Friday, November 4, 2016

Friday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday uncertain.
  • ES pivot 2084.42.  Holding below is bearish.
  • Next week bias uncertain technically.
  • Monthly outlook: bias higher.
  • YM futures trader: short at 17,670.

Despite starting to look fairly oversold last night some more air came out of the balloon on Thursday with the Dow down another 29 points as it continues to ride its lower BB lower.  That makes it down six in a row now, its longest losing streak since last July when it was down seven.  Is that in the cards this time around?  Let's see what the charts have to say about Friday as we round out a rocky start to what's supposed to be a good month for the market.

The technicals

VIX, daily
The VIX:  After I thought the VIX had topped three days ago, it just kept shooting higher - up another 14% on Thursday.  That makes it up eight in a row - quite unusual.  I went back three years in the daily VIX chart and couldn't find a single instance that came even close to this.  The VIX has also touched its upper BB for the last five in a row - that's also highly unusual.  In fact on Thursday it traded almost entirely above its upper BB.  And its RSI hit 100 - for the second day in a row!  I can't recall another time period that had all these features.  Take a look.  The three parallel rising lines are the rising regression trend channel.

Market index futures: Tonight, all three futures are slightly higher at 12:44 AM EDT with ES up 0.06%. 

ES daily pivot: Tonight the ES daily pivot falls from 2095.33 to 2087.33.  ES remains below its new pivot so once again this indicator continues bearish.


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        9      3       4           4       0.813     756
June       8      5       7           1       0.643    1393

July       5      6       6           2       0.539    -304
August     1      3       8           0       0.250     120 September  4      5       6           0       0.444     -59
October   10      3       4           1       0.786     314

November   0      1       2           0       0.000    -105

     And the winner is...

Tonight we're starting to see a few early signs of bottoming: the SPX Hi-Lo indicator fell again Thursday to 21, though that's still not as low as I'd like to see.  And ES's RSI fell again to 0.45 about as low as it can go and the new overnight is actually rising slightly along with a small uptick in OBV which has been falling for two weeks now.  Also, the VIX is now impossibly overbought and I can't believe it's not coming back down to earth soon, election or no election.  But we're only still just above 20.  During the Brexit brouha last June, the VIX managed to hit 26 before giving up and it hit a whopping 32 way back in January back when, uh I can't even remember - Martians landed on Wall St. perhaps.

So given the current turmoil, I'm reluctant to stick out my neck.  I really want to see what this blasted election will bring and then maybe we can get back to business.  So it's simply Friday uncertain.  Oh, and I'm planning on taking all of Thanksgiving week off.  I need a break.

That's all she wrote.  See you again Sunday night!

YM Futures Trader

No trade tonight.