Monday, November 7, 2016

Monday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday higher.
  • ES pivot 2084.33.  Holding above is bullish.
  • Rest of week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: short at 17,670.

It was all over the news last Friday about how the SPX was on its longest losing streak in 35 years, down nine in a row.  That's going by closing values - two of those nine were actually winning days but still closed lower than the previous close.  Meanwhile, the Dow is down seven in a row, all on red candles.  How long can this go on?  Let's see what's in the charts for Monday.
The technicals

The DowOn Friday, the Dow's RSI hit zero.  That's as oversold as it gets.  The last time it did this was on August 2nd, after a similar extended losing streak.  The next day was higher, and we weren't even close to the lower BB back then.  Now we've been sliding down the lower BB for four days now.  With an inverted hammer, I have to think a reversal is overdue.  Streaks (losing or winning) obviously don't go on forever before coming to an end.

VIX, daily
The VIX:  Forget the SPX - the VIX is now on a nine-day winning streak.  I don't know just when it's gone that long before.  It was three days ago that I said we were headed lower but the VIX just keeps on rocketing higher.  On Friday it traded not only entirely to the left of its rising RTC but almost entirely above its upper BB.  That also marked three straight days that the VIX has scored an RSI of 100.  That's just completely nutso.  See for yourself.  This can't go on forever and is already long overdue for some serious retracement.

Market index futures: Tonight, all three futures are higher at 12:16 AM EST with ES up a whopping 1.27%. 

ES daily pivot: Tonight the ES daily pivot falls from 2087.33 to 2084.33.  ES's big pop Sunday evening put it well above its new pivot so this indicator turns bullish.


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   10      3       4           1       0.786     314
November   0      1       2           0       0.000    -105

     And the winner is...

Well apparently I'm not the only one to have noticed all of the extremely oversold reading on the charts  The pendulum swings one way and then it swings back.  And it looks like the backswing has begun.  The new Sunday overnight futures are registering the biggest gain I've ever seen in12 years of doing this.  Much of this though is no doubt due to the latest news that the craven FBI has suddenly miraculously determined that Liar Clinton's emails didn't violate any laws after all.  I sense the shadowy presence of Obama's large thumb in the background here.  But hey, whatever drives the market higher, eh?

So at this point I think it's a fairly safe bet to go ahead and election or not, call Monday higher.

YM Futures Trader

No trade tonight.

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