Friday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Friday lower.
• ES pivot 1902.00.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• YM Futures Trader: still long at 16,434.

Recap

I'm glad I took a day off  on Thursday because we finally got a bit of clarity form the charts as the market finally managed to put in a non-trivial advance for only the second time this year.  This made for some interesting chartage so let's get to it snd see what we can deduce about op-ex Friday.

The technicals

The Dow:  On Thursday the Dow retraced  a bit more than half of Wednesday's losses.  The green candle was something close to a bullish harami and though that's not the best of patterns, the indicators are now all clearly rising off their crazy oversold lows from last week.  Even the stochastic is participating, making me cautiously optimistic here for Friday.

The VIX:  The VIX has been all over the place this week which makes it an opportune time to take a look at the VVIX. On that chart we see that Thursday gave us a bearish harami with indicators just shy of overbought. It's not a slam dunk, but with strong resistance now at 116.7 it looks like there's more downside available there. What does that mean for the VIX? Well that gave us a classic red spinning top on Thursday that was unable to push any higher than Wednesday's highs. Indicators are now wandering around just short of overbought but with a bearish harami here as well, there's at least a suggestion the VIX could go lower on Friday.

Market index futures: Tonight, all three futures are lower at 12:35 AM EST with ES down 0.87%. After another disappointing day on Wednesday ES retraced most of those losses on Thursday to close right back up to 1914.50 on a tall fat green spinning top. Even with that big move the indicators are still oversold and all continuing higher off the bottom achieved last week. We also just barely exited the year-long descending RTC for the second time to produce a bullish setup. That all looks vaguely positive for Friday but we've been burned before here and in fact the new overnight is guiding mildly lower so I'm hesitant to call ES higher on the basis of this chart alone. And let's remember it's options expiration so anything is possible.

ES daily pivot: Tonight the ES daily pivot ticks up from 1902.00 to 1904.33. But an evening sag in ES now puts it back below its new pivot so this indicator flips right back to bearish again.

Dollar index:   After a big dark cloud cover on Wednesday the dollar opened lower on Thursday but ended up finishing with a small 0.18% advance on a green spinning top. This is also a bullish piercing pattern and with the stochastic continuing its recent bullish crossover and indicators a long way from overbought there's a distinct possibility here the dollar might move higher on Friday.

Euro:  The euro is now clearly in congestion mode because after a green hammer on Wednesday it gave most of those gains back on Thursday on a lopsided red spinning top to close back to 1.0878, a level that we seen for the last five days in a row. With only average volume and indicators that are just wandering around aimlessly between overbought and oversold, there is really no way to tell which way this chart is headed on Friday.

Transportation:  The trans have been getting absolutely hammered all month so far and after their worst showing of the year on Wednesday they finally managed a decent 1.17% gain on Thursday on a nice green hammer with increased volume. Indicators are rising ever so slowly off of extreme oversold levels but remain oversold. So that all leaves us with possibly the best reversal sign we've een all month. But we've seen this movie before so it's definitely going to require confirmation. In the meantime I have a snaeking suspicion that the trans just might make it two in a row on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      3       2           0       0.571    439


     And the winner is...

While Thursday's action offed some vaguely bullish signs, they all require confimration.  And we're distinctly not getting that in the overnight futures.  And given the market's continuing inability to put in more than one higher in a row, I'm afraid I'm just going to have to call Friday lower.  I'll be happy to be proven wrong.  That's all she wrote.  See you again not Sunday but Monday night!

YM Futures Trader

After a nice recovery Thursday that helped cut our losses, we remain long at 16,434 in anticipation of further gains.

Thursday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Thursday uncertain.
• ES pivot 1902.00.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• YM Futures Trader: still long at 16,434.

Recap

OK, I have to admit, I'm astonished at Wednesday's big 365 point dump in the Dow.  I went back and looked at the charts again and for the life of me I don't see anything I could have called different.  This was the ideal setup and perfect patterns for a rally higher, and yet we went lower - a lot lower.  The continuing failure of the bulls to make any headway coming up on the middle of January is starting to become a concern.  And this breakdown in the technicals, on a scale I haven't seen in 10 years is sending me to the sidelines.  I'm not even going to bother analyzing this tonight because what went on on Wednesday defies analysis.  So there will be no chart run-down tonight.  I'm reverting to wait & see mode until some measure of sanity returns to the market.
The technicals

Market index futures: Tonight, all three futures are higher at 12:17 AM EST with ES up 0.19%.

ES daily pivot: Tonight the ES daily pivot falls from 1921.42 to 1902.00. That still leaves ES below its new pivot so this indicator flips right back to bearish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      3       1           0       0.571    439


     And the winner is...

I am concerned about the complete failure of the technicals on Wednesday, and oddly enough tonight we find ourselves in pretty much the same place, with a small drift higher in the futures.  So I'm not touching this one: Thursday uncertain it is.

YM Futures Trader

Still long at 16,434.  I'm going to wait this one out.  The Dow can't keep going down forever.

Wednesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday higher.
• ES pivot 1921.42.  Holding above is bullish..
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• YM Futures trader: going long at 16,434.

Recap

It was as crazy a day on Wall St. as I've seen in a long while as the Dow on Tuesday popped out of the gate, only to give it all back, then wander about the flat line most of the day before finally staging a late day rally to end almost back to the early highs.  Go figure.  I'm glad I called this day as "uncertain".  But in the end we finally got some good stuff to chew on so let's get down to it and see whither Wednesday.

The technicals

The Dow:  In the end the Dow's meanderings on Tuesday gave us a nice fat green spinning top that neatly confirmed Monday's hammer. It also served to finally send all the indicators rising after reaching extreme oversold levels and also finally gave us a fresh bullish stochastic crossover. In addition we also finally managed to break out of a descending RTC that has been going on since the beginning of the month for a bullish setup. In other words there is nothing bearish about this chart at all tonight and things are looking good for Wednesday.

The VIX:  Last night I called the VIX lower for Tuesday and it cooperated nicely, dropping 7.53% on a stubby gap-down red spinning top. That sent indicators right to the edge of overbought and neatly completed a new bearish stochastic crossover. That seems to trump the candles' reversal warning so I'm going to say that there's more downside left to come on Wednesday. That is supported by a bearish trigger on a rising RTC exit.

Market index futures: Tonight, all three futures are higher at 12:25 AM EST with ES up 0.78%. Tuesday's action in ES was mostly notable for the confirmation that it gave to Monday's green hammer. That looks like it did in fact mark an end to the month-long decline that we've seen so far. The result was that we got a nice confirmation to close back up to 1925. That also clearly caused the indicators to bottom at oversold and finally gave us a fresh bullish stochastic crossover. On top of that the new overnight is trading outside this steep descending RTC that we've been in for a bullish setup. This is about as good a setup as it gets so I'm fairly confident in calling ES higher for Wednesday.

ES daily pivot: Tonight the ES daily pivot finally rises from 1911.92 to 1921.42. And the strong showing og ES on Tuesday finally puts it back above its new pivot so this indicator, yes, finally turns bullish.

Dollar index:   Last night I found the dollar too confusing to call. And on Tuesday it took a surprising gap up for a 0.24% gain on a classic doji star. That also completed a fresh bullish stochastic crossover while leaving the indicators wandering around halfway between overbought and oversold. So push comes to shove I have to say there's a good probability the dollar could go higher again on Wednesday.

Euro:  Last night I called the euro lower for Tuesday and it obliged, falling back to 1.0872 on a small red doji star.  But the new overnight is already disconfirming that and along with a fresh bearish stochastic crossover in place, I'm calling the euro lower Wednesday.

Transportation:  Last night I called Monday as a short-term bottom in the trans. After Tuesday's 0.92% advance on a nice green candle it looks like that was a pretty good call. Indicators remain quite oversold and the stochastic has just completed a fresh bullish crossover so I'd say we have the green light to move higher here on Wednesday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      2       1           0       0.667    804


     And the winner is...

We have finally gotten some decent confirmation of Monday's reversal signs so as op-ex week continues I'm just going to go ahead and call Wednesday higher.

YM Futures Trader

Tonight we go long YM at 16,434.  I wanted to enter this trade right at the close but got distracted.  No matter, I think there's still money to be made here as it looks like we have some very good bottoming signs in place.








































 BOT    1    false    YM    MAR16 Futures     16434    USD    ECBOT    20:14:43


YTD stats: 1 trade, 1 win, 0 losses, 1/1 long, 0/0 short, P/L +103 YM points

Tuesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday uncertain.
• ES pivot 1911.92.  Holding below is bearish..
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• YM Futures trader: sold at 16,226, trade closed..

Recap

Whew!  Last night I said I'd eat my hat if the Dow didn't close higher on Monday.  Well after an encouraging pop out the gate, I watched in horror as it gave it all back dragged down by oil until by 2 PM I started warming up the oven (I never said I'd eat it raw).  Then finally a late afternoon rally came to my rescue and the Dow finally broke its crazy 7 for 8 losing streak with a modest, though welcome 52 point gain.  So with that out of the way, let's move on to Tuesday  as this crazy op-ex week rolls on.

The technicals

The Dow:  On Monday the Dow finally gave us what we've been waiting for since the beginning of the year: a green hammer, crazy oversold indicators (RSI = 4.66) , and a stochastic that is within microns of a bullish crossover. This looks like one of those back up the truck moments and it finally appears that the Dow is ready to reverse course.

The VIX:  Once again what I keep saying about the VIX proved to be true on Monday. It rarely spends more than a day or two above its upper BB. And after trading above it last Thursday and Friday, it fell 10% on Monday to close back down to 24.3. That's still pretty elevated but at least we are now coming back into low Earth orbit. Indicators remain overbought but they are also beginning to decline and the stochastic is curving around in preparation for a bearish crossover. With a bearish inside harami completed, it looks like there's more downside in store for the VIX on Tuesday

Market index futures: Tonight all three futures are higher at 12: AM EST with ES up %. ES has finally given us the candle we've been waiting for. On Monday it finished with a long-legged green spinning top to arrest a six out of seven day losing streak. That was enough to stop the relentless decline of the indicators, and the stochastic is now in prime position for a bullish crossover. Unfortunately, we're seeing a resumption of the downtrend in the new overnight, disconfirming the reversal signs.

ES daily pivot: Tonight the ES daily pivot falls again from 1928.75 to 1911.92. We remain below the new pivot so this indicator just continues bearish.

Dollar index:   After a monster dark cloud cover on Friday, the dollar surprised me Monday by actually gaining 0.19%. That caused the indicators to stop their descent off of overbought though the the stochastic continues falling towards oversold. That all leaves this chart in something of a muddle so I'm not calling it tonight.

Euro:  At least I got the euro right last night. After a tall hanging man it dropped right back down to 1.0890 on Monday on a large bearish engulfing pattern. That also stalled the indicators from their mark higher and caused a brand new bearish stochastic crossover. That is all a clue of a move lower on Tuesday and is also supported by the overnight which is currently moving lower by 0.17%.

Transportation:  And finally we got a bit of bearish divergence in the trans which fell 0.46% on Monday compared to the Dow's 0.32% gain. However this may just be a case of one day late because the candle was a nice hammer nonetheless. Indicators are also crazy oversold here with RSI at 1.75. And the stochastic looks like it is just about to form a bullish crossover. We remain in a steep descending RTC but that could change at any minute. This looks like it could very well be a short term bottom for the trans.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    4      2       0           0       0.667    804



     And the winner is...

I don't know what's going on here.  All the charts look ready to reverse but the futures are having none of it tonight, and to a degree that has me worried.  Perhaps oil is reasserting itself again - I'm not sure what's going on here.  I think the market is testing for a bottom but with the general craziness lately and this being op-ex week, I think I'm just going to step back tonight and see what happens.  Therefore, the call is for Tuesday uncertain.  I still think we're overdue for a significant rally, but I no longer believe it's coming on Tuesday.

YM Futures Trader
With a decent profit from last night and the futures fading fast, I'm exiting this trade.  For now we're going to sit back and watch.

SLD    1    false    YM    MAR16 Futures     16226    USD    ECBOT    00:18:48

YTD stats: 1 trade, 1 win, 0 losses, 1/1 long, 0/0 short, P/L +103 YM points

Monday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Monday higher.
• ES pivot 1928.75.  Holding below is bearish..
• Rest of week  bias higher technically.
• Monthly outlook: bias lower.
• YM Futures trader: now long at 16,123.

Recap

Here's an interesting factoid: if the Dow keeps falling at the same rate it's been this year so far, it will hit zero on April 13th - that's just three months from now.  Obviously there's something very screwy going on in the market right now.  My call for a higher close last Friday was looking really good early on until another wave of selling hit after lunch and sent the Dow lower again.

The First Five Days of January indicator is now officially a bust.  And according to the Stock Traders Almanac, in presidential election years (and yes, we finally get rid of Obama), the market has followed the First Five Days fourteen of the last sixteen times.  So 2016 ain't lookin' good.  Meanwhile, let's see if we can figure out Monday as we begin the first op-ex week of 2016.

The technicals

The Dow:  Just looking at the chart, the Dow is pretty dismal. It has given up multiple support levels since the beginning of the year including 17,000 and remains in a very steep descending RTC. The only bright spot is that RSI has now hit 0.69, its lowest level since since November of 2012 amazingly enough. That alone should hint that a move higher is due very soon though just looking at the chart it isn't there yet.


The VIX:  The VIX ignored its upper BB on Friday and instead kept on moving higher, this time on a tall green marubozu that gained another 8% to close at 27.01, its highest level since last September. Indicators are now extremely overbought and look like the logical next move is lower. However the stochastic has yet to begin curving around for a bearish crossover. So in the absence of any bearish candles I can't call the VIX lower yet.

Market index futures: Tonight, all three futures are slightly lower at 12:20 AM EST with ES down 0.07%. ES continued its seemingly endless descent last Friday making it now down 6 out of 7 for its worst annual start since the late Pleistocene era. We remain stuck in a very steep descending RTC and indicators are now at extreme oversold levels with all RSI = 1.8, a level that I haven't seen in many years. Of interest is that the stochastic has finally curved around and is getting very close to putting in a bullish crossover though that hasn't happened yet. However, the new overnight has been slowly drifting higher to the point that it has now formed a solid hammer, suggesting a reversal is imminent.

ES daily pivot: Tonight the ES daily pivot falls again from 1950.83 to 1928.75. So once again ES remains below its new pivot and this indicator continues bearish.

Dollar index:   And in another example of this topsy turvy market, I thought the dollar would go lower on Friday but instead it moved higher gaining 0.33%. But it did it on a big classic red dark cloud cover. That left indicators continuing falling off of overbought and the stochastic in full-on bearish crossover mode. All of this looks like a lower close for the dollar on Monday.

Euro:  At least I was right about the euro last Thursday night. On Friday it was indeed unable to move any further than its big gain on Thursday falling instead back to 1.0920 on a tall red hanging man. However the indicators have not yet reached over bought and continue to rise. In fact the new Sunday overnight is putting in a strong gain on a small dogs star which could possibly signal a move lower on Monday. But that requires confirmation which we do not have yet.

Transportation:  Like everything else last Friday the trans had a dreadful day, trading entirely below their lower BB. That sent all the indicators to extreme oversold levels with RSI of just 1.63. At least here we are now seeing a stochastic that is curving around in preparation for a bullish crossover though we're not there yet. In the meantime we remain in a steep descending RTC and it's too early to call this one higher yet.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    3      2       0           0       0.600    752


     And the winner is...

The SPX Hi-Lo indicator hit 1.22 last Friday, its lowest level since last November 13th, after a similar six out of seven day decline.  And the next day then was strongly higher.  And tonight all the charts are looking extremely oversold, to levels not seen in several years.  And finally we're seeing good reversal candles forming in the futures.  So I'm thinking I might have just been a day early in calling Friday higher.  Therefore I'm going to do it again and call Monday higher.  If it doesn't (go higher), I'll eat my hat.

YM Futures Trader




Welcome to our new feature for 2016: the YM Futures Trader.  Here I will trade YM, the Dow futures, in free-form fashion.  I'm not going to limit myself to swing trades.  I may hold for a minute, I may hold for a month.  Part of it depends on what all else I have going on that day.  I definitely do not spend the entire day glued to my screen watching every tick go by.  We'll see how it works out.  I'll be posting the trades in real-time on Twitter @nightwoltrader.  I strongly discourage anyone from acting on that information.

I am now long YM at 16,123.  With an RSI of zero, as in zip, zilch, nada, the square root of nothing,, this one has nowhere to go but up.  I am prepared to hold this as long as it takes to be profitable.

Here is the trade confirm as generated by Interactive Brokers:

BOT    1    false    YM    MAR16 Futures     16123    USD    ECBOT    20:22:53