Friday stock market forecast

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

• Friday uncertain.
• ES pivot 2007.83.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

As I called it last night the market did indeed advance on Wednesday with the Dow gaining an impressive 217 points. With this interesting turn of events we now move ahead to Friday as we close out October's op-ex week.
The technicals

The Dow:  After a small late morning sag, it was just up up and away for the Dow which closed out Thursday at session highs for a 1.28% gain. The resulting candle is something like a cross between a bullish ladder pattern and a reversed bullish piercing pattern. That left the indicators confused as RSI went back overbought but the stochastic continues descending in a fresh bearish crossover - go figure. This left the Dow back at recent resistance right around Thursdays close so this is a tricky one to call, and I'm not going to touch it.

The VIX:  Last night I was wrong about the VIX. It ended by confirming Wednesday's spinning top with a big 11% decline that punched right back down through its 200-day MA for the second time in three days. That took the indicators back into oversold territory but interestingly caused a bearish crossover from a low level in the stochastic. And that is often good for another day or two of lower prices. So at this point I would say the VIX may be headed lower again on Friday.

Market index futures: Tonight, all three futures are mixed at 12:45 AM EDT with ES down 0.05%. ES had a fantastic day on Thursday handily breaking through resistance around 2011 on a tall green marubozu. That sent the stochastic into a bullish crossover from a high level and as I've mentioned before this is often good for another day or two of higher prices. With resistance breached it's not out of the question that ES could advance some more on Friday  Unfortunately, there's no follow-through in the overnight so it's also possible ES might want to take a breather on Friday.

ES daily pivot: Tonight the ES daily pivot rises again from 1989.42 to 2007.83.  That still leaves ES well above its new pivot so this indicator continues bullish.

Dollar index:  Last night I mentioned that the dollar looked a bit overextended after Wednesday's precipitous decline and speculated that it could move higher again on Thursday. Well that's exactly what happened with a half percent advance that finished with a green bullish harami pattern. The indicators are now starting to move off of highly oversold levels and the stochastic has just completed a bullish crossover. So this chart looks higher again on Friday.

Euro:  Similarly, last night I called the euro lower for Thursday and that's also just what happened with the currency giving up all of Wednesday's big gains to finish almost exactly where it started at 1.1287. This is a bearish pattern and having visited its upper BB for an entire week in a row the indicators are now moving lower off of overbought with a completed bearish stochastic crossover to boot. Furthermore the overnight is moving lower in a non-trivial manner so my guess is that the euro closes Friday lower.

Transportation:  Last night I mentioned the possibility of a move higher in the trans on Thursday and that's just what happened with a nice 1.44% advance on a green marubozu. That was enough to lift the all the indicators back higher towards overbought before ever reaching oversold. So with a confirmed spinning top from Wednesday it now looks possible that the trans could run higher again on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    4      4       1           0       0.500    455

     And the winner is...

Tonight we have some bullish signs (a declining VIX) and some bearish signs (sagging futures).  The indicators generally suggest more upside is possible but then we had a nice run on Thursday and with Friday upon us, traders may want to book some of those profits before the weekend.  And to top it all off, it's options expiration again.  Add it all up and there's only one safe course of action for me: Friday uncertain.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

On Thursday VZ got swept up in the Dow's general euphoria with a $0.68 gain that finally propelled it past resistance around 44.39. It also formed a bullish stochastic crossover from a high level and those are often good for a day or two of higher prices. So with the other indicators now down off of overbought it's entirely possible VZ could still have room to run higher on Friday. But it's not a swing trade buy.

Thursday stock market forecast

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

• Thursday higher.
• ES pivot 1989.42.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

After three days of small range moves the Dow finally made a break on Wednesday at it was to the downside with a 157 point loss. This finally gives us an interesting candle to work with so let's take a look at the charts and see which way Thursday might go.

The technicals

The Dow:  On Wednesday the Dow made a brief attempt to move higher out of the gate but it was all for naught as after the first 15 minutes it spent the rest of the day moving lower to finish with a close to marubozu candle good for a 0.92% decline. That threw it right out of its rising RTC for a bearish trigger, sent the indicators continuing off of overbought and confirmed yesterday's bearish stochastic crossover. So there's really nothing bullish all about this chart tonight.

The VIX:  Last night I said the VIX looked higher for Wednesday and indeed it was, gaining 2% on a long legged green spinning top. That finally took the indicators off of oversold and confirmed the recent bullish stochastic crossover. So despite the reversal candle my guess is that there's more upside to come here.

Market index futures: Tonight, all three futures are higher at 12:19 AM EDT with ES up 0.57%. On Wednesday ES followed up Tuesday's big dump with yet another move lower on a gap-down inverted hammer to close at 1984. That finally sent the indicators off of overbought moving lower. But oddly enough the new overnight seems to be staging a non-trivial rally despite the bearish trigger on a rising RTC exit. So I'm not so sure that I can call Thursday lower at this point.

ES daily pivot: Tonight the ES daily pivot falls again from 2000.00 to 1989.42.  That, plus an overnight rally is enough to put ES back above its new pivot so this indicator now turns bullish again.

Dollar index:  I was quite surprised by Wednesday's big 0.88% decline in the dollar on a tall gap-down marubozu that went right through its lower BB. I had figured with three reversal candles in a row and having hit its lower BB the dollar would go higher. But it was not to be and instead we're left with massively oversold indicators with RSI now down to 2.48 and a stochastic that has fallen off the bottom of my chart. There's no bullish reversal candle here and yet with everything else looking quite overextended I have to wonder if the dollar might not stage rally on Thursday.

Euro:  At least I had the sense to take a pass on the euro on Wednesday which is just as well because it had a big gain to close up at 1.1489, a move which punched right through its upper BB on a tall green marubozu. That leaves indicators all extremely overbought and the stochastic just in position for a bearish crossover. It looks like this finally may be it for the euro as the overnight seems to be wanted wanting to go lower. So my guess is that we could see a lower close on Thursday.

Transportation:  After a massive plunge on Tuesday the trans found a modicum of support on Wednesday in the form of a long-legged green spinning top signaling a reversal warning of sorts. However, the indicators are still nowhere near oversold and the stochastic continues in a full-blown bearish mode. Still, there is some question as to whether the downside might continue on Thursday. It's possible that we could be in for a relief rally as Tuesday's move looks a little overdone to me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    3      4       1           0       0.429    238

     And the winner is...

We have a number of reversal signs tonight, particularly in the VIX and the trans.  Ordinarily they're not enough to call a market reversal but with some pretty decent support from the futures I'm going to go a bit out on  limb and call Thursday higher.

Single Stock Trader

After three indecisive days finally on Wednesday Verizon broke to the down side losing $0.37 on a fairly tall red candle. That was enough to send the indicators off of overbought on their way towards oversold and also to complete a bearish stochastic crossover. So the recent uptrend is now clearly over and it looks like there's more downside on the way.

Wednesday lower

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

• Wednesday lower.
• ES pivot 2000.00.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Last night I mentioned that the charts were all looking tired and that fatigue came home to roost on Tuesday as all three major averages lost ground with the Dow down 0.29%. That leaves us at an interesting juncture so let's go straight to the charts as we figure out where Wednesday is heading.
The technicals

The Dow:  On Tuesday the Dow snapped an impressive 7-day winning streak and 9 out of 10 with a 50 point loss. This move left it teetering on the brink of its steep rising RTC. I will add that indicators have already begun coming off of extreme overbought levels (which isn't hard since when RSI hits 100 there there's no place left to go but down). The stochastic remains threaded out at extreme overbought so there's no telling when it will form a bearish crossover. However the overall look of this chart is now quite bearish.

The VIX:  In an impressive show of strength on Tuesday the VIX managed to escape the 200 day MA trap by refusing to sink lower and instead actually gained 9.28% to finish with a green hanging man that started to bring the indicators off of extreme oversold level and left this chart right on the edge of its descending RTC. his all looks bullish or Wednesday.

Market index futures:  Tonight, all three futures are mixed at 12:29 AM EDT with ES dead even.  I wasn't ready to commit to a move lower in ES last night considering all the momentum it had going for it. However on Tuesday it had a bad day indeed with its worst performance since September 28th. That left it hanging right on the edge of its rising RTC and all of the indicators are now descending strongly off of overbought with the stochastic in a nicely completed bearish crossover. The overnight is trading outside this RTC so that's a bearish set up and therefore this chart now looks negative for Wednesday.

ES daily pivot: Tonight the ES daily pivot falls from 2008.92 to 2000.00 on the dot. ES remains below its new pivot though so this indicator continues bearish.

Dollar index:  Last night I noted a reversal warning in the dollar but one which required confirmation. We got that on Tuesday and while the dollar only gained 0.03% it did it on wide-ranging red spinning top. However, indicators continue to remain quite oversold so it looks like the dollar still has more room to run higher from here

Euro:  However last night I missed the euro which I thought would move lower on Tuesday. Instead it continued higher to close at 1.1395 marking its third day in a row where it just exactly touched its upper BB. Indicators continue to rise and are now at extreme overbought levels. The stochastic also looks like it's trying to form a bearish crossover but it's not quite there yet. So this chart is a little too difficult to call tonight.

Transportation:  Last night I noted a classic hanging man in the trend. And interestingly, on Tuesday marketwatch.com also noted it in one of their TA pieces. That was the same day that we got the payoff in the form of a giant 2.22% decline with a red marubozu that crashed right out of a steep two week long rising RTC and sent all the indicators lower off of overbought. That leaves no bullish signs at all on this chart tonight.


Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    2      4       1           0       0.333     81

     And the winner is...

Tonight the futures appear to be trying to  find some support after Tuesday's big drop but the overall tenor of the charts remains bearish.  It just seems that overall there's more downside risk than upside potential so I'm going to go ahead and call Wednesday lower.  I'll be happy to be proven wrong.

Single Stock Trader

On Tuesday Verizon gained a bit on an upgrade from Morgan Stanley to finish with a small bullish engulfing pattern. However indicators continue climbing into overbought territory and the stochastic remains on the cusp of a bearish crossover. The stock continues to find resistance around 44.40 and I still don't see this as a swing trade buy right now.

Tuesday lower

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

• Tuesday lower....
• ES pivot 2008.92.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Well it was about what I expected on Monday with a semi-holiday.The Dow gained a meager 47 points and the SPX managed less than that on a low volume snoozer of a day. So with nothing much having happened let's continue on to see which way Tuesday is headed.
The technicals

The Dow:  The Dow just keeps right on trucking with Monday making it 10 in a row on the latest rising RTC. Lately its been just crawling right up its upper BB and RSI is now pegged at 100. It doesn't get any higher than that. The stochastic similarly is also bumping up against the ceiling with no predictive power. We remain in the biggest uptrend I've seen in a long time and with no reversal candles in sight I just can't call this chart lower yet.

The VIX:  And correspondingly the VIX is now in an equally long downtrend losing another 5.3% on Monday with its own RSI now on zero. This is in fact the third day in a row RSI has been at zero and I can't recall the last time that happened. In any case we continue to dribble down the lower BB with no end in sight. Of even more importance is the fact that on Monday the VIX broke under its 200-day MA. That's always a bad sign and with a red marubozu on the books it doesn't look like there's any reversal in sight for the VIX right now.

Market index futures: Tonight, all three futures are lower at 12:36 AM EDT with ES down 0.17 %. After a rip-roaring rally last week ES has been having some trouble making any headway the last few days putting in just a small advance on Monday. And it appears to be giving most of that back in the new overnight in the form of a dark cloud cover. Indicators also now appear to be falling back off extreme overbought levels and the stochastic has just squeaked out a bearish crossover. So the general impression here is that this chart looks lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises again from 2006.75 to 2008.92.  An overnight sag in ES has now put it back below its new pivot so this indicator now turns bearish.

Dollar index:  On Friday the dollar dropped all the way to its lower BB and on Monday it lost another 0.12% on a gravestone doji. Indicators are now oversold but the stochastic has not yet begun to curve around for a bullish crossover. So we have a reversal warning in place but one which requires confirmation on Tuesday.

Euro:  After touching its upper BB on Monday with a small lopsided spinning top the euro looks like it's falling back in the overnight, down 0.13% at the moment. Indicators look to have now peaked at overbought and the stochastic is getting ready for a bearish crossover so overall this chart looks negative for Tuesday.

Transportation:  After a decent gain last Friday, on Monday the trans put in a tall classic hanging man sitting right at the top of Friday's candle. Indicators remain quite overbought and the stochastic is just about in position to form a bearish crossover. We remain in a steep rising RTC but the trans are looking to be about out of gas right now so a move lower on Tuesday would not surprise me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      4       1           0       0.200     31

     And the winner is...

Tonight the charts are looking tired, and they have the right to be after such a nice rally last week.  We're getting some reversal signs so I'm just going to go ahead and call Tuesday lower.

Single Stock Trader

After putting in a red spinning top on Friday Verizon wasn't really able to make any headway on Monday with a stubby green hanging man. Indicators and now quite overbought and the stochastic is getting ready to curve around for a bearish crossover. Therefore this chart now looks to me to be more than a little toppy.