Friday stock market forecast

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

• Friday lower.
• ES pivot 2049.67.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

Blame it on Fed regret or or the price of oil which snapped a two day winning streak on Thursday to resume its downward march, but the recent market rally is now over. We're going to take one more look at the charts for Friday before taking next week off for the Christmas holidays.  'm not expecting a lot of market action next week anyway.

The technicals

The Dow:  With a dark cloud cover on Thursday that saw the Dow fall right back through the same 200 day MA that it broke above the day before, this chart now turns decidedly bearish for Friday.

The VIX:  In a similar vein, on Thursday the VIX rose 6.05% but the candle belies that small move. It was a tall green marubozu that successfully tested its own 200 day MA and finished by giving us a bullish piercing pattern. Although indicators are not yet oversold the stochastic is starting to come around for a bullish crossover and the net impression of this chart is bullish.

Market index futures: Tonight, all three futures are lower at 12:31 AM EST with ES down 0.25%. Like the Dow, on Thursday ES completely reversed course and fell right back through its own 200 day MA on a tall red candle to finish right back down to 2034.25. On top of that the new overnight is continuing lower and that is causing a brand new bearish stochastic crossover before the indicators have even reached overbought. That's not a good sign and so I'm not optimistic for Friday here.

ES daily pivot: Tonight the ES daily pivot drops from 2063.00 to 2049.67. That now puts ES below its new pivot so this indicator turns bearish.

Dollar index:   Perhaps the most extraordinary chart of the day was the dollar which took a massive 1.47% gap-up pop thus completely canceling Wednesday's bearish harami . With such a big gap below it now, it looks like two thirds of a bearish evening star so I give better than even odds at this point that the dollar goes lower on Friday.

Euro:  And of course just as impressively on Thursday the euro ignored a bullish harami to gap down on a tall red marubozu and close back down to 1.0830. That sent all the indicators continuing lower and they are now just off of oversold. And that marks a clear rejection of its 200-day MA and the start of a new downtrend. The overnight seems to be trying to stage something of a rally but I'm not convinced it will hold through Friday.

Transportation:  The trans were as bearish as anything else in the charts on Thursday, completely unable to make any headway above Wednesday's highs as they fell a large 2% to give up all of Wednesday's gains and half of Tuesday's as well. Even at that the indicators continue rising just barely off of oversold. Still with such a tall red candle it's hard to find anything bullish 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   4      6       4           2       0.500   -350
December   7      2       4           0       0.778    662


     And the winner is...

What a difference a day makes.  With a promising rally short-circuited and all of the charts looking rather bearish tonight I'm just going to call Friday lower.  I'll be happy to be proven wrong.  That's all she wrote.

See you again not this coming Sunday night but the week after that since I'm taking next week off.  Merry Christmas one and all!

Single Stock Trader

Last night I said that Verizon looked to be done as a swing trade buy and indeed on Thursday it fell along with the rest of the Dow. The candle is basically a dark cloud cover and while the indicators are now only just short of overbought they look to be about ready to turn around. So there is nothing bullish here tonight .

Thursday stock market forecast

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

• Thursday higher only if ES stays above its new pivot, else lower.
• ES pivot 2063.00.  Holding above is bullish.
• Friday  bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

Hey Mikey!  He likes it!

I had a bad feeling about Wednesday.  After all, all year long it was clear that Mr. Market hates everything.  But then right at 2 PM Auntie Janet served up some of her tasty Interest Rate Surprise and it was like, hey Mikey!  He likes it! With the Dow up 1.28%, the SPX up 1.45% and the Nasdaq up 1.52% it was a sea of green on the Street as the Night Owl had her best day of the year so far.  Yum!  There were some interesting charts to be sure but now we have to ask, will Mr. Market have a sugar crash on Thursday or will he be hankering for another helping of Feds. Let's check the charts to find out.

Let me also add that with Christmas coming next week, the Night Owl is planning to take the entire week off.  With a holiday-shortened week and after all the excitement this week, I'm sure a lot of traders will be ready for a vacation.


The technicals

The Dow:  Looking at it from a purely technical point of view on Monday we got a nice hammer on the Dow which was confirmed on Tuesday. And on Wednesday we got the payoff in the form of a tall green marubozu good for a 2.24 point pop that took the Dow straight through its 200-day MA. That left indicators only barely off of oversold with a long way to go before hitting overbought. So with a new rising RTC established with three up days in a row (something haven't seen in since the end of September) this chart looks flat-out bullish for Thursday.

The VIX:  On Monday the VIX traded almost entirely above its 200 day MA by putting in a fat red spinning top. That was confirmed on Tuesday with a small gap-down spinning top that completed a bearish evening star. And that in turn was confirmed on Wednesday with another gap-down spinning top, this one red that resulted in a nearly 15% decline.. That leaves the VIX just above its 200 day MA at 16.51 with falling indicators and a completed bearish stochastic corssover. And there's no reason to believe that it won't try to touch that level on Thursday.

ES daily

Market index futures: Tonight, all three futures are lower at 12:49 AM EST with ES down 0.29%. Like the Dow and the SPX, on Wednesday ES smashed right through its 200-day MA in this case at 2049 to finish at 2072 on a tall green candle. That leaves all of the indicators rising towards overbought, but they're not there yet. With Monday's green spinning top confirmed and no real resistance between here and 2090 there is technically nothing bearish about this chart tonight. The only worry is that after such a big three day gain investors might want to be taking some profits off the table on Thursday, and the overnight pin action seems to be supporting that idea.  Oh - something else to note - it looks to me like ES is putting in a double bottom with support at 2007, a bullish sign for sure.  Just take a look at the daily chart here and see if you don't agree.

ES daily pivot: Tonight the ES daily pivot rises again from 2039.50 to 2063.00. Even at that ES is still above its new pivot so this indicator continues bulish.

Dollar index:   For all the hoopla on Wednesday it wasn't particularly reflected in the dollar which lost 0.41%, a move that in other times might have seemed large but given the giant decline we saw just two weeks ago it was nothing out of the ordinary. This fat red spinning top in bearish harami position sent the indicators moving lower before ever reaching overbought. That makes it questionable whether the dollar can advance any further on Thursday.

Euro:  And on Wednesday the euro which had been frustrated for a week now by its own 200 day MA at 1.1038 finally gave up the ghost with a gap-down red marubozu that took it back to 1.0889. That also sent all the indicator is falling off of overbought and left the stochastic in full on bearish crossover mode. And that leaves nothing at all bullish about this chart for Thursday.

Transportation:  And finally the trans also had a great day on Wednesday with a 1.8% gain on a tall green marubozu. That confirms Monday's hammer and sent all of the indicators rising off of oversold. We are now also just on the edge of a three week long descending RTC for a bullish set up. It very well looks like the three week-long descending RTC might finally be over. In any case tonight there's nothing at all bearish about this chart for 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      7       5           1       0.533    538
November   4      6       4           2       0.500   -350
December   6      2       4           0       0.750    662


     And the winner is...

Surely I can't be the only person who was surprised at the extent of the rally the last two days.  I think this may tempt traders to take some profits, and some may develop a case of Fed remorse.  Either way, although the charts are uniformly bullish tonight the futures are guiding lower and we may be in for a pause or a bit of retracement on Thursday so I'm going to make a conditional call: if ES can stay above its new pivot by mid-morning, we'll close Thursday higher, but if it breaks under and stays there, we close lower.

Single Stock Trader

On Wednesday Verizon was one of the better performers in the Dow and that was good enough for a better than 2% pop. That move took it above its upper BB on a tall green candle for a new rising RTC. Indicators are now all solidly rising along with a nicely completed bullish stochastic crossover. Since we are still nowhere near overbought there might still be some more upside available on Thursday but this bus has now left the station so it is sadly no longer a swing trade buy.

Wednesday stock market forecast

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

• Wednesday uncertain.
• ES pivot 2039.50.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy

Recap

It's nice to see the technicals play out as expected for once and on Tuesday they delivered nicely with a  156 point gain in the Dow.  I was a bit surprised to see a move this big ahead of the Fed, but it is what it is.  Moving forward, it is my standing policy to never call Fed days, and this one coming up is about the best one I can think of to stay away from.  Accordingly, we're skipping the detailed charts tonight.  There's no point in analyzing anything when the conclusion is foregone.

The technicals

Market index futures: Tonight, all three futures are higher at 12:31 AM EST with ES up 0.24%.

ES daily pivot: Tonight the ES daily pivot rises again from 2013.00 to 2039.50.  That leaves ES above its new pivot so this indicator continues 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      7       5           1       0.533    538 November   4      6       4           2       0.500   -350
December   6      2       3           0       0.750    662


     And the winner is...

Will the Fed deliver good news on Wednesday or bad news?  And then will Mr. Markert react to good news as good news or bad news, or bad as good, etc.?  Who knows.  I sure don't so I'm not touching this one at all even though the futures are guiding higher at the moment.  Bottom line: Wednesday uncertain.

Single Stock Trader

VZ did manage a small advance on Tuesday but it was a classic doji star so that closes the window on this buy.  The conservative choice would be to get out now while the gettin's good.

Tuesday stock market forecast

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

• Tuesday higher.
• ES pivot 2013.00.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ now a swing trade buy.

Recap

After a scare early Monday that left me wondering where I had gone wrong as I watched the market fall again, it was gratifying to see the Dow turn around and end the day with a nice 103 point gain.  Tonight I'm out of time to put togehter the usual show as sometimes happens so it's another Night Owl Lite Nite  Less for me to write, less for you to read - that's a win-win as we thread our way through this treacherous week.

The technicals

Market index futures: Tonight, all three futures are higher  at 12:19 AM EST with ES up 0.16%.

ES daily pivot: Tonight the ES daily pivot falls again from 2023.67 to 2013.00. That's finally enough to put ES back above its new pivot so this indicator now turns 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      7       5           1       0.533    538
November   4      6       4           2       0.500   -350
December   5      2       3           0       0.714    506


     And the winner is...

Let's cut right to the chase.  I'm seeing enough reversal signs on the charts tonight, and the market is now sufficiently oversold that I'm going to call Tuesday higher as traders position themselves ahead of Wednesday's Fed announcement.  But I'm not looking for a large move.

Single Stock Trader

VZ is now close enough to my stringent criteria for a swing trade buy that I'll endorse it here.

Monday stock market forecast

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

• Monday higher.
• ES pivot 2023.67.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ not a swing trade buy.

Recap

well it looks like I picked a bad day to be wrong last Friday as the Dow tanked 310 points with all 30 components lower in a broad-based sell-off as oil continued to sink. That led to some important changes so let's take a look at them as we start off what may be the most momentous week in a long long time as the market is just waiting for the Fed announcement on interest rates. The fact that it's an options expiration doesn't help matters either. One thing's for sure - we're in for a bumpy ride.

The technicals

The Dow:  The 200 day MA proved to be no support at all as last Friday the Dow broke right through it for its biggest drop since August stopping only on its lower BB. And even this giant 1.76% crash wasn't enough to take the indicators oversold. They're all heading lower but still not there yet. The Dow successfully tested support from the November lows though which is about the best that can be said for it. Other than that there's nothing at all bullish about this chart tonight.

The VIX:  Last Thursday night I noted that the VIX had touched its upper BB and suggested that might mean it could go lower on Friday. That proved to be a very bad suggestion as instead the VIX popped an astonishing 26% on Friday on a giant gap-up green marubozu that blasted right through its upper BB to not only close above 20 but almost 25 for its highest finish since the last big spike we got back in September. That was enough to drive the indicators overbought and even send the stochastic starting to curve around for a bearish crossover. But we're not there yet so it's too soon to call this chart lower on Monday. Sometimes when the VIX gets this excited it takes it a few days for it to come back to its senses.

Market index futures: Tonight, all three futures are higher at 12:59 AM EST with ES up 0.49%. Perhaps the ugliest charter last Friday came from ES. After stopping right on its 200-day MA on Thursday, on Friday it was completely unable to make any headway at all and crashed right back down through its lower BB at 2018.50, and then kept right on going to close at 2009.75. That was its worst showing since last September. It was also enough to send the indicators oversold and it stopped just shy of the November lows.  Interestingly, the new Sunday overnight seems to be attempting to stage something of a small rally and after such a big one day lost one might expect at least a DCB on Monday.

ES daily pivot: Tonight the ES daily pivot dives from 2053.33 to 2023.67.  That still leaves ES below its new pivot, although it appears to be making an attempt to climb out of its crater as I write.  But for the time being this indicator continues bearish.

Dollar index:   I missed the dollar last Thursday night too. Instead of rising it gave up all of Thursday's gains and then some for a 0.44% decline that sent it right back oversold. The stochastic is now threaded out at a low level so is useless for predictive purposes at this point. The candlestick is something of a lopsided bearish engulfing pattern though so if anything this chart looks lower again on Monday.

Euro:  And of course I missed the euro on Friday too. After looking lower Thursday night instead climbed right back up to close at 1.0992 leaving it still overbought. However the new Sunday overnight is actually going higher again, now back over 1.10. And with the 200 day MA now at 1.1038,not too far away it's entirely possible the euro might want to take a look at that level on Monday.

Transportation:  And finally, as bad as the Dow's 1.76% dump was last Friday it was only worse with the trains which loss 1.91% on a tall red marubozu. This continues what is now a three week long waterfall decline dribbling down their lower BB and is now as bad as it was last August. Indicators continue to be oversold but that doesn't seem to help any. And there's no support from here until the August bottom at 7465. So just like the Dow there's nothing bullish about this chart either tonight, and Dow Theory-wise, that ain't a good sign.

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      2       3           0       0.667    397


     And the winner is...

I'm probably a fool for even attempting to make any calls on an op-ex week featuring such a big Fed meeting but here goes anyway.  I think Friday's action was overdone to the down side.  Note particularly that the SPX Hi-Lo indicator has now hit 2.5, and that's definitely the territory from which rallies spring.  We're also at a few key support levels and with no economic news scheduled for Monday I'm just going to give this another try and call Monday higher.  Hey, I can't be wrong forever.

Single Stock Trader

At least I was right last Thursday night when I called Verizon lower because on Friday it dropped another 1.1% on a tall gap-down inverted hammer. And even that only left the indicators about halfway between overbought and oversold. With no support now until 44.58 I see no sign of a move higher on Monday.