Friday, October 14, 2016

Friday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Friday higher.
  • ES pivot 2122.08.  Holding above is bullish..
  • Next week bias uncertain technically.
  • Monthly outlook: bias lower.
  • YM futures trader: short at 17,670.

I've been talking a lot about support levels the past few days, especially the 18,090 level on the Dow.  Well on Thursday I called the market lower and we indeed opened with a big dump out the gate.  That broke 18,090 and indeed the lower BB at 18,039 and then even the 18K level before a rally began that brought us nearly back to break-even with just a 45 point loss.  So what's the take-away here?  Read on.

The technicals

VIX, daily
The VIX:  I guess the third time's the charm.  After trying unsuccessfully to bust through its 200 day MA for two days, the VIX managed it on Thursday, continuing right on through its upper BB before ending with a 4.9% gain on a tall red spinning top.  Check it out.  I always say the VIX rarely spends more than a day or two above its upper BB and this pattern looks like a good setup for an evening star, so I'm giving better than even odds that the VIX is going lower very soon.

Market index futures: Tonight, all three futures are slightly higher at 12:26 AM EDT with ES up 0.05%. 

ES daily pivot: Tonight the ES daily pivot falls again from 2132.83 to 2122.08.  That's enough to send ES back above its new pivot so this indicator now turns bullish.

Dollar index: xxx

Euro:  xxx

Transportation:  xxx


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    4      1       3           1       0.833      93

     And the winner is...

The past four days have featured lower highs, and the past three with lower lows.  On Thursday the Dow tested support at 18,030 and it held, although we gave up the 18,090 level.  And with all that indicators have yet to hit oversold suggesting there's still room to run lower.  On the other hand, we did get a nice hammer-type candle (as well as one in the trans) that shows the bulls haven't thrown in the towel and the SPX Hi-Lo indicator is now way down to 14, near the point from which reversals spring.  Also oil looks ready to move higher.

There is admittedly some economic news coming out on Friday that could still throw a monkey wrench into the works and the conservative course would be to just call it uncertain, but I think we've come down far enough over the past few days and there are enough positive signs tonight to warrant at least a ginger call of Friday higher.  I could be wrong.  Lord knows I am often enough.

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

YM Futures Trader

No trade tonight.