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

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Busted
Patterns
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Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 07/20/2017
21,612 -28.97 -0.1%
9,483 -92.64 -1.0%
720 5.10 0.7%
6,390 4.96 0.1%
2,473 -0.38 0.0%
YTD
9.4%
4.9%
9.1%
18.7%
10.5%
Tom's Targets    Overview: 07/14/2017
21,850 or 21,000 by 08/01/2017
9,950 or 9,400 by 08/01/2017
725 or 685 by 08/01/2017
6,450 or 6,175 by 08/01/2017
2,525 or 2,400 by 08/01/2017

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February 2012 Headlines


Archives


Tuesday 2/28/12. Trading Tuesday: Dow

The index dropped by 0.0% or -1.44 points. Since 10/01/1928 the index made 1158 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 616 occasions.
     Average loss was -0.7% on 542 occasions.
Expect the index to close higher 53.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 20/30 or 66.7% of the time.
     The prediction of the index closing lower has been right 3/4 or 75.0% of the time.

Picture of the Dow industrials on the 5 minute scale.

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

An inverted and ascending scallop appears at C and D. I don't follow that pattern because they are as numerous as ants at a picnic. But in this case, it makes money.

A double top appears at AB but it is difficult to determine if the pattern confirmed as valid. The index has to close below the red line (the lowest valley between the two peaks). If it confirmed, this pattern would have lost money.

The last pattern is a rectangle top, at E, shown in blue. It gives an important clue to how the index will trade tomorrow. This pattern sets up overhead resistance which price has closed below. Thus, I expect the index to close lower tomorrow. However, the probabilities above, suggest a higher close. One of these predictions should be correct.

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

-- Thomas Bulkowski

Top 

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  12,357.17    
 Monthly S1  12,669.34  312.17   
 Daily S2  12,818.94  149.60   
 Weekly S2  12,828.18  9.24   Yes! The Weekly S2 is close to the Daily S2.
 Monthly Pivot  12,841.58  13.40   Yes! The Monthly Pivot is close to the Weekly S2.
 Low  12,882.59  41.01   
 Daily S1  12,900.23  17.64   
 Weekly S1  12,904.85  4.62   Yes! The Weekly S1 is close to the Daily S1.
 61.8% Down from Intraday High  12,937.95  33.11   
 50% Down from Intraday High  12,955.05  17.10   
 Weekly Pivot  12,959.33  4.28   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 Daily Pivot  12,963.87  4.54   Yes! The Daily Pivot is close to the Weekly Pivot.
 38.2% Down from Intraday High  12,972.16  8.28   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Open  12,981.13  8.97   Yes! The Open is close to the 38.2% Down from Intraday High.
 Close  12,981.51  0.38   Yes! The Close is close to the Open.
 High  13,027.52  46.01   
 Weekly R1  13,036.00  8.48   Yes! The Weekly R1 is close to the High.
 Daily R1  13,045.16  9.16   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2  13,090.48  45.33   
 Daily R2  13,108.80  18.32   
 Monthly R1  13,153.75  44.95   
 Monthly R2  13,325.99  172.24   

Monday 2/27/12. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

I am still expecting the indices to retrace their gains since mid December, but do not see a sign of that happening yet. With the price of oil climbing (gas prices, too), it's going to hurt the economy, but will take a while to appear in the numbers and scare the s^%* out of everyone.

The Dow Utilities have formed an ascending triangle and those breakout upward most often. The transports have almost touched a 50% retrace mark, so they are also primed to rise.

I show a pic of the Nasdaq where a 38% retrace of the move up from A to B would be.

The only hint of a trend change is from the most recent two candles. They form a bearish doji star candle pattern. This could develop into a evening doji star. Those act as bearish reversals 71% of the time.

See my book, Encyclopedia of Candlestick Charts for more information on both candlestick patterns.

Top

A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Up 15.82 points.
Wednesday: Down 27.02 points.
Thursday: Up 46.02 points.
Friday: Down 1.74 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 33.08 points or 0.3%.
The Nasdaq composite was up 11.97 points or 0.4%.
The S&P 500 index was up 4.51 points or 0.3%.

Year to Date...

Dow Industrials
     0.2% down from the high of 13,013.82 on 02/24/2012.
     6.2% up from the low of 12,221.19 on 01/03/2012.
Nasdaq
     0.2% down from the high of 2,970.88 on 02/24/2012.
     12.8% up from the low of 2,627.23 on 01/04/2012.
S&P 500
     0.2% down from the high of 1,368.92 on 02/24/2012.
     8.5% up from the low of 1,258.86 on 01/03/2012.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Durable goods orders8:30 TBMeasures orders, shipments of goods with lifespans >3 years.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Gross domestic product8:30 WBMeasures economic activity; GDP deflator measures inflation.
Chicago purchasing managers index9:45 WBMonitors regional manufacturing activity.
Crude inventories10:30 W?My guess: Measures oil inventory.
FEDs Beige book2:00 W?Reports on economic conditions.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Personal income & consumption8:30 ThC+Measures sources of income to predict future demand.
Construction spending10:00 ThDCovers residential/non-residential/public spending on new construction.
Auto & truck sales2:00 ThC-Monthly sales of domestically produced vehicles.

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 02/24/2012, the CPI had:

9 bearish patterns,
20 bullish patterns,
397 patterns waiting for breakout.
The CPI signal is 69.0%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,919  12,951  12,982  13,014  13,046 
Weekly  12,829  12,906  12,960  13,037  13,091 
Monthly  12,358  12,670  12,842  13,155  13,326 
S&P 500 (^GSPC): Daily  1,361  1,363  1,366  1,369  1,372 
Weekly  1,346  1,356  1,362  1,372  1,379 
Monthly  1,277  1,321  1,345  1,390  1,413 
Nasdaq (^IXIC): Daily  2,952  2,958  2,964  2,970  2,977 
Weekly  2,905  2,934  2,953  2,982  3,000 
Monthly  2,696  2,830  2,900  3,034  3,105 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 30.8%  The trend may continue.
 5 months up 8.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 2 weeks up 29.1%  The trend may continue.
 3 months up 30.8%  The trend may continue.
 Nasdaq composite (^IXIC) 2 weeks up 25.8%  The trend may continue.
 2 months up 38.4%  The trend may continue.

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

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
16Triangle, symmetrical
10Pipe bottom
7Triangle, ascending
6Rectangle top
6Rectangle bottom
6Pipe top
5Rising wedge
5Flag, high and tight
4Triangle, descending
4Head-and-shoulders bottom

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

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

 

 

 

 

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

This WeekLast Week
1. Homebuilding1. Homebuilding
2. Retail Building Supply2. Retail Building Supply
3. Insurance (Life)3. Cement and Aggregates
4. Furn/Home Furnishings4. Furn/Home Furnishings
5. Machinery5. Insurance (Life)
48. Electric Utility (East)48. Electric Utility (East)
49. Metals and Mining (Div.)49. Natural Gas (Diversified)
50. Natural Gas (Diversified)50. Metals and Mining (Div.)
51. Coal51. Coal
52. Short ETFs52. Short ETFs

-- Thomas Bulkowski

Top


Thursday 2/23/12. Trading Thursday: Nasdaq

The index dropped by -0.5% or -15.4 points. Since 02/05/1971 the index made 297 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 141 occasions.
     Average loss was -1.0% on 156 occasions.
Expect the index to close lower 52.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 14/21 or 66.7% of the time.
     The prediction of the index closing lower has been right 7/15 or 46.7% of the time.

Picture of the Nasdaq composite on the 5 minute scale.

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

Early in the session, a head-and-shoulders top appeared, which was unusual because it occurred early in the day. The head-and-shoulders did not fulfill the measure rule for the pattern. That is somewhat unusual, too.

In the afternoon, a double top materialized. It lead to a profitable decline for those willing to short the index.

The above numbers suggest a lower close in the Nasdaq tomorrow. However, the index is resting on support that you can see when you switch to the 10-day chart (and at 2930 on the above pic). I get the feeling that the index will close higher, so that is the way I am going to bet. Often, when I have gone against the numbers, the numbers have been right, so keep that in mind. I feel that support will be sufficient to stop the decline. And with Greece turning around, it could help boost the markets. However, Iran is a thorn that is going to get worse. I think, longer term, that Iran will be the catalyst that takes the market down significantly.

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

-- Thomas Bulkowski

Top

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,588.64    
 Monthly S1  2,760.91  172.26   
 Monthly Pivot  2,861.84  100.94   
 Weekly S2  2,884.31  22.47   
 Weekly S1  2,908.74  24.43   
 Daily S2  2,917.05  8.31   
 Daily S1  2,925.11  8.06   
 Low  2,929.68  4.57   
 Close  2,933.17  3.49   
 Weekly Pivot  2,935.76  2.59   
 61.8% Down from Intraday High  2,937.58  1.82   Yes! The 61.8% Down from Intraday High is close to the Weekly Pivot.
 Daily Pivot  2,937.74  0.16   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  2,940.02  2.28   
 38.2% Down from Intraday High  2,942.47  2.44   
 Open  2,942.77  0.30   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  2,945.80  3.03   
 High  2,950.37  4.57   
 Daily R2  2,958.43  8.06   
 Weekly R1  2,960.19  1.76   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  2,987.21  27.02   
 Monthly R1  3,034.11  46.90   
 Monthly R2  3,135.04  100.94   

Tuesday 2/21/12. Market Monday on Tuesday: The Week Ahead

My Prediction

Picture of the Dow industrials on the weekly scale.

I show the Dow industrials on the weekly scale for a longer term view.

If you are an Elliott Wave lover, and I'm not, then this interpretation may interest you. Elliott says that motive waves move in a series of three advancing waves and two counter trend ones, for a total of five. I show the advancing waves on the chart as 1, 3, 5 and counter trend waves 2 and 4.

One of the rules is that wave 4 never overlaps wave 1, but that's not what my picture shows. Thus, my interpretation is flawed.

After the motive wave ends, a corrective wave begins. This is the ABC down move (not shown). A and C are waves down and B is an up wave. In other words, after the 5-wave move ends, a correction begins. How close is that to happening?

I show a series of blue lines starting from the peaks in 2007. Those peaks are locations of overhead resistance. The closer the lines are to one another, the more significant is the resistance. Thus, there's a bunch of it overhead.

When you combine those two interpretations, Elliott and resistance, this up trend may not continue much beyond 14,000. Of course, that's still 1,000 points away. We could see weakness set in anytime between where we are now and the top blue line on the chart. If my 2012 prediction is correct, then we should see weakness starting near the beginning of March.

I think that is likely, so I am not buying any long-term positions here. In fact, I'm worried about my long-term holdings, so I'm looking at taking profits or placing/tightening stops.

Top

A Brief Look Back

Picture of a flower from my garden.

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

Monday: Up 72.81 points.
Tuesday: Up 4.24 points.
Wednesday: Down 97.33 points.
Thursday: Up 123.13 points.
Friday: Up 45.79 points.

For the Week...

The Dow industrials were up 148.64 points or 1.2%.
The Nasdaq composite was up 47.9 points or 1.6%.
The S&P 500 index was up 18.59 points or 1.4%.

Year to Date...

Dow Industrials
     0.1% down from the high of 12,967.92 on 02/17/2012.
     6.0% up from the low of 12,221.19 on 01/03/2012.
Nasdaq
     0.4% down from the high of 2,962.78 on 02/17/2012.
     12.4% up from the low of 2,627.23 on 01/04/2012.
S&P 500
     0.2% down from the high of 1,363.40 on 02/17/2012.
     8.1% up from the low of 1,258.86 on 01/03/2012.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Existing home sales10:00 WCCounts sales of used homes.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Crude inventories11:00 Th?My guess: Measures oil inventory.
Michigan sentiment9:55 FB-Consumer sentiment: Measures strength of consumer spending.
New home sales10:00 FC+Shows sales of single-family homes.

Options Expiration

No options expire this week. Market holiday on Monday.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 02/17/2012, the CPI had:

4 bearish patterns,
21 bullish patterns,
293 patterns waiting for breakout.
The CPI signal is 84.0%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,876  12,913  12,940  12,977  13,005 
Weekly  12,676  12,813  12,890  13,027  13,105 
Monthly  12,087  12,518  12,743  13,175  13,399 
S&P 500 (^GSPC): Daily  1,354  1,358  1,361  1,364  1,367 
Weekly  1,333  1,347  1,355  1,369  1,378 
Monthly  1,248  1,305  1,334  1,391  1,420 
Nasdaq (^IXIC): Daily  2,931  2,941  2,952  2,963  2,973 
Weekly  2,891  2,921  2,942  2,973  2,993 
Monthly  2,595  2,773  2,868  3,047  3,141 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.7%  Expect a random direction.
 5 months up 8.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week up 42.0%  Expect a random direction.
 3 months up 30.8%  The trend may continue.
 Nasdaq composite (^IXIC) 1 week up 40.3%  Expect a random direction.
 2 months up 38.4%  The trend may continue.

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

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
15Triangle, symmetrical
11Rising wedge
10Flag, high and tight
9Triangle, ascending
8Pipe bottom
6Rectangle bottom
5Triangle, descending
5Broadening top
5Pipe top
4Rectangle top

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

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

 

 

 

 

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

This WeekLast Week
1. Homebuilding1. Homebuilding
2. Retail Building Supply2. Retail Building Supply
3. Cement and Aggregates3. Cement and Aggregates
4. Furn/Home Furnishings4. Biotechnology
5. Insurance (Life)5. Furn/Home Furnishings
48. Electric Utility (East)48. Securities Brokerage
49. Natural Gas (Diversified)49. Metals and Mining (Div.)
50. Metals and Mining (Div.)50. Natural Gas (Diversified)
51. Coal51. Short ETFs
52. Short ETFs52. Coal

-- Thomas Bulkowski

Top


Thursday 2/16/12. Trading Thursday: Nasdaq

The index dropped by -0.5% or -16 points. Since 02/05/1971 the index made 296 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 140 occasions.
     Average loss was -1.0% on 156 occasions.
Expect the index to close lower 52.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 14/21 or 66.7% of the time.
     The prediction of the index closing lower has been right 7/14 or 50.0% of the time.

Picture of the Nasdaq composite on the 5 minute scale.

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

A broadening top pattern appears near the open, but those are difficult to trade since the breakout price is not well defined. A double top at AB provides a better opportunity. A short of the index when it closed below the horizontal blue line would have been a profitable play. For the exit, the measure rule for the pattern (which is the height subtracted from the bottom of the pattern), fills by day's end.

I think that the indices have reached an inflection point. That means I expect them to roll over and head down. I have changed my targets on two of them (see top of this page) and I could flip the others if they show signs of a downturn.

For tomorrow (Thursday), I expect a move up in the morning to about 2935 (which is the corrective phase of a measured move down). After that, I expect the index to head lower. However, there is underlying support in the index at today's (Wednesday's) low. Whether the index will close lower is a tough call but the probabilities suggest that it will.

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

-- Thomas Bulkowski

Top

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,563.26    
 Monthly S1  2,739.55  176.28   
 Monthly Pivot  2,835.11  95.57   
 Weekly S2  2,865.05  29.94   
 Daily S2  2,881.59  16.54   
 Weekly S1  2,890.44  8.85   
 Daily S1  2,898.71  8.27   
 Weekly Pivot  2,910.56  11.85   
 Low  2,911.33  0.77   Yes! The Low is close to the Weekly Pivot.
 Close  2,915.83  4.50   Yes! The Close is close to the Low.
 Daily Pivot  2,928.45  12.62   
 61.8% Down from Intraday High  2,929.23  0.78   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  2,934.76  5.53   
 Weekly R1  2,935.95  1.19   Yes! The Weekly R1 is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,940.29  4.34   Yes! The 38.2% Down from Intraday High is close to the Weekly R1.
 Open  2,943.42  3.13   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  2,945.57  2.15   Yes! The Daily R1 is close to the Open.
 Weekly R2  2,956.07  10.50   
 High  2,958.19  2.12   Yes! The High is close to the Weekly R2.
 Daily R2  2,975.31  17.12   
 Monthly R1  3,011.40  36.09   
 Monthly R2  3,106.96  95.57   

Tuesday 2/14/12. Trading Tuesday: Dow

The index climbed by 0.6% or 72.81 points. Since 10/01/1928 the index made 780 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 430 occasions.
     Average loss was -0.7% on 350 occasions.
Expect the index to close higher 55.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 19/29 or 65.5% of the time.
     The prediction of the index closing lower has been right 3/4 or 75.0% of the time.

Picture of a flower from my garden.

I released new research that might help day traders. Click on the link for the complete story.

It describes when in the trading day a stock is most likely to hit the day's high or low. Most often, it happens within the first minute (a frequency distribution of over 60,000 samples shows the first minute has the highest frequency).

Almost half the time it happens within the first hour.

Again, click the above research for more details.

$ $ $

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

-- Thomas Bulkowski

Top

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  12,090.59    
 Monthly S1  12,482.32  391.72   
 Weekly S2  12,666.29  183.97   
 Monthly Pivot  12,703.51  37.23   
 Daily S2  12,764.87  61.36   
 Weekly S1  12,770.16  5.29   Yes! The Weekly S1 is close to the Daily S2.
 Low  12,799.11  28.95   
 Open  12,799.11  0.00   Yes! The Open is close to the Low.
 Daily S1  12,819.46  20.35   
 61.8% Down from Intraday High  12,833.04  13.58   
 50% Down from Intraday High  12,843.52  10.48   
 Weekly Pivot  12,847.44  3.92   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 Daily Pivot  12,853.69  6.26   Yes! The Daily Pivot is close to the Weekly Pivot.
 38.2% Down from Intraday High  12,854.00  0.31   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  12,874.04  20.04   
 High  12,887.93  13.89   
 Daily R1  12,908.28  20.35   
 Daily R2  12,942.51  34.24   
 Weekly R1  12,951.31  8.80   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  13,028.59  77.27   
 Monthly R1  13,095.24  66.65   
 Monthly R2  13,316.43  221.20   

Monday 2/13/12. 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. Could it show the future direction of the other indices?

Maybe.

I have been expecting a retrace of the upward move for several weeks now. I changed my targets from down to up in recognition to the continued move upward. However, that could be changing if the index is correct. It has been falling for several days now.

It is still too early to tell whether the other indices will follow this one and if so, how severe the drop may be. Often, the retrace is a Fibonacci number, like 38% of the move up from the December low.

I am not going to make a prediction. Rather, I still show the indices moving higher in the short term until I feel more confident of the new direction.

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 17.1 points.
Tuesday: Up 33.07 points.
Wednesday: Up 5.75 points.
Thursday: Up 6.51 points.
Friday: Down 89.23 points.

For the Week...

The Dow industrials were down 61 points or 0.5%.
The Nasdaq composite was down 1.78 points or 0.1%.
The S&P 500 index was down 2.26 points or 0.2%.

Year to Date...

Dow Industrials
     1.0% down from the high of 12,924.71 on 02/09/2012.
     4.7% up from the low of 12,221.19 on 01/03/2012.
Nasdaq
     0.9% down from the high of 2,930.68 on 02/09/2012.
     10.5% up from the low of 2,627.23 on 01/04/2012.
S&P 500
     0.9% down from the high of 1,354.32 on 02/09/2012.
     6.7% up from the low of 1,258.86 on 01/03/2012.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Retail sales8:30 TA-Reports total retail sales (not services). Are people spending?
International trade8:30 TC+Import/export prices, trade balance. US economy vs others.
Business inventories10:00 TC-Reports manufacturing, wholesale, retail inventories.
Industrial production9:15 WB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 WB-Gauges economic activity, hints of inflation.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Minutes2:00 W?Minutes of the prior Federal Reserve meeting.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Housing starts8:30 ThB-Number of homes beginning construction.
Building permits8:30 ThB-Measures building permits for new construction.
Producer price index8:30 ThB-Measures wholesale goods cost. An indication of future inflation.
Consumer price index8:30 FB+Inflation report. Measures cost of goods and services.
Leading indicators10:00 FD-Summary of already known reports.

Options Expiration

The following is courtesy of the Options Industry Council.

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

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

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Swing and Position Traders: Chart Pattern Indicator

On 02/10/2012, the CPI had:

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

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,665  12,733  12,811  12,879  12,958 
Weekly  12,642  12,722  12,823  12,903  13,004 
Monthly  12,066  12,434  12,679  13,047  13,292 
S&P 500 (^GSPC): Daily  1,330  1,336  1,344  1,350  1,358 
Weekly  1,326  1,334  1,344  1,353  1,363 
Monthly  1,242  1,293  1,323  1,374  1,404 
Nasdaq (^IXIC): Daily  2,887  2,896  2,903  2,912  2,919 
Weekly  2,861  2,882  2,907  2,928  2,952 
Monthly  2,559  2,732  2,831  3,003  3,103 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 30.5%  The trend may continue.
 5 months up 8.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week down 31.3%  The trend may continue.
 3 months up 30.8%  The trend may continue.
 Nasdaq composite (^IXIC) 1 week down 34.1%  The trend may continue.
 2 months up 38.4%  The trend may continue.

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

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

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

Buy-and-Hold: 12-Month SMA

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

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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
12Rising wedge
12Flag, high and tight
9Pipe bottom
7Triangle, ascending
6Triangle, descending
5Broadening top
4Rectangle bottom
3Double Bottom, Adam and Adam
3Rectangle top

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

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

 

 

 

 

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

This WeekLast Week
1. Homebuilding1. Homebuilding
2. Retail Building Supply2. Retail Building Supply
3. Cement and Aggregates3. Semiconductor Cap Equip.
4. Biotechnology4. Biotechnology
5. Furn/Home Furnishings5. Chemical (Basic)
48. Securities Brokerage48. Oilfield Svcs/Equipment
49. Metals and Mining (Div.)49. Securities Brokerage
50. Natural Gas (Diversified)50. Natural Gas (Diversified)
51. Short ETFs51. Coal
52. Coal52. Short ETFs

-- Thomas Bulkowski

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Thursday 2/9/12. Trading Thursday: Nasdaq

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 0.4% or 11.78 points. Since 02/05/1971 the index made 504 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 327 occasions.
     Average loss was -0.8% on 177 occasions.
Expect the index to close higher 64.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 13/20 or 65.0% of the time.
     The prediction of the index closing lower has been right 7/14 or 50.0% of the time.

I don't show the Nasdaq today nor do I make a prediction. Instead, I refer you to a new article I posted today on the best way to buy a stock after a throwback to a chart pattern.

It says that the best time to buy is when price returns to the top of the chart pattern or breakout price. That is also the best time to buy regardless of a throwback that might or might not appear.

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

-- Thomas Bulkowski

Top

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,506.00    
 Monthly S1  2,710.93  204.93   
 Weekly S2  2,743.12  32.19   
 Monthly Pivot  2,809.53  66.41   
 Weekly S1  2,829.49  19.96   
 Weekly Pivot  2,868.81  39.32   
 Daily S2  2,883.39  14.58   
 Low  2,892.71  9.32   
 Daily S1  2,899.63  6.92   
 61.8% Down from Intraday High  2,902.47  2.84   
 50% Down from Intraday High  2,905.49  3.01   
 Open  2,906.59  1.10   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,908.50  1.91   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  2,908.94  0.44   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  2,915.86  6.92   
 High  2,918.26  2.40   Yes! The High is close to the Close.
 Daily R1  2,925.18  6.92   
 Daily R2  2,934.49  9.32   
 Weekly R1  2,955.18  20.69   
 Weekly R2  2,994.50  39.32   
 Monthly R1  3,014.46  19.96   
 Monthly R2  3,113.06  98.60   

Tuesday 2/7/12. Trading Tuesday: Dow

The index dropped by -0.1% or -17.1 points. Since 10/01/1928 the index made 1196 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 618 occasions.
     Average loss was -0.8% on 578 occasions.
Expect the index to close higher 51.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 18/28 or 64.3% of the time.
     The prediction of the index closing lower has been right 3/4 or 75.0% of the time.

Picture of the Dow industrials on the 5 minute scale.

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

A potential double top appears at AB but the index does not appear to close below the low at C (red line) to confirm the chart pattern as valid. I did not check the individual candles to verify this, but visually, it appears to not confirm. That is good news since the index went up and not down.

A double bottom, at CD confirmed when the index closed above confirmation at E (a close above the blue line). Of course, the downward move leading to the double bottom isn't really downward at all, but sideways. In fact, now that I have the chart already done, the best pattern looks like a rectangle from about 10 a.m. to E.

Anyway, the sideways move should act as a support area tomorrow, but I have found these patterns to not be reliable from one day to the next.

An upward move is going to prove tough sledding since overhead resistance setup by Friday's action looks formidable. Nevertheless, I expect a higher close.

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

-- Thomas Bulkowski

Top

© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,986.76    
 Weekly S2  12,407.60  420.84   
 Monthly S1  12,415.95  8.34   
 Weekly S1  12,626.37  210.42   
 Monthly Pivot  12,642.96  16.60   
 Weekly Pivot  12,748.17  105.21   
 Daily S2  12,765.76  17.58   
 Low  12,793.43  27.67   
 Daily S1  12,805.44  12.01   
 61.8% Down from Intraday High  12,819.16  13.72   
 50% Down from Intraday High  12,827.11  7.95   
 Daily Pivot  12,833.12  6.01   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  12,835.06  1.94   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  12,845.13  10.07   
 Open  12,860.72  15.59   
 High  12,860.79  0.07   Yes! The High is close to the Open.
 Daily R1  12,872.80  12.01   
 Daily R2  12,900.48  27.67   
 Weekly R1  12,966.94  66.46   
 Monthly R1  13,072.15  105.21   
 Weekly R2  13,088.74  16.60   
 Monthly R2  13,299.16  210.42   

Monday 2/6/12. Market Monday: The Week Ahead

My Prediction

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

I show the S&P 500 index on the weekly scale.

Much to my surprise, the indices have broken out upward from the recent consolidation region to move higher. If the forecast pans out, then this should be a good month but it will spell the top for the year. I have a hard time believing that, but that is what the forecast says.

Since January was an up month, it could be that the forecast has been advanced by a month, and that we will peak soon, ahead of the March decline.

The chart shows overhead resistance at the red lines created by a head-and-shoulders top, a very nice one, too.

Looking forward, a war with Iran could disrupt oil supplies and take the fun out of this year. The overhead resistance shown on the chart suggests that the upward run will be ending soon.

It is possible that the good economic news will continue, that Europe's debt problems will fade, that Iran will make nice with its neighbors, and the index will continue to make new highs. Perhaps it will be a combination. The index will close above the top red line but then turn down. These uphill, straight-line runs can last longer than anyone expects, just like it did last time (Nov 2010).

Top

A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 6.74 points.
Tuesday: Down 20.81 points.
Wednesday: Up 83.55 points.
Thursday: Down 11.05 points.
Friday: Up 156.82 points.

For the Week...

The Dow industrials were up 201.77 points or 1.6%.
The Nasdaq composite was up 89.11 points or 3.2%.
The S&P 500 index was up 28.57 points or 2.2%.

Year to Date...

Dow Industrials
     0.1% down from the high of 12,869.98 on 02/03/2012.
     5.2% up from the low of 12,221.19 on 01/03/2012.
Nasdaq
     0.1% down from the high of 2,908.13 on 02/03/2012.
     10.6% up from the low of 2,627.23 on 01/04/2012.
S&P 500
     0.0% down from the high of 1,345.34 on 02/03/2012.
     6.8% up from the low of 1,258.86 on 01/03/2012.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Consumer credit3:00 TD-Measures auto, credit card and other debt.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Wholesale inventories10:00 ThD-Wholesale sales and inventory statistics.
Trade balance8:30 FC+Signals balance of exports & imports.
Treasury budget2:00 FDTracks budget deficit. Important in April (tax filing).

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 02/03/2012, the CPI had:

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

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,647  12,755  12,812  12,920  12,977 
Weekly  12,413  12,638  12,754  12,978  13,094 
Monthly  11,992  12,427  12,649  13,084  13,305 
S&P 500 (^GSPC): Daily  1,320  1,332  1,339  1,351  1,358 
Weekly  1,285  1,315  1,330  1,360  1,375 
Monthly  1,228  1,286  1,316  1,374  1,404 
Nasdaq (^IXIC): Daily  2,878  2,892  2,900  2,914  2,922 
Weekly  2,740  2,823  2,865  2,948  2,991 
Monthly  2,503  2,704  2,806  3,008  3,110 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.8%  Expect a random direction.
 5 months up 8.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 5 weeks up 7.8%  Expect a reversal soon.
 3 months up 30.8%  The trend may continue.
 Nasdaq composite (^IXIC) 5 weeks up 5.7%  Expect a reversal soon.
 2 months up 38.4%  The trend may continue.

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

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

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

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
26Triangle, symmetrical
17Triangle, ascending
13Rising wedge
11Pipe bottom
10Flag, high and tight
8Head-and-shoulders bottom
7Triangle, descending
4Rectangle top
4Dead-cat bounce
3Triple bottom

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

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

 

 

 

 

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

This WeekLast Week
1. Homebuilding1. Retail Building Supply
2. Retail Building Supply2. Semiconductor Cap Equip.
3. Semiconductor Cap Equip.3. Homebuilding
4. Biotechnology4. Chemical (Specialty)
5. Chemical (Basic)5. Chemical (Basic)
48. Oilfield Svcs/Equipment48. Oilfield Svcs/Equipment
49. Securities Brokerage49. Securities Brokerage
50. Natural Gas (Diversified)50. Natural Gas (Diversified)
51. Coal51. Short ETFs
52. Short ETFs52. Coal

-- Thomas Bulkowski

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Thursday 2/2/12. Trading Thursday: Nasdaq

The index climbed by 1.2% or 34.43 points. Since 02/05/1971 the index made 136 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 91 occasions.
     Average loss was -1.3% on 45 occasions.
Expect the index to close higher 66.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 12/19 or 63.2% of the time.
     The prediction of the index closing lower has been right 7/14 or 50.0% of the time.

Picture of the Nasdaq composite on the 5 minute scale.

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

The only pattern found in this bullish run is a small double top at AB. It confirmed when the index closed below the red line at D.

Will the index close higher tomorrow? Yes, based on the above probabilities. To be honest, I'd be surprised if it did, so I guess we will have to wait and see.

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

-- Thomas Bulkowski

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© 2012 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,509.02    
 Monthly S1  2,678.65  169.62   
 Weekly S2  2,748.34  69.70   
 Monthly Pivot  2,756.47  8.13   
 Weekly S1  2,798.31  41.83   
 Daily S2  2,812.52  14.22   
 Weekly Pivot  2,816.30  3.78   
 Low  2,825.19  8.89   
 Open  2,830.10  4.91   
 Daily S1  2,830.40  0.30   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  2,836.86  6.46   
 50% Down from Intraday High  2,840.46  3.60   
 Daily Pivot  2,843.06  2.60   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,844.06  1.00   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  2,848.27  4.21   
 High  2,855.73  7.46   
 Daily R1  2,860.94  5.21   
 Weekly R1  2,866.27  5.33   
 Daily R2  2,873.60  7.34   
 Weekly R2  2,884.26  10.66   
 Monthly R1  2,926.10  41.83   
 Monthly R2  3,003.92  77.83   

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