Monday, October 17, 2016

Monday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower.
  • ES pivot 2130.83.  Holding below is bearish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: short at 17,670.

So we called last Friday higher and that's what we got, though it was sort of a mirror image of Thursday.  After an initial pop out the gate, the Dow spent the rest of the day retracing to end with just a 39 point advance.  Technically, this tall inverted hammer doesn't inspire a lot of confidence.  Let's see what the new overnight might hold as we head into the start of a news-heavy October op-ex week.

The technicals

VIX, daily
The VIX:  On Friday the VIX came off its upper BB as expected and kept on going back down through its 200 day MA for a 3.4% loss.  The pattern looks fairly bearish and the stochastic (bottom row on this chart) is on the verge of a bearish crossover.

Market index futures: Tonight, all three futures are lower at 12:26 AM EDT with ES down 0.22%. 

ES daily pivot: Tonight the ES daily pivot rises from 2122.08 to 2130.83.  That places ES back below its new pivot so this indicator is once again 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     1      3       8           0       0.250     120
September  4      5       6           0       0.444     -59 October    5      1       3           1       0.857     132

     And the winner is...

The stars are definitely not all aligned tonight.  The VIX in particular is looking rather bearish which ought to be good for the market.  But the Dow with its gap-up inverted hammer isn't looking so hot, nor is the trans which also fell on a day the Dow moved higher.  Oil also seems to be ready to move lower again and with futures guiding lower in the Sunday overnight I'm going to vote with the majority and call Monday lower.

YM Futures Trader

No trade tonight.

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