Friday stock market forecast

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

• Friday higher.
• ES pivot 2080.92.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

I was right to be cautious about Thursday's action after Wednesday's big gains. However I was wrong with my conditional call as the market closed lower despite the fact that ES remained above its pivot all day long. This is often a good play but this time it wasn't. In any case we now move on to finish off the not-so-spooky month of October and see if Friday is going to end with a trick or a treat.

The technicals

The Dow:  Last night I was dubious about how much upside the Dow might have left. As it turns out there was none left as the Dow ended the day with a 24 point loss on a classic red hanging man just below the top of Wednesday's big gains.  In any case with indicators continuing to remain quite overbought this chart looks like there is more downside risk than upside potential for Friday.

The VIX:  The VIX ended Thursday with a slight 1.95% gain that left it right in the middle of Wednesday's range, and going back a little further places it solidly in a two week long congestion zone. The indicators are a bit confused with RSI falling but the stochastic on the verge of a bearish crossover. So overall this chart is completely lacking in direction for Friday and there's no way I'm going to attempt to call that.

Market index futures: Tonight, all three futures are higher at 12:15 AM EDT with ES up 0.49%. On Thursday ES lost some ground putting in a classic green spinning top sitting just below the top of Wednesday's tall green candle. That was enough to drive the indicators to extreme overbought levels and provide something of a reversal warning for a move lower. However the new overnight seems to be moving higher in a non-trivial way so it's entirely possible that ES wants to close out the month on a positive note.

ES daily pivot: Tonight the ES daily pivot rises again from 2075.08 to 2080.92. That leaves ES above its new pivot so this indicator continues bullish.

Dollar index:  Last night I didn't want to call the dollar lower but on Thursday that is exactly what happened and as it fell half a percent after having touched its upper BB on Wednesday. That has sent the indicators starting to fall off of extreme overbought levels so the general idea here is that there might be more downside to come on Friday.

Euro:  Last night I was skeptical about the euro's chances of moving higher on Thursday but that's what it did anyway with a fat green spinning top to close right back up to 1.0981. With the indicators now oversold and the overnight pin action moving higher, it seems possible that the euro could close higher again on Friday.

Transportation:  Last night I said that "I wouldn't be surprised to see the Trans move higher on Thursday". And indeed that is exactly what happened with the trans putting in an impressive 0.84% gain in a bit of bullish divergence on day that the rest of the market was lower. This tall green marubozu confirmed Wednesday's classic doji star. Also the indicators are not yet oversold. That certainly seems to suggest that there might be more upside left for the trans 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    7      6       5           1       0.571    630

     And the winner is...

Tonight the charts don't really look all that bullish (apart from the trans) but the last day of October is historically positive and the futures seem to be supporting that at the moment so I'm going to go out on a limb and call Friday higher.  That's all she wrote.  See you again Sunday night!

Single Stock Trader

Verizon simply continues to put in assortment of topping candles. On Thursday it was a red hanging man. That makes it five in a row now - a bearish tri-star followed by a doji star and then a hanging man. And yet Verizon simply refuses to go down. Nevertheless indicators remain overbought and one has to believe what goes up must come down sooner or later. In any case this is definitely not a swing trade buy. Or any other kind of buy.

Thursday stock market forecast

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

• Thursday higher only if ES remains above its pivot, else lower.
• ES pivot 2058.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Last night I refrained from calling the market on Wednesday because of the looming Fed decision. In retrospect the nearly 200 point gain in the Dow was not entirely unexpected but that's just my policy. In any case it was an interesting candle so let's take a look at the charts for Thursday and see where that's headed.

The technicals

The Dow:  As is so often the case when the Fed's decision comes out the Dow took off in one direction (in this case lower) only to suddenly reverse course and then finish in the other direction (in this case a 1.13% gain.) That proves that the 200 day MA served as support for the second day in a row. But it still leaves the indicators overbought and after a tall green marubozu leaves us just short of the upper BB at 17.878. So there's no bearish reversal candle immediately but it's not clear how much upside Dow has left.

The VIX:  After looking toppy last night on a lopsided red spinning top, on Wednesday the VIX declined 7.13% on a very long-legged red spinning top that almost hit its lower BB at 12.54. That confirmed Tuesday's bearish candle and with indicators that have now begun moving lower before ever reaching overbought it looks like there's more downside possible for the VIX on Thursday.

Market index futures: Tonight, all three futures are lower at 12: 13AM EDT with ES down 0.32%. Thanks to Auntie Janet, on Wednesday ES broke through its recent resistance around 2065 with a big pop back all the way back up to 2085. That means we have now we traced all of the big losses from August. Indicators remain overbought but without a reversal candle insight yet there is no way I can call it lower on Thursday despite it sagging somewhat in the overnight.

ES daily pivot: Tonight the ES daily pivot rises again from 2058.83 to 2075.08. That leaves ES above its new pivot, though not by much.  But for now this indicator remains bullish.

Dollar index:  The dollar went nowhere on Wednesday until the Fed decision. Then it just absolutely took off to finish with a 1.13% gain that sent it clear above its upper BB for its highest close since August 7th. That still leaves the indicators all highly overbought and the stochastic completely threaded out at a high level. But this was not a reversal candle so it is too soon to call a move lower in the dollar yet.

Euro:  After breaking under its 200-day MA last week the euro has been absolutely unable to get anything together. On Wednesday it confirmed Tuesday's lopsided spinning top with a big decline to 1.0909, its lowest level since August 7th. That leaves all the indicators still quite oversold and the overnight appears to be trying to stage a rally, but it is by no means clear that the euro can finish higher from here on Thursday.

Transportation:  On Wednesday the trans put in a nearly perfect long-legged doji star for a tiny 0.08 % gain. Of course on Tuesday they had an enormous decline so any sort of recovery on Wednesday would not be entirely unexpected as moves this big tend to add credibility to reversal dojis. So I wouldn't be surprised to see the trans move higher on Thursday.

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    7      5       5           1       0.615    630

     And the winner is...

I don't know - we don't really have any good bearish signs on the charts tonight but I'm concerned that Wednesday's action, or rather Fed-reaction might have been overdone and that the market could be in for some retracing.  So I'm going to take advantage of the close proximity of ES to its new pivot tonight to make another conditional call.  If ES remains above its new pivot by mid-morning Thursday, we'll close higher.  But it it galls below by then, we close lower.

Single Stock Trader

After a sharp decline when the Fed announcement came out Verizon managed to battle back to gain $0.31. You'd think that would cancel the last three days' bearish tri-star pattern but Wednesday's candle turned out to be yet another doji star making it four bearish reversal signs in a row. Indicators remain quite overbought so it still looks like the next move is lower.

Wednesday stock market forecast

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

• Wednesday uncertain.
• ES pivot 2058.83.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

On Tuesday the market pretty much confirmed my expectations from last night as the Dow put in a 42 point decline saved only by its 200-day MA. With another important Fed day coming up, we'll cut straight to the chase as it is my general policy to never attempt to call a Fed day. We will resume the usual chart rundown on Wednesday

The technicals

ES daily pivot: Tonight the ES daily pivot falls again from 2062.58 to 2058.83. That move was enough to put ES back above its new pivot so this indicator flips back to bullish.

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    7      5       4           1       0.615    630
     And the winner is...

With the Fed coming up and despite the fact that the expectation is generally for no interest rate hike, I make it a point to never try and outguess them.  Therefore, I simply call Wednesday uncertain.  We'll see.

Single Stock Trader

For what it's worth, on Tuesday Verizon confirmed my bearish expectations and in fact ended up putting in a rare bearish tri-star pattern . With indicators still overbought and the stochastic just finally putting in a fresh bearish crossover, this one definitely looks lower on Wednesday.

Tuesday Stock Market Forecast

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

• Tuesday lower.
• ES pivot 2085.92.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Monday turned out be one of those Days of Nothing and everybody was apparently sitting on their hands waiting for a slew of earnings reports to come out later this week as well as an upcoming Fed decision on interest rates. That's about all there really is to say about Monday's action so let's move right on to Tuesday.

The technicals

The Dow:  The Dow lost 24 points on Monday on a small red hanging man. It wasn't a big move but with indicators highly overbought this is at least the warning of a reversal.. But more important perhaps was the failure of the Dow to advance any from Friday's close. So overall it's hard to read too much into this because of the small numbers involved.

The VIX:  Interestingly as well, on Monday the VIX put in a nontrivial 5.74% gain on a day the Dow went nowhere, with a gap-up green marubozu that took the indicators finally off of oversold and gives the general impression that the VIX wants to move higher again on Tuesday

Market index futures: Tonight, all three futures are lower at 12:20 AM EDT with ES down 0.21%. Like all the other charts, on Monday ES pretty much stalled out unable to make any headway from Friday's close. That caused the indicators to continue falling off their recent highs and interestingly also caused a fresh bearish stochastic crossover. With the overnight action going lower, it looks doubtful that ES can advance any further on Tuesday.

ES daily pivot: Tonight the ES daily pivot falls from 2064.58 to 2085.92. ES remains below its new pivot so this indicator turns back to bearish.

Dollar index:  After a week-long rise that saw the dollar bust through its 200 day MA on Friday and hit its upper BB, it fell back 0.29% on Monday with a small red spinning top. That was enough to cause the indicators to top at overbought and flatten out the stochastic in preparation for a bearish crossover. Overall this chart looks like its got more downside risk than upside potential for Tuesday.

Euro:  Meanwhile the euro did nothing much itself on Monday as it rose back to 1.1053 after falling through its 200 day MA last week. Indicators continue to remain overbought but Monday's gain plus some positive pin action in the overnight suggests that there could be a higher close on Tuesday.

Transportation:  On Monday the trans put in a small red spinning top for a 0.16% loss, to follow up two green candles with a reversal warning. Indicators are now somewhat confused because RSI has started falling before ever reaching overbought while the stochastic continues to rise and is still nowhere near in position to form a bearish crossover. So the overall impression is that the trans may be headed lower on Tuesday.

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    6      5       4           1       0.580    588

     And the winner is...

The market continues to look tired and we're seeing some topping signs tonight.  With the futures guiding lower, it seems logical to call Tuesday lower.

Single Stock Trader

Verizon rose again on Monday but did it on a second doji star in a row. That continues to leave the indicators highly overbought and makes it look even more likely that there's a move lower coming very soon now. In any case it's definitely not a swing trade buy.

Monday Stock Market Forecast

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

• Monday lower.
• ES pivot 2064.58.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Thursday night I called the market higher and responded accordingly on Friday with some nice gains across the board. So let's move right on to Monday as we enter the last week of what has turned out to not be a particularly scary month of October after all.

The technicals

The Dow:  The Dow rose 158 points on a gap-up green marubozu that punched right through its 200-day MA. That also sent the indicators to extreme overbought levels (RSI = 93) but next resistance isn't until 17, 750, so there's at least a little bit more room to run here and in the absence of any bearish signs it is too early to call this chart lower just yet.

The VIX:  Friday was one of these unusual days where the VIX rose on same day the general market went higher too. Admittedly it was only a 0.07% gain but the candle was a fairly tall green nearly-marubozu. The overall recent trend is down but with the indicators now oversold it's possible a reversal may be in the works in the next few days. It's just too soon to tell yet.

Market index futures: Tonight, all three futures are lower at 1:45 AM EDT with ES down 0.24%. After breaking through its 200-day MA on Thursday, ES just continued rising on Friday posting a nice gain to close back up to 2066. That move has now retraced almost all of the giant plunge from back in August. The upper BB is now at 2092 so that's the logical next target. In addition, the stochastic has just formed a bullish crossover from a high level and those are often good for another day or two of gains. However RSI has actually turned lower from overbought levels and the overnight seems to be sagging somewhat. So it's not clear to me that ES has any gas at all left in the tank to move higher again on Monday.

ES daily pivot: Tonight the ES daily pivot rises again from 2039.17 to 2064.58.  That's enough to put ES back below its new pivot so this indicator now turns bearish.

Dollar index:  On Friday the dollar had an absolutely awesome day with a 0.82% gain that not only vaulted clear past its 200-day MA but then continued on to its upper BB and then closed above that. That sort of move left the indicators at extreme overbought levels with RSI just short of 100. The stochastic is flattened out but has not yet formed a crossover and the dollar is now near resistance from mid-August so it's not clear if it's got any more gas in the tank to run higher again on Monday.  I have my doubts.

Euro:  Meanwhile, in mirror image fashion on Friday the euro continued its recent slide having already broken through its own 200 day MA on Thursday. On Friday it continued on down through its lower BB to close right back down to 1.1031, its lowest close since early August. That move left the indicators all extremely oversold and the stochastic now looks like it's ready to form a bullish crossover. With the overnight seeming to confirm that my guess is that the euro could close higher on Monday.

Transportation:  The trans on Friday continued a week-long winning streak with 0.69% gain that cleared recent resistance at 8256. And even with that, the indicators are still not yet overbought. So with a steep rising RTC in effect there are no bearish reversal signs 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    5      5       4           1       0.545    564

     And the winner is...

The market ended last week with a pretty nice run but seems to have gotten a bit overextended in the process.  We also had a number of 200 MA crossings and those take their toll.  So with the futures guiding lower Sunday night, I'm going to just go ahead and call Monday lower.

Single Stock Trader

After some nice gains last Thursday, on Friday Verizon put in a perfect gap-up doji star and that is two thirds of a bearish evening star. In addition, the indicators are now quite overbought and stochastic has just formed a bearish crossover so this chart is looking more like a short than a buy of any sort at this point.