crazy, or maybe I've been out in the roasting Florida sun too much, but I'm going to call Monday higher.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside because after being away for four days I want to take a day or two to get back into the swing of things before putting on any new trades.

Tuesday higher

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

• Tuesday higher, low confidence.
  
• ES pivot 1650.75.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

We called last Friday's mostly meaningless session "uncertain" and the results certainly seem to reflect that: Dow up all of 8.6 points, SPX down 0.91 points.  There's no way to call a winner there and it didn't much matter anyway.  But it did throw an interesting wrinkle in the charts, so without further ado, let's get down to it.

Reminder: the Night Owl will be travelling this week, so tonight's post is it for a few days.  Check back again Thursday night.

The technicals (daily)

The Dow: While the net move wasn't much, the dragonfly doji looked like it warrants some attention.  With two back-to-back dojis and the indicators now considerably off overbought, it looks like the Dow is now in rubber duckie mode - you can push down but it just bounces back up.  So despite a technical bearish RTC trigger, this chart doesn't look all that weak to me.

The VIX:  Last Friday I wrote "all the signs are in place for a lower VIX on Friday" and it did not disappoint, dropping another 0.57% to close back under 14, just, on a second bearish marubozu.  This also brought the VIX back under its upper BB, caused an RSI peak at overbought and a bearish stochastic crossover.  So look for lower still here on Tuesday.

Market index futures: Tonight all three futures are significantly higher at 1:01 AM EDT with ES up by 0.33%.  On Friday we got a small green spinning top here for three dojis in a row, each one putting in successively higher lows.  That also caused an exit of an admittedly short descending RTC for a bullish setup and the pin action in the overnight is providing a bullish trigger as well as a bullish stochastic crossover.  So I'd say this chart is looking rather strong for Tuesday.

ES daily pivot: Tonight the pivot rises modestly from 1646.75  to 1650.75. We broke above the old number early Friday morning and have continued higher ever since.  The small rise in the pivot means we remain almost six points above the new pivot, a decent bullish sign.

Dollar index: With two dojis in a row for the dollar too, a reversal may be in order here shortly as the buck looks for some footing.  This chart though is not as bullish looking as the others, so I wouldn't be surprised to get a third doji here on Tuesday.  It doesn't quite look ready to move higher..

Euro: After some volatility early last week, the euro rejected its 200 day MA and then put in a small spinning top on Friday suggesting that it's recent strength may be sagging.  The overnight is forming a hanging man and the stochastic is about to form a bearish crossover so I wouldn't be surprised to see a lower close on Tuesday.  But like the dollar, this chart is far from clear.

Transportation: On Friday the trans lost 0.53% but delivered another classic hammer, making it two in a row there to go along with indicators now close to oversold.  I'd be looking for a reversal here quite soon, perhaps on Tuesday.


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        2      4      6           4        0.600    -17

     And the winner is...

The day after Memorial Day is historically bullish, though not extraordinarily so.  But what I've been seeing over the course of the last few days is a number of attempts by the bears to knock 'em lower, all of which have been rejected.  With many indicators now nearing oversold levels, a whole army of dojis on the march, the TLT in the doldrums, the VIX having hit a hard stop, and the futures looking strong, the logical call is for Tuesday higher.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again because I think we missed the majority of the move.  The time to go long was early Monday evening, not now.  It is, if nothing else, a good way to exercise patience.

Friday uncertain

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

• Friday uncertain.
  
• ES pivot 1647.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• ES Fantasy Trader standing aside.

Recap

Well we finally did close lower on Thursday but it wasn't nearly as bad as I had been thinking it would be last night.  After a big dump out the gate, the buyers reappeared and retraced all those losses as the day wore on, with a late-afternoon mini-dip finally putting us marginally back into the red.  So two interesting candles in a row.  What does this bode for Friday?  Let's figure it out.

The technicals (daily)

The Dow: The Dow showed surprising resilience in bouncing back from its morning lows on Thursday.  The net result was a tall spindly long-legged doji that in itself considerably diminishes the ongoing case for the bears.  We did, however, close outside the long-running rising RTC, just barely, so that's a bearish setup.  The indicators are also looking bearish now, having finally come off their extreme overbought positions.  But Friday will tell the tale and we do need to see that confirmation of both the doji and the RTC before making any further assumptions on market direction.

The VIX:  Last night I wrote "I'm guessing now that the VIX has no more than one up day left".  ANd the VIX delivered just that, starting the day with a huge gap up, skipping its upper BB entirely and continuing right to its 200 day MA -  and then bouncing right back off again like the sledgehammer gong at the country fair.  The end result was an odd red marubozu suspended in space between the 200 MA and the upper BB entirely above Wednesday's action.  It also drove the VIX overbought and moved the stochastic into position for a bearish crossover.  It also formed a definite exponential run-up over the past four days and we know how those always end - lower.  So all the signs are in place for a lower VIX on Friday.

Market index futures: Tonight all three futures are lower at 1:14 AM EDT with ES down by 0.17%.  Wednesday provided us with a classic hammer but also a bearish RTC exit, officially ending the uptrend.  In fact, I'm starting a new descending RTC right here.  With the continued negative follow-through in the overnight and indicators continuing to fall towards oversold, this chart continues to look bearish for Friday.

ES daily pivot: Tonight the pivot dives from 1662.58  to 1647.25.  Interesting action tonight.  The sharply lower pivot allowed ES to move above it at midnight.  Then ES took a quick dump below the new number but then just as quickly pushed back up again.  As I write, ES appears to be threading about the pivot, not quite sure which direction to go.  So until it decides, there's no predictive power here.

Dollar index: I was looking for a higher dollar on Thursday but it was not to be, with Thursday's real body trading entirely below Wednesday's for a big 0.78% loss on a fat little red spinning top.  With this sort of choppy indeterminate action, there's no point in trying to make a call, so I won't.

Euro: The euro meanwhile is acting a little better behaved, regaining all of Wednesday's losses and then some on Thursday to close at 1.2933.  That's a bit better than the plain sideways I'd been looking for, and with the overnight hanging around the upper end of that candle, plus rising indicators, further gains on Friday are possible.

Transportation: Once again we find the trans diverging from the Dow, ending Thursday up 0.21% to the Dow's 0.08% loss.  The candle is also a classic hammer on increased volume.  The indicators are now halfway back to oversold but momentum has actually turned higher already.  So this chart looks set to move higher on Friday.

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 Poll

  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   9/15

 16  4/15       33         50        +      -   1589   10/16   9/16

 17  4/22       19         63        -      -   1555   10/17   9/17

 18  4/29       33         58        -      -   1582 

 19  5/6        50         31        +      +   1614 

 20  5/13       37         37        +      x   1634

 21  5/20       50         25        +      +   1667 

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 both the majority and I voted bearish four weeks ago, so we were both wrong.   Therefore we  continue the year with an accuracy of 10  for 17, or 57%.   The poll as a whole meanwhile  drops to 9  for 17 or 53%.

This week we see that after sitting on the fence last week, the majority decided to join me and vote bullish once again by a considerable margin.  Only two other times this year has bullish sentiment been greater.  I voted bullish once again because I'm still not seeing any meaningful trend changes on either the SPX weekly or monthly 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        2      4      6           4        0.600    -17

     And the winner is...

Here's the thing.  We have the Dow looking not too bad, the VIX looking good (as in ready to move lower, implying good for stocks), ES looking weak, the trans looking strong and the currencies doing their own thing.  And also Friday is the last trading day before Memorial Day.  As usual, lots of people will be leaving early for the long weekend, so we can look for some twists and turns on light volume.  So this one is just plain too tough to call, ergo Friday uncertain.

Happy Memorial Day to all.  Reminder - I'm taking some time off next week though I do expect to post at least Monday night for Tuesday's session.

ES Fantasy Trader

Portfolio stats: the account remains at $110,375 after 12 trades (10 for 12 total, 5 for 5 longs, 5 for 7 short) starting from $100,000 on 1/1/13.  Tonight we stand aside again with another "uncertain" call.