Tuesday higher

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

• Tuesday higher, low confidence.
• ES pivot 1886.92.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well we finally got on the board for May with a correct call as the Dow gained 112 points on Monday for another record close.  he headline risks of the Ukraine didn't amount to much so that crisis is averted for now.  So we simply move on to Tuesday and follow wherever the charts may lead us.

The technicals

The Dow: On Monday the Dow remained well within a rising RTC and disconfirmed Friday's hanging man to finish at another record close, just barely reaching its upper BB.  But even this big gain didnt' quite push us to overbought.  The question now is do we creep up the upper BB or bounce off?  My guess is that after a big move like this, some consolidation is in order, particularly off the upper BB..

The VIX: Last night I asked if the VIX support level would hold and opined that "A bearish stochastic crossover and a VVIX lacking support both suggest "no" despite oversold indicators.".  Good suggestion, as the VIX .gapped down 5.34% on Monday to just touch its lower BB right at a new support level of 12.23.  The resultant hammer suggests some retracement may be coming on Tuesday though.

Market index futures: Tonight all three futures are higher at 12:11 AM EDT with ES up 0.09%.  ES had a big day Monday finally breaking out of a nervous trading range that has plagued us and bedeviled me for over two weeks now.  We managed to take out the March highs and nearly hit the upper BB.  That also solidified the bullish stochastic crossover and broke money flow out of a slump that began at the start of May.  Now while that all looks bullish, we are in fact bumping right up against the upper BB in the overnight and it's been declining for a few days now.  These "roofing" upper BB's aren't too conducive to attempts to climb them so I'm not really sure how much upside is left here.

ES daily pivot: Tonight the ES daily pivot jumps from 1870.33 to 1886.92.    Once again we remain above the new pivot so once again this indicator remains positive. 

Dollar index:  Last night I wrote that "Monday will see a pause in the dollar" and I'd say that exactly unchanged fits the bill.  The failure of the dollar to advance along with indicators nearing overbought increases the odds of a drop to retrace some of last Friday's big gap up.

Euro:And on Monday the euro similarly went nowhere on a tiny star doji that only moved the indicators more oversold.  We've now glanced off the lower BB so the next move seems to be more likely higher from here. We do need to get past the pivot at 1.3758 first though.

Transportation: The trans shifted into high gear on Monday, powering nearly 2% higher right through their upper BB and moving the indicators overbought.  Recent history suggests the trans respect the upper BB so I'd look for a rest, possibly a doji, 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        1       3      3           0       0.250    -46

     And the winner is...

While we've clearly developed a bit of bullish momentum recently, we're also now nearing some stopping points in the form of resistance levels and we have some reversal warnings in the form of dojis on the charts tonight.  I think that we're near s short-term top but who knows whether it's Tuesday.  Accordingly, and in the absence of any overtly bearish signs, I'm just going to call Tuesday higher, with the expectation of a much smaller move than Monday and possibly a doji day.

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 higher

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

• Monday higher, low confidence.
• ES pivot 1870.33.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

I kind of ran out of time last Thursday and wasn't able to put my post together to call Friday.  Turns out Mr. Market was interested in revisiting the all-time highs even after an inverted hammer on Thursday suggested lower.  That leaves us in an interesting state, which we will now proceed to investigate for Monday.

The technicals

The Dow: The combination of green marubozu, inverted hammer, then higher hanging man is highly unusual.  The last one I found was over a year ago, in February 2013 The next day back then was higher and I suspect it might be here too.  We have now exited a descending RTC for a bullish trigger and  also gotten a complete bullish stochastic crossover.  We are admittedly right on the resistance that stymied the Dow twice before last month but this time we're in much better shape, indicator-wise implying there's more gas in the tank for a push higher on Monday.

The VIX: Whew - the VIX now appears to be back in gear, in inverse correlation, falling 3.80% on Friday as the markets rose.  And right back to recent support too.  Will this level hold?.  A bearish stochastic crossover and a VVIX lacking support both suggest "no" despite oversold indicators.

Market index futures: Tonight all three futures are higher at 12:55 AM EDT with ES up 0.20%.  ES ended last week with a spinning top on Thursday and a hammer on Friday.  The latter provided a bullish RTC setup and the new overnight is the trigger.  We also have a nascent bullish stochastic crossover forming so this chart would appear to be gearing up for another stab at resistance around 1880.

ES daily pivot: Tonight the ES daily pivot dips from 1874.00 to 1870.33.  After breaking above the old number last Friday, that still leaves us above the new pivot so this indicator is now bullish.

Dollar index:  Wow!  On Friday the dollar took a monster sky rocket 0.70% gap up to bust out of a nearly month-long descending RTC for a bullish setup.  It also confirmed a bullish stochastic crossover in a big way.  These yawning gaps always worry me though as they invite retracement, so I'd have to guess that Monday will see a pause in the dollar.

Euro:And on Friday the euro gave us a dark cloud cover.  The new overnight is wide-ranging but ultimately lower, seeming to confirm Friday's pattern.  I'd have to say the euro's going lower Monday.

Transportation: The trans chart from Friday is particularly confused with a tall gravestone doji Thursday followed by a hanging man Friday.  Indicators  are mixed, with half moving higher and the rest moving lower so this chart is just too tough for me to digest tonight.

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       3      3           0       0.000   -158

     And the winner is...

The original Anschluss ballot, with sample voting instruction.

 

Technically, the markets are looking fairly bullish tonight.  The only question right now is the headline risk posed by the Anschuluss referendum in Austria, uh I mean Ukraine, this evening.  Now Adolf Putin has admittedly promised he was withdrawing his Panzers from the border last week but golly, I'm not sure the man is entirely trustworthy.  But for the time being the only logical course of action seems to be to stick our heads in the sand mumbling something about "Peace in our time" and call Monday higher.  That could change...

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.

No call Friday

I'm terribly sorry but my schedule just got extraordinarily backed up on Thursday and I never really had the time I need to devote to the markets and to put together the daily blog post.  So I'm just taking a personal day tonight.  We'll return with the customary chart rundown as usual on Sunday night.  See you then!

Thursday uncertain

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

• Thursday uncertain.
• ES pivot 1868.17.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Sigh - sometimes you just can win for losing.  I thought the market was going lower on Wednesday, but instead it went higher, with the Dow up triple digits, for whatever reason.  Doh!  Well that was then, as they say, this is now.  Perhaps the charts will give us the key to Thursday for a change.

The technicals

The Dow: On Wednesday the Dow gave us a big bullish harami that was enough to bend the indicators higher after  week-long slide off overbought..  It still counts as a descending RTC but the candle is a bullish reversal warning.

The VIX: I blew this one too - the VIX did not go higher on Wednesday, it went lower by 2.90% but only after a failed test of the 200 day MA that left us with a giant inverted hammer.  That said it's now looking like a developing symmetrical triangle, which makes me think the break could very well be lower.

Market index futures: Tonight all three futures are higher at 12:41 AM EDT with ES up just 0.04%.  On Wednesday ES retraced most of Tuesday's losses thereby canceling what finally looked like a break lower.  We're now back in a funny nervous sort of trading range sort of like we saw March 18th through 26th.  This chart is remarkably opaque, at least to me tonight.

ES daily pivot: Tonight the ES daily pivot dips exactly one point from 1869.17 to 1868.17.  We broke above the old number Wednesday afternoon, so this indicator is now bullish.

Dollar index:  Well hallelujah - I got one right.  Last night I wrote "the dollar's going higher on Wednesday." and it did, recovering 0.14% after a trouncing on Tuesday.  But that still leaves us on the lower BB with indicators extremely oversold.  So with the inverted hammer confirmed, I have to think Thursday's going higher.

Euro: On Wednesday the euro took a breather with a stubby spinning top near the high of Tuesday' big advance, centering around the upper BB.  But it looks like that was it, as the overnight is now moving lower as the overbought indicators begin to assert themselves.

Transportation: And last but not least, I missed the trans too, which moved higher by 0.57% on Wednesday, not lower. That counts as a bullish RTC setup even as the indicators remain overbought.  So they cancel each other out and this chart is too tough to call.

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       3      2           0       0.000   -158

     And the winner is...

Gosh, I don't know - I'm just not feeling the love tonight.  I hate to do it again but tonight I'm just going to have to shrug and call Thursday uncertain.  Remember, there's no rule that says you have to trade.

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 lower

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

• Wednesday lower, medium confidence.
• ES pivot 1869.17.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• ES Fantasy Trader standing aside.

Recap

Well I'm glad I called Tuesday as uncertain because I wasn't expecting as 130 point dump from the Dow.  The nice thing is that it resolved a number of ambiguities in the charts, as we shall now examine with an eye to Wednesday.

The technicals

The Dow: I guess I was right last night when I wrote "the overall impression continues to look negative here."  Tuesday's big read marubozu confirmed the bearish stochastic crossover, kept us way off the left edge of the descending RTC and drove the indicators further off overbought.  Now there's some support at 16,360 but I see no reason why we can't reach that number on Wednesday.

The VIX: Well some sanity finally returned to the VIX on Tuesday as it rose 3.84% to the Dow's 0.78% drop with a green hanging man.  But it also gave us a descending RTC exit for a bullish trigger, so go figure (hey that rhymes).  My overall impression though is that the VIX wants to go higher again on Wednesday.  This is supported by a VVIX that has itself found support and is now quite oversold.

Market index futures: Tonight all three futures are lower at 12:21 AM EDT with ES down  0.07%.   After waffling inconclusively for several days, ES finally broke down on Tuesday giving up nearly all of last weeks gains.  The indicators are all once again lined up and headed lower and there are no candlestick reversal signs so this chart just looks bearish tonight.

ES daily pivot: Tonight the ES daily pivot falls from 1872.08 to 1869.17.  Even with that drop we remain below the new pivot so this indicator turns bearish.

Dollar index:  Whoa!  On Tuesday the dollar just fell out of bed with a Grand Canyon gap-down that traded entirely way below its lower BB and ending at its lowest level since last October with a small gravestone doji. That pushed the indicators further into oversold and gave us 2/3 of a bullish morning star.  This kind of gap just begs retracing, so if I had to guess I'd say the dollar's going higher on Wednesday.

Euro: And on Tuesday the euro broke out of its railroad track-straight rising RTC - but to the upside, stopping right at resistance at 1.3934, also it's highest level since last October.  That also hit the upper BB and took the indicators overbought.  I'd expect the euro to take a rest after this move and the overnight so far seems to be supporting that idea, down 0.05% at the moment.

Transportation: After a confusing sequence of inverted hammer, hammer, on Tuesday the trans finally rejected Monday's reversal sign and confirmed the trend - lower.  We also now have a new bearish stochastic crossover and with the new candle just a vaguely spinning toppish sort of thing, I'd say this chart has lower to go.

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      2           0       0.000    -40

     And the winner is...

Tonight we see mostly bearish signs in the charts.  The Morningstar Market Fair Value Index has come back to 1.02, but that's still a bit high for a reversal.  And the SPX Hi-Lo index similarly has not dropped far enough yet to call an imminent reversal.  Same for the NYSE A/D line - it's down, but not extremely so.  Dr. Copper's drifting lower, the TLT is in an uptrend, and Wednesday is historically quite bearish so all in all I really don't think it's unreasonable to call Wednesday lower.

Laff of the week

Here's a comment I got in an email from blogspot this evening:

Anonymous has left a new comment on your post "The Rise and Fall of Eastman Kodak":

Hi there, i read your bllog from time to time and i own a similar one and i was just curious iff
you get a lot of spam remarks? If soo how do you prevent it, any plugin
or anything yoou can recommend? I get sso much lately it's driving mme crazzy so any assistance is
very much appreciated.

Here is my web-site :: [gratuitous spam site redacted]
Publish
Delete
Mark as spam    <--- here="" i="" pal.="" right="">

OK well since you ask, oh my yes indeedy I do get lots and lots of spam.  It drives me crazzy too.  My first suggestion is to clean your keyboard or buy a new one with better debouncing, and run spell-check on your posts.  Then, enable comment moderation so you don't automatically publish nonsense from spammers posing as bloggers trying to prevent spam.  Thanks for the minor amusement.

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.

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.