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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

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Busted
Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 10/20/2017
23,329 165.59 0.7%
9,972 85.59 0.9%
749 1.35 0.2%
6,629 23.98 0.4%
2,575 13.11 0.5%
YTD
18.0%
10.3%
13.6%
23.1%
15.0%
Tom's Targets    Overview: 10/16/2017
23,700 or 22,700 by 11/01/2017
10,300 or 9,700 by 11/01/2017
775 or 725 by 11/01/2017
6,700 or 6,500 by 11/01/2017
2,625 or 2,525 by 11/01/2017

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August 2017 Headlines


Archives


Thursday 8/31/17. Intraday Market Direction: Nasdaq

The index climbed by 1.1% or 66.42 points. Since 02/05/1971 the index made 173 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 111 occasions.
     Average loss was -1.0% on 62 occasions.
Expect the index to close higher 64.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 134/236 or 56.8% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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 nearly parallel red lines show an up-sloping channel. The slope of it is too steep for it to last much longer. Indeed, drawing it carefully sees the index already piercing the lower trendline. That suggests the upward trend is going to change.

It's possible that the index will go sideways for a time before resuming its upward move. The slope of the new upward trend might be similar to what's shown on the chart, but often it's a bit less, so that price climbs less quickly.

I also highlighted in green a busted symmetrical triangle. The triangle busts out downward but quickly reverses to make a nice upward move.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,051.80    
 Weekly S2  6,153.21  101.41   
 Monthly S1  6,210.05  56.84   
 Weekly S1  6,260.76  50.71   
 Daily S2  6,277.88  17.12   
 Weekly Pivot  6,284.74  6.86   Yes! The Weekly Pivot is close to the Daily S2.
 Low  6,303.57  18.83   
 Open  6,308.68  5.11   Yes! The Open is close to the Low.
 Daily S1  6,323.10  14.42   
 61.8% Down from Intraday High  6,330.65  7.56   
 Monthly Pivot  6,335.45  4.79   Yes! The Monthly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  6,339.02  3.57   Yes! The 50% Down from Intraday High is close to the Monthly Pivot.
 38.2% Down from Intraday High  6,347.39  8.37   
 Daily Pivot  6,348.78  1.40   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  6,368.31  19.53   
 High  6,374.47  6.16   Yes! The High is close to the Close.
 Weekly R1  6,392.29  17.82   
 Daily R1  6,394.00  1.71   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2  6,416.27  22.27   
 Daily R2  6,419.68  3.41   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1  6,493.70  74.02   
 Monthly R2  6,619.10  125.39   

Wednesday 8/30/17. A Look At Indicators

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.

The indicator has turned green, bullish, as the vertical green bar on the far right of the chart shows.

The thin blue line at the bottom of the chart shows it curling downward, suggesting weakness in the coming days. That would change if the markets make a strong push upward.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 26% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 29%.
The fewest was 14% on 12/09/2016.
And the most was 36% on 11/03/2016.
Shown as a blue line on the above chart...
The 502 stocks in my database are down an average of 15% from their yearly high.
A week ago, the average was 16%.
The peak was 9% on 12/09/2016.
And the bottom was 18% on 11/03/2016.

The red line made a substantial recovery over the past week as the chart shows and the text confirms. The blue line also recovered by improving one percentage point.

Both of those events are bullish and it speaks to the broader market participating in a recovery.

We'll have to wait and see if the upward trend continues. I have my doubts.

-- Thomas Bulkowski

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Tuesday 8/29/17. Intraday Market Direction: Dow

The index dropped by 0.0% or -5.27 points. Since 10/01/1928 the index made 1269 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 674 occasions.
     Average loss was -0.6% on 595 occasions.
Expect the index to close higher 53.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 143/244 or 58.6% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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 drew a red support line beneath price action. It seems to be robust enough to support price going forward (but what do I know?).

The cyan line shows the top of a rectangle bottom. The index could rise but it'll hit overhead resistance setup by a down-sloping trendline. I show that line here in green. Don't be fooled by the convergence of the green and cyan lines. The strength of that resistance isn't additive, I think.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  21,144.90    
 Weekly S2  21,461.37  316.47   
 Monthly S1  21,476.65  15.28   
 Weekly S1  21,634.88  158.23   
 Daily S2  21,719.06  84.18   
 Daily S1  21,763.73  44.67   
 Low  21,767.94  4.21   Yes! The Low is close to the Daily S1.
 Weekly Pivot  21,773.86  5.92   Yes! The Weekly Pivot is close to the Low.
 61.8% Down from Intraday High  21,803.68  29.82   
 Close  21,808.40  4.72   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  21,812.61  4.21   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  21,814.71  2.11   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  21,825.75  11.04   
 Monthly Pivot  21,827.88  2.13   Yes! The Monthly Pivot is close to the 38.2% Down from Intraday High.
 Open  21,832.50  4.62   Yes! The Open is close to the Monthly Pivot.
 Daily R1  21,857.28  24.78   
 High  21,861.49  4.21   Yes! The High is close to the Daily R1.
 Daily R2  21,906.16  44.67   
 Weekly R1  21,947.37  41.21   
 Weekly R2  22,086.35  138.97   
 Monthly R1  22,159.63  73.28   
 Monthly R2  22,510.86  351.23   

Monday 8/28/17. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

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

The chart shows a head-and-shoulders bottom several months ago. I have labeled that L (left shoulder), Head, and R (right shoulder). The chart pattern confirms as a valid one when the index closes above the green line.

In this case, a traditional neckline would slope upward, so I use the horizontal line, connecting the right armpit, as the buy signal.

More recent is a channel, which I show bounded by two red lines.

Notice how the index has bounced off the bottom of the channel at A. That bounce suggests the index will travel to the top of the channel, but that is not a guarantee.

As the chart shows in its bumpy decline from the July peak, the move higher is likely to be a bumpy one, too.

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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 29.24 points.
Tuesday: Up 196.14 points.
Wednesday: Down 87.8 points.
Thursday: Down 28.69 points.
Friday: Up 30.27 points.

For the Week...

The Dow industrials were up 139.16 points or 0.6%.
The Nasdaq composite was up 49.11 points or 0.8%.
The S&P 500 index was up 17.5 points or 0.7%.

Year to Date...

Dow Industrials
     1.6% down from the high of 22,179.11 on 08/08/2017.
     10.9% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     3.0% down from the high of 6,460.84 on 07/27/2017.
     16.1% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     1.9% down from the high of 2,490.87 on 08/08/2017.
     8.8% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/25/2017, the CPI had:

11 bearish patterns,
18 bullish patterns,
413 patterns waiting for breakout.
The CPI signal is 62.1%, which is neutral (between 35% and 65%).

The chart pattern indicator is bearish 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  21,750  21,782  21,844  21,876  21,938 
Weekly  21,463  21,638  21,776  21,951  22,088 
Monthly  21,147  21,480  21,830  22,163  22,513 
S&P500 (^GSPC): Daily  2,435  2,439  2,446  2,451  2,458 
Weekly  2,401  2,422  2,438  2,459  2,476 
Monthly  2,377  2,410  2,450  2,483  2,524 
Nasdaq (^IXIC): Daily  6,226  6,246  6,277  6,297  6,329 
Weekly  6,119  6,192  6,251  6,324  6,382 
Monthly  6,018  6,142  6,301  6,425  6,585 
  • 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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.2%   Expect a random direction. 
 1 month down 20.8%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 42.6%   Expect a random direction. 
 1 month down 21.4%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 45.3%   Expect a random direction. 
 1 month down 26.0%   The trend may continue. 

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.

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
16Triangle, symmetrical
12Head-and-shoulders top
9Double Top, Adam and Adam
8Triple top
8Double Bottom, Adam and Adam
7Dead-cat bounce
6Triangle, descending
5Head-and-shoulders bottom
4Pipe bottom
3Rectangle 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. Semiconductor1. Medical Supplies
2. Aerospace/Defense2. Semiconductor
3. Medical Supplies3. Semiconductor Cap Equip.
4. Semiconductor Cap Equip.4. Aerospace/Defense
5. Homebuilding5. Homebuilding
50. Retail Store50. Food Processing
51. Petroleum (Integrated)51. Advertising
52. Advertising52. Retail (Special Lines)
53. Furn/Home Furnishings53. Cement and Aggregates
54. Building Materials54. Petroleum (Integrated)
55. Food Processing55. Natural Gas (Diversified)
56. Petroleum (Producing)56. Petroleum (Producing)
57. Oilfield Svcs/Equipment57. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Friday 8/25/17. Pattern Trading Setups for the Weekend.

Go to Table.

You can find setups based on a Fibonacci retrace by clicking on the link.

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 601 stocks searched, or 3.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 8 bullish chart patterns this week and 2 bearish ones with any remaining (6) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ANFDouble Bottom, Eve and Eve      07/12/201708/21/2017Apparel
FBFalling wedge      07/27/201708/24/2017E-Commerce
GILDDouble Bottom, Adam and Adam      08/11/201708/18/2017Biotechnology
GXPTriangle, symmetrical      08/10/201708/23/2017Electric Utility (Central)
IPARTriangle, symmetrical      07/24/201708/24/2017Toiletries/Cosmetics
KLICFalling wedge      08/04/201708/24/2017Semiconductor Cap Equip.
LZBDead-cat bounce      08/23/201708/23/2017Furn/Home Furnishings
MCHXRectangle top      05/10/201708/24/2017Advertising
MSFTDiamond top      08/04/201708/24/2017Computer Software and Svcs
PANWDiamond top      08/14/201708/24/2017Computer Software and Svcs
PICOTriangle, descending      05/31/201708/24/2017Diversified Co.
RMBSTriangle, symmetrical      07/24/201708/23/2017Semiconductor Cap Equip.
COLFlag      08/08/201708/22/2017Aerospace/Defense
SEICTriangle, symmetrical      07/26/201708/24/2017IT Services
STMPPennant      08/07/201708/22/2017Internet
VRSNDouble Bottom, Adam and Adam      08/11/201708/18/2017Internet
ICFDouble Bottom, Adam and Adam      08/11/201708/18/2017Long ETFs
IBBDouble Bottom, Adam and Adam      08/11/201708/21/2017Biotechnology

 

Weekly screen for chart patterns ending between 08/17/2017 and 08/24/2017. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Abercrombie and Fitch Co. (ANF)
Industry: Apparel
Industry RS rank: 40 out of 56
Stock RS rank: 411 out of 593
8/24/17 close: $11.25
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $9.84 or 12.5% below the close.
Change YTD: -6.25%
Volume: 20,225,200 shares. 3 month avg: 4,054,326 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Bottom, Eve and Eve reversal pattern from 07/12/2017 to 08/21/2017
WARNING: A dead-cat bounce occurred on 07/10/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 10/09/2017 and a 38% chance by 01/08/2018.
Breakout is upward 100% of the time.
Average rise: 40%.
Break-even failure rate: 4%.
Throwbacks occur 55% of the time.
Price hits measure rule target 67% of the time.

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Facebook (FB)
Industry: E-Commerce
Industry RS rank: 22 out of 56
Stock RS rank: 48 out of 593
8/24/17 close: $167.74
1 Month avg volatility: $2.66. Volatility stop (for upward breakout): $161.08 or 4.0% below the close.
Change YTD: 45.80%
Volume: 13,759,600 shares. 3 month avg: 17,793,091 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Falling wedge from 07/27/2017 to 08/24/2017
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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Gilead Sciences Inc (GILD)
Industry: Biotechnology
Industry RS rank: 12 out of 56
Stock RS rank: 209 out of 593
8/24/17 close: $74.02
1 Month avg volatility: $1.01. Volatility stop (for upward breakout): $71.63 or 3.2% below the close.
Change YTD: 3.37%
Volume: 4,769,400 shares. 3 month avg: 8,624,288 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/11/2017 to 08/18/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Great Plains Energy (GXP)
Industry: Electric Utility (Central)
Industry RS rank: 13 out of 56
Stock RS rank: 149 out of 593
8/24/17 close: $31.45
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $30.62 or 2.7% below the close.
Change YTD: 14.99%
Volume: 964,600 shares. 3 month avg: 2,581,674 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/10/2017 to 08/23/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Inter Parfums Inc. (IPAR)
Industry: Toiletries/Cosmetics
Industry RS rank: 26 out of 56
Stock RS rank: 203 out of 593
8/24/17 close: $38.60
1 Month avg volatility: $0.98. Volatility stop (for upward breakout): $36.50 or 5.5% below the close.
Change YTD: 17.86%
Volume: 33,200 shares. 3 month avg: 87,203 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/24/2017 to 08/24/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Kulicke and Soffa (KLIC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 56
Stock RS rank: 461 out of 593
8/24/17 close: $18.59
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $17.02 or 8.5% below the close.
Change YTD: 16.55%
Volume: 308,500 shares. 3 month avg: 604,674 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Falling wedge from 08/04/2017 to 08/24/2017
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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La-Z-Boy Inc (LZB)
Industry: Furn/Home Furnishings
Industry RS rank: 51 out of 56
Stock RS rank: 506 out of 593
8/24/17 close: $23.55
1 Month avg volatility: $0.82. Volatility stop (for downward breakout): $26.84 or 14.0% above the close.
Change YTD: -24.15%
Volume: 1,936,100 shares. 3 month avg: 611,034 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/23/2017 to 08/23/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 53 out of 56
Stock RS rank: 196 out of 593
8/24/17 close: $3.02
1 Month avg volatility: $0.07. Volatility stop (for upward breakout): $2.84 or 6.1% below the close.
Change YTD: 13.96%
Volume: 25,700 shares. 3 month avg: 158,249 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 05/10/2017 to 08/24/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Microsoft Corp (MSFT)
Industry: Computer Software and Svcs
Industry RS rank: 9 out of 56
Stock RS rank: 121 out of 593
8/24/17 close: $72.69
1 Month avg volatility: $0.93. Volatility stop (for downward breakout): $74.71 or 2.8% above the close.
Change YTD: 16.98%
Volume: 16,295,300 shares. 3 month avg: 23,987,660 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Diamond top reversal pattern from 08/04/2017 to 08/24/2017
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Palto Alto Networks Inc (PANW)
Industry: Computer Software and Svcs
Industry RS rank: 9 out of 56
Stock RS rank: 492 out of 593
8/24/17 close: $131.74
1 Month avg volatility: $2.71. Volatility stop (for downward breakout): $137.95 or 4.7% above the close.
Change YTD: 5.35%
Volume: 591,900 shares. 3 month avg: 1,559,634 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Diamond top reversal pattern from 08/14/2017 to 08/24/2017
WARNING: A dead-cat bounce occurred on 03/01/2017. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/30/2017.
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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PICO Holdings (PICO)
Industry: Diversified Co.
Industry RS rank: 20 out of 56
Stock RS rank: 94 out of 593
8/24/17 close: $16.20
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $17.05 or 5.3% above the close.
Change YTD: 6.93%
Volume: 71,600 shares. 3 month avg: 97,386 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, descending reversal pattern from 05/31/2017 to 08/24/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Rambus Inc (RMBS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 56
Stock RS rank: 298 out of 593
8/24/17 close: $12.75
1 Month avg volatility: $0.17. Volatility stop (for upward breakout): $12.35 or 3.2% below the close.
Change YTD: -7.41%
Volume: 340,500 shares. 3 month avg: 819,834 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/24/2017 to 08/23/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Rockwell Collins (COL)
Industry: Aerospace/Defense
Industry RS rank: 2 out of 56
Stock RS rank: 14 out of 593
8/24/17 close: $129.28
1 Month avg volatility: $3.09. Volatility stop (for upward breakout): $120.39 or 6.9% below the close.
Change YTD: 39.37%
Volume: 4,257,500 shares. 3 month avg: 1,863,923 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 08/08/2017 to 08/22/2017
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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SEI Investments Co (SEIC)
Industry: IT Services
Industry RS rank: 24 out of 56
Stock RS rank: 125 out of 593
8/24/17 close: $57.03
1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $54.96 or 3.6% below the close.
Change YTD: 15.54%
Volume: 303,300 shares. 3 month avg: 510,902 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/26/2017 to 08/24/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Stamps.com (STMP)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 8 out of 56
Stock RS rank: 10 out of 593
8/24/17 close: $194.90
1 Month avg volatility: $8.12. Volatility stop (for upward breakout): $173.96 or 10.7% below the close.
Change YTD: 70.00%
Volume: 782,800 shares. 3 month avg: 503,992 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pennant continuation pattern from 08/07/2017 to 08/22/2017
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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Verisign (VRSN)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 8 out of 56
Stock RS rank: 47 out of 593
8/24/17 close: $101.50
1 Month avg volatility: $1.43. Volatility stop (for upward breakout): $97.45 or 4.0% below the close.
Change YTD: 33.43%
Volume: 583,400 shares. 3 month avg: 739,431 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/11/2017 to 08/18/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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iShares Cohen and Steers Realty Majors (ICF)
Industry: Long ETFs
Industry RS rank: 18 out of 56
Stock RS rank: 333 out of 593
8/24/17 close: $101.43
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $99.19 or 2.2% below the close.
Change YTD: 1.80%
Volume: 132,700 shares. 3 month avg: 149,537 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/11/2017 to 08/18/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Nasdaq Biotechnology Index (IBB)
Industry: Biotechnology
Industry RS rank: 12 out of 56
Stock RS rank: 204 out of 593
8/24/17 close: $312.87
1 Month avg volatility: $4.49. Volatility stop (for upward breakout): $299.77 or 4.2% below the close.
Change YTD: 17.90%
Volume: 661,600 shares. 3 month avg: 1,175,734 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/11/2017 to 08/21/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Thursday 8/24/17. Intraday Market Direction: Nasdaq

The index dropped by -0.3% or -19.07 points. Since 02/05/1971 the index made 492 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 264 occasions.
     Average loss was -0.9% on 228 occasions.
Expect the index to close higher 53.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 134/235 or 57.0% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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.

Two head-and-shoulders bottoms appear on the chart (LS=left shoulder, RS=right shoulder). Both were tradeable and made money if you were fortunate enough to participate in them and trade them properly. The one on the left was harder to make a profit because it confirmed as a valid chart pattern only after price gapped up the next day. That didn't leave a lot of room for profit.

The two red lines are necklines associated with the head-and-shoulders patterns. A close above the line is the traditional confirmation signal.

Now, an unconfirmed double top appears at AB. It'll confirm when price closes below the green line. That hasn't happened yet. If it does, then I'd say the index will close lower for the day. But there's also a chance that the index will rise right at the open, leaving the pattern unconfirmed and thus just squiggles on the price chart.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,043.42    
 Weekly S2  6,100.94  57.52   
 Monthly S1  6,160.91  59.98   
 Weekly S1  6,189.67  28.76   
 Daily S2  6,249.70  60.03   
 Low  6,263.29  13.59   
 Open  6,263.47  0.18   Yes! The Open is close to the Low.
 Daily S1  6,264.06  0.59   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  6,273.96  9.91   
 50% Down from Intraday High  6,277.26  3.30   
 Daily Pivot  6,277.64  0.38   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  6,278.41  0.77   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  6,280.56  2.15   Yes! The 38.2% Down from Intraday High is close to the Close.
 Weekly Pivot  6,282.12  1.56   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 High  6,291.23  9.11   
 Daily R1  6,292.00  0.77   Yes! The Daily R1 is close to the High.
 Daily R2  6,305.58  13.59   
 Monthly Pivot  6,310.88  5.29   
 Weekly R1  6,370.85  59.98   
 Monthly R1  6,428.37  57.52   
 Weekly R2  6,463.30  34.92   
 Monthly R2  6,578.34  115.04   

Wednesday 8/23/17. A Look At Indicators

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.

Today's big move in the Dow and other indices caused the chart pattern indicator to show some life.

The latest signal has turned green, as the vertical bar on the far right shows. How long it'll remain green will depend on what happens in the coming 7 days.

A sharp move down will cause the bar to disappear. That's a side-effect of how the indicator works. Regardless, the chart is bullish.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 29% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 24%.
The fewest was 14% on 12/09/2016.
And the most was 36% on 11/03/2016.
Shown as a blue line on the above chart...
The 503 stocks in my database are down an average of 16% from their yearly high.
A week ago, the average was 14%.
The peak was 9% on 12/09/2016.
And the bottom was 18% on 11/03/2016.

As the charts show, both the red and blue lines tumbled during this past week, corresponding to the bearish CPI chart at the time. The size of the drop, especially in the red line, startled me (24% changed to 29% of stocks in bear market territory).

Notice how the line didn't budge today. I'm not sure why. It could be a measure of how I built the indicators and when they report (the red line talks about "Monday" and not "Tuesday," which has me puzzled).

Maybe this chart has lag, so that today's good news will appear next week. Clearly this chart is bearish and the prior one is bullish. One of them is right.

-- Thomas Bulkowski

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Tuesday 8/22/17. Intraday Market Direction: Dow

The index climbed by 0.1% or 29.24 points. Since 10/01/1928 the index made 1313 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 675 occasions.
     Average loss was -0.6% on 638 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 142/243 or 58.4% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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.

This is an interesting pic. Why?

Because it shows a head-and-shoulders bottom chart pattern. That's why. Maybe not as interesting as attempting to be blinded by the sun...

I tried to take a picture of the eclipse on my camera. They said to put the filter over the lens so you wouldn't burn out the sensors. So I did. Took a picture and the flash went off. Didn't expect that. Took a few more snaps. Same result. And all of them were blurry and may or may not have shown the sun. Why? Because I didn't want to look through the viewfinder to line it up with the sun.

Returning to our head-and-shoulders story, the index has closed above the neckline, signaling a valid chart pattern. It suggests a rise to, oh, 21,825. Maybe we'll see it tomorrow (Tuesday) or maybe it'll take longer. My guess is you'll see a throwback before a continued trend higher.

$ $ $

I released version 6.3 of Patternz today. About five minutes later, I found a bug. Fixed that and released a new version, 6.4. This version has some important bug fixes and a new form: Relative strength, so you can gauge how well your stocks are behaving vs other stocks and with themselves.

So if you happened to have downloaded 6.3 in the half hour or so while I was working on a fix, download the new version. Version 6.3 reports 100% losses on the new relative strength form when quotes for the date are not available. Not bad if you're short...

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  21,076.70    
 Weekly S2  21,366.28  289.59   
 Monthly S1  21,390.22  23.94   
 Weekly S1  21,535.02  144.79   
 Daily S2  21,555.88  20.86   
 Low  21,600.34  44.46   
 Daily S1  21,629.81  29.47   
 61.8% Down from Intraday High  21,645.57  15.76   
 50% Down from Intraday High  21,659.54  13.97   
 Open  21,671.36  11.82   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  21,673.51  2.15   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  21,674.28  0.77   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  21,703.75  29.47   
 High  21,718.74  14.99   
 Daily R1  21,748.21  29.47   
 Monthly Pivot  21,784.67  36.45   
 Daily R2  21,792.68  8.01   Yes! The Daily R2 is close to the Monthly Pivot.
 Weekly Pivot  21,810.36  17.69   
 Weekly R1  21,979.10  168.73   
 Monthly R1  22,098.19  119.10   
 Weekly R2  22,254.44  156.25   
 Monthly R2  22,492.64  238.19   

Monday 8/21/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

Shown is the Dow industrials on the daily scale.

One of the questions I've been asking is how far will the indices drop?

Unfortunately, I don't know the answer. The 2017 prediction makes me nervous.

The chart shows what I call an ugly double top. As it applies to the indices, it's when the two peaks don't line up. In this case, peak B is well below peak A.

The pattern confirms as a valid one when price closes below the valley between the two peaks (below the red line).

I also show what I believe is a support area, highlighted by the two green lines. The support area is between those two lines, but there's a bit of support just above the top line, too, formed by the horizontal price movement in July (circled).

Maybe we'll see the indices turn around shortly.

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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 135.39 points.
Tuesday: Up 5.28 points.
Wednesday: Up 25.88 points.
Thursday: Down 274.14 points.
Friday: Down 76.22 points.

For the Week...

The Dow industrials were down 183.81 points or 0.8%.
The Nasdaq composite was down 40.03 points or 0.6%.
The S&P 500 index was down 15.77 points or 0.6%.

Year to Date...

Dow Industrials
     2.3% down from the high of 22,179.11 on 08/08/2017.
     10.1% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     3.8% down from the high of 6,460.84 on 07/27/2017.
     15.2% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     2.6% down from the high of 2,490.87 on 08/08/2017.
     8.0% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/18/2017, the CPI had:

26 bearish patterns,
9 bullish patterns,
280 patterns waiting for breakout.
The CPI signal is 25.7%, which is bearish (<= 35%).

The chart pattern indicator is bearish 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  21,551  21,613  21,703  21,765  21,855 
Weekly  21,357  21,516  21,801  21,960  22,245 
Monthly  21,067  21,371  21,775  22,079  22,483 
S&P500 (^GSPC): Daily  2,409  2,417  2,429  2,437  2,448 
Weekly  2,386  2,406  2,440  2,460  2,495 
Monthly  2,376  2,401  2,446  2,471  2,516 
Nasdaq (^IXIC): Daily  6,161  6,189  6,221  6,249  6,282 
Weekly  6,080  6,148  6,261  6,330  6,443 
Monthly  6,023  6,120  6,290  6,387  6,558 
  • 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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 16.0%   Expect a reversal soon. 
 1 month down 20.8%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 14.8%   Expect a reversal soon. 
 1 month down 21.4%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 4 weeks down 4.0%   Expect a reversal soon. 
 1 month down 26.0%   The trend may continue. 

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.

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
19Triangle, symmetrical
14Head-and-shoulders top
8Double Top, Adam and Adam
8Triple top
7Double Bottom, Adam and Adam
6Triangle, descending
6Dead-cat bounce
5Rising wedge
5Double Top, Eve and Adam
5Pipe 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, 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. Medical Supplies1. Aerospace/Defense
2. Semiconductor2. Homebuilding
3. Semiconductor Cap Equip.3. Medical Supplies
4. Aerospace/Defense4. Semiconductor Cap Equip.
5. Homebuilding5. Internet
50. Food Processing50. Advertising
51. Advertising51. Short ETFs
52. Retail (Special Lines)52. Petroleum (Integrated)
53. Cement and Aggregates53. Retail (Special Lines)
54. Petroleum (Integrated)54. Natural Gas (Diversified)
55. Natural Gas (Diversified)55. Cement and Aggregates
56. Petroleum (Producing)56. Petroleum (Producing)
57. Oilfield Svcs/Equipment57. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Friday 8/18/17. Pattern Trading Setups for the Weekend.

Go to Table.

You can find setups based on a Fibonacci retrace by clicking on the link.

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 601 stocks searched, or 2.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 2 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 4 bullish chart patterns this week and 6 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
BRKSPipe bottom      07/31/201708/07/2017Semiconductor Cap Equip.
^DJTBroadening top, right-angled and ascending      07/31/201708/17/2017None
HONHead-and-shoulders top      07/27/201708/14/2017Aerospace/Defense
LRCXPipe bottom      07/31/201708/07/2017Semiconductor Cap Equip.
LANCHead-and-shoulders top      07/05/201708/16/2017Food Processing
LLYTriangle, descending      07/26/201708/15/2017Drug
MCHXRectangle top      05/10/201708/17/2017Advertising
MUDouble Bottom, Adam and Adam      08/04/201708/11/2017Semiconductor
PICOTriangle, descending      05/31/201708/17/2017Diversified Co.
PORRising wedge      07/21/201708/17/2017Electric Utility (West)
STMPPennant      08/07/201708/17/2017Internet
SXITriangle, symmetrical      07/27/201708/17/2017Diversified Co.
IYKTriangle, symmetrical      06/20/201708/17/2017Household Products
EWGTriangle, descending      05/11/201708/17/2017Investment Co. (Foreign)
EWLTriangle, descending      05/11/201708/17/2017Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 08/10/2017 and 08/17/2017. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Brooks Automation (BRKS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 5 out of 56
Stock RS rank: 103 out of 593
8/17/17 close: $24.42
1 Month avg volatility: $0.87. Volatility stop (for upward breakout): $22.64 or 7.3% below the close.
Change YTD: 43.06%
Volume: 598,400 shares. 3 month avg: 715,471 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 07/31/2017 to 08/07/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
8/17/17 close: $9,152.45
1 Month avg volatility: $98.92. Volatility stop (for downward breakout): $9,560.98 or 4.5% above the close.
Change YTD: 1.20%
Volume: 62,509,300 shares. 3 month avg: 54,929,077 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 07/31/2017 to 08/17/2017
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Honeywell International Inc (HON)
Industry: Aerospace/Defense
Industry RS rank: 2 out of 56
Stock RS rank: 174 out of 593
8/17/17 close: $135.85
1 Month avg volatility: $1.61. Volatility stop (for downward breakout): $141.09 or 3.9% above the close.
Change YTD: 17.26%
Volume: 2,994,300 shares. 3 month avg: 2,484,966 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/27/2017 to 08/14/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Lam Research Corp (LRCX)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 5 out of 56
Stock RS rank: 16 out of 593
8/17/17 close: $158.46
1 Month avg volatility: $4.13. Volatility stop (for upward breakout): $150.04 or 5.3% below the close.
Change YTD: 49.87%
Volume: 1,921,300 shares. 3 month avg: 2,591,268 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 07/31/2017 to 08/07/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Lancaster Colony Corp (LANC)
Industry: Food Processing
Industry RS rank: 50 out of 56
Stock RS rank: 428 out of 593
8/17/17 close: $115.11
1 Month avg volatility: $2.28. Volatility stop (for downward breakout): $127.81 or 11.0% above the close.
Change YTD: -18.59%
Volume: 243,100 shares. 3 month avg: 121,478 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/05/2017 to 08/16/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Lilly, Eli and Co. (LLY)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 39 out of 56
Stock RS rank: 339 out of 593
8/17/17 close: $77.80
1 Month avg volatility: $1.14. Volatility stop (for downward breakout): $82.86 or 6.5% above the close.
Change YTD: 5.78%
Volume: 7,240,100 shares. 3 month avg: 3,724,255 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 07/26/2017 to 08/15/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 48 out of 56
Stock RS rank: 414 out of 593
8/17/17 close: $2.87
1 Month avg volatility: $0.08. Volatility stop (for upward breakout): $2.70 or 5.9% below the close.
Change YTD: 8.30%
Volume: 25,300 shares. 3 month avg: 161,091 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 05/10/2017 to 08/17/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Micron Technology (MU)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 24 out of 593
8/17/17 close: $29.62
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $27.82 or 6.1% below the close.
Change YTD: 35.13%
Volume: 25,933,600 shares. 3 month avg: 29,380,089 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/04/2017 to 08/11/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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PICO Holdings (PICO)
Industry: Diversified Co.
Industry RS rank: 15 out of 56
Stock RS rank: 94 out of 593
8/17/17 close: $16.25
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $17.27 or 6.3% above the close.
Change YTD: 7.26%
Volume: 191,900 shares. 3 month avg: 94,811 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, descending reversal pattern from 05/31/2017 to 08/17/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Portland General Electric Co. (POR)
Industry: Electric Utility (West)
Industry RS rank: 9 out of 56
Stock RS rank: 218 out of 593
8/17/17 close: $46.09
1 Month avg volatility: $0.55. Volatility stop (for downward breakout): $47.78 or 3.7% above the close.
Change YTD: 6.37%
Volume: 349,400 shares. 3 month avg: 580,311 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rising wedge reversal pattern from 07/21/2017 to 08/17/2017
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Stamps.com (STMP)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 8 out of 56
Stock RS rank: 6 out of 593
8/17/17 close: $208.85
1 Month avg volatility: $7.23. Volatility stop (for upward breakout): $194.11 or 7.1% below the close.
Change YTD: 82.16%
Volume: 297,900 shares. 3 month avg: 552,017 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pennant continuation pattern from 08/07/2017 to 08/17/2017
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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Standex International Corp (SXI)
Industry: Diversified Co.
Industry RS rank: 15 out of 56
Stock RS rank: 381 out of 593
8/17/17 close: $93.10
1 Month avg volatility: $2.00. Volatility stop (for upward breakout): $88.66 or 4.8% below the close.
Change YTD: 5.98%
Volume: 26,600 shares. 3 month avg: 35,965 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/27/2017 to 08/17/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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DJ US consumer goods (household goods) (IYK)
Industry: Household Products
Industry RS rank: 26 out of 56
Stock RS rank: 270 out of 593
8/17/17 close: $121.32
1 Month avg volatility: $0.68. Volatility stop (for upward breakout): $119.96 or 1.1% below the close.
Change YTD: 9.57%
Volume: 28,300 shares. 3 month avg: 72,742 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/20/2017 to 08/17/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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MSCI Germany Index (EWG)
Industry: Investment Co. (Foreign)
Industry RS rank: 14 out of 56
Stock RS rank: 157 out of 593
8/17/17 close: $30.47
1 Month avg volatility: $0.19. Volatility stop (for downward breakout): $31.15 or 2.2% above the close.
Change YTD: 15.07%
Volume: 3,715,600 shares. 3 month avg: 3,316,540 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 05/11/2017 to 08/17/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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MSCI Switzerland Index (EWL)
Industry: Investment Co. (Foreign)
Industry RS rank: 14 out of 56
Stock RS rank: 173 out of 593
8/17/17 close: $34.01
1 Month avg volatility: $0.20. Volatility stop (for downward breakout): $34.70 or 2.0% above the close.
Change YTD: 15.44%
Volume: 793,300 shares. 3 month avg: 792,926 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 05/11/2017 to 08/17/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Thursday 8/17/17. Intraday Market Direction: Nasdaq

The index climbed by 0.2% or 12.1 points. Since 02/05/1971 the index made 652 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 377 occasions.
     Average loss was -0.7% on 275 occasions.
Expect the index to close higher 57.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 134/234 or 57.3% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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.

This will be interesting to see if it plays out as predicted.

Look at the chart. I drew a red trendline underneath price. What struck me is the peak (A) that rises above the calm seas of the last few days.

The measure rule for trendlines says that the peak to trendline distance (A) will be reflected from the breakout downward (B). It doesn't have to happen in one day nor does it have to happen immediately. But looking at this picture it just calls to me saying that the index is going to drop.

First, though, is the index has to close below the trendline. If it does, then look for the index to drop to B.

I guess we'll find out shortly if it does or not.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,956.09    
 Weekly S2  6,118.68  162.59   
 Monthly S1  6,150.60  31.92   
 Weekly S1  6,231.90  81.30   
 Daily S2  6,305.69  73.79   
 Monthly Pivot  6,305.72  0.03   Yes! The Monthly Pivot is close to the Daily S2.
 Daily S1  6,325.40  19.68   
 Weekly Pivot  6,327.62  2.22   Yes! The Weekly Pivot is close to the Daily S1.
 Low  6,330.27  2.65   Yes! The Low is close to the Weekly Pivot.
 Close  6,345.11  14.84   
 61.8% Down from Intraday High  6,347.19  2.08   Yes! The 61.8% Down from Intraday High is close to the Close.
 Open  6,348.11  0.92   Yes! The Open is close to the 61.8% Down from Intraday High.
 Daily Pivot  6,349.98  1.87   Yes! The Daily Pivot is close to the Open.
 50% Down from Intraday High  6,352.42  2.44   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  6,357.64  5.23   
 Daily R1  6,369.69  12.05   
 High  6,374.56  4.87   
 Daily R2  6,394.27  19.71   
 Weekly R1  6,440.84  46.57   
 Monthly R1  6,500.23  59.39   
 Weekly R2  6,536.56  36.33   
 Monthly R2  6,655.35  118.79   

Wednesday 8/16/17. A Look At Indicators

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.

The indicator turned bearish during the past week. That's evident by the vertical red line.

The index cooperated by dropping, but only briefly. It's almost recovered, though.

What does the next chart say?

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 24% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 24%.
The fewest was 14% on 12/09/2016.
And the most was 36% on 11/03/2016.
Shown as a blue line on the above chart...
The 503 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 12/09/2016.
And the bottom was 18% on 11/03/2016.

This time, we have the blue line showing a drop in performance when the red line normally sends the news first. That makes me suspect that this is a fake out, that the dip in the blue line will recover during the next week.

However, when the prior chart shows a weakening situation in the market and the blue line dips, you have to wonder if the market is going down. Hmm.

-- Thomas Bulkowski

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Tuesday 8/15/17. Intraday Market Direction: Dow

The index climbed by 0.6% or 135.39 points. Since 10/01/1928 the index made 838 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 466 occasions.
     Average loss was -0.6% on 372 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 141/242 or 58.3% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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.

When I looked at this chart, I was reminded of a simple ABC correction.

After price trends up in a strong push higher (to reach the peak last Tuesday, the highest peak on the chart) , you'll see price retrace, often in a stair-step fashion. In this case, you see price dropping in leg A, moving higher in leg B (may not be finished), followed by a second leg down (hasn't happened yet).

I think it's an Elliott wave component, as the corrective phase of the motive wave.

Of it could be the start of an upward move. Take your pick.

$ $ $

A shout out to Andrius Kontenis for helping me with Patternz problems. Thanks, Andrius! And thanks to others who have made helpful suggestions for improvement.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,917.56    
 Monthly S1  21,455.64  538.07   
 Weekly S2  21,668.82  213.18   
 Monthly Pivot  21,817.37  148.56   
 Weekly S1  21,831.26  13.89   
 Daily S2  21,912.60  81.34   
 Low  21,945.64  33.04   
 Open  21,945.64  0.00   Yes! The Open is close to the Low.
 Daily S1  21,953.16  7.52   
 61.8% Down from Intraday High  21,973.75  20.60   
 50% Down from Intraday High  21,982.44  8.68   
 Daily Pivot  21,986.19  3.76   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  21,991.12  4.93   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  21,993.71  2.59   Yes! The Close is close to the 38.2% Down from Intraday High.
 Weekly Pivot  22,005.19  11.48   
 High  22,019.23  14.04   
 Daily R1  22,026.75  7.52   
 Daily R2  22,059.78  33.04   
 Weekly R1  22,167.63  107.85   
 Weekly R2  22,341.56  173.92   
 Monthly R1  22,355.45  13.89   
 Monthly R2  22,717.18  361.74   

Monday 8/14/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

I show the Dow transports on the daily scale.

I drew a horizontal red line of support, starting from the right to the left. That shows support below the AB bottoms and it goes through two congestion regions, one in April and another in May.

I highlight bottoms AB because it's a potential double bottom.

It will become a valid double bottom when the index closes above the peak between the two bottoms. That hasn't happened yet.

 

 

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A Brief Look Back

Picture of a bug 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 25.61 points.
Tuesday: Down 33.08 points.
Wednesday: Down 36.64 points.
Thursday: Down 204.69 points.
Friday: Up 14.31 points.

For the Week...

The Dow industrials were down 234.49 points or 1.1%.
The Nasdaq composite was down 95 points or 1.5%.
The S&P 500 index was down 35.51 points or 1.4%.

Year to Date...

Dow Industrials
     1.4% down from the high of 22,179.11 on 08/08/2017.
     11.1% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     3.2% down from the high of 6,460.84 on 07/27/2017.
     15.9% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     2.0% down from the high of 2,490.87 on 08/08/2017.
     8.7% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 08/11/2017, the CPI had:

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

The chart pattern indicator is bearish 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  21,802  21,830  21,871  21,899  21,939 
Weekly  21,624  21,741  21,960  22,077  22,296 
Monthly  20,872  21,365  21,772  22,265  22,672 
S&P500 (^GSPC): Daily  2,432  2,437  2,442  2,447  2,453 
Weekly  2,404  2,422  2,457  2,476  2,510 
Monthly  2,370  2,406  2,448  2,484  2,526 
Nasdaq (^IXIC): Daily  6,196  6,226  6,247  6,277  6,297 
Weekly  6,089  6,173  6,298  6,382  6,507 
Monthly  5,927  6,092  6,276  6,441  6,626 
  • 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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.3%   The trend may continue. 
 1 month down 20.8%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.1%   The trend may continue. 
 1 month down 21.4%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.3%   Expect a reversal soon. 
 1 month down 26.0%   The trend may continue. 

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.

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
20Triangle, symmetrical
9Head-and-shoulders top
7Double Bottom, Adam and Adam
6Head-and-shoulders bottom
6Triple top
6Rectangle top
6Dead-cat bounce
5Rising wedge
4Double Top, Adam and Adam
4Double Top, Eve and Adam

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. Aerospace/Defense1. Internet
2. Homebuilding2. Aerospace/Defense
3. Medical Supplies3. Homebuilding
4. Semiconductor Cap Equip.4. Medical Supplies
5. Internet5. Medical Services
50. Advertising50. Food Processing
51. Short ETFs51. Petroleum (Integrated)
52. Petroleum (Integrated)52. Trucking/Transp. Leasing
53. Retail (Special Lines)53. Natural Gas (Diversified)
54. Natural Gas (Diversified)54. Cement and Aggregates
55. Cement and Aggregates55. Short ETFs
56. Petroleum (Producing)56. Petroleum (Producing)
57. Oilfield Svcs/Equipment57. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Friday 8/11/17. Pattern Trading Setups for the Weekend.

Go to Table.

You can find setups based on a Fibonacci retrace by clicking on the link.

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 601 stocks searched, or 3.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 3 bullish chart patterns this week and 8 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
BCPCTriple top      07/17/201708/04/2017Chemical (Specialty)
CONNHead-and-shoulders top      07/19/201708/07/2017Retail (Special Lines)
DECKTriangle, symmetrical      07/21/201708/07/2017Shoe
EFIIDead-cat bounce      08/04/201708/04/2017Computers and Peripherals
EMRTriangle, ascending      04/26/201708/10/2017Computers and Peripherals
ESLDead-cat bounce      08/04/201708/04/2017Precision Instrument
NVTABroadening top, right-angled and ascending      07/10/201708/10/2017Medical Services
JAZZHead-and-shoulders top      07/05/201708/07/2017Biotechnology
MTriple top      07/05/201708/08/2017Retail Store
MCHXRectangle top      05/10/201708/10/2017Advertising
OLNTriple top      07/17/201708/04/2017Chemical (Basic)
OTEXDouble Top, Adam and Adam      07/27/201708/04/2017E-Commerce
SCHWDouble Top, Eve and Adam      06/29/201708/04/2017Securities Brokerage
IATTriple top      07/03/201708/08/2017Long ETFs
SLVHead-and-shoulders bottom      06/21/201708/07/2017Metals and Mining (Div.)
PSQDouble Bottom, Adam and Adam      07/27/201708/08/2017Short ETFs
QIDDouble Bottom, Adam and Adam      07/27/201708/08/2017Short ETFs
QQQDouble Top, Adam and Adam      07/27/201708/08/2017Long ETFs
XLIHead-and-shoulders top      06/19/201708/08/2017Investment Co. (Domestic)
XRTRising wedge      07/03/201708/08/2017Retail Store

 

Weekly screen for chart patterns ending between 08/03/2017 and 08/10/2017. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Balchem Corp (BCPC)
Industry: Chemical (Specialty)
Industry RS rank: 45 out of 56
Stock RS rank: 470 out of 593
8/10/17 close: $75.03
1 Month avg volatility: $1.68. Volatility stop (for downward breakout): $78.72 or 4.9% above the close.
Change YTD: -10.59%
Volume: 89,100 shares. 3 month avg: 92,003 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple top reversal pattern from 07/17/2017 to 08/04/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 52 out of 56
Stock RS rank: 3 out of 593
8/10/17 close: $20.25
1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $23.10 or 14.1% above the close.
Change YTD: 60.08%
Volume: 483,300 shares. 3 month avg: 600,557 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/19/2017 to 08/07/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Deckers Outdoor Corp (DECK)
Industry: Shoe
Industry RS rank: 15 out of 56
Stock RS rank: 29 out of 593
8/10/17 close: $63.85
1 Month avg volatility: $1.59. Volatility stop (for upward breakout): $60.30 or 5.6% below the close.
Change YTD: 15.27%
Volume: 346,700 shares. 3 month avg: 638,672 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/21/2017 to 08/07/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 56
Stock RS rank: 568 out of 593
8/10/17 close: $29.40
1 Month avg volatility: $1.29. Volatility stop (for downward breakout): $32.76 or 11.4% above the close.
Change YTD: -32.97%
Volume: 766,400 shares. 3 month avg: 747,363 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/04/2017 to 08/04/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Emerson Electric (EMR)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 56
Stock RS rank: 426 out of 593
8/10/17 close: $59.14
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $57.68 or 2.5% below the close.
Change YTD: 6.08%
Volume: 2,033,700 shares. 3 month avg: 3,293,575 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 04/26/2017 to 08/10/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Esterline Technologies Corp. (ESL)
Industry: Precision Instrument
Industry RS rank: 6 out of 56
Stock RS rank: 391 out of 593
8/10/17 close: $86.25
1 Month avg volatility: $2.67. Volatility stop (for downward breakout): $91.99 or 6.7% above the close.
Change YTD: -3.31%
Volume: 319,100 shares. 3 month avg: 147,720 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/04/2017 to 08/04/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Invitae Corp (NVTA)
Industry: Medical Services
Industry RS rank: 4 out of 56
Stock RS rank: 306 out of 593
8/10/17 close: $9.11
1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $9.97 or 9.5% above the close.
Change YTD: 14.74%
Volume: 358,300 shares. 3 month avg: 344,602 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 07/10/2017 to 08/10/2017
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Jazz Pharmaceuticals, Inc. (JAZZ)
Industry: Biotechnology
Industry RS rank: 13 out of 56
Stock RS rank: 169 out of 593
8/10/17 close: $143.66
1 Month avg volatility: $3.61. Volatility stop (for downward breakout): $153.68 or 7.0% above the close.
Change YTD: 31.76%
Volume: 579,100 shares. 3 month avg: 478,191 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/05/2017 to 08/07/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Macys, Inc (M)
Industry: Retail Store
Industry RS rank: 46 out of 56
Stock RS rank: 569 out of 593
8/10/17 close: $20.67
1 Month avg volatility: $0.77. Volatility stop (for downward breakout): $24.38 or 18.0% above the close.
Change YTD: -42.28%
Volume: 39,481,800 shares. 3 month avg: 10,219,922 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple top reversal pattern from 07/05/2017 to 08/08/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 48 out of 56
Stock RS rank: 195 out of 593
8/10/17 close: $2.82
1 Month avg volatility: $0.09. Volatility stop (for upward breakout): $2.62 or 7.0% below the close.
Change YTD: 6.42%
Volume: 204,500 shares. 3 month avg: 167,823 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 05/10/2017 to 08/10/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Olin Corp. (OLN)
Industry: Chemical (Basic)
Industry RS rank: 36 out of 56
Stock RS rank: 393 out of 593
8/10/17 close: $28.62
1 Month avg volatility: $0.82. Volatility stop (for downward breakout): $31.17 or 8.9% above the close.
Change YTD: 11.75%
Volume: 2,659,900 shares. 3 month avg: 2,166,065 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triple top reversal pattern from 07/17/2017 to 08/04/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Open Text Corp (OTEX)
Industry: E-Commerce
Industry RS rank: 30 out of 56
Stock RS rank: 411 out of 593
8/10/17 close: $31.77
1 Month avg volatility: $0.62. Volatility stop (for downward breakout): $33.54 or 5.6% above the close.
Change YTD: 2.80%
Volume: 465,900 shares. 3 month avg: 585,100 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 07/27/2017 to 08/04/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Schwab, Charles Corporation (SCHW)
Industry: Securities Brokerage
Industry RS rank: 39 out of 56
Stock RS rank: 330 out of 593
8/10/17 close: $40.61
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $42.80 or 5.4% above the close.
Change YTD: 2.89%
Volume: 6,698,900 shares. 3 month avg: 6,994,608 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 06/29/2017 to 08/04/2017
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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iShares DJ US Regional Banks (IAT)
Industry: Long ETFs
Industry RS rank: 20 out of 56
Stock RS rank: 387 out of 593
8/10/17 close: $44.76
1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $46.61 or 4.1% above the close.
Change YTD: -1.37%
Volume: 235,000 shares. 3 month avg: 187,192 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triple top reversal pattern from 07/03/2017 to 08/08/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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iShares Silver Trust (SLV)
Industry: Metals and Mining (Div.)
Industry RS rank: 32 out of 56
Stock RS rank: 413 out of 593
8/10/17 close: $16.18
1 Month avg volatility: $0.17. Volatility stop (for upward breakout): $15.77 or 2.5% below the close.
Change YTD: 7.08%
Volume: 10,509,200 shares. 3 month avg: 7,219,642 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 06/21/2017 to 08/07/2017
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price hits measure rule target 74% of the time.

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Nasdaq 100 short 1x ProShares (PSQ)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 481 out of 593
8/10/17 close: $39.44
1 Month avg volatility: $0.32. Volatility stop (for upward breakout): $38.18 or 3.2% below the close.
Change YTD: -16.62%
Volume: 1,963,400 shares. 3 month avg: 493,754 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 07/27/2017 to 08/08/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Nasdaq 100 short 2x ProShares (QID)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 534 out of 593
8/10/17 close: $16.55
1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $15.49 or 6.4% below the close.
Change YTD: -30.84%
Volume: 6,308,200 shares. 3 month avg: 2,805,922 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 07/27/2017 to 08/08/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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PowerShares QQQ -- Nasdaq 100 (QQQ)
Industry: Long ETFs
Industry RS rank: 20 out of 56
Stock RS rank: 186 out of 593
8/10/17 close: $141.03
1 Month avg volatility: $1.22. Volatility stop (for downward breakout): $145.83 or 3.4% above the close.
Change YTD: 19.03%
Volume: 62,735,200 shares. 3 month avg: 36,447,322 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 07/27/2017 to 08/08/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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SPDR Industrial Select Sector (XLI)
Industry: Investment Co. (Domestic)
Industry RS rank: 27 out of 56
Stock RS rank: 270 out of 593
8/10/17 close: $67.82
1 Month avg volatility: $0.44. Volatility stop (for downward breakout): $69.44 or 2.4% above the close.
Change YTD: 9.00%
Volume: 10,547,800 shares. 3 month avg: 9,017,106 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 06/19/2017 to 08/08/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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SPDR Retail ETF (XRT)
Industry: Retail Store
Industry RS rank: 46 out of 56
Stock RS rank: 457 out of 593
8/10/17 close: $39.40
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $41.60 or 5.6% above the close.
Change YTD: -10.60%
Volume: 7,730,600 shares. 3 month avg: 4,462,038 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rising wedge reversal pattern from 07/03/2017 to 08/08/2017
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Thursday 8/10/17. 2017-2018 Forecast

First, someone asked about my Holidays page several months ago. I updated the research.

$ $ $

I reviewed my software to make sure my forecast for the Dow was correct because it differed from another website.

I found a minor error during leap years. Instead of averaging in the closing price from 4/1, I'd take it from 3/31. As you can imagine, you probably wouldn't see any difference in the chart, especially when it happens once every four years. The error only applied to daily charts. The chart below is on the weekly scale.

The daily charts are constructed by taking the average of daily closing prices for each year ending in 7 (for a 2017 prediction) or 8 (for 2018 or 2028) or whatever. The theory is that there's a 10-year cycle in the markets and this chart exploits that idea.

My data starts with the decade of the 1930s. And incidentally, the person who was kind enough to give me Dow data going back to 1900, I looked at that data and saw that trading happened on January 1 of each year. Then I looked back at Christmas and people traded the Dow then, too. So I'm thinking that can't be right. I also spotted one section where the daily OHLC data was the same for like 10 days in a row. Needless to say, I consider the data useless. It might be right, but there are too many red flags popping up for it to be trusted.

Forecast

Getting back to the chart, it's a good time to review the forecast and see how the Dow has been tracking this year.

The chart shows the forecast through 2018.

You'll notice that the forecast shows the Dow peaking at A but in reality, that peak either disappeared or hasn't happened yet.

The Dow is continuing to march up to B. Maybe with the threat of war with North Korea we'll see some up and down movement in the Dow.

Notice that after peak B, the Dow goes into a bear market (C). That actually ends in the early part of 2019 (not shown).

I've been keeping this in mind as I trade stocks. Mostly, I'll sell them and keep it in cash, expecting the downturn.

If you want to see a longer-term chart, visit my Market Review page. I haven't reshot the chart with the corrected software, but who cares? It's a forecast which won't be right anyway. But that chart shows the Dow to year 2027. According to that chart, the Dow will bottom at 15,600 (early 2019) and then rise up to 31,300. Nice!

And by the way, I applied a factor to the prediction so that both lines start at the same price. That way, I can track how the Dow moves by just looking at the price scale. The factor is simply the ratio between the closing price on the last trading day of the prior year compared to the predicted close.

For example, if the Dow were trading at 10 and the prediction came out to 2, I would multiple each day's prediction going forward by 5. Thus the first day would also be 10 (2*5). Thereafter, I didn't change the adjustment factor. I'd just multiply each day's prediction by 5.

-- Thomas Bulkowski

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Wednesday 8/9/17. A Look At Indicators

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.

The chart shows the indicator has turned bearish, with the appearance of the vertical red bar on the far right.

I've been complaining about bearish divergence between the indicator and the index for a while now. The indicator has trended lower even as the index has climbed.

It's possible that the bearish signal will disappear, so don't be too alarmed. The signal can appear and disappear for up to a week, but it's usually solid after three days.

Let's see what the next chart says.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 24% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 22%.
The fewest was 14% on 12/09/2016.
And the most was 36% on 11/03/2016.
Shown as a blue line on the above chart...
The 503 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 12/09/2016.
And the bottom was 18% on 11/03/2016.

The blue line held steady but the red line dropped two percentage points. It's difficult to see on the chart, but the red line, where it goes horizontal on the far right, appears shorter than the corresponding blue line above it. So that's why the two appear horizontal but a week ago, the red line was higher.

The red line is the more sensitive of the two lines. So it's bearish also. Maybe with the prior CPI chart, it shows weakness in the underlying stocks making up the market.

-- Thomas Bulkowski

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Tuesday 8/8/17. Intraday Market Direction: Dow

The index climbed by 0.1% or 25.61 points. Since 10/01/1928 the index made 1310 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 674 occasions.
     Average loss was -0.6% on 636 occasions.
Expect the index to close higher 51.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 141/241 or 58.5% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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.

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

Not much to see on this chart. The index just keeps moving up at a nice, sustainable pace (meaning not too steep).

However, I drew two trendlines. The bottom one begins from today and I drew it backward in time. The top, I just connected the peaks that seemed to touch.

Notice how the two lines narrow (converge). That's a chart pattern called a rising wedge. A full 69% of those breakout downward. It'll be interesting to see if a downward breakout holds true in this case.

$ $ $

I released a new version of patternz (6.2) to fix a bug that's been there for a long time. It would find some double bottoms/Big Ws and then remove them. Thanks to Serge P. for discovering the problem and having the tenacity to say it was broke.

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Be advised that in early September, the number of days to settle a trade will change from 3 to 2.

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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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  21,016.67    
 Monthly S1  21,567.54  550.88   
 Weekly S2  21,793.21  225.67   
 Monthly Pivot  21,830.18  36.96   
 Weekly S1  21,955.82  125.64   
 Weekly Pivot  22,024.31  68.50   
 Daily S2  22,068.00  43.69   
 Low  22,081.97  13.97   
 Daily S1  22,093.21  11.24   
 61.8% Down from Intraday High  22,096.94  3.73   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Open  22,100.20  3.26   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  22,101.56  1.36   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  22,106.18  4.62   
 Daily Pivot  22,107.18  1.00   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  22,118.42  11.24   
 High  22,121.15  2.73   Yes! The High is close to the Close.
 Daily R1  22,132.39  11.24   
 Daily R2  22,146.36  13.97   
 Weekly R1  22,186.92  40.56   
 Weekly R2  22,255.41  68.50   
 Monthly R1  22,381.05  125.64   
 Monthly R2  22,643.69  262.63   

Monday 8/7/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily scale.

A double top appears at AB. This confirms as a valid double top when price closes below the valley between the two peaks.

I show that with horizontal line D.

A pullback swings price higher than I expected, to reach C.

If the index were to drop and close below the July valley, it would form a triple top pattern. Obviously, the index can continue rising, but I'm not so sure it will. I expect it to stall first at the old peaks (AB, meaning in the next few days), and then continue up.

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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 60.81 points.
Tuesday: Up 72.8 points.
Wednesday: Up 52.32 points.
Thursday: Up 9.86 points.
Friday: Up 66.71 points.

For the Week...

The Dow industrials were up 262.5 points or 1.2%.
The Nasdaq composite was down 23.12 points or 0.4%.
The S&P 500 index was up 4.73 points or 0.2%.

Year to Date...

Dow Industrials
     0.0% down from the high of 22,092.81 on 08/04/2017.
     12.3% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     1.7% down from the high of 6,460.84 on 07/27/2017.
     17.7% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.3% down from the high of 2,484.04 on 07/27/2017.
     10.3% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/04/2017, the CPI had:

9 bearish patterns,
24 bullish patterns,
315 patterns waiting for breakout.
The CPI signal is 72.7%, which is bullish (>= 65%).

The chart pattern indicator is bullish 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  22,002  22,047  22,070  22,116  22,138 
Weekly  21,785  21,939  22,016  22,170  22,247 
Monthly  21,008  21,550  21,822  22,364  22,635 
S&P500 (^GSPC): Daily  2,468  2,473  2,476  2,481  2,484 
Weekly  2,461  2,469  2,475  2,483  2,488 
Monthly  2,380  2,428  2,456  2,505  2,533 
Nasdaq (^IXIC): Daily  6,316  6,334  6,348  6,365  6,379 
Weekly  6,271  6,311  6,354  6,394  6,437 
Monthly  5,919  6,135  6,298  6,514  6,677 
  • 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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 31.1%   The trend may continue. 
 5 months up 14.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 42.9%   Expect a random direction. 
 5 months up 18.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks down 16.5%   Expect a reversal soon. 
 2 months up 37.7%   The trend may continue. 

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.

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
22Double Bottom, Adam and Adam
20Triangle, symmetrical
8Head-and-shoulders bottom
7Big W
6Rectangle top
5Dead-cat bounce
5Rising wedge
4Triple bottom
4Head-and-shoulders top
3Broadening 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. Internet1. Semiconductor Cap Equip.
2. Aerospace/Defense2. Medical Supplies
3. Homebuilding3. Internet
4. Medical Supplies4. Medical Services
5. Medical Services5. Precision Instrument
50. Food Processing50. Retail (Special Lines)
51. Petroleum (Integrated)51. Natural Gas (Diversified)
52. Trucking/Transp. Leasing52. Trucking/Transp. Leasing
53. Natural Gas (Diversified)53. Petroleum (Integrated)
54. Cement and Aggregates54. Cement and Aggregates
55. Short ETFs55. Short ETFs
56. Petroleum (Producing)56. Petroleum (Producing)
57. Oilfield Svcs/Equipment57. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Saturday 8/5/17. Patternz Released

I released version 6.1 of Patternz, my free pattern finding software.

This version has a scoring system which helps you select better performing chart patterns, and another form for stock splits and dividends. If you haven't upgraded, now's the time.

-- Thomas Bulkowski

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Friday 8/4/17. Pattern Trading Setups for the Weekend.

Go to Table.

You can find setups based on a Fibonacci retrace by clicking on the link.

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 19 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 601 stocks searched, or 3.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 1 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 11 bullish chart patterns this week and 6 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
DDDDead-cat bounce      08/03/201708/03/2017Electronics
AEOTriangle, symmetrical      07/03/201708/03/2017Apparel
ATWTriangle, symmetrical      06/27/201708/03/2017Petroleum (Producing)
BZHRectangle top      06/28/201708/01/2017Homebuilding
BOOTHorn bottom      07/10/201707/24/2017Shoe
BRKSPipe top      07/17/201707/24/2017Semiconductor Cap Equip.
CALMPennant      07/28/201708/03/2017Food Processing
CALTriangle, symmetrical      04/26/201708/03/2017Shoe
CENXDead-cat bounce      08/03/201708/03/2017Metals and Mining (Div.)
EXPDDiamond top      07/19/201708/02/2017Air Transport
GPRORectangle bottom      06/27/201708/03/2017Electronics
HHSRectangle bottom      06/20/201708/03/2017Advertising
IPIFlag, high and tight      06/21/201708/03/2017Chemical (Diversified)
LOWPipe bottom      07/17/201707/24/2017Retail Building Supply
MCHXRectangle top      05/10/201708/03/2017Advertising
TEVADead-cat bounce      08/03/201708/03/2017Drug
TXTTriangle, symmetrical      07/19/201708/03/2017Diversified Co.
WRBBroadening top, right-angled and ascending      06/19/201707/28/2017Insurance (Prop/Casualty)
XLNXHorn top      07/10/201707/24/2017Semiconductor Cap Equip.
XHBTriangle, symmetrical      06/20/201708/03/2017Homebuilding

 

Weekly screen for chart patterns ending between 07/27/2017 and 08/03/2017. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
3D Systems (DDD)
Industry: Electronics
Industry RS rank: 18 out of 56
Stock RS rank: 529 out of 593
8/3/17 close: $13.39
1 Month avg volatility: $0.73. Volatility stop (for downward breakout): $17.17 or 28.2% above the close.
Change YTD: 0.75%
Volume: 13,290,700 shares. 3 month avg: 3,245,220 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/03/2017 to 08/03/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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American Eagle Outfitters Inc. (AEO)
Industry: Apparel
Industry RS rank: 48 out of 56
Stock RS rank: 540 out of 593
8/3/17 close: $11.65
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $10.78 or 7.5% below the close.
Change YTD: -23.20%
Volume: 2,022,700 shares. 3 month avg: 4,611,135 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/03/2017 to 08/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Atwood Oceanics Inc. (ATW)
Industry: Petroleum (Producing)
Industry RS rank: 55 out of 56
Stock RS rank: 574 out of 593
8/3/17 close: $7.89
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $6.68 or 15.3% below the close.
Change YTD: -39.91%
Volume: 9,470,100 shares. 3 month avg: 6,067,892 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/27/2017 to 08/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Beazer Homes USA, Inc (BZH)
Industry: Homebuilding
Industry RS rank: 5 out of 56
Stock RS rank: 284 out of 593
8/3/17 close: $15.32
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $13.90 or 9.2% below the close.
Change YTD: 15.19%
Volume: 535,200 shares. 3 month avg: 512,549 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 06/28/2017 to 08/01/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Boot Barn Holdings Inc (BOOT)
Industry: Shoe
Industry RS rank: 30 out of 56
Stock RS rank: 535 out of 593
8/3/17 close: $8.55
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $7.29 or 14.7% below the close.
Change YTD: -31.71%
Volume: 631,100 shares. 3 month avg: 427,455 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Friday.
 
Chart pattern: Horn bottom reversal pattern from 07/10/2017 to 07/24/2017
WARNING: A dead-cat bounce occurred on 06/02/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 09/01/2017 and a 38% chance by 12/01/2017.
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price hits measure rule target 76% of the time.

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Brooks Automation (BRKS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 56
Stock RS rank: 48 out of 593
8/3/17 close: $22.72
1 Month avg volatility: $0.76. Volatility stop (for downward breakout): $25.90 or 14.0% above the close.
Change YTD: 33.10%
Volume: 1,129,900 shares. 3 month avg: 728,895 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 07/17/2017 to 07/24/2017
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Cal-Maine Foods Inc (CALM)
Industry: Food Processing
Industry RS rank: 47 out of 56
Stock RS rank: 484 out of 593
8/3/17 close: $37.60
1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $35.42 or 5.8% below the close.
Change YTD: -14.89%
Volume: 170,500 shares. 3 month avg: 334,226 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pennant continuation pattern from 07/28/2017 to 08/03/2017
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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Caleres (CAL)
Industry: Shoe
Industry RS rank: 30 out of 56
Stock RS rank: 511 out of 593
8/3/17 close: $26.18
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $24.43 or 6.7% below the close.
Change YTD: -20.23%
Volume: 150,700 shares. 3 month avg: 310,035 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/26/2017 to 08/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Century Aluminum Co. (CENX)
Industry: Metals and Mining (Div.)
Industry RS rank: 36 out of 56
Stock RS rank: 505 out of 593
8/3/17 close: $13.33
1 Month avg volatility: $0.82. Volatility stop (for downward breakout): $16.67 or 25.1% above the close.
Change YTD: 55.72%
Volume: 12,744,200 shares. 3 month avg: 2,343,451 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/03/2017 to 08/03/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Expeditors International of Washington (EXPD)
Industry: Air Transport
Industry RS rank: 29 out of 56
Stock RS rank: 186 out of 593
8/3/17 close: $59.56
1 Month avg volatility: $0.74. Volatility stop (for downward breakout): $61.08 or 2.6% above the close.
Change YTD: 12.46%
Volume: 856,200 shares. 3 month avg: 1,192,866 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Diamond top reversal pattern from 07/19/2017 to 08/02/2017
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 18 out of 56
Stock RS rank: 538 out of 593
8/3/17 close: $8.26
1 Month avg volatility: $0.24. Volatility stop (for downward breakout): $8.85 or 7.2% above the close.
Change YTD: -5.17%
Volume: 5,557,900 shares. 3 month avg: 2,191,997 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rectangle bottom continuation pattern from 06/27/2017 to 08/03/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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Harte-Hanks Inc (HHS)
Industry: Advertising
Industry RS rank: 46 out of 56
Stock RS rank: 580 out of 593
8/3/17 close: $0.93
1 Month avg volatility: $0.06. Volatility stop (for downward breakout): $1.09 or 16.8% above the close.
Change YTD: -38.41%
Volume: 53,400 shares. 3 month avg: 116,868 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rectangle bottom continuation pattern from 06/20/2017 to 08/03/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 33 out of 56
Stock RS rank: 5 out of 593
8/3/17 close: $3.49
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $3.01 or 13.8% below the close.
Change YTD: 67.79%
Volume: 5,104,900 shares. 3 month avg: 1,794,762 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Flag, high and tight continuation pattern from 06/21/2017 to 08/03/2017
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Lowes Companies, Inc (LOW)
Industry: Retail Building Supply
Industry RS rank: 44 out of 56
Stock RS rank: 288 out of 593
8/3/17 close: $77.91
1 Month avg volatility: $1.24. Volatility stop (for upward breakout): $75.39 or 3.2% below the close.
Change YTD: 9.55%
Volume: 3,203,000 shares. 3 month avg: 6,018,269 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 07/17/2017 to 07/24/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 46 out of 56
Stock RS rank: 293 out of 593
8/3/17 close: $2.93
1 Month avg volatility: $0.09. Volatility stop (for upward breakout): $2.71 or 7.6% below the close.
Change YTD: 10.57%
Volume: 172,300 shares. 3 month avg: 169,423 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 05/10/2017 to 08/03/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Teva Pharmaceutical Industries (TEVA)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 31 out of 56
Stock RS rank: 567 out of 593
8/3/17 close: $23.75
1 Month avg volatility: $0.91. Volatility stop (for downward breakout): $28.20 or 18.7% above the close.
Change YTD: -34.48%
Volume: 106,479,500 shares. 3 month avg: 9,417,602 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/03/2017 to 08/03/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Textron Inc (TXT)
Industry: Diversified Co.
Industry RS rank: 11 out of 56
Stock RS rank: 354 out of 593
8/3/17 close: $49.04
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $47.38 or 3.4% below the close.
Change YTD: 0.99%
Volume: 1,011,500 shares. 3 month avg: 1,405,788 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/19/2017 to 08/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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W. R. Berkley Corp (WRB)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 14 out of 56
Stock RS rank: 367 out of 593
8/3/17 close: $69.20
1 Month avg volatility: $0.86. Volatility stop (for downward breakout): $71.18 or 2.9% above the close.
Change YTD: 4.04%
Volume: 488,300 shares. 3 month avg: 384,712 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 06/19/2017 to 07/28/2017
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Xilinx Inc (XLNX)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 56
Stock RS rank: 258 out of 593
8/3/17 close: $62.90
1 Month avg volatility: $1.27. Volatility stop (for downward breakout): $65.48 or 4.1% above the close.
Change YTD: 4.19%
Volume: 2,463,000 shares. 3 month avg: 3,158,815 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Horn top reversal pattern from 07/10/2017 to 07/24/2017
Breakout is downward 100% of the time.
Average decline: 21%.
Break-even failure rate: 7%.
Pullbacks occur 33% of the time.
Price hits measure rule target 70% of the time.

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SPDR Homebuilders ETF (XHB)
Industry: Homebuilding
Industry RS rank: 5 out of 56
Stock RS rank: 220 out of 593
8/3/17 close: $38.55
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $37.66 or 2.3% below the close.
Change YTD: 13.88%
Volume: 1,337,100 shares. 3 month avg: 1,318,555 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/20/2017 to 08/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Thursday 8/3/17. Intraday Market Direction: Dow

The index dropped by 0.0% or -0.29 points. Since 02/05/1971 the index made 634 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 359 occasions.
     Average loss was -0.9% on 275 occasions.
Expect the index to close higher 56.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 134/233 or 57.5% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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 on the 5 minute scale.

$ $ $

I show a picture of the Dow on the 5-minute scale. It should have been the Nasdaq but I screwed up.

The chart shows a picture of an ascending triangle highlighted in red.

It has a flat top and up-sloping bottom, just as you would expect.

According to my book, Chart Patterns: After the BuyChart Patterns: After the Buy, 64% of ascending triangles break out upward.

But hold on.

Today's (Wednesday) chart pattern indicator has turned bearish. The signal could disappear in the coming days, and frequently does, so it's not an immediate concern. But if it lasts, if could mean a drop (retrace, probably) is coming.

$ $ $

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

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,922.94    
 Monthly S1  6,142.79  219.86   
 Weekly S2  6,238.48  95.69   
 Daily S2  6,275.98  37.50   
 Weekly S1  6,300.57  24.58   
 Monthly Pivot  6,301.82  1.25   Yes! The Monthly Pivot is close to the Weekly S1.
 Low  6,313.43  11.61   
 Daily S1  6,319.32  5.89   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  6,344.29  24.97   
 50% Down from Intraday High  6,353.82  9.53   
 Daily Pivot  6,356.76  2.94   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  6,362.65  5.89   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  6,363.35  0.70   Yes! The 38.2% Down from Intraday High is close to the Close.
 Weekly Pivot  6,380.70  17.35   
 Open  6,393.10  12.40   
 High  6,394.21  1.11   Yes! The High is close to the Open.
 Daily R1  6,400.10  5.89   Yes! The Daily R1 is close to the High.
 Daily R2  6,437.54  37.45   
 Weekly R1  6,442.79  5.24   Yes! The Weekly R1 is close to the Daily R2.
 Monthly R1  6,521.67  78.89   
 Weekly R2  6,522.92  1.25   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  6,680.70  157.77   

Wednesday 8/2/17. A Look At Indicators

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.

The bullish vertical green bar on the far right remains intact.

Let's look at the indicator line. This time I remembered to mark it. Notice that the line is rising (A). That is also bullish.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 22% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 23%.
The fewest was 14% on 12/09/2016.
And the most was 36% on 11/03/2016.
Shown as a blue line on the above chart...
The 503 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 12%.
The peak was 9% on 12/09/2016.
And the bottom was 18% on 11/03/2016.

The above text highlights a contradiction. The red line improved with fewer stocks in bear market territory but the blue line said that the average distance below the yearly high has decreased.

I'm not sure what to make of this. But given the prior chart is still bullish, that's how I continue to lean.

-- Thomas Bulkowski

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Tuesday 8/1/17. Intraday Market Direction: Dow

The index climbed by 0.3% or 60.81 points. Since 10/01/1928 the index made 1066 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 585 occasions.
     Average loss was -0.7% on 481 occasions.
Expect the index to close higher 54.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 140/240 or 58.3% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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.

Nothing much to report about Monday's trading.

The chart shows an upward-sloping channel. I drew the lines connecting the peaks and valleys.

This channel is similar to the one I blogged about on the Nasdaq. That channel saw the index continuing higher until Thursday when it plummeted. The Dow might follow a similar trend, but I have my doubts. Still, the index isn't moving up vertically, so there's hope this upward trend can continue. (Shallow rises last longer than more vertical ones.)

$ $ $

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

© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,999.03    
 Weekly S2  21,397.76  398.73   
 Monthly S1  21,445.07  47.31   
 Monthly Pivot  21,643.13  198.05   
 Weekly S1  21,644.44  1.31   Yes! The Weekly S1 is close to the Monthly Pivot.
 Weekly Pivot  21,742.81  98.37   
 Daily S2  21,826.12  83.31   
 Daily S1  21,858.62  32.50   
 Low  21,861.71  3.09   Yes! The Low is close to the Daily S1.
 Open  21,863.39  1.68   Yes! The Open is close to the Low.
 61.8% Down from Intraday High  21,887.72  24.33   
 Close  21,891.12  3.40   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  21,894.21  3.09   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  21,895.76  1.54   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  21,903.79  8.03   
 Daily R1  21,926.71  22.92   
 High  21,929.80  3.09   Yes! The High is close to the Daily R1.
 Daily R2  21,962.30  32.50   
 Weekly R1  21,989.49  27.19   
 Weekly R2  22,087.86  98.37   
 Monthly R1  22,089.17  1.31   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  22,287.23  198.05   

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