Wednesday, August 3, 2016

Wednesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday lower.
  • ES pivot 2155.08.  Holding below is bearish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: short at 17,670.

The Dow's been sagging for two weeks now but the SPX has been pretty much just wandering about.  Perhaps that changed on Tuesday with a broad decline in the market that even took the Nasdaq with it.  Is this a break lower or just another fake-out like we had last week?  We check the charts and draw some conclusions.

The technicals

Market index futures: Tonight, all three futures are lower  at 12:24 AM EDT with ES down 0.13%. 

ES daily pivot: Tonight the ES daily pivot falls from 2167.33 to 2155.08.  Despite this big drop, ES is now below its new pivot so this indicator turns bearish.


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     0      1       1           0       0.000     -28

     And the winner is...

Tonight we're seeing a number of fairly bearish signs on the charts, including a bearish stochastic crossover in SPX, continuing weakness in the Dow (though its RSI hit zero on Tuesday indicating a reversal can't be too far off), a breakdown in ES with negative overnight pin action, and a bullish stochastic crossover in the VIX along with a bullish setup on a descending RTC exit.  With August a historically weak month, I don't see how I can make any other call than Wednesday lower in the face of this evidence.

YM Futures Trader

No trade tonight.

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