Thursday, December 22, 2016

Thursday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Thursday lower.
  • ES pivot 2262.17.  Holding below is bearish.
  • Friday bias lower technically.
  • Monthly outlook: bias lower.
  • YM futures trader: no trade tonight.

Last night things were looking somewhat less than crystal clear so I took the emergency escape hatch and  made my market call conditional on the value of the ES pivot at mid-morning Thursday.  At the time ES was just about half a point above the new pivot.  Well at 6:20 AM ES broke below its pivot.  It made a brief and vain attempt to break back above right at the opening bell but that didn't last long and by 9:40 AM ES was back below its pivot.  It was still there for the rest of the morning and we indeed closed lower.  I don't know why this works, but it often does.

We now move on to Thursday as we count down the waning days of 2016 and continue to chase the elusive Dow 20K handle. 

The technicals

VIX, daily
The VIX:  Last night I wrote that "there would appear to be at least a bit more downside available here for Wednesday" for the VIX.  And wouldn't you know, that's just what happened with the VIX dropping just 1.57% on a little red hammer that just ticked its lower BB at 10.93 before bouncing back a bit.  That left the VIX oversold for the firs time since November 28th and positioned the stochastic for a bullish crossover.  So now it looks likely that the next move in the VIX is higher.

Market index futures: Tonight, all three futures are lower at 12:58 AM EST with ES down 0.13%. 

ES daily pivot: Tonight the ES daily pivot dips from 2265.33 to 2262.17.  And that now leaves ES below its new pivot so this indicator turns bearish for the first time in a while.


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   4      4       5           3       0.636     463

December   5      3       4           2       0.700      89

     And the winner is...

What was looking like a breakout of a symmetrical triangle on Tuesday was completely retraced on Wednesday leaving us right back in a week-long consolidation zone.  But with all the major averages lower on Wednesday with indicators heading off overbought and the VIX looking ready to move higher, the impression I'm getting is that we could see Thursday lower.

And finally, recall that I'm taking Friday off, as I expect a low volume day as people pack their bags for a weekend ski trip to Gstaad or at least to Vail.  And I'm also taking all of next week off since that's bracketed by two major holidays and I don't expect a lot of action then either.  And that makes this my last post of the year.  Merry Christmas and a very Happy New Year one and all.

That's all she wrote - see you again next year!

YM Futures Trader

No trade tonight.