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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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Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 12/14/2018
24,101 -496.87 -2.0%
9,514 -158.63 -1.6%
758 -1.70 -0.2%
6,911 -159.67 -2.3%
2,600 -50.59 -1.9%
YTD
-2.5%
-10.3%
4.8%
0.1%
-2.8%
Tom's Targets    Overview: 12/14/2018
25,000 or 23,500 by 01/01/2019
10,100 or 9,000 by 01/01/2019
740 or 775 by 01/01/2019
7,300 or 6,700 by 01/01/2019
2,700 or 2,525 by 01/01/2019

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

August 2018 Headlines


Archives


Friday 8/31/18. 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 12 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 608 stocks searched, or 2.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 7 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 12 bullish chart patterns this week and 5 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
AKAMPipe bottom      08/13/201808/20/2018E-Commerce
AMWDPipe bottom      08/13/201808/20/2018Building Materials
APHTriangle, symmetrical      07/27/201808/30/2018Electronics
AWITriangle, symmetrical      08/07/201808/30/2018Building Materials
BBBYBroadening top, right-angled and ascending      08/02/201808/29/2018Retail (Special Lines)
CXPipe bottom      08/13/201808/20/2018Cement and Aggregates
CHSPipe top      08/13/201808/20/2018Apparel
CVGDiamond bottom      07/30/201808/24/2018Computer Software and Svcs
COTYPipe bottom      08/13/201808/20/2018Toiletries/Cosmetics
CTSHead-and-shoulders bottom      08/02/201808/24/2018Electronics
FORMPipe bottom      08/13/201808/20/2018Semiconductor
HHSPipe bottom      08/13/201808/20/2018Advertising
NVTAFlag, high and tight      07/02/201808/30/2018Medical Services
LENDiamond bottom      07/26/201808/30/2018Homebuilding
NFLXPipe bottom      08/13/201808/20/2018Internet
OMCRising wedge      07/31/201808/30/2018Advertising
PPLRising wedge      05/04/201808/30/2018Electric Utility (East)
SMRTPipe top      08/13/201808/20/2018Apparel
WERNTriangle, symmetrical      07/26/201808/30/2018Trucking/Transp. Leasing

 

Weekly screen for chart patterns ending between 08/23/2018 and 08/30/2018. 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.
 
Akamai Technologies Inc (AKAM)
Industry: E-Commerce
Industry RS rank: 17 out of 58
Stock RS rank: 268 out of 601
8/30/18 close: $74.71
1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $71.58 or 4.2% below the close.
Change YTD: 14.87%
Volume: 724,200 shares. 3 month avg: 2,185,974 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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American Woodmark Corp (AMWD)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 590 out of 601
8/30/18 close: $88.05
1 Month avg volatility: $2.97. Volatility stop (for upward breakout): $81.24 or 7.7% below the close.
Change YTD: -32.40%
Volume: 182,300 shares. 3 month avg: 141,992 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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Amphenol Corp (APH)
Industry: Electronics
Industry RS rank: 37 out of 58
Stock RS rank: 358 out of 601
8/30/18 close: $94.38
1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $92.46 or 2.0% below the close.
Change YTD: 7.49%
Volume: 736,000 shares. 3 month avg: 1,207,969 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 07/27/2018 to 08/30/2018
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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Armstrong World Industries (AWI)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 198 out of 601
8/30/18 close: $70.00
1 Month avg volatility: $1.27. Volatility stop (for upward breakout): $66.92 or 4.4% below the close.
Change YTD: 15.61%
Volume: 297,900 shares. 3 month avg: 508,948 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 08/07/2018 to 08/30/2018
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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Bed Bath and Beyond (BBBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 58
Stock RS rank: 558 out of 601
8/30/18 close: $17.66
1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $18.92 or 7.1% above the close.
Change YTD: -22.24%
Volume: 2,746,200 shares. 3 month avg: 4,821,077 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: Broadening top, right-angled and ascending reversal pattern from 08/02/2018 to 08/29/2018
WARNING: A dead-cat bounce occurred on 04/12/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 10/11/2018.
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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Cemex SA de CV (CX)
Industry: Cement and Aggregates
Industry RS rank: 54 out of 58
Stock RS rank: 286 out of 601
8/30/18 close: $7.14
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $6.63 or 7.2% below the close.
Change YTD: -5.18%
Volume: 3,883,400 shares. 3 month avg: 9,928,860 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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Chicos FAS Inc. (CHS)
Industry: Apparel
Industry RS rank: 29 out of 58
Stock RS rank: 551 out of 601
8/30/18 close: $8.53
1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $9.52 or 11.6% above the close.
Change YTD: -3.29%
Volume: 5,522,700 shares. 3 month avg: 2,783,222 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 top reversal pattern from 08/13/2018 to 08/20/2018
WARNING: A dead-cat bounce occurred on 05/30/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 11/28/2018.
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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Convergys Corporation (CVG)
Industry: Computer Software and Svcs
Industry RS rank: 6 out of 58
Stock RS rank: 309 out of 601
8/30/18 close: $24.89
1 Month avg volatility: $0.23. Volatility stop (for upward breakout): $24.26 or 2.5% below the close.
Change YTD: 5.91%
Volume: 446,500 shares. 3 month avg: 888,571 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 bottom reversal pattern from 07/30/2018 to 08/24/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Coty (COTY)
Industry: Toiletries/Cosmetics
Industry RS rank: 16 out of 58
Stock RS rank: 594 out of 601
8/30/18 close: $12.74
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $11.61 or 8.9% below the close.
Change YTD: -35.95%
Volume: 6,512,500 shares. 3 month avg: 5,764,371 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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CTS Corp (CTS)
Industry: Electronics
Industry RS rank: 37 out of 58
Stock RS rank: 56 out of 601
8/30/18 close: $36.45
1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $34.32 or 5.8% below the close.
Change YTD: 41.55%
Volume: 103,500 shares. 3 month avg: 73,662 shares.
This security may be thinly traded (less than 100k 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: Head-and-shoulders bottom reversal pattern from 08/02/2018 to 08/24/2018
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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FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 58
Stock RS rank: 147 out of 601
8/30/18 close: $15.90
1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $14.19 or 10.8% below the close.
Change YTD: 1.60%
Volume: 838,500 shares. 3 month avg: 748,688 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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Harte-Hanks Inc (HHS)
Industry: Advertising
Industry RS rank: 51 out of 58
Stock RS rank: 437 out of 601
8/30/18 close: $8.50
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $7.52 or 11.6% below the close.
Change YTD: -10.40%
Volume: 4,200 shares. 3 month avg: 98,162 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 Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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Invitae Corp (NVTA)
Industry: Medical Services
Industry RS rank: 10 out of 58
Stock RS rank: 7 out of 601
8/30/18 close: $14.17
1 Month avg volatility: $0.60. Volatility stop (for upward breakout): $12.80 or 9.7% below the close.
Change YTD: 49.16%
Volume: 1,439,700 shares. 3 month avg: 321,822 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: Flag, high and tight continuation pattern from 07/02/2018 to 08/30/2018
WARNING: A dead-cat bounce occurred on 03/28/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/26/2018.
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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Lennar Corp. Cl A (LEN)
Industry: Homebuilding
Industry RS rank: 56 out of 58
Stock RS rank: 498 out of 601
8/30/18 close: $51.84
1 Month avg volatility: $1.06. Volatility stop (for upward breakout): $49.66 or 4.2% below the close.
Change YTD: -18.03%
Volume: 1,569,700 shares. 3 month avg: 3,465,638 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: Diamond bottom reversal pattern from 07/26/2018 to 08/30/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Netflix, Inc (NFLX)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 18 out of 58
Stock RS rank: 109 out of 601
8/30/18 close: $370.98
1 Month avg volatility: $10.38. Volatility stop (for upward breakout): $342.78 or 7.6% below the close.
Change YTD: 93.26%
Volume: 10,970,900 shares. 3 month avg: 6,844,629 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: Pipe bottom reversal pattern from 08/13/2018 to 08/20/2018
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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Omnicom Group (OMC)
Industry: Advertising
Industry RS rank: 51 out of 58
Stock RS rank: 512 out of 601
8/30/18 close: $68.94
1 Month avg volatility: $0.86. Volatility stop (for downward breakout): $71.34 or 3.5% above the close.
Change YTD: -5.34%
Volume: 1,293,500 shares. 3 month avg: 2,548,395 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: Rising wedge reversal pattern from 07/31/2018 to 08/30/2018
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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PPL Corporation (PPL)
Industry: Electric Utility (East)
Industry RS rank: 31 out of 58
Stock RS rank: 355 out of 601
8/30/18 close: $29.74
1 Month avg volatility: $0.44. Volatility stop (for downward breakout): $30.77 or 3.5% above the close.
Change YTD: -3.91%
Volume: 3,430,200 shares. 3 month avg: 3,908,818 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: Rising wedge reversal pattern from 05/04/2018 to 08/30/2018
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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Stein Mart Inc. (SMRT)
Industry: Apparel
Industry RS rank: 29 out of 58
Stock RS rank: 3 out of 601
8/30/18 close: $2.18
1 Month avg volatility: $0.22. Volatility stop (for downward breakout): $2.73 or 25.2% above the close.
Change YTD: 87.93%
Volume: 520,300 shares. 3 month avg: 428,055 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: Pipe top reversal pattern from 08/13/2018 to 08/20/2018
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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Werner Enterprises, Inc (WERN)
Industry: Trucking/Transp. Leasing
Industry RS rank: 28 out of 58
Stock RS rank: 414 out of 601
8/30/18 close: $36.95
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $35.26 or 4.6% below the close.
Change YTD: -4.40%
Volume: 507,400 shares. 3 month avg: 887,242 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: Triangle, symmetrical continuation pattern from 07/26/2018 to 08/30/2018
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 8/30/18. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 79.65 points. Since 02/05/1971 the index made 224 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 149 occasions.
     Average loss was -0.9% on 75 occasions.
Expect the index to close higher 66.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 150/272 or 55.1% of the time.
     The prediction of the index closing lower has been right 46/92 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

I looked at this picture and my eyes connected the bottoms with a trendline, but this one is curved. It reminds me of price going exponential, and those curves never end well.

The top line is straight, though. This looks like a rising wedge except that the bottom trendline doesn't have enough touches.

Because the index is closest to the bottom trendline, my guess is it'll find support there. It might not. It might just punch though the line and drop. I guess you can make a case for that, too, because the index has been rising for days now. It's time to take a rest. But we'll see.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,542.41    
 Weekly S2  7,787.29  244.88   
 Monthly S1  7,826.05  38.76   
 Monthly Pivot  7,887.88  61.83   
 Weekly S1  7,948.49  60.61   
 Weekly Pivot  7,949.10  0.61   Yes! The Weekly Pivot is close to the Weekly S1.
 Daily S2  8,016.99  67.89   
 Low  8,042.10  25.11   
 Open  8,044.34  2.24   Yes! The Open is close to the Low.
 Daily S1  8,063.34  19.00   
 61.8% Down from Intraday High  8,069.40  6.06   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  8,077.83  8.43   
 38.2% Down from Intraday High  8,086.26  8.43   
 Daily Pivot  8,088.45  2.19   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  8,109.69  21.24   
 Weekly R1  8,110.30  0.61   Yes! The Weekly R1 is close to the Close.
 Weekly R2  8,110.91  0.61   Yes! The Weekly R2 is close to the Weekly R1.
 High  8,113.56  2.65   Yes! The High is close to the Weekly R2.
 Daily R1  8,134.80  21.24   
 Daily R2  8,159.91  25.11   
 Monthly R1  8,171.52  11.61   
 Monthly R2  8,233.35  61.83   

Wednesday 8/29/18. 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.

This chart looks peachy...except for the bearish divergence.

Divergence: The indicator is heading lower and the index is moving up. You can see on the chart that this situation has occurred in the past and the index has continued higher.

For a time. Sometimes a long time. Look at July to August on the thin blue line. It trended down even as the index climbed during that time.

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 Tuesday, 23% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 25%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 505 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 01/22/2018.
And the bottom was 19% on 02/08/2018.

The red line shows improvement over the last week, but the blue line held steady.

There's nothing new about that pattern.

After looking at the numbers, notice how the red line bottomed in April, right when the index started a big move up. The blue line made a short-term drop in February and again in April, following the index.

But I like the more sensitive red line. Since both lines are about mid range, I don't think there's much to worry about.

-- Thomas Bulkowski

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Tuesday 8/28/18. Intraday Market Direction: Dow

The index climbed by 1.0% or 259.29 points. Since 10/01/1928 the index made 415 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 218 occasions.
     Average loss was -0.7% on 197 occasions.
Expect the index to close higher 52.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 169/283 or 59.7% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

First, let's talk about the red lines. Those outline a chart pattern called a measured move up. I've written about them often enough.

The second leg, C, is supposed to equal the length of leg A. Corrective phase B is where price is likely to find support. Hence, the green lines.

The green lines outline the top and bottom of the corrective phase. If the MMU works as I've seen it in the past, the index will drop back and find support within the two green lines before rebounding.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,711.69    
 Monthly S1  25,380.67  668.97   
 Weekly S2  25,568.03  187.36   
 Monthly Pivot  25,634.74  66.72   
 Weekly S1  25,808.83  174.09   
 Daily S2  25,815.16  6.33   Yes! The Daily S2 is close to the Weekly S1.
 Weekly Pivot  25,848.83  33.67   
 Low  25,882.71  33.88   
 Open  25,885.71  3.00   Yes! The Open is close to the Low.
 Daily S1  25,932.40  46.69   
 61.8% Down from Intraday High  25,953.30  20.90   
 50% Down from Intraday High  25,975.11  21.81   
 38.2% Down from Intraday High  25,996.91  21.80   
 Daily Pivot  25,999.95  3.04   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  26,049.64  49.69   
 High  26,067.50  17.86   Yes! The High is close to the Close.
 Weekly R1  26,089.63  22.13   
 Daily R1  26,117.19  27.56   
 Weekly R2  26,129.63  12.44   Yes! The Weekly R2 is close to the Daily R1.
 Daily R2  26,184.74  55.11   
 Monthly R1  26,303.72  118.98   
 Monthly R2  26,557.79  254.08   

Monday 8/27/18. Market Monday: The Week Ahead

My Prediction

Picture of the SP 500 on the daily scale.

This is a picture of the S&P 500 index on the daily scale. I write that line every week and it's boring, but necessary.

Anyway, the two red lines outline a chart pattern called a right-angled and ascending broadening formation. That's a mouthful.

The bottom of the pattern is flat with an up-sloping trend along the peaks.

That pattern fits inside the two parallel green lines. Those are channel lines.

What does all of it mean? I've no idea, but I did discover that regardless of how long a trend is, there's a 50% chance price will close higher the next day.

I'm not kidding. I found that was true for trends up to ten consecutively higher closes. I was hoping that price would close higher after the stock started move up for a few bars. But that didn't happen. Sigh.

Have a good weekend.

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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 89.37 points.
Tuesday: Up 63.6 points.
Wednesday: Down 88.69 points.
Thursday: Down 76.62 points.
Friday: Up 133.37 points.

For the Week...

The Dow industrials were up 121.03 points or 0.5%.
The Nasdaq composite was up 129.65 points or 1.7%.
The S&P 500 index was up 24.56 points or 0.9%.

Year to Date...

Dow Industrials
     3.1% down from the high of 26,616.71 on 01/26/2018.
     10.5% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     0.0% down from the high of 7,949.71 on 08/24/2018.
     19.8% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     0.1% down from the high of 2,876.16 on 08/24/2018.
     13.5% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/24/2018, the CPI had:

8 bearish patterns,
35 bullish patterns,
432 patterns waiting for breakout.
The CPI signal is 81.4%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,631  25,711  25,768  25,848  25,906 
Weekly  25,482  25,636  25,762  25,917  26,043 
Monthly  24,625  25,208  25,548  26,131  26,471 
S&P500 (^GSPC): Daily  2,857  2,866  2,871  2,880  2,885 
Weekly  2,842  2,858  2,867  2,884  2,893 
Monthly  2,768  2,821  2,849  2,902  2,930 
Nasdaq (^IXIC): Daily  7,892  7,919  7,934  7,961  7,977 
Weekly  7,733  7,839  7,895  8,001  8,056 
Monthly  7,488  7,717  7,833  8,062  8,179 
  • 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 32.2%   The trend may continue. 
 2 months up 41.6%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 33.5%   The trend may continue. 
 5 months up 19.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 46.9%   Expect a random direction. 
 5 months up 16.6%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
13Triangle, symmetrical
10Dead-cat bounce
8Double Bottom, Adam and Adam
8Pipe bottom
6Triple bottom
5Triple top
5Head-and-shoulders top
5Head-and-shoulders bottom
4Broadening top
4Rising wedge

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. Healthcare Information1. Healthcare Information
2. Short ETFs2. Short ETFs
3. Petroleum (Integrated)3. Computers and Peripherals
4. Shoe4. Shoe
5. Computers and Peripherals5. Medical Services

-- Thomas Bulkowski

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Friday 8/24/18. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 608 stocks searched, or 1.6%. 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 7 bullish chart patterns this week and 2 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
APHTriangle, symmetrical      07/27/201808/23/2018Electronics
ARCBDiamond bottom      06/26/201808/23/2018Trucking/Transp. Leasing
CONNHorn bottom      07/30/201808/13/2018Retail (Special Lines)
^DJIBroadening top      07/26/201808/21/2018None
ETHScallop, descending      07/09/201808/22/2018Furn/Home Furnishings
JBHTRising wedge      07/24/201808/23/2018Trucking/Transp. Leasing
KBHBroadening bottom      07/31/201808/21/2018Homebuilding
MSFTTriangle, symmetrical      07/19/201808/23/2018Computer Software and Svcs
NVDABroadening bottom      07/11/201808/20/2018Semiconductor
OXMTriangle, symmetrical      07/26/201808/23/2018Apparel
TFXPipe bottom      08/06/201808/13/2018Diversified Co.

 

Weekly screen for chart patterns ending between 08/16/2018 and 08/23/2018. 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.
 
Amphenol Corp (APH)
Industry: Electronics
Industry RS rank: 40 out of 58
Stock RS rank: 338 out of 601
8/23/18 close: $93.50
1 Month avg volatility: $1.19. Volatility stop (for upward breakout): $90.94 or 2.7% below the close.
Change YTD: 6.49%
Volume: 1,662,500 shares. 3 month avg: 1,207,969 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 07/27/2018 to 08/23/2018
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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ArcBest Corp (ARCB)
Industry: Trucking/Transp. Leasing
Industry RS rank: 29 out of 58
Stock RS rank: 51 out of 601
8/23/18 close: $47.05
1 Month avg volatility: $1.76. Volatility stop (for upward breakout): $42.97 or 8.7% below the close.
Change YTD: 31.61%
Volume: 152,000 shares. 3 month avg: 234,063 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: Diamond bottom reversal pattern from 06/26/2018 to 08/23/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% 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: 11 out of 58
Stock RS rank: 148 out of 601
8/23/18 close: $36.90
1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $33.88 or 8.2% below the close.
Change YTD: 3.80%
Volume: 199,300 shares. 3 month avg: 567,568 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: Horn bottom reversal pattern from 07/30/2018 to 08/13/2018
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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DJ 30 Industrials (^DJI)
Industry: None
Industry RS rank is unavailable.
8/23/18 close: $25,656.98
1 Month avg volatility: $176.39. Volatility stop (for downward breakout): $26,115.33 or 1.8% above the close.
Change YTD: 3.79%
Volume: 213,274,500 shares. 3 month avg: 293,079,458 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: Broadening top reversal pattern from 07/26/2018 to 08/21/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Ethan Allen Interiors Inc (ETH)
Industry: Furn/Home Furnishings
Industry RS rank: 43 out of 58
Stock RS rank: 491 out of 601
8/23/18 close: $22.85
1 Month avg volatility: $0.57. Volatility stop (for downward breakout): $24.29 or 6.3% above the close.
Change YTD: -20.10%
Volume: 138,500 shares. 3 month avg: 320,755 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: Scallop, descending continuation pattern from 07/09/2018 to 08/22/2018
Breakout is downward 66% of the time.
Average decline: 17%.
Break-even failure rate: 15%.
Pullbacks occur 55% of the time.
Price hits measure rule target 30% of the time.

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Hunt, J.B. (JBHT)
Industry: Trucking/Transp. Leasing
Industry RS rank: 29 out of 58
Stock RS rank: 334 out of 601
8/23/18 close: $123.49
1 Month avg volatility: $1.97. Volatility stop (for downward breakout): $128.33 or 3.9% above the close.
Change YTD: 7.40%
Volume: 557,400 shares. 3 month avg: 898,451 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 07/24/2018 to 08/23/2018
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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KB Home Corp. (KBH)
Industry: Homebuilding
Industry RS rank: 58 out of 58
Stock RS rank: 558 out of 601
8/23/18 close: $24.86
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $23.29 or 6.3% below the close.
Change YTD: -22.19%
Volume: 1,372,100 shares. 3 month avg: 2,684,634 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: Broadening bottom reversal pattern from 07/31/2018 to 08/21/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Microsoft Corp (MSFT)
Industry: Computer Software and Svcs
Industry RS rank: 9 out of 58
Stock RS rank: 165 out of 601
8/23/18 close: $107.56
1 Month avg volatility: $1.69. Volatility stop (for upward breakout): $103.48 or 3.8% below the close.
Change YTD: 25.74%
Volume: 18,005,500 shares. 3 month avg: 21,460,729 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 07/19/2018 to 08/23/2018
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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NVidia Corp (NVDA)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 31 out of 58
Stock RS rank: 248 out of 601
8/23/18 close: $266.84
1 Month avg volatility: $6.54. Volatility stop (for upward breakout): $247.62 or 7.2% below the close.
Change YTD: 37.90%
Volume: 18,001,500 shares. 3 month avg: 15,363,712 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 bottom reversal pattern from 07/11/2018 to 08/20/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Oxford Industries (OXM)
Industry: Apparel
Industry RS rank: 16 out of 58
Stock RS rank: 187 out of 601
8/23/18 close: $94.15
1 Month avg volatility: $2.02. Volatility stop (for upward breakout): $89.51 or 4.9% below the close.
Change YTD: 25.22%
Volume: 61,500 shares. 3 month avg: 144,562 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 07/26/2018 to 08/23/2018
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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Teleflex Inc (TFX)
Industry: Diversified Co.
Industry RS rank: 48 out of 58
Stock RS rank: 482 out of 601
8/23/18 close: $246.36
1 Month avg volatility: $5.40. Volatility stop (for upward breakout): $234.53 or 4.8% below the close.
Change YTD: -0.99%
Volume: 200,400 shares. 3 month avg: 269,822 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: Pipe bottom reversal pattern from 08/06/2018 to 08/13/2018
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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Thursday 8/23/18. Yearly Forecast

Picture of the year's forecast

I show the updated forecast of the Dow industrials for the year.

The forecast (red line) is not my guess of what will happen this year. Rather, it's based on the belief that the Dow has a 10-year cycle. So if you average each year ending in 8, you can get a prediction for this year. I removed the 2007-2009 bear market from the forecast because it's doubtful a bear market will occur this year.

I've been tracking this forecast for 10-years now, and it's been close once (2016) but 2011 was decent, too.

The forecast yearly high is 28,318, occurring in November, but if the forecast is correct, we'll end the year above 28,000.

The forecast might look better if the red line were inverted. Hmm.

-- Thomas Bulkowski

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Wednesday 8/22/18. 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 signal of long ago is still intact. That's the vertical green bar on the right of the chart.

Notice the thin blue indicator line at the bottom of the chart, how it's shot upward over the last few days. That move could change should the index take a serious dive. Indicator signals can change for up to a week, but are usually steady after three days.

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 Tuesday, 25% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 25%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 505 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 01/22/2018.
And the bottom was 19% on 02/08/2018.

Both lines are flat compared to a week ago, so no change here.

That's odd, given that the CPI shot up in the last few days. But if you look at the red line, it's recovering from a downward spike, so even it moved higher in the past few days, returning it to where it was a week ago.

That upward move is bullish. The CPI is bullish, but I worry that the move higher is too fast.

-- Thomas Bulkowski

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Tuesday 8/21/18. Intraday Market Direction: Dow

The index climbed by 0.3% or 89.37 points. Since 10/01/1928 the index made 1088 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 601 occasions.
     Average loss was -0.7% on 487 occasions.
Expect the index to close higher 55.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 168/282 or 59.6% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

A few days ago, the index formed a double bottom at AB. It became a valid chart pattern when the index closed above cyan line C. This one turned into a very profitable trade, providing you held on long enough. Often for short-term trades, I'll use the measure rule to set a target. The measure rule is the height of the pattern added to the top of the pattern, in the case of double bottoms.

Today, the index moved horizontally for most of the day, as the two red lines show.

That movement forms a chart pattern called a rectangle top. Those breakout upward 68% of the time. So an upward move is what I expect on Tuesday. The above probabilities agree with that assessment.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,620.87    
 Weekly S2  24,721.82  100.95   
 Monthly S1  25,189.78  467.96   
 Weekly S1  25,240.25  50.47   
 Monthly Pivot  25,458.97  218.72   
 Weekly Pivot  25,484.21  25.24   
 Daily S2  25,681.33  197.12   
 Low  25,716.41  35.08   
 Daily S1  25,720.01  3.60   Yes! The Daily S1 is close to the Low.
 Open  25,727.70  7.69   
 61.8% Down from Intraday High  25,744.59  16.89   
 50% Down from Intraday High  25,753.29  8.70   
 Daily Pivot  25,755.09  1.80   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  25,758.69  3.60   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  25,761.99  3.30   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  25,790.17  28.18   
 Daily R1  25,793.77  3.60   Yes! The Daily R1 is close to the High.
 Daily R2  25,828.85  35.08   
 Weekly R1  26,002.64  173.79   
 Monthly R1  26,027.88  25.24   
 Weekly R2  26,246.60  218.72   
 Monthly R2  26,297.07  50.47   

Monday 8/20/18. Market Monday: The Week Ahead

My Prediction

Picture of the NASDAQ on the daily scale.

I show the Nasdaq composite on the daily scale.

After I drew the two red lines, the pattern reminded me of a rising wedge.

The rising wedge has two rising and converging trendlines.

What interests me most is that price failed to rise up to the top trendline at A.

I've written about partial rises before (this week, in fact) but not in a wedge.

A partial rise suggests weakness. Indeed, the index has dropped to the bottom trendline. We'll have to wait and see if the index will bounce off that line and move upward or drop through it.

With so many prior trendline touches (6 so far), a pierce would be a significant event. But it also denotes strength (support), so we could see a bounce upward.

Of course, one could argue that so many trendline touches means support has burned away and it's time for a plunge.

I hate saying I don't know what's going to happen, but it's true.

$ $ $

I updated the statistics on the cup with handle chart pattern. The performance has improved...

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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: Down 125.44 points.
Tuesday: Up 112.22 points.
Wednesday: Down 137.51 points.
Thursday: Up 396.32 points.
Friday: Up 110.59 points.

For the Week...

The Dow industrials were up 356.18 points or 1.4%.
The Nasdaq composite was down 22.78 points or 0.3%.
The S&P 500 index was up 16.55 points or 0.6%.

Year to Date...

Dow Industrials
     3.6% down from the high of 26,616.71 on 01/26/2018.
     10.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.5% down from the high of 7,933.31 on 07/25/2018.
     17.9% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     0.8% down from the high of 2,872.87 on 01/26/2018.
     12.5% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/17/2018, the CPI had:

5 bearish patterns,
22 bullish patterns,
290 patterns waiting for breakout.
The CPI signal is 81.5%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,433  25,551  25,640  25,758  25,846 
Weekly  24,692  25,181  25,454  25,943  26,217 
Monthly  24,591  25,130  25,429  25,968  26,267 
S&P500 (^GSPC): Daily  2,825  2,837  2,847  2,859  2,868 
Weekly  2,783  2,817  2,836  2,870  2,889 
Monthly  2,760  2,805  2,834  2,879  2,908 
Nasdaq (^IXIC): Daily  7,722  7,769  7,800  7,847  7,878 
Weekly  7,657  7,736  7,813  7,892  7,969 
Monthly  7,456  7,636  7,785  7,965  8,114 
  • 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 44.9%   Expect a random direction. 
 2 months up 41.6%   Expect a random direction. 
 S & P 500 (^GSPC) 1 week up 45.4%   Expect a random direction. 
 5 months up 19.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.3%   The trend may continue. 
 5 months up 16.6%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
14Triangle, symmetrical
11Dead-cat bounce
6Double Bottom, Adam and Adam
6Head-and-shoulders top
5Pipe top
5Triple top
5Double Top, Adam and Eve
5Pipe bottom
5Double Top, Adam and Adam
4Broadening 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. Healthcare Information1. Healthcare Information
2. Short ETFs2. Computers and Peripherals
3. Computers and Peripherals3. Computer Software and Svcs
4. Shoe4. Shoe
5. Medical Services5. Human Resources

-- Thomas Bulkowski

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Friday 8/17/18. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 610 stocks searched, or 1.6%. 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 4 bullish chart patterns this week and 5 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
ALKDiamond top      07/09/201808/15/2018Air Transport
AAPLFlag      08/03/201808/15/2018Computers and Peripherals
BMITriangle, symmetrical      07/23/201808/16/2018Precision Instrument
EDTriangle, ascending      07/13/201808/14/2018Electric Utility (East)
COPHead-and-shoulders top      07/30/201808/14/2018Petroleum (Integrated)
EFXBroadening top      06/11/201808/16/2018Information Services
JCPDead-cat bounce      08/16/201808/16/2018Retail Store
LAMRBroadening wedge, ascending      07/19/201808/15/2018Advertising
NJRBroadening top      07/19/201808/16/2018Natural Gas (Distributor)
TPRPipe bottom      07/30/201808/06/2018Apparel
TUESRectangle bottom      06/04/201808/16/2018Retail Store

 

Weekly screen for chart patterns ending between 08/09/2018 and 08/16/2018. 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.
 
Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 32 out of 58
Stock RS rank: 412 out of 603
8/16/18 close: $64.31
1 Month avg volatility: $1.84. Volatility stop (for downward breakout): $69.06 or 7.4% above the close.
Change YTD: -12.52%
Volume: 2,063,200 shares. 3 month avg: 1,966,126 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: Diamond top reversal pattern from 07/09/2018 to 08/15/2018
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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Apple Inc. (AAPL)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 58
Stock RS rank: 84 out of 603
8/16/18 close: $213.32
1 Month avg volatility: $3.00. Volatility stop (for upward breakout): $205.47 or 3.7% below the close.
Change YTD: 26.05%
Volume: 27,611,400 shares. 3 month avg: 27,687,312 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Monday.
 
Chart pattern: Flag continuation pattern from 08/03/2018 to 08/15/2018
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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Badger Meter Inc. (BMI)
Industry: Precision Instrument
Industry RS rank: 38 out of 58
Stock RS rank: 288 out of 603
8/16/18 close: $52.05
1 Month avg volatility: $1.34. Volatility stop (for upward breakout): $49.22 or 5.4% below the close.
Change YTD: 8.89%
Volume: 69,800 shares. 3 month avg: 149,246 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 07/23/2018 to 08/16/2018
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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Con Edison, Inc (ED)
Industry: Electric Utility (East)
Industry RS rank: 22 out of 58
Stock RS rank: 294 out of 603
8/16/18 close: $80.71
1 Month avg volatility: $1.08. Volatility stop (for upward breakout): $77.25 or 4.3% below the close.
Change YTD: -4.99%
Volume: 2,286,900 shares. 3 month avg: 1,605,666 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, ascending reversal pattern from 07/13/2018 to 08/14/2018
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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ConocoPhillips (COP)
Industry: Petroleum (Integrated)
Industry RS rank: 12 out of 58
Stock RS rank: 94 out of 603
8/16/18 close: $69.41
1 Month avg volatility: $1.21. Volatility stop (for downward breakout): $72.09 or 3.9% above the close.
Change YTD: 26.45%
Volume: 5,418,000 shares. 3 month avg: 6,156,062 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: Head-and-shoulders top reversal pattern from 07/30/2018 to 08/14/2018
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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Equifax Inc (EFX)
Industry: Information Services
Industry RS rank: 24 out of 58
Stock RS rank: 191 out of 603
8/16/18 close: $129.76
1 Month avg volatility: $1.75. Volatility stop (for downward breakout): $133.99 or 3.3% above the close.
Change YTD: 10.04%
Volume: 485,600 shares. 3 month avg: 3,458,600 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: Broadening top reversal pattern from 06/11/2018 to 08/16/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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JC Penney Company Inc (JCP)
Industry: Retail Store
Industry RS rank: 20 out of 58
Stock RS rank: 600 out of 603
8/16/18 close: $1.76
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $2.19 or 24.3% above the close.
Change YTD: -44.30%
Volume: 83,752,400 shares. 3 month avg: 17,298,666 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: Dead-cat bounce continuation pattern from 08/16/2018 to 08/16/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Lamar Advertising (LAMR)
Industry: Advertising
Industry RS rank: 55 out of 58
Stock RS rank: 219 out of 603
8/16/18 close: $75.75
1 Month avg volatility: $1.14. Volatility stop (for downward breakout): $78.23 or 3.3% above the close.
Change YTD: 2.03%
Volume: 360,100 shares. 3 month avg: 612,354 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: Broadening wedge, ascending reversal pattern from 07/19/2018 to 08/15/2018
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price hits measure rule target 58% of the time.

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New Jersey Resources Corp (NJR)
Industry: Natural Gas (Distributor)
Industry RS rank: 10 out of 58
Stock RS rank: 110 out of 603
8/16/18 close: $46.90
1 Month avg volatility: $0.90. Volatility stop (for downward breakout): $48.89 or 4.2% above the close.
Change YTD: 16.67%
Volume: 315,200 shares. 3 month avg: 424,785 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: Broadening top reversal pattern from 07/19/2018 to 08/16/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Tapestry Inc (TPR)
Industry: Apparel
Industry RS rank: 21 out of 58
Stock RS rank: 355 out of 603
8/16/18 close: $51.38
1 Month avg volatility: $1.16. Volatility stop (for upward breakout): $48.48 or 5.7% below the close.
Change YTD: 16.17%
Volume: 3,721,800 shares. 3 month avg: 3,145,718 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: Pipe bottom reversal pattern from 07/30/2018 to 08/06/2018
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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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 20 out of 58
Stock RS rank: 377 out of 603
8/16/18 close: $3.00
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $3.28 or 9.2% above the close.
Change YTD: 9.09%
Volume: 312,600 shares. 3 month avg: 391,566 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: Rectangle bottom continuation pattern from 06/04/2018 to 08/16/2018
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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Thursday 8/16/18. Intraday Market Direction: Nasdaq

The index dropped by -1.2% or -96.77 points. Since 02/05/1971 the index made 113 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 47 occasions.
     Average loss was -1.4% on 66 occasions.
Expect the index to close lower 58.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 150/272 or 55.1% of the time.
     The prediction of the index closing lower has been right 46/91 or 50.5% 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 index took a big dive right from the opening. It hit bottom at A, bounced up to the red line, and then dropped back down to B.

That pattern formed the beginning of a double bottom.

The pattern became real when the index closed above the red line. The problem is, I'm not sure it's happened yet. If it has, then it suggests an upward move tomorrow. No guarantees, of course and I've been wrong a lot recently. The above probabilities suggest a lower close, too, so who knows what will happen.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,420.70    
 Monthly S1  7,597.41  176.71   
 Daily S2  7,679.85  82.44   
 Weekly S2  7,711.65  31.79   
 Daily S1  7,726.99  15.34   
 Low  7,732.69  5.70   Yes! The Low is close to the Daily S1.
 Weekly S1  7,742.88  10.19   
 Monthly Pivot  7,765.36  22.48   
 61.8% Down from Intraday High  7,770.88  5.52   Yes! The 61.8% Down from Intraday High is close to the Monthly Pivot.
 Close  7,774.12  3.24   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  7,779.82  5.70   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  7,782.67  2.85   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  7,794.47  11.80   
 Open  7,810.02  15.55   
 Daily R1  7,826.96  16.94   
 High  7,832.66  5.70   Yes! The High is close to the Daily R1.
 Weekly Pivot  7,833.12  0.46   Yes! The Weekly Pivot is close to the High.
 Weekly R1  7,864.35  31.24   
 Daily R2  7,879.79  15.44   
 Monthly R1  7,942.07  62.28   
 Weekly R2  7,954.59  12.52   
 Monthly R2  8,110.02  155.43   

Wednesday 8/15/18. 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.

This chart is an unusual one because it depicts a signal change within days of each other. That's because of the wild swing the market took today.

If the market drops on Wednesday, I expect the vertical green bar on the far right of the chart will disappear. That happens from time to time and this chart is probably an example of that about to happen.

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 Tuesday, 25% 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 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 507 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 01/22/2018.
And the bottom was 19% on 02/08/2018.

The more sensitive red line shows a dramatic drop from a week ago. The blue line is unchanged.

Not sure what it all means.

The chart shows three variations. The index from the July low has moved up. The blue line has been flat. The red line has been falling. It's no wonder I can't figure this out.

-- Thomas Bulkowski

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Tuesday 8/14/18. Intraday Market Direction: Dow

The index dropped by -0.5% or -125.44 points. Since 10/01/1928 the index made 748 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 374 occasions.
     Average loss was -0.7% on 374 occasions.
Expect the index to close higher 50.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 167/281 or 59.4% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

A broadening bottom appears between the two red lines. I prefer to see this patterns with three touches of each trendline, but two on the top will suffice for this example. That's not what's important about this pattern.

Do you know what is important? Hint: I have it labeled at A.

Turn A represents a partial rise.

A partial rise works 57% of the time in broadening bottoms, according to my latest research. Yes, that's about random, but it does give you a hint of the index moving lower tomorrow (Tuesday). It might not, but it's something to be aware of.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,642.71    
 Monthly S1  24,415.21  772.49   
 Weekly S2  24,897.93  482.72   
 Daily S2  25,013.55  115.62   
 Weekly S1  25,042.81  29.27   
 Monthly Pivot  25,053.96  11.15   Yes! The Monthly Pivot is close to the Weekly S1.
 Daily S1  25,100.62  46.66   
 Low  25,153.93  53.31   
 Close  25,187.70  33.77   
 61.8% Down from Intraday High  25,240.82  53.12   
 Daily Pivot  25,241.01  0.19   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  25,267.66  26.65   
 38.2% Down from Intraday High  25,294.50  26.84   
 Open  25,327.19  32.69   
 Daily R1  25,328.08  0.89   Yes! The Daily R1 is close to the Open.
 Weekly Pivot  25,367.77  39.68   
 High  25,381.39  13.62   Yes! The High is close to the Weekly Pivot.
 Daily R2  25,468.47  87.08   
 Weekly R1  25,512.65  44.19   
 Monthly R1  25,826.46  313.80   
 Weekly R2  25,837.61  11.15   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  26,465.21  627.61   

Monday 8/13/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily scale.

The two diverging red lines highlight a difficult to find pattern in this chart. It's a broadening top.

The top trendline has 3 touches and there's two on the bottom (counted as minor highs or lows, not trendline crossings). The five trendline touch is a minimum, but six touches is better (three of each trendline).

I drew a horizontal green line at the top of the pattern, showing where it breaks out upward. That happens at A.

So even though the chart looks to be topping out and is ready for a downward swing, all is not lost. However, stocks are still suffering from the recent earnings announcements.

Those companies that perform well see their stocks jump. And those that don't, see, their stocks make a dramatic drop. It's like there's little middle ground.

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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 39.6 points.
Tuesday: Up 126.73 points.
Wednesday: Down 45.16 points.
Thursday: Down 74.52 points.
Friday: Down 196.09 points.

For the Week...

The Dow industrials were down 149.44 points or 0.6%.
The Nasdaq composite was up 27.1 points or 0.3%.
The S&P 500 index was down 6.77 points or 0.2%.

Year to Date...

Dow Industrials
     4.9% down from the high of 26,616.71 on 01/26/2018.
     8.4% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.2% down from the high of 7,933.31 on 07/25/2018.
     18.2% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     1.4% down from the high of 2,872.87 on 01/26/2018.
     11.9% up from the low of 2,532.69 on 02/09/2018.

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

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  25,134  25,224  25,312  25,402  25,491 
Weekly  24,940  25,126  25,410  25,596  25,879 
Monthly  23,685  24,499  25,096  25,910  26,507 
S&P500 (^GSPC): Daily  2,817  2,826  2,834  2,842  2,850 
Weekly  2,803  2,818  2,841  2,856  2,879 
Monthly  2,680  2,757  2,810  2,887  2,940 
Nasdaq (^IXIC): Daily  7,793  7,816  7,841  7,864  7,889 
Weekly  7,733  7,786  7,855  7,908  7,976 
Monthly  7,442  7,641  7,787  7,985  8,132 
  • 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 28.7%   The trend may continue. 
 1 month down 21.4%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 26.9%   The trend may continue. 
 5 months up 19.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks up 34.1%   The trend may continue. 
 5 months up 16.6%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
13Double Bottom, Adam and Adam
13Triangle, symmetrical
10Dead-cat bounce
6Triple bottom
6Double Top, Adam and Adam
5Head-and-shoulders top
5Double Top, Adam and Eve
5Head-and-shoulders bottom
4Head-and-shoulders complex bottom
4Pipe 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. Healthcare Information1. Short ETFs
2. Computers and Peripherals2. Healthcare Information
3. Computer Software and Svcs3. Shoe
4. Shoe4. Computers and Peripherals
5. Human Resources5. Computer Software and Svcs

-- Thomas Bulkowski

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Friday 8/10/18. Pattern Trading Setups for the Weekend.

Into the wild, I released the bullish crab chart pattern today.

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 11 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 610 stocks searched, or 1.8%. 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 7 bullish chart patterns this week and 2 bearish ones with any remaining (4) 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
ANDVCup with handle      06/04/201808/09/2018Petroleum (Integrated)
BECNTriangle, symmetrical      07/23/201808/07/2018Retail Building Supply
CLNEDead-cat bounce      08/08/201808/08/2018Natural Gas (Distributor)
EGNBroadening top      07/19/201808/08/2018Natural Gas (Diversified)
IVCDouble Top, Adam and Eve      07/19/201808/06/2018Medical Supplies
KALUTriangle, symmetrical      07/31/201808/09/2018Metals and Mining (Div.)
NTAPPipe bottom      07/23/201807/30/2018Computers and Peripherals
NVDABroadening bottom      07/11/201808/08/2018Semiconductor
OGETriangle, symmetrical      07/19/201808/08/2018Electric Utility (Central)
SSYSPipe bottom      07/23/201807/30/2018Electronics
TMOFlag      07/26/201808/09/2018Precision Instrument
TOLDouble Bottom, Adam and Eve      07/25/201808/06/2018Homebuilding
TUESRectangle bottom      06/04/201808/09/2018Retail Store

 

Weekly screen for chart patterns ending between 08/02/2018 and 08/09/2018. 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.
 
Andeavor Corp (ANDV)
Industry: Petroleum (Integrated)
Industry RS rank: 7 out of 58
Stock RS rank: 41 out of 603
8/9/18 close: $149.92
1 Month avg volatility: $2.67. Volatility stop (for upward breakout): $144.26 or 3.8% below the close.
Change YTD: 31.12%
Volume: 846,200 shares. 3 month avg: 1,337,488 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: Cup with handle continuation pattern from 06/04/2018 to 08/09/2018
Breakout is upward 100% of the time.
Average rise: 34%.
Break-even failure rate: 5%.
Throwbacks occur 58% of the time.
Price hits measure rule target 50% of the time.

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Beacon Roofing Supply Inc. (BECN)
Industry: Retail Building Supply
Industry RS rank: 43 out of 58
Stock RS rank: 596 out of 603
8/9/18 close: $38.24
1 Month avg volatility: $1.36. Volatility stop (for upward breakout): $33.89 or 11.4% below the close.
Change YTD: -40.03%
Volume: 2,987,600 shares. 3 month avg: 811,195 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: Triangle, symmetrical continuation pattern from 07/23/2018 to 08/07/2018
WARNING: A dead-cat bounce occurred on 05/09/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 11/07/2018.
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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Clean Energy Fuels Corp. (CLNE)
Industry: Natural Gas (Distributor)
Industry RS rank: 10 out of 58
Stock RS rank: 16 out of 603
8/9/18 close: $2.71
1 Month avg volatility: $0.16. Volatility stop (for downward breakout): $3.06 or 12.8% above the close.
Change YTD: 33.50%
Volume: 2,008,200 shares. 3 month avg: 1,021,160 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 08/08/2018 to 08/08/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Energen Corp (EGN)
Industry: Natural Gas (Diversified)
Industry RS rank: 16 out of 58
Stock RS rank: 55 out of 603
8/9/18 close: $72.21
1 Month avg volatility: $1.62. Volatility stop (for downward breakout): $76.13 or 5.4% above the close.
Change YTD: 25.43%
Volume: 1,025,800 shares. 3 month avg: 929,683 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 reversal pattern from 07/19/2018 to 08/08/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 8 out of 58
Stock RS rank: 432 out of 603
8/9/18 close: $16.60
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $17.90 or 7.8% above the close.
Change YTD: -1.48%
Volume: 381,900 shares. 3 month avg: 553,063 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: Double Top, Adam and Eve reversal pattern from 07/19/2018 to 08/06/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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Kaiser Aluminum Corp (KALU)
Industry: Metals and Mining (Div.)
Industry RS rank: 45 out of 58
Stock RS rank: 326 out of 603
8/9/18 close: $111.12
1 Month avg volatility: $2.74. Volatility stop (for upward breakout): $105.06 or 5.5% below the close.
Change YTD: 4.00%
Volume: 54,100 shares. 3 month avg: 141,669 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 07/31/2018 to 08/09/2018
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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Network Appliance (NTAP)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 58
Stock RS rank: 47 out of 603
8/9/18 close: $82.59
1 Month avg volatility: $1.80. Volatility stop (for upward breakout): $78.52 or 4.9% below the close.
Change YTD: 49.30%
Volume: 2,236,100 shares. 3 month avg: 2,986,022 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: Pipe bottom reversal pattern from 07/23/2018 to 07/30/2018
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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NVidia Corp (NVDA)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 17 out of 58
Stock RS rank: 222 out of 603
8/9/18 close: $256.46
1 Month avg volatility: $5.15. Volatility stop (for upward breakout): $245.84 or 4.1% below the close.
Change YTD: 32.54%
Volume: 5,099,000 shares. 3 month avg: 15,363,712 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 bottom reversal pattern from 07/11/2018 to 08/08/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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OGE Energy Corp (OGE)
Industry: Electric Utility (Central)
Industry RS rank: 11 out of 58
Stock RS rank: 128 out of 603
8/9/18 close: $36.88
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $34.94 or 5.3% below the close.
Change YTD: 12.06%
Volume: 1,810,400 shares. 3 month avg: 1,006,480 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 07/19/2018 to 08/08/2018
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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Stratasys Ltd (SSYS)
Industry: Electronics
Industry RS rank: 39 out of 58
Stock RS rank: 201 out of 603
8/9/18 close: $23.31
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $21.04 or 9.7% below the close.
Change YTD: 16.78%
Volume: 1,390,100 shares. 3 month avg: 835,520 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: Pipe bottom reversal pattern from 07/23/2018 to 07/30/2018
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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Thermo Electron Corp (TMO)
Industry: Precision Instrument
Industry RS rank: 34 out of 58
Stock RS rank: 214 out of 603
8/9/18 close: $233.24
1 Month avg volatility: $3.13. Volatility stop (for upward breakout): $226.84 or 2.8% below the close.
Change YTD: 22.84%
Volume: 856,800 shares. 3 month avg: 1,572,766 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: Flag continuation pattern from 07/26/2018 to 08/09/2018
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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Toll Brothers (TOL)
Industry: Homebuilding
Industry RS rank: 58 out of 58
Stock RS rank: 576 out of 603
8/9/18 close: $36.28
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $34.41 or 5.2% below the close.
Change YTD: -24.45%
Volume: 1,615,500 shares. 3 month avg: 2,237,614 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 Eve reversal pattern from 07/25/2018 to 08/06/2018
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 5%.
Throwbacks occur 59% of the time.
Price hits measure rule target 66% of the time.

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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 20 out of 58
Stock RS rank: 300 out of 603
8/9/18 close: $2.90
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $3.12 or 7.6% above the close.
Change YTD: 5.45%
Volume: 118,100 shares. 3 month avg: 391,566 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: Rectangle bottom continuation pattern from 06/04/2018 to 08/09/2018
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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Thursday 8/9/18. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 4.67 points. Since 02/05/1971 the index made 681 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 374 occasions.
     Average loss was -0.7% on 307 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 149/271 or 55.0% of the time.
     The prediction of the index closing lower has been right 46/91 or 50.5% 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 last two days began by forming a rectangle top.

Today, however, it formed an ascending triangle. That's shown on the chart by the converging red lines.

Just before I drew the line, I saw that the index had broken out downward from the triangle. That suggests the index will move lower but it could bust the triangle and shoot upward, instead.

Wish I could be more definitive than that...

$ $ $

I reviewed the bearish crab pattern.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,264.70    
 Weekly S2  7,552.39  287.69   
 Monthly S1  7,576.52  24.13   
 Weekly S1  7,720.36  143.84   
 Monthly Pivot  7,754.91  34.55   
 Weekly Pivot  7,772.21  17.30   
 Daily S2  7,847.60  75.39   
 Low  7,864.46  16.86   
 Daily S1  7,867.96  3.50   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  7,878.68  10.72   
 Open  7,880.00  1.32   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  7,883.08  3.08   Yes! The 50% Down from Intraday High is close to the Open.
 Daily Pivot  7,884.83  1.75   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  7,887.47  2.64   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  7,888.33  0.86   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  7,901.69  13.36   
 Daily R1  7,905.19  3.50   Yes! The Daily R1 is close to the High.
 Daily R2  7,922.06  16.86   
 Weekly R1  7,940.18  18.12   
 Weekly R2  7,992.03  51.85   
 Monthly R1  8,066.73  74.70   
 Monthly R2  8,245.12  178.40   

Wednesday 8/8/18. 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 is still bullish, the same it's been since early July. That's what the vertical green bar on the far right of the chart means.

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 Tuesday, 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 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 507 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 14%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Both lines improved this week compared to a week ago. The improvement was modest, one percentage point.

Look at the slope of the red line. The peaks in June and July appear at about the same level, so the line really hasn't moved higher much.

Now compare what the index has done over the same period. That's divergence. The index is climbing but the indicator lines are flat. Bearish divergence. Could spell trouble.

-- Thomas Bulkowski

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Tuesday 8/7/18. Intraday Market Direction: Dow

The index climbed by 0.2% or 39.6 points. Since 10/01/1928 the index made 1304 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 712 occasions.
     Average loss was -0.5% on 592 occasions.
Expect the index to close higher 54.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 166/280 or 59.3% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

I was so busy doing nothing last night that I forgot to post this.

I show a number of patterns on the chart, all of them profitable. From the left, DE is a double bottom. AB is a double top, and C is an ugly double bottom. The pattern happens when the second bottom is more than 5% above the first, so that the two bottoms look uneven. The 5% number applies to stocks, not the indices, because such large moves rarely occur in an average or index.

The green line is one of overhead resistance setup by the Thursday-Friday horizontal move. The resistance represents an area, not a single price.

Based on the futures this morning, it appears to put the opening move near the upper part of that area.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,545.98    
 Monthly S1  24,524.08  978.10   
 Weekly S2  24,994.05  469.97   
 Monthly Pivot  25,055.66  61.61   
 Weekly S1  25,248.11  192.45   
 Daily S2  25,315.89  67.77   
 Weekly Pivot  25,374.14  58.25   
 Low  25,381.38  7.24   Yes! The Low is close to the Weekly Pivot.
 Daily S1  25,409.03  27.65   
 Open  25,437.43  28.40   
 61.8% Down from Intraday High  25,441.98  4.55   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  25,460.70  18.72   
 Daily Pivot  25,474.53  13.83   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  25,479.42  4.89   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  25,502.18  22.76   
 High  25,540.02  37.84   
 Daily R1  25,567.67  27.65   
 Weekly R1  25,628.20  60.53   
 Daily R2  25,633.17  4.96   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  25,754.23  121.06   
 Monthly R1  26,033.76  279.53   
 Monthly R2  26,565.34  531.58   

Monday 8/6/18. 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. It seems I repeat that every time I post a pic for Monday's blog.

Anyway, I drew two red lines on the chart, the bottom one shows support and the top one shows resistance.

I just wanted to see what the chart looked like with those lines on there. Hmm.

I noticed that recently, the index has marched above the top line and stayed there for a time.

So how about this. Imagine the chart reflected across the green line, like flipping the left of the chart onto the right.

That price mirror is a technique which helps show where price might go. It rarely works perfectly, but it does provide guidance.

If it works, it means the index will slide downward back in between the red lines and trend sideways. The cause? Maybe the trade war with China that Trump has his heart set on. Of course, it'll hit your pocketbook, but you will get your chance to vote your anger (or delight) in November.

$ $ $

I updated the statistics on cloud banks.

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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: Down 144.23 points.
Tuesday: Up 108.36 points.
Wednesday: Down 81.37 points.
Thursday: Down 7.66 points.
Friday: Up 136.42 points.

For the Week...

The Dow industrials were up 11.52 points or 0.0%.
The Nasdaq composite was up 74.59 points or 1.0%.
The S&P 500 index was up 21.53 points or 0.8%.

Year to Date...

Dow Industrials
     4.3% down from the high of 26,616.71 on 01/26/2018.
     9.1% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.5% down from the high of 7,933.31 on 07/25/2018.
     17.8% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     1.1% down from the high of 2,872.87 on 01/26/2018.
     12.1% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 08/03/2018, the CPI had:

6 bearish patterns,
12 bullish patterns,
316 patterns waiting for breakout.
The CPI signal is 66.7%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,276  25,369  25,419  25,512  25,561 
Weekly  24,981  25,222  25,361  25,602  25,741 
Monthly  23,533  24,498  25,042  26,007  26,552 
S&P500 (^GSPC): Daily  2,823  2,832  2,836  2,845  2,849 
Weekly  2,782  2,811  2,826  2,855  2,870 
Monthly  2,647  2,744  2,796  2,893  2,945 
Nasdaq (^IXIC): Daily  7,766  7,789  7,806  7,830  7,847 
Weekly  7,527  7,669  7,747  7,889  7,967 
Monthly  7,239  7,526  7,729  8,016  8,220 
  • 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) 5 weeks up 12.7%   Expect a reversal soon. 
 2 months up 41.6%   Expect a random direction. 
 S & P 500 (^GSPC) 5 weeks up 12.1%   Expect a reversal soon. 
 5 months up 19.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 46.8%   Expect a random direction. 
 5 months up 16.6%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
11Double Bottom, Adam and Adam
10Triangle, symmetrical
9Dead-cat bounce
7Head-and-shoulders top
7Pipe top
5Double Top, Adam and Adam
5Head-and-shoulders bottom
4Triple top
4Head-and-shoulders complex bottom
4Double Top, Eve and Eve

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. Short ETFs1. Short ETFs
2. Healthcare Information2. Healthcare Information
3. Shoe3. Computer Software and Svcs
4. Computers and Peripherals4. Internet
5. Computer Software and Svcs5. Shoe

-- Thomas Bulkowski

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Friday 8/3/18. 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 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 610 stocks searched, or 3.4%. 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 12 bearish ones with any remaining (1) 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
ACXMPipe top      07/16/201807/23/2018Computer Software and Svcs
ASNADouble Bottom, Eve and Eve      07/16/201807/30/2018Apparel
CSODPipe top      07/16/201807/23/2018E-Commerce
CROXBroadening wedge, ascending      07/11/201808/01/2018Shoe
CCRNDead-cat bounce      08/02/201808/02/2018Human Resources
DUKTriangle, ascending      07/06/201808/02/2018Electric Utility (East)
BOOMDead-cat bounce      07/27/201807/27/2018Metal Fabricating
EOGBroadening top, right-angled and ascending      06/29/201808/02/2018Natural Gas (Distributor)
GPROHead-and-shoulders complex top      06/12/201807/27/2018Electronics
HEHead-and-shoulders bottom      07/18/201807/30/2018Electric Utility (West)
HURCFalling wedge      06/26/201807/31/2018Machinery
IPIDead-cat bounce      08/02/201808/02/2018Chemical (Diversified)
KBALBroadening bottom      05/22/201808/02/2018Furn/Home Furnishings
MDCAHead-and-shoulders top      06/22/201807/30/2018Advertising
OXYTriangle, symmetrical      05/25/201808/02/2018Petroleum (Producing)
PESDead-cat bounce      07/31/201807/31/2018Oilfield Svcs/Equipment
TDOCPipe top      07/16/201807/23/2018Healthcare Information
TGDead-cat bounce      08/02/201808/02/2018Chemical (Specialty)
TUESRectangle bottom      06/04/201808/02/2018Retail Store
VMITriangle, symmetrical      07/12/201807/31/2018Metal Fabricating
WWWDiamond top      07/20/201808/02/2018Shoe

 

Weekly screen for chart patterns ending between 07/26/2018 and 08/02/2018. 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.
 
Acxiom Corp (ACXM)
Industry: Computer Software and Svcs
Industry RS rank: 5 out of 58
Stock RS rank: 28 out of 603
8/2/18 close: $40.43
1 Month avg volatility: $1.17. Volatility stop (for downward breakout): $43.30 or 7.1% above the close.
Change YTD: 46.70%
Volume: 672,200 shares. 3 month avg: 464,885 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: Pipe top reversal pattern from 07/16/2018 to 07/23/2018
WARNING: A dead-cat bounce occurred on 03/29/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/27/2018.
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 17 out of 58
Stock RS rank: 12 out of 603
8/2/18 close: $3.89
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $3.24 or 16.6% below the close.
Change YTD: 65.53%
Volume: 2,115,500 shares. 3 month avg: 2,861,685 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: Double Bottom, Eve and Eve reversal pattern from 07/16/2018 to 07/30/2018
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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Cornerstone OnDemand Inc (CSOD)
Industry: E-Commerce
Industry RS rank: 13 out of 58
Stock RS rank: 72 out of 603
8/2/18 close: $51.30
1 Month avg volatility: $1.44. Volatility stop (for downward breakout): $54.24 or 5.7% above the close.
Change YTD: 45.20%
Volume: 359,300 shares. 3 month avg: 697,858 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: Pipe top reversal pattern from 07/16/2018 to 07/23/2018
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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CROCS Inc (CROX)
Industry: Shoe
Industry RS rank: 3 out of 58
Stock RS rank: 51 out of 603
8/2/18 close: $17.96
1 Month avg volatility: $0.64. Volatility stop (for downward breakout): $19.44 or 8.3% above the close.
Change YTD: 42.09%
Volume: 720,900 shares. 3 month avg: 1,230,068 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: Broadening wedge, ascending reversal pattern from 07/11/2018 to 08/01/2018
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price hits measure rule target 58% of the time.

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Cross Country Healthcare Inc (CCRN)
Industry: Human Resources
Industry RS rank: 7 out of 58
Stock RS rank: 599 out of 603
8/2/18 close: $8.11
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $10.06 or 24.1% above the close.
Change YTD: -36.44%
Volume: 1,721,800 shares. 3 month avg: 226,311 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 08/02/2018 to 08/02/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Duke Energy Corp (DUK)
Industry: Electric Utility (East)
Industry RS rank: 29 out of 58
Stock RS rank: 262 out of 603
8/2/18 close: $80.45
1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $77.16 or 4.1% below the close.
Change YTD: -4.35%
Volume: 4,075,600 shares. 3 month avg: 2,571,354 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 07/06/2018 to 08/02/2018
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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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 55 out of 58
Stock RS rank: 10 out of 603
8/2/18 close: $41.70
1 Month avg volatility: $2.11. Volatility stop (for downward breakout): $46.36 or 11.2% above the close.
Change YTD: 66.47%
Volume: 154,600 shares. 3 month avg: 60,208 shares.
This security may be thinly traded (less than 100k 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 07/27/2018 to 07/27/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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EOG Resources (EOG)
Industry: Natural Gas (Distributor)
Industry RS rank: 10 out of 58
Stock RS rank: 179 out of 603
8/2/18 close: $125.93
1 Month avg volatility: $2.60. Volatility stop (for downward breakout): $131.51 or 4.4% above the close.
Change YTD: 16.70%
Volume: 3,507,800 shares. 3 month avg: 2,618,102 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: Broadening top, right-angled and ascending reversal pattern from 06/29/2018 to 08/02/2018
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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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 43 out of 58
Stock RS rank: 178 out of 603
8/2/18 close: $5.99
1 Month avg volatility: $0.29. Volatility stop (for downward breakout): $6.69 or 11.7% above the close.
Change YTD: -22.21%
Volume: 6,700,600 shares. 3 month avg: 5,624,629 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: Head-and-shoulders complex top reversal pattern from 06/12/2018 to 07/27/2018
Breakout is downward 100% of the time.
Average decline: 23%.
Break-even failure rate: 4%.
Pullbacks occur 67% of the time.
Price hits measure rule target 53% of the time.

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Hawaiian Electric Industries, Inc. (HE)
Industry: Electric Utility (West)
Industry RS rank: 20 out of 58
Stock RS rank: 248 out of 603
8/2/18 close: $35.24
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $33.86 or 3.9% below the close.
Change YTD: -2.52%
Volume: 464,700 shares. 3 month avg: 432,540 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: Head-and-shoulders bottom reversal pattern from 07/18/2018 to 07/30/2018
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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Hurco Companies Inc. (HURC)
Industry: Machinery
Industry RS rank: 53 out of 58
Stock RS rank: 322 out of 603
8/2/18 close: $45.05
1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $43.16 or 4.2% below the close.
Change YTD: 6.75%
Volume: 7,200 shares. 3 month avg: 26,271 shares.
This security may be thinly traded (less than 100k 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: Falling wedge from 06/26/2018 to 07/31/2018
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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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 44 out of 58
Stock RS rank: 531 out of 603
8/2/18 close: $3.26
1 Month avg volatility: $0.17. Volatility stop (for downward breakout): $4.34 or 33.3% above the close.
Change YTD: -31.51%
Volume: 5,774,900 shares. 3 month avg: 1,190,495 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 08/02/2018 to 08/02/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Kimball International, Inc. (KBAL)
Industry: Furn/Home Furnishings
Industry RS rank: 56 out of 58
Stock RS rank: 446 out of 603
8/2/18 close: $16.90
1 Month avg volatility: $0.35. Volatility stop (for upward breakout): $15.73 or 6.9% below the close.
Change YTD: -9.67%
Volume: 94,900 shares. 3 month avg: 102,372 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: Broadening bottom reversal pattern from 05/22/2018 to 08/02/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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MDC Pateners Inc (MDCA)
Industry: Advertising
Industry RS rank: 50 out of 58
Stock RS rank: 600 out of 603
8/2/18 close: $4.55
1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $5.60 or 23.2% above the close.
Change YTD: -53.33%
Volume: 653,300 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 06/22/2018 to 07/30/2018
WARNING: A dead-cat bounce occurred on 05/10/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 08/09/2018 and a 38% chance by 11/08/2018.
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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Occidental Petroleum Corp (OXY)
Industry: Petroleum (Producing)
Industry RS rank: 21 out of 58
Stock RS rank: 177 out of 603
8/2/18 close: $82.24
1 Month avg volatility: $1.28. Volatility stop (for upward breakout): $79.28 or 3.6% below the close.
Change YTD: 11.65%
Volume: 3,354,900 shares. 3 month avg: 4,088,786 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: Triangle, symmetrical continuation pattern from 05/25/2018 to 08/02/2018
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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Pioneer Energy Services (PES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 39 out of 58
Stock RS rank: 353 out of 603
8/2/18 close: $3.20
1 Month avg volatility: $0.33. Volatility stop (for downward breakout): $3.96 or 23.9% above the close.
Change YTD: 4.92%
Volume: 1,192,400 shares. 3 month avg: 605,192 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: Dead-cat bounce continuation pattern from 07/31/2018 to 07/31/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Teladoc, Inc (TDOC)
Industry: Healthcare Information
Industry RS rank: 2 out of 58
Stock RS rank: 16 out of 603
8/2/18 close: $65.25
1 Month avg volatility: $2.80. Volatility stop (for downward breakout): $71.10 or 9.0% above the close.
Change YTD: 82.77%
Volume: 2,713,400 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: Pipe top reversal pattern from 07/16/2018 to 07/23/2018
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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Tredegar Corp (TG)
Industry: Chemical (Specialty)
Industry RS rank: 18 out of 58
Stock RS rank: 148 out of 603
8/2/18 close: $20.60
1 Month avg volatility: $0.90. Volatility stop (for downward breakout): $27.29 or 32.5% above the close.
Change YTD: 7.29%
Volume: 366,400 shares. 3 month avg: 64,734 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 Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 08/02/2018 to 08/02/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 22 out of 58
Stock RS rank: 273 out of 603
8/2/18 close: $2.95
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $3.16 or 7.3% above the close.
Change YTD: 7.27%
Volume: 138,700 shares. 3 month avg: 391,566 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: Rectangle bottom continuation pattern from 06/04/2018 to 08/02/2018
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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Valmont Industries Inc. (VMI)
Industry: Metal Fabricating
Industry RS rank: 55 out of 58
Stock RS rank: 513 out of 603
8/2/18 close: $140.10
1 Month avg volatility: $2.87. Volatility stop (for upward breakout): $133.21 or 4.9% below the close.
Change YTD: -15.53%
Volume: 86,400 shares. 3 month avg: 117,540 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 07/12/2018 to 07/31/2018
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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Wolverine World Wide (WWW)
Industry: Shoe
Industry RS rank: 3 out of 58
Stock RS rank: 160 out of 603
8/2/18 close: $36.48
1 Month avg volatility: $0.85. Volatility stop (for downward breakout): $38.21 or 4.8% above the close.
Change YTD: 14.43%
Volume: 466,800 shares. 3 month avg: 772,149 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: Diamond top reversal pattern from 07/20/2018 to 08/02/2018
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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Thursday 8/2/18. Intraday Market Direction: Nasdaq

The index climbed by 0.5% or 35.5 points. Since 02/05/1971 the index made 548 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 370 occasions.
     Average loss was -0.7% on 178 occasions.
Expect the index to close higher 67.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 148/270 or 54.8% of the time.
     The prediction of the index closing lower has been right 46/91 or 50.5% 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 index is following a channel higher (parallel red lines), but notice that the index is riding along the bottom half of the channel. From my day trading days, it suggests a downward breakout. No guarantees, of course.

The ABC pattern is a double top (AB, actually). The green line is the confirmation line. When the index closes below the line, it suggests a continuing lower trend.

And that's what we saw here. If you were to short this, based on the height of the pattern (B-C) subtracted from C, that would be the target. And that would have made a tidy profit with a hold time of just over a day (a swing trade).

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,172.97    
 Monthly S1  7,440.13  267.16   
 Weekly S2  7,545.50  105.37   
 Weekly S1  7,626.40  80.89   
 Daily S2  7,641.59  15.19   
 Low  7,670.71  29.12   
 Daily S1  7,674.44  3.73   Yes! The Daily S1 is close to the Low.
 Monthly Pivot  7,686.72  12.28   
 61.8% Down from Intraday High  7,694.38  7.66   
 50% Down from Intraday High  7,701.69  7.31   
 Open  7,701.82  0.13   Yes! The Open is close to the 50% Down from Intraday High.
 Daily Pivot  7,703.56  1.74   Yes! The Daily Pivot is close to the Open.
 Close  7,707.29  3.73   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  7,709.01  1.72   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  7,732.68  23.67   
 Daily R1  7,736.41  3.73   Yes! The Daily R1 is close to the High.
 Daily R2  7,765.53  29.12   
 Weekly Pivot  7,779.85  14.32   
 Weekly R1  7,860.75  80.89   
 Monthly R1  7,953.88  93.13   
 Weekly R2  8,014.20  60.32   
 Monthly R2  8,200.47  186.27   

Wednesday 8/1/18. 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.

Another bearish signal appeared a few days ago and disappeared, which is typical for the indicator when the markets make large moves.

What remains is a bullish signal, shown here by the vertical green bar on the far right of the chart.

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 Tuesday, 23% 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 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 508 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 14%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

The more sensitive of the two lines, the red line, shows improvement over a week ago. The blue line has held steady.

The only thing this tells me is that there's a bullish tint to the market. I adjusted "Tom's Targets," which I do twice a month (see the grid at page top) and those reflect my belief that the markets remain bullish, that we'll get a nice move higher. But I could be wrong, of course.

$ $ $

I released updated statistics on bump-and-run reversal tops

-- Thomas Bulkowski

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