Monday stock market forecast

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

• Monday uncertain.
• ES pivot 2170.92.  Holding below is bearish..
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: short at 17,670.

Recap

Last Friday was an interesting day.  We finally got some range action with the biggest intraday move in over a month.  The net result was still negative though with the Dow down another 53 points, with that its biggest loss in a month.  In any case, the downtrend is now established so the question becomes when do we bottom out?  We'll take a look at the charts for answers.

The technicals

VIX, daily

The Dow:  On Friday the Dow put in a spinning top with very long legs.  THe lower shadow nearly touched its lower BB  The last time we were this close was June 16th.  RSI is now quite oversold and the stochastic has been falling for two weeks now though it has yet to form a bullish crossover.  I note too now the clear failure on 8/16 of the Dow to push any higher into record territory immediately upon touching its upper BB.  We then quickly retraced the July highs and it's been all downhill ever since.  None of this is particularly bullish.  No indeedee no.

The VIX:  Look at this giant doji in the VIX on Friday!  After touching its upper BB for two days already, this sure looks like a sign we're going lower on Monday.

Market index futures: Tonight, all three futures are lower at 1:18 AM EDT with ES down 0.07%. 

ES daily pivot: Tonight the ES daily pivot falls from 2172.75 to 2170.92.  That still leaves ES below its new pivot so this indicator s back to bearish

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       8      5       7           1       0.643    1393
July       5      6       6           2       0.539    -304
August     1      3       5           0       0.000     120

     And the winner is...

When looking for reversals, I like to look at the SPX Hi-Lo indicator and right now it stands at 97 which is a long way indeed from the level from which reversals usually come.  Tonight we're seeing some reversal candles on the charts and the VIX seems to be wanting to go lower but its stochastic isn't on board yet.  I don't think we're quite ready for a move higher but with the evidence so weak, once again I just have to call Monday uncertain.

YM Futures Trader

No trade tonight.