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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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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 11/21/2017
23,591 160.50 0.7%
9,615 92.77 1.0%
758 2.01 0.3%
6,862 71.77 1.1%
2,599 16.89 0.7%
YTD
19.4%
6.3%
14.9%
27.5%
16.1%
Tom's Targets    Overview: 11/14/2017
23,700 or 22,800 by 12/01/2017
9,300 or 9,800 by 12/01/2017
800 or 750 by 12/01/2017
7,000 or 6,500 by 12/01/2017
2,625 or 2,540 by 12/01/2017

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February 2015 Headlines


Archives


Friday 2/27/15. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 590 stocks searched, or 3.4%. 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 6 bullish chart patterns this week and 1 bearish ones with any remaining (11) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALKTriangle, symmetrical      02/11/201502/26/2015Air Transport
ALLTriangle, symmetrical      02/04/201502/26/2015Insurance (Prop/Casualty)
AIGDiamond top      02/18/201502/26/2015Insurance (Prop/Casualty)
CONNFlag      02/11/201502/26/2015Retail (Special Lines)
CROXBroadening bottom      01/26/201502/24/2015Shoe
CYDiamond top      12/23/201402/26/2015Semiconductor
EMRTriangle, symmetrical      01/21/201502/24/2015Computers and Peripherals
GDBroadening top, right-angled and descending      12/16/201402/26/2015Aerospace/Defense
LLDead-cat bounce      02/25/201502/26/2015Retail Building Supply
MLMFlag      02/18/201502/26/2015Cement and Aggregates
NWLFlag      02/18/201502/26/2015Household Products
NVDAFlag      02/17/201502/26/2015Semiconductor
PEGPipe bottom      02/17/201502/17/2015Electric Utility (East)
SEEFlag      02/20/201502/26/2015Packaging and Container
SLGNFlag      02/11/201502/26/2015Packaging and Container
STMPFlag      02/18/201502/26/2015Internet
TUESRoof      02/09/201502/26/2015Retail Store
WMBFlag      02/18/201502/26/2015Natural Gas (Distributor)
EWIBroadening top, right-angled and descending      10/29/201402/20/2015Investment Co. (Foreign)
EWMTriangle, ascending      12/26/201402/26/2015Investment Co. (Foreign)
SRSRising wedge      01/28/201502/26/2015Short ETFs

 

Weekly screen for chart patterns ending between 02/19/2015 and 02/26/2015. 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: 4 out of 53
Stock RS rank: 24 out of 582
2/26/15 close: $63.98
1 Month avg volatility: $1.95. Volatility stop (for upward breakout): $59.11 or 7.6% below the close.
Change YTD: 7.06%
Volume: 1,225,400 shares. 3 month avg: 1,570,955 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 02/11/2015 to 02/26/2015
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.

Top

Allstate Corp (ALL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 26 out of 53
Stock RS rank: 144 out of 582
2/26/15 close: $71.31
1 Month avg volatility: $1.13. Volatility stop (for upward breakout): $68.62 or 3.8% below the close.
Change YTD: 1.51%
Volume: 1,903,400 shares. 3 month avg: 2,361,138 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 02/04/2015 to 02/26/2015
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.

Top

American International Group (AIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 26 out of 53
Stock RS rank: 372 out of 582
2/26/15 close: $54.93
1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $57.00 or 3.8% above the close.
Change YTD: -1.93%
Volume: 6,594,200 shares. 3 month avg: 8,723,762 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 top reversal pattern from 02/18/2015 to 02/26/2015
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.

Top

Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 36 out of 53
Stock RS rank: 567 out of 582
2/26/15 close: $25.64
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $23.12 or 9.8% below the close.
Change YTD: 37.19%
Volume: 365,900 shares. 3 month avg: 1,565,765 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 02/11/2015 to 02/26/2015
WARNING: A dead-cat bounce occurred on 12/09/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/10/2015 and a 38% chance by 06/09/2015.
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.

Top

CROCS Inc (CROX)
Industry: Shoe
Industry RS rank: 41 out of 53
Stock RS rank: 541 out of 582
2/26/15 close: $10.69
1 Month avg volatility: $0.26. Volatility stop (for upward breakout): $10.08 or 5.7% below the close.
Change YTD: -14.41%
Volume: 1,745,900 shares. 3 month avg: 913,034 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening bottom reversal pattern from 01/26/2015 to 02/24/2015
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.

Top

Cypress Semiconductor (CY)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 16 out of 53
Stock RS rank: 27 out of 582
2/26/15 close: $14.81
1 Month avg volatility: $0.43. Volatility stop (for downward breakout): $15.68 or 5.9% above the close.
Change YTD: 3.71%
Volume: 5,199,000 shares. 3 month avg: 6,014,311 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: Diamond top reversal pattern from 12/23/2014 to 02/26/2015
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.

Top

Emerson Electric (EMR)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 29 out of 53
Stock RS rank: 448 out of 582
2/26/15 close: $57.94
1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $55.72 or 3.8% below the close.
Change YTD: -6.14%
Volume: 3,878,600 shares. 3 month avg: 5,466,854 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 01/21/2015 to 02/24/2015
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.

Top

General Dynamics Corp (GD)
Industry: Aerospace/Defense
Industry RS rank: 9 out of 53
Stock RS rank: 190 out of 582
2/26/15 close: $139.43
1 Month avg volatility: $2.23. Volatility stop (for upward breakout): $134.54 or 3.5% below the close.
Change YTD: 1.32%
Volume: 1,059,600 shares. 3 month avg: 1,720,986 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, right-angled and descending continuation pattern from 12/16/2014 to 02/26/2015
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

Top

Lumber Liquidators, Inc. (LL)
Industry: Retail Building Supply
Industry RS rank: 6 out of 53
Stock RS rank: 485 out of 582
2/26/15 close: $49.23
1 Month avg volatility: $2.93. Volatility stop (for upward breakout): $42.77 or 13.1% below the close.
Change YTD: -25.76%
Volume: 5,730,000 shares. 3 month avg: 1,051,628 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: Dead-cat bounce from 02/25/2015 to 02/26/2015

Top

Martin Marietta Materials, Inc (MLM)
Industry: Cement and Aggregates
Industry RS rank: 33 out of 53
Stock RS rank: 235 out of 582
2/26/15 close: $141.63
1 Month avg volatility: $3.76. Volatility stop (for upward breakout): $133.35 or 5.9% below the close.
Change YTD: 28.38%
Volume: 703,400 shares. 3 month avg: 884,115 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: Flag continuation pattern from 02/18/2015 to 02/26/2015
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.

Top

Newell Rubbermaid Inc (NWL)
Industry: Household Products
Industry RS rank: 14 out of 53
Stock RS rank: 116 out of 582
2/26/15 close: $39.58
1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $38.05 or 3.9% below the close.
Change YTD: 3.91%
Volume: 998,300 shares. 3 month avg: 1,879,571 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 02/18/2015 to 02/26/2015
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.

Top

NVidia Corp (NVDA)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 16 out of 53
Stock RS rank: 147 out of 582
2/26/15 close: $22.20
1 Month avg volatility: $0.46. Volatility stop (for upward breakout): $21.11 or 4.9% below the close.
Change YTD: 10.72%
Volume: 3,820,900 shares. 3 month avg: 5,201,345 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 02/17/2015 to 02/26/2015
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.

Top

Public Service Enterprise Group PEG (PEG)
Industry: Electric Utility (East)
Industry RS rank: 23 out of 53
Stock RS rank: 161 out of 582
2/26/15 close: $42.21
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $40.10 or 5.0% below the close.
Change YTD: 1.93%
Volume: 3,750,200 shares. 3 month avg: 3,376,182 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: Pipe bottom reversal pattern from 02/17/2015 to 02/17/2015
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.

Top

Sealed Air Corp (SEE)
Industry: Packaging and Container
Industry RS rank: 8 out of 53
Stock RS rank: 32 out of 582
2/26/15 close: $48.10
1 Month avg volatility: $1.04. Volatility stop (for upward breakout): $45.37 or 5.7% below the close.
Change YTD: 13.36%
Volume: 1,024,700 shares. 3 month avg: 2,321,037 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 02/20/2015 to 02/26/2015
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.

Top

Silgan Holdings Inc (SLGN)
Industry: Packaging and Container
Industry RS rank: 8 out of 53
Stock RS rank: 159 out of 582
2/26/15 close: $57.72
1 Month avg volatility: $0.87. Volatility stop (for upward breakout): $55.38 or 4.1% below the close.
Change YTD: 7.69%
Volume: 168,400 shares. 3 month avg: 243,823 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: Flag continuation pattern from 02/11/2015 to 02/26/2015
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.

Top

Stamps.com (STMP)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 37 out of 53
Stock RS rank: 3 out of 582
2/26/15 close: $56.81
1 Month avg volatility: $1.83. Volatility stop (for upward breakout): $52.65 or 7.3% below the close.
Change YTD: 18.38%
Volume: 105,300 shares. 3 month avg: 166,015 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: Flag continuation pattern from 02/18/2015 to 02/26/2015
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.

Top

Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 11 out of 53
Stock RS rank: 308 out of 582
2/26/15 close: $18.95
1 Month avg volatility: $0.66. Volatility stop (for downward breakout): $20.66 or 9.0% above the close.
Change YTD: -12.67%
Volume: 354,800 shares. 3 month avg: 510,242 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: Roof reversal pattern from 02/09/2015 to 02/26/2015
Breakout is downward 84% of the time.
Average decline: 16%.
Break-even failure rate: 13%.
Pullbacks occur 56% of the time.
Price hits measure rule target 68% of the time.

Top

Williams Companies Inc. (WMB)
Industry: Natural Gas (Distributor)
Industry RS rank: 44 out of 53
Stock RS rank: 496 out of 582
2/26/15 close: $48.81
1 Month avg volatility: $1.21. Volatility stop (for upward breakout): $46.05 or 5.7% below the close.
Change YTD: 8.61%
Volume: 6,584,200 shares. 3 month avg: 8,999,528 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: Flag continuation pattern from 02/18/2015 to 02/26/2015
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.

Top

MSCI Italy Index (EWI)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 439 out of 582
2/26/15 close: $14.80
1 Month avg volatility: $0.20. Volatility stop (for upward breakout): $14.36 or 3.0% below the close.
Change YTD: 8.82%
Volume: 949,800 shares. 3 month avg: 2,586,192 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 descending continuation pattern from 10/29/2014 to 02/20/2015
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

Top

MSCI Malaysia Index (EWM)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 494 out of 582
2/26/15 close: $13.56
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $13.29 or 2.0% below the close.
Change YTD: 0.59%
Volume: 772,000 shares. 3 month avg: 1,729,011 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, ascending reversal pattern from 12/26/2014 to 02/26/2015
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.

Top

UltraShort 2x Real Estate ProShares (SRS)
Industry: Short ETFs
Industry RS rank: 50 out of 53
Stock RS rank: 498 out of 582
2/26/15 close: $12.04
1 Month avg volatility: $0.30. Volatility stop (for downward breakout): $12.68 or 5.3% above the close.
Change YTD: -5.42%
Volume: 442,400 shares. 3 month avg: 172,543 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rising wedge reversal pattern from 01/28/2015 to 02/26/2015
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.

Top


Thursday 2/26/15. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -0.98 points. Since 02/05/1971 the index made 595 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 332 occasions.
     Average loss was -0.9% on 263 occasions.
Expect the index to close higher 55.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 79/133 or 59.4% of the time.
     The prediction of the index closing lower has been right 28/58 or 48.3% 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 drew two channel lines in red, hugging the price action for the last several days.

Notice that at A the index has broken out downward. Normally that doesn't mean much on the intraday scale since much of what happens is noise. But this time?

My guess is it's nothing to worry about. I'm still bullish and expect the index to continue to move up. If I'm wrong, then the index could drop to 4925 easily enough although it might take a few days.

$ $ $

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

-- Thomas Bulkowski

Top

© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,435.18    
 Monthly S1  4,701.16  265.98   
 Monthly Pivot  4,829.09  127.93   
 Weekly S2  4,858.55  29.46   
 Weekly S1  4,912.85  54.29   
 Weekly Pivot  4,934.93  22.09   
 Daily S2  4,940.89  5.95   
 Daily S1  4,954.01  13.13   
 Low  4,956.00  1.99   Yes! The Low is close to the Daily S1.
 Open  4,960.36  4.36   
 61.8% Down from Intraday High  4,966.79  6.43   
 Close  4,967.14  0.35   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  4,969.13  1.99   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  4,970.12  0.99   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  4,973.45  3.33   
 Daily R1  4,982.25  8.80   
 High  4,984.24  1.99   Yes! The High is close to the Daily R1.
 Weekly R1  4,989.23  4.99   
 Daily R2  4,997.37  8.14   
 Weekly R2  5,011.31  13.95   
 Monthly R1  5,095.07  83.76   
 Monthly R2  5,223.00  127.93   

Wednesday 2/25/15. Chart Pattern Indicator: What's It Say?

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.

Notice how the indicator has turned flat to down even as the index has continued to move up.

That's bearish divergence. It suggests the index is going to go lower, but the timing of this event is unknown.

If you look at the stock chart, the index started its climb weeks ago without pausing. That suggests it's overdue for a rest.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

-- Thomas Bulkowski

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Tuesday 2/24/15. Intraday Market Direction: Dow

The index dropped by -0.1% or -23.6 points. Since 10/01/1928 the index made 1248 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 649 occasions.
     Average loss was -0.8% on 599 occasions.
Expect the index to close higher 52.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 89/143 or 62.2% of the time.
     The prediction of the index closing lower has been right 23/43 or 53.5% 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 Dow industrials on the 5 minute scale.

$ $ $

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

AB is a confirmed double top. That means the index closed below the price of the valley between the two peaks. It did this just after 3:00 today.

Then look what happened. The index reversed and closed above the top of the double top, achieving that just before the close. I call that pattern a busted double top. Patterns that bust tend to see a robust move in the busted direction. That means up. It's not a sure thing. Nothing in the investment world is a sure thing. But I am hopeful that the index will continue higher.

$ $ $

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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,659.77    
 Monthly S1  17,388.30  728.54   
 Monthly Pivot  17,766.30  377.99   
 Weekly S2  17,780.58  14.28   
 Weekly S1  17,948.71  168.13   
 Daily S2  18,017.93  69.21   
 Weekly Pivot  18,046.50  28.57   
 Low  18,054.84  8.34   Yes! The Low is close to the Weekly Pivot.
 Daily S1  18,067.38  12.54   
 61.8% Down from Intraday High  18,087.83  20.45   
 50% Down from Intraday High  18,098.03  10.19   
 Daily Pivot  18,104.30  6.27   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  18,108.22  3.92   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  18,116.84  8.62   Yes! The Close is close to the 38.2% Down from Intraday High.
 Open  18,140.76  23.92   
 High  18,141.21  0.45   Yes! The High is close to the Open.
 Daily R1  18,153.75  12.54   
 Daily R2  18,190.67  36.91   
 Weekly R1  18,214.63  23.96   
 Weekly R2  18,312.42  97.79   
 Monthly R1  18,494.83  182.41   
 Monthly R2  18,872.83  377.99   

Monday 2/23/15. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

Friday's move of 154 points was a joke. I think the Dow stocks participated because my portfolio didn't. I think the gain was a narrow one.

I show a picture of the Dow industrials on the daily scale.

The twin lows at A and B are the bottoms of a double bottom. This one has price entering the pattern from the bottom, not the top. It acts as a continuation of the prevailing price trend.

New research says that these types of patterns do not work as well as reversals, despite the common belief otherwise.

Notice the move up from the low at C to D. The CD move is proportional to the AB move (proportional to the move after D, really). I think this signals an extended up move in the coming weeks.

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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.

Tuesday: Up 28.23 points.
Wednesday: Down 17.73 points.
Thursday: Down 44.08 points.
Friday: Up 154.67 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 121.09 points or 0.7%.
The Nasdaq composite was up 62.13 points or 1.3%.
The S&P 500 index was up 13.31 points or 0.6%.

Year to Date...

Dow Industrials
     0.0% down from the high of 18,144.29 on 02/20/2015.
     6.5% up from the low of 17,037.76 on 02/02/2015.
Nasdaq
     0.0% down from the high of 4,957.02 on 02/20/2015.
     8.6% up from the low of 4,563.11 on 01/16/2015.
S&P 500
     0.0% down from the high of 2,110.61 on 02/20/2015.
     6.5% up from the low of 1,980.90 on 02/02/2015.

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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
Existing home sales10:00 MCCounts sales of used homes.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
New home sales10:00 WC+Shows sales of single-family homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Consumer price index8:30 ThB+Inflation report. Measures cost of goods and services.
Durable goods orders8:30 ThBMeasures orders, shipments of goods with lifespans >3 years.
Gross domestic product8:30 FBMeasures economic activity; GDP deflator measures inflation.
Chicago purchasing managers index9:45 FBMonitors regional manufacturing activity.
Michigan sentiment10:00 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 02/20/2015, the CPI had:

4 bearish patterns,
48 bullish patterns,
312 patterns waiting for breakout.
The CPI signal is 92.3%, which is bullish (>= 65%).

The chart pattern indicator is bullish with 1 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,788  17,964  18,054  18,230  18,320 
Weekly  17,788  17,964  18,054  18,230  18,320 
Monthly  16,668  17,404  17,774  18,511  18,881 
S&P500 (^GSPC): Daily  2,077  2,094  2,102  2,119  2,127 
Weekly  2,077  2,094  2,102  2,119  2,127 
Monthly  1,938  2,024  2,067  2,154  2,197 
Nasdaq (^IXIC): Daily  4,888  4,922  4,940  4,973  4,991 
Weekly  4,855  4,905  4,931  4,982  5,008 
Monthly  4,431  4,694  4,825  5,088  5,219 
  • 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) 3 weeks up 21.7%   Expect a reversal soon. 
 1 month up 53.0%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 22.3%   Expect a reversal soon. 
 1 month up 53.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 24.8%   Expect a reversal soon. 
 1 month up 48.3%   Expect a random direction. 

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

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

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

Buy-and-Hold: 12-Month SMA

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

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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
24Head-and-shoulders bottom
24Triangle, symmetrical
15Triple bottom
14Double Bottom, Adam and Adam
14Pipe bottom
13Double Top, Adam and Eve
11Triangle, descending
9Broadening top
6Double Bottom, Eve and Adam
6Horn bottom

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

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

 

 

 

 

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

This WeekLast Week
1. Drug1. Retail Building Supply
2. Human Resources2. Biotechnology
3. Retail Building Supply3. Drug
4. Biotechnology4. Air Transport
5. Air Transport5. Furn/Home Furnishings
50. Petroleum (Integrated)50. Metals and Mining (Div.)
51. Short ETFs51. Natural Gas (Diversified)
52. Natural Gas (Diversified)52. Short ETFs
53. Petroleum (Producing)53. Petroleum (Producing)
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Saturday 2/21/15. Triangle Apex and Turning Points

The chart shows the triangle apex matching the minor high.

The chart shows an example of how the triangle apex can predict the stock turning (A versus B).

How is this done and how often does it work?

For answers, read the full article here.

-- Thomas Bulkowski

 

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Friday 2/20/15. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 591 stocks searched, or 3.0%. 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 14 bullish chart patterns this week and 2 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
GASBroadening top      09/05/201402/17/2015Natural Gas (Diversified)
BMRNPipe bottom      02/02/201502/09/2015Biotechnology
CALMTriangle, symmetrical      02/02/201502/19/2015Food Processing
CBKRectangle bottom      01/16/201502/19/2015Retail (Special Lines)
CONNFlag      02/11/201502/19/2015Retail (Special Lines)
FDPBroadening top      01/22/201502/17/2015Food Processing
GPSTriangle, symmetrical      01/20/201502/19/2015Apparel
HUBGBroadening bottom      11/24/201402/13/2015Trucking/Transp. Leasing
JBHTTriangle, symmetrical      01/14/201502/13/2015Trucking/Transp. Leasing
JBLUTriangle, symmetrical      01/30/201502/18/2015Air Transport
LAMRChannel      01/05/201502/19/2015Advertising
LEGDiamond top      01/14/201502/18/2015Furn/Home Furnishings
MTriangle, symmetrical      01/13/201502/19/2015Retail Store
MYLTriangle, descending      11/07/201402/13/2015Drug
OXYTriangle, ascending      12/03/201402/19/2015Petroleum (Producing)
PRANDead-cat bounce      02/13/201502/13/2015Biotechnology
PGTriangle, symmetrical      02/02/201502/19/2015Household Products
TECHPipe bottom      02/02/201502/09/2015Biotechnology
WWWBroadening bottom      01/26/201502/18/2015Shoe
XLVTriangle, ascending      12/08/201402/18/2015Drug

 

Weekly screen for chart patterns ending between 02/12/2015 and 02/19/2015. 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.
 
AGL Resources Inc (GAS)
Industry: Natural Gas (Diversified)
Industry RS rank: 51 out of 53
Stock RS rank: 406 out of 583
2/19/15 close: $50.14
1 Month avg volatility: $1.21. Volatility stop (for downward breakout): $53.38 or 6.5% above the close.
Change YTD: -8.02%
Volume: 633,400 shares. 3 month avg: 895,295 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 09/05/2014 to 02/17/2015
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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BioMarin Pharmaceutical Inc (BMRN)
Industry: Biotechnology
Industry RS rank: 4 out of 53
Stock RS rank: 11 out of 583
2/19/15 close: $104.19
1 Month avg volatility: $3.48. Volatility stop (for upward breakout): $95.48 or 8.4% below the close.
Change YTD: 15.25%
Volume: 893,300 shares. 3 month avg: 1,277,128 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 02/02/2015 to 02/09/2015
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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Cal-Maine Foods Inc (CALM)
Industry: Food Processing
Industry RS rank: 41 out of 53
Stock RS rank: 417 out of 583
2/19/15 close: $36.66
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $33.67 or 8.2% below the close.
Change YTD: -6.07%
Volume: 302,000 shares. 3 month avg: 472,855 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 02/02/2015 to 02/19/2015
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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Christopher and Banks Corp (CBK)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 27 out of 53
Stock RS rank: 574 out of 583
2/19/15 close: $5.23
1 Month avg volatility: $0.22. Volatility stop (for downward breakout): $5.80 or 10.9% above the close.
Change YTD: -8.41%
Volume: 117,900 shares. 3 month avg: 386,865 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: Rectangle bottom continuation pattern from 01/16/2015 to 02/19/2015
WARNING: A dead-cat bounce occurred on 12/04/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/05/2015 and a 38% chance by 06/04/2015.
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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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 27 out of 53
Stock RS rank: 566 out of 583
2/19/15 close: $25.67
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $22.52 or 12.3% below the close.
Change YTD: 37.35%
Volume: 582,700 shares. 3 month avg: 1,561,971 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 02/11/2015 to 02/19/2015
WARNING: A dead-cat bounce occurred on 12/09/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/10/2015 and a 38% chance by 06/09/2015.
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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Fresh Del Monte Produce (FDP)
Industry: Food Processing
Industry RS rank: 41 out of 53
Stock RS rank: 229 out of 583
2/19/15 close: $34.08
1 Month avg volatility: $0.73. Volatility stop (for downward breakout): $35.80 or 5.0% above the close.
Change YTD: 1.58%
Volume: 260,700 shares. 3 month avg: 253,938 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 01/22/2015 to 02/17/2015
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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Gap Inc. (GPS)
Industry: Apparel
Industry RS rank: 44 out of 53
Stock RS rank: 414 out of 583
2/19/15 close: $41.07
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $39.10 or 4.8% below the close.
Change YTD: -2.47%
Volume: 3,274,800 shares. 3 month avg: 3,973,192 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: Triangle, symmetrical continuation pattern from 01/20/2015 to 02/19/2015
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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Hub Group Inc. (HUBG)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 53
Stock RS rank: 501 out of 583
2/19/15 close: $38.69
1 Month avg volatility: $1.01. Volatility stop (for upward breakout): $36.15 or 6.6% below the close.
Change YTD: 1.60%
Volume: 192,600 shares. 3 month avg: 266,463 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 bottom reversal pattern from 11/24/2014 to 02/13/2015
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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Hunt, J.B. (JBHT)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 53
Stock RS rank: 245 out of 583
2/19/15 close: $82.90
1 Month avg volatility: $1.35. Volatility stop (for upward breakout): $79.91 or 3.6% below the close.
Change YTD: -1.61%
Volume: 455,100 shares. 3 month avg: 737,009 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 01/14/2015 to 02/13/2015
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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JetBlue Airways Corporation (JBLU)
Industry: Air Transport
Industry RS rank: 6 out of 53
Stock RS rank: 28 out of 583
2/19/15 close: $17.02
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $15.64 or 8.1% below the close.
Change YTD: 7.31%
Volume: 8,117,400 shares. 3 month avg: 8,619,735 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: Triangle, symmetrical continuation pattern from 01/30/2015 to 02/18/2015
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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Lamar Advertising (LAMR)
Industry: Advertising
Industry RS rank: 23 out of 53
Stock RS rank: 177 out of 583
2/19/15 close: $58.22
1 Month avg volatility: $0.68. Volatility stop (for upward breakout): $56.62 or 2.8% below the close.
Change YTD: 8.54%
Volume: 953,600 shares. 3 month avg: 864,888 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: Channel from 01/05/2015 to 02/19/2015

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Leggett and Platt (LEG)
Industry: Furn/Home Furnishings
Industry RS rank: 5 out of 53
Stock RS rank: 55 out of 583
2/19/15 close: $44.33
1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $46.19 or 4.2% above the close.
Change YTD: 4.04%
Volume: 871,800 shares. 3 month avg: 1,223,483 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: Diamond top reversal pattern from 01/14/2015 to 02/18/2015
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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Macys, Inc (M)
Industry: Retail Store
Industry RS rank: 12 out of 53
Stock RS rank: 303 out of 583
2/19/15 close: $63.00
1 Month avg volatility: $1.06. Volatility stop (for upward breakout): $60.85 or 3.4% below the close.
Change YTD: -4.18%
Volume: 2,958,700 shares. 3 month avg: 4,266,454 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 01/13/2015 to 02/19/2015
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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Mylan Laboratories Inc. (MYL)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 53
Stock RS rank: 119 out of 583
2/19/15 close: $57.22
1 Month avg volatility: $1.40. Volatility stop (for downward breakout): $60.15 or 5.1% above the close.
Change YTD: 1.51%
Volume: 2,865,900 shares. 3 month avg: 3,288,732 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, descending reversal pattern from 11/07/2014 to 02/13/2015
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Occidental Petroleum Corp (OXY)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 53
Stock RS rank: 517 out of 583
2/19/15 close: $80.61
1 Month avg volatility: $2.03. Volatility stop (for upward breakout): $74.95 or 7.0% below the close.
Change YTD: 0.00%
Volume: 4,521,500 shares. 3 month avg: 6,507,991 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, ascending reversal pattern from 12/03/2014 to 02/19/2015
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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Prana Biotechnology Limited (PRAN)
Industry: Biotechnology
Industry RS rank: 4 out of 53
Stock RS rank: 578 out of 583
2/19/15 close: $1.13
1 Month avg volatility: $0.09. Volatility stop (for upward breakout): $0.90 or 20.1% below the close.
Change YTD: -31.10%
Volume: 453,700 shares. 3 month avg: 389,769 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 from 02/13/2015 to 02/13/2015

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Procter and Gamble Co (PG)
Industry: Household Products
Industry RS rank: 16 out of 53
Stock RS rank: 324 out of 583
2/19/15 close: $85.21
1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $82.91 or 2.7% below the close.
Change YTD: -6.46%
Volume: 7,271,600 shares. 3 month avg: 7,554,294 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 02/02/2015 to 02/19/2015
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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Techne Corporation (TECH)
Industry: Biotechnology
Industry RS rank: 4 out of 53
Stock RS rank: 350 out of 583
2/19/15 close: $95.65
1 Month avg volatility: $2.01. Volatility stop (for upward breakout): $91.19 or 4.7% below the close.
Change YTD: 3.52%
Volume: 146,200 shares. 3 month avg: 192,169 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 02/02/2015 to 02/09/2015
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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Wolverine World Wide (WWW)
Industry: Shoe
Industry RS rank: 43 out of 53
Stock RS rank: 157 out of 583
2/19/15 close: $29.67
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $28.17 or 5.1% below the close.
Change YTD: 0.68%
Volume: 926,800 shares. 3 month avg: 741,309 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: Broadening bottom reversal pattern from 01/26/2015 to 02/18/2015
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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SPDR Health Care Select Sector (XLV)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 53
Stock RS rank: 173 out of 583
2/19/15 close: $71.43
1 Month avg volatility: $0.90. Volatility stop (for upward breakout): $69.30 or 3.0% below the close.
Change YTD: 4.46%
Volume: 5,383,600 shares. 3 month avg: 10,298,900 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/08/2014 to 02/18/2015
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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Thursday 2/19/15. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 7.09 points. Since 02/05/1971 the index made 625 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 348 occasions.
     Average loss was -0.8% on 277 occasions.
Expect the index to close higher 55.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 78/132 or 59.1% of the time.
     The prediction of the index closing lower has been right 28/58 or 48.3% 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.

Notice how the trend moved up at A and then flat lined at B.

What does it mean?

When a stock (index in this case) moves up at a good pace like it did during trend A, the stock/index needs to take a break. Often that break is proportional to the rise. After the horizontal movement, the security often continues its move up.

This chart suggests another half day or so of horizontal movement before a resumption of the up move. I say that because B is nearly proportional to A already.

$ $ $

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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,457.04    
 Weekly S2  4,665.71  208.67   
 Monthly S1  4,681.70  15.99   
 Weekly S1  4,786.03  104.33   
 Monthly Pivot  4,787.77  1.74   Yes! The Monthly Pivot is close to the Weekly S1.
 Weekly Pivot  4,839.94  52.17   
 Daily S2  4,877.92  37.98   
 Low  4,885.60  7.68   
 Open  4,890.84  5.24   
 Daily S1  4,892.14  1.30   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  4,893.97  1.83   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  4,896.55  2.58   
 38.2% Down from Intraday High  4,899.13  2.58   
 Daily Pivot  4,899.82  0.69   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  4,906.36  6.54   
 High  4,907.50  1.14   Yes! The High is close to the Close.
 Daily R1  4,914.04  6.54   
 Daily R2  4,921.72  7.68   
 Weekly R1  4,960.26  38.54   
 Monthly R1  5,012.43  52.17   
 Weekly R2  5,014.17  1.74   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  5,118.50  104.33   

Tuesday 2/17/15. Intraday Market Direction: Dow

The index climbed by 0.3% or 46.97 points. Since 10/01/1928 the index made 1035 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 571 occasions.
     Average loss was -0.7% on 464 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 88/142 or 62.0% of the time.
     The prediction of the index closing lower has been right 23/43 or 53.5% 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 Dow industrials on the 5 minute scale.

$ $ $

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

Let's look at the red lines first. They are parallel or nearly so, depending on how much you've had to drink over this holiday weekend. The index has flat lined like a dead animal.

This could be the result of the holiday weekend where traders left early to party. Or it could just be a pause in the move higher.

Now look at the two blue lines. Notice that they are both trending up at the same rate.

I don't attach much significance to this trend except that the slope of it is what I like to see (the flatter the better, really). It's not too steep to be unsustainable. So I expect the uptrend to continue, especially as earnings season winds down.

$ $ $

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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,698.52    
 Monthly S1  17,358.94  660.41   
 Weekly S2  17,561.94  203.00   
 Monthly Pivot  17,698.17  136.24   
 Weekly S1  17,790.64  92.47   
 Weekly Pivot  17,914.03  123.38   
 Daily S2  17,930.52  16.50   
 Low  17,961.76  31.24   
 Open  17,968.65  6.89   Yes! The Open is close to the Low.
 Daily S1  17,974.94  6.29   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  17,990.66  15.72   
 50% Down from Intraday High  17,999.59  8.93   
 Daily Pivot  18,006.17  6.59   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  18,008.51  2.34   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  18,019.35  10.84   
 High  18,037.41  18.06   
 Daily R1  18,050.59  13.18   
 Daily R2  18,081.82  31.24   
 Weekly R1  18,142.73  60.91   
 Weekly R2  18,266.12  123.38   
 Monthly R1  18,358.59  92.47   
 Monthly R2  18,697.82  339.24   

Weekend Report: Book Translated into Polish

My publisher, John Wiley & Sons, informed me that they sold the license to translate my book, Fundamental Analysis and Position Trading into Polish.

I show a picture of the book on the right.

It could be a year or more before it goes into print and there is no guarantee that it will make it into print, too.

The book is turning into a popular choice for value investors and those wanting more information on fundamental analysis and position trading.

The book joins my first edition of Getting Started in Chart Patterns.

I show the second edition of the book on the left. We sold the first edition of the book to the Polish publisher, too.

-- Thomas Bulkowski


Friday 2/13/15. 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 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 591 stocks searched, or 2.9%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 4 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 13 bullish chart patterns this week and 3 bearish ones with any remaining (3) 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.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEORectangle top      01/02/201502/06/2015Apparel
ANNHorn bottom      01/20/201502/02/2015Retail (Special Lines)
AONPipe bottom      01/26/201502/02/2015Insurance (Diversified)
ADMDiamond bottom      01/16/201502/12/2015Food Processing
ARWRTriangle, descending      01/14/201502/12/2015Biotechnology
CBKRectangle bottom      01/16/201502/12/2015Retail (Special Lines)
XRAYHead-and-shoulders bottom      01/22/201502/09/2015Medical Supplies
DOTriple bottom      01/15/201502/09/2015Oilfield Svcs/Equipment
BOOMBroadening wedge, ascending      01/14/201502/11/2015Metal Fabricating
ESVBroadening bottom      01/09/201502/09/2015Oilfield Svcs/Equipment
LLFlag      02/09/201502/12/2015Retail Building Supply
MGEETriple top      12/29/201402/06/2015Electric Utility (Central)
MUTriple bottom      01/16/201502/09/2015Semiconductor
NVDAPipe bottom      01/26/201502/02/2015Semiconductor
OMCHead-and-shoulders bottom      01/16/201502/10/2015Advertising
PFEPipe bottom      01/26/201502/02/2015Drug
RAXPipe bottom      01/26/201502/02/2015E-Commerce
TMODiamond bottom      01/15/201502/12/2015Precision Instrument
XLBroadening top      01/14/201502/06/2015Insurance (Diversified)
FXIDiamond top      01/08/201502/12/2015Investment Co. (Foreign)
QQQTriangle, descending      11/28/201402/06/2015Long ETFs

 

Weekly screen for chart patterns ending between 02/05/2015 and 02/12/2015. 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.
 
American Eagle Outfitters Inc. (AEO)
Industry: Apparel
Industry RS rank: 40 out of 53
Stock RS rank: 34 out of 583
2/12/15 close: $14.80
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $13.71 or 7.4% below the close.
Change YTD: 6.63%
Volume: 2,700,000 shares. 3 month avg: 5,258,808 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: Rectangle top continuation pattern from 01/02/2015 to 02/06/2015
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Ann Inc (ANN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 19 out of 53
Stock RS rank: 359 out of 583
2/12/15 close: $36.00
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $33.09 or 8.1% below the close.
Change YTD: -1.32%
Volume: 532,000 shares. 3 month avg: 597,185 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: Horn bottom reversal pattern from 01/20/2015 to 02/02/2015
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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Aon Corp (AON)
Industry: Insurance (Diversified)
Industry RS rank: 36 out of 53
Stock RS rank: 139 out of 583
2/12/15 close: $100.74
1 Month avg volatility: $1.67. Volatility stop (for upward breakout): $96.56 or 4.2% below the close.
Change YTD: 6.23%
Volume: 1,627,300 shares. 3 month avg: 1,398,863 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: Pipe bottom reversal pattern from 01/26/2015 to 02/02/2015
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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Archer-Daniels-Midland Co (ADM)
Industry: Food Processing
Industry RS rank: 41 out of 53
Stock RS rank: 420 out of 583
2/12/15 close: $47.44
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $44.30 or 6.6% below the close.
Change YTD: -8.77%
Volume: 4,750,000 shares. 3 month avg: 3,889,297 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 bottom reversal pattern from 01/16/2015 to 02/12/2015
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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Arrowhead Research Corp (ARWR)
Industry: Biotechnology
Industry RS rank: 5 out of 53
Stock RS rank: 577 out of 583
2/12/15 close: $6.56
1 Month avg volatility: $0.44. Volatility stop (for downward breakout): $7.53 or 14.7% above the close.
Change YTD: -11.11%
Volume: 1,599,700 shares. 3 month avg: 2,657,863 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 01/14/2015 to 02/12/2015
WARNING: A dead-cat bounce occurred on 01/12/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 04/13/2015 and a 38% chance by 07/13/2015.
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Christopher and Banks Corp (CBK)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 19 out of 53
Stock RS rank: 571 out of 583
2/12/15 close: $5.32
1 Month avg volatility: $0.23. Volatility stop (for downward breakout): $5.80 or 9.0% above the close.
Change YTD: -6.83%
Volume: 99,700 shares. 3 month avg: 388,138 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: Rectangle bottom continuation pattern from 01/16/2015 to 02/12/2015
WARNING: A dead-cat bounce occurred on 12/04/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/05/2015 and a 38% chance by 06/04/2015.
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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Dentsply International, Inc. (XRAY)
Industry: Medical Supplies
Industry RS rank: 18 out of 53
Stock RS rank: 244 out of 583
2/12/15 close: $52.42
1 Month avg volatility: $0.88. Volatility stop (for upward breakout): $49.65 or 5.3% below the close.
Change YTD: -1.60%
Volume: 812,500 shares. 3 month avg: 885,546 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 01/22/2015 to 02/09/2015
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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Diamond Offshore (DO)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 525 out of 583
2/12/15 close: $34.85
1 Month avg volatility: $1.66. Volatility stop (for upward breakout): $30.56 or 12.3% below the close.
Change YTD: -5.07%
Volume: 1,974,100 shares. 3 month avg: 1,983,545 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: Triple bottom reversal pattern from 01/15/2015 to 02/09/2015
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 46 out of 53
Stock RS rank: 542 out of 583
2/12/15 close: $14.23
1 Month avg volatility: $0.55. Volatility stop (for downward breakout): $15.64 or 9.9% above the close.
Change YTD: -11.17%
Volume: 63,900 shares. 3 month avg: 72,995 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: Broadening wedge, ascending reversal pattern from 01/14/2015 to 02/11/2015
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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ENSCO International (ESV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 564 out of 583
2/12/15 close: $29.62
1 Month avg volatility: $1.32. Volatility stop (for upward breakout): $26.82 or 9.5% below the close.
Change YTD: -1.10%
Volume: 3,953,500 shares. 3 month avg: 5,529,371 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening bottom reversal pattern from 01/09/2015 to 02/09/2015
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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Lumber Liquidators, Inc. (LL)
Industry: Retail Building Supply
Industry RS rank: 1 out of 53
Stock RS rank: 205 out of 583
2/12/15 close: $62.80
1 Month avg volatility: $2.61. Volatility stop (for upward breakout): $57.29 or 8.8% below the close.
Change YTD: -5.29%
Volume: 1,206,100 shares. 3 month avg: 745,006 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: Flag continuation pattern from 02/09/2015 to 02/12/2015
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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MGE Energy Inc (MGEE)
Industry: Electric Utility (Central)
Industry RS rank: 26 out of 53
Stock RS rank: 236 out of 583
2/12/15 close: $43.52
1 Month avg volatility: $1.21. Volatility stop (for downward breakout): $46.41 or 6.7% above the close.
Change YTD: -4.58%
Volume: 85,600 shares. 3 month avg: 81,235 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triple top reversal pattern from 12/29/2014 to 02/06/2015
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Micron Technology (MU)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 20 out of 53
Stock RS rank: 349 out of 583
2/12/15 close: $31.94
1 Month avg volatility: $0.99. Volatility stop (for upward breakout): $28.97 or 9.3% below the close.
Change YTD: -8.77%
Volume: 23,759,300 shares. 3 month avg: 22,292,015 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: Triple bottom reversal pattern from 01/16/2015 to 02/09/2015
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% 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: 20 out of 53
Stock RS rank: 141 out of 583
2/12/15 close: $22.30
1 Month avg volatility: $0.50. Volatility stop (for upward breakout): $20.86 or 6.4% below the close.
Change YTD: 11.22%
Volume: 16,922,000 shares. 3 month avg: 5,428,768 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 01/26/2015 to 02/02/2015
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: 27 out of 53
Stock RS rank: 297 out of 583
2/12/15 close: $76.47
1 Month avg volatility: $1.46. Volatility stop (for upward breakout): $72.85 or 4.7% below the close.
Change YTD: -1.29%
Volume: 1,506,600 shares. 3 month avg: 1,454,215 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 01/16/2015 to 02/10/2015
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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Pfizer Inc. (PFE)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 53
Stock RS rank: 82 out of 583
2/12/15 close: $34.87
1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $32.85 or 5.8% below the close.
Change YTD: 11.94%
Volume: 43,163,500 shares. 3 month avg: 27,400,098 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: Pipe bottom reversal pattern from 01/26/2015 to 02/02/2015
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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Rackspace Hosting (RAX)
Industry: E-Commerce
Industry RS rank: 14 out of 53
Stock RS rank: 7 out of 583
2/12/15 close: $49.77
1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $46.58 or 6.4% below the close.
Change YTD: 6.32%
Volume: 806,100 shares. 3 month avg: 1,520,834 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: Pipe bottom reversal pattern from 01/26/2015 to 02/02/2015
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: 28 out of 53
Stock RS rank: 320 out of 583
2/12/15 close: $126.83
1 Month avg volatility: $2.31. Volatility stop (for upward breakout): $120.97 or 4.6% below the close.
Change YTD: 1.23%
Volume: 1,370,700 shares. 3 month avg: 1,789,332 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 01/15/2015 to 02/12/2015
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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XL Group (XL)
Industry: Insurance (Diversified)
Industry RS rank: 36 out of 53
Stock RS rank: 246 out of 583
2/12/15 close: $35.81
1 Month avg volatility: $0.56. Volatility stop (for downward breakout): $36.97 or 3.2% above the close.
Change YTD: 4.19%
Volume: 2,170,300 shares. 3 month avg: 2,572,495 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: Broadening top reversal pattern from 01/14/2015 to 02/06/2015
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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FTSE/Xinhua China 25 index fund (FXI)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 332 out of 583
2/12/15 close: $42.71
1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $43.72 or 2.4% above the close.
Change YTD: 2.62%
Volume: 11,386,300 shares. 3 month avg: 17,613,643 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 01/08/2015 to 02/12/2015
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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PowerShares QQQ -- Nasdaq 100 (QQQ)
Industry: Long ETFs
Industry RS rank: 16 out of 53
Stock RS rank: 262 out of 583
2/12/15 close: $106.00
1 Month avg volatility: $1.53. Volatility stop (for downward breakout): $109.09 or 2.9% above the close.
Change YTD: 2.66%
Volume: 22,495,800 shares. 3 month avg: 34,154,425 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 11/28/2014 to 02/06/2015
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Thursday 2/12/15. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 13.54 points. Since 02/05/1971 the index made 586 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 322 occasions.
     Average loss was -0.7% on 264 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 77/131 or 58.8% of the time.
     The prediction of the index closing lower has been right 28/58 or 48.3% 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.

At AB, the index has made a double top or has it? No, it's not a double top...yet. Why? Because the index has to close below the price of the valley between the two tops (about 4,775).

For guidance, I like to look at what the historical tape has to say.

Look at C, a confirmed triple top. The index made a strong move down on Friday, confirmed the triple top, and finished its decline the next day.

I suspect none of that will happen, that the index will close higher instead. 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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,493.09    
 Weekly S2  4,516.22  23.13   
 Monthly S1  4,647.13  130.91   
 Weekly S1  4,658.70  11.57   
 Monthly Pivot  4,717.16  58.46   
 Weekly Pivot  4,722.94  5.78   
 Daily S2  4,766.99  44.05   
 Low  4,780.13  13.14   
 Daily S1  4,784.09  3.96   
 Open  4,788.37  4.28   
 61.8% Down from Intraday High  4,791.68  3.31   
 50% Down from Intraday High  4,795.25  3.57   
 Daily Pivot  4,797.22  1.98   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,798.81  1.59   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,801.18  2.37   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  4,810.36  9.18   
 Daily R1  4,814.32  3.96   
 Daily R2  4,827.45  13.14   
 Weekly R1  4,865.42  37.97   
 Monthly R1  4,871.20  5.78   
 Weekly R2  4,929.66  58.46   
 Monthly R2  4,941.23  11.57   

Wednesday 2/11/15. Chart Pattern Indicator: What's It Say?

Before we get to the pictures, let me warn you that I flubbed the quarterly earnings article I posted. I noticed some duplicate entries and changed the start date of some measurements. I should have it resolved soon. I'll post a blog notice here when it's finished.

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 showing bullish divergence with the index as the chart shows. The indicator is rising (higher lows) while the index was trending lower until the last week or so.

Right now, they appear to be convergent...trending in the same direction. That's good news if you own stocks long.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

-- Thomas Bulkowski

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Tuesday 2/10/15. New Research, Earnings Surprise

The index dropped by -0.5% or -95.08 points. Since 10/01/1928 the index made 722 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 356 occasions.
     Average loss was -0.8% on 366 occasions.
Expect the index to close lower 50.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 88/142 or 62.0% of the time.
     The prediction of the index closing lower has been right 23/42 or 54.8% of the time.

Picture of the typical move.

I completed my research on bad earnings surprises and here is the summary from the web page. You can visit that page to read the entire article.

I used hundreds of stocks to uncover thousands of bad earnings surprises to develop the model shown in the chart on the right.

For stocks that breakout downward, they drop a median of 1.8% in one day. That is the AB move.

In the coming 7 days, the stock continues dropping a median of 6%. That is the AC move, not BC.

Then bottom fishing begins and pushes the stock up a median of 3% above the last close before the earnings announcement. That is the AD move, not CD.

After peaking at the bounce high, D, the stock tumbles and closes down a median of 15% in 43 days. That is the AE move (not DE).

Since these are median values, half the stocks will do better and half will do worse each number. That means your situation may vary widely from the model.

$ $ $

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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,658.90    
 Weekly S2  16,659.36  0.46   Yes! The Weekly S2 is close to the Monthly S2.
 Monthly S1  17,194.05  534.70   
 Weekly S1  17,194.28  0.23   Yes! The Weekly S1 is close to the Monthly S1.
 Weekly Pivot  17,572.69  378.40   
 Monthly Pivot  17,572.92  0.23   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Daily S2  17,609.17  36.25   
 Daily S1  17,669.19  60.02   
 Low  17,685.32  16.13   
 Close  17,729.21  43.89   
 61.8% Down from Intraday High  17,737.34  8.13   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  17,745.34  8.00   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,753.40  8.06   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,769.47  16.07   
 Daily R1  17,805.36  35.89   
 Open  17,821.49  16.13   
 High  17,821.49  0.00   Yes! The High is close to the Open.
 Daily R2  17,881.51  60.02   
 Weekly R1  18,107.61  226.10   
 Monthly R1  18,108.07  0.46   Yes! The Monthly R1 is close to the Weekly R1.
 Weekly R2  18,486.02  377.94   
 Monthly R2  18,486.94  0.92   Yes! The Monthly R2 is close to the Weekly R2.

Monday 2/9/15. Descending Triangle in the Transports

My Prediction

Picture of the Dow transports on the daily scale.

I show the Dow transports on the daily scale.

This chart is interesting because it shows a descending triangle outlined here in red.

The index touches the bottom trendline three times and the top one twice with another touch nearing the top trendline (the current day's price). Both bottom and top touch counts are what I like to see (at least 5 touches total).

My book, Encyclopedia of Chart Patterns, Second Edition (pictured on the left) gives a complete list of performance statistics for descending triangles.

You have to do a bit of math, but from the numbers presented in the book, downward breakouts occur 64% of the time.

The transports could punch through the top of the triangle this time though. We won't know the breakout direction (a close outside the trendline boundary) until it happens.

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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 196.09 points.
Tuesday: Up 305.36 points.
Wednesday: Up 6.62 points.
Thursday: Up 211.86 points.
Friday: Down 60.59 points.

For the Week...

The Dow industrials were up 659.34 points or 3.8%.
The Nasdaq composite was up 109.16 points or 2.4%.
The S&P 500 index was up 60.48 points or 3.0%.

Year to Date...

Dow Industrials
     0.7% down from the high of 17,951.78 on 01/02/2015.
     4.6% up from the low of 17,037.76 on 02/02/2015.
Nasdaq
     0.9% down from the high of 4,787.18 on 02/06/2015.
     4.0% up from the low of 4,563.11 on 01/16/2015.
S&P 500
     0.8% down from the high of 2,072.40 on 02/06/2015.
     3.8% up from the low of 1,980.90 on 02/02/2015.

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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
Wholesale inventories10:00 TD-Wholesale sales and inventory statistics.
Crude inventories10:30 W?My guess: Measures oil inventory.
Treasury budget2:00 WDTracks budget deficit. Important in April (tax filing).
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Retail sales8:30 ThA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 ThC-Reports manufacturing, wholesale, retail inventories.
International trade8:30 FC+Import/export prices, trade balance. US economy vs others.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 02/06/2015, the CPI had:

19 bearish patterns,
26 bullish patterns,
386 patterns waiting for breakout.
The CPI signal is 57.8%, which is neutral (between 35% and 65%).

The chart pattern indicator is bullish with 1 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,660  17,742  17,847  17,929  18,033 
Weekly  16,691  17,258  17,604  18,171  18,518 
Monthly  16,691  17,257  17,605  18,171  18,519 
S&P500 (^GSPC): Daily  2,037  2,046  2,059  2,069  2,082 
Weekly  1,945  2,000  2,036  2,092  2,128 
Monthly  1,945  2,000  2,036  2,092  2,128 
Nasdaq (^IXIC): Daily  4,698  4,721  4,754  4,777  4,810 
Weekly  4,497  4,621  4,704  4,828  4,911 
Monthly  4,474  4,609  4,698  4,833  4,922 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.5%   Expect a random direction. 
 1 month up 53.0%   Expect a random direction. 
 S & P 500 (^GSPC) 1 week up 42.7%   Expect a random direction. 
 1 month up 53.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 1 week up 44.8%   Expect a random direction. 
 1 month up 48.3%   Expect a random direction. 

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

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

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

Buy-and-Hold: 12-Month SMA

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

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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
26Pipe bottom
23Triangle, symmetrical
21Head-and-shoulders bottom
9Triangle, descending
9Head-and-shoulders top
8Triple bottom
7Double Bottom, Adam and Adam
7Channel
6Triangle, ascending
6Diamond 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. Retail Building Supply1. Electric Utility (West)
2. Biotechnology2. Biotechnology
3. Drug3. Furn/Home Furnishings
4. Air Transport4. Drug
5. Furn/Home Furnishings5. Retail Building Supply
50. Metals and Mining (Div.)50. Metals and Mining (Div.)
51. Natural Gas (Diversified)51. Natural Gas (Diversified)
52. Short ETFs52. Petroleum (Integrated)
53. Petroleum (Producing)53. Petroleum (Producing)
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Friday 2/6/15. 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 31 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 592 stocks searched, or 5.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

Excluding ETFs, there were 16 bullish chart patterns this week and 5 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.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACGLBroadening top      01/08/201502/02/2015Insurance (Prop/Casualty)
ASNAHead-and-shoulders bottom      12/19/201402/02/2015Apparel
ADPBroadening top, right-angled and ascending      12/15/201402/05/2015Computer Software and Svcs
CDIRectangle top      10/29/201402/05/2015Human Resources
CNPTriangle, symmetrical      11/11/201402/05/2015Electric Utility (Central)
CFBroadening top      01/21/201501/30/2015Chemical (Basic)
CEBHead-and-shoulders bottom      01/06/201502/02/2015Information Services
DECKDead-cat bounce      01/30/201501/30/2015Shoe
^DJTTriangle, descending      12/17/201402/05/2015None
HGGPipe bottom      01/20/201501/26/2015Retail (Special Lines)
HUBGDouble Bottom, Eve and Eve      01/20/201502/03/2015Trucking/Transp. Leasing
ICONTriple bottom      12/19/201401/30/2015Shoe
LAMRRising wedge      01/05/201502/05/2015Advertising
LNCDouble Bottom, Adam and Adam      01/16/201501/30/2015Insurance (Life)
MROHorn bottom      01/12/201501/26/2015Petroleum (Integrated)
^IXICTriangle, symmetrical      12/16/201402/02/2015None
NETriangle, symmetrical      11/21/201401/30/2015Oilfield Svcs/Equipment
NUSTriangle, symmetrical      12/08/201402/03/2015Household Products
RLDead-cat bounce      02/04/201502/04/2015Apparel
RESHorn bottom      01/12/201501/26/2015Oilfield Svcs/Equipment
SCHWDouble Bottom, Adam and Adam      01/16/201501/30/2015Securities Brokerage
SODADouble Bottom, Eve and Adam      01/16/201502/02/2015Food Processing
SMRTBroadening top      11/24/201402/02/2015Apparel
AMTDDouble Bottom, Adam and Adam      01/21/201502/02/2015Securities Brokerage
WLKTriangle, symmetrical      12/16/201401/30/2015Chemical (Basic)
SOXXChannel      12/16/201402/05/2015Semiconductor
OIHHorn bottom      01/12/201501/26/2015Oilfield Svcs/Equipment
ECHHead-and-shoulders bottom      12/16/201401/30/2015Investment Co. (Foreign)
EWMHead-and-shoulders bottom      12/17/201401/30/2015Investment Co. (Foreign)
PXJHorn bottom      01/12/201501/26/2015Oilfield Svcs/Equipment
XLYHead-and-shoulders bottom      01/06/201502/02/2015Investment Co. (Domestic)
XLIHead-and-shoulders bottom      01/06/201502/02/2015Investment Co. (Domestic)

 

Weekly screen for chart patterns ending between 01/29/2015 and 02/05/2015. 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.
 
Arch Capital Group Ltd (ACGL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 17 out of 53
Stock RS rank: 243 out of 584
2/5/15 close: $60.46
1 Month avg volatility: $0.96. Volatility stop (for downward breakout): $62.41 or 3.2% above the close.
Change YTD: 2.30%
Volume: 230,100 shares. 3 month avg: 472,080 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top reversal pattern from 01/08/2015 to 02/02/2015
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 37 out of 53
Stock RS rank: 540 out of 584
2/5/15 close: $12.13
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $10.65 or 12.2% below the close.
Change YTD: -3.42%
Volume: 1,228,100 shares. 3 month avg: 1,984,274 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 12/19/2014 to 02/02/2015
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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Automatic Data Processing Inc (ADP)
Industry: Computer Software and Svcs
Industry RS rank: 13 out of 53
Stock RS rank: 273 out of 584
2/5/15 close: $87.17
1 Month avg volatility: $1.52. Volatility stop (for downward breakout): $90.22 or 3.5% above the close.
Change YTD: 4.56%
Volume: 2,151,300 shares. 3 month avg: 2,159,482 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 top, right-angled and ascending reversal pattern from 12/15/2014 to 02/05/2015
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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CDI Corp (CDI)
Industry: Human Resources
Industry RS rank: 9 out of 53
Stock RS rank: 61 out of 584
2/5/15 close: $18.00
1 Month avg volatility: $0.58. Volatility stop (for upward breakout): $16.29 or 9.5% below the close.
Change YTD: 1.64%
Volume: 58,800 shares. 3 month avg: 59,778 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 10/29/2014 to 02/05/2015
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Centerpoint Energy (CNP)
Industry: Electric Utility (Central)
Industry RS rank: 10 out of 53
Stock RS rank: 382 out of 584
2/5/15 close: $23.19
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $21.81 or 6.0% below the close.
Change YTD: -1.02%
Volume: 3,555,300 shares. 3 month avg: 4,127,152 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 11/11/2014 to 02/05/2015
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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CF Industries Holdings, Inc. (CF)
Industry: Chemical (Basic)
Industry RS rank: 15 out of 53
Stock RS rank: 159 out of 584
2/5/15 close: $299.60
1 Month avg volatility: $7.36. Volatility stop (for downward breakout): $316.54 or 5.7% above the close.
Change YTD: 9.93%
Volume: 624,000 shares. 3 month avg: 751,428 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: Broadening top reversal pattern from 01/21/2015 to 01/30/2015
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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Corporate Executie Board Co (CEB)
Industry: Information Services
Industry RS rank: 22 out of 53
Stock RS rank: 82 out of 584
2/5/15 close: $78.45
1 Month avg volatility: $2.21. Volatility stop (for upward breakout): $69.63 or 11.2% below the close.
Change YTD: 8.16%
Volume: 420,900 shares. 3 month avg: 174,629 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 bottom reversal pattern from 01/06/2015 to 02/02/2015
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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Deckers Outdoor Corp (DECK)
Industry: Shoe
Industry RS rank: 41 out of 53
Stock RS rank: 516 out of 584
2/5/15 close: $74.00
1 Month avg volatility: $3.11. Volatility stop (for upward breakout): $65.47 or 11.5% below the close.
Change YTD: -18.72%
Volume: 1,474,000 shares. 3 month avg: 991,563 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: Dead-cat bounce from 01/30/2015 to 01/30/2015

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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
2/5/15 close: $8,966.58
1 Month avg volatility: $152.00. Volatility stop (for downward breakout): $9,276.55 or 3.5% above the close.
Change YTD: -1.90%
Volume: 13,053,300 shares. 3 month avg: 15,543,365 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, descending reversal pattern from 12/17/2014 to 02/05/2015
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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hhgregg, Inc (HGG)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 53
Stock RS rank: 466 out of 584
2/5/15 close: $6.25
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $5.04 or 19.3% below the close.
Change YTD: -17.44%
Volume: 297,800 shares. 3 month avg: 348,858 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/20/2015 to 01/26/2015
WARNING: A dead-cat bounce occurred on 01/06/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 04/07/2015 and a 38% chance by 07/07/2015.
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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Hub Group Inc. (HUBG)
Industry: Trucking/Transp. Leasing
Industry RS rank: 36 out of 53
Stock RS rank: 520 out of 584
2/5/15 close: $36.70
1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $32.49 or 11.5% below the close.
Change YTD: -3.62%
Volume: 1,269,500 shares. 3 month avg: 258,608 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 Bottom, Eve and Eve reversal pattern from 01/20/2015 to 02/03/2015
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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Iconix Brand Group Inc. (ICON)
Industry: Shoe
Industry RS rank: 41 out of 53
Stock RS rank: 489 out of 584
2/5/15 close: $35.45
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $33.44 or 5.7% below the close.
Change YTD: 4.91%
Volume: 1,123,400 shares. 3 month avg: 1,017,125 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: Triple bottom reversal pattern from 12/19/2014 to 01/30/2015
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Lamar Advertising (LAMR)
Industry: Advertising
Industry RS rank: 29 out of 53
Stock RS rank: 225 out of 584
2/5/15 close: $56.96
1 Month avg volatility: $0.89. Volatility stop (for downward breakout): $59.02 or 3.6% above the close.
Change YTD: 6.19%
Volume: 880,100 shares. 3 month avg: 875,329 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rising wedge reversal pattern from 01/05/2015 to 02/05/2015
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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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 40 out of 53
Stock RS rank: 317 out of 584
2/5/15 close: $53.78
1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $48.57 or 9.7% below the close.
Change YTD: -6.75%
Volume: 4,565,000 shares. 3 month avg: 2,166,725 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/16/2015 to 01/30/2015
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Marathon Oil (MRO)
Industry: Petroleum (Integrated)
Industry RS rank: 49 out of 53
Stock RS rank: 541 out of 584
2/5/15 close: $28.38
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $26.16 or 7.8% below the close.
Change YTD: 0.32%
Volume: 7,309,700 shares. 3 month avg: 8,834,575 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 01/12/2015 to 01/26/2015
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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Nasdaq Composite (^IXIC)
Industry: None
Industry RS rank is unavailable.
2/5/15 close: $4,765.10
1 Month avg volatility: $70.69. Volatility stop (for upward breakout): $4,581.42 or 3.9% below the close.
Change YTD: 0.61%
Volume: 0 shares. Could not calculate the 3 month avg volume.
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 12/16/2014 to 02/02/2015
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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Noble Corporation (NE)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 550 out of 584
2/5/15 close: $17.77
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $15.17 or 14.6% below the close.
Change YTD: 7.24%
Volume: 11,413,400 shares. 3 month avg: 8,564,509 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 11/21/2014 to 01/30/2015
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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Nu Skin Enterprises, Inc (NUS)
Industry: Household Products
Industry RS rank: 20 out of 53
Stock RS rank: 269 out of 584
2/5/15 close: $50.69
1 Month avg volatility: $2.17. Volatility stop (for upward breakout): $38.21 or 24.6% below the close.
Change YTD: 16.00%
Volume: 5,383,600 shares. 3 month avg: 1,273,015 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 12/08/2014 to 02/03/2015
WARNING: A dead-cat bounce occurred on 11/06/2014. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 05/07/2015.
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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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 37 out of 53
Stock RS rank: 451 out of 584
2/5/15 close: $141.77
1 Month avg volatility: $4.09. Volatility stop (for upward breakout): $128.33 or 9.5% below the close.
Change YTD: -23.43%
Volume: 4,374,900 shares. 3 month avg: 1,012,543 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 from 02/04/2015 to 02/04/2015

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RPC Inc (RES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 565 out of 584
2/5/15 close: $13.28
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $11.65 or 12.3% below the close.
Change YTD: 1.84%
Volume: 1,556,700 shares. 3 month avg: 1,664,434 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 01/12/2015 to 01/26/2015
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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Schwab, Charles Corporation (SCHW)
Industry: Securities Brokerage
Industry RS rank: 24 out of 53
Stock RS rank: 354 out of 584
2/5/15 close: $27.92
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $26.06 or 6.7% below the close.
Change YTD: -7.52%
Volume: 5,507,800 shares. 3 month avg: 6,810,063 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/16/2015 to 01/30/2015
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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SodaStream International Ltd (SODA)
Industry: Food Processing
Industry RS rank: 31 out of 53
Stock RS rank: 563 out of 584
2/5/15 close: $20.00
1 Month avg volatility: $0.61. Volatility stop (for upward breakout): $18.02 or 9.9% below the close.
Change YTD: -0.60%
Volume: 501,800 shares. 3 month avg: 527,857 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Bottom, Eve and Adam reversal pattern from 01/16/2015 to 02/02/2015
WARNING: A dead-cat bounce occurred on 10/07/2014. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/07/2015.
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 4%.
Throwbacks occur 57% of the time.
Price hits measure rule target 66% of the time.

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Stein Mart Inc. (SMRT)
Industry: Apparel
Industry RS rank: 37 out of 53
Stock RS rank: 166 out of 584
2/5/15 close: $15.76
1 Month avg volatility: $0.49. Volatility stop (for downward breakout): $17.52 or 11.2% above the close.
Change YTD: 7.80%
Volume: 1,169,100 shares. 3 month avg: 109,826 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: Broadening top reversal pattern from 11/24/2014 to 02/02/2015
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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TD AmeriTrade Holding A (AMTD)
Industry: Securities Brokerage
Industry RS rank: 24 out of 53
Stock RS rank: 268 out of 584
2/5/15 close: $34.90
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $33.13 or 5.1% below the close.
Change YTD: -2.46%
Volume: 1,883,400 shares. 3 month avg: 2,397,455 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 Bottom, Adam and Adam reversal pattern from 01/21/2015 to 02/02/2015
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Westlake Chemical Corp (WLK)
Industry: Chemical (Basic)
Industry RS rank: 15 out of 53
Stock RS rank: 534 out of 584
2/5/15 close: $65.25
1 Month avg volatility: $2.11. Volatility stop (for upward breakout): $58.59 or 10.2% below the close.
Change YTD: 6.81%
Volume: 1,192,300 shares. 3 month avg: 937,489 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: Triangle, symmetrical continuation pattern from 12/16/2014 to 01/30/2015
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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iShares PHLX SOX Semiconductor Sector (SOXX)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 23 out of 53
Stock RS rank: 255 out of 584
2/5/15 close: $91.39
1 Month avg volatility: $1.69. Volatility stop (for upward breakout): $87.02 or 4.8% below the close.
Change YTD: -1.61%
Volume: 233,000 shares. 3 month avg: 241,285 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: Channel from 12/16/2014 to 02/05/2015

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Market Vectors Oil Services (OIH)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 552 out of 584
2/5/15 close: $35.42
1 Month avg volatility: $0.99. Volatility stop (for upward breakout): $32.85 or 7.3% below the close.
Change YTD: -1.39%
Volume: 7,013,700 shares. 3 month avg: 9,604,185 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: Horn bottom reversal pattern from 01/12/2015 to 01/26/2015
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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MSCI Chile Investable Mkt Idx (ECH)
Industry: Investment Co. (Foreign)
Industry RS rank: 46 out of 53
Stock RS rank: 444 out of 584
2/5/15 close: $40.01
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $38.70 or 3.3% below the close.
Change YTD: 0.30%
Volume: 212,000 shares. 3 month avg: 268,865 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 12/16/2014 to 01/30/2015
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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MSCI Malaysia Index (EWM)
Industry: Investment Co. (Foreign)
Industry RS rank: 46 out of 53
Stock RS rank: 479 out of 584
2/5/15 close: $13.67
1 Month avg volatility: $0.14. Volatility stop (for upward breakout): $13.25 or 3.1% below the close.
Change YTD: 1.41%
Volume: 2,180,000 shares. 3 month avg: 1,663,140 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 12/17/2014 to 01/30/2015
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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PowerShares Dynamic Oil Services (PXJ)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 561 out of 584
2/5/15 close: $17.18
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $15.94 or 7.2% below the close.
Change YTD: -1.94%
Volume: 37,000 shares. 3 month avg: 73,965 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: Horn bottom reversal pattern from 01/12/2015 to 01/26/2015
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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SPDR Consumer Discretionary (XLY)
Industry: Investment Co. (Domestic)
Industry RS rank: 33 out of 53
Stock RS rank: 248 out of 584
2/5/15 close: $73.05
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $70.37 or 3.7% below the close.
Change YTD: 1.25%
Volume: 5,070,800 shares. 3 month avg: 7,966,932 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 01/06/2015 to 02/02/2015
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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SPDR Industrial Select Sector (XLI)
Industry: Investment Co. (Domestic)
Industry RS rank: 33 out of 53
Stock RS rank: 262 out of 584
2/5/15 close: $56.33
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $54.26 or 3.7% below the close.
Change YTD: -0.44%
Volume: 9,193,900 shares. 3 month avg: 10,492,460 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 01/06/2015 to 02/02/2015
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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Thursday 2/5/15. Nasdaq Channel Play

The index dropped by -0.2% or -11.04 points. Since 02/05/1971 the index made 447 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 231 occasions.
     Average loss was -1.0% on 216 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 76/130 or 58.5% of the time.
     The prediction of the index closing lower has been right 28/58 or 48.3% 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.

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

The chart shows the head-and-shoulders bottom that I blogged about last Tuesday in the Dow (L, H, R with a green neckline).

This chart shows a channel highlighted in red. Although the lines are thick, you can still see a downward breakout from this rising channel. That's not bullish.

What does it mean? It's hard to say on the intraday scale. The market can gap open in either direction. If this were on the daily scale, I would say to look for a pullback to the bottom channel trend line followed by a further decline. Clearly the weakness in the Nasdaq and S&P 500 indices today supports that theory. Of course, any major earnings announcement or oil price change can knock things about.

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I didn't finish writing about the research on quarterly earnings. I hope to blog about it on the site next week, probably Tuesday.

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The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the 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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,446.41    
 Weekly S2  4,525.13  78.71   
 Monthly S1  4,581.56  56.43   
 Weekly S1  4,620.91  39.36   
 Daily S2  4,673.07  52.15   
 Daily S1  4,694.88  21.82   
 Weekly Pivot  4,697.55  2.66   Yes! The Weekly Pivot is close to the Daily S1.
 Low  4,697.79  0.24   Yes! The Low is close to the Weekly Pivot.
 Monthly Pivot  4,698.25  0.46   Yes! The Monthly Pivot is close to the Low.
 Open  4,699.81  1.56   Yes! The Open is close to the Monthly Pivot.
 61.8% Down from Intraday High  4,715.57  15.76   
 Close  4,716.70  1.13   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  4,719.61  2.91   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  4,721.06  1.45   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  4,726.55  5.49   
 Daily R1  4,741.42  14.87   
 High  4,744.33  2.91   Yes! The High is close to the Daily R1.
 Daily R2  4,766.15  21.82   
 Weekly R1  4,793.33  27.19   
 Monthly R1  4,833.40  40.06   
 Weekly R2  4,869.97  36.57   
 Monthly R2  4,950.09  80.13   

Wednesday 2/4/15. Chart Pattern Indicator: Bullish Divergence!

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 shows bullish divergence. The indicator (bottom) has an upward trend. The index on the top has a downward trend (red channel lines in both cases). One of them is telling the future direction. But which one?

Usually it is the indicator. They say (whomever "they" are) that the index will follow the indicator eventually. That is my bet too. We saw some of that today with the Dow rising 305 points. It could bust out of the channel top tomorrow. But it's still earnings season, so anything can happen.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

The indicator is bullish as the chart shows, having moved out of the neutral zone (white space) and into buy territory (green lines).

-- Thomas Bulkowski

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Tuesday 2/3/15. Intraday Market Direction: Dow

The index climbed by 1.1% or 196.09 points. Since 10/01/1928 the index made 347 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 201 occasions.
     Average loss was -0.8% on 146 occasions.
Expect the index to close higher 57.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 87/141 or 61.7% of the time.
     The prediction of the index closing lower has been right 23/42 or 54.8% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

A head-and-shoulders bottom appears in the Dow, as shown, with the left shoulder (L), head (H), and right shoulder (R). If this were a person, they would need a trip to the hospital.

The two shoulders should be symmetrical about the head, but they are not.

I show the neckline as a thick red line. The index has closed above the neckline below A, signaling a breakout and a valid chart pattern.

The green trend line I drew at B looks red for some reason. But the index also closes above this line. I have seen this before, where we get two buy signals at the same time. They are not additive. They do NOT combine to form a more powerful, more reliable signal. The last time we saw this, the index dropped the next day. We'll just have to wait and see what happens this time, but the signals are bullish.

$ $ $

I'm working on new research that hopes to answer the question, should I sell a stock if it drops because of poor earnings? I hope to post the results on Thursday, but these things can take longer than one would expect.

$ $ $

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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© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,566.45    
 Weekly S2  16,837.84  271.39   
 Daily S2  16,925.57  87.73   
 Monthly S1  16,963.74  38.17   
 Low  17,037.76  74.02   
 Weekly S1  17,099.44  61.68   
 Daily S1  17,143.31  43.87   
 61.8% Down from Intraday High  17,163.79  20.48   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Open  17,169.99  6.20   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,202.72  32.73   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  17,241.65  38.93   
 Daily Pivot  17,255.49  13.84   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  17,361.04  105.54   
 High  17,367.68  6.64   Yes! The High is close to the Close.
 Weekly Pivot  17,397.90  30.22   Yes! The Weekly Pivot is close to the High.
 Daily R1  17,473.23  75.33   
 Monthly Pivot  17,533.60  60.37   
 Daily R2  17,585.41  51.82   
 Weekly R1  17,659.50  74.09   
 Monthly R1  17,930.89  271.39   
 Weekly R2  17,957.96  27.07   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  18,500.75  542.79   

Monday 2/2/15. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utility index on the daily scale.

The red line separates 2014 from this year.

I was fortunately to have several electric utility stocks in my portfolio last year. As you know the utilities went up 26% last year and that doesn't include the hefty dividends they pay (the ones I own pay at least 4% with most over 5%. That's because I bought them cheap when the yields were high).

This year, the utilities are the only index still in positive territory, up 3.1% this year and month. The transports are the worst performing, down 5.4%. Ouch.

When earnings season finishes and I don't know when that is, but when it's done I expect the indices to start their recovery. Until then, you have to hold onto the boat tightly or else you might get whipped out.

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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 6.1 points.
Tuesday: Down 291.49 points.
Wednesday: Down 195.84 points.
Thursday: Up 225.48 points.
Friday: Down 251.9 points.

For the Week...

The Dow industrials were down 507.65 points or 2.9%.
The Nasdaq composite was down 122.64 points or 2.6%.
The S&P 500 index was down 56.83 points or 2.8%.

Year to Date...

Dow Industrials
     4.4% down from the high of 17,951.78 on 01/02/2015.
     0.2% up from the low of 17,136.30 on 01/29/2015.
Nasdaq
     3.0% down from the high of 4,777.01 on 01/02/2015.
     1.6% up from the low of 4,563.11 on 01/16/2015.
S&P 500
     3.7% down from the high of 2,072.36 on 01/02/2015.
     0.3% up from the low of 1,988.12 on 01/16/2015.

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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
Personal income & consumption8:30 MC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 MC+Covers durables, non-durables, and services.
Construction spending10:00 MDCovers residential/non-residential/public spending on new construction.
Factory orders10:00 TD+Durable/non-durable goods orders w/factory inventories.
Auto & truck sales2:00 TC-Monthly sales of domestically produced vehicles.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Trade balance8:30 ThC+Signals balance of exports & imports.
Productivity & costs8:30 ThD+Cost of producing a unit of output.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Consumer credit3:00 FD-Measures auto, credit card and other debt.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/30/2015, the CPI had:

36 bearish patterns,
12 bullish patterns,
173 patterns waiting for breakout.
The CPI signal is 25.0%, which is bearish (<= 35%).

The chart pattern indicator is bearish with 1 of 3 half triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  16,984  17,075  17,247  17,338  17,510 
Weekly  16,772  16,969  17,333  17,529  17,893 
Monthly  16,501  16,833  17,468  17,800  18,435 
S&P500 (^GSPC): Daily  1,974  1,984  2,004  2,014  2,034 
Weekly  1,945  1,970  2,014  2,039  2,082 
Monthly  1,920  1,958  2,026  2,063  2,131 
Nasdaq (^IXIC): Daily  4,584  4,610  4,657  4,682  4,729 
Weekly  4,498  4,567  4,670  4,739  4,843 
Monthly  4,419  4,527  4,671  4,779  4,923 
  • 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. 
 2 months down 11.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.0%   The trend may continue. 
 2 months down 11.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 29.7%   The trend may continue. 
 2 months down 16.3%   Expect a reversal soon. 

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

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

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

Buy-and-Hold: 12-Month SMA

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

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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
24Pipe bottom
19Triangle, symmetrical
9Head-and-shoulders top
9Double Bottom, Adam and Adam
8Triangle, descending
7Head-and-shoulders bottom
6Triangle, ascending
6Channel
6Diamond top
5Broadening 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. Electric Utility (West)1. Biotechnology
2. Biotechnology2. Drug
3. Furn/Home Furnishings3. Electric Utility (West)
4. Drug4. Retail Building Supply
5. Retail Building Supply5. Furn/Home Furnishings
50. Metals and Mining (Div.)50. Cement and Aggregates
51. Natural Gas (Diversified)51. Petroleum (Integrated)
52. Petroleum (Integrated)52. Natural Gas (Diversified)
53. Petroleum (Producing)53. Petroleum (Producing)
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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