Thursday, November 3, 2016

Thursday stock markert forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday uncertain.
  • ES pivot 2084.42.  Holding below is bearish.
  • Friday  bias uncertain technically.
  • Monthly outlook: bias higher.
  • YM futures trader: short at 17,670..

Well that was certainly interesting.  The Fed, to the complete surprise of absolutely no one, did not in fact raise rates on Wednesday.  But Mr. Market nonetheless drove lower anyway.  Among the multitude of reasons I heard cited for this was that this now increased the likelihood of an increase in December.  But I thought everyone was already expecting that.  Or maybe not.

In the end, you end up second-guessing your second guess and that's all just a good way to drive yourself crazy  Bottom line, the Dow shed another 77 points and this has some important ramifications.  I really wasn't going to write anything this week given all the uncertainty about, but this is just too good to pass up.  Let's take a look.

The technicals

Dow, daily
The DowAfter closing on its lower BB Tuesday, the Dow traded almost entirely bow that on Wednesday.  In addition, it gave up the 18K handle which is not just a psychological support level but eight month technical level too.  That now leaves the Dow on a five day losing streak with no reversal candle in sight.  We're also now quite oversold so a reversal can't be too far off, but it's not clear that that is coming on Thursday.

Market index futures: Tonight, all three futures are lower at 12:30 AM EDT with ES down 0.16%. ES RSI has now hit 0.5.  It doesn't get much more oversold than that.

ES daily pivot: Tonight the ES daily pivot falls from 2095.33 to 2084.42.   ES remains below its new pivot so this indicator continues 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   10      3       4           1       0.786     314
November   0      1       1           0       0.000    -105

     And the winner is...

Tonight, things are starting to get pretty oversold.  And we got an interesting bullish divergence in the trans, which gained 0.22% on a day the Dow was down 0.43%.  However, the futures continue to run lower in the overnight and I don't see any outright reversal signals just yet.  But given the current weirdness in the market  (I note that ES had gained four points just as I write this) I think it might just be better for me to call Thursday uncertain and see if we get a more definitive sign of a bottom then.

YM Futures Trader

No trade tonight.

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