Tuesday, June 21, 2016

Tuesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesday higher.
  • ES pivot 2079.00.  Holding above is bullish..
  • Rest of week bias higher technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade tonight.

Well so the US stock market is apparently now trading on the predictions of British bookies for an election that's still almost a week away asking people to make a decision about something the implications of which most people don't really understand.  Ummm, hokey dokey.  I suppose I've seen stranger things  Not much though.  What next?  Will the market next week be dependant on the outcome of the third race at Hialeah?  The technicals don't stand much of a chance in front of this sort of lunacy.

The technicals

The DowOn Monday the Dow catapulted out the gate to ridiculous levels before a modicum of common sense returned retracing half of that jump.  It was still good for 130 points and the result was an inverted hammer.  This is nominally bearish but I suspect this is more a news-driven candle than anything.  And my suspicions are bolstered by indicators that are only just off oversold and a stochastic in full-on bullish crossover mode.

The VIX:  Last night I noted a doji in the VIX but added that "it's hard to see a reversal higher from here.'  Which was about right as the VIX fell another 5.36% on Monday breaking under its 200 day MA before finalyl bobbing back just barely above it for a fat green hammer.  These 200 MA hits from above rarely bounce, so with the indicators all still overbought and falling, and a stochastic in bearhs crossover mode I'd wager there's more downside left here.

Market index futures: Tonight, all three futures are higher at 1:16 AM EDT with ES up 0.37%. ES produced an even taller inverted hammer on Monday but my Dow comment shold for this one too.

ES daily pivot: Tonight the ES daily pivot rises from 2062.33 to 2079.00.  ES remains above its new pivot so this indicator continues bullish.

US dollar ($USDUPX), daily
Dollar index: Monday was clearl a day of extremes.  Just look at the poor dollar, doing a cliff-dive 0.70% gap-down doji star to month-long support.  Looks like it could be a morning star but the indicators, only halfway to oversold aren't supporting that idea.

Euro:  And the euro had about the expedcte dmirror image on Monday, with a gap up to 113515 fter nearly touching its upper BB instraday.  Looks like a developing evening star but the new overnight seems intent on extending those gains so it's too soon to call the euro lower yet.

Transportation:  After a bullish setup off a descneding RTC last night, on Monday the trans gave us a bullish trigger on a gap-up inverted hamer that tested (unsuccessfully) their 200 day MA.  But the indicators remain all oversold and a new bullish stochasti crossover is in effect making me wonder if this inverted hammer is all it's cracked up to be.


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       4      5       4           1       0.500      78

     And the winner is...

If I had any sense, I'd just call the next three days uncertain until this Brexit nonsense is done with.  On the other hand, if I had any sense I'd be in a different business.  Tonight we're gaced with a bunch of charts with potential reversal candles but I'm not too sure how seriously to take them.  In the end, I'm going with the VIX, which is still overbought and moving lower, and the futures which are guiding higher.  So that makes it a call for Tuesday higher.  Keeping in mind that all it will take is one new Brexit poll to derail the whole thing.

YM Futures Trader

No trade tonight.

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