Thursday, November 17, 2016

Thursday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday higher only if ES stays above its pivot, else lower.
  • ES pivot 2175.50.  Waiting for a break either higher or lower..
  • Friday bias lower technically.
  • Monthly outlook: bias higher.
  • YM futures trader: no trade tonight.

The overboughtedness of the market finally kicked in on Wednesday as the Dow broke its seven day winning streak with a 55 point loss.  As sometimes happens, I was simply a day early with my call for a move lower and then I waffled at the last minute, preferring to call Wednesday uncertain instead of lower.  Ah well - nothing ventured, nothing lost.  And there's more to that than just a twist on an old saying.  The cardinal rule is "buy low, sell high" and right now the market is as high as it ever was.  It's not clear to me where more buyers will be coming from.  Perhaps the charts can tell us so let's take a peep right now as we grind on towards November op-ex.

The technicals

The VIX:  I mentioned support around 13 last night as a reason the VIX might not go much lower (but still could dip a bit).  Turns out it wasn't even interested in that, gaining instead 2.62% but cagily enough on an inverted hammer.  So is this a bottom?  Hard to say - just look at what happened last Thursday (the 10th) the last time we had a pop after a drop.  It all came to naught and the overall trend continued lower.

Market index futures: Tonight, all three futures are higher at 12:54 AM EST with ES up 0.12%. 

ES daily pivot: Tonight the ES daily pivot rises from 2172.50 to 2175.50.  ES is currently bumping around its new pivot so this indicator is uncertain tonight.

All hail the Mighty Dollar!
Dollar index: I'd be remiss in not giving a shout-out to the Mighty Dollar tonight as it hit its highest level since, well ages ago.  My $USDUPX chart only goes back to mid-2007 and it's higher now than at any time since then.  OTOH, I remember when one dollar used to buy you 360 Japanese yen (and no, I'm not that old).  Now that was a strong dollar.

And why, you may ask, am I not looking at the $DXY?  Well it's because those thieving cheapskates at Esignal keep trying to nickel and dime me for every last tiny bit of information they pipe my way that used to be free, and this was one of the casualties.  I just told them to keep their DXY..


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   3      3       5           0       0.500     451

     And the winner is...

With a bearish exit on a rising RTC the Dow looks lower for Thursday.  The trans also look lower.  And the VIX's inverted hammer suggests a possible coming move higher.  But copper might see a move higher and ES is already running a bit higher in the overnight.  What to do?  Well since ES is so close to its new pivot I'm going to try another conditional call.  If ES breaks above its pivot and is still there by mid-morning Thursday, we'll close higher.  But if it breaks lower and stays there, we close lower.

YM Futures Trader

No trade tonight.

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