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Friday 1/29/16. Pattern Trading Setups for the Weekend.

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 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 647 stocks searched, or 2.5%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 8 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 15 bullish chart patterns this week and 7 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski. Donate now to keep this website free.

Weekly screen for chart patterns ending between 01/21/2016 and 01/28/2016. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Information Services

Industry RS rank: 40 out of 56

Stock RS rank: 473 out of 640

1/28/16 close: $199.00

1 Month avg volatility: $8.02. Volatility stop (for downward breakout): $247.44 or 24.3% above the close.

Change YTD: -28.05%

Volume: 3,380,900 shares. 3 month avg: 471,586 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/28/2016 to 01/28/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Electric Utility (Central)

Industry RS rank: 2 out of 56

Stock RS rank: 75 out of 640

1/28/16 close: $59.45

1 Month avg volatility: $1.18. Volatility stop (for downward breakout): $62.21 or 4.6% above the close.

Change YTD: 2.03%

Volume: 4,541,800 shares. 3 month avg: 3,254,491 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.

 

Chart pattern: Broadening top reversal pattern from 12/31/2015 to 01/28/2016

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.

Industry: Medical Services

Industry RS rank: 39 out of 56

Stock RS rank: 370 out of 640

1/28/16 close: $126.42

1 Month avg volatility: $3.94. Volatility stop (for downward breakout): $140.95 or 11.5% above the close.

Change YTD: -9.34%

Volume: 3,195,500 shares. 3 month avg: 2,110,286 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: Double Top, Eve and Adam reversal pattern from 12/30/2015 to 01/25/2016

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.

Industry: Retail Building Supply

Industry RS rank: 14 out of 56

Stock RS rank: 30 out of 640

1/28/16 close: $39.54

1 Month avg volatility: $1.06. Volatility stop (for upward breakout): $37.24 or 5.8% below the close.

Change YTD: -3.98%

Volume: 302,800 shares. 3 month avg: 466,334 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 01/11/2016 to 01/19/2016

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.

Industry: Retail (Special Lines)

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 56 out of 56

Stock RS rank: 489 out of 640

1/28/16 close: $12.45

1 Month avg volatility: $0.62. Volatility stop (for upward breakout): $10.99 or 11.7% below the close.

Change YTD: 1.72%

Volume: 118,900 shares. 3 month avg: 304,408 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 bottom reversal pattern from 12/10/2015 to 01/22/2016

WARNING: A dead-cat bounce occurred on 10/29/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/28/2016.

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.

Industry: Retail (Special Lines)

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 56 out of 56

Stock RS rank: 596 out of 640

1/28/16 close: $1.69

1 Month avg volatility: $0.15. Volatility stop (for upward breakout): $1.25 or 26.1% below the close.

Change YTD: 2.42%

Volume: 356,400 shares. 3 month avg: 479,100 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Flag, high and tight continuation pattern from 12/15/2015 to 01/25/2016

WARNING: A dead-cat bounce occurred on 08/14/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 02/12/2016.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: IT Services

Industry RS rank: 10 out of 56

Stock RS rank: 37 out of 640

1/28/16 close: $34.84

1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $32.10 or 7.9% below the close.

Change YTD: -3.17%

Volume: 164,900 shares. 3 month avg: 260,729 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: Broadening bottom reversal pattern from 11/30/2015 to 01/26/2016

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.

Industry: Electric Utility (East)

Industry RS rank: 5 out of 56

Stock RS rank: 143 out of 640

1/28/16 close: $32.14

1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $30.17 or 6.1% below the close.

Change YTD: 1.29%

Volume: 4,022,000 shares. 3 month avg: 4,270,551 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 11/25/2015 to 01/28/2016

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.

Industry: Food Processing

Industry RS rank: 13 out of 56

Stock RS rank: 142 out of 640

1/28/16 close: $39.48

1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $37.80 or 4.3% below the close.

Change YTD: 1.54%

Volume: 132,900 shares. 3 month avg: 185,846 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 12/23/2015 to 01/28/2016

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 45 out of 56

Stock RS rank: 630 out of 640

1/28/16 close: $3.61

1 Month avg volatility: $0.33. Volatility stop (for upward breakout): $2.82 or 21.8% below the close.

Change YTD: -22.70%

Volume: 487,400 shares. 3 month avg: 596,034 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 01/11/2016 to 01/19/2016

WARNING: A dead-cat bounce occurred on 11/10/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/09/2016 and a 38% chance by 05/10/2016.

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.

Industry: Toiletries/Cosmetics

Industry RS rank: 20 out of 56

Stock RS rank: 126 out of 640

1/28/16 close: $86.31

1 Month avg volatility: $3.01. Volatility stop (for downward breakout): $92.94 or 7.7% above the close.

Change YTD: -8.42%

Volume: 208,200 shares. 3 month avg: 301,123 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 01/14/2016 to 01/28/2016

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.

Industry: Shoe

Industry RS rank: 55 out of 56

Stock RS rank: 632 out of 640

1/28/16 close: $6.31

1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $5.00 or 20.8% below the close.

Change YTD: -7.61%

Volume: 1,026,400 shares. 3 month avg: 3,085,954 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.

 

Chart pattern: Pipe bottom reversal pattern from 01/11/2016 to 01/19/2016

WARNING: A dead-cat bounce occurred on 12/28/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/28/2016 and a 38% chance by 06/27/2016.

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.

Industry: Medical Supplies

Industry RS rank: 15 out of 56

Stock RS rank: 154 out of 640

1/28/16 close: $526.59

1 Month avg volatility: $14.84. Volatility stop (for downward breakout): $568.54 or 8.0% above the close.

Change YTD: -3.58%

Volume: 441,700 shares. 3 month avg: 350,092 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 12/29/2015 to 01/28/2016

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.

Industry: Medical Services

Industry RS rank: 39 out of 56

Stock RS rank: 525 out of 640

1/28/16 close: $6.76

1 Month avg volatility: $0.63. Volatility stop (for downward breakout): $8.53 or 26.2% above the close.

Change YTD: -17.66%

Volume: 296,900 shares. 3 month avg: 150,251 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Triangle, descending reversal pattern from 09/29/2015 to 01/28/2016

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.

Industry: Natural Gas (Distributor)

Industry RS rank: 21 out of 56

Stock RS rank: 27 out of 640

1/28/16 close: $61.91

1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $57.97 or 6.4% below the close.

Change YTD: 4.21%

Volume: 308,500 shares. 3 month avg: 235,658 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 01/04/2016 to 01/22/2016

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.

Industry: Retail (Special Lines)

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 56 out of 56

Stock RS rank: 636 out of 640

1/28/16 close: $13.14

1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $11.21 or 14.7% below the close.

Change YTD: -10.49%

Volume: 2,297,300 shares. 3 month avg: 2,577,000 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: Pipe bottom reversal pattern from 01/11/2016 to 01/19/2016

WARNING: A dead-cat bounce occurred on 12/10/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/10/2016 and a 38% chance by 06/09/2016.

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.

Industry: Trucking/Transp. Leasing

Industry RS rank: 52 out of 56

Stock RS rank: 607 out of 640

1/28/16 close: $20.85

1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $18.22 or 12.6% below the close.

Change YTD: -6.29%

Volume: 190,700 shares. 3 month avg: 263,432 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 01/11/2016 to 01/19/2016

WARNING: A dead-cat bounce occurred on 10/29/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/28/2016.

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.

Industry: IT Services

Industry RS rank: 10 out of 56

Stock RS rank: 481 out of 640

1/28/16 close: $37.32

1 Month avg volatility: $1.80. Volatility stop (for downward breakout): $42.72 or 14.5% above the close.

Change YTD: -28.78%

Volume: 4,140,200 shares. 3 month avg: 828,065 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/27/2016 to 01/28/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: IT Services

Industry RS rank: 10 out of 56

Stock RS rank: 382 out of 640

1/28/16 close: $63.57

1 Month avg volatility: $2.83. Volatility stop (for downward breakout): $70.04 or 10.2% above the close.

Change YTD: -26.56%

Volume: 19,775,100 shares. 3 month avg: 1,729,562 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/27/2016 to 01/27/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Metals and Mining (Div.)

Industry RS rank: 25 out of 56

Stock RS rank: 256 out of 640

1/28/16 close: $24.98

1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $22.97 or 8.0% below the close.

Change YTD: -4.36%

Volume: 1,101,300 shares. 3 month avg: 1,639,455 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 01/11/2016 to 01/19/2016

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.

Industry: Natural Gas (Diversified)

Industry RS rank: 38 out of 56

Stock RS rank: 616 out of 640

1/28/16 close: $8.54

1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $6.80 or 20.4% below the close.

Change YTD: 20.11%

Volume: 14,844,200 shares. 3 month avg: 19,182,531 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: Flag, high and tight continuation pattern from 12/17/2015 to 01/28/2016

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Chemical (Specialty)

Industry RS rank: 16 out of 56

Stock RS rank: 563 out of 640

1/28/16 close: $12.21

1 Month avg volatility: $0.61. Volatility stop (for upward breakout): $10.89 or 10.8% below the close.

Change YTD: -10.35%

Volume: 46,400 shares. 3 month avg: 92,985 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: Diamond bottom reversal pattern from 01/11/2016 to 01/28/2016

Breakout is upward 69% of the time.

Average rise: 36%.

Break-even failure rate: 4%.

Throwbacks occur 53% of the time.

Price hits measure rule target 81% of the time.

Industry: Apparel

Industry RS rank: 23 out of 56

Stock RS rank: 419 out of 640

1/28/16 close: $60.07

1 Month avg volatility: $1.46. Volatility stop (for upward breakout): $56.31 or 6.3% below the close.

Change YTD: -3.50%

Volume: 2,837,900 shares. 3 month avg: 3,062,698 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 01/11/2016 to 01/19/2016

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.

Industry: Trucking/Transp. Leasing

Industry RS rank: 52 out of 56

Stock RS rank: 385 out of 640

1/28/16 close: $22.82

1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $20.50 or 10.2% below the close.

Change YTD: -2.44%

Volume: 685,500 shares. 3 month avg: 740,532 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Pipe bottom reversal pattern from 01/11/2016 to 01/19/2016

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.

Thursday 1/28/16. Intraday Market Direction: Nasdaq

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

$ $ $

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

I drew a horizontal red line connecting the recent rounding top chart pattern at A and B.

This chart pattern is a repeat of Tuesday's blog post. With that rounding turn, it broke out downward, not upward as I had hoped. Will this do the same and breakout downward?

The above probabilities suggest the answer is yes, at least it will close lower on Thursday.

I think the index is resting on support, so I'm inclined to believe we'll see a higher close.

$ $ $

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. Donate now to keep this website free.

Wednesday 1/27/16. A Look At Indicators

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

The indicator is near or at the top of the scale, saying it is wildly bullish. But that only means there is one way to go: Down.

Although the signal can change for up to seven days, usually it is solid after three. Thus, I think that maybe, just maybe, the indices have hit bottom and are now moving up.

That could change if the price oil sinks again, which it will, or China burps, which it is likely to do. Thus, the ride up is likely to be a bumpy one.

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

Notice that the red line has bounced off its low. The blue line seems to be turning up, too. Both are bullish.

-- Thomas Bulkowski. Donate now to keep this website free.

Tuesday 1/26/16. Intraday Market Direction: Dow

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

$ $ $

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

The chart shows a rounded top chart pattern, from the low on Wednesday to today (Monday).

I get the feeling that the index will decline some, perhaps as far as the launch price, A.

However, my guess is that the index won't decline that far. Rather, it'll find support sooner, perhaps at the red line (B) or the green line (C). Those two levels would correspond to a Fibonacci retracement. I didn't draw the lines at a Fib retrace of 50%, 38%, or 62%. I just drew them from the left, at support, to the right.

The chart pattern indicator has flipped to bearish from bullish with today's move lower. So that's a negative, suggesting a drop.

Today's reversal is what I feared would happen after I looked at Friday's results. Too many of the stocks opened high but closed lower, suggesting today's downturn. Of course, by then it was too late to flip my bullish predictions in Tom's Target. Still, there is time for the market to get its act together and rescue me by making a strong push 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. Donate now to keep this website free.

Monday 1/25/16. Market Monday: The Week Ahead

• My Prediction
• A Brief Look Back
• Upcoming Economic Reports
• Options Expiration
• Swing and Position Traders: Chart Pattern Indicator
• Swing Traders: Pivot Points
• Consecutive Price Trends
• Buy-and-Hold: 12-Month SMA
• Earnings, Chart Patterns & Industries

My Prediction

This is a picture of the S&P 500 index on the daily scale.

A three falling peaks chart pattern appears at ABC. It confirms as a valid chart pattern when the index closes below the horizontal green line at D.

The index has made a V-bottom. I show that as the red V-shaped lines.

I thought that this v-turn marked the bottom of the downtrend and that a new uptrend has begun. But after reviewing some of the stocks I bought this morning, I'm not so sure. Many of them closed below their opening prices. They jumped up higher at the opening bell but fell back. It suggests weakness not reflected in the indices.

So even though I flipped the targets on Tom's Targets at the top of this page, the downturn may not be over.

A Brief Look Back

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.

For the Week...

Year to Date...

Economic Reports

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

Report	Time	A-F Rating	Description
Consumer confidence	10:00 T	B-	Surveys 5,000 households for trends.
New home sales	10:00 W	C+	Shows sales of single-family homes.
Crude inventories	10:30 W	?	My guess: Measures oil inventory.
FOMC Rate decision	2:00 W	?	The Federal Reserves reports on interest rate changes.
Initial jobless claims	8:30 Th	C+	Counts people filing for state unemployment benefits.
Durable goods orders	8:30 Th	B	Measures orders, shipments of goods with lifespans >3 years.
Gross domestic product	8:30 F	B	Measures economic activity; GDP deflator measures inflation.
Chicago purchasing managers index	9:45 F	B	Monitors regional manufacturing activity.
Michigan sentiment	10:00 F	B-	Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 01/22/2016, the CPI had:

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.

• 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:

Consecutive Price Trends

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

Earnings, Chart Patterns & Industries

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

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.

-- Thomas Bulkowski. Donate now to keep this website free.

Friday 1/22/16. Pattern Trading Setups for the Weekend.

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 7 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 648 stocks searched, or 1.1%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

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

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

More...

-- Thomas Bulkowski. Donate now to keep this website free.

Weekly screen for chart patterns ending between 01/14/2016 and 01/21/2016. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Drug

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 41 out of 56

Stock RS rank: 608 out of 641

1/21/16 close: $33.69

1 Month avg volatility: $3.71. Volatility stop (for downward breakout): $47.71 or 41.6% above the close.

Change YTD: -57.56%

Volume: 12,465,200 shares. 3 month avg: 1,136,137 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/21/2016 to 01/21/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Furn/Home Furnishings

Industry RS rank: 25 out of 56

Stock RS rank: 378 out of 641

1/21/16 close: $29.37

1 Month avg volatility: $1.45. Volatility stop (for upward breakout): $20.07 or 31.7% below the close.

Change YTD: 17.11%

Volume: 380,100 shares. 3 month avg: 75,983 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 Tuesday.

 

Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/24/2015 to 01/20/2016

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.

Industry: Electric Utility (West)

Industry RS rank: 3 out of 56

Stock RS rank: 113 out of 641

1/21/16 close: $58.72

1 Month avg volatility: $1.01. Volatility stop (for downward breakout): $61.51 or 4.8% above the close.

Change YTD: -0.83%

Volume: 2,045,600 shares. 3 month avg: 2,443,595 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: Rectangle bottom continuation pattern from 11/12/2015 to 01/21/2016

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price hits measure rule target 50% of the time.

Industry: Apparel

Industry RS rank: 31 out of 56

Stock RS rank: 314 out of 641

1/21/16 close: $28.88

1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $31.15 or 7.9% above the close.

Change YTD: -1.87%

Volume: 2,819,800 shares. 3 month avg: 3,630,094 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 01/04/2016 to 01/11/2016

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.

Industry: Retail Store

Industry RS rank: 38 out of 56

Stock RS rank: 448 out of 641

1/21/16 close: $46.99

1 Month avg volatility: $1.75. Volatility stop (for downward breakout): $50.97 or 8.5% above the close.

Change YTD: -1.34%

Volume: 2,807,100 shares. 3 month avg: 4,405,398 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 01/04/2016 to 01/11/2016

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.

Industry: Chemical (Specialty)

Industry RS rank: 21 out of 56

Stock RS rank: 289 out of 641

1/21/16 close: $69.92

1 Month avg volatility: $2.07. Volatility stop (for upward breakout): $65.52 or 6.3% below the close.

Change YTD: -9.50%

Volume: 48,200 shares. 3 month avg: 71,372 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: Diamond bottom reversal pattern from 01/07/2016 to 01/21/2016

Breakout is upward 69% of the time.

Average rise: 36%.

Break-even failure rate: 4%.

Throwbacks occur 53% of the time.

Price hits measure rule target 81% of the time.

Industry: Toiletries/Cosmetics

Industry RS rank: 24 out of 56

Stock RS rank: 321 out of 641

1/21/16 close: $29.70

1 Month avg volatility: $1.11. Volatility stop (for upward breakout): $27.40 or 7.7% below the close.

Change YTD: 6.68%

Volume: 61,100 shares. 3 month avg: 55,468 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: Pipe bottom reversal pattern from 01/04/2016 to 01/11/2016

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.

Industry: Biotechnology

Industry RS rank: 49 out of 56

Stock RS rank: 595 out of 641

1/21/16 close: $1.04

1 Month avg volatility: $0.07. Volatility stop (for downward breakout): $1.23 or 18.7% above the close.

Change YTD: 1.96%

Volume: 1,444,400 shares. 3 month avg: 1,536,582 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: Rectangle bottom continuation pattern from 12/07/2015 to 01/21/2016

WARNING: A dead-cat bounce occurred on 08/06/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 02/04/2016.

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price hits measure rule target 50% of the time.

Thursday 1/21/16. Intraday Market Direction: Nasdaq

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

$ $ $

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

I drew a down-sloping channel using two red lines drawn along the peaks and valleys from recent days.

The index briefly dipped below the lower line before powering upward. My sense is that the index will continue higher until meeting the top red line near A before crumbling again.

A higher close tomorrow (Thursday) also agrees with the above probabilities.

My sense is that this correction is unwarranted both in its severity and extent. It's time for a rebound.

$ $ $

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. Donate now to keep this website free.

Wednesday 1/20/16. A Look At Indicators

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

The indicator still shows a bearish reading. The index has followed the indicator lower, too.

There is one hint of a coming trend change. Circled in red, the indicator has been trending upward for about a week, as the green line shows. Compare that to the index. It's been trending lower over the same period. That bullish divergence suggests the index is going to swing higher. When is the question, though.

This is a new set of indicators that I'll be featuring on Wednesday's. Both measure how far stocks have dropped from their 1-year high.

Notice that the blue line has been trending lower for months now, even before the index peaked in May. That shows stocks were trending down even as the index moved up.

Here's some more information about the lines.

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

Shown as a red line on the above chart...

Shown as a blue line on the above chart...

-- Thomas Bulkowski. Donate now to keep this website free.

Tuesday 1/19/16. Intraday Market Direction: Dow

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

$ $ $

I show a picture of the USO fund on the weekly scale.

What's the deal with oil? I wanted to find out so I show you a chart of USO: United States Oil, an exchange traded fund.

According to yahoo finance, the fund, "seeks to reflect the performance of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for light, sweet crude oil."

Thus, what you're looking at is not the price of oil, but a fund that trades in oil futures.

A symmetrical triangle appears within the two converging red lines. The fund broke out upward at A but it was a fake out. The fund collapsed, breaking out downward at B and busting the upward breakout. When a stock (ETF) busts, it often results in a strong move, as you see here. The ETF tumbled from the peak in July to the Friday's low.

One day the fund will reverse. Imagine seeing the price of the fund rise to 15. That's a 50% move up. Then keep the move going, to restore the fund back up to the cloud bank at 30 to 40. Nice.

It'll happen, but probably not anytime soon.

$ $ $

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. Donate now to keep this website free.

Friday 1/15/16. Pattern Trading Setups for the Weekend.

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

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

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

There were 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 649 stocks searched, or 2.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 3 bullish chart patterns this week and 14 bearish ones with any remaining (0) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski. Donate now to keep this website free.

Weekly screen for chart patterns ending between 01/07/2016 and 01/14/2016. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Medical Services

Industry RS rank: 27 out of 56

Stock RS rank: 501 out of 641

1/14/16 close: $17.63

1 Month avg volatility: $1.19. Volatility stop (for downward breakout): $20.45 or 16.0% above the close.

Change YTD: -17.96%

Volume: 446,900 shares. 3 month avg: 217,442 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: Three Falling Peaks reversal pattern from 12/16/2015 to 01/08/2016

Breakout is downward 100% of the time.

Average decline: 17%.

Break-even failure rate: 12%.

Pullbacks occur 59% of the time.

Price hits measure rule target 33% of the time.

Industry: Drug

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 30 out of 56

Stock RS rank: 200 out of 641

1/14/16 close: $64.66

1 Month avg volatility: $3.40. Volatility stop (for downward breakout): $72.35 or 11.9% above the close.

Change YTD: -18.54%

Volume: 949,800 shares. 3 month avg: 927,415 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Broadening top, right-angled and ascending reversal pattern from 11/02/2015 to 01/08/2016

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.

Industry: Shoe

Industry RS rank: 55 out of 56

Stock RS rank: 636 out of 641

1/14/16 close: $7.64

1 Month avg volatility: $0.89. Volatility stop (for downward breakout): $9.74 or 27.5% above the close.

Change YTD: -37.84%

Volume: 738,500 shares. 3 month avg: 551,977 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/12/2016 to 01/12/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Metals and Mining (Div.)

Industry RS rank: 35 out of 56

Stock RS rank: 633 out of 641

1/14/16 close: $4.20

1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $5.19 or 23.5% above the close.

Change YTD: -37.96%

Volume: 77,658,000 shares. 3 month avg: 42,459,534 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/11/2016 to 01/11/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Electronics

Industry RS rank: 48 out of 56

Stock RS rank: 634 out of 641

1/14/16 close: $12.48

1 Month avg volatility: $1.32. Volatility stop (for downward breakout): $15.46 or 23.9% above the close.

Change YTD: -30.71%

Volume: 31,579,500 shares. 3 month avg: 8,919,305 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Friday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/13/2016 to 01/13/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Chemical (Diversified)

Industry RS rank: 42 out of 56

Stock RS rank: 313 out of 641

1/14/16 close: $92.15

1 Month avg volatility: $1.75. Volatility stop (for downward breakout): $96.27 or 4.5% above the close.

Change YTD: -6.47%

Volume: 3,699,000 shares. 3 month avg: 3,658,135 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 11/17/2015 to 01/08/2016

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.

Industry: Apparel

Industry RS rank: 38 out of 56

Stock RS rank: 366 out of 641

1/14/16 close: $2.24

1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $2.60 or 16.2% above the close.

Change YTD: -2.18%

Volume: 179,900 shares. 3 month avg: 80,494 shares.

This security may be thinly traded (less than 100k shares)!

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 12/14/2015 to 01/12/2016

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.

Industry: Natural Gas (Distributor)

Industry RS rank: 34 out of 56

Stock RS rank: 609 out of 641

1/14/16 close: $17.17

1 Month avg volatility: $1.43. Volatility stop (for downward breakout): $20.09 or 17.0% above the close.

Change YTD: -18.82%

Volume: 205,700 shares. 3 month avg: 255,752 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 12/28/2015 to 01/04/2016

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.

Industry: Medical Services

Industry RS rank: 27 out of 56

Stock RS rank: 264 out of 641

1/14/16 close: $32.01

1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $34.89 or 9.0% above the close.

Change YTD: -8.54%

Volume: 280,100 shares. 3 month avg: 247,920 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.

 

Chart pattern: Pipe top reversal pattern from 12/28/2015 to 01/04/2016

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.

Industry: Electric Utility (East)

Industry RS rank: 5 out of 56

Stock RS rank: 171 out of 641

1/14/16 close: $39.74

1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $37.30 or 6.2% below the close.

Change YTD: 2.71%

Volume: 4,829,100 shares. 3 month avg: 3,107,237 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: Head-and-shoulders complex bottom reversal pattern from 11/09/2015 to 01/12/2016

Breakout is upward 100% of the time.

Average rise: 39%.

Break-even failure rate: 4%.

Throwbacks occur 63% of the time.

Price hits measure rule target 74% of the time.

Industry: Computer Software and Svcs

Industry RS rank: 28 out of 56

Stock RS rank: 187 out of 641

1/14/16 close: $76.53

1 Month avg volatility: $1.76. Volatility stop (for downward breakout): $80.48 or 5.2% above the close.

Change YTD: -7.58%

Volume: 2,728,800 shares. 3 month avg: 1,586,378 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.

 

Chart pattern: Broadening top reversal pattern from 11/11/2015 to 01/13/2016

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.

Industry: Chemical (Specialty)

Industry RS rank: 29 out of 56

Stock RS rank: 562 out of 641

1/14/16 close: $23.70

1 Month avg volatility: $1.50. Volatility stop (for downward breakout): $29.08 or 22.7% above the close.

Change YTD: -22.65%

Volume: 225,400 shares. 3 month avg: 188,245 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/11/2016 to 01/11/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Packaging and Container

Industry RS rank: 16 out of 56

Stock RS rank: 194 out of 641

1/14/16 close: $50.05

1 Month avg volatility: $1.51. Volatility stop (for downward breakout): $53.93 or 7.7% above the close.

Change YTD: -6.83%

Volume: 747,000 shares. 3 month avg: 287,523 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 12/28/2015 to 01/04/2016

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.

Industry: Electronics

Industry RS rank: 48 out of 56

Stock RS rank: 618 out of 641

1/14/16 close: $3.09

1 Month avg volatility: $0.21. Volatility stop (for downward breakout): $3.56 or 15.1% above the close.

Change YTD: -34.67%

Volume: 396,300 shares. 3 month avg: 335,455 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/12/2016 to 01/12/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Retail Store

Industry RS rank: 39 out of 56

Stock RS rank: 342 out of 641

1/14/16 close: $70.41

1 Month avg volatility: $1.54. Volatility stop (for upward breakout): $66.92 or 5.0% below the close.

Change YTD: -3.03%

Volume: 6,282,900 shares. 3 month avg: 5,921,005 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Broadening bottom reversal pattern from 11/27/2015 to 01/14/2016

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.

Industry: Diversified Co.

Industry RS rank: 33 out of 56

Stock RS rank: 198 out of 641

1/14/16 close: $129.17

1 Month avg volatility: $2.22. Volatility stop (for upward breakout): $124.55 or 3.6% below the close.

Change YTD: -1.73%

Volume: 583,400 shares. 3 month avg: 232,638 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: Rectangle top continuation pattern from 11/04/2015 to 01/08/2016

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.

Industry: Natural Gas (Distributor)

Industry RS rank: 34 out of 56

Stock RS rank: 628 out of 641

1/14/16 close: $18.29

1 Month avg volatility: $1.97. Volatility stop (for downward breakout): $22.38 or 22.4% above the close.

Change YTD: -28.83%

Volume: 42,550,000 shares. 3 month avg: 12,525,552 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Dead-cat bounce continuation pattern from 01/12/2016 to 01/13/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Thursday 1/14/16. Intraday Market Direction: Nasdaq

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

$ $ $

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

I drew the green line just to see how the price action of the last two days moved around it. The dot where the horizontal red line begins seems to be a support area. The index is also undecided about direction to the right of C.

A double top forms using peaks A and B. It confirms as a valid pattern when the index closes below the red line.

The index has fulfilled (or is very close to doing so) the measure rule for double tops. The measure rule helps pick a price target. It's the height of the chart pattern subtracted from the red line.

I'm hoping for a higher close, but the above probabilities says that's probably not going to happen.

$ $ $

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

-- Thomas Bulkowski. Donate now to keep this website free.

Wednesday 1/13/16. Chart Pattern Indicator: What's It Say?

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

This chart shows the signal changes. Take my word for it that the latest reading is bearish (red bars), not neutral (white bars, invisible on this chart).

The indicator shows that it signaled near the peak in the index about two weeks ago. Since then the index has tumbled.

In the last few days, the indicator has turned up. It's like it bounced off 0 and coasted up to 20 or so, where it sits now.

If we get more positive moves in the index, we could turn bullish in the indicator. That's what I expect to happen. I think this downturn is overdone (over sold) and we will see a snap-back rally.

-- Thomas Bulkowski. Donate now to keep this website free.

Tuesday 1/12/16. Intraday Market Direction: Dow

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

$ $ $

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

I drew a red trendline down along the peaks of the last several days of trading.

Notice how today's close came close to the trendline. It suggests the trendline marks overhead resistance that the index is going to struggle to push through.

Of course, the international stage will push the markets around. So if China burps, we'll have a hiccup.

The trend of the futures market before the open will help set the stage for tomorrow's (Tuesday's) ride. I'm still expecting the markets to fall. That would be good news because I searched all weekend for stocks to buy and didn't find any. I'm thinking that a cheaper price might price my fingers loose from some cash.

$ $ $

I bought a new computer and worked on setting it up today. I got it running easily enough but I wanted it to run my Windows XP software. Thus, if my main computer crashes, and my backup machine crashes, I have a Window 7 Pro system to fill in.

That will become important a decade or two down the road. I still don't want to rewrite all of the software I developed.

Anyway, I downloaded three files to get it working. The first checked my hardware to make sure my system was up to snuff (the CPU supports hardware virtualization).

The remaining two files were the XP simulator. One was big, took a few minutes to download it.

It took less than 30 minutes to get the simulator installed and working. Then I copied over my files from an external hard drive and proved that my XP software worked on the simulator.

I felt so good about this achievement, I celebrated by having a glass of wine.

The stuff is so dry, it taste like paint thinner.

$ $ $

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. Donate now to keep this website free.

Monday 1/11/16. Market Monday: The Week Ahead

• My Prediction
• A Brief Look Back
• Upcoming Economic Reports
• Options Expiration
• Swing and Position Traders: Chart Pattern Indicator
• Swing Traders: Pivot Points
• Consecutive Price Trends
• Buy-and-Hold: 12-Month SMA
• Earnings, Chart Patterns & Industries

My Prediction

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

On my computer, the head-and-shoulders top looks like a head-and-shoulders. On this figure, the left shoulder (LS) and Head (H) look more like a double top.

The height of the pattern from the head to the neckline directly below (shown here as a blue line at A), projected downward from the neckline, gives a target. That target could serve as a minimum decline.

I did not measure the height, but it looks like the index has almost met the target. My guess is the target is just below the purple (magenta) line. The index has another day of declining to\ get there.

The horizontal red line is what I use as a sell signal for those cases, like this one, in which the neckline slopes downward. When the index closes below the red line, it confirms the head-and-shoulders as a valid chart pattern.

I show support areas as the magenta line and two green lines.

I used the magenta line for "Tom's Targets" at the top of this page but the green area might work as support, too.

One thing is certain. China's stock market is going to go up and down, vibrating the US markets accordingly. So quick in-and-out trading (swing trading) might be in vogue for the next year.

A Brief Look Back

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.

For the Week...

Year to Date...

Economic Reports

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

Report	Time	A-F Rating	Description
Crude inventories	10:30 W	?	My guess: Measures oil inventory.
FEDs Beige book	2:00 W	?	Reports on economic conditions.
Treasury budget	2:00 W	D	Tracks budget deficit. Important in April (tax filing).
Initial jobless claims	8:30 Th	C+	Counts people filing for state unemployment benefits.
International trade	8:30 Th	C+	Import/export prices, trade balance. US economy vs others.
Retail sales	8:30 F	A-	Reports total retail sales (not services). Are people spending?
Producer price index	8:30 F	B-	Measures wholesale goods cost. An indication of future inflation.
Industrial production	9:15 F	B-	Production of utilities, mines, and manufacturers.
Capacity utilization	9:15 F	B-	Gauges economic activity, hints of inflation.
Business inventories	10:00 F	C-	Reports manufacturing, wholesale, retail inventories.

Options Expiration

The following is courtesy of the Options Industry Council.

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).

Swing and Position Traders: Chart Pattern Indicator

As of 01/08/2016, the CPI had:

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

Swing Traders: Pivot Points

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

• 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:

Consecutive Price Trends

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 5 days.

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.

-- Thomas Bulkowski. Donate now to keep this website free.

Friday 1/8/16. Pattern Trading Setups for the Weekend.

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

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

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

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 630 stocks searched, or 3.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 7 bullish chart patterns this week and 10 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski. Donate now to keep this website free.

Weekly screen for chart patterns ending between 12/31/2015 and 01/07/2016. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Medical Services

Industry RS rank: 27 out of 56

Stock RS rank: 413 out of 623

1/7/16 close: $19.97

1 Month avg volatility: $1.31. Volatility stop (for downward breakout): $23.15 or 15.9% above the close.

Change YTD: -7.07%

Volume: 355,200 shares. 3 month avg: 195,791 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: Horn top reversal pattern from 12/14/2015 to 12/28/2015

Breakout is downward 100% of the time.

Average decline: 21%.

Break-even failure rate: 7%.

Pullbacks occur 33% of the time.

Price hits measure rule target 70% of the time.

Industry: Medical Supplies

Industry RS rank: 7 out of 56

Stock RS rank: 312 out of 623

1/7/16 close: $131.99

1 Month avg volatility: $2.27. Volatility stop (for downward breakout): $137.38 or 4.1% above the close.

Change YTD: -4.81%

Volume: 190,600 shares. 3 month avg: 103,908 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: Rectangle bottom continuation pattern from 08/25/2015 to 01/06/2016

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price hits measure rule target 50% of the time.

Industry: Food Processing

Industry RS rank: 15 out of 56

Stock RS rank: 363 out of 623

1/7/16 close: $46.98

1 Month avg volatility: $2.28. Volatility stop (for downward breakout): $51.76 or 10.2% above the close.

Change YTD: 1.38%

Volume: 928,900 shares. 3 month avg: 1,081,612 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 12/21/2015 to 12/28/2015

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.

Industry: Information Services

Industry RS rank: 30 out of 56

Stock RS rank: 366 out of 623

1/7/16 close: $35.30

1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $33.14 or 6.1% below the close.

Change YTD: 4.25%

Volume: 947,300 shares. 3 month avg: 491,637 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 Bottom, Adam and Adam reversal pattern from 12/22/2015 to 01/04/2016

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.

Industry: Semiconductor

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 23 out of 56

Stock RS rank: 134 out of 623

1/7/16 close: $25.14

1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $27.33 or 8.7% above the close.

Change YTD: -5.74%

Volume: 1,001,900 shares. 3 month avg: 1,322,975 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Pipe top reversal pattern from 12/21/2015 to 12/28/2015

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 52 out of 56

Stock RS rank: 488 out of 623

1/7/16 close: $18.41

1 Month avg volatility: $0.95. Volatility stop (for upward breakout): $16.34 or 11.3% below the close.

Change YTD: -12.75%

Volume: 3,502,700 shares. 3 month avg: 2,699,360 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: Triangle, symmetrical continuation pattern from 12/10/2015 to 01/04/2016

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.

Industry: Information Services

Industry RS rank: 30 out of 56

Stock RS rank: 64 out of 623

1/7/16 close: $105.29

1 Month avg volatility: $1.92. Volatility stop (for downward breakout): $112.28 or 6.6% above the close.

Change YTD: -5.46%

Volume: 1,087,900 shares. 3 month avg: 665,805 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 11/24/2015 to 01/07/2016

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 52 out of 56

Stock RS rank: 615 out of 623

1/7/16 close: $3.23

1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $4.72 or 46.2% above the close.

Change YTD: -30.84%

Volume: 627,600 shares. 3 month avg: 541,831 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, descending reversal pattern from 11/03/2015 to 01/04/2016

WARNING: A dead-cat bounce occurred on 11/10/2015. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/09/2016 and a 38% chance by 05/10/2016.

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.

Industry: Retail (Special Lines)

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 56 out of 56

Stock RS rank: 498 out of 623

1/7/16 close: $2.50

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $1.86 or 25.6% below the close.

Change YTD: -31.69%

Volume: 333,600 shares. 3 month avg: 134,458 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 01/06/2016 to 01/06/2016

Industry: Homebuilding

Industry RS rank: 49 out of 56

Stock RS rank: 541 out of 623

1/7/16 close: $1.54

1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $1.92 or 24.5% above the close.

Change YTD: -14.92%

Volume: 4,116,100 shares. 3 month avg: 2,057,765 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 top reversal pattern from 12/21/2015 to 12/28/2015

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.

Industry: Metal Fabricating

Industry RS rank: 17 out of 56

Stock RS rank: 264 out of 623

1/7/16 close: $84.73

1 Month avg volatility: $1.35. Volatility stop (for upward breakout): $81.81 or 3.5% below the close.

Change YTD: -8.58%

Volume: 2,606,600 shares. 3 month avg: 1,650,135 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top, right-angled and descending continuation pattern from 12/03/2015 to 01/04/2016

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.

Industry: Advertising

Industry RS rank: 9 out of 56

Stock RS rank: 32 out of 623

1/7/16 close: $22.16

1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $23.53 or 6.2% above the close.

Change YTD: -4.81%

Volume: 3,355,700 shares. 3 month avg: 3,545,517 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.

 

Chart pattern: Broadening top reversal pattern from 11/06/2015 to 01/07/2016

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.

Industry: Retail Store

Industry RS rank: 36 out of 56

Stock RS rank: 480 out of 623

1/7/16 close: $7.26

1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $6.53 or 10.0% below the close.

Change YTD: 9.01%

Volume: 24,522,700 shares. 3 month avg: 14,134,857 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.

 

Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/18/2015 to 01/04/2016

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.

Industry: Semiconductor Cap Equip.

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 11 out of 56

Stock RS rank: 262 out of 623

1/7/16 close: $11.05

1 Month avg volatility: $0.41. Volatility stop (for downward breakout): $11.99 or 8.6% above the close.

Change YTD: -5.31%

Volume: 528,400 shares. 3 month avg: 656,732 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 top reversal pattern from 12/21/2015 to 12/28/2015

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.

Industry: Insurance (Prop/Casualty)

Industry RS rank: 13 out of 56

Stock RS rank: 235 out of 623

1/7/16 close: $36.16

1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $38.00 or 5.1% above the close.

Change YTD: -5.83%

Volume: 1,448,200 shares. 3 month avg: 1,604,709 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 11/03/2015 to 01/07/2016

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.

Industry: Retail Store

Industry RS rank: 36 out of 56

Stock RS rank: 590 out of 623

1/7/16 close: $36.89

1 Month avg volatility: $1.03. Volatility stop (for upward breakout): $34.24 or 7.2% below the close.

Change YTD: 5.46%

Volume: 18,241,900 shares. 3 month avg: 8,479,942 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.

 

Chart pattern: Double Bottom, Eve and Adam reversal pattern from 12/22/2015 to 01/04/2016

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 4%.

Throwbacks occur 57% of the time.

Price hits measure rule target 66% of the time.

Industry: Electronics

Industry RS rank: 48 out of 56

Stock RS rank: 516 out of 623

1/7/16 close: $44.02

1 Month avg volatility: $1.89. Volatility stop (for downward breakout): $50.22 or 14.1% above the close.

Change YTD: -14.64%

Volume: 226,600 shares. 3 month avg: 141,309 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 12/21/2015 to 12/28/2015

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.

Industry: Semiconductor

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 23 out of 56

Stock RS rank: 621 out of 623

1/7/16 close: $3.34

1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $1.64 or 50.8% below the close.

Change YTD: -34.38%

Volume: 163,573,100 shares. 3 month avg: 54,361,206 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: Dead-cat bounce from 01/07/2016 to 01/07/2016

Industry: Diversified Co.

Industry RS rank: 33 out of 56

Stock RS rank: 228 out of 623

1/7/16 close: $128.71

1 Month avg volatility: $2.04. Volatility stop (for upward breakout): $123.57 or 4.0% below the close.

Change YTD: -2.08%

Volume: 274,600 shares. 3 month avg: 226,683 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: Rectangle top continuation pattern from 11/04/2015 to 01/07/2016

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.

Industry: Telecom. Equipment

Industry RS rank: 28 out of 56

Stock RS rank: 435 out of 623

1/7/16 close: $25.40

1 Month avg volatility: $0.77. Volatility stop (for downward breakout): $27.99 or 10.2% above the close.

Change YTD: -9.35%

Volume: 1,391,900 shares. 3 month avg: 1,293,865 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.

 

Chart pattern: Pipe top reversal pattern from 12/21/2015 to 12/28/2015

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.

Thursday 1/7/16. Intraday Market Direction: Nasdaq

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

$ $ $

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

The red shows overhead resistance drawn along the top of the index over the last week or so. Notice how the index hits the line and then turns back down.

The green line is a weak support line drawn from the right valley to the left one. I write "weak" because the index dropped below the left valley when forming the right one.

Now, it looks like the index is being squeezed between the two lines.

The above prediction says the index will close higher on Thursday but I'm not convinced. I'm looking for the index to drop below the green line, meaning a lower close.

$ $ $

In this latest down turn, I feel fortunate to be 33% in cash due to portfolio rebalancing last month and some timely selling of energy stocks a few days ago.

When I looked at my spreadsheet of trades, I'm surprised and glad that on 39 trades I more than doubled my money. If you count another stock I currently hold, it hits 40 doubles. That's a good start. Too bad those are from 30 years of being in the market, so that's just over one double a year.

$ $ $

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. Donate now to keep this website free.

Wednesday 1/6/16. Chart Pattern Indicator: What's It Say?

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.

After yesterday's big drop in the indices, the indicator remained bearish, a sign that occurred days ago but probably hasn't confirmed as valid yet. (It takes up to 7 days for the signal to calm down).

The indicator has turned neutral after today's action. It's hard to see on this chart but the right price bar is white: neutral

Another strong move will flip the signal to bullish or bearish easily enough. The neutral stance in the indicator suggests yesterday's drop wasn't important over the longer term.

-- Thomas Bulkowski. Donate now to keep this website free.

Tuesday 1/5/16. A Look At The Dow

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

$ $ $

Instead of showing the Dow intraday, this is a pic of the index on the daily scale.

I thought it would be important to view the context of what I see happening.

Let me say that the 7% drop in China is equivalent to the Dow dropping 1,200 points. We closed just 276 points lower (1.6%). That's a sneeze for us.

The chart shows three horizontal red lines. Those are Fibonacci retrace levels of 38%, 50%, and 62% of the move between the two green circles (the Sept to Nov rise). Notice that today's price action has touched the 50% bar. I am thinking that the index will drop to the lower red bar before rebounding, but we could turn upward here just as easily.

Why? Because the China thing is just a bump in the road, not much of a cause for concern. We won't go into a recession because of it. Even if China's growth slows (which apparently, it has).

The two green lines mark a channel down. Today's price action pierced the lower line but the index closed well off its lows and above the green line.

All of this suggests nothing to worry about. Maybe use this as an opportunity to update your shopping list. It may be too soon to buy but be ready.

-- Thomas Bulkowski. Donate now to keep this website free.

-- Thomas Bulkowski. Donate now to keep this website free.

Monday 1/4/16. The Year Ahead and Behind

This is a picture of the Dow industrials in black, daily scale.

The red line is the prediction made a year ago. Notice that the prediction started the year well but began to deviate in April or May. The prediction went up and the Dow went down.

Annual Performance
Dow utilities	-6.5%
Dow transports	-17.8%
Nasdaq	5.7%
S&P 500	-0.7%
Dow industrials	-2.2%

Here is how the indices faired during 2015, shown in the table on the right.

The Nasdaq was the only index that I follow to remain in positive territory this year.

The transports really got knocked, falling almost 18%.

Does this mean the transports will outperform the other indices this year? Maybe. I've seen that behavior with the utility index a few years ago. Maybe the Nasdaq will struggle this year and the transports will post the largest gain.

This is the predicted path the Dow industrials will take in 2016, daily scale. Since these predictions are mechanical in nature (they use the average of all prior years ending in 6 -- see the link for more info), they are never right, but they do give you an idea of what could happen, based on the historical perspective.

Anyway, this figure suggests the index is going to make a good move up starting later this month and that should peak in May followed by a drop going into July. After that, the index will make a straight-line run up. Nice!

Notice that there's no sustained dip in September (weakest month) or October (a volatile month).

This chart is a longer prediction for the Dow industrials, using the weekly scale.

It shows the Dow rising until October 2017, peaking at 23,369 and then starting a slide that will take it down to 16,580 in March 2019. That means a drop of 29%. In other words, it suggests a bear market is going to begin late next year.

Notice the nice recovery. After the index bottoms in March 2019 at 16,580, it'll start an upward run that will take the index back up to 21,053. Nice!

You can look at the charts of prior years and the predictions to see how close these predictions are.

-- Thomas Bulkowski. Donate now to keep this website free.

Written by and copyright © 2005-2020 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.