Subscribe to RSS feeds Bulkowski Blog via RSS

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

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.
Bulkowski's Blog: ThePatternSite.com
Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/24/2017
20,597 -59.86 -0.3%
8,929 -7.37 -0.1%
706 3.20 0.5%
5,829 11.05 0.2%
2,344 -1.98 -0.1%
YTD
4.2%
-1.3%
7.0%
8.3%
4.7%
Tom's Targets    Overview: 03/14/2017
21,250 or 20,600 by 04/15/2017
9,500 or 8,700 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,425 or 2,325 by 04/15/2017
Mutt Losers: None YTD
Mutt Winners: None YTD

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.

January 2015 Headlines


Archives


Saturday 1/31/15. Does Divergence Work?

Picture of the Nasdaq composite on the 5 minute scale.

Does divergence between price and the RSI work?

Here is the first of three conclusions listed in my summary of the article that you can find here.

Tests show that divergence between price and the Wilder relative strength index (RSI) beat the performance of the S&P 500 index consistently only in a bull market using bullish divergence.

The other combinations of bull/bear markets and bullish/bearish divergence under perform the market index.

For the winning combination, bullish divergence in a bull market, I found that it wins between 45% and 48% of the time. In other words, the performance of the index beats stocks showing bullish divergence more often than not.

Click to read the full article.

-- Thomas Bulkowski

Top


Friday 1/30/15. 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 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 593 stocks searched, or 3.5%. 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 16 bullish chart patterns this week and 1 bearish ones with any remaining (1) 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
ALBTriangle, symmetrical      10/15/201401/23/2015Chemical (Diversified)
ASNAPipe bottom      01/12/201501/20/2015Apparel
COHHead-and-shoulders bottom      01/06/201501/27/2015Apparel
CRPipe bottom      01/12/201501/20/2015Diversified Co.
^DJITriangle, symmetrical      12/17/201401/26/2015None
DOVTriangle, symmetrical      12/03/201401/29/2015Machinery
ELXTriangle, symmetrical      01/15/201501/28/2015Computers and Peripherals
FORMTriangle, descending      11/04/201401/29/2015Semiconductor
HSICChannel      11/28/201401/29/2015Medical Supplies
MONTriangle, symmetrical      01/07/201501/29/2015Chemical (Diversified)
MOSBroadening top      01/22/201501/29/2015Chemical (Diversified)
^IXICTriangle, symmetrical      12/16/201401/29/2015None
NCSTriangle, symmetrical      01/07/201501/29/2015Building Materials
NEWPTriangle, symmetrical      12/29/201401/29/2015Precision Instrument
ROKHead-and-shoulders bottom      01/06/201501/27/2015Diversified Co.
SRDXTriangle, symmetrical      12/29/201401/29/2015Medical Supplies
RIGPipe bottom      01/12/201501/20/2015Oilfield Svcs/Equipment
VLOPipe bottom      01/12/201501/20/2015Petroleum (Integrated)
EWWRising wedge      12/16/201401/28/2015Investment Co. (Foreign)
QLDTriangle, descending      11/28/201401/29/2015Long ETFs
QQQTriangle, descending      11/28/201401/29/2015Long ETFs
IXNTriangle, descending      12/16/201401/29/2015Investment Co. (Foreign)
XLVTriangle, ascending      12/08/201401/29/2015Drug
XLBTriangle, symmetrical      12/05/201401/29/2015Building Materials
SSGTriangle, ascending      12/17/201401/29/2015Short ETFs

 

Weekly screen for chart patterns ending between 01/22/2015 and 01/29/2015. 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.
 
Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 53
Stock RS rank: 529 out of 585
1/29/15 close: $47.77
1 Month avg volatility: $1.91. Volatility stop (for upward breakout): $43.13 or 9.7% below the close.
Change YTD: -20.56%
Volume: 10,098,600 shares. 3 month avg: 1,738,917 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/15/2014 to 01/23/2015
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

Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 26 out of 53
Stock RS rank: 515 out of 585
1/29/15 close: $11.97
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $10.91 or 8.9% below the close.
Change YTD: -4.70%
Volume: 2,276,700 shares. 3 month avg: 1,995,549 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/12/2015 to 01/20/2015
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

Coach Inc. (COH)
Industry: Apparel
Industry RS rank: 26 out of 53
Stock RS rank: 196 out of 585
1/29/15 close: $38.94
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $36.22 or 7.0% below the close.
Change YTD: 3.67%
Volume: 19,082,900 shares. 3 month avg: 5,094,603 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 01/06/2015 to 01/27/2015
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.

Top

Crane Co (CR)
Industry: Diversified Co.
Industry RS rank: 34 out of 53
Stock RS rank: 465 out of 585
1/29/15 close: $59.58
1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $56.01 or 6.0% below the close.
Change YTD: 1.50%
Volume: 663,300 shares. 3 month avg: 399,298 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/12/2015 to 01/20/2015
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

DJ 30 Industrials (^DJI)
Industry: None
Industry RS rank is unavailable.
1/29/15 close: $17,416.85
1 Month avg volatility: $250.72. Volatility stop (for upward breakout): $16,634.87 or 4.5% below the close.
Change YTD: -2.28%
Volume: 111,691,700 shares. 3 month avg: 94,966,228 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 12/17/2014 to 01/26/2015
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

Dover Corp (DOV)
Industry: Machinery
Industry RS rank: 43 out of 53
Stock RS rank: 483 out of 585
1/29/15 close: $70.14
1 Month avg volatility: $1.83. Volatility stop (for upward breakout): $64.46 or 8.1% below the close.
Change YTD: -2.20%
Volume: 2,551,800 shares. 3 month avg: 2,334,023 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 12/03/2014 to 01/29/2015
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

Emulex Corp (ELX)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 41 out of 53
Stock RS rank: 127 out of 585
1/29/15 close: $6.75
1 Month avg volatility: $0.23. Volatility stop (for upward breakout): $6.10 or 9.6% below the close.
Change YTD: 19.05%
Volume: 919,800 shares. 3 month avg: 1,075,165 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 01/15/2015 to 01/28/2015
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

FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 27 out of 53
Stock RS rank: 224 out of 585
1/29/15 close: $7.91
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $8.73 or 10.4% above the close.
Change YTD: -8.02%
Volume: 229,100 shares. 3 month avg: 323,852 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, descending reversal pattern from 11/04/2014 to 01/29/2015
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.

Top

Henry Schein Inc. (HSIC)
Industry: Medical Supplies
Industry RS rank: 13 out of 53
Stock RS rank: 133 out of 585
1/29/15 close: $140.01
1 Month avg volatility: $2.56. Volatility stop (for upward breakout): $133.85 or 4.4% below the close.
Change YTD: 2.84%
Volume: 614,300 shares. 3 month avg: 476,094 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: Channel from 11/28/2014 to 01/29/2015

Top

Monsanto Co (MON)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 53
Stock RS rank: 285 out of 585
1/29/15 close: $118.49
1 Month avg volatility: $1.87. Volatility stop (for upward breakout): $113.52 or 4.2% below the close.
Change YTD: -0.82%
Volume: 2,875,900 shares. 3 month avg: 3,309,257 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 01/07/2015 to 01/29/2015
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

Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 53
Stock RS rank: 304 out of 585
1/29/15 close: $48.22
1 Month avg volatility: $0.85. Volatility stop (for downward breakout): $49.98 or 3.6% above the close.
Change YTD: 5.63%
Volume: 3,472,000 shares. 3 month avg: 3,376,855 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 reversal pattern from 01/22/2015 to 01/29/2015
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.

Top

Nasdaq Composite (^IXIC)
Industry: None
Industry RS rank is unavailable.
1/29/15 close: $4,683.41
1 Month avg volatility: $68.03. Volatility stop (for upward breakout): $4,465.71 or 4.7% below the close.
Change YTD: -1.11%
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 01/29/2015
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

NCI Building Systems Inc. (NCS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 53
Stock RS rank: 424 out of 585
1/29/15 close: $15.79
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $14.40 or 8.8% below the close.
Change YTD: -14.74%
Volume: 222,400 shares. 3 month avg: 220,774 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/07/2015 to 01/29/2015
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

Newport Corporation (NEWP)
Industry: Precision Instrument
Industry RS rank: 22 out of 53
Stock RS rank: 246 out of 585
1/29/15 close: $18.85
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $17.33 or 8.1% below the close.
Change YTD: -1.36%
Volume: 95,100 shares. 3 month avg: 161,012 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 12/29/2014 to 01/29/2015
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

Rockwell Automation Inc (ROK)
Industry: Diversified Co.
Industry RS rank: 34 out of 53
Stock RS rank: 365 out of 585
1/29/15 close: $110.02
1 Month avg volatility: $2.41. Volatility stop (for upward breakout): $102.00 or 7.3% below the close.
Change YTD: -1.06%
Volume: 1,738,600 shares. 3 month avg: 1,182,595 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 01/27/2015
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.

Top

Surmodics, Inc (SRDX)
Industry: Medical Supplies
Industry RS rank: 13 out of 53
Stock RS rank: 193 out of 585
1/29/15 close: $22.28
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $20.15 or 9.6% below the close.
Change YTD: 0.81%
Volume: 78,300 shares. 3 month avg: 72,548 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/29/2014 to 01/29/2015
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

Transocean Inc. (RIG)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 582 out of 585
1/29/15 close: $15.75
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $14.14 or 10.2% below the close.
Change YTD: -14.08%
Volume: 9,884,200 shares. 3 month avg: 14,439,162 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 01/12/2015 to 01/20/2015
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

Valero Energy (VLO)
Industry: Petroleum (Integrated)
Industry RS rank: 51 out of 53
Stock RS rank: 280 out of 585
1/29/15 close: $52.08
1 Month avg volatility: $1.60. Volatility stop (for upward breakout): $47.99 or 7.9% below the close.
Change YTD: 5.21%
Volume: 11,391,500 shares. 3 month avg: 7,782,485 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/12/2015 to 01/20/2015
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

MSCI Mexico Investable Mkt idx (EWW)
Industry: Investment Co. (Foreign)
Industry RS rank: 45 out of 53
Stock RS rank: 467 out of 585
1/29/15 close: $57.99
1 Month avg volatility: $0.99. Volatility stop (for downward breakout): $60.40 or 4.2% above the close.
Change YTD: -2.36%
Volume: 1,996,800 shares. 3 month avg: 2,485,549 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rising wedge reversal pattern from 12/16/2014 to 01/28/2015
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

Nasdaq 100 long 2x Ultra QQQ ProShares (QLD)
Industry: Long ETFs
Industry RS rank: 17 out of 53
Stock RS rank: 222 out of 585
1/29/15 close: $132.73
1 Month avg volatility: $3.93. Volatility stop (for downward breakout): $141.10 or 6.3% above the close.
Change YTD: -2.93%
Volume: 1,882,400 shares. 3 month avg: 1,461,525 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 01/29/2015
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.

Top

PowerShares QQQ -- Nasdaq 100 (QQQ)
Industry: Long ETFs
Industry RS rank: 17 out of 53
Stock RS rank: 272 out of 585
1/29/15 close: $101.89
1 Month avg volatility: $1.60. Volatility stop (for downward breakout): $105.29 or 3.3% above the close.
Change YTD: -1.32%
Volume: 46,532,800 shares. 3 month avg: 34,864,394 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 01/29/2015
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.

Top

S and P Global Tech Sector Index fund (IXN)
Industry: Investment Co. (Foreign)
Industry RS rank: 45 out of 53
Stock RS rank: 309 out of 585
1/29/15 close: $93.50
1 Month avg volatility: $1.31. Volatility stop (for downward breakout): $96.20 or 2.9% above the close.
Change YTD: -1.45%
Volume: 209,500 shares. 3 month avg: 46,735 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 12/16/2014 to 01/29/2015
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.

Top

SPDR Health Care Select Sector (XLV)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 185 out of 585
1/29/15 close: $70.37
1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $67.12 or 4.6% below the close.
Change YTD: 2.91%
Volume: 12,120,000 shares. 3 month avg: 9,843,122 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 01/29/2015
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

SPDR Materials Select Sector (XLB)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 53
Stock RS rank: 370 out of 585
1/29/15 close: $47.88
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $45.47 or 5.0% below the close.
Change YTD: -1.44%
Volume: 5,958,400 shares. 3 month avg: 6,495,663 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/05/2014 to 01/29/2015
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

UltraShort 2x Semiconductor ProShares (SSG)
Industry: Short ETFs
Industry RS rank: 42 out of 53
Stock RS rank: 491 out of 585
1/29/15 close: $50.36
1 Month avg volatility: $1.20. Volatility stop (for upward breakout): $47.96 or 4.8% below the close.
Change YTD: 5.32%
Volume: 1,700 shares. 3 month avg: 8,609 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/17/2014 to 01/29/2015
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


Thursday 1/29/15. Intraday Market Direction: Nasdaq

The index dropped by -0.9% or -43.51 points. Since 02/05/1971 the index made 179 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.1% on 83 occasions.
     Average loss was -1.4% on 96 occasions.
Expect the index to close lower 53.6% 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 28/57 or 49.1% 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.

Intraday, a head-and-shoulders top appears as shown in the figure (LS=left shoulder, H=head, RS=right shoulder). The chart pattern has confirmed as a valid pattern. That means the index has closed below the neckline. I show the neckline as the red line joining the armpits.

The height of the head-and-shoulders is about 60 points. I subtracted that height from the neckline to get the green line. Notice that the index hasn't reached that far yet. Will it tomorrow? I am not going to hazard a guess. With earnings season, the index can bounce up or down like crazy as the last two days have shown. However, research I just completed yesterday says a stock on the daily charts will hit the green target 75% of the time. I don't know how it works on an index nor intraday. But it gives you an idea.

If you split the height in half and use that then it will reach the target 92% of the time. In this case, the index already hit it.

$ $ $

I took some time off today to mail my mother a puzzle. Postage ($10.01) was more than the puzzle was worth. It is one I've built before and tried again about a week ago. I gave up. The picture is an artist rendition of a fire in New York about a decade ago. It's at night, so many of the pieces are black. Yuck. It's like trying to build a 2,000 piece puzzle by flipping the thing over and building it on the non-picture side. Agony.

$ $ $

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  4,420.18    
 Weekly S2  4,500.01  79.83   
 Monthly S1  4,529.08  29.07   
 Daily S2  4,567.93  38.85   
 Weekly S1  4,569.00  1.07   Yes! The Weekly S1 is close to the Daily S2.
 Daily S1  4,602.96  33.96   
 Low  4,637.48  34.52   
 Close  4,637.99  0.51   Yes! The Close is close to the Low.
 Weekly Pivot  4,670.09  32.10   
 Monthly Pivot  4,672.02  1.93   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Daily Pivot  4,672.51  0.49   Yes! The Daily Pivot is close to the Monthly Pivot.
 61.8% Down from Intraday High  4,677.43  4.92   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  4,689.77  12.34   
 38.2% Down from Intraday High  4,702.11  12.34   
 Daily R1  4,707.54  5.43   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Weekly R1  4,739.08  31.54   
 Open  4,740.69  1.61   Yes! The Open is close to the Weekly R1.
 High  4,742.06  1.37   Yes! The High is close to the Open.
 Daily R2  4,777.09  35.03   
 Monthly R1  4,780.92  3.83   Yes! The Monthly R1 is close to the Daily R2.
 Weekly R2  4,840.17  59.25   
 Monthly R2  4,923.86  83.69   

Wednesday 1/28/15. 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.

Judging by the loss in my portfolio, today's nearly 300 point drop in the Dow was confined to the Dow 30. Yes, I did lose money but not like you would have expected from a 300 point drop.

Anyway, both the index and the CPI show weakness. The indicator has moved into neutral territory as the next chart makes clear.

Picture of the chart pattern indicator

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

This chart shows no color on the right bar. That means the signal is neutral. The last signal was bullish, so that is still in effect.

Today's drop was driven by earnings, rather, the lack of earnings. Those declines tend to be short lived, so I expect a recovery shortly.

-- Thomas Bulkowski

Top


Tuesday 1/27/15. Dow Cup with Handle

The index climbed by 0.0% or 6.1 points. Since 10/01/1928 the index made 1215 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 644 occasions.
     Average loss was -0.7% on 571 occasions.
Expect the index to close higher 53.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 87/140 or 62.1% 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.

Please forgive the awkward looking cup with handle. That's the thing in red.

In a standard cup with handle (daily scale), there are a lot of conditions that need to be met. Price, for one, needs to rise by 30% leading to the start of the cup. In an index like the Dow pictured here, that's unrealistic.

The handle also isn't a nice looking one. It splits as a new trading day emerges.

A cup with handle is bullish which matches the probability (above) suggesting a higher close tomorrow.

On the daily chart (not shown), the Dow has formed a symmetrical triangle starting with the valley in December. The breakout from a sym tri is about random (54% breakout upward).

$ $ $

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

-- Thomas Bulkowski

Top

© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,815.33    
 Weekly S2  17,127.95  312.61   
 Monthly S1  17,247.02  119.07   
 Weekly S1  17,403.32  156.31   
 Daily S2  17,518.79  115.47   
 Low  17,567.60  48.81   
 Daily S1  17,598.75  31.15   
 61.8% Down from Intraday High  17,616.79  18.04   
 Weekly Pivot  17,622.11  5.32   Yes! The Weekly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,631.98  9.87   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 38.2% Down from Intraday High  17,647.17  15.19   
 Daily Pivot  17,647.55  0.38   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Open  17,668.11  20.56   
 Monthly Pivot  17,675.23  7.12   Yes! The Monthly Pivot is close to the Open.
 Close  17,678.70  3.47   Yes! The Close is close to the Monthly Pivot.
 High  17,696.36  17.66   
 Daily R1  17,727.51  31.15   
 Daily R2  17,776.31  48.81   
 Weekly R1  17,897.48  121.17   
 Monthly R1  18,106.92  209.43   
 Weekly R2  18,116.27  9.35   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  18,535.13  418.87   

Monday 1/26/15. Market Monday: The Week Ahead

My Prediction

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

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

There's not much to comment on. Why? Because I'm as confused as the market about a direction.

Although I'm bullish, it's earnings season. The Dow dropped 141 points today (Friday) on weak earnings, at least that's the rumor I'm spreading.

I drew two red lines bounding recent price action. The market seems to be confined within those two lines, at least going back 2 weeks or so.

The top red line also merges with overhead resistance in November-December.

I expect the index to drop again, but eventually recover to make a new high. My targets at the top of this page suggest that will happen by mid February, but now I'm not so sure. We'll have to wait and see.

Top

A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Up 3.66 points.
Wednesday: Up 39.05 points.
Thursday: Up 259.7 points.
Friday: Down 141.38 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 161.03 points or 0.9%.
The Nasdaq composite was up 123.5 points or 2.7%.
The S&P 500 index was up 32.4 points or 1.6%.

Year to Date...

Dow Industrials
     1.6% down from the high of 17,951.78 on 01/02/2015.
     2.5% up from the low of 17,243.55 on 01/16/2015.
Nasdaq
     0.4% down from the high of 4,777.01 on 01/02/2015.
     4.3% up from the low of 4,563.11 on 01/16/2015.
S&P 500
     1.0% down from the high of 2,072.36 on 01/02/2015.
     3.2% up from the low of 1,988.12 on 01/16/2015.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Durable goods orders8:30 TBMeasures orders, shipments of goods with lifespans >3 years.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
New home sales10:00 TC+Shows sales of single-family homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Rate decision2:00 W?The Federal Reserves reports on interest rate changes.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Gross domestic product8:30 FBMeasures economic activity; GDP deflator measures inflation.
Chicago purchasing managers index9:45 FBMonitors regional manufacturing activity.
Michigan sentiment9:55 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 01/23/2015, the CPI had:

12 bearish patterns,
36 bullish patterns,
445 patterns waiting for breakout.
The CPI signal is 75.0%, which is bullish (>= 65%).

The chart pattern indicator is bullish 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  17,573  17,623  17,718  17,768  17,863 
Weekly  17,126  17,399  17,620  17,893  18,114 
Monthly  16,813  17,243  17,673  18,103  18,533 
S&P500 (^GSPC): Daily  2,043  2,047  2,055  2,060  2,068 
Weekly  1,981  2,017  2,040  2,075  2,098 
Monthly  1,939  1,995  2,044  2,101  2,150 
Nasdaq (^IXIC): Daily  4,722  4,740  4,756  4,773  4,789 
Weekly  4,540  4,649  4,710  4,819  4,880 
Monthly  4,460  4,609  4,712  4,861  4,964 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.6%   Expect a random direction. 
 2 months down 11.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 42.9%   Expect a random direction. 
 2 months down 11.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 45.0%   Expect a random direction. 
 1 month up 48.5%   Expect a random direction. 

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

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
15Pipe bottom
13Pipe top
10Triangle, symmetrical
8Head-and-shoulders top
7Double Bottom, Adam and Adam
5Triangle, ascending
5Broadening top
5Channel
5Double Top, Eve and Eve
5Head-and-shoulders bottom

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

The 10 types of most frequently appearing chart patterns in the stocks, 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. Biotechnology1. Retail Building Supply
2. Drug2. Biotechnology
3. Electric Utility (West)3. Medical Supplies
4. Retail Building Supply4. Furn/Home Furnishings
5. Furn/Home Furnishings5. E-Commerce
50. Cement and Aggregates50. Cement and Aggregates
51. Petroleum (Integrated)51. Petroleum (Integrated)
52. Natural Gas (Diversified)52. Natural Gas (Diversified)
53. Petroleum (Producing)53. Oilfield Svcs/Equipment
54. Oilfield Svcs/Equipment54. Petroleum (Producing)

-- Thomas Bulkowski

Top


Picture ofa bee.

Saturday 1/24/15. Bottom Fish or Play Momentum?

Buying stocks: Should you bottom fish (buy low, sell high) or play momentum (buy high, sell higher).

Research shows that bottom fishing gives better returns with less risk of failure.

See the link for more details.

$ $ $

This weekend I plan to read a book on gardening. It was a Christmas present from a friend. I love to garden! I'm looking forward to getting new ideas.

I'm already thinking about building a seat around my oak tree. The book has plans for that.

-- Thomas Bulkowski

 

Top

 


Friday 1/23/15. 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 14 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 593 stocks searched, or 2.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 12 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 18 bullish chart patterns this week and 2 bearish ones with any remaining (1) 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
ANIKTriangle, descending      12/23/201401/22/2015Biotechnology
AAPLHead-and-shoulders bottom      12/16/201401/16/2015Computers and Peripherals
ATWPipe bottom      01/05/201501/12/2015Petroleum (Producing)
CSCTriangle, symmetrical      12/03/201401/22/2015Computer Software and Svcs
CLRPipe bottom      01/05/201501/12/2015Petroleum (Producing)
CREEPipe bottom      01/05/201501/12/2015Semiconductor
CRHPipe bottom      01/05/201501/12/2015Cement and Aggregates
EGNPipe bottom      01/05/201501/12/2015Natural Gas (Diversified)
FISTriangle, symmetrical      12/19/201401/22/2015Computer Software and Svcs
GSOLTriangle, descending      10/10/201401/20/2015Advertising
HLITDiamond top      11/06/201401/22/2015Telecom. Equipment
INFAPipe bottom      01/05/201501/12/2015E-Commerce
JAZZHead-and-shoulders bottom      12/16/201401/16/2015Biotechnology
LMTTriangle, ascending      12/17/201401/22/2015Aerospace/Defense
NFXPipe bottom      01/05/201501/12/2015Natural Gas (Diversified)
NEPipe bottom      01/05/201501/12/2015Oilfield Svcs/Equipment
NBLPipe bottom      01/12/201501/12/2015Petroleum (Producing)
NUSPipe bottom      01/05/201501/12/2015Household Products
RTIBroadening bottom      10/27/201401/20/2015Metals and Mining (Div.)
LUVScallop, ascending and inverted      10/15/201401/16/2015Air Transport
TPXHead-and-shoulders bottom      12/17/201401/16/2015Furn/Home Furnishings
IYKTriangle, symmetrical      12/16/201401/21/2015Household Products
EWIPipe bottom      01/05/201501/12/2015Investment Co. (Foreign)
EWUPipe bottom      01/05/201501/12/2015Investment Co. (Foreign)
PPATriangle, symmetrical      12/15/201401/22/2015Aerospace/Defense
XLPRising wedge      11/28/201401/21/2015Household Products

 

Weekly screen for chart patterns ending between 01/15/2015 and 01/22/2015. 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.
 
Anika Therapeutics Inc (ANIK)
Industry: Biotechnology
Industry RS rank: 5 out of 53
Stock RS rank: 479 out of 585
1/22/15 close: $39.60
1 Month avg volatility: $1.38. Volatility stop (for downward breakout): $43.06 or 8.7% above the close.
Change YTD: -2.80%
Volume: 104,600 shares. 3 month avg: 184,152 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, descending reversal pattern from 12/23/2014 to 01/22/2015
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.

Top

Apple Inc. (AAPL)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 39 out of 53
Stock RS rank: 130 out of 585
1/22/15 close: $112.40
1 Month avg volatility: $2.48. Volatility stop (for upward breakout): $104.76 or 6.8% below the close.
Change YTD: 1.83%
Volume: 53,741,300 shares. 3 month avg: 51,181,706 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 12/16/2014 to 01/16/2015
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.

Top

Atwood Oceanics Inc. (ATW)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 53
Stock RS rank: 562 out of 585
1/22/15 close: $29.53
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $26.70 or 9.6% below the close.
Change YTD: 4.09%
Volume: 1,073,300 shares. 3 month avg: 1,750,335 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
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

Computer Sciences Corp (CSC)
Industry: Computer Software and Svcs
Industry RS rank: 19 out of 53
Stock RS rank: 345 out of 585
1/22/15 close: $63.56
1 Month avg volatility: $1.06. Volatility stop (for upward breakout): $60.42 or 4.9% below the close.
Change YTD: 0.81%
Volume: 1,117,700 shares. 3 month avg: 1,109,692 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 12/03/2014 to 01/22/2015
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

Continental Resources Inc. (CLR)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 53
Stock RS rank: 567 out of 585
1/22/15 close: $42.58
1 Month avg volatility: $2.16. Volatility stop (for upward breakout): $36.65 or 13.9% below the close.
Change YTD: 11.00%
Volume: 6,777,100 shares. 3 month avg: 4,669,674 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
WARNING: A dead-cat bounce occurred on 11/28/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/27/2015 and a 38% chance by 05/29/2015.
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

Cree Inc (CREE)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 508 out of 585
1/22/15 close: $36.61
1 Month avg volatility: $1.34. Volatility stop (for upward breakout): $31.23 or 14.7% below the close.
Change YTD: 13.63%
Volume: 4,523,600 shares. 3 month avg: 2,878,055 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
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

CRH plc (CRH)
Industry: Cement and Aggregates
Industry RS rank: 49 out of 53
Stock RS rank: 334 out of 585
1/22/15 close: $24.76
1 Month avg volatility: $0.37. Volatility stop (for upward breakout): $23.64 or 4.5% below the close.
Change YTD: 3.12%
Volume: 1,756,200 shares. 3 month avg: 671,558 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 01/05/2015 to 01/12/2015
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

Energen Corp (EGN)
Industry: Natural Gas (Diversified)
Industry RS rank: 51 out of 53
Stock RS rank: 521 out of 585
1/22/15 close: $64.52
1 Month avg volatility: $2.62. Volatility stop (for upward breakout): $57.77 or 10.5% below the close.
Change YTD: 1.19%
Volume: 1,053,700 shares. 3 month avg: 1,070,231 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 01/05/2015 to 01/12/2015
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

Fidelity National Information Svcs (FIS)
Industry: Computer Software and Svcs
Industry RS rank: 19 out of 53
Stock RS rank: 168 out of 585
1/22/15 close: $63.84
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $60.64 or 5.0% below the close.
Change YTD: 2.64%
Volume: 644,900 shares. 3 month avg: 1,038,305 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 12/19/2014 to 01/22/2015
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

Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 29 out of 53
Stock RS rank: 493 out of 585
1/22/15 close: $6.18
1 Month avg volatility: $0.20. Volatility stop (for downward breakout): $6.59 or 6.6% above the close.
Change YTD: -2.83%
Volume: 23,000 shares. 3 month avg: 20,605 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 10/10/2014 to 01/20/2015
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.

Top

Harmonic Inc (HLIT)
Industry: Telecom. Equipment
Industry RS rank: 38 out of 53
Stock RS rank: 189 out of 585
1/22/15 close: $6.99
1 Month avg volatility: $0.23. Volatility stop (for downward breakout): $7.46 or 6.7% above the close.
Change YTD: -0.29%
Volume: 536,800 shares. 3 month avg: 568,537 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Diamond top reversal pattern from 11/06/2014 to 01/22/2015
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

Informatica Corporation (INFA)
Industry: E-Commerce
Industry RS rank: 8 out of 53
Stock RS rank: 171 out of 585
1/22/15 close: $38.49
1 Month avg volatility: $0.73. Volatility stop (for upward breakout): $36.40 or 5.4% below the close.
Change YTD: 0.93%
Volume: 1,851,900 shares. 3 month avg: 1,197,632 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 01/05/2015 to 01/12/2015
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

Jazz Pharmaceuticals, Inc. (JAZZ)
Industry: Biotechnology
Industry RS rank: 5 out of 53
Stock RS rank: 106 out of 585
1/22/15 close: $176.19
1 Month avg volatility: $5.20. Volatility stop (for upward breakout): $160.77 or 8.8% below the close.
Change YTD: 7.61%
Volume: 607,800 shares. 3 month avg: 731,208 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: Head-and-shoulders bottom reversal pattern from 12/16/2014 to 01/16/2015
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.

Top

Lockheed Martin Corp (LMT)
Industry: Aerospace/Defense
Industry RS rank: 12 out of 53
Stock RS rank: 115 out of 585
1/22/15 close: $198.09
1 Month avg volatility: $3.20. Volatility stop (for upward breakout): $188.89 or 4.7% below the close.
Change YTD: 2.87%
Volume: 1,307,700 shares. 3 month avg: 1,415,845 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/17/2014 to 01/22/2015
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

Newfield Exploration Company (NFX)
Industry: Natural Gas (Diversified)
Industry RS rank: 51 out of 53
Stock RS rank: 551 out of 585
1/22/15 close: $28.53
1 Month avg volatility: $1.45. Volatility stop (for upward breakout): $24.54 or 14.0% below the close.
Change YTD: 5.20%
Volume: 4,997,600 shares. 3 month avg: 3,895,548 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
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

Noble Corporation (NE)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 574 out of 585
1/22/15 close: $16.97
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $14.91 or 12.2% below the close.
Change YTD: 2.41%
Volume: 5,601,800 shares. 3 month avg: 8,433,231 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 01/05/2015 to 01/12/2015
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

Noble Energy Inc. (NBL)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 53
Stock RS rank: 552 out of 585
1/22/15 close: $46.74
1 Month avg volatility: $1.72. Volatility stop (for upward breakout): $42.37 or 9.4% below the close.
Change YTD: -1.45%
Volume: 2,552,600 shares. 3 month avg: 3,732,809 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/12/2015 to 01/12/2015
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

Nu Skin Enterprises, Inc (NUS)
Industry: Household Products
Industry RS rank: 15 out of 53
Stock RS rank: 529 out of 585
1/22/15 close: $45.06
1 Month avg volatility: $1.68. Volatility stop (for upward breakout): $39.91 or 11.4% below the close.
Change YTD: 3.11%
Volume: 1,070,900 shares. 3 month avg: 1,276,563 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
WARNING: A dead-cat bounce occurred on 11/06/2014. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/05/2015 and a 38% chance by 05/07/2015.
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.

Top

RTI International Metals Inc. (RTI)
Industry: Metals and Mining (Div.)
Industry RS rank: 47 out of 53
Stock RS rank: 465 out of 585
1/22/15 close: $21.32
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $19.67 or 7.7% below the close.
Change YTD: -15.60%
Volume: 1,100 shares. 3 month avg: 187,791 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
Warning: the quarterly earnings announcement is due within the next 3 weeks (but verify to be sure), so consider avoiding a trade.
 
Chart pattern: Broadening bottom reversal pattern from 10/27/2014 to 01/20/2015
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

Southwest Airlines Company (LUV)
Industry: Air Transport
Industry RS rank: 2 out of 53
Stock RS rank: 9 out of 585
1/22/15 close: $43.96
1 Month avg volatility: $1.16. Volatility stop (for upward breakout): $41.02 or 6.7% below the close.
Change YTD: 3.86%
Volume: 1,929,300 shares. 3 month avg: 8,897,566 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 01/16/2015
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

Top

Tempur-pedic Intl (TPX)
Industry: Furn/Home Furnishings
Industry RS rank: 6 out of 53
Stock RS rank: 402 out of 585
1/22/15 close: $56.15
1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $52.97 or 5.7% below the close.
Change YTD: 2.26%
Volume: 5,200 shares. 3 month avg: 821,245 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 01/16/2015
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.

Top

DJ US consumer goods (household goods) (IYK)
Industry: Household Products
Industry RS rank: 15 out of 53
Stock RS rank: 244 out of 585
1/22/15 close: $106.04
1 Month avg volatility: $1.01. Volatility stop (for upward breakout): $104.00 or 1.9% below the close.
Change YTD: 1.22%
Volume: 6,300 shares. 3 month avg: 68,789 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: Triangle, symmetrical continuation pattern from 12/16/2014 to 01/21/2015
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

MSCI Italy Index (EWI)
Industry: Investment Co. (Foreign)
Industry RS rank: 46 out of 53
Stock RS rank: 475 out of 585
1/22/15 close: $13.80
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $13.34 or 3.4% below the close.
Change YTD: 1.47%
Volume: 69,400 shares. 3 month avg: 2,531,889 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 01/05/2015 to 01/12/2015
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

MSCI United Kingdom Index (EWU)
Industry: Investment Co. (Foreign)
Industry RS rank: 46 out of 53
Stock RS rank: 437 out of 585
1/22/15 close: $18.21
1 Month avg volatility: $0.19. Volatility stop (for upward breakout): $17.82 or 2.2% below the close.
Change YTD: 1.00%
Volume: 276,500 shares. 3 month avg: 3,231,243 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 01/05/2015 to 01/12/2015
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

PowerShares Aerospace and Defense (PPA)
Industry: Aerospace/Defense
Industry RS rank: 12 out of 53
Stock RS rank: 253 out of 585
1/22/15 close: $34.51
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $33.65 or 2.5% below the close.
Change YTD: -0.69%
Volume: 700 shares. 3 month avg: 69,534 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: Triangle, symmetrical continuation pattern from 12/15/2014 to 01/22/2015
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

SPDR Consumer Staples Select Sector (XLP)
Industry: Household Products
Industry RS rank: 15 out of 53
Stock RS rank: 182 out of 585
1/22/15 close: $50.21
1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $51.26 or 2.1% above the close.
Change YTD: 3.55%
Volume: 12,062,000 shares. 3 month avg: 7,890,394 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 11/28/2014 to 01/21/2015
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 1/22/15. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 12.57 points. Since 02/05/1971 the index made 584 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 321 occasions.
     Average loss was -0.7% on 263 occasions.
Expect the index to close higher 55.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 75/129 or 58.1% of the time.
     The prediction of the index closing lower has been right 28/57 or 49.1% of the time.

Picture of my water diverter.

Before I discuss oil stocks let me tell you part of what I did today.

In the summer, I bought a rosemary bush and planted it under the house eaves, right in the drip line of the roof. When it rained, the plant died right where the rain hit it. Think of a 2 foot long branch with a 6" section dead. Yes, dead. The section has remained dead for months now (I've never seen anything like it).

I installed a water diverter on the roof. That cured the problem of roof water falling on the plant. But then the diverted water splashed onto the ground and was spraying the side of my house. Not good.

So, today I installed a second diverter to carry the water to a gutter. I show a picture of it above. Circled in red is the diverter, an L-shaped piece of metal that diverts the water cascading off the shingles. It's raining now, and the thing works. Yippee!

$ $ $

This weekend, I wanted to check the oil companies to see if now was the right time to buy (bottom-fishing). Instead, what I learned said it was too soon to buy. Here's why.

Let's take the oil services and equipment group. Stock symbols in this group that I follow are:

DO, DRQ, ESV, GLF, MTRX, NBR, NOV, PTEN, PES, RES, SLB, RIG, IEZ, OIH, PXJ.

In these lists (including the two lists below), I removed any stocks I owned.

The Baker-Hughes rig report shows that the number of rigs today is the lowest it has been since February 2011. That's as far back as the data I looked at goes.

Just today the BBC website had an article titled, "BP boss Bob Dudley: Oil prices 'low for up to 3 years'."

The S&P Capital IQ report I looked at said, "We believe that West Texas Intermediate crude oil prices, at $48 per barrel as of January 2015, are likely to remain range-bound over the next 12 months. Bentek Energy, a unit of Platts, projects WTI crude oil averaging $50.64/barrel in 2015."

With fewer rigs actively drilling, companies that provide tools and equipment to those activities will be hurt. Thus, in the coming quarters, you'll see negative earnings surprises from the oilfield svcs group. Those surprises have the potential to drop stock prices by 15% to 70% in one trading session, perhaps more over additional sessions.

The likelihood is that the oil svcs stocks will be cheaper in the coming months, so buying now puts your holding at a higher risk of a dead-cat bounce.

Two other industries I follow are Integrated Petroleum: CVX, COP, XOM, MRO, MUR, TSO, VLO, IYE, IEO, IGE, XLE, and Producing Petroleum: APC, APA, ATW, CLR, HP, NBL, OXY, USO.

Some of these securities are ETFs, by the way. Again, I don't own any of them.

With some in this group, the story is a bit different. If you examine the oil svcs stocks, you'll see they are at or near new lows. Not so with some stocks in these two groups.

For example, take TSO, Tesoro. The company is a large US refiner and marketer of oil products (like gasoline).

If the cost of your feedstock (oil) is dropping and you can still charge high prices for gas, your margins grow. Yes, the price of gas at the pump is dropping, but how many times have you heard that the price should be dropping faster? When the price of oil rises, the price at the pump seems to skyrocket faster than it should. I haven't heard that complaint recently, but it's been true in the past.

S&P is neutral on the oil refining industry for the next year.

Anyway TSO stock is at 74.08 (Wednesday close) with the yearly high/low of 79.49/46.40 according to yahoo.com. So TSO is near the yearly high.

I'm NOT recommending you buy the stock. I'm only using it as an example.

The low cost of oil will eventually curb supply and that will force the price upward. The BP boss said oil can remain low for up to 3 years. That remains to be seen (I think maybe a year). Regardless, there are companies like TSO that will prosper and those in these three groups that will be killed.

If you plan to play the oils, pick your stocks carefully. I'm going to sit on the sidelines for a while yet.

$ $ $

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  4,408.92    
 Weekly S2  4,472.39  63.47   
 Monthly S1  4,538.17  65.78   
 Weekly S1  4,569.91  31.74   
 Daily S2  4,600.29  30.38   
 Low  4,629.59  29.30   
 Daily S1  4,633.85  4.26   Yes! The Daily S1 is close to the Low.
 Open  4,641.95  8.10   
 61.8% Down from Intraday High  4,653.61  11.66   
 Weekly Pivot  4,660.62  7.02   
 50% Down from Intraday High  4,661.02  0.40   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 Daily Pivot  4,663.16  2.13   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  4,667.42  4.26   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  4,668.44  1.02   Yes! The 38.2% Down from Intraday High is close to the Close.
 Monthly Pivot  4,676.56  8.12   
 High  4,692.46  15.90   
 Daily R1  4,696.72  4.26   Yes! The Daily R1 is close to the High.
 Daily R2  4,726.03  29.30   
 Weekly R1  4,758.14  32.11   
 Monthly R1  4,805.81  47.67   
 Weekly R2  4,848.85  43.04   
 Monthly R2  4,944.20  95.35   

Wednesday 1/21/15. 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.

Surprise! The chart pattern indicator, pictured, has moved into the neutral zone. And I thought it was still bearish. The next chart makes the move clearer.

Picture of the chart pattern indicator

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

The red bars are bearish, the green are bullish and the absence of either is neutral. The last several trading days have been neutral.

I have swapped my targets for the utility index to upward (from downward) a few days ago and I swapped the transports last night (Tuesday night). However, the other indices, like the industrials, Nasdaq, and S&P 500 are still unclear as to their direction going forward. Many posted a doji candle. I consider and have proven that most candle lines (a single bar) act randomly.

So, we will just have to wait and see, but my guess is the markets are about to head up. That could change in an instant since earnings season has arrived.

-- Thomas Bulkowski

Top


Tuesday 1/20/15. The Week Ahead

My Prediction

Picture of the nasdaq on the daily scale.

I show the Nasdaq composite on the daily scale.

The index is at an inflection point, as they say. I don't know who "they" are, but it appears the Nasdaq is resting on support.

My targets ("Tom's Targets") at the top of this page suggest a continued decline in the index as well as other indices. But I also believe they will find support and turn within the next two weeks.

I show two support lines in red, begun along the tops of recent peaks. It appears that there is support at or below where the index is now, but will it be strong enough to reverse the downturn?

That remains to be seen. Clearly today, Friday, was a good day with the Dow soaring 190 points. But it's also earnings season and anything can happen.

My prediction is that the index will drop a bit more, perhaps as far as the bottom red line, and then rebound over the coming two weeks.

Top

A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 96.53 points.
Tuesday: Down 27.16 points.
Wednesday: Down 186.59 points.
Thursday: Down 106.38 points.
Friday: Up 190.86 points.

For the Week...

The Dow industrials were down 225.8 points or 1.3%.
The Nasdaq composite was down 69.69 points or 1.5%.
The S&P 500 index was down 25.39 points or 1.2%.

Year to Date...

Dow Industrials
     2.5% down from the high of 17,951.78 on 01/02/2015.
     1.6% up from the low of 17,243.55 on 01/16/2015.
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
     2.6% down from the high of 2,072.36 on 01/02/2015.
     1.6% up from the low of 1,988.12 on 01/16/2015.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Housing starts8:30 WB-Number of homes beginning construction.
Building permits8:30 WB-Measures building permits for new construction.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Crude inventories11:00 Th?My guess: Measures oil inventory.
Existing home sales10:00 FCCounts sales of used homes.
Leading indicators10:00 FD-Summary of already known reports.

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,143  17,327  17,428  17,612  17,713 
Weekly  16,880  17,196  17,559  17,875  18,239 
Monthly  16,525  17,018  17,561  18,054  18,597 
S&P500 (^GSPC): Daily  1,977  1,998  2,009  2,031  2,042 
Weekly  1,953  1,986  2,021  2,055  2,090 
Monthly  1,908  1,963  2,029  2,084  2,150 
Nasdaq (^IXIC): Daily  4,538  4,586  4,611  4,659  4,684 
Weekly  4,461  4,548  4,650  4,736  4,838 
Monthly  4,398  4,516  4,666  4,784  4,933 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 11.8%   Expect a reversal soon. 
 2 months down 11.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 7.6%   Expect a reversal soon. 
 2 months down 11.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 11.1%   Expect a reversal soon. 
 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.

Top

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
12Pipe top
10Scallop, ascending and inverted
8Broadening top
7Triangle, symmetrical
6Double Top, Eve and Eve
6Broadening top, right-angled and ascending
5Pipe bottom
5Broadening bottom
5Channel
4Triangle, ascending

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

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

 

 

 

 

The industries I follow were the best (rank 1) and worst performing. Warning: My computer informs me that last week's results are incorrect.

This WeekLast Week
1. Retail Building Supply1. Retail Building Supply
2. Biotechnology2. Biotechnology
3. Medical Supplies3. Medical Supplies
4. Furn/Home Furnishings4. Furn/Home Furnishings
5. E-Commerce5. E-Commerce
50. Cement and Aggregates50. Cement and Aggregates
51. Petroleum (Integrated)51. Petroleum (Integrated)
52. Natural Gas (Diversified)52. Natural Gas (Diversified)
53. Oilfield Svcs/Equipment53. Oilfield Svcs/Equipment
54. Petroleum (Producing)54. Petroleum (Producing)

-- Thomas Bulkowski

Top


Saturday 1/17/15. Visual Guide Chart Muster.

Picture of my latest book.

The picture is the latest book of mine. It's the German version of my Visual Guide to Chart Patterns.

This is especially important to that person who emailed me several weeks ago asking if my books had been translated into German.

The answer is "Yes, they have been." In fact, several of my books have made it into German. If you total the translations, they number nine, but that includes languages besides German.

The German publisher is my favorite. They know how to sell books, and they send me sample copies. The French, well, let's just say I'm still waiting for my personal copy...

-- Thomas Bulkowski

Top


Friday 1/16/15. 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 26 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 593 stocks searched, or 4.4%. 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 13 bullish chart patterns this week and 7 bearish ones with any remaining (7) 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
ABTHead-and-shoulders top      12/08/201401/09/2015Medical Supplies
ACXMTriangle, descending      12/01/201401/13/2015Computer Software and Svcs
ADSBroadening top, right-angled and ascending      10/31/201401/12/2015Information Services
AEOBroadening top, right-angled and descending      10/14/201401/15/2015Apparel
BZHDouble Top, Eve and Adam      11/26/201401/13/2015Homebuilding
BBYTriangle, ascending      11/18/201401/14/2015Retail (Special Lines)
COHChannel      10/15/201401/13/2015Apparel
ELNKRoof, inverted      11/11/201401/15/2015Internet
GPSChannel      10/16/201401/13/2015Apparel
GSOLTriangle, descending      10/10/201401/15/2015Advertising
GGGDiamond top      11/11/201401/12/2015Machinery
HSONChannel      12/01/201401/12/2015Human Resources
NSPPipe bottom      12/29/201401/05/2015Human Resources
KDiamond top      11/19/201401/14/2015Food Processing
LRCXFalling wedge      11/17/201401/14/2015Semiconductor Cap Equip.
MASBroadening top      11/25/201401/09/2015Building Materials
MWWDouble Top, Eve and Eve      12/23/201401/13/2015Advertising
MCOTriangle, descending      12/16/201401/15/2015Information Services
MYGNPipe bottom      01/05/201501/05/2015Biotechnology
NTGRTriangle, symmetrical      12/05/201401/15/2015Telecom. Equipment
NWYTriangle, symmetrical      12/09/201401/13/2015Apparel
ASGNTriangle, symmetrical      12/17/201401/15/2015Human Resources
COLTriangle, symmetrical      12/15/201401/15/2015Aerospace/Defense
SMTCHead-and-shoulders top      12/15/201401/13/2015Semiconductor Cap Equip.
SKXTriangle, symmetrical      09/12/201401/15/2015Shoe
TXTTriangle, ascending      12/04/201401/15/2015Diversified Co.
UNMBroadening bottom      10/28/201401/15/2015Insurance (Diversified)
IYHTriangle, ascending      12/08/201401/15/2015Long ETFs

 

Weekly screen for chart patterns ending between 01/08/2015 and 01/15/2015. 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.
 
Abbott Laboratories (ABT)
Industry: Medical Supplies
Industry RS rank: 2 out of 53
Stock RS rank: 210 out of 585
1/15/15 close: $43.95
1 Month avg volatility: $0.81. Volatility stop (for downward breakout): $46.30 or 5.3% above the close.
Change YTD: -2.38%
Volume: 3,920,300 shares. 3 month avg: 5,087,752 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: Head-and-shoulders top reversal pattern from 12/08/2014 to 01/09/2015
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

Top

Acxiom Corp (ACXM)
Industry: Computer Software and Svcs
Industry RS rank: 15 out of 53
Stock RS rank: 368 out of 585
1/15/15 close: $18.44
1 Month avg volatility: $0.74. Volatility stop (for downward breakout): $20.97 or 13.7% above the close.
Change YTD: -9.03%
Volume: 515,500 shares. 3 month avg: 529,537 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 12/01/2014 to 01/13/2015
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.

Top

Alliance Data Systems Corp (ADS)
Industry: Information Services
Industry RS rank: 22 out of 53
Stock RS rank: 284 out of 585
1/15/15 close: $279.65
1 Month avg volatility: $5.73. Volatility stop (for downward breakout): $298.44 or 6.7% above the close.
Change YTD: -2.24%
Volume: 345,100 shares. 3 month avg: 554,769 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: Broadening top, right-angled and ascending reversal pattern from 10/31/2014 to 01/12/2015
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.

Top

American Eagle Outfitters Inc. (AEO)
Industry: Apparel
Industry RS rank: 25 out of 53
Stock RS rank: 33 out of 585
1/15/15 close: $13.79
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $12.83 or 6.9% below the close.
Change YTD: -0.65%
Volume: 7,088,400 shares. 3 month avg: 5,914,885 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, right-angled and descending continuation pattern from 10/14/2014 to 01/15/2015
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

Beazer Homes USA, Inc (BZH)
Industry: Homebuilding
Industry RS rank: 43 out of 53
Stock RS rank: 439 out of 585
1/15/15 close: $16.77
1 Month avg volatility: $0.81. Volatility stop (for downward breakout): $20.27 or 20.9% above the close.
Change YTD: -13.38%
Volume: 1,178,200 shares. 3 month avg: 604,963 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 11/26/2014 to 01/13/2015
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

Top

Best Buy Co. (BBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 53
Stock RS rank: 156 out of 585
1/15/15 close: $34.30
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $30.93 or 9.8% below the close.
Change YTD: -12.01%
Volume: 40,581,200 shares. 3 month avg: 6,507,174 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 11/18/2014 to 01/14/2015
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

Coach Inc. (COH)
Industry: Apparel
Industry RS rank: 25 out of 53
Stock RS rank: 208 out of 585
1/15/15 close: $36.26
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $34.48 or 4.9% below the close.
Change YTD: -3.46%
Volume: 4,036,100 shares. 3 month avg: 4,793,083 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: Channel from 10/15/2014 to 01/13/2015

Top

Earthlink, Inc (ELNK)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 46 out of 53
Stock RS rank: 86 out of 585
1/15/15 close: $4.25
1 Month avg volatility: $0.22. Volatility stop (for downward breakout): $4.82 or 13.5% above the close.
Change YTD: -3.19%
Volume: 599,500 shares. 3 month avg: 908,640 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: Roof, inverted reversal pattern from 11/11/2014 to 01/15/2015
Breakout is downward 50% of the time.
Average decline: 17%.
Break-even failure rate: 10%.
Pullbacks occur 56% of the time.
Price hits measure rule target 73% of the time.

Top

Gap Inc. (GPS)
Industry: Apparel
Industry RS rank: 25 out of 53
Stock RS rank: 287 out of 585
1/15/15 close: $40.31
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $38.63 or 4.2% below the close.
Change YTD: -4.27%
Volume: 4,095,000 shares. 3 month avg: 4,424,542 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 10/16/2014 to 01/13/2015

Top

Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 26 out of 53
Stock RS rank: 470 out of 585
1/15/15 close: $6.21
1 Month avg volatility: $0.22. Volatility stop (for downward breakout): $6.73 or 8.4% above the close.
Change YTD: -2.36%
Volume: 43,300 shares. 3 month avg: 20,980 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 10/10/2014 to 01/15/2015
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.

Top

Graco Incorporated (GGG)
Industry: Machinery
Industry RS rank: 44 out of 53
Stock RS rank: 295 out of 585
1/15/15 close: $76.22
1 Month avg volatility: $1.58. Volatility stop (for downward breakout): $80.60 or 5.7% above the close.
Change YTD: -4.94%
Volume: 364,000 shares. 3 month avg: 249,735 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond top reversal pattern from 11/11/2014 to 01/12/2015
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.

Top

Hudson Global (HSON)
Industry: Human Resources
Industry RS rank: 29 out of 53
Stock RS rank: 524 out of 585
1/15/15 close: $2.70
1 Month avg volatility: $0.15. Volatility stop (for upward breakout): $2.29 or 15.1% below the close.
Change YTD: -12.76%
Volume: 13,100 shares. 3 month avg: 51,071 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Channel from 12/01/2014 to 01/12/2015

Top

Insperity (NSP)
Industry: Human Resources
Industry RS rank: 29 out of 53
Stock RS rank: 152 out of 585
1/15/15 close: $35.88
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $34.10 or 5.0% below the close.
Change YTD: 5.87%
Volume: 119,600 shares. 3 month avg: 155,994 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 12/29/2014 to 01/05/2015
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

Kellogg Co (K)
Industry: Food Processing
Industry RS rank: 18 out of 53
Stock RS rank: 268 out of 585
1/15/15 close: $67.74
1 Month avg volatility: $1.02. Volatility stop (for downward breakout): $70.32 or 3.8% above the close.
Change YTD: 3.51%
Volume: 2,287,000 shares. 3 month avg: 1,783,955 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: Diamond top reversal pattern from 11/19/2014 to 01/14/2015
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

Lam Research Corp (LRCX)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 34 out of 53
Stock RS rank: 199 out of 585
1/15/15 close: $76.68
1 Month avg volatility: $1.62. Volatility stop (for upward breakout): $73.16 or 4.6% below the close.
Change YTD: -3.35%
Volume: 2,147,700 shares. 3 month avg: 1,849,449 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: Falling wedge from 11/17/2014 to 01/14/2015
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

Top

Masco Corp. (MAS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 33 out of 53
Stock RS rank: 165 out of 585
1/15/15 close: $23.76
1 Month avg volatility: $0.54. Volatility stop (for downward breakout): $25.66 or 8.0% above the close.
Change YTD: -5.71%
Volume: 6,125,600 shares. 3 month avg: 4,417,612 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 11/25/2014 to 01/09/2015
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.

Top

Monster Worldwide (MWW)
Industry: Advertising
Industry RS rank: 26 out of 53
Stock RS rank: 528 out of 585
1/15/15 close: $4.27
1 Month avg volatility: $0.20. Volatility stop (for downward breakout): $4.99 or 16.8% above the close.
Change YTD: -7.58%
Volume: 928,600 shares. 3 month avg: 1,919,917 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 12/23/2014 to 01/13/2015
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

Top

Moodys Corp (MCO)
Industry: Information Services
Industry RS rank: 22 out of 53
Stock RS rank: 266 out of 585
1/15/15 close: $92.67
1 Month avg volatility: $1.65. Volatility stop (for downward breakout): $97.66 or 5.4% above the close.
Change YTD: -3.28%
Volume: 1,461,500 shares. 3 month avg: 1,138,483 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: Triangle, descending reversal pattern from 12/16/2014 to 01/15/2015
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.

Top

Myriad Genetics Inc (MYGN)
Industry: Biotechnology
Industry RS rank: 1 out of 53
Stock RS rank: 272 out of 585
1/15/15 close: $39.45
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $36.63 or 7.1% below the close.
Change YTD: 15.83%
Volume: 819,900 shares. 3 month avg: 824,514 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 01/05/2015 to 01/05/2015
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

Netgear Inc. (NTGR)
Industry: Telecom. Equipment
Industry RS rank: 39 out of 53
Stock RS rank: 260 out of 585
1/15/15 close: $34.58
1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $32.87 or 4.9% below the close.
Change YTD: -2.81%
Volume: 200,700 shares. 3 month avg: 214,308 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/05/2014 to 01/15/2015
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

New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 25 out of 53
Stock RS rank: 535 out of 585
1/15/15 close: $2.35
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $2.11 or 10.4% below the close.
Change YTD: -10.98%
Volume: 79,400 shares. 3 month avg: 191,088 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 12/09/2014 to 01/13/2015
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.

Top

On Assignment, Inc. (ASGN)
Industry: Human Resources
Industry RS rank: 29 out of 53
Stock RS rank: 415 out of 585
1/15/15 close: $31.62
1 Month avg volatility: $0.87. Volatility stop (for upward breakout): $29.74 or 6.0% below the close.
Change YTD: -4.73%
Volume: 186,300 shares. 3 month avg: 501,511 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 12/17/2014 to 01/15/2015
WARNING: A dead-cat bounce occurred on 07/31/2014. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/29/2015.
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

Rockwell Collins (COL)
Industry: Aerospace/Defense
Industry RS rank: 12 out of 53
Stock RS rank: 218 out of 585
1/15/15 close: $84.85
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $82.23 or 3.1% below the close.
Change YTD: 0.44%
Volume: 1,069,400 shares. 3 month avg: 981,158 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 12/15/2014 to 01/15/2015
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

Semtech Corp (SMTC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 34 out of 53
Stock RS rank: 253 out of 585
1/15/15 close: $25.78
1 Month avg volatility: $0.80. Volatility stop (for downward breakout): $28.48 or 10.5% above the close.
Change YTD: -6.49%
Volume: 331,900 shares. 3 month avg: 411,660 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: Head-and-shoulders top reversal pattern from 12/15/2014 to 01/13/2015
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

Top

Skechers USA Inc (SKX)
Industry: Shoe
Industry RS rank: 14 out of 53
Stock RS rank: 54 out of 585
1/15/15 close: $57.12
1 Month avg volatility: $1.86. Volatility stop (for upward breakout): $53.24 or 6.8% below the close.
Change YTD: 3.38%
Volume: 928,700 shares. 3 month avg: 1,082,008 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
Warning: the quarterly earnings announcement is due within the next 3 weeks (but verify to be sure), so consider avoiding a trade.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/12/2014 to 01/15/2015
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

Textron Inc (TXT)
Industry: Diversified Co.
Industry RS rank: 37 out of 53
Stock RS rank: 192 out of 585
1/15/15 close: $42.33
1 Month avg volatility: $0.87. Volatility stop (for upward breakout): $40.16 or 5.1% below the close.
Change YTD: 0.52%
Volume: 3,081,800 shares. 3 month avg: 2,111,837 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, ascending reversal pattern from 12/04/2014 to 01/15/2015
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

Unum Group (UNM)
Industry: Insurance (Diversified)
Industry RS rank: 41 out of 53
Stock RS rank: 403 out of 585
1/15/15 close: $31.35
1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $29.81 or 4.9% below the close.
Change YTD: -10.12%
Volume: 1,649,200 shares. 3 month avg: 1,963,565 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
Warning: the quarterly earnings announcement is due within the next 3 weeks (but verify to be sure), so consider avoiding a trade.
 
Chart pattern: Broadening bottom reversal pattern from 10/28/2014 to 01/15/2015
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

iShares DJ US Healthcare (IYH)
Industry: Long ETFs
Industry RS rank: 16 out of 53
Stock RS rank: 126 out of 585
1/15/15 close: $145.96
1 Month avg volatility: $2.27. Volatility stop (for upward breakout): $141.31 or 3.2% below the close.
Change YTD: 1.27%
Volume: 227,500 shares. 3 month avg: 428,337 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/08/2014 to 01/15/2015
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


Thursday 1/15/15. Nasdaq Double Bottom?

The index dropped by -0.5% or -22.18 points. Since 02/05/1971 the index made 313 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 150 occasions.
     Average loss was -1.0% on 163 occasions.
Expect the index to close lower 52.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 75/129 or 58.1% of the time.
     The prediction of the index closing lower has been right 27/56 or 48.2% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

What caught my eye right off is the potential for a double bottom. The first bottom is at A and the second is at B. B is slightly above the price of A, but they are close enough.

It's not a double bottom until the index closes above the peak between the two bottoms. That's C in this case. The index won't make the climb in a day. It's not 3,000 feet like the El Capital face, but it's too far for a day climb. Hats off to the two climbers -- Caldwell and Jorgeson -- for making the summit, by the way. In the winter, too. Wow.

$ $ $

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  4,399.55    
 Weekly S2  4,473.42  73.87   
 Monthly S1  4,519.44  46.02   
 Weekly S1  4,556.37  36.93   
 Daily S2  4,570.83  14.46   
 Low  4,595.98  25.15   
 Daily S1  4,605.08  9.10   
 Open  4,610.76  5.68   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  4,618.67  7.91   
 50% Down from Intraday High  4,625.67  7.01   
 Daily Pivot  4,630.22  4.55   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,632.68  2.46   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,639.32  6.64   
 Weekly Pivot  4,650.54  11.22   
 High  4,655.37  4.83   Yes! The High is close to the Weekly Pivot.
 Daily R1  4,664.47  9.10   
 Monthly Pivot  4,667.19  2.73   Yes! The Monthly Pivot is close to the Daily R1.
 Daily R2  4,689.61  22.42   
 Weekly R1  4,733.49  43.88   
 Monthly R1  4,787.08  53.59   
 Weekly R2  4,827.66  40.58   
 Monthly R2  4,934.83  107.17   

Wednesday 1/14/15. 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.

The chart pattern indicator in this chart suggests a weakening situation. Notice how the indicator continues to head lower, toward zero.

Could it mean a larger one-day decline is coming? That might happen and probably will since earnings season is starting and some company is bound to come up short.

Looking at the index, it looks like it's forming a diamond top chart pattern. That could suggest a large decline to just above the launch price, say, 1850.

Picture of the chart pattern indicator

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

This chart shows the bearish state of the market. The red bars are bearish, green ones bullish, and white is neutral.

-- Thomas Bulkowski

Top


Tuesday 1/13/15. Stock Shopping List

The index dropped by -0.5% or -96.53 points. Since 10/01/1928 the index made 721 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 365 occasions.
Expect the index to close lower 50.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 87/140 or 62.1% of the time.
     The prediction of the index closing lower has been right 22/41 or 53.7% of the time.

Picture of the HD on the weekly scale.

This weekend, I went shopping for stocks to buy using the weekly scale that shows weekly prices going back as far as 2005.

I spotted an unusual pattern that some call a basing structure. Home Depot (HD) is an example of what I found (see figure).

The figure is on the weekly scale, but you can see the flat base at A. The bottom shape of this pattern doesn't matter, but sometimes I key on that in the search. Preferably, the top should be flat or nearly so. Sometimes it slopes downward but I don't know if that's significant or not.

At B, the stock breaks out of the base and that represents the buy signal.

Sometimes the stock dropped near the end of the rectangle (blue line, C) but then recovered. When that happened, it turned out to be a good entry signal, too. Those stocks that broke out tended to go on straight-line runs upward, running through the base resistance and continuing up. Avery Dennison (AVY) and Bemis (BMS) are examples.

This pattern does fail when the breakout is to the down side as in Flowserve (FLS). Hence, wait for an upward breakout.

Other examples that worked include FBL Financial group (FFG), Henry Schein (HSIC), and Saia (SAIA). Again, use the weekly scale of 5 years duration to see the pattern.

Here is my shopping list of stocks that I found showing this basing pattern or a variation. I have reviewed them briefly for non-technical factors (insider trading, analyst coverage, that kind of thing) but more work is needed to verify that they are good buy candidates.

Most will be thrown away, but I may take small positions in some of them (I don't own any of them now). I am NOT saying that you should buy them.

Alliance Data Systems (ADS): Flat/choppy since 3/14. Insider selling but rating agencies like it.
Assurant (AIZ): Flat since 2014. I used to own this and may buy it again.
Chicos FAS (CHS): Flat to down since 9/12. Probably not a good choice since it's in competitive business and stock has been dropping.
DirecTV Group (DTV): Flat since 5/14. In May, it agreed to be bought by AT&T, so it's not a good choice.
eBay (EBAY): Flat since 1/13. Insider selling. I bought/sold this one in 2014. Plans to spin off its PayPal service by end of 2015.
Estee Lauder (EL): Flat since 4/14. Lots of insider selling but Credit Suisse loves it.
Fastenal (FAST): Sloping down since 2/13. Probably not a good choice because of that.
Graco (GGG): Flat since 11/13. Has lots of product recalls which I find troubling. Insider selling.
Kulicke and Soffa (KLIC): Flat since 4/14 but bumped up then flat in 5/14. Lots of selling from CEO.
Lamar Adversiting (LAMR): Flat since 11/13 but announced it converted to a REIT in 10/14 and the price dropped, recovered.
NewMarket (NEU): Flat since 2/14. I like this one but it's expensive and volume is tiny.
Steinmart (SMRT): Flat to down since 7/13. I don't like the dropping channel.
Unum Group (UNM): Flat since 12/13. Lots of insider selling. Credit Suisse hates it. S&P likes it. Go figure.
USG (USG): Wavy down/up/down pattern since 2013. Insiders have been selling. Uh-oh.
VeriFone Systems (PAY): Flat since 6/14 but stock is below all-time highs set in 2011.

$ $ $

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

-- Thomas Bulkowski

Top

© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,568.10    
 Weekly S2  16,952.75  384.65   
 Monthly S1  17,104.47  151.72   
 Weekly S1  17,296.79  192.32   
 Daily S2  17,446.47  149.67   
 Daily S1  17,543.65  97.19   
 Low  17,571.58  27.93   
 Monthly Pivot  17,603.96  32.38   
 Weekly Pivot  17,606.42  2.46   Yes! The Weekly Pivot is close to the Monthly Pivot.
 Close  17,640.84  34.42   
 61.8% Down from Intraday High  17,656.50  15.66   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  17,668.77  12.27   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,682.73  13.96   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,708.96  26.23   
 Open  17,742.05  33.09   
 Daily R1  17,765.95  23.90   
 High  17,793.88  27.93   
 Daily R2  17,891.07  97.19   
 Weekly R1  17,950.46  59.40   
 Monthly R1  18,140.33  189.87   
 Weekly R2  18,260.09  119.76   
 Monthly R2  18,639.82  379.73   

Monday 1/12/15. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

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

The red line shows the start of support. It worked to stop the decline in December and you might say in January as well.

What is going to happen now?

One answer is to look at the channel I drew in blue. The two lines are not parallel but close enough. I just connected the two bottoms and the two tops.

Will price stay within the channel? That's unknown. The thinking with channels is that it will. At least it serves as regions were you can take profit (the upper line) or buy something (near the lower one). That can be risky if the trend changes and the index moves outside of the channel. You will either leave profit on the table by selling too soon or buying more of an index that's dropping.

Top

A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 331.34 points.
Tuesday: Down 130.01 points.
Wednesday: Up 212.88 points.
Thursday: Up 323.35 points.
Friday: Down 170.5 points.

For the Week...

The Dow industrials were down 95.62 points or 0.5%.
The Nasdaq composite was down 22.74 points or 0.5%.
The S&P 500 index was down 13.39 points or 0.7%.

Year to Date...

Dow Industrials
     1.2% down from the high of 17,951.78 on 01/02/2015.
     2.8% up from the low of 17,262.37 on 01/06/2015.
Nasdaq
     1.5% down from the high of 4,777.01 on 01/02/2015.
     3.0% up from the low of 4,567.59 on 01/06/2015.
S&P 500
     1.3% down from the high of 2,072.36 on 01/02/2015.
     2.6% up from the low of 1,992.44 on 01/06/2015.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Treasury budget2:00 TDTracks budget deficit. Important in April (tax filing).
Retail sales8:30 WA-Reports total retail sales (not services). Are people spending?
International trade8:30 WC+Import/export prices, trade balance. US economy vs others.
Business inventories10:00 WC-Reports manufacturing, wholesale, retail inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
FEDs Beige book2:00 W?Reports on economic conditions.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Producer price index8:30 ThB-Measures wholesale goods cost. An indication of future inflation.
Consumer price index8:30 FB+Inflation report. Measures cost of goods and services.
Industrial production9:15 FB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 FB-Gauges economic activity, hints of inflation.

Options Expiration

The following is courtesy of the Options Industry Council.

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

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

Top

Swing and Position Traders: Chart Pattern Indicator

As of 01/09/2015, the CPI had:

11 bearish patterns,
2 bullish patterns,
222 patterns waiting for breakout.
The CPI signal is 15.4%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,550  17,644  17,780  17,873  18,009 
Weekly  16,985  17,361  17,639  18,015  18,292 
Monthly  16,600  17,169  17,636  18,205  18,672 
S&P500 (^GSPC): Daily  2,023  2,034  2,049  2,060  2,075 
Weekly  1,962  2,003  2,034  2,075  2,106 
Monthly  1,916  1,980  2,037  2,101  2,158 
Nasdaq (^IXIC): Daily  4,647  4,675  4,710  4,739  4,773 
Weekly  4,495  4,600  4,672  4,777  4,849 
Monthly  4,421  4,563  4,689  4,830  4,956 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 15.3%   Expect a reversal soon. 
 2 months down 11.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 14.0%   Expect a reversal soon. 
 2 months down 11.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks down 17.4%   Expect a reversal soon. 
 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.

Top

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 4 days.

 Found Chart Pattern Name
32Pipe bottom
22Scallop, ascending and inverted
12Pipe top
9Broadening top
7Broadening top, right-angled and ascending
6Channel
5Broadening wedge, ascending
4Triangle, symmetrical
3Rectangle top
3Double Bottom, Adam and Adam

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

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

 

 

 

 

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

This WeekLast Week
1. Retail Building Supply1. Biotechnology
2. Biotechnology2. Medical Supplies
3. Medical Supplies3. Drug
4. Furn/Home Furnishings4. Air Transport
5. E-Commerce5. Securities Brokerage
50. Cement and Aggregates50. Metal Fabricating
51. Petroleum (Integrated)51. Petroleum (Integrated)
52. Natural Gas (Diversified)52. Natural Gas (Diversified)
53. Oilfield Svcs/Equipment53. Oilfield Svcs/Equipment
54. Petroleum (Producing)54. Petroleum (Producing)

-- Thomas Bulkowski

Top


Saturday 1/10/15. Best Month to Buy a Stock

What is the best month to buy a stock?

I researched that and here is the summary (click on the link for more details).

Both the Dow industrials and the S&P 500 show tendencies to have the worst performing month in September followed by a rising trend of up closes ending with December.

December is most likely to close up (at least 72% of the time). However, a $10,000 investment from the close at the end of September to the close in December severely under performs a buy-and-hold approach of buying at the end of December and holding it for a year.

$ $ $

Picture of an inspiration quote

I looked at the yearly traffic statistics for thepatternsite.com and I am impressed.

For 2014, the site had visits from 199 countries or territories, served almost 4 million pages during 1.2 million visits from 535,000 people.

Thanks to all of you for helping me make a difference.

Top


Friday 1/9/15. 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 26 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 594 stocks searched, or 4.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 14 bearish ones with any remaining (5) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

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
AESPipe top      12/22/201412/29/2014Electric Utility (East)
AEEPipe top      12/22/201412/29/2014Electric Utility (Central)
ARCBPipe top      12/22/201412/29/2014Trucking/Transp. Leasing
AVPChannel      10/30/201401/08/2015Toiletries/Cosmetics
CALMBroadening bottom      11/14/201401/06/2015Food Processing
CGNXPipe top      12/22/201412/29/2014Precision Instrument
WIREPipe top      12/22/201412/29/2014Metals and Mining (Div.)
REDouble Bottom, Eve and Eve      12/15/201401/05/2015Insurance (Prop/Casualty)
FOERectangle top      10/20/201401/08/2015Chemical (Specialty)
FMCChannel      12/02/201401/08/2015Chemical (Basic)
GPNDouble Bottom, Adam and Adam      12/16/201401/06/2015Computer Software and Svcs
HLITPipe top      12/22/201412/29/2014Telecom. Equipment
HTLDPipe top      12/22/201412/29/2014Trucking/Transp. Leasing
HGGDead-cat bounce      01/06/201501/06/2015Retail (Special Lines)
JBHTBroadening top, right-angled and ascending      11/04/201401/06/2015Trucking/Transp. Leasing
IDXXRoof, inverted      11/20/201401/07/2015Drug
KELYAPipe top      12/22/201412/29/2014Human Resources
KMTPipe top      12/22/201412/29/2014Metal Fabricating
MONBroadening top      11/21/201401/07/2015Chemical (Diversified)
MOSDiamond top      11/26/201401/07/2015Chemical (Diversified)
MLIPipe top      12/22/201412/29/2014Metal Fabricating
NEWPPipe top      12/22/201412/29/2014Precision Instrument
POLPipe top      12/22/201412/29/2014Chemical (Specialty)
VMCHead-and-shoulders bottom      12/01/201401/06/2015Cement and Aggregates
IATBroadening top      11/12/201401/06/2015Long ETFs
PJPDouble Bottom, Adam and Adam      12/24/201401/06/2015Drug

 

Weekly screen for chart patterns ending between 01/01/2015 and 01/08/2015. 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.
 
AES Corp (AES)
Industry: Electric Utility (East)
Industry RS rank: 11 out of 53
Stock RS rank: 450 out of 586
1/8/15 close: $13.23
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $14.12 or 6.8% above the close.
Change YTD: -3.92%
Volume: 6,674,400 shares. 3 month avg: 6,122,255 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Ameren (AEE)
Industry: Electric Utility (Central)
Industry RS rank: 16 out of 53
Stock RS rank: 142 out of 586
1/8/15 close: $45.51
1 Month avg volatility: $0.92. Volatility stop (for downward breakout): $47.71 or 4.8% above the close.
Change YTD: -1.34%
Volume: 1,665,000 shares. 3 month avg: 1,664,386 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

ArcBest Corp (ARCB)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 53
Stock RS rank: 299 out of 586
1/8/15 close: $43.11
1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $46.51 or 7.9% above the close.
Change YTD: -7.03%
Volume: 496,500 shares. 3 month avg: 378,151 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
WARNING: A dead-cat bounce occurred on 07/31/2014. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/29/2015.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Avon Products (AVP)
Industry: Toiletries/Cosmetics
Industry RS rank: 42 out of 53
Stock RS rank: 560 out of 586
1/8/15 close: $8.83
1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $7.94 or 10.1% below the close.
Change YTD: -5.96%
Volume: 11,598,400 shares. 3 month avg: 9,489,808 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: Channel from 10/30/2014 to 01/08/2015

Top

Cal-Maine Foods Inc (CALM)
Industry: Food Processing
Industry RS rank: 23 out of 53
Stock RS rank: 310 out of 586
1/8/15 close: $38.13
1 Month avg volatility: $1.82. Volatility stop (for upward breakout): $33.70 or 11.6% below the close.
Change YTD: -2.31%
Volume: 572,800 shares. 3 month avg: 435,069 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 11/14/2014 to 01/06/2015
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

Cognex (CGNX)
Industry: Precision Instrument
Industry RS rank: 22 out of 53
Stock RS rank: 346 out of 586
1/8/15 close: $38.34
1 Month avg volatility: $1.04. Volatility stop (for downward breakout): $41.11 or 7.2% above the close.
Change YTD: -7.23%
Volume: 869,400 shares. 3 month avg: 496,103 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: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Encore Wire Corp (WIRE)
Industry: Metals and Mining (Div.)
Industry RS rank: 49 out of 53
Stock RS rank: 538 out of 586
1/8/15 close: $34.62
1 Month avg volatility: $1.24. Volatility stop (for downward breakout): $37.98 or 9.7% above the close.
Change YTD: -7.26%
Volume: 155,500 shares. 3 month avg: 135,488 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: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Everest Re Group Ltd (RE)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 19 out of 53
Stock RS rank: 248 out of 586
1/8/15 close: $174.96
1 Month avg volatility: $2.91. Volatility stop (for upward breakout): $165.10 or 5.6% below the close.
Change YTD: 2.74%
Volume: 348,200 shares. 3 month avg: 285,155 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, Eve and Eve reversal pattern from 12/15/2014 to 01/05/2015
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.

Top

Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 26 out of 53
Stock RS rank: 392 out of 586
1/8/15 close: $12.80
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $11.69 or 8.7% below the close.
Change YTD: -1.23%
Volume: 467,200 shares. 3 month avg: 462,491 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 10/20/2014 to 01/08/2015
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.

Top

FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 15 out of 53
Stock RS rank: 473 out of 586
1/8/15 close: $57.90
1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $54.67 or 5.6% below the close.
Change YTD: 1.53%
Volume: 1,156,300 shares. 3 month avg: 1,417,185 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 12/02/2014 to 01/08/2015

Top

Global Payments Inc (GPN)
Industry: Computer Software and Svcs
Industry RS rank: 17 out of 53
Stock RS rank: 135 out of 586
1/8/15 close: $84.78
1 Month avg volatility: $1.58. Volatility stop (for upward breakout): $80.65 or 4.9% below the close.
Change YTD: 5.02%
Volume: 1,934,600 shares. 3 month avg: 644,603 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/16/2014 to 01/06/2015
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.

Top

Harmonic Inc (HLIT)
Industry: Telecom. Equipment
Industry RS rank: 40 out of 53
Stock RS rank: 384 out of 586
1/8/15 close: $6.87
1 Month avg volatility: $0.25. Volatility stop (for downward breakout): $7.47 or 8.7% above the close.
Change YTD: -2.00%
Volume: 571,900 shares. 3 month avg: 618,820 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Heartland Express, Inc (HTLD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 53
Stock RS rank: 80 out of 586
1/8/15 close: $26.60
1 Month avg volatility: $0.72. Volatility stop (for downward breakout): $28.12 or 5.7% above the close.
Change YTD: -1.52%
Volume: 499,400 shares. 3 month avg: 383,592 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 top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

hhgregg, Inc (HGG)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 34 out of 53
Stock RS rank: 548 out of 586
1/8/15 close: $5.97
1 Month avg volatility: $0.50. Volatility stop (for upward breakout): $4.76 or 20.2% below the close.
Change YTD: -21.14%
Volume: 621,200 shares. 3 month avg: 321,660 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: Dead-cat bounce from 01/06/2015 to 01/06/2015

Top

Hunt, J.B. (JBHT)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 53
Stock RS rank: 212 out of 586
1/8/15 close: $81.26
1 Month avg volatility: $1.49. Volatility stop (for downward breakout): $84.42 or 3.9% above the close.
Change YTD: -3.55%
Volume: 731,800 shares. 3 month avg: 891,729 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 11/04/2014 to 01/06/2015
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.

Top

IDEXX Laboratories, Inc (IDXX)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 174 out of 586
1/8/15 close: $150.83
1 Month avg volatility: $2.92. Volatility stop (for downward breakout): $157.27 or 4.3% above the close.
Change YTD: 1.73%
Volume: 480,000 shares. 3 month avg: 457,446 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: Roof, inverted reversal pattern from 11/20/2014 to 01/07/2015
Breakout is downward 50% of the time.
Average decline: 17%.
Break-even failure rate: 10%.
Pullbacks occur 56% of the time.
Price hits measure rule target 73% of the time.

Top

Kelly Services A (KELYA)
Industry: Human Resources
Industry RS rank: 28 out of 53
Stock RS rank: 415 out of 586
1/8/15 close: $15.70
1 Month avg volatility: $0.62. Volatility stop (for downward breakout): $17.35 or 10.5% above the close.
Change YTD: -7.76%
Volume: 304,000 shares. 3 month avg: 197,235 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: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Kennametal (KMT)
Industry: Metal Fabricating
Industry RS rank: 45 out of 53
Stock RS rank: 524 out of 586
1/8/15 close: $33.69
1 Month avg volatility: $0.77. Volatility stop (for downward breakout): $35.24 or 4.6% above the close.
Change YTD: -5.87%
Volume: 799,900 shares. 3 month avg: 765,138 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: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Monsanto Co (MON)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 53
Stock RS rank: 355 out of 586
1/8/15 close: $119.19
1 Month avg volatility: $1.77. Volatility stop (for downward breakout): $123.13 or 3.3% above the close.
Change YTD: -0.23%
Volume: 3,837,000 shares. 3 month avg: 3,895,725 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: Broadening top reversal pattern from 11/21/2014 to 01/07/2015
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.

Top

Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 53
Stock RS rank: 356 out of 586
1/8/15 close: $46.33
1 Month avg volatility: $0.75. Volatility stop (for downward breakout): $47.93 or 3.5% above the close.
Change YTD: 1.49%
Volume: 2,888,700 shares. 3 month avg: 3,261,205 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 11/26/2014 to 01/07/2015
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

Mueller Industries Inc. (MLI)
Industry: Metal Fabricating
Industry RS rank: 45 out of 53
Stock RS rank: 145 out of 586
1/8/15 close: $33.15
1 Month avg volatility: $0.69. Volatility stop (for downward breakout): $34.62 or 4.4% above the close.
Change YTD: -2.90%
Volume: 158,200 shares. 3 month avg: 213,148 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Newport Corporation (NEWP)
Industry: Precision Instrument
Industry RS rank: 22 out of 53
Stock RS rank: 314 out of 586
1/8/15 close: $18.38
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $19.79 or 7.7% above the close.
Change YTD: -3.82%
Volume: 206,800 shares. 3 month avg: 175,422 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Polyone Corp (POL)
Industry: Chemical (Specialty)
Industry RS rank: 26 out of 53
Stock RS rank: 457 out of 586
1/8/15 close: $36.30
1 Month avg volatility: $0.86. Volatility stop (for downward breakout): $38.23 or 5.3% above the close.
Change YTD: -4.25%
Volume: 981,200 shares. 3 month avg: 716,726 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 12/22/2014 to 12/29/2014
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

Top

Vulcan Materials (VMC)
Industry: Cement and Aggregates
Industry RS rank: 47 out of 53
Stock RS rank: 277 out of 586
1/8/15 close: $68.28
1 Month avg volatility: $1.54. Volatility stop (for upward breakout): $63.74 or 6.7% below the close.
Change YTD: 3.88%
Volume: 1,383,300 shares. 3 month avg: 1,182,429 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 12/01/2014 to 01/06/2015
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.

Top

iShares DJ US Regional Banks (IAT)
Industry: Long ETFs
Industry RS rank: 13 out of 53
Stock RS rank: 340 out of 586
1/8/15 close: $33.83
1 Month avg volatility: $0.53. Volatility stop (for downward breakout): $34.96 or 3.3% above the close.
Change YTD: -3.20%
Volume: 647,900 shares. 3 month avg: 221,018 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 11/12/2014 to 01/06/2015
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.

Top

PowerShares Dynamic Pharmaceuticals (PJP)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 170 out of 586
1/8/15 close: $68.75
1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $65.44 or 4.8% below the close.
Change YTD: 3.34%
Volume: 211,200 shares. 3 month avg: 210,532 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/24/2014 to 01/06/2015
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.

Top


Thursday 1/8/15. Intraday Market Direction: Nasdaq

The index climbed by 1.3% or 57.73 points. Since 02/05/1971 the index made 128 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 82 occasions.
     Average loss was -1.3% on 46 occasions.
Expect the index to close higher 64.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 74/128 or 57.8% of the time.
     The prediction of the index closing lower has been right 27/56 or 48.2% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

In red appear areas where I think the Nasdaq will run into resistance. The nearest is 4665. Above that is 4695 then 4770. This is based on the chart as shown, not the daily chart.

The green line shows support near 4560. That's the value of the twin lows Tuesday.

The daily charts show more reliable support levels at 4550 to 4600. That's setup by peaks in September and the valley in December (not shown). Below that would be 4450 from another peak in July, although this support area appears to be weak.

My thinking is that these levels will help you with your intraday trading.

$ $ $

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  4,403.27    
 Monthly S1  4,526.87  123.60   
 Daily S2  4,600.21  73.34   
 Weekly S2  4,605.16  4.95   
 Low  4,613.90  8.74   
 Daily S1  4,625.34  11.44   
 Open  4,626.84  1.50   Yes! The Open is close to the Daily S1.
 Weekly S1  4,627.81  0.97   Yes! The Weekly S1 is close to the Open.
 61.8% Down from Intraday High  4,628.73  0.92   Yes! The 61.8% Down from Intraday High is close to the Weekly S1.
 50% Down from Intraday High  4,633.31  4.58   
 38.2% Down from Intraday High  4,637.89  4.58   
 Daily Pivot  4,639.03  1.14   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  4,650.47  11.44   
 High  4,652.72  2.25   Yes! The High is close to the Close.
 Daily R1  4,664.16  11.44   
 Monthly Pivot  4,670.91  6.75   
 Daily R2  4,677.85  6.94   
 Weekly Pivot  4,720.77  42.92   
 Weekly R1  4,743.42  22.66   
 Monthly R1  4,794.51  51.09   
 Weekly R2  4,836.38  41.87   
 Monthly R2  4,938.55  102.17   

Wednesday 1/7/15. Chart Pattern Indicator Turns Bearish

Picture of the chart pattern indicator

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

The chart pattern indicator changed to bearish four trading days ago. That's not clear on this chart but the one that follows, it shows how timely the signal was.

A while back I received an email asking how long the bearish divergence would last. The chart shows the answer. In this case, it lasted until the index started dropping. That was about 2 months or so. I pointed out the bearish divergence in this blog post and on Friday's pictures, but no one could predict when the index would turn down.

Picture of the chart pattern indicator

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

The red bars show the bearish climate.

The only thing I can say about this chart is that the indicator could change to bullish quickly if the index makes a large upward move. Do I think that will happen? No. I expect a turn to the bullish side in the coming days, perhaps starting tomorrow (Wednesday) but I don't know the timing.

The index is approaching support, so that's why I believe the index will recover. Plus, this decline is based on fear of the world economy slowing. If that happens, exports will slow but the U.S. economy is humming along, not great, but doing well. It will continue to chug along. So the fears of what the world is doing doesn't matter if we keep prospering. Thus, I'll be looking to add to my holdings by buying the dip.

-- Thomas Bulkowski

Top


Tuesday 1/6/15. Descending Scallop in Dow: Bad Omen?

The index dropped by -1.9% or -331.34 points. Since 10/01/1928 the index made 95 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 54 occasions.
     Average loss was -1.6% on 41 occasions.
Expect the index to close higher 56.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 87/139 or 62.6% of the time.
     The prediction of the index closing lower has been right 22/41 or 53.7% 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.

The Dow dropped like a stone and pulled out of its dive in the afternoon. It turned marginally higher near the close but couldn't hold it.

The pattern that formed is a descending scallop. Since the breakout is near the bottom of the chart pattern, descending scallops breakout downward most often (66%).

Although the market tumbled a lot today, I don't share its worries about a weak global economy, suggested by a falling price of oil. Thus, I'm looking for a higher close on Tuesday.

$ $ $

I have my trading results from 2014. On winning trades, I made an average of 45%. On losing trades, I lost an average of 7%. The win/loss ratio was 65%. For every dollar lost, I made $14.76. As good as that sounds, I didn't trade much, so my portfolio didn't grow like it should have. In retrospect, that's not a surprise since I had a large gain last year. This year, the stocks I kept were flat. Like a measured move up they are in waiting mode...I hope. I'm looking for them to resume the upward move this year.

$ $ $

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

-- Thomas Bulkowski

Top

© 2015 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,521.70    
 Monthly S1  17,011.68  489.97   
 Daily S2  17,254.26  242.58   
 Daily S1  17,377.95  123.70   
 Weekly S2  17,426.92  48.97   
 Weekly S1  17,464.29  37.36   
 Low  17,475.93  11.64   Yes! The Low is close to the Weekly S1.
 Close  17,501.65  25.72   Yes! The Close is close to the Low.
 Monthly Pivot  17,557.56  55.91   
 Daily Pivot  17,599.63  42.06   
 61.8% Down from Intraday High  17,607.86  8.23   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  17,648.62  40.75   
 38.2% Down from Intraday High  17,689.37  40.75   
 Daily R1  17,723.32  33.96   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Weekly Pivot  17,768.66  45.34   
 Weekly R1  17,806.03  37.36   
 Open  17,821.30  15.27   Yes! The Open is close to the Weekly R1.
 High  17,821.30  0.00   Yes! The High is close to the Open.
 Daily R2  17,945.00  123.70   
 Monthly R1  18,047.54  102.54   
 Weekly R2  18,110.40  62.87   
 Monthly R2  18,593.42  483.02   

Thursday 1/1/15. The Year Behind and Ahead

The index dropped by -0.9% or -41.39 points. Since 02/05/1971 the index made 178 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.1% on 83 occasions.
     Average loss was -1.4% on 95 occasions.
Expect the index to close lower 53.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 74/128 or 57.8% of the time.
     The prediction of the index closing lower has been right 26/55 or 47.3% of the time.

Picture of the Dow over time.

The figure is a picture of the Dow industrials on the weekly chart for 2014 in black. The red is the prediction for the Dow that was made a year ago. It's based on the historical movement of the Dow over time, based on the work of Larry Willams. See my forecast for more information.

Notice how the prediction bottoms three times (see the thin green lines) near the actual bottoms in the Dow.

Picture of the Dow over time.

This chart is the same as the last one, only extended out until 2019, viewed monthly.

Notice that 2014 was supposed to be flat. That's more clear on this chart. But look at 2015. If the prediction holds true, it's going to be a good year. In fact, the good times should continue to roll until oh, September 2017 when the market begins crashing.

As you can see, the prediction is rarely right, but it's nice to dream.

 

 

Here is how the indices faired over the past year.

Annual Performance
Dow utilities26.0%
Dow transports23.5%
Nasdaq13.4%
S&P 50011.4%
Dow industrials7.5%

$ $ $

I'm going to pretend I'm a submarine and go quiet in this blog space until the close on Monday. Just taking a breaking from commenting.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,431.80    
 Monthly S1  4,583.92  152.13   
 Daily S2  4,686.54  102.62   
 Monthly Pivot  4,699.44  12.89   
 Daily S1  4,711.30  11.86   
 Weekly S2  4,712.46  1.17   Yes! The Weekly S2 is close to the Daily S1.
 Weekly S1  4,724.26  11.79   
 Low  4,734.11  9.85   
 Close  4,736.05  1.94   Yes! The Close is close to the Low.
 Daily Pivot  4,758.86  22.81   
 61.8% Down from Intraday High  4,761.74  2.87   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot  4,769.60  7.87   
 50% Down from Intraday High  4,770.27  0.67   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 38.2% Down from Intraday High  4,778.80  8.53   
 Weekly R1  4,781.40  2.59   Yes! The Weekly R1 is close to the 38.2% Down from Intraday High.
 Daily R1  4,783.62  2.22   Yes! The Daily R1 is close to the Weekly R1.
 Open  4,790.53  6.91   Yes! The Open is close to the Daily R1.
 High  4,806.43  15.90   
 Weekly R2  4,826.74  20.31   
 Daily R2  4,831.18  4.44   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1  4,851.56  20.38   
 Monthly R2  4,967.08  115.51   

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.