Subscribe to RSS feeds Bulkowski Blog via RSS

Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of Bumper.
Kindle
Paperback
Nook
Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.
Bulkowski's Blog: ThePatternSite.com
Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 09/21/2017
22,359 -53.36 -0.2%
9,669 14.62 0.2%
731 -0.83 -0.1%
6,423 -33.35 -0.5%
2,501 -7.64 -0.3%
YTD
13.1%
6.9%
10.8%
19.3%
11.7%
Tom's Targets    Overview: 09/14/2017
22,450 or 21,500 by 10/01/2017
9,750 or 9,200 by 10/01/2017
775 or 730 by 10/01/2017
6,650 or 6,200 by 10/01/2017
2,600 or 2,425 by 10/01/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

August 2011 Headlines


Archives


Tuesday 8/30/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 2.3% or 254.71 points. Since 10/01/1928 the index made 53 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 29 occasions.
     Average loss was -0.6% on 24 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading. I show two channels glued together by a retrace. Those two channels (AB and CD) and the retrace (BC) actually form a chart pattern called a measured move up. One of the key elements of the measured move is that once price finishes the second up-channel (CD), it drops back to the retrace area (BC). Channels AB and CD should have a similar move and slope.

Tomorrow (Tuesday), after price finishes the retrace, look for the index to close higher.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,491.26    
 Monthly S1  10,515.26  1,023.99   
 Weekly S2  10,669.32  154.06   
 Weekly S1  11,104.28  434.97   
 Daily S2  11,200.67  96.39   
 Weekly Pivot  11,255.34  54.67   
 Low  11,286.58  31.24   
 Open  11,286.65  0.07   Yes! The Open is close to the Low.
 Daily S1  11,369.96  83.31   
 61.8% Down from Intraday High  11,384.07  14.11   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  11,414.18  30.11   
 38.2% Down from Intraday High  11,444.29  30.11   
 Daily Pivot  11,455.87  11.58   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  11,539.25  83.38   
 High  11,541.78  2.53   Yes! The High is close to the Close.
 Daily R1  11,625.16  83.38   
 Monthly Pivot  11,628.06  2.90   Yes! The Monthly Pivot is close to the Daily R1.
 Weekly R1  11,690.30  62.24   
 Daily R2  11,711.07  20.77   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  11,841.36  130.29   
 Monthly R1  12,652.06  810.70   
 Monthly R2  13,764.86  1,112.81   

Monday 8/29/11. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily chart. A well-formed symmetrical triangle appears outlined in red. In one respect, it's odd and that's because none of the other indices show the same pattern. Many times, if you see one chart pattern in an index, you also find variations of it in the other indices. Not this time.

If price breaks out upward, it will reach overhead resistance at B soon enough. If it pushes through that, then C is the next resistance line. If you are a candlestick lover, the long lower shadow on the most recent candle suggests an upward breakout is more likely, especially since the index closed above the open (a white candle).

The triangle forms at a support area setup by a peak in April 2010 and a congestion region in November '10. There is additional support in the 10,000 to 10,500 area, starting in February 2010 with additional support from May to October 2010. None of that appears in the chart.

If price breaks out lower, then look for it to find support in the 10,000 to 10,500 area. In other words, the index may drop but it should not drop far.

Looking forward, we are going into September and October when mutual funds begin to dress their portfolio's for the end of the quarter. That often means selling and an increase in volatility.

My guess is that the mutt funds will take this opportunity to buy stocks that have been unfairly punished. We might see a move higher during the next two months, which will take the markets by surprise. Those sitting on the sidelines will feel as if they are missing the start of the next bull run and will jump in, helping to push the index higher.

I cannot say for certain which way the index will break out. Since I'm bullish, I look for an upward breakout but it could make a false breakout lower and then shoot higher. Historically, the triangle breaks out upward 54% of the time. That's what I call "near random."

Top 

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 37 points.
Tuesday: Up 322.11 points.
Wednesday: Up 143.95 points.
Thursday: Down 170.89 points.
Friday: Up 134.72 points.

For the Week...

The Dow industrials were up 466.89 points or 4.3%.
The Nasdaq composite was up 138.01 points or 5.9%.
The S&P 500 index was up 53.27 points or 4.7%.

Year to Date...

Dow Industrials
     12.4% down from the high of 12,876.00 on 05/02/2011.
     6.4% up from the low of 10,604.07 on 08/09/2011.
Nasdaq
     14.1% down from the high of 2,887.75 on 05/02/2011.
     6.4% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     14.1% down from the high of 1,370.58 on 05/02/2011.
     6.8% up from the low of 1,101.54 on 08/09/2011.

Top 

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

ReportTimeA-F
Rating
Description
Personal income & consumption8:30 MC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 MC+Covers durables, non-durables, and services.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Chicago purchasing managers index9:45 WBMonitors regional manufacturing activity.
Factory orders10:00 WD+Durable/non-durable goods orders w/factory inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Productivity & costs8:30 ThD+Cost of producing a unit of output.
Construction spending10:00 ThDCovers residential/non-residential/public spending on new construction.
Auto & truck sales3:00 ThC-Monthly sales of domestically produced vehicles.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.

Options Expiration

No options expire this week.

Top 

Swing and Position Traders: Chart Pattern Indicator

As of 08/26/2011, the CPI had:

0 bearish patterns,
16 bullish patterns,
210 patterns waiting for breakout.
The CPI signal is 100.0%, which is bullish (>= 65%).

The chart pattern indicator is bullish with 2 of 3 half triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a two-dimensional approach." He offers these tips.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  10,783  11,034  11,180  11,431  11,577 
Weekly  10,584  10,934  11,170  11,520  11,756 
Monthly  9,406  10,345  11,543  12,482  13,680 
S&P 500 (^GSPC): Daily  1,119  1,148  1,165  1,193  1,210 
Weekly  1,093  1,135  1,163  1,205  1,232 
Monthly  964  1,070  1,208  1,315  1,453 
Nasdaq (^IXIC): Daily  2,350  2,415  2,450  2,516  2,551 
Weekly  2,286  2,383  2,434  2,532  2,583 
Monthly  2,027  2,253  2,558  2,784  3,089 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

Top 

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.3%  Expect a random direction.
 4 months down 5.5%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week up 40.8%  Expect a random direction.
 4 months down 3.2%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week up 39.7%  The trend may continue.
 4 months down 1.9%  Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indexes, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

Top 

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
43Double Bottom, Adam and Adam
12Pipe top
12Head-and-shoulders top
10Pipe bottom
9Triple top
6Dead-cat bounce
5Double Top, Adam and Adam
5Triangle, symmetrical
3Broadening top
2Broadening top, right-angled and descending

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Electric Utility (East)2. Electric Utility (East)
3. Household Products3. Household Products
4. Electric Utility (Central)4. Electric Utility (Central)
5. Drug5. Drug
48. Insurance (Life)48. Cement and Aggregates
49. Human Resources49. Securities Brokerage
50. Securities Brokerage50. Human Resources
51. Homebuilding51. Coal
52. Coal52. Homebuilding

-- Thomas Bulkowski

Top 


Friday 8/26/11. Crash in Tour of Spain

Picture of a flower from my garden.

At today's finish in the 7th stage of the Vuelta a Espana bicycle race, Tyler Farrar (about 4 wheels behind the front of the race) turned right and appears to clip the front wheel of the bike behind him. Farrar tumbled to the pavement at over 40 mph, causing those behind him to crash as well. All were trying to sprint for the finish after today's 180+ km (about 120 mile) stage.

You can view crash photos at http://www.universalsports.com/.

Crashes are common at the 3-week race. A few days ago, a child ran across the road and a rider slammed into her at over 40 mph. His bike split into two: the front wheel and steering column separated from the tubes connecting it. Neither had any broken bones, but the rider withdrew from the race the next day because his knees were bothering him.

Another crash that often appears as part of the intro to the race shows a rider with a tire going flat driving off the pavement and tumbling over.

I am happy that my 14.5 mile time trial today ended without injury or incident, but with a southwest wind and oven-type heat, my enthusiasm lacked. My ride ended with a speed that averaged 18.3 mph, well short of the 50+ mph the professional riders did on today's Vuelta. I wonder from where they get their engines?


Thursday 8/25/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 0.9% or 21.63 points. Since 02/05/1971 the index made 241 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 167 occasions.
     Average loss was -1.2% on 74 occasions.
Look for the index to close higher.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

A head-and-shoulders bottom chart pattern appears mid day with left shoulder (LS), head, and right shoulder (rs) clearly defined. Well, sort of. The right shoulder I show as two valleys merged into one turn. The two shoulders are also not symmetrical in terms of price, meaning that the left and right shoulders should bottom near the same price.

Whatever its flaws, the bottom predicted a rise in the index, which is what happened. When the neckline slopes upward, as in this case (not shown), I use a horizontal line on the right side as the neckline (shown here as a red line). A close above this line confirms the pattern and signals an entry.

At day's end, the price stalled where it began, B versus A.

Looking ahead, expect the index to suffer profit taking out of the gate but then to rebound and push through overhead resistance to close higher.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,022.95    
 Weekly S2  2,237.31  214.36   
 Monthly S1  2,245.32  8.01   
 Weekly S1  2,352.50  107.18   
 Daily S2  2,402.67  50.17   
 Low  2,420.48  17.81   
 Daily S1  2,435.18  14.70   
 Open  2,437.48  2.30   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  2,439.70  2.22   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  2,445.64  5.94   
 38.2% Down from Intraday High  2,451.58  5.94   
 Daily Pivot  2,452.99  1.41   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot  2,453.85  0.86   Yes! The Weekly Pivot is close to the Daily Pivot.
 Close  2,467.69  13.84   
 High  2,470.80  3.11   Yes! The High is close to the Close.
 Daily R1  2,485.50  14.70   
 Daily R2  2,503.31  17.81   
 Monthly Pivot  2,554.02  50.71   
 Weekly R1  2,569.04  15.02   
 Weekly R2  2,670.39  101.35   
 Monthly R1  2,776.39  106.00   
 Monthly R2  3,085.09  308.70   

Tuesday 8/23/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 0.3% or 37 points. Since 10/01/1928 the index made 997 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 549 occasions.
     Average loss was -0.8% on 448 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading. No significant chart patterns appear, but there is a potential one: a double bottom.

Points A and B are the two bottoms. If the index closes above the confirmation line near D, then it will confirm a valid double bottom. Should that occur, then look for the index to continue rising.

It's also possible that the potential double bottom will fail. In that case, expect the index to tumble. I do not consider that likely. With support at C and A, point B could be the turning pivot.

My guess is that the index will open higher and continue moving up, confirming the double bottom.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

$ $ $

Over the weekend, I flushed my hot water heater. That should be done to most water heaters annually. To flush your heater, this is what I did.

  1. Turn off the circuit breaker powering the heater.
  2. Attach a garden hose to the spigot at the bottom of the tank and place the other end to water shrubs, grass, flowers, and, of course, the neighbor's cat that uses your lawn as a liter box.
  3. Close the water intake valve at the top of the tank. This valve allows water to fill the tank.
  4. Open the spigot at the bottom.
  5. Open the emergency relief valve at the top of the tank. This will allow air to fill the tank.
  6. Let the tank drain for 30 minutes or so.
  7. When empty, close the emergency relief valve (at tank top), open the water intake valve, and flush out the sediment. If you place your fingers in the water stream, it will feel like cottage cheese but is often clear.
  8. Close the water intake valve when you can't feel any more "cottage cheese."
  9. Repeat the procedure of allowing the tank to drain and then filling it again. I did this 3 times.
  10. When finished, close the spigot at the bottom of the tank, close the emergency relief valve, open the intake valve and allow the tank to fill with water. You might want to place a few drops of oil on the relief valve stem to make sure it will open and close easily.
  11. "Burp" the tank by opening the emergency relief valve until you hear water flowing out. You may also have to burp your hot water pipes inside the home by opening a few hot water faucets (especially those on the upper floors).
  12. I left the unit powered down since it's so hot down here (100+ degrees), the cold water is warm enough that it does not need to be heated. I'm not kidding.
  13. If you haven't put your heater on a timer, consider doing so. Why heat your water overnight or when you're at work when no one is going to use it? The hot water will remain hot for days.
  14. When you're finished, check that the spigot is not leaking and that the drain tube for the emergency relief value is not showing any water coming out. If it does, apply oil to the valve stem as discussed, cycle it a few times, and then ask that cat if it needs another shower.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,256.02    
 Monthly S1  10,055.34  799.31   
 Weekly S2  10,333.65  278.31   
 Weekly S1  10,594.15  260.50   
 Daily S2  10,698.34  104.19   
 Daily S1  10,776.50  78.15   
 Open  10,820.37  43.87   
 Low  10,820.37  0.00   Yes! The Low is close to the Open.
 Close  10,854.65  34.28   
 61.8% Down from Intraday High  10,896.84  42.19   
 Daily Pivot  10,898.52  1.68   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  10,920.46  21.94   
 38.2% Down from Intraday High  10,944.08  23.62   
 Daily R1  10,976.68  32.60   
 High  11,020.55  43.87   
 Weekly Pivot  11,061.91  41.36   
 Daily R2  11,098.70  36.79   
 Weekly R1  11,322.41  223.71   
 Monthly Pivot  11,403.38  80.97   
 Weekly R2  11,790.17  386.79   
 Monthly R1  12,202.70  412.53   
 Monthly R2  13,550.74  1,348.05   

Monday 8/22/11. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show a chart of the Dow industrials on the daily scale. To the right of the blue vertical line is an example of what could happen. It's a guess but I think it unlikely. Let me explain.

I expect price to find a bottom here as it drops to support near the prior bottom just a week or so ago. After that, the index should rise but such a straight-line run back up would be very unusual. More likely is a less vertical rise, one that takes not just a week or so, but longer to make the journey back to A and B.

If the chart is correct, the index will form a Big W chart pattern. The pattern from A to B looks like a W with tall sides.

Alternatively, the index could continue lower. Based on all the fear that's going around, you would think that is a likely scenario, but that negative sentiment also suggests we are closer to the bottom.

In short, I still expect a V-shaped recovery, just not one that is as vertical as the image suggests.

Top 

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 213.88 points.
Tuesday: Down 76.97 points.
Wednesday: Up 4.28 points.
Thursday: Down 419.63 points.
Friday: Down 172.93 points.

For the Week...

The Dow industrials were down 451.37 points or 4.0%.
The Nasdaq composite was down 166.14 points or 6.6%.
The S&P 500 index was down 55.28 points or 4.7%.

Year to Date...

Dow Industrials
     16.0% down from the high of 12,876.00 on 05/02/2011.
     2.0% up from the low of 10,604.07 on 08/09/2011.
Nasdaq
     18.9% down from the high of 2,887.75 on 05/02/2011.
     0.4% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     18.0% down from the high of 1,370.58 on 05/02/2011.
     2.0% up from the low of 1,101.54 on 08/09/2011.

Top 

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

ReportTimeA-F
Rating
Description
New home sales10:00 TC+Shows sales of single-family homes.
Durable goods orders8:30 WBMeasures orders, shipments of goods with lifespans >3 years.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Gross domestic product8:30 FBMeasures economic activity; GDP deflator measures inflation.
Michigan sentiment9:55 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

Top 

Swing and Position Traders: Chart Pattern Indicator

As of 08/19/2011, the CPI had:

158 bearish patterns,
1 bullish patterns,
695 patterns waiting for breakout.
The CPI signal is 0.6%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 3 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a two-dimensional approach." He offers these tips.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  10,617  10,717  10,902  11,002  11,187 
Weekly  10,321  10,569  11,050  11,298  11,778 
Monthly  9,244  10,031  11,391  12,178  13,538 
S&P 500 (^GSPC): Daily  1,101  1,112  1,133  1,145  1,166 
Weekly  1,065  1,094  1,151  1,181  1,238 
Monthly  945  1,034  1,191  1,280  1,436 
Nasdaq (^IXIC): Daily  2,289  2,315  2,365  2,392  2,442 
Weekly  2,195  2,269  2,412  2,485  2,628 
Monthly  1,981  2,161  2,512  2,692  3,043 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

Top 

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 4 weeks down 5.4%  Expect a reversal soon.
 4 months down 5.5%  Expect a reversal soon.
 S & P 500 (^GSPC) 4 weeks down 6.7%  Expect a reversal soon.
 4 months down 3.2%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 4 weeks down 9.0%  Expect a reversal soon.
 4 months down 1.9%  Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indexes, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

Top 

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
45Double Top, Adam and Adam
36Pipe top
29Head-and-shoulders top
25Double Top, Eve and Eve
25Triple top
19Double Top, Adam and Eve
17Double Top, Eve and Adam
9Triangle, symmetrical
8Dead-cat bounce
4Pipe bottom

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Electric Utility (East)2. Household Products
3. Household Products3. Apparel
4. Electric Utility (Central)4. Shoe
5. Drug5. Electric Utility (East)
48. Cement and Aggregates48. Cement and Aggregates
49. Securities Brokerage49. Securities Brokerage
50. Human Resources50. Human Resources
51. Coal51. Coal
52. Homebuilding52. Homebuilding

-- Thomas Bulkowski

Top 


Thursday 8/18/11. Car Troubles

Picture of a flower from my garden.

On my way to Walmart to do some grocery shopping today, I had a brief thought that I would have car trouble. An hour later, that's what happened.

This type of premonition happens occasionally and it always surprises me when it comes true. The last time I remember this happening is with my ex-fiancÚ. She broke off our engagement back in the 80s. Fast forward to two years ago when her name kept popping into my mind for several days in a row. I sent her an email, just to ask if she was alright and her reply came back that she and hubby had a wicked fight.

Anyway, I finished my shopping, loaded the groceries into my car and inserted the ignition key. It wouldn't turn. I bought this car new in March and the odometer is still below 500 miles. I played with the darn thing for 5 minutes then gave up. I called their free roadside assistance. They dispatched a tow truck but hoped it would be less than an hour's wait.

While waiting, I tried several more times to unlock the ignition, but with no luck.

An hour later, I had an idea. I returned to the car (from the air conditioning of the store), rotated the steering wheel a few inches, and bingo! The ignition unlocked.

I was not aware that if you turn the wheel when the ignition is off, it has an interlock that engages. That lock prevents the steering wheel from begin turned (past a certain point), but also freezes the ignition key. Turning the wheel in the opposite direction removes the interlock and frees the ignition key.

Maybe this explains why I prefer to ride a bicycle.

-- Thomas Bulkowski

Top 


Thursday 8/18/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -0.5% or -11.97 points. Since 02/05/1971 the index made 292 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 137 occasions.
     Average loss was -0.9% on 155 occasions.
Look for the index to close lower.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading. A head-and-shoulders bottom chart pattern appears in the afternoon. It becomes an actual reversal when price closes above the red neckline, which happens at A. This suggests price will rise and it does. Price attempts to throw back to the neckline at 3:30, but then resumes its upward march going into the close.

What does this pattern say about Thursday's trading? By itself, not much. However, looking at the price action of several days (not shown in the figure) suggests that there is overhead resistance at 2520, 2535, and 2550.

Four economic reports come out on Thursday, and they will probably be bad. Thus, any upward momentum will get crushed. So, I expect the market to open weak since two of the reports are released an hour before the market opens. The above probabilities suggest a lower close and my tea leaves seem to agree.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,037.55    
 Weekly S2  2,263.30  225.75   
 Monthly S1  2,274.51  11.21   
 Weekly S1  2,387.39  112.88   
 Daily S2  2,455.21  67.82   
 Weekly Pivot  2,455.74  0.53   Yes! The Weekly Pivot is close to the Daily S2.
 Daily S1  2,483.34  27.60   
 Low  2,488.09  4.75   Yes! The Low is close to the Daily S1.
 61.8% Down from Intraday High  2,511.40  23.31   
 Close  2,511.48  0.08   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  2,516.23  4.75   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  2,518.60  2.37   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  2,525.80  7.20   
 Open  2,527.79  1.99   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  2,544.36  16.57   
 High  2,549.11  4.75   Yes! The High is close to the Daily R1.
 Monthly Pivot  2,568.62  19.51   
 Daily R2  2,577.25  8.63   
 Weekly R1  2,579.83  2.58   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  2,648.18  68.35   
 Monthly R1  2,805.58  157.40   
 Monthly R2  3,099.69  294.10   

Tuesday 8/16/11. Trading Tuesday: Dow

With no wind blowing today, I was able to power my bicycle over a 14.5 mile course to a personal best: 19.16 miles per hour. That beats the prior record of 18.91 set late last year, a few weeks after I bought my new bike.

Trying for an average of 20 mph would require trimming the time by 2 minutes. My flat road speed is 20 to 24 mph, faster if I have a tail wind, but cutting 2 minutes off the time seems impossible right now.

One of the benefits of going so fast is that I can ride down 2-lane roads and few cars catch me. Thus, having cars pass me is not as much of a concern as it used to be, but there are still people that up to pass then slow down after having done so. It's rather stupid when they turn soon after.

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 1.9% or 213.88 points. Since 10/01/1928 the index made 90 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 38 occasions.
     Average loss was -0.5% on 52 occasions.
Look for the index to close lower.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

A v-shaped turn is highlighted by red trendlines. This is a more relaxed turn than your typical v-bottom, I think. Following that, a small rectangle top appeared from 1:00 to 2:00. The index didn't so much as break out of this consolidation pattern as eased its way out of it. Notice that the slope of prices before the rectangle and after it are similar.

What will happen tomorrow? The above probabilities give a good indication that the Dow will close lower. It's always possible, of course, that the economic reports due out will send the index higher. That will be a welcome surprise.

I noticed that on my relative strength screen, the utility stocks have been pushing higher and all 3 of the industries are in the top 11 (1 is strongest). Apparently, others view their tasty yields as much as I do. Also, you may notice that corporations are buying back their stock. That is another indication that they see value at these prices.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,465.44    
 Weekly S2  10,343.67  878.23   
 Monthly S1  10,474.17  130.50   
 Weekly S1  10,913.28  439.11   
 Weekly Pivot  11,173.69  260.40   
 Daily S2  11,197.70  24.01   
 Low  11,269.85  72.15   
 Open  11,269.85  0.00   Yes! The Open is close to the Low.
 Daily S1  11,340.30  70.45   
 61.8% Down from Intraday High  11,351.88  11.58   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  11,377.22  25.34   
 38.2% Down from Intraday High  11,402.57  25.34   
 Daily Pivot  11,412.45  9.88   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  11,482.90  70.45   
 High  11,484.60  1.70   Yes! The High is close to the Close.
 Daily R1  11,555.05  70.45   
 Monthly Pivot  11,612.80  57.75   
 Daily R2  11,627.20  14.40   Yes! The Daily R2 is close to the Monthly Pivot.
 Weekly R1  11,743.30  116.10   
 Weekly R2  12,003.71  260.40   
 Monthly R1  12,621.53  617.82   
 Monthly R2  13,760.16  1,138.63   

Monday 8/15/11. Market Monday: The Week Ahead

My Prediction

Each Sunday is a blessing, not because I am religious. Rather, I skip breakfast and go straight to my bicycle. I say a short prayer for a safe ride then pedal away, minutes after 7 AM.

This morning (Sunday), the wind was out of the north at 6 mph with temperatures a "cold" 78 (they are usually in the mid 80s). A north wind is perfect because I only have to struggle for two miles going against it before I transition for most of my ride going east-west. A north wind means it will push me up the mile-long Everest-sized mountain (small hill, really) which is a killer after going flat out for 13 miles.

Anyway, as I was riding, I felt drained of energy, not because I skipped breakfast, but probably more to do with the wind at the beginning. Anyway, I covered my 14.5 mile course at an average speed of 18.88 miles per hour, a season's best, but just short of the 18.91 all-time record.

# # #

Picture of the Dow utilities on the daily scale.

I show a picture the Dow utility index on the daily scale. Does this index lead the others?

Some say that it does and judging from this picture, the index has retraced more than the other indices. That retrace is a clue to what is likely to happen next.

The index is bumping up against the 62% ceiling of the move down from A to B. Point C suggests that the upward retrace is over, that price will drop again, perhaps forming a double bottom.

If that is true, then wait for the second bottom before buying any stocks.

Alternatively, the index will continue rising. When it reaches 425 (which is close to where it is now), it should bump up against overhead resistance and struggle to move higher. You can begin to see that by the length of candle C. It is much shorter than the prior candles. This might suggest a lack of upward momentum, given strength to the idea that the retrace is coming to an end.

However, there are economic reports out on Tuesday, so the market may wait for those before deciding to scare the dickens out of us again.

Top 

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 634.76 points.
Tuesday: Up 429.92 points.
Wednesday: Down 519.83 points.
Thursday: Up 423.37 points.
Friday: Up 125.71 points.

For the Week...

The Dow industrials were down 175.59 points or 1.5%.
The Nasdaq composite was down 24.43 points or 1.0%.
The S&P 500 index was down 20.57 points or 1.7%.

Year to Date...

Dow Industrials
     12.5% down from the high of 12,876.00 on 05/02/2011.
     6.3% up from the low of 10,604.07 on 08/09/2011.
Nasdaq
     13.2% down from the high of 2,887.75 on 05/02/2011.
     7.6% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     14.0% down from the high of 1,370.58 on 05/02/2011.
     7.0% up from the low of 1,101.54 on 08/09/2011.

Top 

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

ReportTimeA-F
Rating
Description
Housing starts8:30 TB-Number of homes beginning construction.
Building permits8:30 TB-Measures building permits for new construction.
International trade8:30 TC+Import/export prices, trade balance. US economy vs others.
Industrial production9:15 TB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 TB-Gauges economic activity, hints of inflation.
Producer price index8:30 WB-Measures wholesale goods cost. An indication of future inflation.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Consumer price index8:30 ThB+Inflation report. Measures cost of goods and services.
Existing home sales10:00 ThCCounts sales of used homes.
Leading indicators10:00 ThD-Summary of already known reports.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
VIX expiresWednesday
A.M. settled index options cease trading.Thursday
Expiring equity, P.M. settled index options and treasury/interest rate options classes cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, cash-settled currency and treasury/interest rate options expireSaturday

Many options expire this week, so traders will be looking to close out their positions ahead of that, and that suggests increased volatility (large daily price swings).

Top 

Swing and Position Traders: Chart Pattern Indicator

As of 08/12/2011, the CPI had:

1 bearish patterns,
0 bullish patterns,
474 patterns waiting for breakout.
The CPI signal is 0.0%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 3 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a two-dimensional approach." He offers these tips.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  11,048  11,159  11,253  11,363  11,457 
Weekly  10,272  10,771  11,102  11,601  11,932 
Monthly  9,394  10,332  11,542  12,479  13,689 
S&P 500 (^GSPC): Daily  1,161  1,170  1,180  1,188  1,198 
Weekly  1,063  1,121  1,160  1,218  1,257 
Monthly  960  1,069  1,211  1,320  1,462 
Nasdaq (^IXIC): Daily  2,462  2,485  2,505  2,528  2,547 
Weekly  2,262  2,385  2,455  2,577  2,647 
Monthly  2,036  2,272  2,567  2,803  3,099 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

Top 

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 16.2%  Expect a reversal soon.
 4 months down 5.5%  Expect a reversal soon.
 S & P 500 (^GSPC) 3 weeks down 12.5%  Expect a reversal soon.
 4 months down 3.2%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 3 weeks down 15.5%  Expect a reversal soon.
 4 months down 1.9%  Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indexes, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

Top 

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
47Double Top, Adam and Adam
37Pipe top
26Double Top, Eve and Eve
23Head-and-shoulders top
23Triple top
22Double Top, Adam and Eve
20Double Top, Eve and Adam
12Head-and-shoulders bottom
12Triangle, symmetrical
6Dead-cat bounce

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Household Products2. Apparel
3. Apparel3. Household Products
4. Shoe4. Shoe
5. Electric Utility (East)5. Electric Utility (East)
48. Cement and Aggregates48. Securities Brokerage
49. Securities Brokerage49. Human Resources
50. Human Resources50. Semiconductor
51. Coal51. Homebuilding
52. Homebuilding52. Coal

-- Thomas Bulkowski

Top 


Thursday 8/11/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -4.1% or -101.47 points. Since 02/05/1971 the index made 5 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.1% on 2 occasions.
     Average loss was -3.2% on 3 occasions.
Look for the index to close lower.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Two chart patterns appears. The first is a triple bottom, shown quite cleverly by the numbers, 1, 2, and, yes, 3. When price closes above the highest peak in the pattern, it confirms it as a valid reversal. I show the confirmation price as a blue line drawn along the peak between 1 and 2.

Price wobbled after confirmation, forming a second chart pattern, a symmetrical triangle. For confirmation of the triangle, all price had to do was pierce one of the red trendlines. That was upward and price zoomed higher as a result. After about half an hour of trending, profit taking by fearful bulls or short selling by greedy bears forced the index back down, way down, to finish lower for the day.

With the strength of the drop from 2460 to 2380, it appears that downward momentum will continue tomorrow (Thursday). That is my guess and it agrees with the probabilities listed above.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,160.88    
 Weekly S2  2,216.02  55.13   
 Monthly S1  2,270.97  54.95   
 Weekly S1  2,298.53  27.57   
 Daily S2  2,323.60  25.07   
 Daily S1  2,352.33  28.72   
 Low  2,378.08  25.75   
 Close  2,381.05  2.97   Yes! The Close is close to the Low.
 Daily Pivot  2,406.80  25.75   
 61.8% Down from Intraday High  2,409.86  3.06   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  2,419.68  9.82   
 Open  2,425.55  5.87   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,429.50  3.95   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily R1  2,435.53  6.03   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 High  2,461.28  25.75   
 Daily R2  2,490.00  28.72   
 Weekly Pivot  2,547.39  57.38   
 Monthly Pivot  2,574.95  27.57   
 Weekly R1  2,629.90  54.95   
 Monthly R1  2,685.04  55.13   
 Weekly R2  2,878.76  193.72   
 Monthly R2  2,989.02  110.27   

Tuesday 8/9/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -5.5% or -634.76 points. Since 10/01/1928 the index made 4 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.4% on 2 occasions.
     Average loss was -2.3% on 2 occasions.
Look for the index to close higher.

By the way the markets have been plunging, you would think that an asteroid was heading toward the earth and astronomers were predicting an extinction level event. Yawn.

I have been on the wrong side of this market since it started to plunge, so take what I say and ignore it. But eventually this decline will end. And when it does, it will be a wonderful buying opportunity.

My guess is you won't get much warning when it does bottom. I expect a V-shaped bounce because traders will recognize value and buy. When one starts buying, everyone will, sending prices shooting back up. That's why I keep lowering my price targets for the indices, but still expect a rebound.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading. After making a swift drop at the open, price formed a descending triangle. Those breakout downward 64% of the time, and that's what happened.

Following the breakout, price pulled back, which they do 54% of the time after a descending triangle. Then the decline resumed.

Since the probabilities are evenly split as to tomorrow's direction, I am reminded that tall candles often act as reversals within a day. With the Federal Reserve meeting tomorrow, my guess is they will throw some kind of bone to the market. I expect the Dow to closer higher tomorrow. Or it will choke on the bone... Take your pick.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,952.69    
 Weekly S2  10,267.00  314.31   
 Monthly S1  10,381.27  114.27   
 Daily S2  10,393.69  12.42   Yes! The Daily S2 is close to the Monthly S1.
 Weekly S1  10,538.43  144.74   
 Daily S1  10,601.77  63.34   
 Close  10,809.85  208.08   
 Low  10,809.85  0.00   Yes! The Low is close to the Close.
 Daily Pivot  11,017.93  208.08   
 61.8% Down from Intraday High  11,048.31  30.38   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  11,121.97  73.66   
 38.2% Down from Intraday High  11,195.63  73.66   
 Daily R1  11,226.01  30.38   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Weekly Pivot  11,410.42  184.41   
 Open  11,433.93  23.51   Yes! The Open is close to the Weekly Pivot.
 High  11,434.09  0.16   Yes! The High is close to the Open.
 Monthly Pivot  11,567.58  133.49   
 Daily R2  11,642.17  74.59   
 Weekly R1  11,681.85  39.68   Yes! The Weekly R1 is close to the Daily R2.
 Monthly R1  11,996.16  314.31   
 Weekly R2  12,553.84  557.68   
 Monthly R2  13,182.47  628.63   

Monday 8/8/11. Market Monday: The Week Ahead

My Prediction

Everyone wants to know what is going to happen to the stock market at Monday's open, given that S&P lowered their rating on US debt on Friday evening. My answer is a guess, right along with everyone else's guess.

I think the downgrade will be a non-event. The market has been dropping like a stone through water for almost two weeks now. I think the market is oversold, but I have been bullish for a long time, as you know. The market will probably sell off at the open, flushing out those nervous about holding equities. Then the smart money will come in and buy stocks that have been punished enough. I bought one near the close on Thursday and three more on Friday -- electric utilities all. Each pays over a 5% dividend, so even if the market continues to drop, I will make 5% to 5.5% and can wait for a rebound. The trades on Friday were too quick (I thought of buying them just before the open) to add to my watch list.

After the markets sell off at or near the open, I expect a rebound, the same rebound I have been expecting for days. Look for it to carry the indices higher going into mid August.

Picture of the S and P 500 on the daily scale.

As to the chart, I show the S&P 500 index on the weekly scale. A diamond bottom appears in mid 2010 and it should act as support if the index ignores my bullish stance and has the audacity to continue lower. It is approaching support now, setup by bottoms in November 2011.

A head-and-shoulders top chart pattern appears in early 2011. A neckline connects the armpits (shown in red).

I show the measure rule in blue (the thin lines down from the head and near the breakout) but it appears black on my screen. Measure vertically down from the high price at the head to the neckline at A (1370 to 1259, or 111 points). Subtract this value from the breakout price (1262 - 111) to get the 1151 target. Round that down to 1,150 for round-number support. I show that with the thin line to the left of candle B. It bottoms just below a support level.

This chart pattern says there is more down moving coming. We may see the index spike down to 1150 on Monday morning. It's also possible that the index will shoot higher right from the start. That would be a nice gift, especially if it can continue higher for, say, the rest of the year. I have some damage to my net worth caused by the recent down turn to repair.

Top 

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 10.75 points.
Tuesday: Down 265.87 points.
Wednesday: Up 29.82 points.
Thursday: Down 512.76 points.
Friday: Up 60.93 points.

For the Week...

The Dow industrials were down 698.63 points or 5.8%.
The Nasdaq composite was down 223.97 points or 8.1%.
The S&P 500 index was down 92.9 points or 7.2%.

Year to Date...

Dow Industrials
     11.1% down from the high of 12,876.00 on 05/02/2011.
     2.7% up from the low of 11,139.00 on 08/05/2011.
Nasdaq
     12.3% down from the high of 2,887.75 on 05/02/2011.
     2.7% up from the low of 2,464.87 on 08/05/2011.
S&P 500
     12.5% down from the high of 1,370.58 on 05/02/2011.
     2.7% up from the low of 1,168.09 on 08/05/2011.

Top 

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

ReportTimeA-F
Rating
Description
Productivity & costs8:30 TD+Cost of producing a unit of output.
FOMC Rate decision2:15 T?The Federal Reserves reports on interest rate changes.
Wholesale inventories10:00 WD-Wholesale sales and inventory statistics.
Crude inventories10:30 W?My guess: Measures oil inventory.
Treasury budget2:00 WDTracks budget deficit. Important in April (tax filing).
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Trade balance8:30 ThC+Signals balance of exports & imports.
Retail sales8:30 FA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 FC-Reports manufacturing, wholesale, retail inventories.

Options Expiration

No options expire this week.

Top 

Swing and Position Traders: Chart Pattern Indicator

As of 08/05/2011, the CPI had:

5 bearish patterns,
0 bullish patterns,
17 patterns waiting for breakout.
The CPI signal is 0.0%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 3 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a two-dimensional approach." He offers these tips.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  10,963  11,204  11,380  11,620  11,796 
Weekly  10,479  10,962  11,622  12,105  12,765 
Monthly  10,164  10,804  11,779  12,419  13,394 
S&P 500 (^GSPC): Daily  1,145  1,172  1,195  1,222  1,245 
Weekly  1,086  1,143  1,225  1,282  1,364 
Monthly  1,053  1,126  1,241  1,315  1,430 
Nasdaq (^IXIC): Daily  2,403  2,468  2,530  2,595  2,657 
Weekly  2,266  2,399  2,598  2,731  2,929 
Monthly  2,211  2,372  2,625  2,786  3,039 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

Top 

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 19.5%  Expect a reversal soon.
 4 months down 5.5%  Expect a reversal soon.
 S & P 500 (^GSPC) 2 weeks down 20.1%  Expect a reversal soon.
 4 months down 3.2%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 2 weeks down 21.5%  Expect a reversal soon.
 4 months down 1.9%  Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indexes, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

Top 

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
35Double Top, Adam and Adam
23Double Top, Eve and Eve
22Head-and-shoulders top
20Pipe top
18Double Top, Adam and Eve
15Head-and-shoulders bottom
14Double Top, Eve and Adam
13Triangle, symmetrical
12Triple top
7Dead-cat bounce

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Apparel
2. Apparel2. Shoe
3. Household Products3. Natural Gas (Diversified)
4. Shoe4. Toiletries/Cosmetics
5. Electric Utility (East)5. Household Products
48. Securities Brokerage48. Coal
49. Human Resources49. Semiconductor
50. Semiconductor50. Insurance (Life)
51. Homebuilding51. Securities Brokerage
52. Coal52. Homebuilding

-- Thomas Bulkowski

Top 


Wednesday 8/3/11. Trading Thursday on Wednesday: Dow

Picture of my thermometers.

Inside my home, I have two LCD thermometers. They are way cool looking (one of which is pictured in the photo, left panel), about 4" wide and tall, and they look like sheets of clear glass hanging on the wall. Numbers appear on the glass panel from a projector that sits on top of the unit. It has three digits, so it can go up to 99.9 degrees. My question was this: how would it handle the triple digits?

I found out today. I went downstairs to my living room and the thermometer registered 101.6 degrees. This was inside my home. Outside, it was 112 (right side of the photo). Ouch. Upstairs, in my office, it was a cool 87 degrees because of the window unit I install each spring to keep my computers happy. I will probably have to turn on my central air around 9 pm this evening, about an hour sooner than normal.

Limiting use of the central air and relying on box fans allows me to keep my electrical usage to about $50 to $70 a month. With me running the A/C each night, I expect my bill to triple.

Picture of the Dow industrials on the 5 minute scale.

To the markets... I decided to post "What's Hot Wednesday's" tomorrow (that's an appropriate title, don't you think? Maybe in the winter, I'll change it to "What's Cold Wednesdays").

Since the market dropped such a large amount, I decided to take a closer look.

The index dropped by -2.2% or -265.87 points. Since 10/01/1928 the index made 55 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 29 occasions.
     Average loss was -0.6% on 26 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from the last 10 days of trading.

There is not much to see on the chart, except a continuation of the downward trend. I am both gratified that my prediction yesterday about today's price action got some of it right. I wrote "I expect the index to retrace back to 12,050 level....Once it finds support, then I expect the index to move higher." It did drop to the 12,05x level and then bounced. I thought it would continue moving higher, but alas, I was wrong as the chart shows.

The index has been dropping for 8 days now. I think the drop is oversold, but you can call me a perma-bull. I have been waiting for the index to make a smart run back up to the old highs. That will happen, hopefully in my lifetime.

The index has reached support, so I expect a bounce today. I'm not in the mood to go shopping, but if I was, I would be looking to pick up some stocks on the cheap here. If I am wrong, then the index will continue to drop, and what you buy today will be cheaper tomorrow. Maybe it would be best to wait a day to see how this turns out?

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,365.01    
 Weekly S2  11,613.60  248.59   
 Monthly S1  11,615.82  2.22   Yes! The Monthly S1 is close to the Weekly S2.
 Daily S2  11,689.42  73.60   
 Weekly S1  11,740.11  50.69   
 Daily S1  11,778.02  37.91   
 Low  11,865.56  87.54   
 Close  11,866.62  1.06   Yes! The Close is close to the Low.
 Daily Pivot  11,954.16  87.54   
 61.8% Down from Intraday High  11,966.69  12.53   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  11,997.93  31.24   
 38.2% Down from Intraday High  12,029.17  31.24   
 Daily R1  12,042.76  13.59   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  12,129.77  87.01   
 High  12,130.30  0.53   Yes! The High is close to the Open.
 Monthly Pivot  12,184.85  54.55   
 Weekly Pivot  12,210.03  25.18   Yes! The Weekly Pivot is close to the Monthly Pivot.
 Daily R2  12,218.90  8.87   Yes! The Daily R2 is close to the Weekly Pivot.
 Weekly R1  12,336.54  117.64   
 Monthly R1  12,435.66  99.12   
 Weekly R2  12,806.46  370.80   
 Monthly R2  13,004.69  198.23   

Tuesday 8/2/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -0.1% or -10.75 points. Since 10/01/1928 the index made 1190 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 615 occasions.
     Average loss was -0.8% on 575 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

To my mind, the Dow acted as I expected, shooting up on news that the debt ceiling deal might, just might, be closer to a solution. And then it did the unexpected. It dropped, changing a 100-point gain into a 150 point deficit. After that, the index began a slow recovery.

The chart shows the action today. It formed a head-and-shoulders bottom chart pattern. I do not consider this one easy to spot. The head found support at the round number 12,000. The left (LS) and right (RS) shoulders mirrored themselves about the head, forming a symmetrical pattern. When price closed above the neckline, it confirmed the chart pattern and confirmed a reversal from down to up. Buying then was the smart move but it did not amount to a large gain by day's end.

Looking forward, I expect the index to retrace back to 12,050 level since the move up from the bottom consisted of two straight-line runs (or nearly so). The move up from the head resembles a measured move up chart pattern. I expect a drop back to the corrective phase, which happens 35% of the time, the highest of the four areas of support I looked at. You can find an explanation of those four measures on pages 517-518 (and Table 33.4) of my book, Encyclopedia of Chart Patterns, Second Edition, pictured on the right.

The drop means the index has to tunnel through support at 12,100 (after 3:00, you can see the bottoms of candles bouncing off that level). Once it finds support, then I expect the index to move higher, and at the end of the day, look for the index to close up, too, just as the probabilities suggest.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,453.64    
 Weekly S2  11,702.22  248.59   
 Monthly S1  11,793.06  90.84   
 Daily S2  11,853.32  60.26   
 Weekly S1  11,917.36  64.03   
 Daily S1  11,992.91  75.55   
 Low  11,998.08  5.17   Yes! The Low is close to the Daily S1.
 61.8% Down from Intraday High  12,106.70  108.62   
 Close  12,132.49  25.79   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  12,137.66  5.17   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  12,140.25  2.59   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Open  12,144.22  3.97   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  12,173.80  29.58   
 Monthly Pivot  12,273.48  99.67   
 Daily R1  12,277.25  3.77   Yes! The Daily R1 is close to the Monthly Pivot.
 High  12,282.42  5.17   Yes! The High is close to the Daily R1.
 Weekly Pivot  12,298.65  16.23   Yes! The Weekly Pivot is close to the High.
 Daily R2  12,422.00  123.35   
 Weekly R1  12,513.79  91.78   
 Monthly R1  12,612.90  99.12   
 Weekly R2  12,895.08  282.18   
 Monthly R2  13,093.32  198.23   

Monday 8/1/11. Market Monday: The Week Ahead

Picture of the Dow utilities on the daily scale.

My Prediction

I show the Dow utilities on the daily scale.

I show this chart because I find it interesting to see that price is dropping in a straight-line run toward an up-sloping trendline, shown here in red.

With news on a possible deal to raise the debt ceiling in the works, I believe that the index will bounce off the trendline and head higher. I also expect the other indices to follow this one and move up as well.

The really good news is that it's August, and that justifies the triple digit temperatures that I have been seeing since June when I look at my thermometer.

It's even hotter outside!

Top 

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 88.36 points.
Tuesday: Down 91.5 points.
Wednesday: Down 198.75 points.
Thursday: Down 62.44 points.
Friday: Down 96.87 points.

For the Week...

The Dow industrials were down 537.92 points or 4.2%.
The Nasdaq composite was down 102.45 points or 3.6%.
The S&P 500 index was down 52.74 points or 3.9%.

Year to Date...

Dow Industrials
     5.7% down from the high of 12,876.00 on 05/02/2011.
     5.1% up from the low of 11,555.48 on 03/16/2011.
Nasdaq
     4.5% down from the high of 2,887.75 on 05/02/2011.
     6.0% up from the low of 2,599.88 on 06/16/2011.
S&P 500
     5.7% down from the high of 1,370.58 on 05/02/2011.
     3.5% up from the low of 1,249.05 on 03/16/2011.

Top 

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

ReportTimeA-F
Rating
Description
Construction spending10:00 MDCovers residential/non-residential/public spending on new construction.
Personal income & consumption8:30 TC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 TC+Covers durables, non-durables, and services.
Auto & truck sales3:00 TC-Monthly sales of domestically produced vehicles.
Factory orders10:00 WD+Durable/non-durable goods orders w/factory inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Consumer credit3:00 FD-Measures auto, credit card and other debt.

Options Expiration

No options expire this week.

Top 

Swing and Position Traders: Chart Pattern Indicator

As of 07/29/2011, the CPI had:

21 bearish patterns,
3 bullish patterns,
152 patterns waiting for breakout.
The CPI signal is 12.5%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 3 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a two-dimensional approach." He offers these tips.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  11,997  12,070  12,157  12,230  12,316 
Weekly  11,706  11,925  12,302  12,521  12,899 
Monthly  11,457  11,800  12,277  12,620  13,097 
S&P 500 (^GSPC): Daily  1,272  1,282  1,293  1,303  1,314 
Weekly  1,245  1,269  1,306  1,330  1,368 
Monthly  1,216  1,254  1,305  1,343  1,394 
Nasdaq (^IXIC): Daily  2,698  2,727  2,754  2,783  2,810 
Weekly  2,646  2,701  2,780  2,836  2,915 
Monthly  2,530  2,643  2,761  2,874  2,992 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

Top 

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 30.4%  The trend may continue.
 3 months down 5.5%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week down 31.3%  The trend may continue.
 3 months down 5.9%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week down 33.9%  The trend may continue.
 3 months down 8.5%  Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indexes, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

Top 

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
24Double Top, Adam and Adam
21Head-and-shoulders bottom
17Triangle, symmetrical
14Head-and-shoulders top
10Pipe top
8Broadening bottom
7Double Top, Eve and Eve
6Double Top, Adam and Eve
6Double Bottom, Eve and Adam
5Triple top

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Apparel1. Apparel
2. Shoe2. Natural Gas (Diversified)
3. Natural Gas (Diversified)3. Shoe
4. Toiletries/Cosmetics4. Toiletries/Cosmetics
5. Household Products5. Medical Supplies
48. Coal48. Semiconductor
49. Semiconductor49. Insurance (Life)
50. Insurance (Life)50. Short ETFs
51. Securities Brokerage51. Securities Brokerage
52. Homebuilding52. Homebuilding

-- Thomas Bulkowski

Top 

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.