Friday stock market forecast

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

• Friday higher.
• ES pivot 1883.00.  Holding above is bullish..
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: still long at 16,434 .

Recap

Well the conditional call didn't really work out on Thursday.  ES spent most of the day simply oscillating about its pivot so it was never really clear which way it would finish.  It certainly wasn't clearly above its pivot by mid-morning.  This technique works often, but not always.  Turns out the Dow ended the day with a 125 point gain and I can never complain about that.  And that now leaves just one more day as we round out the week and the dreadful month of January, so let's check it out.

The technicals

The Dow:  The Dow has now been reversed direction for five days in a row with a 0.79% gain on Thursday. Even with that, all the indicators continue to rise but have still not yet hit overbought. So with a green candle now on the books the logical assumption would be that Friday will be a down day, but with the Dow still only in the middle of its recent trading range I'm hesitant to do that .

The VIX:  After a crazy long-legged doji star on Wednesday, instead the VIX decided to continue moving lower although it was on a funny gap-down green inverted hammer to close down 3%. That leaves all the indicators just shy of oversold and the stochastic primed for a bullish crossover although it has not done that yet. So we are left with a reversal warning of a move higher but one which requires confirmation.

Market index futures: Tonight, all three futures are sharply higher at 12:19 AM EST with ES up 0.70%. All of ES's gyrations on Thursday left it at the end of day with a perfect long legged doji star centered exactly in the middle of Wednesday's trading action. There is no better indicator of uncertainty than this. And that is reflected in the indicators, some of which are continuing higher, others of which have topped and are moving lower. In particular the stochastic has just barely squeaked out a bearish crossover. There was plenty of doubt left earlier tonight but that seems to be getting resolved to the upside in the new overnight after a surprise interest rate announcement from the Japanese.

ES daily pivot: Tonight the ES daily pivot is essentially unchanged, moving  from 1883.17 to 1883.00. That leaves ES back above its new pivot so this indicator flips right back to bullish again.

Dollar index:   The dollar fooled me on Thursday by ignoring Wednesday's inverted hammer and instead continuing lower, this time by 0.42% to continue a week-long descending RTC. Even at that the indicators have not yet hit oversold as the stochastic continues on in full-blown bearish crossover mode. There isn't even any decent support nearby for another day or two so I can't really call this chart higher tonight.

Euro:  Last night I was looking at the euro's recent trading range and figuring that it had about run its course. However it turned out that the euro had plenty of gas left in the tank and on Thursday put in a tall green candle to close right back up to 1.0918, its best close since December 29th and just short of its upper BB at 1.0989. But even with a four day winning streak now the indicators are still a fair ways from overbought. So one might think that the euro would want to check out the aforementioned BB on Friday though with a non-trivial move lower in the overnight that remains to be seen.

Transportation:  In a bit of a bearish divergence, on Thursday the trans lost 0.8% on a day where the Dow gained exactly that amount. This confirmed their dark cloud cover from Wednesday while narrowing the stochastic around for a bearish crossover although hasn't done it yet. Meanwhile the indicators are lying just short of overbought. So the overall appearance here is bearish though not extremely so.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      5       5           0       0.615    1036


     And the winner is...

I was getting all set to call Friday uncertain in the face of a bunch of reversal signs that all required confirmtion.  But the news out of Japan tonight has sent the futures sharply higher.  In addition, the last day of January is historically pretty strong anyway.  Now there is a bunch of economic news coming out on Friday, but unless it's really stinko, I'm going to hazard a guess that we close Friday higher.  The possibility exists that we could be breaking out of a week-long trading range soon.  That's all she wrote.  See you again Sunday night!

YM Futures Trader

Nothing new again here.

Thursday stock market forecast

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

• Thursday higher only if ES breaks above its pivot, else lower.
• ES pivot 1883.17.  Holding below is bearish..
• Friday  bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: still long at 16,434 .

Recap

Dammit, Janet!

Dammit, Janet!  Wednesday's Fed announcement, as expected, did not include any more interest rate hikes, but it also didn't rule them out for March and that's all it took to send Mr. Market into a 222 Dow point depression.  I have absolutely no idea what they're thinking over there in Fed-land but it seems fairly divorced from the reality of a low inflation environment where things aren't really so hot and in most of the rest of the world are downright ugly.  It's starting to look like a Rocky Horror.

OK, Janet, you got your rate hike last month and showed everybody who's boss.  Now it's time to just declare victory and go home.  The market is clearly signaling that the American economy is not ready for more of this nonsense just yet.  And on that jolly note, let's see where Thursday is headed as January winds down.

The technicals

The Dow:  Things were looking good Wednesday morning after a rally on Tuesday with further advances right up until the 2 PM Fed announcement. Then it was all downhill from there. The resulting candle was mostly bearish engulfing that sent momentum lower just short of overbought. The overall impression here is bearish but I will note that the last four days we have alternated between gains and losses so on that basis you might think that Thursday would be higher.

The VIX:  I scrolled all the way back to the beginning of 2011 to find another day with a perfect doji star as big as the one the VIX put in on Wednesday, without success. The result was a gain of all of 2.71% centered exactly in the middle of Tuesday's action. While the candle reflects indecision indicators continue to fall and are now very nearly oversold. Perhaps more importantly the stochastic looks like it is just about to form a bullish crossover. So all other things being equal it looks like we could just very well see a move higher here on Thursday.

Market index futures: Tonight, all three futures are higher at 12:16 AM EST with ES up  0.40%. Wednesday's action in ES gave us a red spinning top that traded entirely outside an admittedly short rising RTC for a bearish setup, sent momentum and OBV lower, and started the stochastic flattening out for a bearish crossover.  On the other hand, the new overnightdoesn't seem interested in moving lower at all as I write.

ES daily pivot: Tonight the ES daily pivot barely ticks up from 1882.33 to `1883.17. That leaves ES just below its new pivot so this indicaotr is now back to bearish.

Dollar index:   The dollar dropped 0.18% on Wednesday a small gap-down green inverted hammer that sent all the indicators continuing towards oversold though they're not there yet. The stochastic in particular is nowhere near forming a bullish crossover. After wandering pretty much aimlessly for a month the dollar is now near the lower end of this range so it's possible given the day's candle that we could see a move higher here on Thursday.

Euro:  After a small doji star on Tuesday the euro continued its advance by closing back up to 1.0918 on Wednesday on a decent green candle. But that left the indicators mixed with momentum and money flow falling but the stochastic continuing its bullish crossover. From a longer view, the euro is now exactly in the middle of a range that it has been stuck in going all the way back to beginning of December. The new overnight is moving lower a bit but in the absence of any bearish signs this chart is too difficult for me to call for Thursday.

Transportation:  The trans got hit like the Dow on Wednesday finishing the day down 0.88% on a dark cloud cover. Indicators are now mixed with momentum leading the way lower and the stochastic just about to form a bearish crossover. Overall this looks like there's more downside risk than upside potential from this point.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      4       5           0       0.67     1036


     And the winner is...

We've got dojis galore on the charts tonight and ES just about sitting on its new pivot.  Those are good conditions for a conditional call: if ES can break above its new pivot by mid-morning Thursday, we'll close higher.  If on the other hand it fails to break above by then, we close lower.

YM Futures Trader

Nothing new again here.

Wednesday stock market forecast

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

• Wednesday uncertain.
• ES pivot 1882.33.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: still long at 16,434 .

Recap

Ouch.  I guess that's what I get for taking my stock market advice form a moose.  On Tuesday the market did not fall again, instead the Dow rose 282 points for its best showing of hte year so far.  Apparently, a gain in oil and consumer confidence numbers combined for a one-two punch to KO my forecast.  Oh well - I never really mind being wrong on a down call since I'm always net long anyway.

Now the thing is is that Wednesday is a Fed day and it's my firm policy to always call those days as "uncertain" since there's a good chance they'll be news-driven.  So given taht, we'll simply skip the individual charts tonight as there's really no point in going into that much detail.  Less for me to write, less for you to read.  For the bottom line, just scroll down.

The technicals

Market index futures: Tonight, all three futures are lower at 12:48 AM EST with ES down 0.41%.

ES daily pivot: Tonight the ES daily pivot rises again from 1880.67 to 1882.33. That leaves ES ack above its new pivot so this indicator flips over to bullish again.
Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      4       4           0       0.67     1036


     And the winner is...

I'll be glued to the news at 2 PM just like everyone else on Wednesday.  For the record, I'm not expecting another rate hike, but it will be interesting to hear what Auntie Janet has to say.  Bottom line: the call is Wendesday uncertain.  For the record, the charts are sufficiently mixed tonight that I probably would have called it uncertain even if wednesday wasn't a Fed day.

YM Futures Trader

Nothing new again here.

Tuesday stock market forecast

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

• Tuesday lower.
• ES pivot 1880.67.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: still long at 16,434 .

Recap

Hey Rocky, take a look at this!

Well I'm certainly glad I didn't call Monday higher just because last Friday's charts looked bullish as on Monday the Dow did an about-face and marched right back down 208 points, relinquishing all of Friday's gains and then some.  I figured hte market might have a tough time extending its gains, but I sure didn't anticipate another triple digit decline.

Now it's time to go to the tape again as the Rocky month of January thankfully nears its conclusion.

The technicals

The Dow:  Bah - after a promising two day gain, the Dow fell on its face Monday with a 1.29% plop on the opposite of a bullish piercing pattern - what is that, a bearish piercing pattern?  Indicators are still well shy of overbought but Monday's ugly action just put the kaibosh on the whole party.  Foo.

The VIX:  After its biggest gap down in two years last Friday, the VIX bounced back on Monday with an 8.1% bounce and a green hammerish candle.  Indicators continue to fall though so that all leaves this chart rather indeterminate tonight.

Market index futures: Tonight, all three futures are lower at 12:17 AM EST with ES down 0.31%.  On Monday ES put in a big dark cloud cover that retraced ost for Friday's gains.  That was enough to send all the indicators lower before ever evne hitting overbought and start the stochastic narrowing around for a bearish crossover.  None of that looks good and the overnight pin action is just plain awful.

ES daily pivot: Tonight the ES daily pivot drops back from 1885.75 to 1880.67. But that leaves ES considerably below its new pivot so this indicator now turns bearish.

Dollar index:   After its recet visits to the upper BB the past two days, on Monday the dollar gave it up witha  quarter percent drop that nevertheless still left the indicators just overbought.  There's not much to go on with this small spinning top.  My guess is that the selling's not done yet.

Euro:  After a big drop Friday last night I called the euro higher for Monday and whadaya know about that - it bounced right back up to 1.0849,  That sent all the indicators moving higher before ever hitting oversold and also sent the stochastic around in preparation for a bullish crossover.  So my money's on a further gain Tuesday for the euro, a thesis that is supported by further gains in the new overnight.

Transportation:  And finally on Monday the trans badly underperformed the Dow to confirm Friday's inverted hammer and complete a bearish evening star of sorts  Indicators are now confused between oversold and overbought but the general impression here is distinctly bearish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      3       4           0       0.727    1318



     And the winner is...

The general tenor of the charts tonight is fairly bearish, so Bullwinkle and I call Tuesday lower.

YM Futures Trader

Nothing new again here.