Friday stock market forecast

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

• Friday uncertain.
• ES pivot 1940.75..  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

After two days of conflicting candles and indicators, it wasn't quite clear to me which way we were going on Thursday.  Turns out the Dow went on another triple digit tear to break out of resistance around 16,625.  Tonight we do another Night Owl Lite.

The technicals

Market index futures: Tonight, all three futures are mixed at 12:57 AM EST with ES down 0.03%.

ES daily pivot: Tonight the ES daily pivot falls from 1916.92 to 1940.75.  That still leaves ES above its new pivot so this indicator continues bullish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   8      3       4           3       0.786    1010


     And the winner is...

Tonight we have no real bearish signs on the charts.  True, the indicators are all overbought, but not extremely so.  We also have both the Dow and SPX within striking distance of their upper BB's and I think they might want to take a peek at them. On the other hand, the futures have begun to sag in the overnight and I always worry they know something I don't. It might be a doji day, so I'm afraid I'm going to have to call Friday uncertain.  I never like doing it two days in a row, but that's just the way it plays out.  That's all she wrote.  See you again Sunday night..

YM Futures Trader

No trade tonight.

Thursday stock market forecast

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

• Thursday uncertain.
• ES pivot 1916.92.  Holding above is bullish.
• Friday bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Huh - well that was certainly odd.  I called Wednesday lower and indeed the Dow plummeted right out the gate.  But right about the time I was congratulating myself on being so prescient, a funny thing happened.  The market turned around and spent the rest of the day clawing its way back to break-even, ending with a 53 point gain of all things.  Go figure.  The resulting candle was interesting so let's take a closer look;.

The technicals

The Dow:  On Wednesday the Dow put in a classic tall green hammer, good for a 0.32% gain. That still leaves the indicators overbought but it short-circuited what looked like a slam dunk bearish stochastic crossover. So in the space of one day this chart has gone from looking bearish to a bullish reversal.

The VIX: Adding to the bullish sentiment is the VIX . This chart fooled me too because I thought it looked ready to go higher on Wednesday. And while it did initially gap up Wednesday morning it spent the rest of the day moving lower to finish with a 1.24% decline on a tall red spinning top in dark dark cloud cover position. Indicators remain oversold and the stochastic is still looking like it has just completed a bullish crossover. The candles tell a different story though and it's looking to me more like there's more downside available here on Thursday.

Market index futures: Tonight, all three futures are barely higher at 12:11 AM EST with ES up 0.01%. So much for the inside bearish harami that ES posted on Tuesday. This has never been one of the best reversal signs and indeed it wasn't again on Wednesday as ES put in a tall classic hammer to retrace most of Tuesday's losses and finish right back up to 1930.25. Indicators remain overbought but the stochastic is now threaded out and has lost its predictive power The new overnight looked like it was wanting to move higher but now seems to be running out of gas, leaving some doubt about Thursday.

ES daily pivot: Tonight the ES daily pivot falls from 1922.58 to 1916.92.  That leaves ES above its new pivot so this indicator flips back to bullish.

Dollar index:   The dollar had its own reversals on Wednesday falling 0.02% after a big initial pop. The resulting candle is a fat hanging man and with indicators now considerably overbought this chart looks bearish to me.

Euro:  I also didn't think that the euro was going to post any gains on Wednesday. That ended up being correct as it finished just a bit lower down to 1.1019. But the candle was a long legged doji star and the indicators have now started rising off of extreme oversold levels. We also have a stochastic that has just formed a new bullish crossover, so with support now established right in this neighborhood it looks possible at least that the euro moves higher on Thursday.

Transportation:  But finally we have a bit of bearish divergence in that the trans dropped 0.47% on a day that the dog and 0.32%. The chart was a tall doji star looking like two thirds of a morning star but the indicators remain overbought and the stochastic is still poised for a bearish crossover. All of that makes this chart too confused for me to call for Thursday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   8      3       3           3       0.786    1010


     And the winner is... 

With the market flopping around like a dead fish lately and four reversals in as many days, and candles that aren't panning out, it's hard to discern any particular short-term direction.  So I won't try.  I simply throw up my hands in disgust and proclaim Thursday uncertain..

YM Futures Trader

No trade tonight.

Wednesday stock market forecast

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

• Wednesday lower.
• ES pivot 1922.58.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

I figured that despite Monday's big advance we were going lower on Tuesday and that's just what happened as the toppiness I noted last night came into play. The Dow dropped 189 and put a quick end to what looked like the beginning of another rally. So with this change in the charts let's see where Wednesday is headed.

The technicals

The Dow:  On Tuesday the Dow gave up the ghost right out the gate and simply moved lower all day long to finish with a broad bearish inside harami. Even that still left the indicators all overbought and it was enough to squeak out a brand new bearish stochastic crossover. So while the harami is not the greatest of all reversal indicators the overall impression here is nevertheless bearish.

The VIX:  Last night I thought that Tuesday might be a bottoming day for the VIX. But it turns out that it wasn't at all interested in testing either its lower BB or its 200-day MA. Instead it simply rose all day long to finish with a tall green marubozu that was good for an 8.26% gain. That still leaves us in a descending RTC but very close to the edge. However with indicators all still oversold and the stochastic on the verge of a bullish crossover it looks like it's entirely possible there could be more upside here on Wednesday.

Market index futures: Tonight, all three futures are lower at 12:12 AM EST with ES down 0.22%. On Tuesday ES put in a bearish red inside harami giving up most of Monday's gains to close back down to 1916. That wasn't enough to move the indicators very far though and they all remain overbought. However, the stochastic has just squeaked out a brand new bearish crossover. That all looks bearish - on the other hand the new overnight seems to be trying to stage something of a rally. All of which leaves this chart slightly confused

ES daily pivot: Tonight the ES daily pivot falls again from 1929.42 to 1922.58. That still leaves ES below its new pivot so this indicator continues bearish.

US dollar ($USDUPX) daily

Dollar index:   Last night I noted that the dollar looked like it was ready to form a bearish evening star after a huge gap up on Monday. However the dollar was having none of that and instead continued climbing another 0.1%. This time though it was with a tall green spinning top that extended the indicators even further into overbought territory and left the stochastic flattened out at overbought ready for a bearish crossover at any moment. So with this second reversal warning in a row I still have to stick to my guns and think that the dollar is going lower any day now.

Euro:  And of course I got fooled by the euro too because after its big dump on Monday I thought there was a chance of at least some sort of a bounce on Tuesday. Instead it just kept right on falling through its lower BB, putting in a small red spinning top to close at 1.10145. The indicators are now quite oversold but the new overnight seems to be continuing lower again. It looks like we could be in one of these situations where the euro just dribbles down its lower BB for a while until it's ready to move higher. It should be noted that the next level of support isn't until 1.10245.

Transportation:  After outperforming the Dow to the upside on Monday, on Tuesday the trans underperformed with a 1.29% loss to end with a lopsided red spinning top. It looks like a bullish piercing pattern, however with indicators still quite overbought and the stochastic getting ready for a bearish crossover at any moment this looks more negative than positive to me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   8      2       3           3       0.846    1063



     And the winner is...

So far the final week of February is upholding its reputation as being rather weak and the charts tonight generally feature confirmations of bearish warnings form Monday so there's nothing really positive on that front either.  Overall, it looks like the best course is to call Wednesday lower.

YM Futures Trader

No trade tonight.

Tuesday stock market forecast

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

• Tuesday lower.
• ES pivot 1929.42.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

After two down days in a row, we were correct in calling Monday higher as the Dow climbed 229 points.  With this new development, we have some interesting charts to sink our teeth into so let';s start munching and see where Tuesday is headed.

The technicals

The Dow:  On Monday the Dow put in a near-marubozu as it rang to gong with a 1.4% pop that just touched its upper BB.  That sent the indicators higher into overbought territory and narrowed the stochastic around close to a bearish crossover.  Right now, this chart looks like it has more downside risk than upside potential to me.

The VIX:  Last night I mentioned that the VIX could test support at 19.82.  Well it did, and it failed the test as the VIX sank right back to 19.38 on a fat gap-down red spinning top.  Tonight we have even better support i the form of both the lower BB and 200 day MA around 18.30 so we're pretty much in the same spot as last night.  I think the VIX will again test these new levels on Tuesday before reversing.  Tuesday could be a bottoming day.

Market index futures: Tonight, all three futures are lower at 12:15 AM EST with ES down 0.43%. On Monday ES confirmed Friday's hammer with a big bump back to 1936.25.  But that was enough to leave it at month-long resistance with indicators extremely overbought.  And right now the new overnight is looking like it's had enough.  This chart definitely looks toppy right here.

ES daily pivot: Tonight the ES daily pivot rises again from 1911.92 to 1929.42. And that's finally just enough to put ES back below its new pivot so this indicator now turns bearish.

Dollar index:   So much for the dollar's bearish engulfing candle last night.  Instead of falling further, it took a giant gap-up 0.81% pop on Monday that sent the indicators overbought as it easily vaulted over its 200 day MA.  That's now looking like 2/3 of a bearish evening star

Euro:  At least I got the euro right last night.  It indeed was unable to advance any further, instead collapsing in a heap right back down through its 200 day MA all the way to its lower BB at 1.1031.  That sent the indicators even further into oversold territory and the new overnight seems to be staging something of a comeback.  I don't know that this qualifies as a reversal but we could get at least a DCB on Tuesday.

Transportation:  And the trans were pretty much a carbon copy of the Dow, gaining 1.86% on Monday with a tall gap-up green near-marubozu.  That leaves the indicators quite overbought and the stochastic ready for a bearish crossover nay day now.  With decreased volume, I don't see the trans having that much gas left in the tank for Tuesday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    9      5       5           0       0.643    1433
February   7      2       3           3       0.833     874


     And the winner is...

Things are starting to look a bit toppy on the charts so as the historically weak last week of February grinds on, with the futures guiding lower I'm going to call Tuesday lower.

YM Futures Trader

No trade tonight.