Monday stock market forecast

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

• Monday lower.
• ES pivot 2099.58.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade tonight.

Recap

Last Thursday night I noted some bearish signs in the harts and put together a case for the market going lower on Friday.  Which is what it did with the Dow dumping 120, and off even more than that intraday.  We now begin what could be a bumpy week with both a triple witching options expiration Friday and a Fed meeting announcement on Wednesday.

The technicals

The Dow:  On Friday the Dow fell out of its rising RTC for a bearish setup, confirming Thursday's bearish harami/spinning toppish thingie,  With indicators all falling off overbought there's nothing bullish about this chart tonight.

VIX, daily

The VIX:  Friday's move in the VIX was even more dramatic as it popped over 16%, its biggest one day move since January 13th.  Take a lookee here.  We went clear through resistance at 16.64 and then kept right one going through the upper BB at 16.71 before the bell rang. That sent all the indicators quite overbought and the stochastic is still not ready to curve around for a bearish crossover (bottom chart, red and blue lines).  So nothing good on this chart tonight either.  No sirree Bob.

Market index futures: Tonight, all three futures are lower at 12:41 AM EST with ES down 0.42%. Last Friday ES exited its rising RTC for a bearish trigger on a tall red candle that completed a bearish stochastic crossover and sent all the indicators lower off of overbought.  The new overnight gapped lower again so there's no sign of a reversal here.

ES daily pivot: Tonight the ES daily pivot falls  from 2113.00 to 2099.58.  That keeps ES below its new pivot so this indicator continues bearish.

Dollar index: Big moves here too on Friday as the dollar gapped up 0.97% on a green near-marubozu.  This completed a bullish stochastic crossover and sent all the indicators rising off oversold.  So there's no sign of anything but more gains on Monday.

Euro:  And in usual mirror image fashion to the dollar, on Friday the euro gapped down with a second red marubozu to close back to 1.12610 retracing exactly 50% of last week's big jump higher.  We now have a completed bearish stochastic crossover and indicators are all falling off of overbought so this chart looks lower again from here.

Transportation:  And finally, the trans took it on the chin Friday, underperforming the Dow  by more than double, off 1.49% - Dow Theorists take note.  We now have a confirmed reversal candle, a completed bearish stochastic crossover, a bearish trigger on a rising RTC exit, and indicators falling off overbought  With the 200 day MA now not too far distant at 7718, it's not inconceivable for the trans to go have a look on Monday.

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      8      6       6           1       0.600     222
April      6      4       8           2       0.667     416
May        9      3       4           4       0.813     756
June       2      2       3           1       0.600      23
     And the winner is...

Tonight all the charts are looking pretty ugly so there's little need to equivocate.  I'm just going to call Monday lower.  I'm always happy to be proven wrong as I'm always net long.

YM Futures Trader

No trade tonight.