Thursday stock market forecast

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

• Thursday higher.
• ES pivot 2288.00.  Holding above is bullish..
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade tonight.

Recap

The Dow hits 20,000

Well they were popping the champagne corks on Wall St. Wednesday as the Dow finally cracked the 20,000 handle after trying and failing for over a month.  And it did it in style with a gap-up green marubozu that traded mostly above its upper BB and closed just off session highs.  And even that wasn't enough to send the Dow overbought.

Let me add that we're really witnessing history here.  At the risk of dating myself, I'll admit that I still remember when the Dow hit 1,000 for the first time.  That was a huge deal and it was front page news, just as I expect it to be in Thursday's papers.  Is there still more room to run?  We ow address this burning question with a quick look at the charts.

The technicals

The VIX:  Last night I noted the state of the VIX, opining that "this was not a bullish candle."  And indeed it was not with the VIX dropping another 2.35% on Wednesday on a small gap-down doji star.  But with the VIX now below 11 and near its lower BB, and the stochastic getting ready for a bullish crossover, I think after four down days in a row, any further downside is limited.  I'm looking for a move higher in the next few days.

Market index futures: Tonight, all three futures are higher at 1:22 AM EST with ES up 0.21%. 

ES daily pivot: Tonight the ES daily pivot rises again from 2271.50 to 2288.00.  ES remains above its new pivot so this indicator remains bullish.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January    6      2       7           1       0.778    326

     And the winner is...

Despite big and record-breaking gains on Wednesday, the major averages are not yet short-term overbought.  The candles are all bullish and the trans continue to outperform.  The only twist is the VIX which looks like it may be moving higher soon, but that doesn't necessarily mean on Thursday.  And so with the futures guiding higher once again in the overnight I see no reason not to call Thursday higher.

YM Futures Trader

No trade tonight.