Friday stock market forecast

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

• Friday lower.
• ES pivot 2077.33.  Holding below is bearish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

Last night's news from Japan was definitely not what Mr. Market was wanting to hear and that sent the Dow tumbling 211 points on Thursday for its biggest loss since the February 11th bottom.  At least that finally takes care of all the wishy-washy action (or non-action) we've been getting for a week now.  Let's go straight to the charts to see how this changes the picture as we close out the month of April.

The technicals

The Dow:  Mr. Market really didn't like the BoJ news, crashing through support at 18,000, 17,977, 17,931, and then 17,890 like a hot knife through sushi, before finally bouncing off 17,800 on a tell red marubozu.  That finally drove all the indicators into agreement and down to oversold  but with no reversal candle in sight this chart looks just plain uglier than Michelle Caruso-Cabrera's Iranian head-towel.  Foo.

The VIX: The VIX, which really looked like it was headed lower after Wednesday, instead shot up over 10% on Thursday with a tall green hanging man that drove the indicators overbought and sent it right back into its rising RTC.  But with the stochastic nowhere near curving around for a bearish crossover yet, it's not clear that the VIX is moving lower on Friday.

Market index futures: Tonight, all three futures are mixed at 12:32 AM EDT with ES down 0.07%.  On Thursday ES finally crashed out of its week-long doldrums breaking support at 2082 with a tal red candle that drove all the indicators oversold.  The new overnight though seems to be attempting a rally and after such a big move lower, I'd think at least a DCB would be a possibility on Friday.

ES daily pivot: Tonight the ES daily pivot falls from 2087.00 to 2077.33. ES remains below its new pivot so this indicator continues bearish.

Dollar index:   Last night I wrote that "I'd have to think there's more downside left here on Thursday" and was there ever as the dollar did an Acapulco cliff-dive for a giant 0.68% gap-down inverted hammer that cracked through its lower BB.  And even that wasn't enough to send the indicators oversold, so there could still be some more selling here on Friday though I have to think the bulk of that is exhausted and that a DCB could be on the way.

Euro:  On Thursday the euro of course rose but with a much more measured gain than the dollar's drop, extending its winning streak to four now.  We now have a very steep rising RTC (Pierson's=0.986) going, rising indicators still not overbought and positive pin action in the new overnight so I see no sign of a downturn here on Friday.

Transportation:  The trans got whacked again on Thursday breaking support at 7990 on a tall red marubozu for a 1.55% loss that started all the indicators moving lower in unison, though they're still a ways from oversold.  There's nothing positive about this chart tonight.

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      8      6       6           1       0.600     222
April      5      4       8           2       0.636     359


     And the winner is...

Frankly, Thursday's action seemed a bit overblown to me but we don't have any really compelling reversal candles on the charts and we haven't hit any strong support lines, MA's, BB's or other natural bounce points.  In addition, the last trading day of April is historically fairly week according to The Stock Traders Almanac   So while I'm mindful of the possibility of a relief rally or at least a DCB, I can't call that from the technicals I see.  So I don't have much other choie than to call Friday lower again, though I'm not expecting another 200 point drop.  It could be a doji day.  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 lower.
• ES pivot 2087.00.  Holding below is bearish.
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

Hmm - interesting.  When the big Fed announcement came out, there was a fairly muted reaction from the market.  The Fed's statement was so nuanced that Mr. Market wasn't entirely sure what to make of it.  In the end he liked it - kinda sorta, just 51 points worth on the Dow.  Perhaps he wanted to hear from the BoJ?  Who knows, let's just see if we can make heads or tails out the the candles we've been dealt for Thursday.  But first:

Golden Toady Award of the Week

This week we give the GTA of the Week to CNBC's Michelle Caruso-Cabrera for showing up Wednesday afternoon on CNBC from Tehran with her head all wrapped up in a big bath towel.  So what's the deal, Michelle?  Were you having a bad hair day, converting to Mohammedanism or are you just too craven to assert your basic human rights on US TV?  There was absolutely nothing in that piece that even required your physical presence in the rogue nation of Iran in the first place.  The sight of you toadying up to the forces of religous bigotry and intolerence on American television is shameful, disgraceful, and outrageous.  This made me want to lose my Power Lunch.  I think you, or more like your bosses who put you up to it, owe us an apology.

A towel too far.

The technicals

The Dow:  On a purely technical basis,, we just saw two deep hammers followed by a doji star and that all finally resolved to the upside as one might expect on Wednesday.  But this new candle was itself a reversal sign as a spinning top.  But it also just squeaked out a bullish stochastic crossover and the indicators are still conflicted.  RSI and momentum are both falling while money flow and OBV are rising.  As far as I'm concerned, the net result of all of this is pretty much a wash.

The VIX: Similarly, the VIX dropped 1.36% on Wednesday on a fat red spinning top after a pair of gap-up doji stars.  There is a bit of information here though - we just exited a rising RTC for a bearish setup.  Indicators are still not overbought but the last two tops also came before hitting overbought.  There's at least a yellow caution light blinking here right now.

Market index futures: Tonight, all three futures are lower at 12:18 AM EDT with ES up 0.47%.  On Wednesday ES put in a Fed-fueled green bullish engulfing pattern back up to 2080.75 which also happens to be week-long resistance.  Indicators here too are all over the place but the BoJ news quickly put the kabosh on a developing drift higher leaving us with a bearish engulfing pattern engulfing Tuesday's bullish engulfing pattern.  This is starting to look like a megaphone and bears watching.

ES daily pivot: Tonight the ES daily pivot ticks up from 2086.42 to 2087.00. That leaves ES below its new pivot so this indicator continues bearish.

Dollar index:   On Wednesday the dollar turned in its third gap-down doji in a row, this time losing 0.19% for one of the oddest descending RTC's I've ever seen.  And I have to laugh hearing the CNBC talking heads going on about the dollar "strength".  Hey I remember when the dollar was worth 360 yen (and no, I'm not that old).  And yet the sun still managed to rise in the east and set in the west.  Go figure.  So with stars being worth nothing lately and the indicators a long way from oversold, I'd have to think there's more downside left here on Thursday

Euro:  The euro, meanwhile is a bit better behaved, making it three up in a row on a green spinning top.  But even here we have RSI and momentum falling but money flow and the stochastic rising.  Where's this one going/  Who knows.

Transportation:  And finally the trans are also all over the map. They rose just 0.12% on Wednesday but to a level we've visited fr the past seven days.  Indicators here are also completely confused so I see nothing terribly informative about this chart tonight.  Hey, it happens.

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      8      6       6           1       0.600     222
April      4      4       8           2       0.600     148


     And the winner is...

Apparently, Mr. Market did not approve of the BoJ's move earlier this evening and the futures have taken a tumble.  The rest of the charts are certainly not looking like a screaming buy at this point anyway so I guess I'll just go ahead and call Thursday lower.

YM Futures Trader

No trade tonight..