Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1872.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

We were right about Monday going lower - for the first 15 minutes.  From there it was just a slow grind back up to above water for an eventual gain of a whopping 18 points.  Such is the nature of forecasting.  No matter - it was an interesting candle so let's examine the fallout for clues to Tuesday.

The technicals

The Dow: On Monday the Dow gave us a tall hammer.  However, the indicators continue to look bearish.  And the overall impression continues to look negative here.

The VIX: Amazingly, for the third day in a row, the VIX has been trading in positive correlation to the market - this time up 2.94% even as both the Dow and SPX were higher on Monday.  Now it was on a tall red candle that popped out of the descending RTC before nearly dropping back in... OK, hey I just don't get this.  I'm going to have to go into observation mode only here.

Market index futures: Tonight all three futures are higher at 12:21 AM EDT with ES up 0.16%.    On Monday ES put in a long-legged doji that traded outside its rising RTC for a bearish setup.  Also, the indicators  are now overbought.  But the question is, is this star signaling a reversal of the last two days of declines, or the longer four day rising trend?  The pin action in the overnight would seem to suggest the former.

ES daily pivot: Tonight the ES daily pivot drops from 1877.33 to 1872.08.  This fall is mostly responsible for ES now being above the new pivot, but that turns this indicator bullish anyway.

Dollar index:  After a big failed breakout attempt last Friday the dollah settled for a tiny star on Monday, down just 0.04%.  Being as we're now still oversold and near some good support, I'd have to say this means a move higher on Tuesday.

Euro: Like the rest of the market, the euro is in something of a holding pattern lately, with just a small star on Monday right around the 1.3878 resistance line.

Transportation: Some bearish divergence on the trans on Monday as they dropped 0.30% even as the Dow rose, giving us a hammer to follow Friday's hanging man.  This evinces confusion more than anything else.  The stochastic, often a better indicator, is about to form a bearish crossover - and a bearish RTC exit, so that's what I'm going with.  Trans lower on Tuesday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482 
May        0       2      1           0       0.000    -40

     And the winner is...

We seem to have another rubber duckie market on our hands right now.  The bears try hard to push him underwater, but he just keeps popping back to the top of the tub  The technicals are mostly bearish tonight, with the one exception of the futures.  And because the bears seem to be having so much trouble taking over lately, I'm just going to call Tuesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside.

Monday lower

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

• Monday uncertain.
• ES pivot 1877.50.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

I wasn't really sure which way we were going last Friday but the ultimate verdict was lower on a number of economic and geo-political factors.  So now we might have some more clarity to pick a direction for the new week, and we'll get right to it.

The technicals

The Dow: The Dow did it's part to dispel the uncertainty on Friday.  Though it lost only 46 points, it was a bearish RTC trigger along with a new bearish stochastic crossover.  With momentum, OBV, and RSI all headed lower now, this chart now looks bearish.

The VIX:  Ah, but the mystery deepens.  On Friday, for the second day in a row, the VIX continued its highly unusual positive correlation to the rest of the market.  Normally, VIX goes down, market goes up.  On Friday, they both went down.  IN fact the VIX is now in a five day losing streak.  And with support at 13 broken and falling indicators, there's no reversal in sight.  I've not heard any theories about why the VIX is suddenly correlated with the market.  In over 10 years of doing this, I've never seen this.

Market index futures: Tonight  all three futures are lower at 12:27 EDT with ES down 0.13%.  ES, like the euro below, is giving signs of heading lower.  Last Thursday we got a spinning top, and then another, larger one on Friday sitting just below Thursday's candle.  Now the new Sunday overnight is trading below that, and outsid3e the rising RTC for a bearish setup.  That has also sent all the indicators lower and formed a new bearish stochastic crossover.  That all spells lower in my book.

ES daily pivot: Tonight the ES daily pivot ticks up from 1877.33 to 1877.50.   That leaves us below the new pivot so this indicator is now bearish.

Dollar index: The dollar has an interesting day Friday, opening way up only to collapse back to Thrusday' close for a net loss of 0.02% on a tall red candle.  That keeps us in a descending RTC and kind of puts the kabosh on any aspirations of a higher dollar Monday.

Euro: The euro is now giving some signs of wanting to go lower.  Thursday was a gravestone doji followed by a tall star doji on Friday  While the overnight is a bit higher, it's on another star with a stochastic about to form a bearish crossover.  Resistance is quite strong around 1.3885 and I don't see the euro breaching that on Monday.

Transportation: On Friday the trans fell along with the Dow for a dark cloud-coverish affair that also generated a bearish RTC setup.   But the indicators are indecisive, so the general tenor is bearish but not conclusively so.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482 May        0       1      1           0       0.000    -22

     And the winner is...

Tonight the technicals are looking fairly bearish and there's some noise on the wires of things heating up in the Ukraine.  Also, we have now exited the historically favorable first two days of May and are now entering the "sell in May" zone.  So all things considered, I'm just going to call Monday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside.

Friday uncertain

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

• Friday uncertain.
• ES pivot 1877.33.  Breaking below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well on Thursday the Dow defied history by losing 22 points in a limited range session.  Let's see what that means for Friday.

The technicals

The Dow: On Thursday the Dow gave us a small spinning top that left us right on the lower edge of the rising RTC for a bearish setup.  The promise of the bullish stochastic crossover did not materialize and the indicators mostly turned lower so this chart is now looking bearish.

The VIX:  We also got some rare divergence with the VIX falling 1.19% on a day when the broader market was also lower.  I'm trying to understand what that means but in the meantime with no reversal candles, falling indicators not yet oversold and a good descending RTC going, it looks like the VIX could still go lower on Friday.

Market index futures: Tonight  all three futures are basically even at 12: 53EDT with ES dead flat and YM down just 0.02%. Thursday's red spinning top in ES and its failure to break resistance at 1880 suggests a possible move lower on Friday.  But the indicators are confused, with half moving lower and the rest moving higher.  This chart isn't at all clear.

ES daily pivot: Tonight the ES daily pivot rises from 1874.83 to 1877.33.   We remain above the new pivot, but just barely, so this indicator could turn bearish easily enough.

Dollar index:On Thursday the dollar put in a small bullish harami cross that while it remains inside the descending RTC suggests a reversal higher might be possible Friday.  Oversold indicators support that idea.

Euro: After big gains Wednesday the euro put in a gravestone doji on Thursday near the top of its rising RTC.  With indicators now topped at overbought and the overnight going nowhere, I'd say the euro goes lower on Friday.  And that would square with my call for a higher dollar.

Transportation: And finally more surprising divergence as the trans gained an impressive 0.671% to the Dow's 0.13% loss on Thursday.  With a razor thin rising RTC and three white soldiers, and no resistance til 7760, it looks like the trans could move higher again Friday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482
May        0       1      0           0       0.000    -22

     And the winner is...

There's something strange going on here that I don't quite get.  It's not normal for the VIX to go lower but the market to also go lower.  And it's not normal for the Dow and trans to be inversely correlated.  And I can't predict what I don't understand, so I'm just going to declare Friday uncertain and start over again next Monday.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 1874.83.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Ho hum - it turned out to be something of a sleeper Fed pronouncement Wednesday, with Mr. Market registering just a slight knee-jerk in response to the news.  Well at least we closed out April on a positive note and the Dow finally went positive (by 0.02%) for the year.  Now we face the merry month of May.  To quote those noted market analysts The Clash, "Should I stay or should I go?"  Maybe the charts can tell us.

The technicals

The Dow: The Dow actually did quite well on Wednesday with I believe a new record close, remaining in a new rising RTC and stopping just short of resistance at 16,590.  Interestingly we got a new bullish stochastic crossover from a high level and this is a high probability play that's usually good for a day or two of further upside.

The VIX:  Last night I wrote "the candles are looking bearish" and so they were with the VIX dropping another 2.19% on Wednesday on a red bearish engulfing marubozu that followed three straight failures to recapture the 200 day MA.  This also sent RSI lower before ever reaching overbought and formed a new bearish stochastic crossover.  So with no support til 13.05, I'd say the selling isn't done here yet.

Market index futures: Tonight  the futures are mixed at 12:39 EDT with ES down 0.07% but NQ up 0.07%.  ES had a nice day on Wednesday, advancing to the 1880 resistance zone.  Unfortunately, the new overnight candle is having some problems at that lofty altitude and is currently looking like a dark cloud cover.  And while we do have a completed bullish stochastic crossover, OBV,, momentum, and RSI have all turned lower.  Only money flow continues to move higher.

ES daily pivot: Tonight the ES daily pivot rises from 1870.67 to 1874.83.  Once again we remain above the new pivot (though by less than last night).  Still, this indicator continues bullish.

Dollar index: Last night I noted the rise in the dollar but also the apparent beginnings of a bearish evening star.  Well this star Paid off in a big way on Wednesday as the dollar dunked 0.44% with a big gap-down marubozu, effectively completing the pattern.  This is bearish but there's support not too far below, so Thursday could be a bottoming day.

Euro: Ah, that pesky euro.  It fooled me big time on Wednesday.  Instead of going lower it posted a big gain all the way back to1.3870.  That took it  to overbought levels and near resistance.  So we look at the overnight for clarity, but there's not much to be found as the euro is generally just wandering sideways in the overnight.  This one is too tough to call.

Transportation: On Wednesday the trans handily outperformed the Dow motoring 0.72% higher for a bullish exit to a descending RTC and a new bullish stochastic crossover with a long way to go til overbought.  So with two white soldiers now on the march, looks like there's room left to run higher on Thursday.

Performance:

With April now closed, here are my cumulative 2014 YTD trading results so far, compared to the Dow, my benchmark.  I've started including the results of my traditional IRA too.

        Trading    IRA       Dow
Jan.     0.50%             -5.30%
Feb.     3.94%             -1.94%
Mar.     6.01%    6.14%    -0.72%
Apr.     8.22%    8.46%     0.02%

 And here's a day-by-day plot of my trading account balance:

2014 trading balance, Jan. - Apr.

You can see we started off well but hit a rough spot late in January and then kind of stagnated for much of March, but April did quite well.

Again, my trading goals, in ascending order of difficulty, are:

1. Don't lose money.
2. Make money.
3. Beat the Dow.
4. Get an annual return around 30%.

So far this year we continue to do well with an annual run rate YTD of 24.66% trading, easily outperforming the benchmark.  While I'd like to see a 30% annual return, 24%+ is still not too shabby.  Even Bernie Madoff only promised his victims 20%.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      5           0       0.750    482

     And the winner is...

Well they say to sell in May, but they never say when in May.  Right now, based on tonight's charts I don't think it's going to be the 1st.  Most of the charts are looking bullish tonight and May 1st is historically quite bullish.  The only fly in the ointment is that ES seems to be losing some steam in the wee hours.  I always hate going against the futures, but given that the rest of the evidence is bullish, I will simply nervously declare Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside.

Wednesday uncertain

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

• Wednesday uncertain.
• ES pivot 1870.67.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night the charts were a bit on the confused side, but we were able to correctly resolve the ambiguities and were rewarded with an 87 point gain in the Dow on Tuesday.  We now move on to the last day of April to figure out how we might close out the month.

The technicals

The Dow: On Tuesday the Dow exited its (admittedly short) descending RTC for a bullish setup on increased volume that handily confirmed Monday's tomahawk candle.  (Recall that the tomahawk is my own invention.  It is bullish like a hammer, but with a small upper shadow showing.)  Money flow and OBV continue to rise while the stochastic appears to be squeezing in for a bullish crossover in a day or two.  Overall, the pattern here now looks bullish.

The VIX:  This was a chart that perplexed me last night.  In the end, the inverted hammer and failure to capture the 200 day MA won the day and the VIX sank 1.86%.  While the indicators continue to rise off oversold, the candles are looking bearish.  This notion is reinforced by VVIX which broke through two levels of support on Tuesday with a red marubozu.

Market index futures: Tonight  all three futures are lower at 1:31 EDT with ES down 0.17%.  On Tuesday ES had a small gain that was nevertheless enough to just break out of its descending RTC for a bullish setup, and also form a bullish stochastic crossover.  However, both money flow and OBV have now turned negative and the overnight isn't showing any follow-through, so it's not at all clear that ES can move any higher on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises from 1860.58 to 1870.67.   We just crossed under the new pivot at midnight so this indicator now turns bearish.

Dollar index: On Tuesday the dollar took a big gap up for a 0.15% gain that also just formed a bullish stochastic crossover.  But this candle forms 2/3 of a bearish evening star pattern so we need to wait for confirmation on Wednesday for this one.

Euro: I thought the euro would go higher on Tuesday but it was not to b as it instead very nearly fell out of its rising RTC.  The new overnight is in fact trading outside, so that's a bearish setup.  We also now have a new bearish stochastic crossover, so this one is looking lower for Wednesday.

Transportation: On Tuesday the trans confirmed Monday's reversal doji with a 0.43% gain.  The stochastic is flattening out though not at a bullish crossover yet.  But this move up wasn't enough to get us out of a descending RTC so I'm not all-in on the bull case here.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      9       3      4           0       0.750    482
 

     And the winner is...

Hmm - there are still some mixed signs on the charts tonight but the preponderance of evidence has shifted from bullish to bearish.  However, with a Fed announcement due on Wednesday, I am going to stick to my official policy which is to never make a call on Fed days.  The last two times I tried to break this rule I got my head handed to me.  So while I will come out and say that technically the market is looking lower, the official call is simply for Wednesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside in view of the "uncertain" call.

Tuesday higher

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

• Tuesday higher, low confidence..
• ES pivot 1860.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Wow - what a roller coaster ride.  We were up, then we were down, then we were up.  It was a great day for the day traders and an interesting one from the swing trading point of view.  We examine this further from tonight's charts.

The technicals

The Dow: On Monday the Dow just couldn't figure out where it wanted to go, finally ending 87 points higher, though if the bell had rung 30 minutes later, it might have been down 87.  It was just one of those days.  The conclusion is evident in the indicators, with momentum, money flow and OBV all rising but RSI and the stochastic falling.  The daily candle is similarly indecisive, so I just don't know where this one leaves us.

The VIX:  For the second day in a row the VIX challenged the 200 day MA and was rejected, losing 0.64% on a tall inverted hammer.  And confusion is evident here too as momentum is falling but the stochastic and RSI are rising.  I have to say, I don't get this chart either.

Market index futures: Tonight  all three futures are higher at 12:21 EDT with ES up by 0.12%.   On Monday ES gave us a tall tomahawk (a hammer with a protruding upper shadow).  RSI has just come off overbought but the other indicators are as confused as the other charts.  Still, with positive pin action in the overnight so far, this chart might be signaling a move higher for Tuesday.

ES daily pivot: Tonight the ES daily pivot dips from 1862.25 to 1860.58.  After popping above the old number at 3:15 PM Monday, we remain above the new pivot so this indicator now becomes bullish.

Dollar index: On Monday the dollar resumed its odd march lower backwards from last week by dropping 0.07% on a fat green spinning top.  The indicators are not yet oversold though and with a descending RTC in effect and no nearby support, my best guess is there's more downside to come.

Euro: The euro meanwhile continued its rally on Monday with a tall green spinning top  It has only just entered overbought so it looks like the rally isn't over yet.  Indeed the new overnight continues higher in a ruler-straight rising RTC.

Transportation: And finally, indecision was also on display in the trans which lost all of 0.02% on Monday on a classic doji.  Here too  half the indicators are rising and the other half falling.  This all leaves us with no good guidance for this chart at all.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      8       3      4           0       0.727    395


     And the winner is...

I had to think long and hard about the charts tonight because we're getting some mixed signals.  In addition to the usual suspects, I'll note that the NYSE A/D line looks like it might be moving higher and the TLT looks like it might be moving lower.  Ultimately, while the situation isn't all that clear tonight I think we have enough evidence, just barely, to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside - this is far from my ideal trade entry and I want more of an edge before committing again.

Monday lower

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

• Monday lower, low confidence.
• ES pivot 1862.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader stands aside.

Recap

Last Friday was a textbook-perfect example of the regression trend analysis technique.  Thursday traded outside the rising RTC for a bearish setup with a sdoji star.  And on Friday, boom, the bearish RTC trigger as the Dow dumped a quick 140 points.  Earnings, Putinoia, whatever - the technicals showed the way.  Now we gear up to do battle with Mr. Market once again as we bid farewell to April and say hello to (sell in?) May.

The technicals

The Dow: The Dow set the tone quickly last Friday, tanking right out the gate and it was all downhill from there.  This move solidified a bearish stochastic crossover and sent the indicators lower, though still overbought.  So this chart per se continues to look bearish.

The VIX:  I took a pass on this chart last Thursday night and it's just as well since I didn't expect a gap-up 5.56% jump that tested the 200 day MA.  That probe was rejected but we're still oversold and the inverted hammer notwithstanding, there's plenty of gas left in the tank for another crack at the MA on Monday.

Market index futures: Tonight  the futures are mixed at 12:11 EDT with ES up all of one tick but YM down one - call it essentially flat.  On Friday, unlike some other charts, ES only produced a bearish RTC setup, not a trigger.  Recall that a chart has to trade outside its RTC on two successive candles for a trigger.  Still with the indicators having clearly topped at overbought and continuing lower and the bearish stochastic crossover now in full bloom, this chart continues to look bearish for Monday.

ES daily pivot: Tonight the ES daily pivot falls from 1873.08 to 1862.25.   Even with that drop, the failure of ES to make any headway in the Sunday overnight keeps us below the new pivot so this indicator continues bearish.

Dollar index: Last THursday I said "I'd say there's more downside to come on Friday." and it's good I said it because the dollar lost 0.07% on Friday, though admittedly with a stubby green hammer.  he dollar also stopped right at support on Friday so with the indicators halfway between overbought and oversold, there's at least a chance of a move higher on Monday.

Euro: Last Friday the euro put in a doji in evening star position.  And so far in the overnight we seem to be getting some significant confirmation with the euro down 0.10% on a bearish engulfing pattern.  The indicators have also peaked before even reaching overbought - that's always a bearish sign.  So I'd say it's likely the euro goes lower on Monday.

Transportation: On Friday the Dow tanked but the trans got simply run over, losing 1.61%, almost double the Dow's loss.  That's a clear bearish RTC trigger and bearish stochastic crossover.  Even at that, we're still overbought, so I'd say it's likely there's more downside to come on Monday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      8       2      4           0       0.800    482


     And the winner is...

There are still no reversal signs in the charts tonight and the technicals continue to look bearish, so the only logical call is for Monday lower.

ES Fantasy Trader

Last THursday night I finally saw what is pretty much my ideal trade setup, a bearish RTC exit coupled with a bearish stochastic crossover, and the expected move had not yet started at the time I like to enter trades - around midnight to 2 AM.  So I took advantage of it was was rewarded on Friday with a nifty 12 point gain.  Not bad for 12 hours of work, most of which I spent sleeping.  Admittedly I left some money on the table as ES kept going lower, but such is life.  I can't complain.  Reminder, I post all these trades live on Twitter @nightowltrader.

BOT    10    false    ES    JUN14 Futures     1859.50    USD    GLOBEX    APR 25 12:53:30
SLD    10    false    ES    JUN14 Futures     1871.50    USD    GLOBEX    APR 25 00:32:06

Portfolio stats:  the account now rises to $111,625 after three trades in 2014, starting with $100,000.  We are now 3 for 3 total, 2 for 2 long, 1 for 1 short.  Tonight we stand aside, on the off chance of a DCB on Monday.

Friday lower

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

• Friday lower, medium confidence.
• ES pivot 1873.08.  Holding below is bearish.
• Next week bias lower technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader going short at 1871.50.

Recap

Well that sure was weird.  In more than 10 years of observing the markets on a daily basis I've never seen this.  On Thursday the Dow closed exactly unchanged - down to 1/100th of a point.  This is like flipping a coin and having it land on edge.  Now here's the problem - last night I called the Dow higher.  Well it didn't close higher but it also didn't close lower.  So was I right or was I wrong?  I guess we'll just go by Blackjack rules and call it a push.  IN my defense, I'll point out that both the Nasdaq and SPX did close higher.  Ah well - no point dwelling on it - let's move on to see what Friday might have in store.

The technicals

The Dow: Last night I called this the "ah-choo" market - the sneeze waiting to happen but won't.  Well Thursday was just one more "ahh..." as the Dow formed a textbook-perfect doji.  With largely sideways motion for two days now and indicators still extremely oversold, the logical next direction remains lower.  Oh, and Thursday's trade was a bearish RTC setup.

The VIX:  Last night I said there was still no clear reversal here and while the VIX did gain 036% it did it on  a long-legged doji that simply reflects more uncertainty.  Which way this chart goes on Friday is anybody's guess.

Market index futures: Tonight  all three futures are lower at 12:34 EDT with ES down 0.07%.  ES followed Wednesday's doji with a red hanging man in dark cloud cover position.  In addition, we've finally gotten the bearish stochastic crossover I've been waiting for.  Also, the overnight is trading outside the rising RTC and that's a bearish setup.  ES would need to close above 1879.50 on Friday to cancel this.  Indicators remain highly overbought and we've been seeing some bearish divergence in both OBV and money flow which have been dropping for three days now even as ES moved higher.  To me, this all spells lower for Friday

ES daily pivot: Tonight the ES daily pivot drops for the first time in a while, from 1873.75 to 1873.08.   And we are now below the new pivot so this indicator has turned bearish.

Dollar index: Last night I called the dollar bearish and it did lose 0.07% on Thursday, but did it with a spinning top that doesn't prove much by itself.  However, with indicators now having officially topped at overbought and a newly completed bearish stochastic crossover, I'd say there's more downside to come on Friday.

Euro: Ah, it's dojis galore tonight with one more from the euro on Thursday.  Coming higher than Wednesday, it now leaves the euro in a clear, if choppy uptrend.  With a completed bullish stochastic crossover, and rising indicators not yet overbought, I'd say the euro's looking higher for Friday.

Transportation: If there's any guidance in the charts tonight, it comes from the trans which on Thursday dropped 0.42% from highly overbought levels.  That was enough to exit the rising RTC with a bearish setup and send both money flow and OBV lower.  At this point I'm willing to claim that the trans are looking lower on Friday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      7       2      4           0       0.778    342

     And the winner is...

The number of bearish signs I'm seeing across the board has increased since last night, and the signs are becoming more unambiguous.  The market is now looking pretty toppy to me and seems to be ready to roll over.  Accordingly, we're just going to call Friday lower and call it a week.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we go short at 1871.50.

Thursday higher

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

• Thursday higher, low confidence.
• ES pivot 1873.75.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well that's really odd, my entire post for Wednesday seems to have simply vanished into the ether without a trace.  When I hit "Publish" I kind of expect something to happen.  Oh well.  For the record, my call was for Wednesday as uncertain, which proved to be about right as the Dow lost just 13 points.  I also mentioned how the market was feeling toppy.  So let's see now if that's still the case or if we can motor higher on Thursday.  Assuming I can actually get this stuff out onto the web.  Thanks a lot Google - you big dorks.

The technicals

The Dow: OK, so this looks like an "ah-choo" market now.  You know how it is when you need to sneeze but maybe you don't and you just go "ah... ah... ah..." and everyone is waiting for the "choo"?  Well that's what this is.  We exited the rising RTC on Wednesday - unless you redraw it to account for Monday's gains, in which case we're now still inside.  Doh!  Meanwhile RSI keeps going higher, now up to 94.55.  And the stochastic has just crossover to bearish - if you can call a %K of 92.07 vs. a %D of 92.37 a crossover.  We are now literally teetering on the edge of a trend reversal but the break just doesn't seem to want to happen.

The VIX:  The VIX is no help resolving this mess either.  It did gain 0.61% on Wednesday but did it with a big gravestone doji.  We're near support and the indicators are all oversold but there is still no clear reversal here.

Market index futures: Tonight  all three futures are higher at 1:06 AM EDT with ES up 0.28%.  A perfect doji star for ES on Wednesday warns of a reversal, a notion supported by extremely overbought indicators and a stochastic that's ready to do a bearish crossover (but hasn't yet).  But the new overnight is not confirming the reversal and we do remain in a rising RTC so it is premature to calla  top right here, particularly with no resistance til 1884.

ES daily pivot: Tonight the ES daily pivot rises from 1871.17 to 1873.75.  We remain above the new pivot so this indicator is still bullish.

Dollar index: The dollar continues its weird antics, this time by losing 0.07% for a third consecutive loss on three consecutive green candles.  I don't even know the candlestick name for this - three white soldiers marching backwards?  In any event, there's a now-completed bearish stochastic crossover and indicators having peaked at overbought so let's just say this chart now looks officially bearish.

Euro: And the euro, which earlier this week looked ready to break down, climbed right back into its tight range about 1.3816.  There is though a completed bullish stochastic crossover and indicators just barely off oversold, so it looks bullish for Thursday.

Transportation: And finally in an interesting bit of bullish divergence, the trans on Wednesday gained 0.10% to the Dow's 0.08% loss.  However, that came on a spinning top that left RSI at 100 - it doesn't get any more overbought than that.  We also have a stochastic that just barely squeaked out a bearish crossover.  But both OBV and money flow continue to rise.  So this chart is somewhat conflicted but I'd say we have a good warning of a move lower now.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      7       2      4           0       0.778    342


     And the winner is...

Tonight we're once again seeing some classical reversal signs but Mr. Market is having none of it.  It may be a case where positive economic news just keeps on propping up the market enough to stave off the pullback that seems overdue.  So having learned my lesson about fighting trends, I'm just going to go way out on a limb and call Thursday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside because we had a big pop right at the close on Wednesday.  That was the time to open a trade, not late at night.  The timing was just off on this one.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1862.17.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Last night I said that the logical call was for Monday higher.  Well logic prevailed as it usually does and Putinoia was held at bay long enough for the Dow gain 41 points.  Now let's see where logic might lead us on Tuesday.  Bring on the charts! (clap clap!)

The technicals

The Dow:  Last night I punted on this chart in the face of a red spinning top.  Turns out that reversal warning was canceled with a respectable 0.25% advance.  That managed to clear resistance at 16,439 and kept us inside a rising RTC.  Indicators are still not yet at overbought though the RSI has actually looked to have topped and the stochastic is curving over for a bearish stochastic crossover.So at this point this chart continues to look bullish though there's a flashing yellow caution light on now.

The VIX:  Wow - this is weird.  Last night I mentioned a rare side by side white lines pattern in the dollar index (see below).  And on Monday we got a nearly identical side by side black lines in the VIX.  So as the dollar was bullish, this is bearish, supported by indicators that are still not yet oversold.  With support still not til 13, I'd say the VIX is going to take a peek at that number on Tuesday.

Market index futures: Tonight  the futures are mixed at 12:26 EDT, with YM down 0.02%, NQ up 0.07% and ES dead even.   ES is now on a strong five day winning streak that has finally just pushed the indicators to overbought.  We need to continue moving higher now to avoid a bearish RTC exit.  Also, the stochastic is flattening out in preparation for a bearish crossover in the next few days, but not quite yet.  So for now this chart continues bullish, though the tide seems to be turning.

ES daily pivot: Tonight the ES daily pivot rises from 1856.33 to 1862.17.  Once again we remain above the new pivot so once again this indicator is bullish.

Dollar index: Last night I mentioned an unusual pattern - the side by side white lines.  And sure enough, they paid off with a 0.16% gap-up gain for the dollar on Monday.  That pulls the dollar into overbought territory but the stochastic has yet to start positioning for a bearish crossover.  With 2/3 of that big down gap from two weeks ago yet to be filled I have to think there's more upside left here for Tuesday.

Euro: I thought the euro would move sideways for a bit but instead it broke to the downside on Monday to close at 1.3794 after briefly touching its lower BB.  That left the indicators quite oversold and suggests that a reversal is on the way - if not Tuesday then more likely Wednesday.

Transportation: Last night I wrote of the trans "I'd say we're headed up to take look-see [at 7713]". Well at 7691 for a high, I'd say we got within shouting distance.  That bumps out winning streak to five, and leaves resistance at 7700 and the upper BB at 7735.  Indicators are still not overbought yet so it looks like there's still enough gas in the tank to take a run at at least one of those numbers on Tuesday.

Accuracy:

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      7       2      3           0       0.778    342


     And the winner is...

We still don't have any clear bearish signs on the charts tonight though we are starting to have a few hints of reversals.  It's not clear to me how much upside is left.  At this point, it looks like Tuesday could be a doji day.  Accordingly, I'm just going to call it uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside in view of the "uncertain" call.

Monday higher

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

• Monday higher, low confidence.
• ES pivot 1856.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Hmm - last Wednesday night I said Thursday would close lower unless ES broke above its pivot.  Well, ES did just that early Thursday morning and the SPX did indeed close higher.  However, my forecast is for the Dow and that closed lower.  On the other hand, that was entirely attributable to a sudden collapse in IBM, so I think the basic premise was still correct.  I'm sort of conflicted as to whether to call this right or wrong.  I think (since I make the rules) we'll just call this one a push and move on to Monday where hopefully we can get back into a normal market rhythm, but without the blues.

The technicals

The Dow: Last Thursday the Dow gave us a small spinning top, at least hinting at a reversal after a nice three day run.  But we remain in a rising RTC and the indicators are not yet overbought, so this one requires confirmation.  Can't say for sure right now.

The VIX:  And the VIX continued its plunge on Thursday, down another 5.78% and unable to reclaim the 200 day MA.  There's support just above 13 and I think we're going to test that on Monday.  No real reversal signs here yet.

Market index futures: Tonight all three futures are higher at 12:34 AM EDT, with ES up by 0.11%.  ES continues to look bullish after a fourth green candle in a row on Thursday.  There's no resistance til 1865 and with indicators not yet overbought I see no reason why we can't hit that number on Monday.

ES daily pivot: Tonight the pivot rises again from 1850.08  to 1856.33.  We remain above the new pivot so this indicator sis now bullish.

Dollar index: The dollar just doesn't want to retrace last week's big gap up and put in an unusual pattern - side by side white lines.  That is bullish, and the rising indicators support that.

Euro: The euro has been finding support at 1.3812 for four days now after a failed breakout attempt on Thursday.  It looks like we're in for some sideways action here for a day or two.

Transportation: And finally the trans motored on higher Thursday to extend their streak to four.  Indicators continued climbing and with no resistance til 7713 (which is also the upper BB) I'd say we're headed up to take look-see there.


Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    5      10      6           0       0.333     64
February   5       2      2           1       0.750    107
March     12       3      6           0       0.800    431
April      6       2      3           0       0.750    301

     And the winner is...

Tonight the charts continue to look bullish and in the absence of any reversal signs the logical call is simply for Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $105,625 after two trades in 2014, staring with $100,000.  We are now 2 for 2 total, 2 for 2 long, 0 for 0 short.  Tonight we stand aside.