Friday, August 29, 2014

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1994.58.  Holding below is bearish.
  • Next week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Repeating a pattern we've seen regularly lately, the Dow took a big dump right out the gate and the spent the rest of the day clawing its way back to even.  Though on Thursday it didn't quite make it, ending down 42 points for the lower close I predicted.  With just one day left in the week and the month, we now ponder where Friday may go, besides off to the beach in preparation for the long Labor Day weekend.

The technicals

The Dow: Thursday's candle did more technical damage than the meager 0.25% loss would suggest.  First, it was a hefty hanging man.  Second, it never managed to even reach Wednesday's highs.  Third, indicators remain highly overbought but have now started coming back down.. And fourth, the stochastic looks like it's trying to untangle itself with a bearish crossover.  That all adds up to lower in my book.

The VIX:  Last night I wrote "I think there's more room to run higher here".  But I also wrote that the VVIX didn't seem to support that.  Turns out, I was right both ways.  T he VIX did gain 2.29% on Thursday but did it with a gap-up red inverted hammer.  Indicators have now come off oversold and we have here a suggestion of a stalled advance, but one which requires confirmation on Friday.

Market index futures: Tonight all three futures are higher at 12:20 AM EDT with ES up 0.06%.  On Thursday ES exhibited the signs of out-of-gas-itis I mentioned last night, failing to take out Wednesday's highs on a tall doji.  Indicators remain quite overbought though the overnight seems to be showing new signs of life and confirming the doji.

ES daily pivot: Tonight the ES daily pivot drops from 1997.00 to 1994.58.  Having moved back above the old number this evening, we remain above the new pivot so this indicator turns bullish.

Dollar index:  I thought the dollar would go lower on Thursday but instead it put in a long-legged doji around the center of Wednesday's candle for a 0.08% gain.  But it also gave us a completed bearish stochastic crossover and with indicators still overbought, I'll go ahead and claim once again that the dollar goes lower on Friday.

Euro: Meanwhile the euro has clearly found support in the 1.3185 region, trading just above that level on Thursday for a classic spinning top.  Trading outside the descending RTC makes it a bullish trigger and the still oversold indicators support that.  The new overnight is trying to break above its pivot but doesn't seem to have much oomph behind it.  So this one is just too tough to call for Friday.

Transportation:  Last night I wrote "I think there's more downside here on Thursday" and it was good thinking because the trans dropped 0.27% to settle just under their recent trading range with a red hammer.  Indicators are now clearly moving from overbought to oversold so the general gestalt here remains negative.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639
August     8       7      2           2       0.588     81

     And the winner is...

The overall impression tonight is fairly negative.  However, the futures are guiding higher.  The problem now is that I expect Friday to be an even lower volume day than Thursday as traders pack up and head out on vacation.  That increases the probability that random gyrations will be magnified and distort the charts.  Therefore I'm just going to call Friday uncertain and start enjoying my own weekend.  Happy Labor Day to all and see you again next Monday night.  That's all she wrote.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, August 28, 2014

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence.
  • ES pivot 1997.00.  Holding below is bearish.
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

So the Dog Days of summer bark on, with another snoozer of a day on the books with teh\\he Dow up just 15 points and the SPX up all of 0.1 points.  I get the feeling that the major players are already packing for the Hamptons, or the Turks and Caicos, or wherever it is that well-heeled traders go on vacation on their Gulfstreams and Citations - not that I'd know anything about that.  But we mere plebians simply trudge on as we now contemplate the next to last day of August.

The technicals

The Dow: Last night I wrote "the only reasonable call here is bullish."  And while a 0.09% gain isn't exactly earth-shaking, it's still higher and reason prevailed.  In any case it was enough to keep us inside the rising RTC though we're now flirting with the right-hand edge.  We now have a small spinning top but it's not really enough to make me call this chart bearish.

The VIX: Last night I wrote "I have to think the next move here is higher" and whaddaya know about that - the VIX gained 1.29% on Wednesday, though with a spinning top of its own.  But this traded outside the descending RTC so that's  bullish trigger and with indicators still oversold I think there's more room to run higher here.  Unfortunately, VVIX continues lower and thus does not support that idea.

Market index futures: Tonight the futures are mixed at 12:14 AM EDT with ES down  0.03% but YM up 0.01%- basically flat.  It's been looking to me for the past few days like Mr. Market was running out of gas and Wednesday's fat  hanging man in ES may be the proof.  We closed just above the rising RTC but the overnight is now trading outside it for a bearish setup.  With indicators now starting to show some signs of coming back to life at overbought, it would appear that ES is getting ready to roll over.

ES daily pivot: Tonight the ES daily pivot dips from 1997.83 to 1997.00.  And that slight move just wasn't enough to get ES back above the new pivot, so this indicator is now bearish, though only by half a point so just like last night the pivot is again in play.

Dollar index:  On Wednesday the dollar put in a decisive end to its recent two-week run-up with a gap-down 0.28% loss that dropped it right out of its rising RTC for a bearish setup.  With indicators now having apparently peaked at extreme overbought, it sure looks to me like there's more downside to come here.

Euro: And as the dollar dropped, the euro put in a nice bullish engulfing candle on Wednesday to close at 1.3197 with a bullish RTC setup to boot.  That all spells higher in my book.

Transportation: On Tuesday we saw something of a bearish warning from the trans.  Wednesday gave us a doji with a small 0.08% gain as we continue a week-log sag out of the last rising RTC.  With indicators now clearly coming off overbought, I think there's more downside here on Thursday.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639 August     7       7      2           2       0.563     39

     And the winner is...

Tonight we're seeing a whole bunch of reversal warnings, but coming in the form of spinning tops they require confirmation.  The VIX looks ready to move higher, though that's not supported by VVIX.  ES definitely appears to be running low on gas at this point.  And the next to last day of August is historically bearish so I'm just going to go out on a limb and call Thursday lower.  I'll be happy to be proven wrong.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday, August 27, 2014

Wednesday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher only if ES remains above pivot, else lower.
  • ES pivot 1997.83.  Breaking below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

OK, I'll be the first to admit, the market fooled me on Tuesday.  I figured that with looming resistance, Mr. Market might want to regroup before another push higher.  But no such luck and the Dow managed a 30 point gain while the SPX put in a record close to crack the 2K mark.  This leaves us in an interesting spot so let's see how the charts sort out for Wednesday.

The technicals

The Dow:  The Dow took off right out the gate on Tuesday but then gave back most of its gains though it still managed a 0.17% gain.. That leaves resistance at 17,150 intact.  We now have an inverted hammer but these reversal warnings haven't counted for much since the July 31st bottom.  We remain in a rising RTC and the upper BB is rising away, now at 17,184.  So with the indicators continuing at broken-overbought, it looks like the only reasonable call here is bullish.

The VIX:  And on Tuesday the VIX lost 0.60% but on an unusual green inverted hammer.  That follows Monday's actual hammer and with the trade coming entirely outside the descending RTC that gives us a bullish trigger.  Indicators remain quite oversold, so I have to think the next move here is higher..

Market index futures: Tonight all three futures are essentially flat at 12:15 AM EDT.  Actually YM is up just 0.02% and ES is dead even. With just three losses in the last 13 sessions, the current rising RTC looks like it's headed to the moon, Alice.  There's simply zero bearish signs on this chart right now.  The overnight action so far seems to be lacking in enthusiasm though but I'm wary of fighting this particular tape.

ES daily pivot: Tonight the ES daily pivot rises again from 1994.50 to 1997.83.  We remain above the new pivot so that's nominally bullish but  at less than a point over, the pivot is clearly in play.  The overnight action so far seems to be lacking in enthusiasm though but I'm wary of fighting this particular tape.

Dollar index:  And what of the dollar?  On Tuesday it simply kept moving higher, completely ignoring Monday's big gap up.  In fact the entire trade was above the upper BB.  Indicators remain broken-overbought and we remain well within a rising RTC so I have to think this chart continues to look bullish.

Euro: And as the dollar rose, the euro sank - again.  Down to 1.3174 on Tuesday to continue a descending RTC back to 8/18. And a longer one back to 7/1.  And an even longer one back to 5/8.  Things look even worse on the weekly chart (never a good sign).  We're now hanging on year-long support.  If that gives way (and there's no reason why it shouldn't), we're headed for 1.3117.

Transportation: In some continuing divergence, the trans on Tuesday lost 0.39% on a red candle that keeps them in a week-long consolidation area and solidifies the 8460 area as resistance.  This failure to advance while the rest of the market moves higher is a bearish sign, Dow Theory-wise.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639
August     7       7      2           1       0.533     39

     And the winner is...

Tonight is a tough call.  We're seeing mostly bullish signs with the exception of the trans, which is always a concern when it diverges from the Dow, and the VIX which looks to be flattening out its recent daily declines.  But with the futures seeming to be weakening a bit and ES is close proximity to its pivot, I think it's time for another conditional call.  If ES can manage to stay above its pivot by mid-morning Wednesday, we'll close higher.  If it breaks under though, then we close lower.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday, August 26, 2014

Tuesday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday lower, low confidence.
  • ES pivot 1994.50.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

After a down Friday, the Dow rebounded on Monday with a 76 point gain to keep the uptrend intact.  We also saw the SPX hit the 2000 mark for the first time, an historic moment.  So as the rally off the July Putinoia lows marches on, let's see now if we can keep it going on Tuesday.

The technicals

The Dow: The Dow shot up out the gate on Monday. before retracing about half the gains, still good for a 0.44% advance.  The high was just short of resistance and the upper BB, both around at 17,143.  Indicators remains highly overbought and useless.  Once they hit the end stop, there's no way to tell if they mean anything anymore.  So since we remain inside the rising RTC, I have to think there's still more upside left here.

The VIX:  But the VIX was a different story.   It ended up 2.01% in an unusual move higher on a day when the market was also higher.  The candle was a clear hammer that perched right on the edge of the descending RTC for a bullish setup.  RSI has also been rising for over a week now and is now just off oversold.  So the takeaway here is that the VIX is due for a move higher on Tuesday..

Market index futures: Tonight all three futures are lower at 1:14 AM EDT with ES down  0.06%.  On Monday ES rejected last Friday's hanging man with another leg up that nearly hit the upper BB.  Indicators are all broken at overbought and we remain in the center of the rising RTC.  However, it looks like ES is confirming Monday's inverted hammer.  It looks as if it may be needing a rest after the exertion of Monday's record high.

ES daily pivot: Tonight the ES daily pivot rises from 1986.92 to 1994.50.  That jump, coupled with the decline in ES now puts us below the new pivot, so this indicator turns bearish.

Dollar index:  Wow - on Monday the dollar took a big boing, gapping up 0.26% on a green marubozu that left the upper BB in the dust. Indicators are now highly overbought and this big gap suggests a possible retracement Tuesday.

Euro: And of course the poor downtroden euro gapped down on Monday to close at 1.3194  I had to back out to the weekly chart to find the last time we were here - it was September 2013.  We remain inside a descending RTC and while indicators are now highly oversold, there's really nothing here to suggest a move higher.

Transportation: On Monday the trans put in a decent 0.29% gain but remain in a congestion zone with resistance at 8470.  Friday's doji yielded Monday's spinning top, but with a bearish stochastic crossover.  I'd say the odds now favor a move lower.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639 August     7       6      2           1       0.538     69

     And the winner is...

We're now seeing a bunch of bearish signs in the charts.  And it's not uncommon for markets to take a breather after setting record highs.  In particular, SPX 2000 is a notable milestone.  So I think I'm going to call Tuesday lower.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday, August 25, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence.
  • ES pivot 19886.92.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well that whole Jackson Hole hoopla last Friday proved to be a resounding dud.  Not even Super Mario could move this market much as the Dow ended the day down all of 38 points.  I'm glad I called it "uncertain".  Now that all that uncertainty is over and done with maybe we can get back to business as we finish out the month of August.

Tonight we feature an abbreviated edition of the Night Owl.  I just got wrapped up in that pesky stuff called Real Life on Sunday and kind of ran out of time, so we'll skip the detailed charts and cut straight to the chase, plus the usual performance update.   The full edition will resume tomorrow.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639
August     6       6      2           1       0.538      7

     And the winner is...

While I didn't outline my reasoning tonight the way I usually do, I did look everything over and it looks like there are some decent bullish signs out there.  Enough in fact for me to just call Monday higher.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Friday, August 22, 2014

Friday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 1980.75.  Holding above is bullish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last night I made a conditional call, claiming we'd finish higher if ES managed to stay above its pivot.  Well ES made a weak attempt at breaking the pivot at exactly 3:25 AM when it touched the pivot at 1980.75 on the dot - and that was it.  It bounced off that and the result was another 60 point gain for the Dow.  Don't tell me the bots don't have the pivot programmed in.

So anyway let's just cut to the chase.  With Auntie Janet's big pronouncement coming down from Mount Jackson-Holius on Friday, the only possible call is "uncertain", the same as I do on regular Fed days.  Therefore I'm skipping the usual chart-by-chart run-down tonight, though I will mention that technically I'm still not seeing any real evidence of bearishness.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132

July       6       4      4           3       0.692    639 August     6       6      1           1       0.538      7

     And the winner is...

Yeah, it's clearly got to be Friday uncertain given the headline risk involved.  Of course the general gestalt of the charts remains bullish so if I absolutely had to guess, I'd say we're going higher on Friday - but you didn't hear that here.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, August 21, 2014

Thursday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher only if ES stays above pivot, otherwise lower.
  • ES pivot 1980.75.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Well I guess that's what I get for playing the odds.  Despite Fed minute days as being historically negative, this Wednesday was not one of those with the Dow initially wavering but then recovering into the close for a 60 point gain.  Oh well, no real harm done so let's continue on into Thursday.

The technicals

The Dow: On Wednesday the Dow recruited three white soldiers just marching ever higher to remain once again well inside a rising RTC.  There is nothing bearish on this chart..

The VIX:  And on Wednesday the VIX rejected Tuesday's spinning top to sink another 3.52%.  With no support now til 11.50 and the 200 day MA a distant memory, this one continues to look bearish.

Market index futures: Tonight the futures are lower at 12:35 AM EDT with ES down one tick.  ES now has three white soldiers going as its rising RTC motors on.  It just managed to touch a new intraday high on Wednesday before falling back a bit for a record close.  With the indicators remaining pegged at overbought, there's no real bearish signs here.

ES daily pivot: Tonight the ES daily pivot rises from 1975.08 to 1980.75.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  And of course I missed the dollar on Wednesday too.  It did not bounce off the upper BBs I thought - instead it just smashed right through it and traded entirely above it for a 0.23% gap up green marubozu to confirm its 200 week MA breakout.  This chart now just looks plain bullish to me.

Euro: The euro made it three down in a row for a three black crows pattern, closing below its lower BB.  Though the indicators are oversold, the stochastic has yet to even start curving around for a bullish crossover.  There's nothing bullish about this chart, and the overnight, down another 0.14% so far supports that.

Transportation:  Most surprising was the trans which rejected Tuesday's gravestone doji in a big way to gain an impressive 0.55% on a green marubozu.  So this one now turns decidedly bullish.

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        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
July       6       4      4           3       0.692    639
August     5       6      1           1       0.500      7

     And the winner is...

There's no really bearish signs in the charts tonight but as I've been writing this the futures have taken a turn south leaving us now just two points about the ES pivot.  Therefore I'm going to try another conditional call: if ES manages to stay above its pivot by mid-morning Thursday, we'll close higher, otherwise lower.

ES Fantasy Trader

Portfolio stats:  the account remains $114,250 after eight trades in 2014, starting with $100,000.  We are now 6 for 8 total, 4 for 4 long, 2 for 3 short, and one push.  Tonight we stand aside.