Friday stock market forecast

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

• Friday lower.
• ES pivot 2074.67.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy

Recap

Last night's conditional call for Thursday worked as expected. ES made a brief and fruitless attempt to break above its pivot just after 3 AM but it was all downhill from there as it closed on session lows. And as a result the rest of the market closed lower too. Tonight once again we're going to have another Night Owl Lite because that annoying thing called Real Life (TM) interfered with my favorite hobby and I didn't have enough time to prepare the usual post. But we should still have some sort of idea of where Friday is headed.

The technicals

ES daily pivot: Tonight the ES daily pivot dives from 2074.67 to 2052.50.  .ES remains well beneath its new pivot so this indicator continues bearish.

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      7       5           1       0.533    538
November   1      4       2           2       0.429   -397
     And the winner is...

On Thursday the Dow and the SPX both ominously fell through their respective 200 day MA's. The VIX also jumped right through its own 200 day MA in the other direction. None of that is any good for the market. And to make matters worse, right now oil seems to be in the driver's seat again as it seems intent on retesting the August lows. There are certainly no bullish signs on that chart. Or any other chart that I can see tonight. So I guess I'll just have to call Friday lower. I'll be happy to be proven wrong. That's all she barely managed to write. See you again Sunday night!


Single Stock Trader

Last night I called Verizon a speculative buy on the basis of a hammer followed by a rising spinning top, its first in quite a while. But on Thursday VZ got caught up in the general downtrend and fell another percent. That cancels everything nice I had to say about it last night and leaves the indicators wandering around at highly oversold levels. With a new red marubozu on the books the current pattern looks more like a bearish evening star than a bullish morning star. We also fell right back into that descending RTC so this stock is no longer any kind of a buy and if anything looks more like a short.

Thursday stock market forecast

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

• Thursday higher only if ES breaks above its pivot, else lower.
• ES pivot 2074.67.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ now a speculative swing trade buy.

Recap

These small movement days are difficult to call and Wednesday was no exception. I was wrong once again because the Dow did not rise, instead it fell 56 points. And on top of that , it's time for another Night Owl Lite because I just plain ran out of time today to put together the usual post and so I will simply present the conclusions without all of the yakking. For all the good it's done lately this will probably be just as well.
The technicals

ES daily pivot: Tonight the ES daily pivot falls again from 2073.83 to 2074.67.  .That till leaves ES below its new pivot but just barely.  So this indicator turns nominally bearish but it is definitely in play 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    7      7       5           1       0.533    538
November   1      4       2           1       0.333   -397

     And the winner is...

There has been little direction to the markets the past two days.  However, tonight ES appears to be finding some support as it puts in a bullish piercing pattern.  On the other hand, the VIX is doing the same.  The cautious thing to do here is simply call Thursday uncertain but I'm groing to try another conditional call: if ES can break above its new pivot by mid-morning Thursday, we'll close higher.  If it remains below though, we close lower.

Single Stock Trader

After putting in a hammer last Friday, Verizon put in a second one on Monday and followed that with a third one on Tuesday, each one lower than the one before. Wednesday was the first day that Verizon actually posted a gain, snapping a seven-day losing streak. This was significant because it's also the first confirmation of any of these hammers we've seen and also one that broke out of the steep descending RTC for a bullish setup. It also sent the indicators rising from extreme oversold levels and that puts us very close to the kind of swing trade buy that I'm looking for. The only thing that doesn't make this a 100% trade is the fact that we had a narrow spinning top on Wednesday instead of an outright bullish candle. But I will nevertheless bless this now as a buy for the adventurous.

Wednesday stock market forecast

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

• Wednesday higher.
• ES pivot 2073.83.  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

Tuesday ended mixed with the Dow up but the Nasdaq down and took my conditional call with it - that was a total flop. Oh well, it doesn't always work. What we got was pretty much another Day of Nothing. So let's go to the charts and see if there might not be some more interesting action coming on Wednesday.

The technicals

The Dow:  The bears were unable to make any further headway on Tuesday as the Dow managed to gain 0.16% and preserve support around the 17,717 level. The indicators are now mixed with money flow and the stochastic falling while momentum and RSI rise and OBV goes nowhere. The resulting candle was clearly a green hammer so there's at least a sign of a reversal here but it's one which requires confirmation on Wednesday.

The VIX:  I clearly missed the VIX last night when I said it would go higher because on Tuesday it instead dropped another seven and a half percent giving up all of Monday's gains and then some for a bearish engulfing pattern that also dropped right back through its 200 day MA, another bearish sign.  With indicators now falling my guess has to be that the VIX moves lower again on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:13 AM EST with ES up 0.10%. Technically, ES didn't look all that strong last night so I was a bit surprised to see it put in a green hammer to close back up to 2078 on Tuesday. Interestingly, the indicators continue to fall and have now hit oversold. There is now a slight suggestion of a move higher but there doesn't seem to be much interest in the overnight to confirm that so once again I have to defer on this chart and await confirmation on Wednesday.

ES daily pivot: Tonight the ES daily pivot falls  from 2077.58 to 2073.83.  .That puts ES back above its new pivot so this indicator turns right back to bullish.

Dollar index:  And last night the dollar was another one of these indeterminate charts that I didn't want to call. That is also just as well because despite the yawning gap beneath it wanting filling and what looked like an imminent bearish evening star, the dollar instead gapped higher on Tuesday with a non-trivial 0.32% gain. But even this was on a red spinning top, the second in a row and the fourth reversal warning candle in a row. So with a dollar now back to levels not seen since last April and despite indicators that are now highly overbought it's not at all clear when it may start moving lower. So I'm just not calling this chart either tonight.

Euro:  And last night the euro was yet another chart I didn't want to call for Tuesday. And that was also wise because after putting in what looked like a bullish piercing pattern on Tuesday it just kept going lower, closing this time down to 1.0711, its lowest close since April 15th. So that leaves us tonight with a chart it's now in a month-long downtrend and the lower BB falling away. While the indicators are now highly oversold there is still no reversal sign in sight on this chart.

Transportation:  I didn't want to call the trans last night after a long-legged doji star and it was just as well because on Tuesday they put in a second even tighter star that resulted in a tiny 0.03% gain. All of which leaves us pretty much in the same spot we were last night - indecision abounds and there's no way to call this chart.

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      7       5           1       0.533    538
November   1      3       2           1       0.400   -341

     And the winner is...

It may be incautious of me as there's still a fair bit of uncertainty in the charts tonight but we do have some reversal signs along with a promising VIX and futures turning positive so I'm going right back out on a limb and calling Wednesday higher.

Single Stock Trader

Last night I called Verizon a falling knife and this was pretty much the textbook definition of that as VZ put in a third hanging man reversal warning in a row, and yet it just keeps going lower finishing this time off another almost half a percent. The indicators at least have now gone to extreme oversold levels with RSI hitting 3.15 and the stochastic lying flat on the floor. But once again we have merely a reversal warning and no confirmation so it is too early to call Verizon higher although at this level it has started to become interesting.

Tuesday stock market forecast

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

• Tuesday higher only if ES breaks above its new pivot, else lower.
• ES pivot 2077.58.  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

Well I guess all the signs were there last night but I chose to ignore them, preferring instead to go "out on a limb" with a call for Monday higher. And as it turns out the limb snapped out from under me as the Dow dropped 180 points on a tall red candle. This is one of those days I wish I could take back but I can't. Part of trading is being wrong sometimes.  So let's simply dust off and move on to Tuesday.
The technicals

The Dow:  On Monday the Dow suffered its biggest loss in nearly a month with an exactly 1% decline. This took it clear out of its rising RTC for a bearish setup. Meanwhile the indicators have now fallen off of overbought and are heading towards oversold but they're not there yet and with Monday's confirmation of last Friday's hanging man this chart just looks bearish for Tuesday.

The VIX:  I also missed the VIX last night . I figured it was going to go check out the bottom end of its recent trading range on Monday but instead it just rocketed right off with a giant 15.28% pop that blasted it right through its 200-day MA at 16.33 to finish just above there at 16.52. That at least finally takes it out of its two week long noodling-around area, and the MA cross is always bullish. Indicators continue to rise but have not yet hit overbought so overall this chart looks higher again on Tuesday.

Market index futures: Tonight, all three futures are higher at 12:15 AM EST with ES up 0.21%. On Monday ES ignored not one but two reversal warnings in the form of doji stars. Instead of moving higher it crashed right back down to 2073 on a tall red candle. That at least sent all the indicators falling off of overbought and headed towards oversold although they're a long way from there. It also dropped out of its latest rising RTC for a bearish setup. And with essentially no follow-through in the overnight it's still too soon to call and move higher for ES on Tuesday.

ES daily pivot: Tonight the ES daily pivot falls again from 2090.08 to 2077.58.  .That leaves ES sitting barely under its new pivot so tonight this indicator is only nominally bearish and essentially neutral.

Dollar index:  At least I was right about the dollar not being able to make any further headway on Monday as it did fall 019% on a small red spinning top. It wasn't classic but one could still call this a bearish evening star. Indicators have also now hit extreme overbought levels with RSI just under 92. The stochastic is now threaded out at overbought and has lost its predictive powers. So with a still considerable gap remaining below here further downside is possible but with a reversal candle in place again we need to wait for confirmation on Tuesday.

Euro:  After last Friday's big decline I was skeptical about the euro's ability to close any higher on Monday. And that turned out to be about right as all it was able to manage was 1.0762 on its smallest range day since I don't know when. That leaves all the indicators still oversold and nothing much to go on in technical terms. Even the new overnight isn't doing much of anything so I really don't have anything to say about this chart for Tuesday. Hey, it happens sometimes.


Transportation:  On Monday the trans put in quite a different candle from the Dow. While they did fall 0.32%, it was on a wide-ranging long-legged doji that sent the indicators falling after having only just barely hit overbought. This is a good reversal candle but one which requires confirmation so I'm not making any guesses about the trans for Tuesday here.

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      7       5           1       0.533    538
November   1      2       2           1       0.500   -341
     And the winner is...

Tonight the crystal ball is a bit cloudy as we have some reversal signs but they all require confirmation.  The best indication we've got right now is ES which is moving higher and forming a bullish piercing pattern, though you can't read too much into a half-baked candle.  So with no great clarity and ES bumping along just under its pivot, I'm going to make a conditional call: if ES can break above its pivot by mid-morning Tuesday, we'll close higher.  On the other hand, if it stays below, or rises above but falls back, then we close lower.

Single Stock Trader

\At least I'm glad that last night I refrained from calling Verizon higher Monday on the basis of a tall hammer candle. Good thing too because VZ got caught up in the general carnage on Monday with a 1.05% drop that took it out of its latest rising RTC for a bearish setup and also sent the indicators oversold. We now have a second hammer in a row but all the factors in play last night remain in play as Verizon is going inverse exponential on us. This will eventually end with a nice gain but once again we require some confirmation. This is one falling knife I don't feel like catching at the moment.

Monday stock market forecast

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

• Monday higher.
• ES pivot 2090.08.  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

I have to admit I'm a bit surprised by Friday's action in the market. I figured for sure there would be a strong reaction one way or the other after the jobs numbers came out. But instead what we got was a tiny move higher in the Dow and an even smaller move lower in the SPX . All in all it was a big nothing. Let's take a look now to see if we can't get a bit more direction as to where this coming week is headed.
The technicals

The Dow:  After a fat spinning top reversal candle last Wednesday and a doji star immediately following on Thursday it's no wonder I called Friday uncertain. And as it turned out what we got was another reversal candle, this one a green hanging man. Indicators remain just barely overbought and the Dow itself is just hanging by a thread on the very edge of its latest rising RTC. The rest of the indicators though have begun moving lower so it's not at all clear which way this one's going on Monday.

The VIX:  Last Friday made it 12 in a row that the VIX has been stuck in a consolidation range. This time it fell nearly 5% after Thursday's inverted hammer that just touched its 200-day MA. And it gave us a second inverted hammer. It also just squeaked out a bearish stochastic crossover. So that gives us two contradictory reversal warnings with one higher, one lower but given recent history my guess is that there's only a small bit of downside left available, perhaps down to 14

Market index futures: Tonight, all three futures are higher at 12:23 AM EST with ES up 0.10%. ES has been having trouble getting it together for the last three days. We had a fat spinning top on Wednesday followed by a doji star somewhat lower on Thursday followed by another doji lower again on Friday. With four days of lower highs and lower lows it's not looking so hot. Indicators are now off of overbought but still a long way from oversold. The new overnight is also sitting right on the edge of the latest month-long rising RTC so it is now do or die time for ES. At the moment the Sunday overnight looks only mildly  encouraging but we'll have to see what happens on Monday. I'm not convinced.


ES daily pivot: Tonight the ES daily pivot falls  from 2094.25 to 2090.08.  .That now leaves ES above its new pivot so this indicator flips back to bullish.

Dollar index: I didn't call the dollar last Thursday night for Friday and it's just as well because I sure wasn't expecting a gigantic 1.23% gap-up rocket all the way back to its upper BB at 66.46. (Recall that this is on the $USDUPX, not the $DXY since those cheapskates at eSignal want to charge me extra for the latter) and even this giant pop was only enough to send the indicators barely overbought. And the stochastic is nowhere near even starting to put in a bearish crossover. What we do have is a an inverted hammer and a giant yawning gap that begs filling so we'll be watching this one to see if the dollar does any retracing a time soon as it seems ripe for that right now.

Euro:  And of course similarly, on Friday the euro took another big leg down, this time to close at 1.0 750 breaking support all the way back to the middle of July. It also just touched its lower BB but we are now clearly in a month-long downtrend here and although the indicators have now gone oversold, again there is really no sign at the moment is that the euro could close higher on Monday.

Transportation:  On Friday the trans outperformed the Dow with a 0.75 percent gain that sent the indicators overbought and brought the trans right back to resistance at 8241. Still, that was enough to break out of their latest short descending RTC so with a confirmed reversal candle and all the indicators rising, there are really no bearish 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    7      7       5           1       0.533    538
November   1      1       2           1       0.667   -161

     And the winner is...

There are a few positive signs in the charts tonight, particularly with the VIX which seems like it could fall a bit more and the futures which seem to be forming a bullish stochastic crossover at the moment.  So I'm going to go way out on a limb and call Monday higher.

Single Stock Trader

It seems like ages since I called a swing trade buy for Verizon. And indeed on Friday it just kept going lower with a gap-down red hammer for a nearly 1% loss to make it five lower in a row. That also left it right on the edge of its rising RTC and indicators continue to fall from overbought towards oversold but they aren't there yet. At least the stochastic has finally begun to curve around for a bullish crossover but it's not there yet either. So what we have here is a reversal warning but one which requires confirmation so this stock is still not a swing trade buy.