Friday stock market forecast

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

• Friday lower.
• ES pivot 2047.83.  Holding above is bullish.
• Next week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

Whew!  Last night I called Thursday higher and  we were indeed looking good right out the gate until around the end of lunchtime.  Mr. Market must have had something that didn't agree with him because the Dow turned negative for a while before finally just barely recovering for a scant nine point gian by the time the bell rang.  Oh well, I'll take it.  I have to.  I was lucky, I admit it.  But sometimes it's better to be lucky than good - or anything else.

So with that excitement out of the way, it's time to wrap up the first week of May as we look forward to Friday.

[My apologies for any typos - Google's stupid spelling checker is uncooperative again tonight].

The technicals

Dow, monthly

The Dow:  Tonight I want to look at the monthly chart for the Dow.  Notice a clear double bottom forming ... if we can break out of the resistance just below 18,000 that's bedeviled us for a year now.  Unfortunately, the indicators aren't too encouraging.  Monthly RSI is actually moving lower while the stochastic is closer to a bearish crossover than anything.

The VIX: The VIX was fairly confusing on Thursday, down 0.87% on a day the Dow was basically flat.  And that came with a lopsided green spinning top.   Indicators remain overbought and we continue trading outside the latest rising RTC for a bearish trigger.  On the other hand we also got a bullish stochastic crossover from a high level and those are often good for a move higher, so I'm not too sure about this one going lower Friday.

Market index futures: Tonight, all three futures are lower at 12:58 AM EDT with ES down 0.12%.  On Thursday, ES continued its raggedy move lower since topping April 20th with a lopsided red spinning top back down to 2039.50.  Indicators are now all oversold but continue falling.  At least we're finally nearing the lower BB at 2034.54 and that's always good for a modicum of support.

ES daily pivot: Tonight the ES daily pivot falls from 2048.75 to 2047.83. ES.is back below its new pivot so this indicator is back to bearish.

Dollar index:   Boinnng!  When last I wrote of the dollar, I said "the dollar's looking higher on Wednesday".  And so it was.  But on Thursday it just took off, jumping 0.64% on a gap-up green marubozu.  The confirms a bullish trigger on a descending RTC exit along with a bullish stochastic crossover while the indicators still remain just barely oversold.  That all spells higher again on Friday in my book.

Euro:  And of course just mirror-image all that for the euro.  It tanked on Thursday, right back to 1.14110, handily confirming Tuesday's tall inverted hammer top.  Indicators are all now falling off overbought and with no bullish signs in sight, it just looks like more downside on Friday here.

Transportation:  Due to the Night Owl Lite last night I didn't mention the 200 MA breakdown in the trans.  Never a good sign, that was confirmed on Thurday as they dropped an outsized 1.14% on a day the rest of the market went mostly nowhere.  Bad from a Dow Theoretic point of view.  The only saving grace here is that we're just above the lower BB and some month-long support, plus oversold indicators..  With a three day losing streak now, I'm not sure where the sellers will be found going forward.

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      6      4       8           2       0.667     416
May        2      0       1           1       1.000     109
 
     And the winner is...

We are now closing in on a level of short-term oversoldedness from which a reversal ought to be coming soon.  But the market's been acting a bit on the anemic side of late.  It's possible we could see some bottoming action on Friday but on balance I'm going to have to call Friday lower.  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 2048.75.  Holding above is bullish.  [value corrected after a comment from an alert reader]
• Friday bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

Last night I wrote that "I don't think the selling's done yet" and indeed it wasn't as the Dow dropped another 100 points on Wednesday. Tonight's another Night Owl Lite so let's go right to the bottom line.

The technicals

Market index futures: Tonight, all three futures are higher at 12:14 AM EDT with ES up 0.31%.  

ES daily pivot: Tonight the ES daily pivot falls again from 2060.42 to 2048.75. ES.is now back above its new pivot so this indicator turns back 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      8      6       6           1       0.600     222
April      6      4       8           2       0.667     416
May        1      0       1           1       1.000     100
 
     And the winner is...

Tonight, the major charts generally don't look so hot, but the VIX put in only a small gain Wednesday on an inverted hammer that once again tested its upper BB.  That's a good sign of a move lower.  And ES has been down two days in a row now.  I note that it has not put in a losing streak longer than that since the first week of January.  And it's now putting in a non-trivial rally that has sent it back above it pivot in the overnight.  Also oil is advancing again after putting in a long spindly doji star on Tuesday.  So call me crazy but I'm going to go with that and go out on a limb to call Thursday higher.

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 2060.42.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

In retrospect I'm glad I called Tuesday as "uncertain" since I sure didn't see a 140 point yen and oil-fueled drop in the Dow coming.  At least this provided some confirmations we were looking for so let's see how this affects the charts as we wend our wary way to Wednesday.

The technicals

The Dow:  I was worried that Monday's pop in the Dow might be a head-fake and indeed we closed right back down078% on Tuesday for the lowest close in two weeks.  That just barely sent the indicators oversold but they're still falling.  The stochastic is flat on the floor and of no help, so in the absence of any reversal signs I really can't call this one higher for Wednesday.

The VIX: After a giant bearish engulfing pattern on Monday, the VIX - surprise - gained over 6% on Tuesday with a bullish harami to finish just short of where it ended last week.  Indicators remain overbought and the stochastic has completed a bearish crossover now.  We also traded outside the latest rising RTC for the second day in a row for a bearish trigger so overall this chart looks negative now.

Market index futures: Tonight, all three futures are lower at 12:11 AM EDT with ES down 0.16%.  ES retraced all of Monday's gains on Tuesday and then some for a bearish engulfing pattern that sent all the indicators, only just off oversold, headed back down again.  Nothing bullish here tonight.

ES daily pivot: Tonight the ES daily pivot falls again from 2069.08 to 2060.42. ES.is now below its new pivot so this indicator turns right back bearish.

Dollar index:   How 'bout dem dollars, eh?  Sunday night I put up a dollar chart showing it seemingly in freefall.  Then Monday it went even lower trading entirely below its lower BB.  But finally on Tuesday we got the first green candle in eight days as the dollar actually gained 034% on a tall red marubozu as a bullish piercing pattern.  With highly oversold indicators, a new bullish stochastic crossover, and a decent bullish candle, the dollar's looking higher on Wednesday

Euro:  The euro was even more dramatic on Tuesday.  It traded entirely above its upper BB for a giant red inverted hammer/gravestone doji that left the indicators all extremely overbought.  The new overnight is falling off its upper BB and handing us a new bearish stochastic crossover so I'd say this one looks lower on Wednesday.

Transportation:  On Tuesday the trans continued a four day slide, underperforming the Dow handily with a 1.21% dump that actually tested their 200 day MA before recovering a bit. The result was a red hammer with oversold indicators and a stochastic that's on the cusp of a bullish crossover.  Overall, this chart actually looks higher for Wednesday.

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      6      4       8           2       0.667     416
May        0      0       1           1       1.000       0
 
     And the winner is...

On Tuesday we got bearish confirmation on all the charts and that's being supported by the overnight futures.  And oil is looking lower for Wednesday too.  And the weekly charts are looking even weaker.  Sell in May?  Maybe so.  In any case, I'm calling Wednesday lower.  I don't think the selling's doen yet.

YM Futures Trader

No trade tonight..

Tuesday stock market forecast

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

• Tuesday uncertain.
• ES pivot 2069.08.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

On Monday the Dow confirmed Friday's hammer with a nice 0.66% advance.  I wanted to wait for confirmation so I made it a conditional call and that worked out well.  ES oscillated about it pivot in the wee hours of the morning, taking until 6 AM before breaking to the upside.  The bears tried to drive it lower again shortly after the open until by mid-morning we were clearly above the pivot and then indeed closed higher.  It doesn't always work, but it works often enough to be useful.  Tonight it's time for another Night Owl Lite - no details, just conclusions.

The technicals

Market index futures: Tonight, all three futures are essentilly flat at 12:32 AM EDT with ES down just one tick.  

ES daily pivot: Tonight the ES daily pivot falls from 2087.00 to 2069.08. ES.is now back above its new pivot so this indicator turns bullish again.

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      6      4       8           2       0.667     416
May        0      0       0           1       1.000       0

Note: When I make a correct conditional call, I increment that column, not the "right" column, but I do not count the daily Dow change in the "Dow points" column.  That seems like the only fair way to do it since the conditional call doesn't take effect until mid-morning of the trading day.
 
     And the winner is...

We had a rally Monday but it came on lower than normal volume and I'm not sure I find it convincing, particularly since there's no pin action in the futures tonight.  On the other hand, I can't come out with a bearish call because the charts aren't indicating that at all.  So all that leaves is Tuesday uncertain

YM Futures Trader

No trade tonight..

Monday stock market forecast

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

• Monday depends on ES pivot.
• ES pivot 2060.25.  Holding below is bearish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias lower.
• YM futures trader: no trade.

Recap

The supposedly good month of April ended on a decidedly down note last Friday with the Dow down again another 57 points.  We now being a new week and a new month as we move on to the merry month of May.  Shall we sell and go away?  Only the charts can tell.

The technicals

The Dow:  On Friday the Dow put in a classic hammer candle.  With indicators now well into oversold, this is a reversal sign worth watching.  But one must remember that this candle requires confirmation.

The VIX: I wasn't ready to call the VIX lower last Friday and good thing too as it rose another 3.15%.  But here's an interesintg candle: it put in a tall inverted hammer that pierced the upper BB.  That's always the third rail of the VIX as it rarely spends much time above its upper BB.  With indicators now overbought it's looking good for a move lower here any time now.

Market index futures: Tonight, all three futures are just slightly lower at 1:06 AM EDT with ES down just a single tick.  ES followed Thursday's dump with another loss on Friday confirming the breakdown from the 2084 area.  The candle is a fat sort of hammer and the indicators are now oversold but this isn't a really good reversal sign, especially with ES showing no inclination to rally in the Sunday overnight.

ES daily pivot: Tonight the ES daily pivot falls from 2077.33 to 2060.25.  That puts ES back below its new pivot so this indicator turns bearish again.

US dollar ($USDUPX) daily

Dollar index:   Wow - I was badly wrong about the dollar last Friday.  I thought the inveted hammer and lower BB touch meant a move higher was near.  Instead on Friday, it crashed  another 0.71% on a big gap-down red marubozu that traded entirely way below its lower BB leaving this chart in negative exponential freefall.  We haven't seen these levels since the start of January 2015.  Indicators are now oversold though not even extremely so.  And with no support in sight, there's no way to call this chart higher for Monday.

Euro:  At least I was right about the euro when I wrote "I see no sign of a downturn here on Friday."  It indeed took a big jump almost up to its upper BB to close at 1.14650, its best close since last October 14th.  That leaves the indicators overbought and with the upper BB nearby, the euro may find it tough to advance more on Monday.

Transportation:  Last Thursday night I wrote "There's nothing positive about this chart tonight."  And boy was that ever the case as the trans gapped down a big 1.19% on Friday greatly underperforming the Dow on a move that camer real close to their 200 day MA.  Indicators are now finally oversold but even after two bad days it's still premature to call a reversal here.

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      6      4       8           2       0.667     416
 
     And the winner is...

We do see some reversal signs on the charts tonight but I never like relying on the Friday charts all that much after a whole weekend.  With ES hanging about just below its new pivot it seems like a good time for a conditional call: if ES can manage to break above its pivot by mid-morning Monday, we'll close higher.  But if it remains below, or attempts a breakout that fails before mid-morning, then we close lower.  The first day of most months is historically positive, so we might see some gains in the end after all.

YM Futures Trader

No trade tonight..