Wednesday stock market forecast

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

• Wednesday lower.
• ES pivot 2111.58.  Holding below is bearish.
• Rest of  week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade tonight.

Recap

On Tuesday the Dow did its best to derail my call for a higher close with a late afternoon tumble but we were saved by the bell, quite literally and ended the day up all of 18 points.  So with all that excitement out of the way, we wend our weary way to Wednesday.

The technicals

The Dow:  We got a classic gravestone doji here and a gap-up one at that.  Though the indicators remain just shy of overbought, this is a clear bearish sign.  Take a look.

The VIX:  We got another unusual day Tuesday, this itme with the VIX rising on a day the rest of the market was up too.  This was a tall green marubozu that nearly touched its lower BB.  With a bullish engulfing candle, rising indicators, and a completed bullish stochastic crossove,r this chart looks higher for Wednesday.

Market index futures: Tonight, all three futures are slightly lower at 12:23 AM EST with ES down 0.04%. ES put in a tall inverted hammer on Tuesday as the indicators continue to slowly fall off of overbought.  With the new overnight again unable to advance any, this chart looks lower to me.

ES daily pivot: Tonight the ES daily pivot rises from 2089.92 to 2111.58.   That's enough to put ES back below its new pivot so this indicator now turns bearish.

Dollar index: The dollar continued its recent precipituous drop on Tuesdya, off another 0.06%as the indicators remain oversold and we near the lower BB.  But this still isn't a reversal candle so I can't yet call the dollar higher.

Euro: Meanwhile the euro has hit a brick wall around 1.1391.  With two spining tops in a row after failing to advance much following last Friday's great leap forward,and with overbought indicators and a stochastic posied for a bearish crossove,r this chart looks lower to me.

Transportation:  On Tuesday the trans outperformed the Dow in a big way, up 1.06% to 0.10%.  This move sent all the indicators overbought and just touched their upper BB, but it also formed a bullish stochastic crossover form a high level, something that's often good for another day or two of higher prices.  So there just might still be a bit of room to run 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      1       3           0       0.500     -30
     And the winner is...

With a few decent topping candles on the charts tonight and indicators that remain a lot closed to overbought than oversold, I'm going to throw all caution to the wind and call Wednesday lower.

YM Futures Trader

No trade tonight.