Friday stock market forecast

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

• Friday uncertain.
• ES pivot 2024.25.  Holding above is bullish..
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Ka-ching!

The Dow made it five up in a row on Thrusday, gaining another respectable 156 points amid a sea of green on St. Patrick's Day to extend a more than month-long run higher.  The talking heads on TV were all excited about the fact that we're now exactly back to where we began the year.   Okey dokey, whatever.  We now move on to op-ex Friday, and a triple-witching at that.

The technicals

The Dow:  And on Thursday the Dow had it best day in a week as it jumped nearly a percent to just hit its upper BB at 17518 on a tall green near-marubozu.  But that lef tthe indicators crazy overbought (RSI = 99!).  Still without a reversal candle in sight and no resistance til 17,713, I can't call this chart lower yet.

The VIX: Last night I thought it might be possible for the VIX to catch a break on Thursday.  But it wasn't and it couldn't as it lost another 3.67% as the "deibble down the lower BB" scenario in fact played out.  That sent the indicators to quite oversold levels and leaves the VIX right on six month-long support.  But like the Dow, without a reversal candle, I can't call this one higher yet.

Market index futures: Tonight, all three futures are higher at 12:30 AM EDT with ES up 0.11%.  After a great day on Wednesday, ES did it again on Thursday closing at 2030.25.  The 200 day MA crossing is now nicely consolidated and the new overnight jusdt keeps on climbing so I clearly can't call this one lower yet.

ES daily pivot: Tonight the ES daily pivot rises again from 2012.33 to 2024.25. Once again ES remains above its new pivot so this indicator continues bullish.

$USDUPX, daily

Dollar index:   Whoa!  On Thursday, the bottom absolutely fell out of the dollar as it gapped down 1.18% trading entirely below its lower BB.  Just look at this chart (click to enlarge).  We're now nearing support from last October and with such a yawning gap above, a DCB is not out of the question, but this is the sort of move that requires confirmation.

Euro:  And similarly, on Thursday the euro had a great day, shooting back up through its upper BB to 1.13475, after a similarly great day on Wednesday.  Indicators remain highly overbought and have in fact been overbought for seven days now, the longest period since last May.  We're also right on six-month resistance, and with the euro stalled out in the new overnight, it's not clear if it still has the mojo needed to move higher on Friday.

Transportation:  On Thursday the trans had an absolutely stellar day, handily outperforming the Dow (Dow theorists, take note) with a monster three percent rocketship green marubozu that blasted right though its 200 day MA and never looked back.  That keeps the rally off the January lows alive and like the other charts, I can't call it lower yet despite indicators now at extreme overbought levels.  And also note that the 200 day MA which has been falling since last June seems to be flattening out - a bullish sign.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   9      3       5           3       0.800    1133
March      5      3       3           1       0.667     125

     And the winner is...

The short-term overboughtedness of the charts is starting to concern me and although the futures ar emodestly higher as I write, I note that on March op-ex day the Dow has been down 5 of the last 7 according to The Stock Trders Almanac.  On the other hand there still aren't any outright bearish reversal candles or stochastics for me to make a negative call.  So I guess that just leaves Friday uncertain.  That's all she wrote.  See you again Sunday night!

YM Futures Trader

No trade tonight..