Thursday stock market forecast

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

• Thursday higher.
• ES pivot 1989.42.  Holding above is bullish.
• Friday bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

After three days of small range moves the Dow finally made a break on Wednesday at it was to the downside with a 157 point loss. This finally gives us an interesting candle to work with so let's take a look at the charts and see which way Thursday might go.

The technicals

The Dow:  On Wednesday the Dow made a brief attempt to move higher out of the gate but it was all for naught as after the first 15 minutes it spent the rest of the day moving lower to finish with a close to marubozu candle good for a 0.92% decline. That threw it right out of its rising RTC for a bearish trigger, sent the indicators continuing off of overbought and confirmed yesterday's bearish stochastic crossover. So there's really nothing bullish all about this chart tonight.

The VIX:  Last night I said the VIX looked higher for Wednesday and indeed it was, gaining 2% on a long legged green spinning top. That finally took the indicators off of oversold and confirmed the recent bullish stochastic crossover. So despite the reversal candle my guess is that there's more upside to come here.

Market index futures: Tonight, all three futures are higher at 12:19 AM EDT with ES up 0.57%. On Wednesday ES followed up Tuesday's big dump with yet another move lower on a gap-down inverted hammer to close at 1984. That finally sent the indicators off of overbought moving lower. But oddly enough the new overnight seems to be staging a non-trivial rally despite the bearish trigger on a rising RTC exit. So I'm not so sure that I can call Thursday lower at this point.

ES daily pivot: Tonight the ES daily pivot falls again from 2000.00 to 1989.42.  That, plus an overnight rally is enough to put ES back above its new pivot so this indicator now turns bullish again.

Dollar index:  I was quite surprised by Wednesday's big 0.88% decline in the dollar on a tall gap-down marubozu that went right through its lower BB. I had figured with three reversal candles in a row and having hit its lower BB the dollar would go higher. But it was not to be and instead we're left with massively oversold indicators with RSI now down to 2.48 and a stochastic that has fallen off the bottom of my chart. There's no bullish reversal candle here and yet with everything else looking quite overextended I have to wonder if the dollar might not stage rally on Thursday.

Euro:  At least I had the sense to take a pass on the euro on Wednesday which is just as well because it had a big gain to close up at 1.1489, a move which punched right through its upper BB on a tall green marubozu. That leaves indicators all extremely overbought and the stochastic just in position for a bearish crossover. It looks like this finally may be it for the euro as the overnight seems to be wanted wanting to go lower. So my guess is that we could see a lower close on Thursday.

Transportation:  After a massive plunge on Tuesday the trans found a modicum of support on Wednesday in the form of a long-legged green spinning top signaling a reversal warning of sorts. However, the indicators are still nowhere near oversold and the stochastic continues in a full-blown bearish mode. Still, there is some question as to whether the downside might continue on Thursday. It's possible that we could be in for a relief rally as Tuesday's move looks a little overdone to me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    3      4       1           0       0.429    238

     And the winner is...

We have a number of reversal signs tonight, particularly in the VIX and the trans.  Ordinarily they're not enough to call a market reversal but with some pretty decent support from the futures I'm going to go a bit out on  limb and call Thursday higher.

Single Stock Trader

After three indecisive days finally on Wednesday Verizon broke to the down side losing $0.37 on a fairly tall red candle. That was enough to send the indicators off of overbought on their way towards oversold and also to complete a bearish stochastic crossover. So the recent uptrend is now clearly over and it looks like there's more downside on the way.

Wednesday lower

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

• Wednesday lower.
• ES pivot 2000.00.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Last night I mentioned that the charts were all looking tired and that fatigue came home to roost on Tuesday as all three major averages lost ground with the Dow down 0.29%. That leaves us at an interesting juncture so let's go straight to the charts as we figure out where Wednesday is heading.
The technicals

The Dow:  On Tuesday the Dow snapped an impressive 7-day winning streak and 9 out of 10 with a 50 point loss. This move left it teetering on the brink of its steep rising RTC. I will add that indicators have already begun coming off of extreme overbought levels (which isn't hard since when RSI hits 100 there there's no place left to go but down). The stochastic remains threaded out at extreme overbought so there's no telling when it will form a bearish crossover. However the overall look of this chart is now quite bearish.

The VIX:  In an impressive show of strength on Tuesday the VIX managed to escape the 200 day MA trap by refusing to sink lower and instead actually gained 9.28% to finish with a green hanging man that started to bring the indicators off of extreme oversold level and left this chart right on the edge of its descending RTC. his all looks bullish or Wednesday.

Market index futures:  Tonight, all three futures are mixed at 12:29 AM EDT with ES dead even.  I wasn't ready to commit to a move lower in ES last night considering all the momentum it had going for it. However on Tuesday it had a bad day indeed with its worst performance since September 28th. That left it hanging right on the edge of its rising RTC and all of the indicators are now descending strongly off of overbought with the stochastic in a nicely completed bearish crossover. The overnight is trading outside this RTC so that's a bearish set up and therefore this chart now looks negative for Wednesday.

ES daily pivot: Tonight the ES daily pivot falls from 2008.92 to 2000.00 on the dot. ES remains below its new pivot though so this indicator continues bearish.

Dollar index:  Last night I noted a reversal warning in the dollar but one which required confirmation. We got that on Tuesday and while the dollar only gained 0.03% it did it on wide-ranging red spinning top. However, indicators continue to remain quite oversold so it looks like the dollar still has more room to run higher from here

Euro:  However last night I missed the euro which I thought would move lower on Tuesday. Instead it continued higher to close at 1.1395 marking its third day in a row where it just exactly touched its upper BB. Indicators continue to rise and are now at extreme overbought levels. The stochastic also looks like it's trying to form a bearish crossover but it's not quite there yet. So this chart is a little too difficult to call tonight.

Transportation:  Last night I noted a classic hanging man in the trend. And interestingly, on Tuesday marketwatch.com also noted it in one of their TA pieces. That was the same day that we got the payoff in the form of a giant 2.22% decline with a red marubozu that crashed right out of a steep two week long rising RTC and sent all the indicators lower off of overbought. That leaves no bullish signs at all on this chart tonight.


Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    2      4       1           0       0.333     81

     And the winner is...

Tonight the futures appear to be trying to  find some support after Tuesday's big drop but the overall tenor of the charts remains bearish.  It just seems that overall there's more downside risk than upside potential so I'm going to go ahead and call Wednesday lower.  I'll be happy to be proven wrong.

Single Stock Trader

On Tuesday Verizon gained a bit on an upgrade from Morgan Stanley to finish with a small bullish engulfing pattern. However indicators continue climbing into overbought territory and the stochastic remains on the cusp of a bearish crossover. The stock continues to find resistance around 44.40 and I still don't see this as a swing trade buy right now.

Tuesday lower

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

• Tuesday lower....
• ES pivot 2008.92.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Well it was about what I expected on Monday with a semi-holiday.The Dow gained a meager 47 points and the SPX managed less than that on a low volume snoozer of a day. So with nothing much having happened let's continue on to see which way Tuesday is headed.
The technicals

The Dow:  The Dow just keeps right on trucking with Monday making it 10 in a row on the latest rising RTC. Lately its been just crawling right up its upper BB and RSI is now pegged at 100. It doesn't get any higher than that. The stochastic similarly is also bumping up against the ceiling with no predictive power. We remain in the biggest uptrend I've seen in a long time and with no reversal candles in sight I just can't call this chart lower yet.

The VIX:  And correspondingly the VIX is now in an equally long downtrend losing another 5.3% on Monday with its own RSI now on zero. This is in fact the third day in a row RSI has been at zero and I can't recall the last time that happened. In any case we continue to dribble down the lower BB with no end in sight. Of even more importance is the fact that on Monday the VIX broke under its 200-day MA. That's always a bad sign and with a red marubozu on the books it doesn't look like there's any reversal in sight for the VIX right now.

Market index futures: Tonight, all three futures are lower at 12:36 AM EDT with ES down 0.17 %. After a rip-roaring rally last week ES has been having some trouble making any headway the last few days putting in just a small advance on Monday. And it appears to be giving most of that back in the new overnight in the form of a dark cloud cover. Indicators also now appear to be falling back off extreme overbought levels and the stochastic has just squeaked out a bearish crossover. So the general impression here is that this chart looks lower for Tuesday.

ES daily pivot: Tonight the ES daily pivot rises again from 2006.75 to 2008.92.  An overnight sag in ES has now put it back below its new pivot so this indicator now turns bearish.

Dollar index:  On Friday the dollar dropped all the way to its lower BB and on Monday it lost another 0.12% on a gravestone doji. Indicators are now oversold but the stochastic has not yet begun to curve around for a bullish crossover. So we have a reversal warning in place but one which requires confirmation on Tuesday.

Euro:  After touching its upper BB on Monday with a small lopsided spinning top the euro looks like it's falling back in the overnight, down 0.13% at the moment. Indicators look to have now peaked at overbought and the stochastic is getting ready for a bearish crossover so overall this chart looks negative for Tuesday.

Transportation:  After a decent gain last Friday, on Monday the trans put in a tall classic hanging man sitting right at the top of Friday's candle. Indicators remain quite overbought and the stochastic is just about in position to form a bearish crossover. We remain in a steep rising RTC but the trans are looking to be about out of gas right now so a move lower on Tuesday would not surprise me.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      4       1           0       0.200     31

     And the winner is...

Tonight the charts are looking tired, and they have the right to be after such a nice rally last week.  We're getting some reversal signs so I'm just going to go ahead and call Tuesday lower.

Single Stock Trader

After putting in a red spinning top on Friday Verizon wasn't really able to make any headway on Monday with a stubby green hanging man. Indicators and now quite overbought and the stochastic is getting ready to curve around for a bearish crossover. Therefore this chart now looks to me to be more than a little toppy.

Friday

Unfortunately, Thursday was one of those occasional days where time just dribbled through my hands like grains of sand as a host of pesky obligations kept me from doing what I enjoy most.  I had no time at all to watch the market, much less write about it.  Looks like it turned out to be another good day though, so my call was wrong again.  Not that that particularly bothers me since I made money as I'm always net long.  The only damage was to my pride.

But I guess we'll just have to let it go at that.  So I've got nothing for Friday and I also intend to take Monday off as the bond markets will be closed and it's sort of a semi-holiday.  That's all she didn't even write.  See you again Monday night!


Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      4       1           0       0.200     31

Thursday lower

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

• Thursday lower.
• ES pivot 1979.67.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Well that was interesting. I was reasonably certain that with the Dow having hit its upper BB on Tuesday with a spinning top reversal candle it would go lower on Wednesday. But no such luck. Instead it gained 122 points to continue its recent week and a half long winning streak. So let's check the charts to see how that changes the picture for Thursday.

The technicals

The Dow:  On Wednesday, the Dow rejected Tuesday's spinning top in a big way to continue crawling up its upper BB for the third day in a row. That has now left the indicators all extremely overbought with RSI having hit 98.64. Of note too is that the stochastic is now perfectly primed for a bearish crossover that could happen any moment. So although this is not a bearish reversal candle it is questionable how much further the Dow can move without reversing course at least for a day.

The VIX:  Similarly, on Wednesday the VIX rejected the spinning top that it put in on Tuesday to descend further on an inverted hammer to close down to 18.40. It is tracking its lower BB and has hit zero, and that's as low as it goes folks. The stochastic has actually fallen off the bottom of my chart and is now primed for a bullish crossover. So with a reversal candle in place here I would give better than even odds that the VIX goes higher on Thursday

Market index futures: Tonight, all three futures are lower at 12:23 AM EDT with ES down 0.52 %. I based my call for a lower close Wednesday in part on a red spinning top reversal candle in ES from Tuesday. Instead, on Wednesday ES put in a tall green marubozu that brought it all the way back up to month-long resistance at 1988, sent the indicators to highly overbought levels and moved the stochastic into position for a bearish crossover. However we remain in a rising RTC and this trend is far from over. On the other hand the new overnight is experiencing a fairly significant move lower and that bodes ill for Thursday.

ES daily pivot: Tonight the ES daily pivot rises again from 1971.08 to 1979.67.  That movr now puts ES back below its new pivot so this indicator turns bearish.

Dollar index:  After bumping into its 200-day MA on Monday the dollar gave it all back on Tuesday and then some on a tall red candle. But on Wednesday it finished essentially unchanged on a small doji star. The indicators continue falling but have not yet hit oversold so what we have here is a reversal warning of a move higher but one which requires confirmation.

Euro:  The euro meanwhile simply continues bouncing around in a two week long consolidation range bounded from below by 1.114 and from above by approximately 1.1300. After a nice gain on Tuesday it was unable to make any further headway on Wednesday and closed right back down to 1.1263 on a small red doji star. And the new overnight isn't doing much of anything so this chart continues to remain conflicted without any clear direction.  I woudn't be trading this currency at the moment.

Transportation:  Finally on Wednesday the trans outperformed the Dow by nearly a factor of two. They easily cleared resistance at 8085on a tall green marubozu that keeps them in a nearly two week long rising RTC. Indicators are now very overbought and the stochastic is in position to form a bearish crossover any day now. But without an actual reversal candle I cannot call this chart lower just yet.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      3       1           0       0.250    169

     And the winner is...

It sometimes happens that I am a day early in my calls and I'm thinking that this is one of those times. All of the forces that were in play last night are still there tonight only more so. And this time we're getting some better confirmation in the form of futures that are moving lower non-trivially. So I'm going to give it another try and once again call Thursday lower.
Single Stock Trader

I was thinking that Verizon looked toppy last night and indeed it came back in on Wednesday confirming Tuesday's tall inverted hammer with a lopsided green long-legged spinning top. Indicators continue to rise though but have not yet hit overbought. That leaves this chart in a very mixed up state but it is definitely not in my preferred swing buy mode at the moment.

Wednesday lower

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

• Wednesday lower.
• ES pivot 1971.08.  Holding below is bearish.
• Rest of week bias lower technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ not a swing trade buy.

Recap

Last night I was getting mixed messages fro the charts and therefore called Tuesday uncertain.  And hey lookee - the Dow ended up just 14 points while the SPX dropped seven.  There was really no way to call something like that.  So let's continue right on to Wednesday and see if we get some more clarity.

Unfortunately, this was yet another day when I kinda just ran out of time to do the actual writing so what you get is another famous Night Owl Lite.  All results, no blathering.  We'll resume the usual chart analysis tomorrow.

The technicals

...are skipped tonight...

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      2       1           0       0.333    291

     And the winner is...

While I didn't write my usual piece about each chart tonight, I did analyze them and I'm seeing a number of decent reversal signs, and unlike last night the charts are in sufficient agreement now to call Wednesday lower.

Single Stock Trader


VX looking toppy right now.

Tuesday uncertain

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

• Tuesday uncertain.
• ES pivot 1964.00.  Holding above is bullish.
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• Single stock trader: VZ still not a swing trade buy.

Recap

Last Friday was something of a question mark as all the charts were posting reversal warnings. But in the end I was correct in ignoring those because on Monday the Dow posted a big 304 point pop that extended its winning streak to essentially five in a row. The market is now clearly on a roll so we need to see how much longer this can go on as we move ahead to the charts for Tuesday.

The technicals

The Dow:  The Dow was quite impressive on Monday putting in a 1.85% gain on a tall green marubozu that took it all the way to its upper BB. That also sent the indicators overbought for the first time in three weeks and caused the stochastic to show the first signs of curving around for a bearish crossover. So those are warning signs of a move lower but they all require confirmation. Basically it's still too soon to call this one lower for Tuesday.

The VIX:  Last night I called for the VIX to hit it lower BB at 19.30 one on Monday. Turns out the low for the day was actually 19.14 as the VIX put in a stubby red gap down hammer. We have now bounced off the lower BB but the indicators continue to fall and have not yet reached oversold. And the stochastic has still not begun to curve around for a bullish crossover. So while we do have a reversal warning now, it is a weak one and I need some confirmation of a move higher on Tuesday before calling an end to the current decline in the VIX.

Market index futures: Tonight, all three futures are lower at 12:48 AM EDT with ES down 0.20%. ES had a great day on Monday making this rally now four in a row. It is now quite clearly more than a relief rally or a DCB as September's big descending RTC is definitely done for. We are still a ways from resistance at 1988 but after having run hard for four days in a row and with the indicators just short of overbought and a stochastic beginning to curve around for a bearish crossover I'm starting to wonder if ES has enough gas left in the tank to continue moving higher on Tuesday.

ES daily pivot: Tonight the ES daily pivot rises again from 1923.25 to 1964.00. That once again leaves ES above its new pivot so this indicator continues bullish.

Dollar index:  On Monday the dollar confirmed Friday's giant gap-down doji star in a big way as it gained 0.28% stopping only at its 200-day MA. Indicators are now wandering around halfway between oversold and overbought so there's not much guidance there. However the Friday reversal followed by a nice bullish confirmation makes it look like the dollar still has enough gas in the tank to put in another advance on Tuesday.

Euro:  Last night I said there continued to be no direction in the euro and Mondays action did nothing to change that view as the euro gave up all of last Friday's gains and then some falling right back down to 1.1192 and stopping exactly on its 200-day MA. The indicators are now halfway between oversold and overbought so there is nothing to learn from them. The question is will the MA provide support or not. Right now it's looking in the overnight as though it just might. Still with a bearish candle on the books on Monday it's not at all clear that the euro won't continue lower on Tuesday.

Transportation:  I wasn't ready to commit to the trans last night either which is too bad because they outperformed even the Dow on Monday with a giant 2.31% green marubozu. That was enough to send the trans overbought even though the stochastic is still rising and has not begun to curve around for a bearish crossover. My only concern right now is that this chart looks like it is going exponential and that would make it ripe for a pullback which could come any day at this point.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    1      2       0           0       0.333    291

     And the winner is...

Technically tonight most of the signs remain bullish but there are a few areas of concern, like the VIX and the futures.  So I'm hesitant to call the market higher again, particularly after such a nice run.  On the other hand, there's not really enough bearish signs to call it lower.  So I guess all that leaves is Tuesday uncertain.

Single Stock Trader

Last night I was playing it conservatively after watching Verizon bleed for more than two weeks straight. But on Monday it turned out that last Friday's hammer was in fact the bottom as Verizon posted a big 2.71% gap-up marubozu on Monday. That was enough to vault it right out of its two week long descending RTC , send all the indicators rising off of oversold, and confirm the bullish crossover from the stochastic. So while we missed the bottom on this one this chart now looks like a buy to me.

Monday higher

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

• Monday higher.
• ES pivot 1923.25.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

Last Thursday night you may recall that I made a conditional call for Friday claiming that the market would close higher if ES managed to stay or rise above its new pivot by the middle of the morning. Well it ended up taking a little longer than that and it wasn't until 12:40 PM that ES made that decisive break through its pivot after which it did indeed close higher. But it didn't quite meet the criteria for the conditional call so we count that as a miss. Still the general idea was sound as the move above the pivot did result in a higher close. Now let's considered the charts as we continue on to the first full day first full week of October.
The technicals

The Dow:  Wow - that sure was interesting! Last Thursday night I was hesitant to call the Dow lower on Friday and good thing too because it ended up gaining 200 points. That completely disconfirmed Thursday's doji star and sent all the indicators continuing on their way towards overbought but they're not there yet. The stochastic similarly has yet to even near the conditions for a bearish crossover. However the candle was a gigantic green hanging man. I'm not quite sure what to make of that long lower shadow that nearly touched the lower BB at 15,978. So we have a conflict here tonight - a reversal warning candle but three out of four recent up days establishing a new rising RTC. Which one gets confirmed on Monday? I have no idea. Once again, we require confirmation.


The VIX:  And by the same logic I wouldn't call the VIX higher on Friday either which was also good because it fell over 7% on a tall red bearish engulfing pattern to remain inside a new descending RTC of its own. Indicators continue falling but have not yet hit oversold and the stochastic is not quite in position to start forming a bullish crossover. We are also very close to the magic 20 handle and with the lower BB at 19.31 I wouldn't be surprised to see the VIX test that level on Monday.

Market index futures: Tonight, all three futures are higher at 12:50AM EDT with ES up 0.12%. Like all the other charts last Friday ES put in some decent gains but on a tall hanging man candle. That makes it three up in a row for three white crows. The indicators continue to rise but have not yet hit overbought. Interestingly, in the overnight we see that OBV has started falling for the first time in a week. My guess would be that we could be in for something of a pause or a pullback here on Monday were it not for the fact that ES continues to rise in the Sunday overnight.

ES daily pivot: Tonight the ES daily pivot rises again from 1912.17 to 1923.25.  ES remains well above its new pivot so this indicator continues bullish.

Dollar index:  I was right about the dollar last Thursday night when I said it was going to go lower on Friday because it lost 0.37% on a giant hanging man of its own just as we've seen in so many other charts tonight. This one actually tested its 200-day MA before recovering. This also had the effect of causing the stochastic to turn around for a bullish crossover from a high level. Those are often good for a move higher in the next day or two so that leaves us with mixed messages on this chart tonight. We have a bearish reversal warning but some bullish looking indicators so there's just no calling this.

Euro:  On the other hand I was wrong, very wrong about the euro last Friday as it did indeed confirm the spinning top that I discounted Thursday night by putting in a second giant green spinning top, one that hit 1.1331 before falling back to close at 1.1241. It also busted right through its 200-day MA but for all that action it remains in a wide consolidation zone that's been going on for 2 weeks now with no definitive break one way or the other. With the overnight losing just a bit there is really no clear direction here for the euro on Monday.

Transportation:  And finally the trans continued their own advance on Friday after with a pattern that looks very much like the Dow. They put in four nice days of gains after bouncing off their lower BB last week, but they also gave us a tall hanging man with a very long lower shadow. That is a clear reversal warning but one which requires confirmation on Monday so we can't make a call here tonight either.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    0      2       0           0       0.000    -13

     And the winner is...

Just about every chart has the same thing going tonight - a tall hammer/hanging man reversal warning.  However, that always requires confirmation.  I also have the feeling that the tall tail in all these candles was news-driven on Friday.  If we discount it, then we get some solid green continuation candles.  And with the VIX not looking anywhere near ready yet to move higher again and the overnight futures guiding higher, what the heck, I'll just go way out on a limb and call Monday higher.

Single Stock Trader

Last Thursday night I still wasn't ready to commit to Verizon as a swing trade buy for Friday that's a good thing too because it was one of only two stocks that lost ground in the Dow on Friday. But it did it on an interesting gap-down green hammer. Indicators simply continue bumping along the bottom at oversold so with the Dow dribbling down its lower BB we at least now have a reversal warning. But we still remain inside a descending RTC so this is a warning that requires confirmation. However, I think we are now an nearing a point where Verizon could be a swing trade buy.

Friday depends oin ES pivot

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

• Friday higher only if ES remains above its pivot, else lower.
• ES pivot 2085.92.  Holding above is bullish.
• Next week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

Well that was just unfortunate. I thought for sure based on the technicals that Thursday would be going higher and in fact both the SPX and the Nasdaq did go higher. It's just that the Dow despite a late afternoon rally didn't quite manage to break even and therefore my call for Thursday being higher was wrong. Oh well - it was only by 13 points. I never like starting off a month being wrong so let's see if I can't redeem myself for Friday as we get October rolling.

The technicals

The Dow:  So after a nice game on Wednesday the aforementioned Dow on Thursday put in a long-legged doji star. This is a reversal warning however the indicators are all still busy rising from oversold but have not yet not yet reached overbought.. Therefore it is too early to call this one lower on Friday.

The VIX:  Last night I said the VIX still had lower to go on Thursday and that proved to be true is it fell another eight percent. That sent all of the indicators off of overbought and confirmed a bearish stochastic crossover. The long-legged inverted hammer is a bullish reversal warning but one which requires confirmation and at this stage it's still too early to do that so I can't call this one higher just yet on Friday.

Market index futures: Tonight, all three futures are mixed at 12:11 AM EDT with ES down 0.03% but NQ up 0.05%. On Thursday ES put in a nice green continuation candle following Wednesday's big gain that confirmed Tuesday's doji star. Indicators are all rising now off of oversold but still a long way from overbought and the stochastic is also continuing higher. In addition the overnight just keeps chugging along so they are really no bearish signs on this chart tonight.

ES daily pivot: Tonight the ES daily pivot rises from 1896.83 to 2085.92.  ES remains slightly above its new pivot so this indicator continues bullish, but just barely.

Dollar index:  Last night I took a wild guess that the dollar will move lower on Thursday and that paid off with a 0.16% decline on a small red hanging man that successfully tested its 200-day MA. Indicators continue to fall off of overbought but are still a long way from oversold. In addition, the stochastic continues to decline and therefore it looks like dollar still has lower to go on Friday.

Euro:  On the other hand I did miss the euro which Thursday did not continue falling but instead put it in a small gain to close at 1.1196 on a classic spinning top. However it still faces resistance at its 200-day MA currently at 1.1198, and all of the indicators are now falling along with a stochastic that has just completed a bearish crossover. Therefore I wouldn't put too much stock in the spinning top as it looks more likely that there is more downside coming on Friday.

Transportation:  And finally last night I said that the trans were looking more likely higher on Friday than lower and that proved to be true as they put in a nice 0.60% advance to make it three white soldiers on the charts. The indicators are still just barely oversold but continuing to rise along with a nicely completed bullish stochastic crossover. We do have some resistance coming up around 7858 but that means there's still at least a little bit more room to run for the trans on Friday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404
October    0      1       0           0       0.000    -13

     And the winner is...

Tonight the charts remain generally bullish but with the failure of the Dow to advance on Thursday I'm a bit cautious.  So with the markets remaining skittish and ES now close to its new pivot this seems like a good time for a conditional call.  If ES remains above its new pivot by mid-morning Friday we'll close higher.  But if it sinks below it by then we'll close lower.  That's all she wrote.  That's enough!  See you again Sunday night!
Single Stock Trader

Once again last night I was reluctant to call Verizon a buy and it's a good thing too because on Thursday it just sold off some more to continue in a two week long descending RTC. It's been oversold the whole time but lately that means nothing as it continues to dribble down its lower BB. So we are still waiting for this stock to become a buy. Of particular concern is the fact that on Thursday it broke through its two month long support at 43.46. It's not looking good.

Thursday higher

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

• Thursday higher.
• ES pivot 1896.83.  Holding above is bullish.
• Friday bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

Despite the bearish reputation of the last day of September, this year the Dow managed a decent 1.47% gain. Nevertheless it finished both the month and the quarter in the red. So with the ugly month of September out of the way let's now move on to the scary month of October and see where Thursday may be headed.
The technicals

The Dow:  The Dow took a nice 236. top on Wednesday to make a tall green marubozu that lifted the indicators off of oversold and finally caused the stochastic to complete a bullish crossover. It also marked the second day trading outside the recent descending RTC and so that's a bullish trigger. The only concern on this chart is resistance around 16,315. But it does appear that the Dow still has some room to run on Thursday.

The VIX:  Last night I said it looks like the VIX had lower to go again on Wednesday. And that's just what happened with the VIX falling nearly another 9% on a gap-down doji star. But that still that leaves the indicators overbought and the stochastic on the verge of forming a bearish crossover. So while this is a bullish reversal indicator it is also one which requires confirmation and from the looks of it my guess is that we're not done going lower yet.

Market index futures: Tonight, all three futures are higher at 12: 15 AM EDT with ES up 0.76%. On Wednesday ES had its best day in almost a month as it confirmed Tuesday's doji star in a big way with a tall green marubozu that brought it all the way back up to 1908.75. That also finally exited the two week long declining RTC for a bullish setup. It also pulled away from the lower BB which is now falling away from us and sent the indicators rising off of oversold as well as confirming a bullish crossover from the stochastic. So everything is looking pretty bullish for this chart except for the fact that there's no follow-through in the overnight which is putting in a nontrivial decline. And that's a concern.

ES daily pivot: Tonight the ES daily pivot rises from 1875.08 to 1896.83.  ES remains well above its new pivot so this indicator continues bullish tonight.

Dollar index:  So much for the classic three black crows pattern. Last night I thought the dollar would move lower again on Wednesday especially after having pierced its 200-day MA. But no, instead it gained half a percent on a stubby spinning top perched above the top of Tuesday's big decline. That still leaves the indicators overbought and the stochastic in the middle of a bearish crossover so this could be a one and done. My guess is that the next move is lower but at this point who knows.

Euro:  On Wednesday the euro confirmed Tuesday's spinning top in a big way with a massive decline that plunged right back through its 200-day MA to close at 1.1179 on a tall red marubozu. That was enough to send the indicators moving lower before ever having reached overbought and the stochastic is now curving around for a bearish crossover before having reached overbought itself. The overnight seems to be looking for some support but it's not clear that it will find it so it looks to me like after such a big move through the 200 MA on Wednesday there's more room to run lower on Thursday.

Transportation:  And finally I was right about the trans moving higher though I was a little surprised that they gained 1.10% on Wednesday. That is the second day we've traded outside the descending RTC so that is a bullish trigger. Indicators remain oversold and the stochastic is still flat on the ground so it looks like the trans have more upside potential than downside risk at this point.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  7      4       8           1       0.667   1404

     And the winner is...

The first day of most months is bullish and though that isn't always true of October, tonight we have a nice technical base to work off of and the futures are guiding sufficiently higher that all in all I'm going to go ahead and call Thursday higher.

Single Stock Trader
Last night I still wasn't ready to commit to Verizon despite the likelihood that the Dow was going to close higher on Wednesday. And that was a good thing too because Verizon ended up being one of only two Dow stocks that moved lower on Wednesday. That left us with two side by side red spinning tops and indicators that continue to hover at highly oversold levels. But until we see some confirmation of these reversal warnings it's still too early to call Verizon a swing buy.

Wednesday higher

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

• Wednesday higher.
• ES pivot 1875.08.  Holding above is bullish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ still not a swing trade buy.

Recap

It was another crazy roller coaster day on Wall Street and it finished with another mixed market with the Dow and the SPX closing higher but the Nasdaq finishing lower. The Dow was up then it was down then it was up then it was down before a late afternoon rally caused it finish with that 47 point advance that caused my call to be wrong but not be very much. So with another interesting candle in the books let's move on to close out the miserable month of September by figuring out which way Wednesday may wend.
The technicals

The Dow:  After the dust settled the Dow had put in a 0.30% advance on a long-legged green spinning top sitting right at the bottom of Monday's big dump. As the lower BB continues to fall away at least support of 16,000 was respected, and the indicators have now started rising from oversold levels. This is an encouraging reversal sign for Wednesday.

The VIX:  I was wrong about the VIX on Tuesday. I thought it would move higher but instead in a bit of bullish divergence it fell 2.9% on a day the Dow and the SPX closed higher but on a small green spinning top that sent the indicators a little further into overbought territory. However the candle is in a bullish harami position so I wouldn't make too much of that. At this point it's hard to tell which way the VIX goes on Wednesday.  But I tend to favor continued lower at this point.

Market index futures: Tonight, all three futures are higher at 12:53 AM EDT with ES up 0.77%. After Monday's big dump, on Tuesday ES put in a nice reversal warning in the form of a long-legged doji star sitting right on its lower BB as the indicators have now hit extreme oversold levels. We haven't quite retested the August lows yet but it looks like the overnight is wanting to confirm Tuesday's candle so we could be looking at a rally on Wednesday.

ES daily pivot: Tonight the ES daily pivot falls again from 1890.17 to 1875.08. That's finally enough to bring ES back above its new pivot so this indicator now turns bullish.

Dollar index:  Last night I wrote that it look like the dollar would move lower again on Tuesday and that's just what it did with another 0.20% loss that drove it right back down through its 200-day MA. That gives us a bearish three black crows pattern and has started the indicators all moving lower off of overbought. The stochastic now has a freshly completed bearish crossover so there's nothing bullish about this chart tonight and it looks like the dollar still has lower to go on Wednesday.

Euro:  Similarly, last night I called the euro higher for Tuesday and that's just where it went climbing right back up to 1.1272 on a green spinning top. That's a weak reversal sign but with the indicators still rising and not yet overbought it has to be taken with a grain of salt.

Transportation:  Last night despite some reversal signs I was cautious about calling the trans higher on Tuesday. They did manage a modest 0.32% gain but it was on a long-legged doji star. With indicators now extremely oversold it looks like the trans may be in a bottoming process. I still think we're due for a move higher and it might come as early as Wednesday but it's not certain.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  6      4       8           1       0.636   1168

     And the winner is...

The last day of September is historically quite bearish but tonight the charts are generally suggesting that we've gotten overextended to the downside and a rally may be at hand.  So I'm going to just go ahead and call Wednesday higher as we close out the month and the quarter.

Single Stock Trader

Last night I was cautious about calling Verizon higher and that proved to be a good move because it fell further with a third spinning top in a row on Tuesday as it continues to dribble down its lower BB. Indicators remain oversold but have not yet begun to put in a convincing bottom. We are still in a descending RTC so once again this is not a swing trade buy.

Tuesday lower

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

• Tuesday lower.
• ES pivot 1890.17.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy.

Recap


Last night demonstrated the problems we have on Sunday nights calling Monday being as most of the information is fairly old by that point. The charts actually didn't look too bad but I hesitated calling Monday higher because the futures weren't participating. As it turns out it was good that I called Monday merely uncertain rather than higher because the Dow took an ugly 313. plunge and the SPX fared even worse. There are some interesting charts to look at tonight so let's get right to them and see where Tuesday may be headed.


The technicals

The Dow:  On Monday the Dow disconfirmed last Friday's bullish setup on a descending RTC exit with a nearly 2% dump that took it right down to its lower BB stopping just short of the 16,000 mark . But even that still leaves the indicators only moderately oversold and continuing to fall. The stochastic is now lying flat on the ground and thus has no predictive power. Perhaps more importantly, OBV continues a decline that began way back in the middle of July, currently running at -872 million. That's not a good sign. And with a red marubozu on the books there's no sign yet of a reversal on this chart.

The VIX:  Last night I thought the VIX was headed higher on Monday and that's just where it went with a big 17% gap up green candle that sent the indicators overbought. With the stochastic continuing to rise but still nowhere near in position for a bearish crossover, VVIX also continuing to rise, and the upper BB not too far away at 30 it looks to me like the VIX still has more room to run on Tuesday.

Market index futures: Tonight, all three futures are lower at 12:23 AM EDT with ES down 0.11%. ES had a simply miserable day on Monday with its worst performance in a month closing just off the day's lows and falling through its lower BB at 1888. It looks to me very much like ES is intent on retesting last month's lows around 1863. We could easily hit that level on Tuesday. In the meantime there's absolutely no sign of a reversal higher even though the indicators are all now extremely oversold.  The continued drift lower in the overnight isn't helping matters either.

ES daily pivot: Tonight the ES daily pivot falls once again from 1926.83 to 1890.17. And with ES unable to make any headway, it remains below its new pivot and this indicator simply continues bearish.

Dollar index:  Last night I said that the dollar looked lower for Monday and that was where it went down 0.26% on a second red candle in a row, this one just touching its 200-day MA before recovering a bit. Indicators remain overbought but the stochastic looks like it's trying to gear up for a bearish crossover. So it appears that there is more downside in store on Tuesday for the dollar.

Euro:  Meanwhile the euro continues to jiggle around in a range bounded by 1.1141 on the lower end and about 1.1254 on the upper end. It did put in another gain on Monday closing back up to 1.1244, a move that took it right up through its 200-day MA. This confirmation of Friday's lopsided spinning top and the 200 MA breakthrough makes it look like there's more upside possible for the euro on Tuesday.

Transportation:  Last night I mentioned that the trans looked positive for Monday based on a bullish looking candle last Friday. Well that of course went right out the window on Monday as the trans lost two and a quarter percent to almost touch their lower BB at 7637. That also took them right back into their descending RTC thus canceling last Friday's bullish setup. On Monday we closed right on recent support, but with the lower BB now starting to fall away there is some concern here and I definitely cannot call the trans higher for Tuesday based on this red marubozu..

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  6      3       8           1       0.700   1215

     And the winner is...

All the charts are looking pretty grim tonight but they're also getting pretty extended.  It's starting to make me think we're due for a reversal soon but technically I just don't see that happening on Tuesday.  So I'll just have to call Tuesday lower.  I'd be delighted to be proven wrong.

Single Stock Trader

On Monday Verizon was of course a loser just like almost the entire rest of the Dow and a gap-down red candle confirmed Friday's red spinning top to send Verizon right back into its descending RTC. So much for the bullish setup. Last night I said it would be good to get out of this trade and it looks like I was right. Having now taken out support at 43.81 and with no new reversal candles insight it is still too soon to call this stock higher despite the fact that all the indicators are now considerably oversold.

Monday uncertain

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

• Monday uncertain.
• ES pivot 1926.83.  Holding below is bearish.
• Rest of week bias higher technically.
• Monthly outlook: bias lower.
• Single stock trader: VZ no longer a swing trade buy.

Recap

Well last Friday saw some more crazy action as we got a mixed market with the Dow rising but the S&P and the Nasdaq both falling. But my call is always for the Dow therefore I was correct. So now let's move on to the last week of the horrible month of September and the end of the quarter as we see what's in store for Monday.
The technicals

The Dow:  Last Thursday the Dow put in a tall hammer that successfully tested its lower BB. Then on Friday it confirmed that hammer with a 113 point gain but did it on an inverted hammer. Nevertheless the indicators are all now oversold and stochastic looks like it has curved around and just barely squeaked out a bullish crossover. Friday's candle also traded outside the descending RTC so that is a bullish setup. So all in all this chart now looks bullish for Monday.

The VIX:  Friday was also one of these unusual days when the VIX rose while the Dow rose also. It put in a tall green candle with the net result of just a 0.64% gain. Still it traded it entirely outside its descending RTC and that makes it a bullish trigger. Indicators continue to rise but they are not yet overbought, so technically this chart looks bullish for Monday.

Market index futures: Tonight, all three futures are lower at 12:13 AM EDT with ES down 0.09%.  After a tall red hammer last Thursday ES followed on with a tall green hammer for a net change of almost nothing.  Indicators are now quite oversold and the stochastic is in position for a bullish crossover any time now.  We're also riding right on the edge of the descending RTC and about to make a bullish setup there.  But the overnight action isn't quite there yet.  It's not clear ES can muster the strength to advance on Monday.

ES daily pivot: Tonight the ES daily pivot rises from 1917.42 to 1926.83. And that's enough to keep ES below its new pivot so this indicator remains bearish.

Dollar index:  On Friday the dollar confirmed Thursday's tall green hammer just above its 200-day MA by gapping up with a 0.3% gain that just touched its upper BB before falling back a bit and caused the indicators to head back towards overbought - though they're not there yet. The stochastic is now in position for a bearish crossover but we still don't quite have it yet. Nevertheless the overall impression here is that there's more downside risk than upside potential for Monday.

Euro:  And as for the euro, on Thursday it put in a tall lopsided spinning top that was confirmed on Friday with another tall lopsided spinning top, this one ending almost exactly where Thursday's began. The indicators are now back to oversold but the stochastic is meandering around with no definitive crossovers in sight at the moment. The overnight is rising a bit so the overall impression is that we are simply consolidating in the area of 1.1205. Which way this one goes on Monday is anyone's guess. I will also note in that we are now just below the 200 day MA and that seems to be serving as some resistance at the moment.

Transportation:  Friday was certainly the day for RTC exits as the trans also put in a bullish setup on a solid 0.89% gain. That move caused the indicators to bottom at oversold and just barely squeaked out a bullish stochastic crossover. So the overall technical impression here is quite positive for Monday.

Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points
January    8      6       4           1       0.563    627
February   6      4       5           3       0.692    183
March      7      6       5           4       0.647    976
April      3      8       7           0       0.273      1
May        6      5       5           2       0.615    581
June       8      6       3           4       0.706    552
July      10      1       5           4       0.938   1212
August    10      2       3           2       0.857   2314
September  6      3       7           1       0.700   1215

     And the winner is...

After a mixed market last Friday, we've got some mixed charts tonight.  The trans and the Dow are looking higher, but the VIX is also looking higher and the futures are guiding lower.  So those opposing forces essentially cancel each other out and although Monday is historically bullish I'm not really seeing it right now.  Therefore I'll just have to wimp out once again and call Monday uncertain.

Single Stock Trader

Last Thursday night I called Verizon a swing trade buy for the adventurous. And that was indeed rewarded on Friday with a small gap-up hanging spinning top. It traded entirely outside the descending RTC for a bullish setup and the indicators now appear to have bottomed out at oversold, another bullish sign. However the spinning top is a reversal warning itself and the stochastic has now threaded out at oversold. Therefore the conservative thing to do would be to exit this trade on Monday.