Friday stock market forecast

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

• Friday higher.
• ES pivot 1988.75.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Last night I decided I couldn't figure out which way Mr. Market was headed on Thursday and therefore called the close as "uncertain".  Turns out Mr. Market couldn't figure it out either with the Dow ending lower by all of five points as he struggled to make sense of the latest shenanigans from the ECB as well as the ongoing tug-o-war in oil.  So let's move right on to the end of the first week of March and see if we get any more clarity for Friday.

The technicals

Dow daily

The Dow:  By the close Thursday it was almost like the Dow was frozen in time and space as it put in a textbook perfect wide-ranging (compared to recent activity) doji star.  It's worth a picture (click the chart to enlarge).  This indicates a lot of uncertainty but the context is pretty negative, with a second day outside the rising RTC (lower diagonal red line) for a bearish trigger, a failed attempt to take on the 200 day MA (thick orange line), indicators that remain overbought and a falling stochastic.

The VIX: Like the Dow, the VIX put in a tall doji star, off just 1.58% after failing to break through its own 200 day MA.  Indicators are rising though only about halfway towards overbought.  Of note is that we now have two down days here, such as they are and the VIX really seems to be showing little appetite at the moment for a run higher.

Market index futures: Tonight, all three futures are higher at 12:25 AM EST with ES up 0.69%.  Like the other charts, ES on Wednesday put in a long-legged doji that tried and failed to break out over its 200 day MA.  That left all the indicators falling off of overbought and a completed bearish stochastic crossover moving lower.  It looks generally bearish but the new overnight is rising strongly.and in fact looks like ES is gearing up for an attack on its 200 day MA again.

ES daily pivot: Tonight the ES daily pivot falls from 1987.00 to 1988.75.  The strong overnight action in ES leaves it well above its new pivot so this indicator continues bullish.

Dollar index:   The dollar took a monster cliff dive on Thursday, down a whopping 1.13%, its biggest daily drop since, uh, I don't know, the late Middle Ages.  I scrolled back a good ways and couldn't find anything this big.  All courtesy of the ECB of course,  So anyway, that instantly drove the dollar to extreme oversold and very nearly touched its lower BB.  It also crashed right through its 200 day MA like a Tall Boy bomb into the U-boat pens at L'Orient.  With YTD support close at hand I'd hazard a guess that further downside is limited from here though.

Euro, daily

Euro:  And the euro of course was the exact opposite fo the dollar - a monster green candle that sliced up through its 200 day MA to jump back to 1.12005, its best close since February 12th.  That leaves the indicators all extremely overbought but without a bearish candle, I can't quite clal this one lower yet even though the new overnight is sagging a bit.  Just look at the chart.

Transportation:  Same story here as all the other cahrts Wednesday - a big doji star.  So after a gain Tuesday and with falling indicators, this looks more bearish than anything else.

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      3      2       2           1       0.667    -227



     And the winner is...

I don't know - it's all rather frustrating.  Despite some dramtic moves on Thursday, we ended up right where we began.  The dojis warn of a possible reversal, but after three days of up/down/up, which way?. Right now the best clue we have is coming from the futures which are all up strongly as I write.  So that's what I'm going with and I'm calling Friday higher.  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 1987.00.  Holding above is bullish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap


Wednesday ended up being pretty odd.  I made it a conditional call last night and at midmoring Wednesday (ie. 10:45 AM) ES was indeed higher.  But a few minutes later it just fell off a cliff.  I wasn't watching the news so I'm not quite sure what precipiated that but it quickly recovered and did indeed end the day higher.  So technically I count that as a win.  Turns out it's yet another day when I was unable to devote my full attention tot the markets and just ran out of time to put together the usual chart rundown.  Therefore it's time for the Night Owl Lite again.  No charts, just conclusions.

The technicals

Market index futures: Tonight, all three futures are slightlyhigher at 12:19 AM EST with ES up 0.08%.

ES daily pivot: Tonight the ES daily pivot rises from 1985.75 to 1987.00.   That now leaves ES above its new pivot so this indicator flips to bullish.

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      3      2       1           1       0.667    -227



     And the winner is...


After a reversal lower on Tuesday, the small retracement of that move on Wednesday wasn't really enough to get a good read on which way the market wants to go.  I get the impression that it's sort of vacillating.  With one reversal candle after another lately, I'm just going to throw up my hands tonight and declare 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 higher only if ES breaks above its pivot, else lower.
• ES pivot 1996.00.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

What goes up must come down sooner or later.  And after giving off reversal signs for four days in a row, the market finally did stage a retreat on Tuesday as I expected.  The question now becomes, is this a one-off or is there more downside to come?  Let's peruse the charts for clues.

The technicals

The Dow:  On Tuesday the Dow finally rolled over with a 110 point decline that left it right on the edge of its rising RTC with indicators still just barely overbought.  This all looks negative for Wednesday.

The VIX: Last night I wrote that "I'd bet the VIX wants to test its nearby 200 day MA at 18.53 on Tuesday."  Well I won that bet as the VIX punched right through the MA with a gap-up 7.61% pop that sent the indicators all off oversold and completed a bullish stochastic crossover.  Now generally when the VIX does a 200 MA breakout, it keeps on going, especially from a low level like we have here.  So I'd say more upside is likely on Wednesday.

Market index futures: Tonight, all three futures are higher at 12:12 AM EST with ES up 0.21%.  ES had a bad day on Tuesday with its biggest loss in about a month.  A tall red near-marubozu stopped exactly on the edge of its rising RTC for a bearish setup.  Indicators are now all moving lower off of overbought so the overall impression here is negative.  Except for the fact that ES seems to be staging something of a rally in the overnight and one must never discount that.

ES daily pivot: Tonight the ES daily pivot falls from 1996.00 to 1985.75.  That now leaves ES less than one point below its new pivot so this indicator remains bearish, but only (wait for it) barely.

Dollar index:   The dollar did fool me on Tuesday.  I was expecting more downside after a 200 day MA breakdown but instead it gained 0.13% on a small green hammer.  With indicators now all oversold and a stochastic just about to form a bullish crossover, I'd say there's more upside potential than downside risk here.

Euro:  Last night I wrote " I'd say there's not much upside left here.  Note too the 200 day MA floating about at 1.10537 just above us."  Well on Tuesday the euro powered higher early on until just tapping its 200 day MA and then collapsed to end right back down to 1.10050 on a tall red inverted hammer.  QED.  The indicators are all overbought now and the stochastic is just inches away from a bearish crossover so this chart definitely looks lower on Wednesday.

Transportation:  If the market was down on Tuesday the trans really took it on the chin, off a huge 2.70% on a tall red marubozu to fall right out of their rising RTC for a bearish setup.  That also sent all the indicators falling off overbought and formed a new bearish stochastic crossover.  This chart looks flat out bearish to me.

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      3      2       1           0       0.600    -227



     And the winner is...

The general impression from the charts is rather gloomy tonight.  The one bright spot is that ES has been drifting slowly higher all evening and is now just below its new pivot, looking like it wants to take a stab at it.  These circumstances are ideal for making one of my conditional calls so that's what I'll do.  I claim that if ES can break above its new pivot by mid-morning Wednesday, we'll close higher.  OTOH, if it bounces off the pivot and moves lower again by then, we close lower.  So sez I.

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 1996.00.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade.

Recap

Oops.  What else can I say?  Last night I figured that with all the reversal signs about, the market was pretty much topped out.  But the market had other ideas and the Dow just kept motoring higher on Monday with a 67 point advance to make it five in a row now.  We are now in fact very close to being back to even for the year.  So can there really still be more upside left in store for Tuesday?  Let's scour the charts for clues.

The technicals

The Dow:  The Dow is now not only on a winning streak the likes of which we haven't seen since last October, it's also in a strong rising RTC that's rapidly closing in on the 200 day MA at 17,176.  This is really the only resistance level in sight so in the absence of any bearish signs there's at least a bit of upside left here.

The VIX: Here's a bit of bearish divergence - on Monday the VIX rose nearly 3% on a day the Dow and SPX were higher too.  It confirmed Friday's bullish piercing pattern with a fat gap-up red hanging man that sent the indicators higher just to the edge of oversold.  It also exited the current descending RTC for a bullish setup so I'd bet the VIX wants to test its nearby 200 day MA at 18.53 on Tuesday.

Market index futures: Tonight, all three futures are lower at 12:43 AM EST with ES down 0.33%. On Monday ES tried hitting its 200 day MA at 2007.98 again but not only missed, it didn't even match last Friday's high though it ended the day in the green with a spinning top, its fourth reversal candle in a row (and still refusing to reverse).  But that may be about to change and the indicators are all quite overbought now and we're finally seeing a non-trivial decline in the overnight.

ES daily pivot: Tonight the ES daily pivot barely ticks up from 1995.50 to 1996.00.  That keeps ES below its new pivot so this indicator continues bearish.

Dollar index:   After last Friday's successful test of its 200 day MA, on Monday the dollar took another stab at it and this time it broke under on a tall red marubozu for a  0.27% loss.  Indicators continue falling towards oversold but aren't there yet.  So with an MA breakdown complete and no bullish reversal in sight, it looks like the selling's not done here yet.

Euro:  The euro meanwhile made it three in a row up with a green hanging man to close back up to 1.0185 o Monday to remain in a steep rising RTC.  Indicators are now just short of overbought and the stochastic has started to curve around for a bearish crossover so I'd say there's not much upside left here.  Note too the 200 day MA floating about at 1.10537 just above us.

Transportation:  Like the Dow, the trans continued their winning ways on Monday with another 0.45% gain, clearing YTD resistance at 7635.  But the candle is a hanging man and indicators are approaching extreme overbought levels.  Still we remain in a steep rising RTC and with this sort of momentum going, I hesitate to call the trans lower, even though they're looking tired at this point.

Light crude oil futures, daily

Oil:  Hey, remember last week when I pointed out a possible cup & handle pattern on the oil chart?  I even wrote in "Breakout" over the March 1st candle.  Well well lookee here.  Here's the same chart, one week later (click the chart to enlarge).  Oil is up 10% since then.  All hail the mighty cup & handle, eh?  Ka-ching!

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      2       1           0       0.500    -337



     And the winner is...

Sometimes I'm not so much wrong as just a day early with my calls.  I'm starting to think last night was one of those times.  All of the bearish forces that were in play then are still there tonight only more so.  So I'm going to the well one more time and call Tuesday lower..

YM Futures Trader

No trade tonight