Friday stock market forecast

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

• Friday uncertain.
• ES pivot 1985.92.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Wow - it was like deja vu all over again on Thrusday with the market sinking right out the gate only to recover and spend the rest of the day clawing its way back to modest gains.  It wasn't much but hey, I'll take it.  And so hi-ho, hi-ho, it's off to the charts we go as we make our way to the end of the first week of March.

[With Google's on-again off-again spell checker (it's off again at the moment) I apologize in advance for any uncaught typos.  I type fast, but not well.]

The technicals

The Dow:  On Thursday the Dow put in a virtually identical candle to Wednesday as it rejected a green hanging man - by putting in a second green hanging man.  Indicators are now into overbought but we're left in the same spot as last night - waiting for confirmation of a reversal lower.

The VIX: As I expected, the VIX continued lower on Thursday losing another 2.28% to make it three down in a row after breaking under its 200 day MA.  We're now oversold but there's still no bullish candle, the stochastic is lying flat on the floor and the lower BB continues falling away, now at 15.45.   So once again, I can't find anything bullish on this chart.

Market index futures: Tonight, all three futures are lower at 12:18 AM EST with ES down just 0.03%.  Like the Dow, ES duplicated Wednesday's performance on Thursday with slight gains.  We do now have a stochastic that has started curving around for a bearish crossover buty we're not there yet.  Indicators are well into overbought and the new overnight isn't making much headway.  After three up in a row and closing in on the 200 day MA, I'm sort of starting to wait to the other show to drop.

ES daily pivot: Tonight the ES daily pivot rises again from 1978.17 to 1985.92.  Onve again, ES remains above its new pivot so this indicator continues bullish.

Dollar index:   Last night I wrote that "the next move could possibly be lower" and so it was, big time as the dollar gapped down 0.64% on a tall red candle.  The indicators are still just overbought but now all headed lower.  With a top clearly in, it looks like there's more downside on the way.

Euro:  And just invert all of that for the euro, which popped back up to 1.09585 on Thursday exiting a descending RTC for a bullish setup.  With indicators now all rising just off oversold this one looks bontinued higher for Friday.

Transportation:  The trans had a great day on Thursday, handily outperforming the Dow, up another 1.13% on a nice green marubozu.  That was enough to send the indicators overbought and we remain in a rising RTC even as the upper BB continues to run away, now at 7659.  So I see no reversals here yet.

Accuracy: 

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      2      1       0           0       0.667    -270


     And the winner is...

While I don't have enough bearish signs on the charts tonight to make an outright negative call, it does appear to me that the tide may be turning.  And with a bunch of employment numbers coming out on Friday, this seems like as good a time as any to call Friday uncertain.  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 higher.
• ES pivot 1959.08.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

It was touch & go for a while there on Wednesday as I feared I'd get whipsawed as I mentioned last night, calling the market higher.  But a late afternoon rally following the release of the Blah Book saved the day and got us on the board.  Now it's back to the charts to see how this changes the picture for Thursday.

The technicals

The Dow:  The Dow managed to make it two in a row after all on Wednesday.  But the result was a small green hanging man sitting on top of Tuesday's action.  That's a bearish reversal warning in anyone's book but the indicators are running just short of overbought so I need confirmation on this one.

The VIX: Last night I wrote that "there's nothing bullish about this chart tonight".  And indeed there wasn't as the VIX continued lower on Wednesday, down another 3.45% confirming the 200 day MA breakdown.  That still leaves the indicators not quite oversold and the lower BB continues to fall away at 16.15 so there's still nothing bullish about this chart.

Market index futures: Tonight, all three futures are higher at 12:14 AM EST with ES up 0.16%. On Wednesday, ES extended its gains after Tuesday's monster pop to close back up to 1983.50 . That brings us almost back to where we began the year. However the small range leads one to believe that ES is running out of gas right now,and the indicators now back to overbought tend to support that. But the new overnight is running modestly higher which would make one think that there's a possibility that ES could close at least a bit higher on Thursday.  Of note is the fact that the stochastic has completed a bullish crossover from a high level and those are often good for another day or two of gains.

ES daily pivot: Tonight the ES daily pivot rises again from 1959.08 to 1978.17.  Once again, ES remains above its new pivot so this indicator continues bullish.

Dollar index:   I was right to be cautious about the dollar last night because after posting a small gain on Tuesday it tried and failed to extend that before falling back to exactly where it started off the week. Indicators remain overbought, and the inability of the dollar to sustain any meaningful headway makes me think that the next move could possibly be lower.

Euro:  Meanwhile, the euro extended its losses on Wednesday heading back down to 1.0885 on a lopsided red spinning top that just touched its lower BB before retreating higher. That leaves the indicators oversold and the new overnight seems to be trying to stage a bit of a rally. So with two hammer candles in a row on the books I'm looking for a reversal in the euro any time now.

Transportation:  After a big jump on Tuesday the trans managed to extend that gain on Wednesday with a smaller 0.22% advance, this one on a fat hanging man parked right at the top of Tuesday's tall candle. Indicators actually moved lower on this one and are just short of overbought. So this is the sort of reversal warning that requires confirmation and although it's tempting to call this chart lower I have to hold back on that for now.

Light crude oil futures, daily

Oil: Last night I pointed out what looked like a breakout of a cup & handle pattern in oil.  On Wednesday we seem to have gotten confirmation of that as oil advanced yet again.  Take a look at the chart.  Note that my breakout call is now one candle behind.  Moving out a bit, I note what looks like a double bottom pattern, if one includes the January lows.  We're now close to confirming that and that would be even more bullish for oil.  And given its recent correlation with the market, good for everything else too.  Though I must say, I've been enjoying the recent decline in the price of avgas.  It is now cheaper, after accounting for inflation, than when I learned to fly way back in the 60's.

Accuracy: 

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      1      1       0           0       0.500    -315


     And the winner is...


Tonight we're in pretty much the same situation as last night as the market continues to slowly melt up.. Oil is also now in a week-long uptrend and nowhere near any resistance.  So I think I'll just call Thursday higher, for much the same reasons I called Wednesday higher - I just can't think of a reason to call it lower.  I'm not expecting anotehr triple digit day though.

YM Futures Trader

No trade tonight.

Wednesday stock market forecast

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

• Wednesday higher.
• ES pivot 1959.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Foo.  I sure picked yet another bad day to be wrong  some good economic news totally torpedoed the technicals resulting in the market having its best day in a month.  Oh well - as Fred Astaire said in Swing Time, you "just pick yourself up, dust yourself off, and start all over again".  I always hate starting off the month with a loser but we will endeavor to get back in step and pick Wednesday right.

The technicals

The Dow:  On Tuesday the Dow jumped 2.11% on a tall green marubozu that was stopped only by its upper BB.  And even that wasn't enough to send the indicators overbought.  That leaves the Dow in a funny sawtooth rising pattern.   And the last two times we've hit the upper BB, the next day was lower.  Hmmm...

The VIX: Last night I was equivocating over the VIX.  Turns out the reversal candle was confirmed as it fell a big 13.87% to come crashing down through its 200 day MA, giving up the 20 handle for17.70.  With a tall red marubozu and the lower BB not til 16.87, there's nothing bullish about this chart tonight.

ES daily

Market index futures: Tonight, all three futures are higher at 12:20 AM EST with ES up 0.13%.  On Tuesday ES had a fantastic day, busting out of a new descending RTC with a jolly green giant marubozu and also ending right on its own upper BB at 1978.  That sent the indicators back to just overbought.  The candle itself isn't bearish but lately ES has been taking a break after big one day rallies so that's what I'd expect there on Wednesday.

ES daily pivot: Tonight the ES daily pivot rises from 1937.42 to 1959.08.  ES remains well above its new pivot so this indicator flips back to bullish.

Dollar index:   On Tuesday the dollar totally disconfirmed Monday's wanna-be evening star, instead gaining 0.15% on a lopsided green spinning top.  That sent the indicators to extreme overbought but this is a reversal sign that requires confirmation.

Euro:  Well at least I got the euro right on Tuesday.  It indeed fell some more to close down to 1.08695 after exactly touching its lower BB and bouncing back a bit.  That still leaves indicators quite oversold but with the lower BB hit and no further deterioration in the overnight, I think a reversal may be at hand here.

Light crude oil futures, daily

Transportation:  And finally of course I missed the trans, which equalled the Dow's performance on Monday, up 2.11% on a tall green marubozu that stopped the descent of the indicators and sent them back towards overbought.  We also cleared resistance at 7447 and with the upper BB not til 7596, there seems to be some headroom left here.

Oil: Remember the cup & handle I showed here last night?  Well oil gained some more on Tuesday.  If this holds, it would constitute a breakout and confirmation of the cup & handle.  This is generally a very good bullish pattern.

Accuracy: 

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      0      1       0           0       0.000    -349


     And the winner is...

What a difference a day makes.  Tonight there are suddenly essentially no bearish signs on the charts and the futures are holding onto Tuesday's gains.  I know I'm going to run the risk of getting whipsawed, but I just can't see how I'd make a bearish case here, so I'm just going to have to call Wednesday higher..

YM Futures Trader

No trade tonight.