Tuesday, June 14, 2016

Tuesdqy stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Tuesdqy higher.
  • ES pivot 2084.25.  Holding below is bearish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade tonight.

Original vintage poster SIMPLON LINE SION VALAIS 1933 BaumbergerLast night it looked to me like the market was going lower Monday and that is indeed just where it went with the Dow off another 133 points.  This is to my mind a bit unusual given that I'd expect mostly a bunch of hand-sitting ahead of a Fed meeting.  Something's clearly afoot here so let's see whaqat the hcarts have to say about Tuesday.

The technicals

The DowOn Monday the Dow followed up Friday's gap-down red candle with an even bigger gap-down red candle.  Indicators continue falling - nothing bullish here at all.

VIX, daily
The VIX:  Meanwhile the VIX followed up Friday's big jump with a Monday rocketship that blasted it right through its 200 day MA another whopping 23% higher in action that traded entirely above its upper BB..  This is highly unusual.  Indicators are all now extremely overbought.  I like to say that the VIX rarely spends more than a day or two above its upper BB and with the latest exponential runup, there really can't be much upside left here.  Take a look.  This chart is quite astonishing.

Market index futures: Tonight, all three futures are slightly higher at 12:33 AM EDT with ES up 0.06%. ES fell along with everything else on Monday - no reversal sign here yet.  However, the new overnight is forming a hammer, though it's dangerous to make any assumptions from half-baked candles.

ES daily pivot: Tonight the ES daily pivot falls from 2099.58 to 2084.25.  And even that's not enough to bring ES back above its new pivot so this indicator continues bearish.

Dollar index: Well I did get the dollar wrong on Monday  It lot 0.22%, unable to make any headway from Friday's highs.The resulting candle is indeterminate, so no call here tonight.

Euro:  And of course I missed the euro too which bounced nicely back to 1.13320 on Monday.  But indicators continue to fall off of overbought so I'm standing aside here tonight.

Transportation:  Last night I wrote that "the 200 day MA [is] now not too far distant at 7718, it's not inconceivable for the trans to go have a look on Monday."  Well on Monday the trans looked, crashed right through, and never looked back with a big 1.14% red marubozu that sent all the indicators in a headlong rush towards oversold.  There's nothing bullish about this chart tonight.


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       3      2       3           1       0.667     155

     And the winner is...

The charts all look quite negative tonight.  But I have the feeling that this selling has gotten pretty overdone.  Of particular interest is the VIX, which looks about as due for a fall as it ever does.  If I played the VIX ETF, I'd be shorting it like mad right now.  ES also is forming a hammer and drifting higher in the overnight.  The conservative in me says wait til we see the bottom put in but oh what the heck, I'll just go for it and call Tuesday higher.  I'll be the first to admit it's a risky call.

YM Futures Trader

No trade tonight.

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