Tuesday, July 22, 2014

Tuesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 1965.58.  Holding above is bullish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Very odd.  Last night I called Monday as uncertain and even after seeing how it turned out, we've gotten no further clarification.  Perhaps the nightly chart run-down will help.

The technicals

The Dow: The Dow now seems to be in down/up/down mode, where it changes direction daily as Monday marked the fourth day in a row where the market closed in the opposite direction from the day before.  But on Monday we got a hanging man.. Or since there's no trend running, something to that effect.  Indicators remain stalled below overbought.  There's just nothing here to grasp, perhaps reflecting the uncertainty going on in the world at the moment.

The VIX:  Huh - so much for Friday's bearish harami.  On Monday the VIX moved right back up again gaining 6%, but on a lopsided star implying yet more uncertainty.  Indicators here too are wavering between overbought and oversold.  So perhaps my technicals skills just aren't up to it, but I see nothing of predictive value on this chart right now.

Market index futures: Tonight all three futures are higher at 12:22 AM EDT with ES up 0.09%.  ES was unable to capitalize on Friday's big move and instead put in a hanging man on Monday.  That now gives us four days in a row of lower highs  This is just a low information content, lackluster chart.  Ugh.  If I had something more intelligent to say about it, I would have.

ES daily pivot: Tonight the ES daily pivot rises from 1962.75 to 1965.58.  We remain above the new pivot so this indicator remains bullish.

Dollar index:  On Monday the dollar pretty much remained in a now four day consolidation area, gaining 0.04% but on a red candle.  Indicators remain highly overbought and with four dojis in a row now, I still have to think this one goes lower soon.

Euro: And the euro remained stuck in its own consolidation area with a spinning top too. We remain oversold so when the break comes my guess it is will be higher.  Until then, it's more sideways action ahead.

Transportation: Last night I wrote "we still have a strong resistance area around 8390" and the trans did not in fact have the gas in the tank to motor through that level, falling instead back to 8361.  The lopsided spinning top is a reversal warning, but not a good one and we remain just inside a rising RTC.  I think Tuesday should bring more clarity to this chart.

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       4       0      2           3       1.000    323

     And the winner is...

Once again, the market seems to be treading water, perhaps waiting for some resolution to the fighting in the Middle East and the Russian sanction saga.  Until then, I'm just not feeling the love, baby and I think it's better to just sit this one out.  Accordingly, the call is Tuesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday, July 21, 2014

Monday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday uncertain.
  • ES pivot 1962.75.  Holding above is bullish.
  • Rest of week bias lower technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Right at the open last Friday, ES began knocking on the door of the daily pivot.  Then at 0:45 AM, it just took off and that was that.  Once again, my conditional call worked (though it doesn't always).  Now we move on, as always to another new week.

The technicals

The Dow: On Friday, the Dow gained a handy 123 points to recoup most of Thursday's losses and regain the 17K level.  Interestingly though, all this action was outside the rising RTC so that's technically a bearish trigger.  Equally importantly, it formed a bearish stochastic crossover.  So this big move wasn't necessarily good news.  The Dow to me appears to be low on mojo at these levels.

The VIX: Last Thursday night I wasn't willing to commit to anything more than "possibly a move lower" in the VIX on Friday.  Turned out to be a good possibility as the VIX  cratered 17%, gapping right back down through the 200 day MA and upper BB it blasted above a day earlier.  The net result is a bearish inside harami so in the absence of any overextended indicators, I have to guess the VIX goes lower again Monday.  A similar move in VVIX supports this idea.

Market index futures: Tonight all three futures are lower at 12:22 AM EDT with ES down  0.05%.  On Friday ES gave us a nominally bullish candle, barely bullish engulfing but unable to crack resistance at 1972.

ES daily pivot: Tonight the ES daily pivot ticks up from 1959.33 to 1962.75.  That still leaves ES reasonably above the new pivot so this indicator continues bullish.  Indicators have turned lower so there really isn't any clear direction here right now.

Dollar index:  I called the dollar lower for Friday and that was just barely wrong as the dollar now seems to be consolidating in the 54.76 area (on $USDUPX) floating just above its 200 day MA.  But with three dojis in a row, indicators now highly overbought, and a good bearish stochastic crossover in place, I'm going to call it lower once again.  Hey, I have to be right sooner or later.

Euro: And the euro is pretty much the mirror image of the dollar with a tall star on Friday and oversold indicators.  The new overnight is trading higher outside a short descending RTC so I'll guess we could go higher on Monday.

Transportation: My best hope here last Thursday was for a DCB. Instead, the trans took off, retracing all of Thursday's losses and then some for a bullish engulfing pattern that closed right on the upper BB.  That much is good news, but we still have a strong resistance area around 8390 to breach and after Friday's big 1.28% pop, it's not clear that there remains enough gas in the tank to move much higher 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67
June       8      10      3           2       0.500    132
 
July       4       0      1           3       1.000    323

     And the winner is...

Maybe it's the geopolitical news, maybe the dog days of summer are starting to bark, but I'm not getting a good read on things tonight.  There's a lot of drifting going on and it's hard to extrapolate from that.  So I'm just going to punt and call Monday uncertain.  It may be time to gear up for a summer vacation.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Friday, July 18, 2014

Friday depends on ES pivot

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher only if ES breaks above pivot, else lower.
  • ES pivot 1959.33.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

One might argue whether the market went down because the technicals called it thus or because an airplane went down in the Ukraine but the end result is the same.  It seems like an over-reaction to me, but the tape is the tape.  So now let's see how this might change our view of Friday's action.

The technicals

The Dow: The Dow took a big dump on Thursday due to [insert favorite reason here - downed airliner, Putinoia, etc.].  But it should be noted that we remain in a rising RTC and have not even broken the midline of the trend.  In fac tit seems that for the past two months, every sven sessions, we have a day or two of triple point losses.. Nevertheless, Thursday's effectively exited the rising RTC for a bearish trigger, formed a bearish stochastic crossover and sent all the indicators lower before ever reaching overbought.  So this is all simply de facto bearish.

VIX daily
The VIX: On Thursday the VIX took a monster 32% pop the likes of which we've not since since last January, back when the big crisis was... yeah, I can't remember either..  Be that as it may, in one swell foop we a. broke out of a descending RTC for a bullish trigger, crashed right through the upper BB, continued on right through the 200 day MA, and. formed a bullish stochastic crossover.  It's really quite amazing and worth a look-see (click to enlarge) --->

Now the one thing about the VIX is that it usually has second thoughts after such extreme one day moves, so I'd look for no more than a doji here on Friday and possibly a move lower.

Market index futures: Tonight all three futures are lower at 12:19 AM EDT with ES down  0.13%.  Like the other charts, on Thursday ES dropped out of its rising RTC for a bearish trigger and a completed bearish stochastic crossover.  The only positive here is the overnight trade which is forming a nice hammer after nearly touching its lower BB.  So while half-baked candles have to be taken with a grain of salt, there's at least a suggestion here that the selling may be over.

ES daily pivot: Tonight the ES daily pivot drops from 1973.25 to 1959.33.  That's still not enough to put us back above the new pivot, so this indicator continues bearish.

Dollar index:  Last night, anticipating an evening star I wrote that the dollar "has a lot more downside risk than upside potential."  And that's how it played out on Thursday with a 0.07% loss trading mostly under Wednesday's doji.  We remain overbought and the stochastic is flattening in preparation for a bearish crossover.  I now expect the 200 MA, just below, to exert some attraction, so I'm calling this one lower on Friday.

Euro: After two big read marubozus, the euro took a breather on Thursday with a tiny little star near the lower end of Wednesday's drop.  We're still on the lower BB, indicators are now quite oversold, we're right on a support line and the overnight is unchanged.  That all suggests support kicking in and the possibility of a move higher on Friday.

Transportation: And finally, the trans took a big hit on Thursday just like everything else, though they'd been so high, this move just barely exited the rising RTC for a bearish setup.  But we also got the bearish stochastic crossover and indicators peaking at overbought so this one looks bearish for Friday too, though  DCB cannot be discounted.

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       4       0      1           2       1.000    323

     And the winner is...

Hmm - despite some tragic news on Thursday, I think the market has over-reacted in the short-term and some retracement is in order on Friday.  But I'm hesitant to call the market higher as long as ES is below its pivot so I'm going to make a conditional call: if ES can manage to break back above its daily pivot by mid-morning Friday, we'll close higher.  If not, then lower.  That's all she wrote.  See you again Sunday night!

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Thursday, July 17, 2014

Thursday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower, low confidence..
  • ES pivot 1973.25.  Holding below is bearish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

In the face of considerable uncertainty last night, Mr. Market rejected the reversal warning and extended his latest winning streak to four.  So let's see now how this changes things for Thursday.

The technicals

The Dow: It wasn't at all clear last night but the Dow rejected Tuesday's doji star and gained a respectable 78 points on Wednesday, to close just a bit higher than its upper BB in increased volume.    The Dow lately has been respecting its upper BB quite well so even though the indicators remain just shy of overbought, we could be in for a pause here on Thursday.

The VIX: On Wednesday the VIX had a big gap down for an 8% drop on a spinning top.  The indicators have now clearly topped but are still just barely coming off overbought..  The lower BB isn't too far away now at 10.22 and before that there's decent support at 10.39.  So we've pretty much just exchanged one uncertainty for another.  We now have a gap down with a reversal candle but the indicators are still overbought.  Who will win?  Who knows.

Market index futures: Tonight all three futures are lower at 12:16 AM EDT with ES down  a non-trivial 0.22%.  On Wednesday, ES rejected Tuesday' spinning top and kept motoring higher to form most of a bullish engulfing pattern.  That also leaves it inside a new rising RTC.  However, the overnight action is disagreeing and has just formed a bearish stochastic crossover.  So overall, this one looks negative.

ES daily pivot: Tonight the ES daily pivot rises from 1967.67 to 1973.25.  Shortly after we published last night, ES moved above the pivot but now we're back below it so this indicator turns bearish.

Dollar index:  On Wednesday, the dollar took a big pop, up 0.22% for a gap-up doji that now forms 2/3 of an evening star.  It also blasted right through its 200 day MA and came close to the upper BB.  After all that, this chart just looks like now it has a lot more downside risk than upside potential.

Euro: Last night I wrote "I wouldn't be surprised to see the euro hit [the lower BB at 1.3545 on Wednesday.".  Well it not only hit it, it kept right on going to end at 1.3526.  That now leaves us right at multi-month support.  The indicators have also now gone oversold and OBV and momentum have bottomed.  So a reversal definitely looks possible from here.  The positive overnight seems to support that idea.

Transportation: The trans meanwhile continued their march into the stratosphere unabated on Wednesday, tracking the left edge of the rising RTC and closing above their upper BB.  Indicators are now quite overbought but at these levels, who knows.  There's really no bearish signs on this chart 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        6       7      6           0       0.462    -67

June       8      10      3           2       0.500    132

July       3       0      1           2       1.000    162

     And the winner is...

The charts continue to be unsettled as they have been for the past few nights, but I'm seeing a slight tilt towards the bear side tonight.  And having now hit a few resistance lines here and there in the charts, I'm going to go out on a limb and call Thursday lower.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Wednesday, July 16, 2014

Wednesday uncertain

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday uncertain.
  • ES pivot 1967.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Mr. Market got spooked by Auntie Janet Tuesday morning, even though she didn't really say anything anyone didn't already know.  It looked like my call for a higher close was a goner there but the Dow battled back and we squeaked out a 6 point win by the bell.  So now we wend our way to Wednesday.

The technicals

The Dow: With all the hoo-hah surrounding the news on Tuesday, the Dow ended up with a perfect star.  Its upper shadow pierced the upper BB for the second day in a row.  Continuing resistance at the 17,070 level is a concern and we now have a reversal candle.  But the indicators have yet to hit overbought.  So this is a warning that requires confirmation and regrettably, no call here..

The VIX: Well the VIX fooled me - I thought it would go higher but perhaps thanks to Auntie Y., it gained 1.18%.  Of more importance is that the pattern was clearly bullish engulfing.  OTOH, the second day outside a rising RTC is a bearish trigger. we have a new bearish stochastic crossover, and the indicators remain overbought.  So that's pretty much a wash - no call here either.

Market index futures: Tonight the futures are mixed at 12:40 AM EDT with ES down 0.04% but YM up 0.04% - not much to go on.  On Tuesday ES put in a wide-ranging spinning top in dark cloud cover position.  That said the indicators continue to rise off oversold.  So we have a conflict here too and that means no call on this chart either.

ES daily pivot: Tonight the ES daily pivot dips from 1969.17 to 1967.67.  That leaves ES just below the new pivot so this indicator is now bearish - barely.

Dollar index:  I didn't call this chart last night and I'm glad of it because I sure didn't expect a big 0.27% pop in the dollar on Tuesday, its biggest gain since May 8th. That was enough to send the indicators on their way from oversold towards overbought, and we very nearly hit the 200 day MA.  I'd expect a test of that number on Wednesday.

Euro: And so of course the euro had a bad day on Tuesday, putting in a big red marubozu that broke support down to 1.3571. It also drove all the indicators lower and with the lower BB at 1.3556 beckoning, I wouldn't be surprised to see the euro hit that on Wednesday.

Transportation: After testing their upper BB on Monday the trans managed to close right on it on Tuesday with an impressive 0.38% gain.  That leaves the rising RTC intact and the indicators still aren't yet overbought.  But having hit the BB, I'd expect a bounce off it on Wednesday.

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       3       0      0           2       1.000    162

     And the winner is...

Tonight the charts are quite conflicted.  We've got reversal warnings, and candlesticks that disagree with indicators all over the place.  I've been scratching my head over this one for a while now without coming to any conclusions so I guess the only thing left to do is shrug and call Wednesday uncertain.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Tuesday, July 15, 2014

Tuesday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher, low confidence.
  • ES pivot 1969.17.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

There was certainly enough warning last night of a breakout and it came in the form of a 112 point pop in the Dow to start off the week smartly.  The chart was interesting, so let's see what this bodes for Tuesday.

The technicals

The Dow: On Monday the Dow just zoomed out the gate for a rocket ship that didn't stop til it hit the upper BB at 17,076.. That also happens to be latest resistance.  It was good for a new record intraday high, reclaimed the 17K level, exited the descending RTC in a big way for a bullish trigger, and formed a bullish stochastic crossover.  That all spells bullish in my book though after such a big one-day move, a day of consolidation might be in order.

The VIX: Last night I wrote "the odds seem to favor a move lower here on Monday.".  .And they were good odds indeed as the VIX gapped down 2.15% in a mirror image of the Dow to fall out of its rising RTC for a bearish setup, and form a bearish stochastic crossover.  With no near-term support and a lower BB a mile away still, this one looks like it has room to run lower.

Market index futures: Tonight all three futures are higher at 12: 21 AM EDT with ES up 0.06%.  On Monday, ES like the Dow shot up out of a descending RTC for a bullish trigger.  But it came nowhere near its upper BB and its new bullish stochastic crossover is very well-defined.  The overnight pin-action is positive and this chart in general continues to look bullish.

ES daily pivot: Tonight the ES daily pivot jumps from 1959.67 to 1969.17.  Once again we remain above the new pivot, though admittedly not nearly as much as last night.  Still, that leaves this indicator bullish.

Dollar index:  Last night I wrote "this chart is too tough to call" and on Monday the dollar put in something of a fat inverted hammer to finish exactly unchanged. And tonight brings no clarity at all.  This chart remains highly conflicted and where it goes on Tuesday is anybody's guess.

Euro: After Friday's star, I took a shot in the dark that the euro would fall on Monday but it did not, posting instead a spinning top that closed up a bit at 1.3622.  That makes two reversal candles in a row, with no reversal.  And with the indicators stuck halfway between overbought and oversold and the chart itself halfway between BB's, this chart like the dollar is too vague to call.

Transportation: The trans had a similarly good day on Monday, up 0.71% to touch their upper BB just like the Dow. But the size of the upper shadow here makes me wonder if there might not be at least a bit of a pullback 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        6       7      6           0       0.462    -67

June       8      10      3           2       0.500    132

July       2       0      0           2       1.000    156

     And the winner is...

It's not unanimous, but I'm once again seeing enough bullish signs in the charts tonight to call Tuesday higher.

ES Fantasy Trader

Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.

Monday, July 14, 2014

Monday higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher, low confidence.
  • ES pivot 1959.67.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside.
Recap

Last Friday's call was "uncertain" and that's pretty much what the session was - down out the gate, then wandering aimlessly before finally closing up just 29 points in the Dow.  But the candles are interesting so let's check the charts as we gird ourselves for yet another wacky week on Wall St.

The technicals

The Dow: The Dow has pretty much established 16,915 as a solid support level, putting in a second hammer in a row on Friday based on that number.  And like heads, two hammers are better than one.  This one also bent the stochastic around to within inches of a bullish stochastic crossover.  When the Dow does this kind of depth-sounding, it's often a good sign that a reversal is at hand.

The VIX: Last Thursday night I claimed that "the VIX goes lower on Friday."  And it was the right claim as the VIX sank 4% to complete a bearish evening star.  Note how once again, the VIX managed only one day on its upper BB before falling back.  This move also left us right on the cusp of a bearish stochastic crossover and also right on the edge of a bearish RTC setup.  So the odds seem to favor a move lower here on Monday.  And VVIX is looking even more bearish.

Market index futures: Tonight all three futures are higher at 12:38 AM EDT with ES up 0.13%.  Completing four days of alternating gains and losses, on Friday ES put in a small rise but remained in a descending RTC.  However, the new Sunday overnight is trading outside the channel and that's a bullish setup.  The stochastic is also flattening out in preparation for a bullish crossover so I'd definitely not be going short at these levels.

ES daily pivot: Tonight the ES daily pivot rises from 1957.08 to 1959.67.  We remain sufficiently above the new pivot to call this indicator bullish.

Dollar index:  After a doji on Thursday the dollar gave us ... yes, another doji on Friday, but a gap-up one for a 0.07% gain.  The indicators are now just overbought, though the stochastic has no particular opinion.  We're also right ont he edge of a descending RTC, just missing a bullish setup ever so slightly.  So once again, this chart is too tough to call.

Euro: Last Thursday night the euro was similarly vague and Friday's action bore that out with a small gain on a perfect star.  The indicators have mostly turned lower and the overnight seems to agree, so I'd say there's a chance the euro falls further on Monday.

Transportation: And on Friday the trans confirmed Thursday's doji with a 0.35% gain that doubled that of the Dow.  And unlike the other charts, this one gave us a genuine completed bullish stochastic crossover so this chart looks higher 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      9       3      5           0       0.750    482
May        6       7      6           0       0.462    -67

June       8      10      3           2       0.500    132
July       1       0      0           1       1.000     44

     And the winner is...

Tonight we see a lot of our predictors on the verge of going bullish.  The cautious approach would be to call it uncertain but the preponderance of evidence is, I believe sufficient to call Monday higher.

ES Fantasy Trader


Portfolio stats:  the account remains at $113,000 after seven trades in 2014, starting with $100,000.  We are now 5 for 7 total, 3 for 3 long, 2 for 3 short, and one push.  Tonight we stand aside.