Friday stock market forecast

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

• Friday uncertain.
• ES pivot 2081.25.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

I called the Dow higher for Wednesday but the market finished virtually unchanged. Of course that's an interesting development - so let's see what the latest charts let's check out the implications of the latest charts for the market on Friday as we close out the week with option expirations for November.

The technicals

The Dow:  On Thursday , the Dow went basically nowhere as it oscillated about the unchanged line to finish with a perfect doji star on its smallest range day since October 26th. Indicators are similarly wandering around halfway between overbought and oversold and thus are not particularly useful tonight. So that leaves us with a weak reversal warning but one that requires confirmation on Friday. This may just reflect uncertainty over option expiration days which often feature strange action.

The VIX:  Last night I thought that the VIX did not look particularly bullish for Thursday and indeed it tested its 200-day MA early on. But in the end it bounced right off it to post a small 0.83% gain on an inverted hammer. That left all the indicators somewhat confused with RSI rising but momentum and the stochastic both falling. So at this point it looks like the 200 MA at 16 is providing some support here and it's not clear that the VIX will want to go below that on Friday. Some limited upside isn't out of the question either.


Market index futures: Tonight, all three futures are mixed at 12:13 AM EST with ES down 0.04% but YM up 0.06%. Last night I couldn't find any bearish signs at all on this chart, but after such a big gain on Wednesday it looks like the way it looks like ES finally ran out of gas on Thursday putting in a doji star sitting right at the top of Wednesday's close. This is a reversal warning that requires confirmation and it looks like we're getting it in the new overnight as ES is running lower and all of the indicators are still a bit short of overbought. So it is possible this one could move lower on Friday.

ES daily pivot: Tonight the ES daily pivot rises from 2068.42 to 2081.25.  .That's enough to put ES back below its new pivot so this indicator now turns back to bearish.

Dollar index:  Last night I noted a reversal warning in the dollar but noted that it required confirmation on Thursday. Well we got that confirmation big time as the dollar plunged 0.68% on a gap-down red candle. That was enough to send the indicators off of overbought and also cause a bearish stochastic crossover. So right now it looks like there's more room for the the dollar to run lower on Friday despite all the noise you're hearing in the media about the strength of the dollar.

Euro:  I also got the euro correct last night when I called for a higher close on Thursday as it bounced right back up to 1.0736 after a nice doji star on Wednesday. That leaves it hanging right on the edge of a month-long descending RTC for a bullish setup. However the overnight is showing no interest in any sort of follow-through and the indicators are confused, wandering around halfway between overbought and oversold. So right now the general impression is that it's possible the euro may run lower on Friday.

Transportation:  At least I got this much correct. After a nice gain on Wednesday the trans followed it up with another 1% advance on Thursday. Indicators continue to rise off of oversold but have yet to reach overbought. In addition the upper BB is not until 8333 so there's still some room to rise here and now with a confirmed two white soldiers marching on there is still nothing bearish about this chart for 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      7       5           1       0.533    538
November   3      6       3           2       0.500   -429

     And the winner is...

The market's failure to advance on Thursday after its 200 MA breakout make me cautious.  Add in a lackluster overnight in the futures and VIX that just bounced off its own 200 day MA and it's not clear where the buyers are going to be coming from.  But there are still no outright bearish signs on the charts so with Friday being op-ex anyway, I'm just going to call Friday uncertain.  That's all she wrote.  Reminder - I'm taking next week off so I'll see you again Sunday night after next.

Single Stock Trader

Verizon surprised me on Thursday by rejecting the hanging man from Wednesday as it gained another 0.84%. That makes it four in a row now and it's pretty clear we missed this particular bus. However, the indicators have not yet hit overbought so there might still be some more gas in the tank for Friday. Nevertheless this is not my preferred trade entry setup.

Thursday stock market forecast

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

• Thursday higher.
• ES pivot 2068.42.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

Wednesday morning Mr. Market must have been anticipating the Fed minutes at 2 PM because the Dow pretty much just rose all day with the gains accelerating after the announcement. It could have gone either way and that probably would account for all the uncertainty in the charts on Tuesday. So with that out of the way let's move on to Friday. I will just add that with Thanksgiving next week I'm planning on taking the entire week off. I'm not looking for much action in the markets then anyway and it will be nice to take a break.

The technicals

The Dow:  Last night I mentioned that Tuesday's pause might just be the Dow gathering steam for another attack on its 200-day MA and I was reluctant to call it lower on the basis of a doji star. On Wednesday the reversal warning was disconfirmed in a big way as the Dow had an excellent day gaining 1.42% on a tall green marubozu that absolutely blasted right through the MA to close back to 17,737. That was enough to take the indicators off of oversold and they are now all rising towards overbought. So this chart now simply looks continued bullish for Thursday.

The VIX:  On Tuesday the VIX put in a stubby green spinning top as a bullish piercing pattern. But that all went by the wayside on Wednesday as the VIX gave it all back with a nearly 11% decline and is now hovering just above its 200-day MA at 15.87. Indicators remain just barely overbought and are now all headed lower along with a nicely completed bearish stochastic crossover. So it definitely looks to me like the VIX may be interested in taking a look at the MA on Thursday. In any event this chart does not look bullish to me tonight.

Market index futures: Tonight, all three futures are higher at 12:12 AM EST with ES up 0.13%. Last night ES was the picture of indecision with a doji star sitting right below its 200-day MA. Well on Wednesday it picked up where it left off and put it in a giant green candle that vaulted it right over that MA and also out of its latest descending RTC for a bullish setup. Indicators continue to rise but have not yet hit overbought and the overnight seems to be guiding higher once again. So there's absolutely no bearish signs at all on this chart right now.

ES daily pivot: Tonight the ES daily pivot rises from 2051.33 to 2068.42.  .That's enough to place ES well above its new pivot so this indicator flips right back to bullish again.

Dollar index:  And on Wednesday the dollar also rejected Tuesday's inverted hammer by gaining another 0.05% on a lopsided green spinning top. Indicators are now just short of overbought and the bullish stochastic crossover from a high level I noted yesterday is now confirmed. So there's no real bearish signs on this chart but we do have a reversal warning and that requires confirmation on Thursday.

Euro:  Meanwhile the euro kept falling in a month-long descending RTC on Wednesday closing this time at 1.0650, its lowest close since April 13th. However we now have a doji star reversal warning and the indicators are now rising off of oversold. Also, the stochastic has just formed a bullish crossover and the overnight is rising strongly suggesting that the euro is going to close higher on Thursday.

Transportation:  And finally similar to the other charts, on Wednesday the trans disconfirmed Tuesday's doji reversal sign with a big 1.65% green marubozu that left the indicators rising off of oversold. Resistance is still not until 8242 so there's still a bit of room to run higher and there's nothing bearish at all about 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   3      5       3           2       0.500   -425

     And the winner is...

After a nice rally it's tempting to think the market may want to take a pause but with indicators still generally only just off oversold and some strong 200 day MA crossings in the Dow and the SPX, and with the futures guiding higher, I think it just makes more sense to go ahead and call Thursday higher.

Single Stock Trader

The Dow was all green on Wednesday but Verizon was one of the weaker players putting in a classic hanging man for a small gain. Indicators continue to rise though but have not yet reached overbought. So with the indicators halfway between oversold and overbought and a reversal candle that requires confirmation I don't have much to say about this chart tonight. In any case it is not a swing trade buy setup.

Wednesday stock market forecast

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

• Wednesday uncertain.
• ES pivot 2051.33.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy

Recap

On Tuesday the markets tried to keep the momentum going from Monday's rally but it eventually fizzled out as both the Dow and the SPX were unable to move past their respective 200 day MA's which now serve as resistance. Does this mean Monday's action was just a one-off or are we simply pausing for a new attempt on the MA? Let's look at the charts and see what they have to say.

The technicals

The Dow:  It was a real squeaker on Tuesday as the Dow moved higher nicely in the morning but then spent the rest of day giving it all back. We did manage a meager six and a half point gain but the 200 day MA proved too tough to crack and left us with a long-legged doji star. Indicators remain oversold though and we still have a fresh bullish stochastic in place so while we now have a reversal warning this is one that is going to require confirmation on Wednesday.

The VIX:  On Tuesday the VIX rejected Monday's nice bearish engulfing pattern by gaining 3.74% instead on a green spinning top. However, the indicators continue to be overbought and the stochastic has just completed a bearish crossover. So that all leave this one kind of up in the air as we now have a reversal warning higher but one that requires confirmation on Wednesday.

Market index futures: Tonight, all three futures are lower at 1:01 AM EST with ES down 0.12%. On Tuesday ES did manage a small gain on top of Monday's big rally but once again it was stymied by the 200 day MA and closed just below it at 2049. Indicators are now off of oversold and all rising towards overbought. The new overnight is forming something of a fat spinning top for what that's worth. Overall this doesn't look very positive for Wednesday but it's hardly conclusive at this point.

ES daily pivot: Tonight the ES daily pivot rises again from 2032.50 to 2051.33.  .That move was enough to put ES back below its new pivot so this indicator now turns bearish again.

Dollar index:  Last night I noted some strength in the dollar and that was born out on Tuesday as the dollar advanced another 0.16%. That marks its best close since April 13th. Indicators remain overbought but the stochastic has now formed a bullish crossover from a high level and those are often good for another day or two of higher prices. So with three white soldiers on the books now it's entirely possible the dollar could move higher again on Wednesday.

Euro:  Last night I called the euro lower and indeed that is exactly what happened on Tuesday as it sank back down to 1.0652, its lowest close since April 14th. Even at that, the indicators are only just barely oversold and the stochastic continues to sink with no bullish crossover in sight. We now have three black crows on the books and no sign that the latest downtrend is over.

Transportation:  After putting in a tall green hammer on Monday, on Tuesday the trans put in an equally tall doji star sitting right at the top of Monday's close. Indicators remain highly oversold though and the stochastic has just completed a bullish crossover so while we do we have a reversal indicator, it is a weak one and overall it looks like this chart might just go higher again on Wednesday.

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   3      5       2           2       0.500   -425

     And the winner is...

On Tuesday we simultaneously hit a number of resistance lines on different charts and also got some reversal signs that require confirmation.  Given the overall contradictory signals, I'm just going to have to call Wednesday uncertain.

Single Stock Trader

Last night I thought Verizon could move higher again on Tuesday and it did though not by much. And the resulting candle was a lopsided spinning top which is something of a reversal warning. But with the indicators still only just recently off oversold and a fresh bullish stochastic crossover in place it's too early to give up on this trade just yet. It may be too late to get in but I'd wait at least one more day to see where this goes on Wednesday. If it looks like it's rolling over early on then it's probably not worth holding on to.

Tuesday stock market forecast

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

• Tuesday higher.
• ES pivot 2032.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

Well that was certainly interesting. The market completely fooled me on Monday and I'm sure more than a few others too by not dropping at all in the wake of the weekend barbarian attacks in Paris. With the future is guiding substantially lower Sunday night and considering the fact that past similar attacks have led to market selloffs, I don't think it was unreasonable to expect a decline on Monday. What we got instead changes the picture so we have some most curious charts to look at tonight.
The technicals

The Dow:  On Monday the Dow put in a canonical bullish engulfing pattern much to my surprise. And I was even more surprised at the extent of the gain with a 238 point jump that was its best performance in nearly a month. It was also enough to send the indicators off of oversold and complete a bullish stochastic crossover. That leaves nothing bearish at all about this chart tonight.

The VIX:  And in perfect mirror image fashion, on Monday the VIX put in a bearish engulfing pattern with a nearly 10% drop . That was enough to send it over off of overbought levels and also form a bearish stochastic crossover. So just as the Dow now looks bullish, the VIX looks correspondingly bearish.

Market index futures: Tonight, all three futures are higher at 12:14 AM EST with ES up 0.18%. What a difference a day makes. After looking decidedly negative at this time last night, on Monday ES roared back with a giant bullish engulfing candle that was stopped only by its 200 day MA at 2049. And while that still leaves the indicators oversold it also completed a bullish stochastic crossover. In any case, it looks like the latest descending RTC may very well be over and there's certainly nothing bearish about this chart tonight. It remains to be seen if ES can punch through the 200 MA on Tuesday. But judging by how much gas is in the tank I wouldn't be surprised to see that happen.

ES daily pivot: Tonight the ES daily pivot rises from 2025.33 to 2032.50. .That leaves ES well above its new pivot so this indicator now turns bullish.

Dollar index:  And also on Monday the dollar put in an exceptional chart of its own with a 0.45% gain that broke monthly resistance for its highest close since April 13th. That also sent the indicators back overbought and caused the stochastic to curve around for a bullish crossover. As an aside, it's interesting that further dollar strength may delay the widely anticipated Fed rate hike next month which would be something (a delay that is) I would definitely applaud.

Euro:  And after a very tall bearish engulfing candle last Friday, on Monday the euro confirmed that with an equally tall red candle that closed right back down to 1.0681, its lowest close since April 15th. And although the indicators remain oversold the stochastic has now formed a bearish crossover from a low level. Those are often good for another day or two of lower prices and a move lower in the overnight seems to be confirming that idea.

Transportation:  After a dreadful week last week culminating with three black crows that took it right down to its lower BB, on Monday the trans put in a textbook perfect green hammer. With the indicators now oversold and the stochastic curving around nicely in preparation for a bullish crossover, this looks like an excellent buying opportunity in the trans for 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    7      7       5           1       0.533    538
November   2      5       2           2       0.444   -431

     And the winner is...

With bullish engulfing candles galore on the charts tonight and with ES having just reclaimed its 200 day MA, the only logical call I can make is for Tuesday higher.

Single Stock Trader

Like most everything else on Monday Verizon had an excellent day with a nearly 2% pop that bounced it right off its lower BB. That sent the indicators off of oversold and formed a bullish stochastic crossover. It also pushed it out of its long-running descending RTC for a bullish crossover. Therefore this chart looks nothing but bullish for Tuesday. And while it's not a classic swing buy for me I think its not a bad entry point right here.

Monday stock market forecast

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

• Monday lower.
• ES pivot 2025.33.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

Last Thursday night I noted that the charts were looking pretty grim and indeed on Friday the Dow plunged another 203 points . You can blame the price of oil, China, whatever but it was a disappointing end to a down week. Let's move on ahead to Monday now and see if we can recover some of those losses on this last week before the big Thanksgiving holiday coming right up.

The technicals

The Dow:  The Dow's 1.16% dump on Friday  extended a week-long decline into an inverse exponential rundown. We confirmed the 200 day MA break as the Dow continues heading down towards its lower BB, now not that far away at 17,146. Indicators have now gone to extreme oversold levels but the stochastic is not quite ready to come around for a bullish crossover yet. So with a second tall red marubozu in the books there is still not a bullish reversal sign on this chart.

The VIX:  After blasting through its 200-day MA on Thursday, the VIX rose another 9.31% on Friday for three white soldiers. It is now climbing up its upper BB and starting to look a little overextended to me. I often note that the VIX rarely spends more than a day or two at elevated levels after it touches its upper BB and we've been there for 2 days now. However indicators are only moderately overbought at this point and we do not yet have a reversal candle here. So while I think the VIX is due to come down to earth sometime this week, it's not clear that that is going to happen on Monday.

Market index futures: Tonight, all three futures are lower at 12:59 AM EST with ES down 0.47%. After punching down through its 200-day MA last Thursday ES confirmed that bearish sign on Friday with another tall red candle. That almost touched its lower BB. Now in the Sunday overnight, ES actually did test the lower BB at 2006 and for the time being that looks like a success. Indicators are now at extreme oversold levels and we are getting a nice gap-down green hammer candle. With ES having fallen three in a row in what looks like an inverse exponential and the stochastic curving around nicely in preparation for a bullish crossover, this chart has all the makings for putting in a bottom on Monday.

ES daily pivot: Tonight the ES daily pivot dives again from 2052.50 to 2025.33.  .That still leaves ES considerably below its new pivot so this indicator continues bearish.

Dollar index:  Lately the dollar has been getting jerked around every which way. After what had the makings of a bearish evening star last week and a tall red candle on Thursday, instead of moving lower on Friday it actually gained 0.39% on a bullish inside harami. However the indicators remain just barely overbought and the stochastic is now in full-on bearish crossover mode. So this chart is something of a conundrum for Monday.

Euro:  And of course it's about the same deal with the euro. After looking like it was going to start a nice rally in the middle of last week, on Thursday it suddenly reversed course with a tall bearish engulfing candle. And so far in the Sunday overnight it looks like that's being confirmed as the euro is moving down another 0.2%. But the indicators are now oversold and the candle (for now anyway)looks like a hammer. So with some decent support around 1.07 this chart looks like it might have more upside potential than downside risk from here.

Transportation:  On Friday the trans made it down three in a row on an inverted red hammer but this one found support right on its lower BB. The indicators are now also oversold although the stochastic has yet to begin curving around for a bullish crossover. So we have a reversal warning in place and it looks to me like the trans are ready to move higher sometime soon but it's not clear that will happen on Monday.

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   2      4       2           2       0.500   -194

     And the winner is...

The charts are starting to show some decent reversal signs.  However, I think that's all pretty much moot in view of the barbarian attacks in Paris this weekend.  I think the market is going to use that as an excuse to do some more selling, and that seems to be supported by the futures running lower by half a percent in the overnight.  So I'm just going to call Monday lower and keep my fingers crossed.

Single Stock Trader

Last Thursday night I called Verizon more of a short than a buy for Friday and that's exactly what happened as it had an absolutely horrible day losing 1.34% for its worst performance in 10 sessions and making it eight out of 10 down now. The good news is that it finally hit its lower BB and the indicators are all at extreme oversold levels. At this point it will be interesting to see if it can manage to bounce off the lower BB or if it starts to dribble down it. There's no real support until 43.51 but because it's been knocked down so hard over the past two weeks there may come a point soon (possibly this week) where all the selling is exhausted. In the meantime it's still not my favorite swing trade buy setup.