Thursday stock market forecast

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

• Thursday lower.
• ES pivot 2114.75.  No guidance tonight.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade tonight.

Recap

Well shoot.  So much for Wednesday's big gravestone doji in the Dow.  That influenced my call for a lower close but the Dow was essentially nothing but up, up, and away to finish with a 67 point gain.  This requires some rethinking as we continue on to Thursday so let's ponder those pesky charts pronto.

The technicals

The Dow:  The Dow folowed up Tuesday's aforementioned gravestone doji with a green marubozu and bullish engulfing pattern that curvbef the indicators higher again to just short of overbought.  So with the 18K handle reclaimed and only minor resistance at 18,043, I see nothing bearish here tonight.

The VIX:  And to confirm how bizarre the current situation is, once again the VIX moved in tandem with the market, something it rarely does, up 0.21% agains tthe Dow's 0.37%.  It was a fat green spinning top sitting atop Tuesday's big move but there's nothing here I can see to call a move lower.

Market index futures: Tonight, all three futures are lower at 1:18 AM EST with ES down 0.15%. ES had a great day Wednesdaya s we rapidly close in on the highs of 2015.  With a green marubozu, a bullish stochastic crossover from a high level,  and no further resistance in sight, I see no technical reaosn to call this chart lower other than the sag in the overnight.  But one does have to take uncooked candles with a grain of salt.

ES daily pivot: Tonight the ES daily pivot rises from 2111.50 to 2114.75.  That now leaves ES smack dab on top of its new pivot, so no guidance here at this time.

Dollar index: Last night I said that "I can't yet call the dollar higher.".  And that was a good thing because the dollar made a big gap down on Wednesday, off another 0.27% but on anice morning star.  Indicators ar enwo oversold and the stochastic is just shy of a bullish crossover so with this yawning gap now above us I'd say there's more upside potential than downside risk to the dollar.

Euro: However, I did miss the euro which popped back up to 1.13990 on Wednesday instead of moving lower.  But that only served to move the indicators higher into overbought territory and put the sotchastic on the cusp of a bearish crossover.  So I'm sticking to my guns and claiming the euro is due to move lower Any Day Now.

Transportation:  Perhaps the most bearish sign of the day wa the trans.  True, they were up 0.58% but it was on an inverted hammer that stopped right on their upper BB.  Indicators ar enow overbought so there's at least a chance of a move lower from here.

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       1      2       3           0       0.333     -97
     And the winner is...

With ES sitting on top of its new pivot and a failure of Tuesday's candles, I'm going to do a conditional call tonight.  This effectively simply delays my decision as to the direction of the close until mid-morning (10:45 AM).  If ES breaks above its new pivot and stays there by mid-morning Thursday, we'll close higher.  But if it breaks lower and stays there, we close lower.

YM Futures Trader

No trade tonight.