Thursday, May 5, 2016

Thursday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher.
  • ES pivot 2060.42.  Holding above is bullish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap

TRAVEL SWITZERLAND SPRING ALPINE MOUNTAIN FLOWER FIELD ART PRINT POSTER BB7645BLast night I wrote that "I don't think the selling's done yet" and indeed it wasn't as the Dow dropped another 100 points on Wednesday. Tonight's another Night Owl Lite so let's go right to the bottom line.

The technicals

Market index futures: Tonight, all three futures are higher at 12:14 AM EDT with ES up 0.31%.  

ES daily pivot: Tonight the ES daily pivot falls again from 2060.42 to 2048.75. ES.is now back above its new pivot so this indicator turns back to bullish.

Accuracy:  

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      6      4       8           2       0.667     416

May        1      0       1           1       1.000     100

 
     And the winner is...

Tonight, the major charts generally don't look so hot, but the VIX put in only a small gain Wednesday on an inverted hammer that once again tested its upper BB.  That's a good sign of a move lower.  And ES has been down two days in a row now.  I note that it has not put in a losing streak longer than that since the first week of January.  And it's now putting in a non-trivial rally that has sent it back above it pivot in the overnight.  Also oil is advancing again after putting in a long spindly doji star on Tuesday.  So call me crazy but I'm going to go with that and go out on a limb to call Thursday higher.

YM Futures Trader

No trade tonight..

Wednesday, May 4, 2016

Wednesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2060.42.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap

TRAVEL SWITZERLAND SPRING ALPINE MOUNTAIN FLOWER FIELD ART PRINT POSTER BB7645BIn retrospect I'm glad I called Tuesday as "uncertain" since I sure didn't see a 140 point yen and oil-fueled drop in the Dow coming.  At least this provided some confirmations we were looking for so let's see how this affects the charts as we wend our wary way to Wednesday.

The technicals

The Dow:  I was worried that Monday's pop in the Dow might be a head-fake and indeed we closed right back down078% on Tuesday for the lowest close in two weeks.  That just barely sent the indicators oversold but they're still falling.  The stochastic is flat on the floor and of no help, so in the absence of any reversal signs I really can't call this one higher for Wednesday.

The VIX: After a giant bearish engulfing pattern on Monday, the VIX - surprise - gained over 6% on Tuesday with a bullish harami to finish just short of where it ended last week.  Indicators remain overbought and the stochastic has completed a bearish crossover now.  We also traded outside the latest rising RTC for the second day in a row for a bearish trigger so overall this chart looks negative now.

Market index futures: Tonight, all three futures are lower at 12:11 AM EDT with ES down 0.16%.  ES retraced all of Monday's gains on Tuesday and then some for a bearish engulfing pattern that sent all the indicators, only just off oversold, headed back down again.  Nothing bullish here tonight.

ES daily pivot: Tonight the ES daily pivot falls again from 2069.08 to 2060.42. ES.is now below its new pivot so this indicator turns right back bearish.

Dollar index:   How 'bout dem dollars, eh?  Sunday night I put up a dollar chart showing it seemingly in freefall.  Then Monday it went even lower trading entirely below its lower BB.  But finally on Tuesday we got the first green candle in eight days as the dollar actually gained 034% on a tall red marubozu as a bullish piercing pattern.  With highly oversold indicators, a new bullish stochastic crossover, and a decent bullish candle, the dollar's looking higher on Wednesday

Euro:  The euro was even more dramatic on Tuesday.  It traded entirely above its upper BB for a giant red inverted hammer/gravestone doji that left the indicators all extremely overbought.  The new overnight is falling off its upper BB and handing us a new bearish stochastic crossover so I'd say this one looks lower on Wednesday.

Transportation:  On Tuesday the trans continued a four day slide, underperforming the Dow handily with a 1.21% dump that actually tested their 200 day MA before recovering a bit. The result was a red hammer with oversold indicators and a stochastic that's on the cusp of a bullish crossover.  Overall, this chart actually looks higher for Wednesday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      6      4       8           2       0.667     416

May        0      0       1           1       1.000       0
 
     And the winner is...

On Tuesday we got bearish confirmation on all the charts and that's being supported by the overnight futures.  And oil is looking lower for Wednesday too.  And the weekly charts are looking even weaker.  Sell in May?  Maybe so.  In any case, I'm calling Wednesday lower.  I don't think the selling's doen yet.

YM Futures Trader

No trade tonight..

Tuesday, May 3, 2016

Tuesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday uncertain.
  • ES pivot 2069.08.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap

TRAVEL SWITZERLAND SPRING ALPINE MOUNTAIN FLOWER FIELD ART PRINT POSTER BB7645BOn Monday the Dow confirmed Friday's hammer with a nice 0.66% advance.  I wanted to wait for confirmation so I made it a conditional call and that worked out well.  ES oscillated about it pivot in the wee hours of the morning, taking until 6 AM before breaking to the upside.  The bears tried to drive it lower again shortly after the open until by mid-morning we were clearly above the pivot and then indeed closed higher.  It doesn't always work, but it works often enough to be useful.  Tonight it's time for another Night Owl Lite - no details, just conclusions.

The technicals

Market index futures: Tonight, all three futures are essentilly flat at 12:32 AM EDT with ES down just one tick.  

ES daily pivot: Tonight the ES daily pivot falls from 2087.00 to 2069.08. ES.is now back above its new pivot so this indicator turns bullish again.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      6      4       8           2       0.667     416

May        0      0       0           1       1.000       0

Note: When I make a correct conditional call, I increment that column, not the "right" column, but I do not count the daily Dow change in the "Dow points" column.  That seems like the only fair way to do it since the conditional call doesn't take effect until mid-morning of the trading day.
 
     And the winner is...

We had a rally Monday but it came on lower than normal volume and I'm not sure I find it convincing, particularly since there's no pin action in the futures tonight.  On the other hand, I can't come out with a bearish call because the charts aren't indicating that at all.  So all that leaves is Tuesday uncertain

YM Futures Trader

No trade tonight..

Monday, May 2, 2016

Monday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday depends on ES pivot.
  • ES pivot 2060.25.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap

TRAVEL SWITZERLAND SPRING ALPINE MOUNTAIN FLOWER FIELD ART PRINT POSTER BB7645BThe supposedly good month of April ended on a decidedly down note last Friday with the Dow down again another 57 points.  We now being a new week and a new month as we move on to the merry month of May.  Shall we sell and go away?  Only the charts can tell.

The technicals

The Dow:  On Friday the Dow put in a classic hammer candle.  With indicators now well into oversold, this is a reversal sign worth watching.  But one must remember that this candle requires confirmation.

The VIX: I wasn't ready to call the VIX lower last Friday and good thing too as it rose another 3.15%.  But here's an interesintg candle: it put in a tall inverted hammer that pierced the upper BB.  That's always the third rail of the VIX as it rarely spends much time above its upper BB.  With indicators now overbought it's looking good for a move lower here any time now.

Market index futures: Tonight, all three futures are just slightly lower at 1:06 AM EDT with ES down just a single tick.  ES followed Thursday's dump with another loss on Friday confirming the breakdown from the 2084 area.  The candle is a fat sort of hammer and the indicators are now oversold but this isn't a really good reversal sign, especially with ES showing no inclination to rally in the Sunday overnight.

ES daily pivot: Tonight the ES daily pivot falls from 2077.33 to 2060.25.  That puts ES back below its new pivot so this indicator turns bearish again.

US dollar ($USDUPX) daily
Dollar index:   Wow - I was badly wrong about the dollar last Friday.  I thought the inveted hammer and lower BB touch meant a move higher was near.  Instead on Friday, it crashed  another 0.71% on a big gap-down red marubozu that traded entirely way below its lower BB leaving this chart in negative exponential freefall.  We haven't seen these levels since the start of January 2015.  Indicators are now oversold though not even extremely so.  And with no support in sight, there's no way to call this chart higher for Monday.

Euro:  At least I was right about the euro when I wrote "I see no sign of a downturn here on Friday."  It indeed took a big jump almost up to its upper BB to close at 1.14650, its best close since last October 14th.  That leaves the indicators overbought and with the upper BB nearby, the euro may find it tough to advance more on Monday.

Transportation:  Last Thursday night I wrote "There's nothing positive about this chart tonight."  And boy was that ever the case as the trans gapped down a big 1.19% on Friday greatly underperforming the Dow on a move that camer real close to their 200 day MA.  Indicators are now finally oversold but even after two bad days it's still premature to call a reversal here.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      6      4       8           2       0.667     416

 
     And the winner is...

We do see some reversal signs on the charts tonight but I never like relying on the Friday charts all that much after a whole weekend.  With ES hanging about just below its new pivot it seems like a good time for a conditional call: if ES can manage to break above its pivot by mid-morning Monday, we'll close higher.  But if it remains below, or attempts a breakout that fails before mid-morning, then we close lower.  The first day of most months is historically positive, so we might see some gains in the end after all.

YM Futures Trader

No trade tonight..

Friday, April 29, 2016

Friday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday lower.
  • ES pivot 2077.33.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap

Original vintage poster VEVEY VAUD FINE ART EXPO 1901Last night's news from Japan was definitely not what Mr. Market was wanting to hear and that sent the Dow tumbling 211 points on Thursday for its biggest loss since the February 11th bottom.  At least that finally takes care of all the wishy-washy action (or non-action) we've been getting for a week now.  Let's go straight to the charts to see how this changes the picture as we close out the month of April.

The technicals

The Dow:  Mr. Market really didn't like the BoJ news, crashing through support at 18,000, 17,977, 17,931, and then 17,890 like a hot knife through sushi, before finally bouncing off 17,800 on a tell red marubozu.  That finally drove all the indicators into agreement and down to oversold  but with no reversal candle in sight this chart looks just plain uglier than Michelle Caruso-Cabrera's Iranian head-towel.  Foo.

The VIX: The VIX, which really looked like it was headed lower after Wednesday, instead shot up over 10% on Thursday with a tall green hanging man that drove the indicators overbought and sent it right back into its rising RTC.  But with the stochastic nowhere near curving around for a bearish crossover yet, it's not clear that the VIX is moving lower on Friday.

Market index futures: Tonight, all three futures are mixed at 12:32 AM EDT with ES down 0.07%.  On Thursday ES finally crashed out of its week-long doldrums breaking support at 2082 with a tal red candle that drove all the indicators oversold.  The new overnight though seems to be attempting a rally and after such a big move lower, I'd think at least a DCB would be a possibility on Friday.

ES daily pivot: Tonight the ES daily pivot falls from 2087.00 to 2077.33. ES remains below its new pivot so this indicator continues bearish.

Dollar index:   Last night I wrote that "I'd have to think there's more downside left here on Thursday" and was there ever as the dollar did an Acapulco cliff-dive for a giant 0.68% gap-down inverted hammer that cracked through its lower BB.  And even that wasn't enough to send the indicators oversold, so there could still be some more selling here on Friday though I have to think the bulk of that is exhausted and that a DCB could be on the way.

Euro:  On Thursday the euro of course rose but with a much more measured gain than the dollar's drop, extending its winning streak to four now.  We now have a very steep rising RTC (Pierson's=0.986) going, rising indicators still not overbought and positive pin action in the new overnight so I see no sign of a downturn here on Friday.

Transportation:  The trans got whacked again on Thursday breaking support at 7990 on a tall red marubozu for a 1.55% loss that started all the indicators moving lower in unison, though they're still a ways from oversold.  There's nothing positive about this chart tonight.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      5      4       8           2       0.636     359



     And the winner is...

Frankly, Thursday's action seemed a bit overblown to me but we don't have any really compelling reversal candles on the charts and we haven't hit any strong support lines, MA's, BB's or other natural bounce points.  In addition, the last trading day of April is historically fairly week according to The Stock Traders Almanac   So while I'm mindful of the possibility of a relief rally or at least a DCB, I can't call that from the technicals I see.  So I don't have much other choie than to call Friday lower again, though I'm not expecting another 200 point drop.  It could be a doji day.  That's all she wrote.  See you again Sunday night!

YM Futures Trader

No trade tonight..

Thursday, April 28, 2016

Thursday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower.
  • ES pivot 2087.00.  Holding below is bearish.
  • Friday bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade.
Recap
Original vintage poster VEVEY VAUD FINE ART EXPO 1901
Hmm - interesting.  When the big Fed announcement came out, there was a fairly muted reaction from the market.  The Fed's statement was so nuanced that Mr. Market wasn't entirely sure what to make of it.  In the end he liked it - kinda sorta, just 51 points worth on the Dow.  Perhaps he wanted to hear from the BoJ?  Who knows, let's just see if we can make heads or tails out the the candles we've been dealt for Thursday.  But first:

Golden Toady Award of the Week

This week we give the GTA of the Week to CNBC's Michelle Caruso-Cabrera for showing up Wednesday afternoon on CNBC from Tehran with her head all wrapped up in a big bath towel.  So what's the deal, Michelle?  Were you having a bad hair day, converting to Mohammedanism or are you just too craven to assert your basic human rights on US TV?  There was absolutely nothing in that piece that even required your physical presence in the rogue nation of Iran in the first place.  The sight of you toadying up to the forces of religous bigotry and intolerence on American television is shameful, disgraceful, and outrageous.  This made me want to lose my Power Lunch.  I think you, or more like your bosses who put you up to it, owe us an apology.

A towel too far.
The technicals

The Dow:  On a purely technical basis,, we just saw two deep hammers followed by a doji star and that all finally resolved to the upside as one might expect on Wednesday.  But this new candle was itself a reversal sign as a spinning top.  But it also just squeaked out a bullish stochastic crossover and the indicators are still conflicted.  RSI and momentum are both falling while money flow and OBV are rising.  As far as I'm concerned, the net result of all of this is pretty much a wash.

The VIX: Similarly, the VIX dropped 1.36% on Wednesday on a fat red spinning top after a pair of gap-up doji stars.  There is a bit of information here though - we just exited a rising RTC for a bearish setup.  Indicators are still not overbought but the last two tops also came before hitting overbought.  There's at least a yellow caution light blinking here right now.

Market index futures: Tonight, all three futures are lower at 12:18 AM EDT with ES up 0.47%.  On Wednesday ES put in a Fed-fueled green bullish engulfing pattern back up to 2080.75 which also happens to be week-long resistance.  Indicators here too are all over the place but the BoJ news quickly put the kabosh on a developing drift higher leaving us with a bearish engulfing pattern engulfing Tuesday's bullish engulfing pattern.  This is starting to look like a megaphone and bears watching.

ES daily pivot: Tonight the ES daily pivot ticks up from 2086.42 to 2087.00. That leaves ES below its new pivot so this indicator continues bearish.

Dollar index:   On Wednesday the dollar turned in its third gap-down doji in a row, this time losing 0.19% for one of the oddest descending RTC's I've ever seen.  And I have to laugh hearing the CNBC talking heads going on about the dollar "strength".  Hey I remember when the dollar was worth 360 yen (and no, I'm not that old).  And yet the sun still managed to rise in the east and set in the west.  Go figure.  So with stars being worth nothing lately and the indicators a long way from oversold, I'd have to think there's more downside left here on Thursday

Euro:  The euro, meanwhile is a bit better behaved, making it three up in a row on a green spinning top.  But even here we have RSI and momentum falling but money flow and the stochastic rising.  Where's this one going/  Who knows.

Transportation:  And finally the trans are also all over the map. They rose just 0.12% on Wednesday but to a level we've visited fr the past seven days.  Indicators here are also completely confused so I see nothing terribly informative about this chart tonight.  Hey, it happens.

Accuracy:  

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      8      6       6           1       0.600     222

April      4      4       8           2       0.600     148



     And the winner is...

Apparently, Mr. Market did not approve of the BoJ's move earlier this evening and the futures have taken a tumble.  The rest of the charts are certainly not looking like a screaming buy at this point anyway so I guess I'll just go ahead and call Thursday lower.

YM Futures Trader

No trade tonight..