Wednesday, October 12, 2016

Wednesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday higher.
  • ES pivot 2139.00.  Holding below is bearish..
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: short at 17,670.

Last night things were looking vaguely bearish to me with the Dow touching its upper BB on an inverted hammer.  But I let myself get spooked into just calling it as "uncertain" because of a little min-rally in ES that occurred just as I was putting together my post.  Well of course, shortly after I hit "Publish" that entire rally faded away and the Dow ended up having a miserable day, off a solid 200 points.  But at least this action wasn't the wishy-washy low range reversals we've been seeing for a week now.  So without further ado let's see how this changes the picture for Wednesday.

The technicals

Market index futures: Tonight, all three futures are higher at 12:40 AM EDT with ES up 0.09%. 

ES daily pivot: Tonight the ES daily pivot falls from 2157.00 to 2139.00.  That leaves ES floating around just below its new pivot so for the moment anyway this indicator remains 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    2      1       3           1       0.750      32

     And the winner is...

Much noise was made on CNBC today about the SPX breaking 2140.  It was indeed a dramatic dump that very nearly touched its lower BB but we bounced off that in a move that sent the SPX oversold for the first time in a month.  I think that more important than 2140 is the support at 2124.  Then you're looking at 2115 for its next stop, but that's below the current lower BB so I'm not sure that's really in the cards anytime soon.  In fact looking at the charts, we see that every time the SPX has been down significantly recently, it's rebounded nicely the next day.  That would be six out of eight over the course of the last month.

Wednesday is in fact looking to me like a bit too much too fast and ripe for at least a bit of retracing.  The VIX is particularly telling in that it went overbought and just touched its 200 day MA before retreating by a third.  That makes me wonder how much gas the VIX has left in the tank.  And if it doesn't, then that's good for the markets.  The Dow also tested support at 18,090 on Tuesday and it held.  Bottom line, it's still sort of a mixed picture but I'm going to go out on a limb and call Wednesday higher.

YM Futures Trader

No trade tonight.

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