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 06/21/2017
21,410 -57.11 -0.3%
9,293 -11.21 -0.1%
730 -4.82 -0.7%
6,234 45.92 0.7%
2,436 -1.42 -0.1%
YTD
8.3%
2.8%
10.7%
15.8%
8.8%
Tom's Targets    Overview: 06/15/2017
21,600 or 21,000 by 07/01/2017
9,100 or 9,600 by 07/01/2017
720 or 745 by 07/01/2017
6,300 or 6,000 by 07/01/2017
2,525 or 2,390 by 07/01/2017

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 2014 Headlines


Archives


Thursday 8/28/14. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -1.02 points. Since 02/05/1971 the index made 591 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 330 occasions.
     Average loss was -1.0% on 261 occasions.
Expect the index to close higher 55.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 67/117 or 57.3% of the time.
     The prediction of the index closing lower has been right 25/50 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The two red lines show a chart pattern called a rectangle top. A rectangle top has price enter the chart pattern from below and then price bounces from trendline to trendline until eventually breaking out. The breakout direction is unknown until it happens but the breakout is upward 68% of the time.

Look at the two blue lines. That is another rectangle top. I find it very helpful to use prior chart patterns as indicators of how a similar chart pattern will behave. The blue one has an upward breakout.

While I think the market is weakening, it could break out upward from the rectangle and do it tomorrow (Thursday). Since the probabilities suggest a higher close, then I guess I'll vote for an upward breakout, too.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,254.23    
 Monthly S1  4,411.93  157.69   
 Weekly S2  4,473.63  61.71   
 Monthly Pivot  4,479.58  5.95   
 Weekly S1  4,521.63  42.04   
 Weekly Pivot  4,534.43  12.81   
 Daily S2  4,555.11  20.67   
 Low  4,561.83  6.72   
 Daily S1  4,562.36  0.53   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  4,567.17  4.81   
 50% Down from Intraday High  4,568.82  1.65   
 Daily Pivot  4,569.09  0.27   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  4,569.62  0.53   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  4,570.47  0.85   Yes! The 38.2% Down from Intraday High is close to the Close.
 Open  4,574.35  3.88   
 High  4,575.81  1.46   
 Daily R1  4,576.34  0.53   Yes! The Daily R1 is close to the High.
 Weekly R1  4,582.43  6.08   
 Daily R2  4,583.07  0.64   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  4,595.23  12.17   
 Monthly R1  4,637.28  42.04   
 Monthly R2  4,704.93  67.66   

Wednesday 8/27/14. Market Direction: CPI

Picture of the chart pattern indicator

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

I circled in red what could turn into a failure swing in the indicator. In short, it suggests a change in momentum from up to down and a probable decline in the index. Compare the blue circle to the red one. The index is moving up even as the CPI is turning down.

It's a form of (bearish) divergence.

A similar pattern of an uptrend in the index accompanied a declining CPI appears circled in green. The index moved sideways to down going into April (cyan line). That scenario could play out now.

Picture of the chart pattern indicator

This is the CPI with the signal changes shown. I'm looking for the most recent green bars to change to clear or even red. That hasn't happened yet. It suggests the upward move is intact and with world events calming down (Ukraine, Gaza), we could have a longer bullish run. Just be aware that the index will pause to retrace some. When that will happen is anyone's guess.

$ $ $

I spent this past weekend working on the entryway to my house. The entryway is not the front entrance but a wooden structure that will span the sidewalk leading to my front door (it's hard to describe). When I'm done, I'll post pix on Facebook. The hope is that it'll prevent cats from getting onto my property (as well as look nice). The cats use the sidewalk to get to my front and back yards where the birds have their own nature preserve.

-- Thomas Bulkowski

Top


Tuesday 8/26/14. Intraday Market Direction: Dow

The index climbed by 0.4% or 75.65 points. Since 10/01/1928 the index made 1030 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 542 occasions.
     Average loss was -0.6% on 488 occasions.
Expect the index to close higher 52.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 79/123 or 64.2% of the time.
     The prediction of the index closing lower has been right 21/39 or 53.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

I don't see much to clue me into how the Dow will do tomorrow or in the coming days.

Today (Monday) was like a rest period. The index moved horizontally, resting on support (A) for a good portion of the day. If the index decides to tumble, it might find support at the lower edge of the range I show as the blue line, B. That would means a tumble of 100 points. In fact, since the index has been rising for seven days now (moving horizontally for the last three), it is time for the index to retrace some.

So for Tuesday, I'm looking for the index to retrace a portion of the gains. It might be a day in which the Dow loses 100 points. That's my target: 17,000. But be aware that the index could rise just as easily, spurting ahead as it comes out of its three-day rest period. The above probabilities show a higher close.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,048.38    
 Weekly S2  16,528.50  480.12   
 Monthly S1  16,562.62  34.13   
 Weekly S1  16,802.68  240.06   
 Monthly Pivot  16,848.03  45.34   
 Weekly Pivot  16,938.64  90.61   
 Daily S2  16,958.21  19.57   
 Low  17,011.81  53.60   
 Open  17,011.81  0.00   Yes! The Open is close to the Low.
 Daily S1  17,017.54  5.73   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  17,054.95  37.41   
 50% Down from Intraday High  17,068.28  13.33   
 Daily Pivot  17,071.14  2.87   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  17,076.87  5.73   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  17,081.60  4.73   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  17,124.74  43.14   
 Daily R1  17,130.47  5.73   Yes! The Daily R1 is close to the High.
 Daily R2  17,184.07  53.60   
 Weekly R1  17,212.82  28.75   
 Weekly R2  17,348.78  135.95   
 Monthly R1  17,362.27  13.50   
 Monthly R2  17,647.68  285.40   

Monday 8/25/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily chart and you may ask why? This chart shows what I believe will happen to the other indices this week.

Overhead resistance setup by prior peaks (shown as blue lines) will cause this index to turn down. Look for it to retrace at least 50% of the climb up from the August low (A).

For the other indices, they appear to be hitting their own type of resistance. The industrials and S&P 500 composite are butting up against a prior peak. The Nasdaq is hitting 4550 (round number) and struggling.

This downturn that I expect to come won't be severe. Rather, consider it a dip in the upward trend. In this case, a dip in the sideways movement.

Notice how this index looks like a complex head-and-shoulders top chart pattern. The two left shoulders (LS) are in and so is the first right shoulder (RS). We only have to put in another shoulder.

Top

A Brief Look Back

Picture of a flower from my garden.

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 175.83 points.
Tuesday: Up 80.85 points.
Wednesday: Up 59.54 points.
Thursday: Up 60.36 points.
Friday: Down 38.27 points.

For the Week...

The Dow industrials were up 338.31 points or 2.0%.
The Nasdaq composite was up 73.62 points or 1.6%.
The S&P 500 index was up 33.34 points or 1.7%.

Year to Date...

Dow Industrials
     0.9% down from the high of 17,151.56 on 07/17/2014.
     10.8% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.2% down from the high of 4,547.24 on 08/22/2014.
     15.0% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     0.3% down from the high of 1,994.76 on 08/21/2014.
     14.4% up from the low of 1,737.92 on 02/05/2014.

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 MC+Shows sales of single-family homes.
Durable goods orders8:30 TBMeasures orders, shipments of goods with lifespans >3 years.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
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 ThBMeasures economic activity; GDP deflator measures inflation.
Personal income & consumption8:30 FC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 FC+Covers durables, non-durables, and services.
Chicago purchasing managers index9:45 FBMonitors regional manufacturing activity.
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 08/22/2014, the CPI had:

7 bearish patterns,
18 bullish patterns,
284 patterns waiting for breakout.
The CPI signal is 72.0%, which is bullish (>= 65%).

The chart pattern indicator is bullish with 2 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  16,937  16,969  17,017  17,049  17,096 
Weekly  16,503  16,752  16,913  17,162  17,324 
Monthly  16,023  16,512  16,823  17,312  17,622 
S&P500 (^GSPC): Daily  1,980  1,984  1,989  1,993  1,998 
Weekly  1,944  1,966  1,981  2,003  2,017 
Monthly  1,873  1,931  1,963  2,021  2,053 
Nasdaq (^IXIC): Daily  4,510  4,524  4,536  4,550  4,561 
Weekly  4,463  4,501  4,524  4,562  4,585 
Monthly  4,244  4,391  4,469  4,617  4,695 
  • 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 up 20.1%   Expect a reversal soon. 
 1 month up 53.6%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 20.1%   Expect a reversal soon. 
 1 month up 54.2%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 22.3%   Expect a reversal soon. 
 1 month up 48.7%   Expect a random direction. 

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 indices, 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
19Pipe bottom
16Triangle, symmetrical
15Head-and-shoulders top
9Channel
8Double Top, Adam and Adam
7Broadening bottom
6Dead-cat bounce
6Double Top, Eve and Adam
5Rectangle top
5Triangle, ascending

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, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The industries I follow were the best (rank 1) and worst performing.

This WeekLast Week
1. Retail (Special Lines)1. Natural Gas (Distributor)
2. Natural Gas (Distributor)2. Petroleum (Producing)
3. Shoe3. Petroleum (Integrated)
4. Trucking/Transp. Leasing4. Trucking/Transp. Leasing
5. Retail Store5. Semiconductor Cap Equip.
50. Metal Fabricating50. Metal Fabricating
51. Homebuilding51. E-Commerce
52. E-Commerce52. Retail Building Supply
53. Retail Building Supply53. Homebuilding
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

Top


Thursday 8/21/14. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -1.03 points. Since 02/05/1971 the index made 590 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 329 occasions.
     Average loss was -1.0% on 261 occasions.
Expect the index to close higher 55.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 66/116 or 56.9% of the time.
     The prediction of the index closing lower has been right 25/50 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The red line just shows the trend. It's not supposed to be significant in any other manner. I just penciled it in. Notice how the line moves up smartly until yesterday. Then the trend flattens.

What does this mean? Slackening momentum. It's like tossing a ball into the air. The ball rises, turns, and heads back down. That is what I believe is happening to the Nasdaq.

The Nasdaq is leading the other indices higher, but it's looking tired. A review of some stocks shows that many are turning down, too. Weakness. Loss of momentum. Choose your phrase.

While it's possible the index is only taking a break in the upward move, I expect a retrace. My guess is a drop to 4,500 tomorrow. After that, we'll see.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,281.01    
 Weekly S2  4,349.63  68.62   
 Monthly S1  4,403.75  54.11   
 Weekly S1  4,438.06  34.31   
 Monthly Pivot  4,444.62  6.57   
 Weekly Pivot  4,460.26  15.64   
 Daily S2  4,507.79  47.53   
 Low  4,515.73  7.94   
 Daily S1  4,517.14  1.41   Yes! The Daily S1 is close to the Low.
 Open  4,517.75  0.61   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  4,522.33  4.58   
 50% Down from Intraday High  4,524.37  2.04   
 Daily Pivot  4,525.07  0.70   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,526.41  1.34   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,526.48  0.07   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  4,533.01  6.53   
 Daily R1  4,534.42  1.41   Yes! The Daily R1 is close to the High.
 Daily R2  4,542.35  7.94   
 Weekly R1  4,548.69  6.33   
 Monthly R1  4,567.36  18.67   
 Weekly R2  4,570.89  3.54   
 Monthly R2  4,608.23  37.34   

Wednesday 8/20/14. Market Direction: CPI

My post called "What's Hot Wednesday's" is gone. It appears I was the only person on the planet that liked that post (mostly because I could just push a button to produce it). Instead, I'll be focusing on the chart pattern indicator (CPI). I find the CPI important when predicting the future direction of the market. You can find signal changes at the top of most pages and on the home page. Those are updated daily, after the close. CPI charts, three of them, are posted here after the close each Friday.

Although this indicator seems to have good timing, it has it's flaws. Don't use it to trade. Rather, use it as background information. Signals can change for up to a week, but are usually stable after three days. Keep that in mind.

Picture of the chart pattern indicator

This chart shows the CPI as a line chart under the S&P 500 index. You can see divergence in prior weeks but I didn't highlight them today. The red line is interesting.

Why? Because the indicator begins rising after the red line even as the index is making lower lows. It's a form of divergence. Now, the indicator is bumping up against 100%, so it won't go any higher.

Picture of the chart pattern indicator

This chart shows that the move up is robust. Green bars (bullish) appear as of today. There is no clear bars (neutral) nor red bars (bearish). As of Tuesday's close, the up move is still intact and strong.

My concern is not with the CPI but with overhead resistance setup by the prior peak in the index. My guess is that the CPI will turn neutral soon and the index will round over and start to head down. For right now, though, the CPI says everything looks good.

-- Thomas Bulkowski

Top


Tuesday 8/19/14. Intraday Market Direction: Dow

The index climbed by 1.1% or 175.83 points. Since 10/01/1928 the index made 343 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 199 occasions.
     Average loss was -0.9% on 144 occasions.
Expect the index to close higher 58.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 78/122 or 63.9% of the time.
     The prediction of the index closing lower has been right 21/39 or 53.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

Picture of the Dow industrials on the 5 minute scale.

I show a picture of the Dow industrials on the 5-minute scale.

Look at the Elliott wave sequence 1 through 5. Odd numbered waves move up, even ones move down. When wave 5 ends, price is supposed to make an ABC correction, which I show in blue (I'm just showing the waveform, not making a 16,600 prediction.).

Do I believe that is going to happen? No. Why not?

I dislike Elliott wave. It seems to me that even the experts can't agree on the wave count. For example, the 1-5 sequence could extend, forming waves 6 and 7, 8 and 9, and so on. The same type of complaint can be lodged against chart patterns, of course. Let's set that argument aside.

My view is that tomorrow the Dow will close higher, following the red arrow. Wave 5 could be the start of a measured move up chart pattern. I am hopeful of this because the above probabilities suggest a higher close and the last half hour of today's market saw the Dow trending upward.

Here is the measure rule for measured move up chart patterns (a way to pick a target)...

Eyeballing the chart, starting with the low on Friday to today's high, we get a move of about 250 points. Add that to the low today of 16,820 (the low around 3:30 in the corrective phase), and you get a target of 17,070.

Will the Dow jump 250 points? Doubtful, even if you factor in a multiple-day gain. Since this method works just 45% of the time, let's multiply the 250 height by 45% to get a closer target: ~16,950. That will be my guess.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,956.91    
 Monthly S1  16,397.83  440.91   
 Weekly S2  16,453.48  55.65   
 Daily S2  16,605.34  151.86   
 Weekly S1  16,646.11  40.77   
 Low  16,664.45  18.34   
 Open  16,664.45  0.00   Yes! The Open is close to the Low.
 Weekly Pivot  16,710.69  46.24   
 Daily S1  16,722.04  11.35   Yes! The Daily S1 is close to the Weekly Pivot.
 61.8% Down from Intraday High  16,731.61  9.57   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  16,752.36  20.75   
 38.2% Down from Intraday High  16,773.10  20.75   
 Monthly Pivot  16,774.69  1.59   Yes! The Monthly Pivot is close to the 38.2% Down from Intraday High.
 Daily Pivot  16,781.15  6.46   Yes! The Daily Pivot is close to the Monthly Pivot.
 Close  16,838.74  57.59   
 High  16,840.26  1.52   Yes! The High is close to the Close.
 Daily R1  16,897.85  57.59   
 Weekly R1  16,903.32  5.47   Yes! The Weekly R1 is close to the Daily R1.
 Daily R2  16,956.96  53.64   
 Weekly R2  16,967.90  10.94   Yes! The Weekly R2 is close to the Daily R2.
 Monthly R1  17,215.61  247.71   
 Monthly R2  17,592.47  376.87   

Monday 8/18/14. Market Direction: The Week Ahead

My Prediction

Picture of the Nasdaq composite on the daily scale.

I show a picture of the Nasdaq composite on the daily scale.

Does this figure show a triple top at points 123?

No. Why not?

Because it's not a confirmed chart pattern. That means price has not closed below the red line at A. I drew that line below the lowest valley between peaks 1, 2, and 3. Until we get a close below the line, the chart just shows squiggles and not a triple top.

What implications does this have?

I don't believe the triple top will confirm. In other words, I don't believe the index will close below A.

Instead, since today showed a close below the open, that suggests weakness. I expect the index to retrace for a few days but then make new highs. I show that as the green line.

If I'm wrong, then one alternative is for the index to just soar higher. That is certainly possible. It's also possible that the index will decline. That would happen if Russia decided to invade Ukraine, for example.

Top

A Brief Look Back

Picture of a vote early thing.

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 16.05 points.
Tuesday: Down 9.44 points.
Wednesday: Up 91.26 points.
Thursday: Up 61.78 points.
Friday: Down 50.67 points.

For the Week...

The Dow industrials were up 108.98 points or 0.7%.
The Nasdaq composite was up 94.03 points or 2.2%.
The S&P 500 index was up 23.47 points or 1.2%.

Year to Date...

Dow Industrials
     2.8% down from the high of 17,151.56 on 07/17/2014.
     8.6% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.5% down from the high of 4,485.93 on 07/03/2014.
     13.1% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     1.8% down from the high of 1,991.39 on 07/24/2014.
     12.5% up from the low of 1,737.92 on 02/05/2014.

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
Consumer price index8:30 TB+Inflation report. Measures cost of goods and services.
Housing starts8:30 TB-Number of homes beginning construction.
Building permits8:30 TB-Measures building permits for new construction.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Minutes2:00 W?Minutes of the prior Federal Reserve meeting.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Existing home sales10:00 ThCCounts sales of used homes.
Leading indicators10:00 ThD-Summary of already known reports.

Options Expiration

VIX expires on Wednesday.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 08/15/2014, the CPI had:

9 bearish patterns,
43 bullish patterns,
494 patterns waiting for breakout.
The CPI signal is 82.7%, which is bullish (>= 65%).

The chart pattern indicator is bullish with 2 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  16,471  16,567  16,671  16,767  16,871 
Weekly  16,395  16,529  16,652  16,786  16,909 
Monthly  15,898  16,281  16,716  17,098  17,534 
S&P500 (^GSPC): Daily  1,931  1,943  1,954  1,966  1,976 
Weekly  1,913  1,934  1,949  1,970  1,985 
Monthly  1,864  1,909  1,950  1,996  2,037 
Nasdaq (^IXIC): Daily  4,403  4,434  4,458  4,489  4,514 
Weekly  4,329  4,397  4,440  4,508  4,550 
Monthly  4,260  4,363  4,424  4,526  4,588 
  • 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 up 29.4%   The trend may continue. 
 1 month up 53.6%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 29.4%   The trend may continue. 
 1 month up 54.2%   Expect a random direction. 
 Nasdaq composite (^IXIC) 2 weeks up 29.9%   The trend may continue. 
 1 month up 48.7%   Expect a random direction. 

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 indices, 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
20Head-and-shoulders top
16Triangle, symmetrical
15Pipe bottom
11Double Top, Adam and Adam
10Channel
8Triple top
8Double Top, Eve and Adam
7Scallop, ascending and inverted
7Broadening top
7Rectangle 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, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The industries I follow were the best (rank 1) and worst performing.

This WeekLast Week
1. Natural Gas (Distributor)1. Shoe
2. Petroleum (Producing)2. Petroleum (Producing)
3. Petroleum (Integrated)3. Petroleum (Integrated)
4. Trucking/Transp. Leasing4. Natural Gas (Distributor)
5. Semiconductor Cap Equip.5. Semiconductor Cap Equip.
50. Metal Fabricating50. Metal Fabricating
51. E-Commerce51. E-Commerce
52. Retail Building Supply52. Retail Building Supply
53. Homebuilding53. Homebuilding
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

Top


Thursday 8/14/14. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 44.88 points. Since 02/05/1971 the index made 203 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 138 occasions.
     Average loss was -0.9% on 65 occasions.
Expect the index to close higher 68.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 65/115 or 56.5% of the time.
     The prediction of the index closing lower has been right 25/50 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Nasdaq composite on the 5 minute scale.

I show a picture of the Nasdaq composite on the 5-minute scale.

The ABCD pattern is the same one I talked about on Tuesday's post for the Dow.

I expect the index to continue to coast upward but then ease lower back into the BC area as the red line shows (don't expect a straight drop. The red line just shows how far down I expect the index to drop). I show it reaching 4395 either tomorrow (Thursday) or Friday. All of that is just a guess born from how a measured move up works after the pattern completes.

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,250.23    
 Weekly S2  4,310.31  60.08   
 Monthly S1  4,342.18  31.87   
 Weekly S1  4,372.22  30.04   
 Weekly Pivot  4,383.80  11.58   
 Daily S2  4,393.36  9.56   
 Low  4,403.64  10.28   
 Open  4,407.87  4.23   
 Daily S1  4,413.74  5.87   
 Monthly Pivot  4,413.84  0.10   Yes! The Monthly Pivot is close to the Daily S1.
 61.8% Down from Intraday High  4,415.36  1.52   Yes! The 61.8% Down from Intraday High is close to the Monthly Pivot.
 50% Down from Intraday High  4,418.98  3.62   
 38.2% Down from Intraday High  4,422.59  3.62   
 Daily Pivot  4,424.03  1.43   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  4,434.13  10.10   
 High  4,434.31  0.18   Yes! The High is close to the Close.
 Daily R1  4,444.41  10.10   
 Weekly R1  4,445.71  1.30   Yes! The Weekly R1 is close to the Daily R1.
 Daily R2  4,454.70  8.99   
 Weekly R2  4,457.29  2.59   Yes! The Weekly R2 is close to the Daily R2.
 Monthly R1  4,505.79  48.50   
 Monthly R2  4,577.45  71.66   

Wednesday 8/13/14. Market Direction: S&P

Picture of the chart pattern indicator against the S and P.

I would show you a 10-day, 5 min chart of SPX, but it appears the same as yesterday's Dow post. I still expect the indices to move higher.

This is a picture of the S&P 500 index (bar chart) against the chart pattern indicator (line chart).

I post three versions of this picture after the market closes each Friday. Sometimes I attach warnings of bullish or bearish divergence. I show two examples of that on this chart.

Divergence is when the index moves one way and the indicator moves the opposite. You can also think of divergence as the index making a new high but the indicator fails to make a new high (or the reverse including new lows).

In this example, the chart pattern indicator had been warning of a downturn for weeks now before the actual drop occurred.

I have found the divergence between the CPI and the S&P to be useful. Right now, the CPI is bullish. I post the reading at the top right of this page.

WARNING: Don't try to trade using this indicator. Rather, consider it background information because signals can change up to a week. Read the warning for more information.

-- Thomas Bulkowski


Tuesday 8/12/14. Market Direction: Dow

The index climbed by 0.1% or 16.05 points. Since 10/01/1928 the index made 1248 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 641 occasions.
     Average loss was -0.6% on 607 occasions.
Expect the index to close higher 51.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 78/121 or 64.5% of the time.
     The prediction of the index closing lower has been right 21/39 or 53.8% of the time.

Since I post this entry the night before, be sure to check how the futures are trading before the market opens. Large plus or minus numbers in the futures often sets the opening direction up or down, respectively.

Picture of the Dow industrials on the 5 minute scale.

$ $ $

I have only received a few emails from my ideas request (Saturday 8/9/14. What Now?). What I'm learning is that readers of this blog want to know the market direction going forward. So would I. Let me think about how to answer that before I make any changes. I'll start with this post, though.

$ $ $

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

Look at the chart. I circled a congestion area at E that I believe will stall the index in the next few days.

The index is making a measured move up chart pattern, starting at A and ending at D. So far, the index has completed the corrective phase BC. If I'm right, the index will climb to D, hit overhead resistance and probably retrace back to BC. I'm looking for a 200 point move not necessarily tomorrow, but in the next day or two.

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,867.33    
 Monthly S1  16,218.65  351.33   
 Weekly S2  16,237.55  18.90   
 Weekly S1  16,403.77  166.21   
 Weekly Pivot  16,499.99  96.23   
 Daily S2  16,514.36  14.37   
 Daily S1  16,542.17  27.81   
 Open  16,557.27  15.10   
 Low  16,557.27  0.00   Yes! The Low is close to the Open.
 Close  16,569.98  12.71   
 61.8% Down from Intraday High  16,584.29  14.30   
 Daily Pivot  16,585.08  0.79   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  16,592.63  7.55   
 38.2% Down from Intraday High  16,600.97  8.34   
 Daily R1  16,612.89  11.92   
 High  16,627.99  15.10   
 Daily R2  16,655.80  27.81   
 Weekly R1  16,666.21  10.41   
 Monthly Pivot  16,685.11  18.90   
 Weekly R2  16,762.43  77.33   
 Monthly R1  17,036.43  274.00   
 Monthly R2  17,502.89  466.45   

Monday 8/11/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utility index on the daily scale.

The index has completed a measured move down, I think. I show that pattern on the chart as ABCD. The first leg is AB, the second leg is CD, and a corrective phase BC connects the two.

The thinking is that leg CD will approximate the length of leg AB.

What I found to be useful is that after the measured move completes, there is an 84% chance that the stock will return to the corrective phase or go even higher. I break it all down at the link.

So, I flipped my targets at the top of this page and expect the index to move back to BC. I expect other indices to join this trend.

A lot of this will depend on world events, so be careful.

Top

A Brief Look Back

Picture of a flower from my garden.

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 75.91 points.
Tuesday: Down 139.81 points.
Wednesday: Up 13.87 points.
Thursday: Down 75.07 points.
Friday: Up 185.66 points.

For the Week...

The Dow industrials were up 60.56 points or 0.4%.
The Nasdaq composite was up 18.26 points or 0.4%.
The S&P 500 index was up 6.44 points or 0.3%.

Year to Date...

Dow Industrials
     3.5% down from the high of 17,151.56 on 07/17/2014.
     7.9% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     2.6% down from the high of 4,485.93 on 07/03/2014.
     10.8% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     3.0% down from the high of 1,991.39 on 07/24/2014.
     11.1% up from the low of 1,737.92 on 02/05/2014.

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
Treasury budget2:00 TuDTracks budget deficit. Important in April (tax filing).
Retail sales8:30 WA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 WC-Reports manufacturing, wholesale, retail inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
International trade8:30 ThC+Import/export prices, trade balance. US economy vs others.
Producer price index8:30 FB-Measures wholesale goods cost. An indication of future inflation.
Industrial production9:15 FB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 FB-Gauges economic activity, hints of inflation.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
A.M. settled index options cease trading.Thursday
Expiring equity and P.M. settled index options cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, and cash-settled currency 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

On 08/08/2014, the CPI had:

1 bearish patterns,
28 bullish patterns,
316 patterns waiting for breakout.
The CPI signal is 96.6%, 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  16,299  16,427  16,492  16,619  16,684 
Weekly  16,232  16,393  16,495  16,656  16,757 
Monthly  15,862  16,208  16,680  17,026  17,498 
S&P500 (^GSPC): Daily  1,901  1,916  1,924  1,940  1,948 
Weekly  1,888  1,910  1,926  1,948  1,965 
Monthly  1,856  1,894  1,943  1,980  2,029 
Nasdaq (^IXIC): Daily  4,312  4,341  4,357  4,387  4,403 
Weekly  4,289  4,330  4,363  4,404  4,436 
Monthly  4,229  4,300  4,393  4,464  4,556 
  • 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 43.1%   Expect a random direction. 
 2 months down 11.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 42.4%   Expect a random direction. 
 1 month up 54.2%   Expect a random direction. 
 Nasdaq composite (^IXIC) 1 week up 43.7%   Expect a random direction. 
 1 month up 48.7%   Expect a random direction. 

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 indices, 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
27Head-and-shoulders top
14Triangle, symmetrical
12Double Top, Adam and Adam
10Triple top
10Channel
9Broadening top
9Scallop, ascending and inverted
8Triangle, ascending
8Double Top, Eve and Adam
7Rectangle 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, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The industries I follow were the best (rank 1) and worst performing.

This WeekLast Week
1. Shoe1. Petroleum (Producing)
2. Petroleum (Producing)2. Natural Gas (Distributor)
3. Petroleum (Integrated)3. Shoe
4. Natural Gas (Distributor)4. Semiconductor Cap Equip.
5. Semiconductor Cap Equip.5. Petroleum (Integrated)
50. Metal Fabricating50. Furn/Home Furnishings
51. E-Commerce51. E-Commerce
52. Retail Building Supply52. Retail Building Supply
53. Homebuilding53. Homebuilding
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

Top


Saturday 8/9/14. What Now?

For the last several months, visits to the website have been dropping. The difficult market could be to blame. It's hard to get enthusiastic when you see your portfolio bouncing around like a basketball.

What if it's something else?

What would you like me to cover in this blog? Keep in mind that I consider my time on this earth to be precious. That's why I have set up the following schedule for posts:

  • Monday: The week ahead
  • Trading Tuesday: Dow (a look at the Dow industrials intraday)
  • What's Hot Wednesday (stocks in my portfolio making big moves)
  • Trading Thursday: Nasdaq (a look at the composite intraday)
  • Friday: Pattern Trading Setups for the Weekend
If you have some ideas, then let me know. Email me at...

Picture of my email address.

Thanks. -- Thomas Bulkowski

Top


Thursday 8/7/14. Trading Thursday: Nasdaq

The index climbed by 0.1% or 2.21 points. Since 02/05/1971 the index made 617 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 343 occasions.
     Average loss was -0.8% on 274 occasions.
Expect the index to close higher 55.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 65/114 or 57.0% of the time.
     The prediction of the index closing lower has been right 25/50 or 50.0% of the time.

Since I post this entry the night before, be sure to check how the futures are trading before the market opens. Large plus or minus numbers in the futures often sets the opening direction up or down, respectively.

Picture of the Nasdaq composite on the 5 minute scale.

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

The index peaked at A, retraced and then climbed to B where it met overhead resistance from A. Isn't it interesting how this works?

The index has slid downward from B to C, following a channel of sorts. The index dipped outside the channel midway along but then recovered. That situation isn't in the "ideal" channel playbook, but few things are these days.

To put it bluntly, I don't see any chart patterns to guide us on Thursday's trading. There might be a tendency for the index to break above the top of the channel to mirror the move below it.

I guess the safest thing to say is to look for the index to close either above or below the down-sloping channel and trade with the trend. Keep aware of the possibility of a quick reversal, as I said, one that mirrors the trip below the bottom red line.

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,226.42    
 Weekly S2  4,233.00  6.58   
 Monthly S1  4,290.74  57.73   
 Weekly S1  4,294.03  3.29   Yes! The Weekly S1 is close to the Monthly S1.
 Daily S2  4,299.08  5.05   Yes! The Daily S2 is close to the Weekly S1.
 Low  4,325.04  25.96   
 Open  4,326.28  1.24   Yes! The Open is close to the Low.
 Daily S1  4,327.06  0.78   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  4,345.65  18.59   
 50% Down from Intraday High  4,352.02  6.37   
 Daily Pivot  4,353.03  1.01   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  4,355.05  2.02   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  4,358.38  3.33   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  4,378.99  20.61   
 Daily R1  4,381.01  2.02   Yes! The Daily R1 is close to the High.
 Weekly Pivot  4,385.04  4.03   Yes! The Weekly Pivot is close to the Daily R1.
 Monthly Pivot  4,388.33  3.29   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Daily R2  4,406.98  18.64   
 Weekly R1  4,446.07  39.09   
 Monthly R1  4,452.65  6.58   
 Weekly R2  4,537.08  84.44   
 Monthly R2  4,550.24  13.16   

Wednesday 8/6/14. What's Hot Wednesday

The following are taken from my database of about 560 stocks and 100 exchange traded funds (ETFs), not from the entire stock market.

Stocks and ETFs with the least amount of noise (low noise means it trends up, down, or both rather than moving sideways) make for better swing trading candidates. ETFs, on average, have lower noise levels than stocks, but that could be due to lots of gaps (which I consider bad). Click here for more information on noise.

Biggest winners and losers over the past week, from the close on 07/29/2014 to 08/05/2014 and year to date. These lists are useful for momentum players, those that buy stocks moving up or trending lower. Also, look for several stocks from the same industry. Finding some may give a clue to an industry on the move, one either trending up or suffering. The lists also include country ETFs. If those are performing well, consider diversifying into them.

Below are the top 10 stocks with the least amount of noise during the past month.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
9.1%$1.11-79.56%Cache (CACH)ApparelDead-cat bounce from 05/08/2014 to 05/08/2014
13.6%$104.620.15%Kimberly-Clark Corp (KMB)Household ProductsDouble Top, Adam and Adam from 06/20/2014 to 07/16/2014
18.2%$115.00-1.33%Monsanto Co (MON)Chemical (Diversified)Double Top, Adam and Adam from 06/25/2014 to 07/02/2014
18.2%$3.78-42.90%Hovnanian Enterprises Inc (HOV)HomebuildingBroadening top, right-angled and ascending from 04/22/2014 to 06/04/2014
18.2%$565.070.84%Google (GOOG)InternetDouble Bottom, Adam and Adam from 06/04/2014 to 06/17/2014
18.2%$23.15-9.39%CRH plc (CRH)Cement and AggregatesFalling wedge from 06/25/2014 to 07/24/2014
22.7%$69.1018.57%Williams-Sonoma Inc. (WSM)Retail (Special Lines)Double Top, Adam and Eve from 03/21/2014 to 04/01/2014
22.7%$22.43-11.27%Semtech Corp (SMTC)Semiconductor Cap Equip.Triangle, descending from 09/04/2013 to 10/31/2013
22.7%$9.09-23.16%QLogic Corp (QLGC)SemiconductorHead-and-shoulders top from 03/26/2014 to 04/09/2014
22.7%$2.03-25.91%Mattson Technology Inc. (MTSN)Semiconductor Cap Equip.Pipe bottom from 12/09/2013 to 12/16/2013

Top

Below are the top 10 stocks with the least amount of noise during the past 3 months.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
18.8%$23.15-9.39%CRH plc (CRH)Cement and AggregatesFalling wedge from 06/25/2014 to 07/24/2014
23.4%$565.070.84%Google (GOOG)InternetDouble Bottom, Adam and Adam from 06/04/2014 to 06/17/2014
26.6%$21.94-6.99%Assured Guaranty Ltd. (AGO)Insurance (Life)Pipe top from 06/16/2014 to 06/23/2014
28.1%$124.960.04%Chevron Corp (CVX)Petroleum (Integrated)Vertical move up from 04/05/2013 to 04/11/2013
31.3%$91.570.96%Raytheon Co. (RTN)Aerospace/DefenseBroadening top, right-angled and descending from 03/05/2014 to 04/24/2014
31.3%$35.655.16%OGE Energy Corp (OGE)Electric Utility (Central)Triangle, symmetrical from 02/26/2014 to 03/27/2014
31.3%$31.93-3.18%FirstEnergy Corp. (FE)Electric Utility (East)Head-and-shoulders top from 04/16/2014 to 05/09/2014
31.3%$30.50-9.50%ConAgra Foods Inc (CAG)Food ProcessingDouble Top, Adam and Eve from 04/04/2014 to 04/22/2014
31.3%$25.65-17.07%Brady Corp (BRC)Chemical (Diversified)Broadening top, right-angled and ascending from 03/13/2014 to 04/07/2014
32.8%$49.677.42%New Jersey Resources Corp (NJR)Natural Gas (Distributor)Big M from 07/19/2013 to 08/08/2013

Top

Below are the top 10 stocks with the least amount of noise during the past 6 months.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
25.6%$23.15-9.39%CRH plc (CRH)Cement and AggregatesFalling wedge from 06/25/2014 to 07/24/2014
29.6%$565.070.84%Google (GOOG)InternetDouble Bottom, Adam and Adam from 06/04/2014 to 06/17/2014
32.0%$30.50-9.50%ConAgra Foods Inc (CAG)Food ProcessingDouble Top, Adam and Eve from 04/04/2014 to 04/22/2014
34.4%$62.84-10.46%Emerson Electric (EMR)Computers and PeripheralsTriangle, symmetrical from 06/20/2014 to 07/24/2014
34.4%$25.65-17.07%Brady Corp (BRC)Chemical (Diversified)Broadening top, right-angled and ascending from 03/13/2014 to 04/07/2014
35.2%$2.08-70.33%Prana Biotechnology Limited (PRAN)BiotechnologyDead-cat bounce from 04/01/2014 to 04/01/2014
36.8%$35.70-11.72%Yahoo! Inc. (YHOO)InternetRectangle bottom from 04/16/2014 to 07/31/2014
36.8%$105.02-7.72%United Technologies Corp (UTX)Diversified Co.Broadening top, right-angled and ascending from 12/30/2013 to 01/16/2014
36.8%$14.4580.40%Pioneer Energy Services (PES)Oilfield Svcs/EquipmentTriangle, ascending from 04/30/2014 to 05/14/2014
36.8%$124.960.04%Chevron Corp (CVX)Petroleum (Integrated)Vertical move up from 04/05/2013 to 04/11/2013

Top

Below are the top 10 ETFs with the least amount of noise during the past month.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
9.1%$45.83-3.41%S and P Europe 350 Index fund (IEV)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/21/2014
13.3%$54.79-0.94%Market Vectors Money-Center (RKH)Long ETFsRising wedge from 09/19/2013 to 12/04/2013
13.6%$32.49-1.52%MSCI Switzerland Index (EWL)Investment Co. (Foreign)Roof from 02/14/2014 to 03/20/2014
13.6%$33.72-5.89%MSCI Sweden Index (EWD)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/22/2014
18.2%$39.372.07%MSCI Spain Index (EWP)Investment Co. (Foreign)Double Top, Adam and Adam from 06/09/2014 to 06/19/2014
18.2%$28.30-10.89%MSCI Germany Index (EWG)Investment Co. (Foreign)Double Top, Adam and Adam from 06/06/2014 to 06/19/2014
18.2%$26.94-5.31%MSCI France Index (EWQ)Investment Co. (Foreign)Broadening top from 11/06/2013 to 12/31/2013
18.2%$16.520.79%MSCI Belgium Investable Mkt Idx (EWK)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/23/2014
18.2%$129.189.38%DJ US Pharmaceuticals index fund (IHE)DrugHead-and-shoulders bottom from 06/06/2013 to 07/03/2013
22.7%$16.21-6.95%UltraShort 2x Financials ProShares (SKF)Short ETFsPipe top from 04/07/2014 to 04/14/2014

Top

Below are the top 10 ETFs with the least amount of noise during the past 3 months.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
10.2%$54.79-0.94%Market Vectors Money-Center (RKH)Long ETFsRising wedge from 09/19/2013 to 12/04/2013
21.9%$15.740.96%MSCI Italy Index (EWI)Investment Co. (Foreign)Rising wedge from 01/15/2014 to 03/13/2014
25.0%$19.051.82%iShares Silver Trust (SLV)Metals and Mining (Div.)Pipe top from 10/21/2013 to 10/28/2013
25.0%$96.200.50%DJ US consumer goods (household goods) (IYK)Household ProductsDouble Top, Eve and Eve from 06/20/2014 to 07/14/2014
26.6%$16.21-6.95%UltraShort 2x Financials ProShares (SKF)Short ETFsPipe top from 04/07/2014 to 04/14/2014
26.6%$45.83-3.41%S and P Europe 350 Index fund (IEV)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/21/2014
26.6%$26.94-5.31%MSCI France Index (EWQ)Investment Co. (Foreign)Broadening top from 11/06/2013 to 12/31/2013
28.1%$33.72-5.89%MSCI Sweden Index (EWD)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/22/2014
28.1%$11.82-2.63%MSCI Japan Index fund (EWJ)Investment Co. (Foreign)Broadening top, right-angled and ascending from 04/17/2014 to 05/20/2014
29.7%$22.171.42%SPDR Financial Select Sector (XLF)Investment Co. (Domestic)Broadening top, right-angled and ascending from 06/09/2014 to 07/10/2014

Top

Below are the top 10 ETFs with the least amount of noise during the past 6 months.

Average
Noise
Last
Close
YTDStockIndustryMost Recent Chart Pattern
19.6%$54.79-0.94%Market Vectors Money-Center (RKH)Long ETFsRising wedge from 09/19/2013 to 12/04/2013
27.2%$65.611.45%MSCI South Korea Index (EWY)Investment Co. (Foreign)Triple top from 05/09/2013 to 06/03/2013
27.2%$15.740.96%MSCI Italy Index (EWI)Investment Co. (Foreign)Rising wedge from 01/15/2014 to 03/13/2014
28.0%$56.0017.50%MSCI Turkey Index (TUR)Long ETFsTriangle, symmetrical from 02/03/2014 to 03/13/2014
28.2%$13.46-33.53%UltraShort 2x Semiconductor ProShares (SSG)Short ETFsPipe bottom from 01/13/2014 to 01/21/2014
28.8%$16.520.79%MSCI Belgium Investable Mkt Idx (EWK)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/23/2014
29.6%$45.83-3.41%S and P Europe 350 Index fund (IEV)Investment Co. (Foreign)Double Top, Adam and Eve from 12/31/2013 to 01/21/2014
30.4%$11.82-2.63%MSCI Japan Index fund (EWJ)Investment Co. (Foreign)Broadening top, right-angled and ascending from 04/17/2014 to 05/20/2014
30.4%$28.30-10.89%MSCI Germany Index (EWG)Investment Co. (Foreign)Double Top, Adam and Adam from 06/06/2014 to 06/19/2014
31.2%$26.247.67%MSCI Australia Index fund (EWA)Investment Co. (Foreign)Rectangle top from 04/09/2014 to 07/17/2014

Top

Below are the top 10 stocks with the best performance during the past week out of 502 stocks. Stocks from this list may suggest what stocks or industries will do well in the future.

Week
Change
Last
Close
YTDStockIndustryMost Recent Chart Pattern
20.94%$33.96-14.60%Trex Company (TREX)Building MaterialsPipe top from 04/21/2014 to 04/28/2014
14.40%$54.3418.18%Open Text Corp (OTEX)E-CommerceRectangle bottom from 05/08/2014 to 07/30/2014
10.51%$20.5095.98%Century Aluminum Co. (CENX)Metals and Mining (Div.)Triangle, symmetrical from 11/05/2013 to 12/09/2013
9.63%$26.97-21.16%RTI International Metals Inc. (RTI)Metals and Mining (Div.)Pipe bottom from 05/12/2014 to 05/19/2014
9.54%$54.29-5.76%Armstrong World Industries (AWI)Building MaterialsTriple bottom from 03/27/2014 to 05/07/2014
8.99%$11.4050.99%Build-A-Bear Workshop Inc (BBW)Retail (Special Lines)Pipe top from 06/02/2014 to 06/09/2014
8.53%$32.31-34.91%SodaStream International Ltd (SODA)Food ProcessingFalling wedge from 04/23/2014 to 05/21/2014
7.65%$4.085.43%Advanced Micro Devices, Inc (AMD)SemiconductorPipe top from 06/09/2014 to 06/16/2014
7.62%$79.84-2.76%Bunge Ltd (BG)Food ProcessingFalling wedge from 05/22/2014 to 06/17/2014
7.14%$21.02-13.82%Surmodics, Inc (SRDX)Medical SuppliesPipe top from 06/30/2014 to 07/07/2014

Top

Below are the 10 worst performing stocks during the past week out of 502 stocks. Stocks from this list suggest companies or industries that may be having difficulty and might be future short sale candidates.

Week
Change
Last
Close
YTDStockIndustryMost Recent Chart Pattern
-21.10%$27.75-20.53%On Assignment, Inc. (ASGN)Human ResourcesDead-cat bounce from 07/31/2014 to 07/31/2014
-20.17%$12.98-16.42%Genworth Financial Inc (GNW)Insurance (Life)Triangle, symmetrical from 05/13/2014 to 06/23/2014
-19.56%$32.90-2.32%ArcBest Corp (ARCB)Trucking/Transp. LeasingDead-cat bounce from 07/31/2014 to 07/31/2014
-17.80%$26.55-29.14%Noble Corporation (NE)Oilfield Svcs/EquipmentTriangle, symmetrical from 03/14/2014 to 05/14/2014
-16.35%$7.11-49.11%hhgregg, Inc (HGG)Retail (Special Lines)Head-and-shoulders top from 08/26/2013 to 10/24/2013
-15.69%$5.59-21.60%Monster Worldwide (MWW)AdvertisingPennant from 06/10/2014 to 06/19/2014
-14.45%$14.4580.40%Pioneer Energy Services (PES)Oilfield Svcs/EquipmentTriangle, ascending from 04/30/2014 to 05/14/2014
-14.31%$41.027.49%Anika Therapeutics Inc (ANIK)BiotechnologyPipe top from 01/13/2014 to 01/21/2014
-12.92%$29.7822.35%Arris Group Inc. (ARRS)Telecom. EquipmentPipe bottom from 07/07/2014 to 07/14/2014
-12.60%$1.11-79.56%Cache (CACH)ApparelDead-cat bounce from 05/08/2014 to 05/08/2014

Top

Below are the top 10 stocks with the best performance year to date out of 502 stocks. Knowing which securities are trending higher makes selecting stocks for momentum trades much easier, especially if some share the same industry.

YTD
Change
Last
Close
StockIndustryMost Recent Chart Pattern
117.44%$11.22RF Micro Devices Inc. (RFMD)SemiconductorDouble Bottom, Adam and Adam from 01/10/2014 to 01/24/2014
95.98%$20.50Century Aluminum Co. (CENX)Metals and Mining (Div.)Triangle, symmetrical from 11/05/2013 to 12/09/2013
80.40%$14.45Pioneer Energy Services (PES)Oilfield Svcs/EquipmentTriangle, ascending from 04/30/2014 to 05/14/2014
76.31%$36.99Myriad Genetics Inc (MYGN)BiotechnologyDouble Top, Adam and Adam from 04/04/2014 to 05/01/2014
62.60%$53.87Skechers USA Inc (SKX)ShoeRising wedge from 04/23/2014 to 05/22/2014
61.55%$39.79Newfield Exploration Company (NFX)Natural Gas (Diversified)Pipe bottom from 07/07/2014 to 07/14/2014
56.92%$26.66Nabors Industries, Ltd. (NBR)Oilfield Svcs/EquipmentDouble Top, Eve and Adam from 07/03/2014 to 07/24/2014
56.73%$8.15MannKind Corp (MNKD)BiotechnologyTriangle, symmetrical from 04/10/2014 to 05/07/2014
54.66%$16.44Alcoa (AA)Metals and Mining (Div.)Pipe top from 01/21/2014 to 01/27/2014
50.99%$11.40Build-A-Bear Workshop Inc (BBW)Retail (Special Lines)Pipe top from 06/02/2014 to 06/09/2014

Top

Below are the 10 worst performing stocks year to date out of 502 stocks. These stocks might represent a good momentum trade from the short side. If some stocks also share the same industry, then the industry may be weak, so concentrate your search there.

YTD
Change
Last
Close
StockIndustryMost Recent Chart Pattern
-79.56%$1.11Cache (CACH)ApparelDead-cat bounce from 05/08/2014 to 05/08/2014
-70.33%$2.08Prana Biotechnology Limited (PRAN)BiotechnologyDead-cat bounce from 04/01/2014 to 04/01/2014
-58.64%$0.76Anadigics Inc (ANAD)SemiconductorHead-and-shoulders bottom from 11/20/2013 to 01/13/2014
-58.10%$57.92Nu Skin Enterprises, Inc (NUS)Household ProductsRectangle bottom from 05/15/2014 to 07/07/2014
-51.41%$17.97Acxiom Corp (ACXM)Computer Software and SvcsDead-cat bounce from 05/15/2014 to 05/15/2014
-49.45%$4.59Vivus Inc (VVUS)BiotechnologyPipe bottom from 11/04/2013 to 11/11/2013
-49.11%$7.11hhgregg, Inc (HGG)Retail (Special Lines)Head-and-shoulders top from 08/26/2013 to 10/24/2013
-49.09%$3.32Hercules Offshore, Inc. (HERO)Petroleum (Producing)Triangle, symmetrical from 04/24/2014 to 06/05/2014
-48.48%$40.54Conns Inc (CONN)Retail (Special Lines)Pipe bottom from 06/09/2014 to 06/16/2014
-46.23%$5.85Blyth Inc (BTH)Household ProductsHead-and-shoulders bottom from 01/14/2014 to 02/24/2014

Top

Below are the top 10 exchange traded funds (ETF) with the best performance this past week out of 95 ETFs. A hot ETF may suggest an industry or commodity that is doing well, so look there for individual stock picks or just trade the ETF for a momentum play.

Week
Change
Last
Close
YTDFundMost Recent Chart Pattern
8.76%$40.58-17.54%UltraShort 2x Oil and Gas ProShares (DUG)Triple bottom from 02/24/2014 to 03/11/2014
5.83%$26.67-2.74%DJIA short 2x ProShares (DXD)Pipe top from 04/07/2014 to 04/14/2014
5.78%$16.94-21.72%UltraShort 2x Technology ProShares (REW)Horn bottom from 03/17/2014 to 03/31/2014
5.12%$16.21-6.95%UltraShort 2x Financials ProShares (SKF)Pipe top from 04/07/2014 to 04/14/2014
5.02%$26.34-11.19%S and P short 2x ProShares (SDS)Pipe top from 04/07/2014 to 04/14/2014
4.67%$13.46-33.53%UltraShort 2x Semiconductor ProShares (SSG)Pipe bottom from 01/13/2014 to 01/21/2014
4.46%$29.29-14.43%UltraShort 2x Basic Materials ProShares (SMN)Double Top, Adam and Adam from 03/13/2014 to 03/27/2014
4.15%$48.96-18.35%Nasdaq 100 short 2x ProShares (QID)Falling wedge from 04/10/2014 to 05/19/2014
3.76%$15.72-27.19%UltraShort 2x Real Estate ProShares (SRS)Double Top, Adam and Adam from 08/19/2013 to 09/03/2013
2.92%$25.76-1.34%DJIA short 1x ProShares (DOG)Broadening top, right-angled and descending from 07/03/2013 to 10/09/2013

Top

Below are the 10 worst performing ETFs over the past week out of 95 ETFs. These funds may represent companies or industries that are suffering. Avoid going long in those stocks or buying any stocks from those industries.

Week
Change
Last
Close
YTDFundMost Recent Chart Pattern
-6.37%$15.740.96%MSCI Italy Index (EWI)Rising wedge from 01/15/2014 to 03/13/2014
-5.95%$39.372.07%MSCI Spain Index (EWP)Double Top, Adam and Adam from 06/09/2014 to 06/19/2014
-5.88%$56.0017.50%MSCI Turkey Index (TUR)Triangle, symmetrical from 02/03/2014 to 03/13/2014
-5.74%$113.90-1.05%DJIA, long 2x Ultra Dow 30 ProShares (DDM)Pipe bottom from 04/07/2014 to 04/14/2014
-5.57%$28.30-10.89%MSCI Germany Index (EWG)Double Top, Adam and Adam from 06/06/2014 to 06/19/2014
-5.45%$27.225.34%PowerShares Dynamic Oil Services (PXJ)Head-and-shoulders top from 06/23/2014 to 07/17/2014
-5.16%$17.29-12.72%MSCI Austria Investable Mkt Index (EWO)Head-and-shoulders bottom from 03/03/2014 to 03/24/2014
-5.04%$111.148.37%S and P long 2x Ultra SP 500 ProShares (SSO)Pipe bottom from 04/07/2014 to 04/14/2014
-4.79%$71.3810.14%DJ US Oil Equip and services (IEZ)Double Top, Adam and Adam from 07/17/2014 to 07/24/2014
-4.55%$40.697.16%SPDR Utilities Select Sector (XLU)Double Top, Adam and Adam from 06/19/2014 to 06/30/2014

Top

Below are the top 10 exchange traded funds (ETF) with the best performance year to date out of 95 ETFs. Concentrate your individual stock picks from industries that are doing well, or trade the ETF for a momentum play.

YTD
Change
Last
Close
FundMost Recent Chart Pattern
17.54%$43.55PowerShares Dynamic Biotech and Genome (PBE)Triangle, symmetrical from 04/15/2014 to 05/08/2014
17.50%$56.00MSCI Turkey Index (TUR)Triangle, symmetrical from 02/03/2014 to 03/13/2014
16.82%$87.29iShares Cohen and Steers Realty Majors (ICF)Triangle, descending from 12/04/2013 to 01/02/2014
16.75%$80.15MSCI Thailand Invest Mkt Index (THD)Double Top, Eve and Eve from 04/17/2014 to 05/02/2014
15.49%$115.03Nasdaq 100 long 2x Ultra QQQ ProShares (QLD)Pipe bottom from 04/07/2014 to 04/14/2014
13.91%$48.33Market Vectors Semiconductor (SMH)Triple top from 07/03/2014 to 07/22/2014
13.31%$82.39iShares PHLX SOX Semiconductor Sector (SOXX)Triple top from 07/03/2014 to 07/22/2014
13.20%$60.12Market Vectors Pharmaceutical (PPH)Triangle, symmetrical from 07/03/2014 to 07/30/2014
11.91%$104.36iShares DJ US Healthcare Provider (IHF)Double Top, Adam and Adam from 03/21/2014 to 04/02/2014
11.30%$53.50Market Vectors Oil Services (OIH)Double Top, Eve and Adam from 07/01/2014 to 07/23/2014

Top

Below are the 10 worst performing ETFs year to date out of 95 ETFs. These represent the stocks or industries you will want to avoid buying or want to concentrate selling short.

YTD
Change
Last
Close
FundMost Recent Chart Pattern
-33.53%$13.46UltraShort 2x Semiconductor ProShares (SSG)Pipe bottom from 01/13/2014 to 01/21/2014
-27.19%$15.72UltraShort 2x Real Estate ProShares (SRS)Double Top, Adam and Adam from 08/19/2013 to 09/03/2013
-21.72%$16.94UltraShort 2x Technology ProShares (REW)Horn bottom from 03/17/2014 to 03/31/2014
-18.35%$48.96Nasdaq 100 short 2x ProShares (QID)Falling wedge from 04/10/2014 to 05/19/2014
-17.54%$40.58UltraShort 2x Oil and Gas ProShares (DUG)Triple bottom from 02/24/2014 to 03/11/2014
-14.43%$29.29UltraShort 2x Basic Materials ProShares (SMN)Double Top, Adam and Adam from 03/13/2014 to 03/27/2014
-12.72%$17.29MSCI Austria Investable Mkt Index (EWO)Head-and-shoulders bottom from 03/03/2014 to 03/24/2014
-11.19%$26.34S and P short 2x ProShares (SDS)Pipe top from 04/07/2014 to 04/14/2014
-10.89%$28.30MSCI Germany Index (EWG)Double Top, Adam and Adam from 06/06/2014 to 06/19/2014
-10.48%$22.22DJ US Home construction index fund (ITB)Flag from 05/28/2014 to 06/04/2014

Top

Below is a list of market index performance over the past week.

Week
Change
Last
Close
YTDIndexMost Recent Chart Pattern
-1.92%8,059.538.90%DJ 20 Transportation (^DJT)Diamond top from 06/02/2014 to 06/27/2014
-2.02%4,352.844.22%Nasdaq Composite (^IXIC)Triangle, symmetrical from 04/24/2014 to 05/21/2014
-2.52%1,920.213.89%S and P 500 (^GSPC)Head-and-shoulders top from 11/18/2013 to 12/09/2013
-2.85%16,429.47-0.89%DJ 30 Industrials (^DJI)Channel from 05/27/2014 to 07/25/2014
-4.70%532.018.45%DJ 15 Utilities (^DJU)Head-and-shoulders top from 04/17/2014 to 05/07/2014

Top

Below are the top 10 country exchange traded funds with the best performance this past week out of 26 ETFs. These may highlight emerging markets that are ready to soar.

Week
Change
Last
Close
YTDFundMost Recent Chart Pattern
-0.07%$80.1516.75%MSCI Thailand Invest Mkt Index (THD)Double Top, Eve and Eve from 04/17/2014 to 05/02/2014
-0.48%$52.027.43%MSCI Israel Cap Invest Mt Index (EIS)Triangle, ascending from 04/21/2014 to 06/05/2014
-0.62%$15.920.63%MSCI Malaysia Index (EWM)Rectangle top from 05/08/2014 to 07/24/2014
-1.07%$13.925.69%MSCI Singapore Index (EWS)Triangle, symmetrical from 12/14/2012 to 02/08/2013
-1.14%$21.725.44%MSCI Hong Kong Index fund (EWH)Big W from 02/05/2014 to 03/20/2014
-1.79%$69.151.69%MSCI Mexico Investable Mkt idx (EWW)Scallop, ascending and inverted from 03/14/2014 to 04/25/2014
-1.87%$65.611.45%MSCI South Korea Index (EWY)Triple top from 05/09/2013 to 06/03/2013
-2.02%$50.047.08%MSCI Pacific ex-Japan Index fund (EPP)Broadening top from 07/17/2013 to 09/11/2013
-2.19%$69.547.83%MSCI South Africa Index (EZA)Double Top, Adam and Adam from 09/18/2013 to 10/22/2013
-2.30%$43.794.77%MSCI Emerging Markets Index fund (EEM)Double Top, Adam and Adam from 07/23/2013 to 08/14/2013

Top

Below are the top 10 country exchange traded funds with the best performance year to date out of 26 ETFs. Finding several countries from a similar region that is performing well helps identify which international mutual fund or ETF may continue to do well in the future.

YTD
Change
Last
Close
FundMost Recent Chart Pattern
17.50%$56.00MSCI Turkey Index (TUR)Triangle, symmetrical from 02/03/2014 to 03/13/2014
16.75%$80.15MSCI Thailand Invest Mkt Index (THD)Double Top, Eve and Eve from 04/17/2014 to 05/02/2014
8.54%$31.65MSCI Canada Index (EWC)Double Bottom, Adam and Adam from 06/24/2013 to 07/05/2013
8.35%$48.41MSCI Brazil Index fund (EWZ)Scallop, ascending from 09/20/2013 to 10/16/2013
7.83%$69.54MSCI South Africa Index (EZA)Double Top, Adam and Adam from 09/18/2013 to 10/22/2013
7.67%$26.24MSCI Australia Index fund (EWA)Rectangle top from 04/09/2014 to 07/17/2014
7.63%$15.52MSCI Taiwan Index (EWT)Head-and-shoulders bottom from 01/09/2014 to 02/25/2014
7.43%$52.02MSCI Israel Cap Invest Mt Index (EIS)Triangle, ascending from 04/21/2014 to 06/05/2014
7.08%$50.04MSCI Pacific ex-Japan Index fund (EPP)Broadening top from 07/17/2013 to 09/11/2013
5.69%$13.92MSCI Singapore Index (EWS)Triangle, symmetrical from 12/14/2012 to 02/08/2013

 

-- Thomas Bulkowski

Top


Tuesday 8/5/14. Trading Tuesday: Dow

The index climbed by 0.5% or 75.91 points. Since 10/01/1928 the index made 884 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 483 occasions.
     Average loss was -0.7% on 401 occasions.
Expect the index to close higher 54.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 78/120 or 65.0% of the time.
     The prediction of the index closing lower has been right 21/39 or 53.8% of the time.

Since I post this entry the night before, be sure to check how the futures are trading before the market opens. Large plus or minus numbers in the futures often sets the opening direction up or down, respectively.

Picture of the Dow industrials on the 5 minute scale.

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

Here's an interesting twist on day trading. This chart pattern, shown as AB is a confirmed Eve & Adam double bottom. This confirms as a valid chart pattern when the index closes above the red line. That happens at C.

It's unusual because it spans two days and not just one. The index is throwing back to the breakout price.

What this suggests for tomorrow is that the Dow may continue a bit lower to tag the breakout price and then move up. Will it also close higher? That would be my guess and the probabilities also suggest a higher close.

All of this is just a guess, as I said, but it will be interesting to see if this two-day pattern acts as it is supposed to.

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,004.81    
 Weekly S2  16,068.21  63.40   
 Monthly S1  16,287.05  218.83   
 Weekly S1  16,318.75  31.70   
 Daily S2  16,388.55  69.80   
 Low  16,447.20  58.65   
 Daily S1  16,478.91  31.71   
 Open  16,493.72  14.81   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  16,504.13  10.40   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  16,521.71  17.59   
 Daily Pivot  16,537.57  15.86   
 38.2% Down from Intraday High  16,539.29  1.73   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  16,569.28  29.98   
 High  16,596.22  26.94   
 Daily R1  16,627.93  31.71   
 Daily R2  16,686.59  58.65   
 Weekly Pivot  16,687.60  1.02   Yes! The Weekly Pivot is close to the Daily R2.
 Monthly Pivot  16,719.30  31.70   
 Weekly R1  16,938.14  218.83   
 Monthly R1  17,001.54  63.40   
 Weekly R2  17,306.99  305.46   
 Monthly R2  17,433.79  126.80   

Monday 8/4/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

As the below tables will confirm, the Dow industrials dropped 467 points this week, or almost 3%. That's huge. Will the drop continue?

Maybe. The utility index says not so fast.

Look at the figure. This shows a measured move down. The first leg, AB, nearly matches the CD move. That's the way it's supposed to work.

I've found that after a measured move down, the stock will recover to the corrective phase, BC. Thus, I expect the index to move higher in the coming days, at least back into the BC area.

 

 

Top

A Brief Look Back

Picture of a flower from my garden.

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 22.02 points.
Tuesday: Down 70.48 points.
Wednesday: Down 31.75 points.
Thursday: Down 317.06 points.
Friday: Down 69.93 points.

For the Week...

The Dow industrials were down 467.2 points or 2.8%.
The Nasdaq composite was down 96.92 points or 2.2%.
The S&P 500 index was down 53.19 points or 2.7%.

Year to Date...

Dow Industrials
     3.8% down from the high of 17,151.56 on 07/17/2014.
     7.5% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     3.0% down from the high of 4,485.93 on 07/03/2014.
     10.3% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     3.3% down from the high of 1,991.39 on 07/24/2014.
     10.8% up from the low of 1,737.92 on 02/05/2014.

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
Factory orders10:00 TD+Durable/non-durable goods orders w/factory inventories.
Trade balance8:30 WC+Signals balance of exports & imports.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Consumer credit3:00 ThD-Measures auto, credit card and other debt.
Productivity & costs8:30 FD+Cost of producing a unit of output.
Wholesale inventories10:00 FD-Wholesale sales and inventory statistics.

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 08/01/2014, the CPI had:

23 bearish patterns,
1 bullish patterns,
97 patterns waiting for breakout.
The CPI signal is 4.2%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 1 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  16,357  16,425  16,505  16,573  16,653 
Weekly  16,043  16,268  16,662  16,888  17,282 
Monthly  15,980  16,236  16,694  16,951  17,408 
S&P500 (^GSPC): Daily  1,905  1,915  1,926  1,936  1,947 
Weekly  1,874  1,899  1,942  1,968  2,011 
Monthly  1,869  1,897  1,944  1,972  2,019 
Nasdaq (^IXIC): Daily  4,293  4,323  4,354  4,384  4,415 
Weekly  4,232  4,292  4,384  4,444  4,536 
Monthly  4,226  4,289  4,388  4,451  4,549 
  • 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 16.6%   Expect a reversal soon. 
 2 months down 11.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.8%   The trend may continue. 
 2 months down 11.4%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 30.6%   The trend may continue. 
 2 months down 15.9%   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 indices, 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
27Head-and-shoulders top
16Triangle, symmetrical
14Double Top, Adam and Adam
11Double Top, Eve and Adam
9Channel
8Scallop, ascending and inverted
7Rectangle top
7Double Top, Eve and Eve
7Triangle, ascending
7Triple 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, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The industries I follow were the best (rank 1) and worst performing.

This WeekLast Week
1. Petroleum (Producing)1. Petroleum (Producing)
2. Natural Gas (Distributor)2. Shoe
3. Shoe3. Natural Gas (Distributor)
4. Semiconductor Cap Equip.4. Petroleum (Integrated)
5. Petroleum (Integrated)5. Cement and Aggregates
50. Furn/Home Furnishings50. Toiletries/Cosmetics
51. E-Commerce51. E-Commerce
52. Retail Building Supply52. Homebuilding
53. Homebuilding53. Retail Building Supply
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

Top


Saturday 8/2/14. Recovering from Disappointing Earnings

One of the important sections in what I call my "green book", Encyclopedia of Chart Patterns, Second Edition, is the one of event patterns.

It covers ten event patterns and it's located at the end of the book. One is relevant to this earnings season: Bad earnings surprises (pg 855).

Table 56.5 shows a frequency distribution of days to the ultimate low. In other words, it tells when price is likely to hit bottom. Almost half of all stocks (47%) will bottom in less than a week after a poor earnings announcement. In two weeks, 60% of them will be on the road to recovery.

The point of this is that as bad as the decline in the market has been, it's just a temporary setback. I'm looking for good stocks to buy on the cheap.

-- Thomas Bulkowski

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.