Friday stock market forecast

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

• Friday higher.
• ES pivot 2053.33.  Breaking above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

It's been quite an interesting week in the markets so far. Many of the charts are in play right around their 200 day moving averages and oil still seems to be in the driver's seat. With yet another surprising move on Thursday, we turn the charts to try to make some sense of all of these shenanigans for Friday.

The technicals

The Dow: After finding support at its 200 day MA on Tuesday the Dow broke under on Wednesday but put in a gigantic spinning top the likes of which I've never seen (and I went all the way back to the crazy days of 2008). I figured that was a good reversal sign and indeed on Thursday the Dow moved higher again to just barely reclaim the same MA on a tall inverted hammer. Indicators continue to be confused some rising, some falling halfway between overbought and oversold so there's no guidance there. However on Thursday the Dow closed above the MA so I think that number will now serve as support. So if anything there's a good possibility of the Dow could add to these gains on Friday.

The VIX:  On Wednesday the VIX touched its upper BB at 19.93 and right on cue it backed off it. And as I've often said the upper BB generally spells the end of a VIX rally. That proved to be the case on Thursday as the VIX lost 1.38% bouncing off that same upper BB with a small doji star. Indicators are now just short of overbought and with the star in place there's at least the suggestion that the VIX could go lower again on Friday.

Market index futures: Tonight, all three futures are higher at 12:11 AM EST with ES up 0.17%. After breaking below its 200-day MA on Wednesday things weren't looking so hot for ES. But on Thursday it managed to post a small gain closing back up to 2049.25, just shy of its 200-day MA after some intraday excursions above that level. That could be taken as a failed test of the MA but we have the benefit of the new Thursday overnight which is showing a nice gap up over that level and making it look like it has enough gas in the tank for a move higher on Friday. Note also that the stochastic is now on the verge of a bullish crossover and volume has increased.

ES daily pivot: Tonight the ES daily pivot ticks up from 2052.00 to 2053.33. That's just barely enough to put ES negligibly below it new pivot.  I'm calling this one a wash.

Dollar index:  After getting hammered over the course of the past week the dollar seems to have finally bottomed on Wednesday, stopping just short of its 200-day MA. Indicators are now quite oversold and we got a decent bounce up 0.64% on Thursday. This makes it look like more upside could be coming on Friday.

Euro: And the euro was also telling us something on the charts today. After a big gain on Wednesday that just touched its 200 day MA it retreated significantly retracing those gains on Thursday. With that MA now serving as resistance, the indicators all overbought and a negative candle on the books it looks like there's more downside to come on Friday. The action lower in the overnight seems to support that idea.

Transportation:  The trans have been getting absolutely hammered for three weeks now but after a giant decline on Tuesday that had a whiff of panic to it , on Wednesday the trans found a bit of buying coming in in the form of a classic spinning top/doji star and then that was confirmed on Thursday with a 0.57% gain its first up day since December 4th. That confirms the spinning top and makes it look that there could be more upside coming on Friday particularly with the indicators now all being significantly oversold.

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   4      6       4           2       0.500   -350
December   4      1       3           0       0.800    707


     And the winner is...

With the charts tonight generally looking at least modestly bullish and certainly not bearish, and with ES having regained its 200 day MA and carrying higher though the overnight (so far anyway), I'm going to go out on a limb and call Friday higher.  Keep in mind there's some economic news coming out on Friday that could easily derail that given the fragile state of Mr. Market's personality lately, but for now, that's what I see.

That's all she wrote. See you again Sunday night!

Single Stock Trader

Last night I said that Verizon was not a buy and indeed on Thursday was only one of a handful of losers on the Dow, down four cents. But the chart is even worse than that with a freshly completed bearish stochastic crossover and three spinning tops in a row now. There are no bullish signs at all on this chart. It is definitely still not a swing trade buy - or a buy of any other kind.

Thursday stock market forecast

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

• Thursday higher.
• ES pivot 2052.00.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Things were looking great for my call for a higher close Wednesday - until oil collapsed - again.  That sent the rest of the market lower after a wild ride that saw triple digit moves both up and down in the Dow before ending with a 76 point loss.  Tonight I'm short on time again so it's another Night Owl Lite night.

The technicals

Market index futures: Tonight, all three futures are higher at 12: 18AM EST with ES up 0.38%.

ES daily pivot: Tonight the ES daily pivot falls from 2063.50 to 2052.00. That still leaves ES below 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   4      6       4           2       0.500   -350
December   3      1       3           0       0.750    625


     And the winner is...

I think things got a bit overextended on Wednesday and the VIX is now looking ready to move lower (finally) so I'm going to try this again and call Thursday higher.

Single Stock Trader

Still not a buy.

Wednesday stock market forecast

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

• Wednesday higher.
• ES pivot 2063.50.  Breaking above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Mr. Market sometimes goes through phases of obsessive compulsive behavior where he gets fixated on just one single factor and starts to ignore everything else. This is one of those phases and Mr M's latest obsession is the price of oil. And with oil of course in a deep and continuing funk it's not looking good. But let's look at the charts anyway and see if there's any light at the end of this particular tunnel.

The technicals

The Dow:  The Dow has tracked oil perfectly for the last four days in a row - down up down down. And Tuesday was down big time, off nearly a full percent. It did however conduct a successful retest of its 200-day MA, stopping exactly at that level by the bell. That leaves us with two hanging man style candles (or is the second one a hammer?) Hard to tell, and the indicators are also confused wandering around halfway between overbought and oversold. The stochastic though remains in bullish mode. So go figure. Right now I'd kind of expect support at the MA to hold on Wednesday but that's by no means certain. It will all depend on where oil goes. For some unknown reason.


The VIX:  Well the VIX sure fooled me on Tuesday. After failing to break its 200-day MA on Monday I expected it to move lower on Tuesday. But that clearly didn't happen as the VIX didn't even bother with its 200 MA , it simply gapped right over it for an 11% jump with a tall doji star. That left the indicators just short of overbought but also but it also looks like two thirds of a bearish evening star. And that, sadly requires confirmation on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:39 AM EST with ES up 0.22%. At least I got this much right. After looking bearish last night, ES had a terrible day on Tuesday to close right back down to 2059. However it conducted a successfully retest of its 200-day MA, the third in four days. Indicators continue to wander around halfway between overbought and oversold so there's little guidance there. But the new overnight seems to be staging something of a non-trivial rally so there's at least a suggestion here is that Wednesday might be higher.

ES daily pivot: Tonight the ES daily pivot falls from 2080.33 to 2063.50. That puts ES exactly on top of its new pivot, so this indicator is neutral at the moment.

Dollar index:   The dollar looked too difficult for me to call last night but after Tuesday's action it's looking a little more clear. And what it looks like is a bearish evening star as the dollar lost 0.2% on a small red candle. That kept indicators moving lower but it also caused a bullish stochastic crossover. So unfortunately with conflicting indicators it is once again too difficult to call this chart for Wednesday though the bias seems continued lower


Euro:  The euro fooled me last night because it did not move lower on Tuesday, instead rallying back up to 1.0889 for a classic bullish engulfing pattern against Monday's candle. But the indicators all remain overbought and the euro seems to be establishing a new trading range in the 1.09 area so this chart is too tough for me tonight.

Transportation:  Last night I noticed some support for the trans around 7886. Too bad the trans didn't notice that themselves because they massively underperformed the Dow on Tuesday with a giant 2.81% plunge that gapped right under support to head all the way down to the next level of support at 7663. The trans are starting to become something of a concern from a Dow Theoretical point of view as they have been massively underperforming the Dow for some time now. With a tall red marubozu that also punched right down through the lower BB on Tuesday and indicators that are still only just barely oversold, and with further support not until 7465, its difficult to make a bullish case for the trans at all at this point.

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   4      6       4           2       0.500   -350 December   3      0       3           0       1.000    701


     And the winner is...

Withe the VIX possibly looking to be topping, the Dow sitting on some decent support, oil putting in a nice doji star on Tuesday, and the futures guiding higher in the overnight, I'm going to dispense with the hand-wringing and just call Wednesday higher. We'll see.

Single Stock Trader

Last night I mentioned the possibility of Verizon bouncing off its upper BB to move lower on Tuesday and that's just what happened with a 0.78% decline. That was enough to send all the indicators lower just before reaching overbought and left VZ with a doji star. That leaves this chart a bit confused for Wednesday but one thing is clear - this is not a swing trade buy.

Tuesday stock market forecast

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

• Tuesday lower.
• ES pivot 2080.33.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Last night I thought that the market was going to be in for a pause on Monday. And it was a generally down day led lower by energy stocks as the price of oil continues to crater. At least now we have the pin action from Friday's big run-up so let's see what that means for Tuesday.

The technicals

The Dow:   While the range was somewhat larger than I expected, the Dow indeed was completely unable to make any headway past Friday's highs. That sent the indicators lower before ever reaching overbought though we still have a bullish stochastic crossover in place. But the resulting hanging man candle leaves some doubt which will need to be resolved on Tuesday. Overall though I'm not very optimistic about this chart tonight.

The VIX: Last night I blew my call for the VIX quite badly. It did not fall on Monday, instead it rose nearly 7%. However, the retest of its 200-day MA was a flop and the resulting candle was a tall gravestone doji. That was enough to cause a bearish stochastic crossover, so with the 200 MA serving as resistance above it's not out of the question that the VIX goes lower from here on Tuesday.

Market index futures: Tonight, all three futures are lower at 1:01 AM EST with ES down 0.41%. On Monday ES put in a red hanging man right at the top of Friday's big pop. That's a reversal warning and a dark cloud cover but indicators are still nowhere near overbought and in fact the stochastic has only now just completed a bullish crossover. Still the short term here looks bearish and in fact the overnight is continuing the lower which seems to confirm that idea.

ES daily pivot: Tonight the ES daily pivot rises again from 2076.08 to 2080.33. That puts ES back below its new pivot so this indicator turns bearish again.

Dollar index:   At least I got the dollar right on Monday as it gained 0.33%. It has now retraced exactly 50% of last Thursday's giant dump (Fibonacci technicians take note). Indicators are only just recently off of oversold and the stochastic is now starting to curve around for a bullish crossover. So with a small gap-up lopsided red spinning top this one is still kind of up in the air. I won't call it tonight.


Euro:  I was right about the euro too which descended on Monday for its second losing day in a row, this time back down to 1.0847 as it continues to retrace last Thursday's big pop. Indicators have now come off of overbought and the stochastic is just now completing a bearish crossover. So with the euro continuing lower in the overnight this chart just looks lower again which would make three in a row on Tuesday.

Transportation:  And finally, I blew my forecast for the trans too. On Monday it did not go higher, instead it lost 0.88% giving up all of Friday's gains and then some. Indicators remain oversold and the stochastic is now threaded out having failed to execute a bullish crossover. We're back to the lower BB and there is some significant support right here around 7886. But whether or not the trans can capitalize on this remains to be seen.

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   4      6       4           2       0.500   -350
December   2      0       3           0       1.000    538


     And the winner is...

Tonight we have a number of bearish reversal signs on the charts along with plenty of evidence of strong resistance blocking any further advance.  And the futures are guiding non-trivially lower so I'm going to go ahead and call Tuesday lower.

Single Stock Trader

Last night I expressed skepticism that Verizon could rise much further on Monday. And it managed a $0.35 gain which is all the more impressive considering it was one of only a handful of winners on an otherwise down day. That brought it up to its upper BB on a small green marubozu. Indicators are now just shy of overbought so it's not clear if VZ is going to just bounce off the BB or start crawling up it. We need some confirmation for this on Tuesday. In the meantime it's not a swing trade buy.

Monday stock market forecast

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

• Monday uncertain.
• ES pivot 2076.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

December 7th, 1941, a date which will live in infamy.

Ho ho ho!  Santa came early last Friday as the Dow rocketed up 370 points in a broad-based advance.  Is this the start of the fabled Santa Claus rally or are there some lumps of coal in the pipeline?  Let's check the charts for whither Monday.

The technicals

The Dow:  Last Thursday night the Dow was looking decidedly negative after having fallen right through its 200 day MA to drive the indicators all oversold. But what a difference a day makes - because on Friday it put in a giant green marubozu that popped right back up through the same MA and then some causing the indicators to all bottom at oversold and also gave us a new bullish stochastic crossover. So right now this chart looks pretty bullish.

The VIX: I often write that the upper BB is the third rail of the VIX. And that proved to be true once again on Friday at as the VIX. fell a giant 18% after just touching its upper BB at 19.46 on Thursday. This move was enough to drive all the indicators lower just before they reached overbought and also just barely squeaked out a brand new bearish stochastic crossover. This tall red marubozu also crashed right through the 200 day MA making this chart look nothing but bearish for Monday.

Market index futures: Tonight, all three futures are lower at 1:11 AM EST with ES down 0.07%. On Friday, ES confirmed its successful test of its 200 day MA on Thursday with a giant green candle that retraced all of Thursday's losses and then some . That caused the indicators to stop falling off of overbought and also caused a fresh bullish stochastic crossover before ever reaching oversold levels. However that also placed it right back in a two week-long congestion zone and after such a large one day move it would not be unreasonable to expect a day of rest for ES. Indeed the move lower in the Sunday overnight seems to support that idea.

ES daily pivot: Tonight the ES daily pivot rises from 2062.17 to 2076.08. That still leaves ES above its new pivot so this indicator continues bullish.

Dollar index:   After its biggest fall since the Middle Ages on Thursday, the dollar recovered in decent fashion on Friday with a 0.73% increase for a classic doji star. That caused the indicators to bottom at oversold and makes it look like there is at least the possibility of moving higher again on Monday.

Euro:  And similarly after a moonshot on Thursday the euro retreated a bit on Friday as one might expect,closing back down to 1.0875. But even that move begs more replacement and the overnight is continuing lower again as indicators are now all overbought and the stochastic is starting to come around for a bearish crossover. My vote would be for another lower close on Monday here.

Transportation:  The trans had a good day on Friday just like everything else though not quite as good as the Dow. But it did bounce off its lower BB with a green hammer and that's a bullish sign. The indicators now appear to have bottomed at oversold and are just starting to come off that level. And the stochastic is now preparing for a bullish crossover so overall this chart looks more bullish than bearish for 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   4      6       4           2       0.500   -350 December   2      0       2           0       1.000    538



     And the winner is...

Friday's big move brought the market right back to earlier resistance levels.  It's also not unusual for the market to take a break after a big one day move.  Also, while the charts are bullish, the overnight futures are not.  And it's always particularly difficult to call Mondays.  I'm not expecting any big moves on Monday either.  So I'm just going to call Monday uncertain.

Single Stock Trader

Last Friday Verizon was as surprising as everything else in the market gaining two and a half percent after looking pretty bearish Thursday night. That confirmed Thursday's fat spinning top as it bounced off the lower BB and squeaked out a new bullish stochastic crossover. In fact Verizon had its best day since February 6th. This move left it just short of its upper BB and right on month-long resistance. So it's not clear if there is all that much gas left in the tank to move significantly higher on Monday.