Wednesday, December 21, 2016

Wednesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Wednesday depends on ES pivot by mid-morning.
  • ES pivot 2265.33.  Holding above is bullish.
  • Thursday bias uncertain technically.
  • Monthly outlook: bias higher.
  • YM futures trader: no trade tonight.

Dow, daily
Last night we were running a symmetrical triangle sin both ES and the Dow, and that influenced y call for a move higher on Tuesday.  And that in fact came to be, with the Dow gaining another 92 points with a textbook classic breakout from the triangle.  This pattern doesn't always work but in this case ti worked to perfection.  That now leaves the Dow within tasting distance of the 20K mark.  At the intraday Tuesday high we were within just 13 of hitting it.  Will we get there before the end of the year?  Or the month?  Or the week?  Or tomorrow?  There may be some clues blowing in the charts so let's take a gander.

The technicals

The VIX:  Last night we called the VIX lower again and once again it obliged, this time with another 2.22% loss, slicing through support at 11.63 to extend the downtrend to four in a row  And the indicators still haven't hit oversold.  Meanwhile the lower BB continues to fall away, now at 11.19.  SO there would appear to be at least a bit more downside available here for Wednesday.

Market index futures: Tonight, all three futures are mixed at 12:49 AM EST with ES down 0.02% but YM up 0.05%

ES daily pivot: Tonight the ES daily pivot rises again from 2259.25 to 2265.33.   Once again, ES remains above its new pivot, but this time just barely.  Still, that leaves this indicator 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   4      4       5           3       0.636     463

December   5      3       4           1       0.667      89

     And the winner is...

It sure looks like a breakout from the symmetrical triangles in ES and the Dow, but there doesn't seem to be any pin action in the overnight.  The VIX is now on multi-month support after four straight losing days.  But with ES essentially sitting on top of its pivot, it seems like a good time to make another conditional call: if ES stays above its new pivot by mid-morning Wednesday, we'll close higher.  But if it breaks below and remains there, we close lower.

YM Futures Trader

No trade tonight.

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