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

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Busted
Patterns
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Patterns
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Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 06/23/2017
21,395 -2.53 0.0%
9,389 68.83 0.7%
725 -2.17 -0.3%
6,265 28.56 0.5%
2,438 3.80 0.2%
YTD
8.3%
3.8%
10.0%
16.4%
8.9%
Tom's Targets    Overview: 06/15/2017
21,600 or 21,000 by 07/01/2017
9,100 or 9,600 by 07/01/2017
720 or 745 by 07/01/2017
6,300 or 6,000 by 07/01/2017
2,525 or 2,390 by 07/01/2017

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January 2017 Headlines


Archives


Tuesday 1/31/17. Intraday Market Direction: Dow

The index dropped by -0.6% or -122.65 points. Since 10/01/1928 the index made 657 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 341 occasions.
     Average loss was -0.7% on 316 occasions.
Expect the index to close higher 51.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 131/218 or 60.1% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The chart shows a descending triangle at A. That broke out downward, of course, in a surprising plunge right at the open.

At B, however, support appeared and stopped the drop. The index has tried to recover and it did, a bit. Tomorrow (Tuesday), if you believe the probabilities, it will try to close the gap.

$ $ $

I replaced a module on my Sole treadmill this weekend. The "10 minute plug and play" job, according to the service department, took me an hour. The darn board had 13 connectors, five of which required pliers and muscle to yank them off and two were glued to the board.

I'm testing it now and for the next few weeks to be sure it's okay before I return my existing board (if I don't, they'll bill me almost $300). But it sure beats paying someone else to fix it.

$ $ $

After less than a week's worth of programming, I finished my diabetes program. It told me that my fasting glucose has been rising at an alarming pace over the past week even as my carbs have dropped. The only difference is I added chia seeds to my diet. I'm going to remove them and see if my blood turns back to red.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  19,477.24    
 Weekly S2  19,549.80  72.56   
 Monthly S1  19,724.19  174.38   
 Weekly S1  19,760.47  36.28   
 Daily S2  19,798.48  38.02   
 Low  19,870.39  71.91   
 Daily S1  19,884.81  14.42   Yes! The Daily S1 is close to the Low.
 Monthly Pivot  19,924.88  40.08   
 61.8% Down from Intraday High  19,930.83  5.95   Yes! The 61.8% Down from Intraday High is close to the Monthly Pivot.
 Weekly Pivot  19,943.02  12.19   Yes! The Weekly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  19,949.51  6.48   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 Daily Pivot  19,956.71  7.21   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  19,968.18  11.46   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  19,971.13  2.96   Yes! The Close is close to the 38.2% Down from Intraday High.
 Open  20,028.62  57.49   
 High  20,028.62  0.00   Yes! The High is close to the Open.
 Daily R1  20,043.04  14.42   Yes! The Daily R1 is close to the High.
 Daily R2  20,114.94  71.91   
 Weekly R1  20,153.69  38.74   
 Monthly R1  20,171.83  18.14   
 Weekly R2  20,336.24  164.42   
 Monthly R2  20,372.52  36.28   

Monday 1/30/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

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

The index has formed a chart pattern called a 2B.

For this pattern, Victor Sperandeo writes, "In an uptrend, if a higher high is made but fails to carry through, and then prices drop below the previous high, then the trend is apt to reverse."

Before you ask, the second peak (B) is slightly above peak A, so it does qualify as a 2B.

In my world, the pattern looks like a double top (peaks A and B). It won't be an actual double top until price closes below the valley (C).

 

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 27.4 points.
Tuesday: Up 112.86 points.
Wednesday: Up 155.8 points.
Thursday: Up 32.4 points.
Friday: Down 7.13 points.

For the Week...

The Dow industrials were up 266.53 points or 1.3%.
The Nasdaq composite was up 105.45 points or 1.9%.
The S&P 500 index was up 23.3798 points or 1.0%.

Year to Date...

Dow Industrials
     0.2% down from the high of 20,125.58 on 01/26/2017.
     2.1% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.2% down from the high of 5,669.61 on 01/26/2017.
     4.9% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.3% down from the high of 2,300.99 on 01/26/2017.
     2.2% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  20,051  20,072  20,094  20,116  20,137 
Weekly  19,591  19,842  19,984  20,235  20,377 
Monthly  19,518  19,806  19,966  20,254  20,413 
S&P500 (^GSPC): Daily  2,288  2,291  2,295  2,299  2,303 
Weekly  2,240  2,267  2,284  2,311  2,328 
Monthly  2,209  2,252  2,276  2,319  2,344 
Nasdaq (^IXIC): Daily  5,634  5,647  5,657  5,671  5,681 
Weekly  5,471  5,566  5,618  5,713  5,765 
Monthly  5,270  5,465  5,567  5,763  5,865 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 42.6%   Expect a random direction. 
 3 months up 29.9%   The trend may continue. 
 S & P 500 (^GSPC) 1 week up 42.0%   Expect a random direction. 
 3 months up 36.9%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week up 45.1%   Expect a random direction. 
 3 months up 28.2%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
33Triangle, symmetrical
12Channel
11Rectangle top
9Triangle, ascending
7Triangle, descending
6Pipe bottom
6Head-and-shoulders top
5Rising wedge
3Rectangle bottom
3Dead-cat bounce

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. Securities Brokerage1. Securities Brokerage
2. Insurance (Life)2. Insurance (Life)
3. Semiconductor3. Semiconductor
4. Trucking/Transp. Leasing4. Trucking/Transp. Leasing
5. Semiconductor Cap Equip.5. Semiconductor Cap Equip.
50. Household Products50. Electric Utility (West)
51. Retail Store51. Biotechnology
52. Toiletries/Cosmetics52. Toiletries/Cosmetics
53. Biotechnology53. Household Products
54. Furn/Home Furnishings54. Furn/Home Furnishings
55. Short ETFs55. Short ETFs
56. Apparel56. Apparel
57. Electric Utility (East)57. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/27/17. 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 29 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 4.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 15 bullish chart patterns this week and 4 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.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ANFTriangle, descending      01/03/201701/26/2017Apparel
AEISChannel      04/29/201601/26/2017Semiconductor
AEETriangle, descending      01/06/201701/26/2017Electric Utility (Central)
APCRectangle top      12/15/201601/26/2017Petroleum (Producing)
AAPLRising wedge      11/08/201601/26/2017Computers and Peripherals
AGOChannel      12/21/201601/26/2017Insurance (Life)
BKHTriangle, ascending      12/21/201601/26/2017Electric Utility (West)
BRKSTriangle, symmetrical      12/27/201601/26/2017Semiconductor Cap Equip.
CNPChannel      11/15/201601/26/2017Electric Utility (Central)
CENXFlag, high and tight      01/03/201701/24/2017Metals and Mining (Div.)
COHDouble Bottom, Adam and Adam      01/05/201701/23/2017Apparel
BOOMTriangle, symmetrical      12/08/201601/24/2017Metal Fabricating
GPSTriangle, symmetrical      01/04/201701/26/2017Apparel
IDATriangle, symmetrical      01/19/201701/26/2017Electric Utility (West)
IEXTriangle, symmetrical      12/20/201601/23/2017Machinery
NSPChannel      11/10/201601/26/2017Human Resources
IBPTriangle, symmetrical      12/08/201601/26/2017Retail Building Supply
LNCRectangle top      12/12/201601/24/2017Insurance (Life)
LMTDouble Top, Eve and Adam      01/09/201701/23/2017Aerospace/Defense
MCHXRectangle bottom      08/31/201601/26/2017Advertising
NSHChannel      11/21/201601/26/2017Natural Gas (Distributor)
PFGRectangle top      12/16/201601/26/2017Insurance (Diversified)
RTNDouble Top, Eve and Eve      01/05/201701/25/2017Aerospace/Defense
SRTriangle, symmetrical      01/04/201701/26/2017Natural Gas (Distributor)
XLTriangle, symmetrical      11/14/201601/25/2017Insurance (Diversified)
YUMERectangle top      12/09/201601/26/2017Advertising
IYHTriangle, symmetrical      09/28/201601/26/2017Long ETFs
EWPRising wedge      11/08/201601/26/2017Investment Co. (Foreign)
IXCChannel      12/15/201601/24/2017Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 01/19/2017 and 01/26/2017. 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.
 
Abercrombie and Fitch Co. (ANF)
Industry: Apparel
Industry RS rank: 54 out of 56
Stock RS rank: 607 out of 613
1/26/17 close: $11.71
1 Month avg volatility: $0.41. Volatility stop (for downward breakout): $13.01 or 11.1% above the close.
Change YTD: -2.42%
Volume: 2,491,100 shares. 3 month avg: 3,345,197 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: Triangle, descending reversal pattern from 01/03/2017 to 01/26/2017
WARNING: A dead-cat bounce occurred on 08/30/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 02/28/2017.
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Advanced Energy (AEIS)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 38 out of 613
1/26/17 close: $58.76
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $56.03 or 4.7% below the close.
Change YTD: 7.32%
Volume: 200,100 shares. 3 month avg: 329,969 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: Channel from 04/29/2016 to 01/26/2017

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Ameren (AEE)
Industry: Electric Utility (Central)
Industry RS rank: 46 out of 56
Stock RS rank: 374 out of 613
1/26/17 close: $52.08
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $53.57 or 2.9% above the close.
Change YTD: -0.72%
Volume: 1,061,900 shares. 3 month avg: 1,394,666 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, descending reversal pattern from 01/06/2017 to 01/26/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Anadarko Petroleum Corp. (APC)
Industry: Petroleum (Producing)
Industry RS rank: 13 out of 56
Stock RS rank: 80 out of 613
1/26/17 close: $71.14
1 Month avg volatility: $1.37. Volatility stop (for upward breakout): $67.91 or 4.6% below the close.
Change YTD: 2.02%
Volume: 2,908,100 shares. 3 month avg: 4,477,943 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: Rectangle top continuation pattern from 12/15/2016 to 01/26/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Apple Inc. (AAPL)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 5 out of 56
Stock RS rank: 162 out of 613
1/26/17 close: $121.94
1 Month avg volatility: $1.18. Volatility stop (for downward breakout): $124.80 or 2.4% above the close.
Change YTD: 5.28%
Volume: 26,282,000 shares. 3 month avg: 31,276,772 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: Rising wedge reversal pattern from 11/08/2016 to 01/26/2017
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Assured Guaranty Ltd. (AGO)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 25 out of 613
1/26/17 close: $40.22
1 Month avg volatility: $0.59. Volatility stop (for upward breakout): $38.50 or 4.3% below the close.
Change YTD: 6.49%
Volume: 871,400 shares. 3 month avg: 1,075,925 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 12/21/2016 to 01/26/2017

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Black Hills Corp (BKH)
Industry: Electric Utility (West)
Industry RS rank: 47 out of 56
Stock RS rank: 389 out of 613
1/26/17 close: $62.36
1 Month avg volatility: $0.92. Volatility stop (for upward breakout): $60.20 or 3.5% below the close.
Change YTD: 1.66%
Volume: 220,200 shares. 3 month avg: 357,295 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, ascending reversal pattern from 12/21/2016 to 01/26/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Brooks Automation (BRKS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 73 out of 613
1/26/17 close: $17.35
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $16.44 or 5.2% below the close.
Change YTD: 1.64%
Volume: 178,500 shares. 3 month avg: 442,020 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 12/27/2016 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Centerpoint Energy (CNP)
Industry: Electric Utility (Central)
Industry RS rank: 46 out of 56
Stock RS rank: 263 out of 613
1/26/17 close: $25.99
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $25.03 or 3.7% below the close.
Change YTD: 5.48%
Volume: 3,078,700 shares. 3 month avg: 3,462,303 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: Channel from 11/15/2016 to 01/26/2017

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Century Aluminum Co. (CENX)
Industry: Metals and Mining (Div.)
Industry RS rank: 38 out of 56
Stock RS rank: 1 out of 613
1/26/17 close: $15.09
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $13.30 or 11.9% below the close.
Change YTD: 76.29%
Volume: 3,524,900 shares. 3 month avg: 2,654,817 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: Flag, high and tight continuation pattern from 01/03/2017 to 01/24/2017
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Coach Inc. (COH)
Industry: Apparel
Industry RS rank: 54 out of 56
Stock RS rank: 575 out of 613
1/26/17 close: $35.90
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $34.35 or 4.3% below the close.
Change YTD: 2.51%
Volume: 2,354,200 shares. 3 month avg: 3,278,574 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: Double Bottom, Adam and Adam reversal pattern from 01/05/2017 to 01/23/2017
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 9 out of 56
Stock RS rank: 13 out of 613
1/26/17 close: $16.55
1 Month avg volatility: $0.60. Volatility stop (for upward breakout): $15.09 or 8.8% below the close.
Change YTD: 4.42%
Volume: 26,100 shares. 3 month avg: 53,495 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 12/08/2016 to 01/24/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Gap Inc. (GPS)
Industry: Apparel
Industry RS rank: 54 out of 56
Stock RS rank: 487 out of 613
1/26/17 close: $23.87
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $22.51 or 5.7% below the close.
Change YTD: 6.37%
Volume: 5,465,500 shares. 3 month avg: 6,300,960 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 01/04/2017 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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IDACORP Inc (IDA)
Industry: Electric Utility (West)
Industry RS rank: 47 out of 56
Stock RS rank: 398 out of 613
1/26/17 close: $79.02
1 Month avg volatility: $1.04. Volatility stop (for upward breakout): $76.61 or 3.1% below the close.
Change YTD: -1.90%
Volume: 112,700 shares. 3 month avg: 195,692 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/19/2017 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Idex Corp (IEX)
Industry: Machinery
Industry RS rank: 15 out of 56
Stock RS rank: 316 out of 613
1/26/17 close: $92.65
1 Month avg volatility: $1.23. Volatility stop (for upward breakout): $89.48 or 3.4% below the close.
Change YTD: 2.88%
Volume: 143,100 shares. 3 month avg: 279,126 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/20/2016 to 01/23/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 21 out of 56
Stock RS rank: 513 out of 613
1/26/17 close: $71.90
1 Month avg volatility: $1.71. Volatility stop (for upward breakout): $67.94 or 5.5% below the close.
Change YTD: 1.34%
Volume: 73,900 shares. 3 month avg: 154,080 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 11/10/2016 to 01/26/2017

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Installed Building Products Inc (IBP)
Industry: Retail Building Supply
Industry RS rank: 37 out of 56
Stock RS rank: 197 out of 613
1/26/17 close: $41.90
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $40.15 or 4.2% below the close.
Change YTD: 1.45%
Volume: 103,300 shares. 3 month avg: 183,114 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, symmetrical continuation pattern from 12/08/2016 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 14 out of 613
1/26/17 close: $69.65
1 Month avg volatility: $1.40. Volatility stop (for upward breakout): $66.14 or 5.0% below the close.
Change YTD: 5.10%
Volume: 1,273,400 shares. 3 month avg: 1,679,914 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 top continuation pattern from 12/12/2016 to 01/24/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Lockheed Martin Corp (LMT)
Industry: Aerospace/Defense
Industry RS rank: 24 out of 56
Stock RS rank: 377 out of 613
1/26/17 close: $254.97
1 Month avg volatility: $3.30. Volatility stop (for downward breakout): $261.59 or 2.6% above the close.
Change YTD: 2.01%
Volume: 1,955,800 shares. 3 month avg: 1,586,891 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 Top, Eve and Adam reversal pattern from 01/09/2017 to 01/23/2017
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.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 27 out of 56
Stock RS rank: 567 out of 613
1/26/17 close: $2.69
1 Month avg volatility: $0.10. Volatility stop (for downward breakout): $2.95 or 9.8% above the close.
Change YTD: 1.51%
Volume: 42,800 shares. 3 month avg: 91,031 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle bottom continuation pattern from 08/31/2016 to 01/26/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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NuStar GP Holdings (NSH)
Industry: Natural Gas (Distributor)
Industry RS rank: 19 out of 56
Stock RS rank: 77 out of 613
1/26/17 close: $30.40
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $27.91 or 8.2% below the close.
Change YTD: 5.19%
Volume: 134,600 shares. 3 month avg: 76,849 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: Channel from 11/21/2016 to 01/26/2017

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Principal Financial Group Inc (PFG)
Industry: Insurance (Diversified)
Industry RS rank: 16 out of 56
Stock RS rank: 82 out of 613
1/26/17 close: $58.57
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $55.69 or 4.9% below the close.
Change YTD: 1.23%
Volume: 1,767,100 shares. 3 month avg: 1,619,480 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 top continuation pattern from 12/16/2016 to 01/26/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Raytheon Co. (RTN)
Industry: Aerospace/Defense
Industry RS rank: 24 out of 56
Stock RS rank: 300 out of 613
1/26/17 close: $142.90
1 Month avg volatility: $2.00. Volatility stop (for downward breakout): $150.32 or 5.2% above the close.
Change YTD: 0.63%
Volume: 4,084,300 shares. 3 month avg: 1,980,523 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: Double Top, Eve and Eve reversal pattern from 01/05/2017 to 01/25/2017
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.

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Spire (SR)
Industry: Natural Gas (Distributor)
Industry RS rank: 19 out of 56
Stock RS rank: 478 out of 613
1/26/17 close: $65.15
1 Month avg volatility: $0.94. Volatility stop (for upward breakout): $62.52 or 4.0% below the close.
Change YTD: 0.93%
Volume: 178,100 shares. 3 month avg: 264,106 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/04/2017 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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XL Group (XL)
Industry: Insurance (Diversified)
Industry RS rank: 16 out of 56
Stock RS rank: 190 out of 613
1/26/17 close: $37.97
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $36.96 or 2.7% below the close.
Change YTD: 1.91%
Volume: 1,036,100 shares. 3 month avg: 1,996,651 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/14/2016 to 01/25/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 27 out of 56
Stock RS rank: 402 out of 613
1/26/17 close: $3.52
1 Month avg volatility: $0.12. Volatility stop (for upward breakout): $3.25 or 7.7% below the close.
Change YTD: -1.68%
Volume: 22,200 shares. 3 month avg: 59,968 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 Friday.
 
Chart pattern: Rectangle top continuation pattern from 12/09/2016 to 01/26/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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iShares DJ US Healthcare (IYH)
Industry: Long ETFs
Industry RS rank: 30 out of 56
Stock RS rank: 489 out of 613
1/26/17 close: $144.97
1 Month avg volatility: $1.31. Volatility stop (for upward breakout): $142.34 or 1.8% below the close.
Change YTD: 0.58%
Volume: 57,800 shares. 3 month avg: 147,366 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 09/28/2016 to 01/26/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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MSCI Spain Index (EWP)
Industry: Investment Co. (Foreign)
Industry RS rank: 31 out of 56
Stock RS rank: 298 out of 613
1/26/17 close: $27.58
1 Month avg volatility: $0.17. Volatility stop (for downward breakout): $28.04 or 1.7% above the close.
Change YTD: 4.04%
Volume: 847,900 shares. 3 month avg: 1,260,612 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: Rising wedge reversal pattern from 11/08/2016 to 01/26/2017
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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S and P Global Energy Sector Index fund (IXC)
Industry: Investment Co. (Foreign)
Industry RS rank: 31 out of 56
Stock RS rank: 250 out of 613
1/26/17 close: $34.78
1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $34.13 or 1.9% below the close.
Change YTD: -0.06%
Volume: 83,500 shares. 3 month avg: 286,886 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: Channel from 12/15/2016 to 01/24/2017

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Thursday 1/26/17. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 55.38 points. Since 02/05/1971 the index made 216 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 144 occasions.
     Average loss was -1.0% on 72 occasions.
Expect the index to close higher 66.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 120/209 or 57.4% of the time.
     The prediction of the index closing lower has been right 41/80 or 51.2% 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.

The index busted through it's horizontal movement (shown by the two green lines) on Tuesday and continued to move higher on Wednesday.

For a while, the trend followed the red line.

Today, Wednesday, the index formed a channel, which I show between two cyan lines.

It's a tight channel, but it slopes upward at an angle not too steep nor too shallow. That suggests the upward trend can continue.

Notice that the index is at the top of the channel, so it's likely tomorrow's open will push the index lower, toward the bottom of the channel. It'll be interesting to see if that is what happens.

Of course, events which happened while the market was closed overnight (for Thursday's open) will likely send the index spinning outside of the channel anyway, but if you needed a bias, it would be downward.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,325.13    
 Monthly S1  5,490.73  165.61   
 Monthly Pivot  5,537.50  46.76   
 Weekly S2  5,538.84  1.34   Yes! The Weekly S2 is close to the Monthly Pivot.
 Weekly Pivot  5,585.97  47.13   
 Weekly S1  5,597.59  11.62   
 Daily S2  5,625.49  27.90   
 Weekly R2  5,633.10  7.61   
 Low  5,634.33  1.23   Yes! The Low is close to the Weekly R2.
 Open  5,635.86  1.53   Yes! The Open is close to the Low.
 Daily S1  5,640.92  5.06   
 61.8% Down from Intraday High  5,643.60  2.68   
 Weekly R1  5,644.72  1.12   Yes! The Weekly R1 is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  5,646.46  1.74   Yes! The 50% Down from Intraday High is close to the Weekly R1.
 38.2% Down from Intraday High  5,649.32  2.86   
 Daily Pivot  5,649.75  0.43   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  5,656.34  6.59   
 High  5,658.59  2.25   Yes! The High is close to the Close.
 Daily R1  5,665.18  6.59   
 Daily R2  5,674.01  8.84   
 Monthly R1  5,703.10  29.09   
 Monthly R2  5,749.87  46.76   

Wednesday 1/25/17. A Look At Indicators

Picture of the chart pattern indicator

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

The bullish signal that showed on last week's chart is still there as the most recent green vertical bar.

The bearish signal which appeared mid week has also disappeared with today's strong move higher. That's odd, because it's not reflected in the next chart.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Monday, 17% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 15%.
The fewest was 14% on 12/09/2016.
And the most was 69% on 02/11/2016.
Shown as a blue line on the above chart...
The 518 stocks in my database are down an average of 12% from their yearly high.
A week ago, the average was 11%.
The peak was 10% on 12/09/2016.
And the bottom was 32% on 02/11/2016.

The red line is higher than it was a week ago, but the chart shows it sloping downward today. I think that's a result of today's movement now being shown.

The blue line looks like a patient who has lost his (or her) heartbeat. Compared to a week ago, it's a bit lower (more bearish).

To me, this chart looks as if the Dow is waiting on a direction to take. The top chart says it'll be bullish.

-- Thomas Bulkowski

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Tuesday 1/24/17. Intraday Market Direction: Dow

The index dropped by -0.1% or -27.4 points. Since 10/01/1928 the index made 1282 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 663 occasions.
     Average loss was -0.7% on 619 occasions.
Expect the index to close higher 51.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 130/217 or 59.9% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale and drew a few trendlines along the peaks and valleys.

Notice how price following the cyan line (A) bumps up against a ceiling, which is the trendline but then becomes a floor at B. Resistance at A, and support at B.

Notice, also, that the index has hit another ceiling, C, shown by the red line.

The BC lines form a pattern called a descending broadening wedge.

The pattern tilts downward and the waves expand as they move from side to side. The breakout is upward 79% of the time, so that gives you an idea of how price will behave tomorrow (Tuesday).

$ $ $

For fun, on Saturday, I started working on a diabetes tracking program. I don't have diabetes (yet, not even pre-diabetic), but it'll allow me to track my glucose before and after meals and ask questions like, "The last time I had a slice of pizza, how did my glucose react?" And track the results in a table and on a chart.

Way cool. And a fun project to work on.

I'd give away the program but it requires SQL. SQL express (which is what I use) is available free from Microsoft. If anyone is interested in getting a copy of my program when it's done, let me know so I can gauge interest.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  19,504.12    
 Weekly S2  19,581.88  77.76   
 Monthly S1  19,651.98  70.11   
 Daily S2  19,687.11  35.13   
 Weekly S1  19,690.86  3.75   Yes! The Weekly S1 is close to the Daily S2.
 Low  19,732.36  41.50   
 Daily S1  19,743.48  11.12   
 61.8% Down from Intraday High  19,771.18  27.70   
 50% Down from Intraday High  19,783.17  11.99   
 Weekly Pivot  19,786.93  3.76   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 Daily Pivot  19,788.73  1.80   Yes! The Daily Pivot is close to the Weekly Pivot.
 Open  19,794.79  6.06   Yes! The Open is close to the Daily Pivot.
 38.2% Down from Intraday High  19,795.16  0.37   Yes! The 38.2% Down from Intraday High is close to the Open.
 Close  19,799.85  4.69   Yes! The Close is close to the 38.2% Down from Intraday High.
 Monthly Pivot  19,825.81  25.96   
 High  19,833.98  8.17   Yes! The High is close to the Monthly Pivot.
 Daily R1  19,845.10  11.12   
 Daily R2  19,890.35  45.25   
 Weekly R1  19,895.91  5.56   Yes! The Weekly R1 is close to the Daily R2.
 Monthly R1  19,973.67  77.76   
 Weekly R2  19,991.98  18.30   
 Monthly R2  20,147.50  155.52   

Monday 1/23/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the monthly scale.

I show the Dow utility index not on the daily scale, but on the monthly. Yes, it's true.

However, on the daily chart, the index has been dropping since July. Despite that drop, the index posted the second best performance in 2016 (behind the transports) of the indices I follow.

As I get older and preservation of capital becomes more important, I have found that utility stocks can be a safe haven, especially when money market funds pay almost nothing.

Anyway, to the monthly chart.

Notice that the index has been moving upward in a nicely defined channel from the low in 2009. I show that channel, bounded by two red trendlines.

You can see how the index peaked at A (July) and has since dropped back to B, just as I described above.

If it stays inside the channel, then the index will soon bottom and turn up. That means a buying opportunity is coming. You can buy a utility stock with a high yield and reasonable payout ratio (below 90%) and ride it upward.

Just keep in mind that the indices (Dow) will peak in mid February and drop until early April, if the forecast is correct.

Maybe April will be the time to go shopping.

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A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Down 58.96 points.
Wednesday: Down 22.05 points.
Thursday: Down 72.32 points.
Friday: Up 94.85 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 58.48 points or 0.3%.
The Nasdaq composite was down 18.79 points or 0.3%.
The S&P 500 index was down 3.3298 points or 0.1%.

Year to Date...

Dow Industrials
     0.9% down from the high of 19,999.63 on 01/06/2017.
     0.8% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.5% down from the high of 5,584.26 on 01/13/2017.
     2.9% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.5% down from the high of 2,282.10 on 01/06/2017.
     1.2% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/20/2017, the CPI had:

8 bearish patterns,
12 bullish patterns,
397 patterns waiting for breakout.
The CPI signal is 60.0%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  19,725  19,776  19,810  19,861  19,895 
Weekly  19,591  19,709  19,796  19,914  20,001 
Monthly  19,513  19,670  19,835  19,992  20,157 
S&P500 (^GSPC): Daily  2,259  2,265  2,271  2,277  2,283 
Weekly  2,250  2,261  2,269  2,279  2,287 
Monthly  2,214  2,243  2,262  2,291  2,311 
Nasdaq (^IXIC): Daily  5,525  5,540  5,557  5,572  5,589 
Weekly  5,505  5,530  5,552  5,577  5,599 
Monthly  5,291  5,423  5,504  5,636  5,716 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 17.0%   Expect a reversal soon. 
 3 months up 29.9%   The trend may continue. 
 S & P 500 (^GSPC) 2 weeks down 15.6%   Expect a reversal soon. 
 3 months up 36.9%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week down 28.4%   The trend may continue. 
 3 months up 28.2%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
33Triangle, symmetrical
10Rectangle top
9Triangle, ascending
9Channel
8Head-and-shoulders top
6Pipe bottom
4Triangle, descending
4Rising wedge
3Dead-cat bounce
3Falling wedge

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

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

 

 

 

 

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

This WeekLast Week
1. Securities Brokerage1. Securities Brokerage
2. Insurance (Life)2. Insurance (Life)
3. Semiconductor3. Semiconductor
4. Trucking/Transp. Leasing4. Semiconductor Cap Equip.
5. Semiconductor Cap Equip.5. Trucking/Transp. Leasing
50. Electric Utility (West)50. Shoe
51. Biotechnology51. Electric Utility (West)
52. Toiletries/Cosmetics52. Furn/Home Furnishings
53. Household Products53. Toiletries/Cosmetics
54. Furn/Home Furnishings54. Household Products
55. Short ETFs55. Short ETFs
56. Apparel56. Apparel
57. Electric Utility (East)57. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/20/17. Pattern Trading Setups for the Weekend.

Addendum: I released a new version, 5.17, which I hope fixes the below bug. Again.

I released a new version of Patternz, 5.16. This fixes a bug, hopefully, that prevented the program from working correctly outside the U.S.

My email this morning says that two people have already broken it. Sigh. Back to the drawing board.

$ $ $

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 24 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 3.9%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 8 bullish chart patterns this week and 7 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEISChannel      04/29/201601/19/2017Semiconductor
APATriangle, descending      01/03/201701/19/2017Petroleum (Producing)
BATriangle, ascending      12/13/201601/19/2017Aerospace/Defense
CBKDead-cat bounce      01/17/201701/17/2017Retail (Special Lines)
CWChannel      12/14/201601/19/2017Machinery
CYHead-and-shoulders top      12/08/201601/13/2017Semiconductor
HIGRectangle top      12/05/201601/17/2017Insurance (Prop/Casualty)
HONTriangle, ascending      12/14/201601/19/2017Aerospace/Defense
NSPChannel      11/10/201601/19/2017Human Resources
IDTITriangle, symmetrical      11/25/201601/17/2017Semiconductor
LNCRectangle top      12/12/201601/19/2017Insurance (Life)
MDCTriangle, symmetrical      12/02/201601/19/2017Homebuilding
NEERising wedge      12/14/201601/19/2017Electric Utility (East)
PETSTriple top      12/21/201601/17/2017Medical Services
PMCHead-and-shoulders top      12/29/201601/17/2017Medical Services
PRUTriangle, descending      12/14/201601/19/2017Insurance (Life)
XLTriangle, symmetrical      11/14/201601/19/2017Insurance (Diversified)
YUMERectangle top      12/09/201601/19/2017Advertising
ITBTriangle, symmetrical      01/03/201701/19/2017Homebuilding
DOGRectangle bottom      12/13/201601/18/2017Short ETFs
DXDRectangle bottom      12/13/201601/18/2017Short ETFs
IXCChannel      12/15/201601/19/2017Investment Co. (Foreign)
XLUTriangle, ascending      11/01/201601/19/2017Electric Utility (Central)
SKFBroadening bottom      12/08/201601/19/2017Short ETFs

 

Weekly screen for chart patterns ending between 01/12/2017 and 01/19/2017. 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.
 
Advanced Energy (AEIS)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 34 out of 613
1/19/17 close: $56.84
1 Month avg volatility: $1.35. Volatility stop (for upward breakout): $53.80 or 5.3% below the close.
Change YTD: 3.82%
Volume: 297,100 shares. 3 month avg: 336,725 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: Channel from 04/29/2016 to 01/19/2017

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Apache Corp. (APA)
Industry: Petroleum (Producing)
Industry RS rank: 14 out of 56
Stock RS rank: 164 out of 613
1/19/17 close: $62.22
1 Month avg volatility: $1.25. Volatility stop (for downward breakout): $65.49 or 5.3% above the close.
Change YTD: -1.97%
Volume: 2,212,300 shares. 3 month avg: 3,285,915 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 01/03/2017 to 01/19/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Boeing Company, The (BA)
Industry: Aerospace/Defense
Industry RS rank: 23 out of 56
Stock RS rank: 129 out of 613
1/19/17 close: $159.00
1 Month avg volatility: $1.85. Volatility stop (for upward breakout): $154.22 or 3.0% below the close.
Change YTD: 2.13%
Volume: 3,132,900 shares. 3 month avg: 3,381,174 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/13/2016 to 01/19/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Christopher and Banks Corp (CBK)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 56
Stock RS rank: 598 out of 613
1/19/17 close: $1.36
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $1.71 or 25.9% above the close.
Change YTD: -41.88%
Volume: 859,200 shares. 3 month avg: 368,711 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 01/17/2017 to 01/17/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Curtiss-Wright (CW)
Industry: Machinery
Industry RS rank: 12 out of 56
Stock RS rank: 198 out of 613
1/19/17 close: $95.80
1 Month avg volatility: $1.66. Volatility stop (for upward breakout): $90.85 or 5.2% below the close.
Change YTD: -2.60%
Volume: 430,300 shares. 3 month avg: 281,475 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 12/14/2016 to 01/19/2017

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Cypress Semiconductor (CY)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 422 out of 613
1/19/17 close: $11.18
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $11.99 or 7.2% above the close.
Change YTD: -2.27%
Volume: 3,884,600 shares. 3 month avg: 5,086,703 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 12/08/2016 to 01/13/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 15 out of 56
Stock RS rank: 212 out of 613
1/19/17 close: $48.24
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $46.63 or 3.4% below the close.
Change YTD: 1.24%
Volume: 3,465,200 shares. 3 month avg: 2,481,234 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 top continuation pattern from 12/05/2016 to 01/17/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Honeywell International Inc (HON)
Industry: Aerospace/Defense
Industry RS rank: 23 out of 56
Stock RS rank: 398 out of 613
1/19/17 close: $117.91
1 Month avg volatility: $1.24. Volatility stop (for upward breakout): $114.82 or 2.6% below the close.
Change YTD: 1.78%
Volume: 2,413,200 shares. 3 month avg: 3,451,811 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/14/2016 to 01/19/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 24 out of 56
Stock RS rank: 536 out of 613
1/19/17 close: $69.45
1 Month avg volatility: $1.68. Volatility stop (for upward breakout): $65.85 or 5.2% below the close.
Change YTD: -2.11%
Volume: 163,100 shares. 3 month avg: 153,674 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 11/10/2016 to 01/19/2017

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Integrated Device Technology (IDTI)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 197 out of 613
1/19/17 close: $24.25
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $22.87 or 5.7% below the close.
Change YTD: 2.93%
Volume: 1,136,200 shares. 3 month avg: 1,924,018 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 11/25/2016 to 01/17/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 20 out of 613
1/19/17 close: $66.69
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $63.32 or 5.1% below the close.
Change YTD: 0.63%
Volume: 1,699,300 shares. 3 month avg: 1,708,803 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 top continuation pattern from 12/12/2016 to 01/19/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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MDC Holdings Inc. (MDC)
Industry: Homebuilding
Industry RS rank: 42 out of 56
Stock RS rank: 408 out of 613
1/19/17 close: $26.00
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $24.87 or 4.4% below the close.
Change YTD: 1.33%
Volume: 172,900 shares. 3 month avg: 381,774 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 12/02/2016 to 01/19/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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NextEra Energy Inc (NEE)
Industry: Electric Utility (East)
Industry RS rank: 56 out of 56
Stock RS rank: 613 out of 613
1/19/17 close: $119.28
1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $122.94 or 3.1% above the close.
Change YTD: -0.15%
Volume: 1,175,500 shares. 3 month avg: 2,364,605 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: Rising wedge reversal pattern from 12/14/2016 to 01/19/2017
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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PetMed Express Inc. (PETS)
Industry: Medical Services
Industry RS rank: 36 out of 56
Stock RS rank: 183 out of 613
1/19/17 close: $22.23
1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $23.87 or 7.4% above the close.
Change YTD: -3.64%
Volume: 267,100 shares. 3 month avg: 183,343 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: Triple top reversal pattern from 12/21/2016 to 01/17/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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PharMerica Corp (PMC)
Industry: Medical Services
Industry RS rank: 36 out of 56
Stock RS rank: 452 out of 613
1/19/17 close: $25.05
1 Month avg volatility: $0.70. Volatility stop (for downward breakout): $27.00 or 7.8% above the close.
Change YTD: -0.40%
Volume: 112,700 shares. 3 month avg: 268,812 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: Head-and-shoulders top reversal pattern from 12/29/2016 to 01/17/2017
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Prudential Financial Inc (PRU)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 41 out of 613
1/19/17 close: $104.76
1 Month avg volatility: $1.76. Volatility stop (for downward breakout): $109.55 or 4.6% above the close.
Change YTD: 0.67%
Volume: 2,078,300 shares. 3 month avg: 2,571,855 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 12/14/2016 to 01/19/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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XL Group (XL)
Industry: Insurance (Diversified)
Industry RS rank: 16 out of 56
Stock RS rank: 165 out of 613
1/19/17 close: $37.33
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $36.22 or 3.0% below the close.
Change YTD: 0.19%
Volume: 1,161,100 shares. 3 month avg: 1,994,068 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/14/2016 to 01/19/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 37 out of 56
Stock RS rank: 344 out of 613
1/19/17 close: $3.54
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $3.20 or 9.6% below the close.
Change YTD: -1.12%
Volume: 21,200 shares. 3 month avg: 62,671 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 Friday.
 
Chart pattern: Rectangle top continuation pattern from 12/09/2016 to 01/19/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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DJ US Home construction index fund (ITB)
Industry: Homebuilding
Industry RS rank: 42 out of 56
Stock RS rank: 464 out of 613
1/19/17 close: $27.63
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $26.84 or 2.8% below the close.
Change YTD: 0.55%
Volume: 2,224,200 shares. 3 month avg: 2,834,668 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 01/03/2017 to 01/19/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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DJIA short 1x ProShares (DOG)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 485 out of 613
1/19/17 close: $19.05
1 Month avg volatility: $0.10. Volatility stop (for downward breakout): $19.30 or 1.3% above the close.
Change YTD: 0.05%
Volume: 564,900 shares. 3 month avg: 876,509 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/18/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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DJIA short 2x ProShares (DXD)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 554 out of 613
1/19/17 close: $14.22
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $14.60 or 2.7% above the close.
Change YTD: 0.28%
Volume: 1,265,300 shares. 3 month avg: 1,272,514 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/18/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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S and P Global Energy Sector Index fund (IXC)
Industry: Investment Co. (Foreign)
Industry RS rank: 34 out of 56
Stock RS rank: 279 out of 613
1/19/17 close: $34.46
1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $33.78 or 2.0% below the close.
Change YTD: -0.98%
Volume: 71,400 shares. 3 month avg: 282,509 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: Channel from 12/15/2016 to 01/19/2017

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SPDR Utilities Select Sector (XLU)
Industry: Electric Utility (Central)
Industry RS rank: 44 out of 56
Stock RS rank: 465 out of 613
1/19/17 close: $48.55
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $47.41 or 2.3% below the close.
Change YTD: -0.04%
Volume: 13,742,500 shares. 3 month avg: 16,642,032 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 11/01/2016 to 01/19/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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UltraShort 2x Financials ProShares (SKF)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 592 out of 613
1/19/17 close: $30.85
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $29.26 or 5.2% below the close.
Change YTD: 0.82%
Volume: 59,600 shares. 3 month avg: 58,858 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: Broadening bottom reversal pattern from 12/08/2016 to 01/19/2017
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Thursday 1/19/17. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 16.92 points. Since 02/05/1971 the index made 611 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 335 occasions.
     Average loss was -0.7% on 276 occasions.
Expect the index to close higher 54.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 120/208 or 57.7% of the time.
     The prediction of the index closing lower has been right 41/80 or 51.2% 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.

The chart shows a head-and-shoulders bottom chart pattern with the left shoulder (LS), head, and right shoulder (RS) marked.

It's difficult on this chart to see if the pattern has confirmed as valid yet. By that, I mean the index has to close above the red neckline (at A) which connects the two armpits.

If it hasn't confirmed, then you're not looking at a head-and-shoulders bottom.

If it does confirm, then look for the index to rise. However, because confirmation is at the close, the opening could throw price anywhere.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,291.56    
 Monthly S1  5,423.61  132.04   
 Weekly S2  5,458.14  34.53   
 Monthly Pivot  5,503.93  45.80   
 Weekly S1  5,506.89  2.96   
 Daily S2  5,527.59  20.70   
 Low  5,534.77  7.18   
 Daily S1  5,541.62  6.85   
 61.8% Down from Intraday High  5,542.87  1.25   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  5,545.38  2.50   
 Weekly Pivot  5,545.58  0.20   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 Open  5,546.94  1.36   Yes! The Open is close to the Weekly Pivot.
 38.2% Down from Intraday High  5,547.88  0.94   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  5,548.80  0.92   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  5,555.65  6.85   
 High  5,555.98  0.33   Yes! The High is close to the Close.
 Daily R1  5,562.83  6.85   
 Daily R2  5,570.01  7.18   
 Weekly R1  5,594.33  24.32   
 Weekly R2  5,633.02  38.68   
 Monthly R1  5,635.98  2.96   
 Monthly R2  5,716.30  80.33   

Wednesday 1/18/17. A Look At Indicators

Picture of the chart pattern indicator

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

The bearish signal shown last week disappeared as it can for up to a week. A strong move down would bring it back.

Maybe the strength (how long a signal lasts) is a function of how high or low the move is. Now, the blue CPI line on the chart is midrange, suggesting the CPI can't make up its mind where it wants to go.

The index has moved horizontally, so it's waiting, gathering strength for the next big move, too.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Friday, 15% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 16%.
The fewest was 14% on 12/09/2016.
And the most was 69% on 02/11/2016.
Shown as a blue line on the above chart...
The 518 stocks in my database are down an average of 11% from their yearly high.
A week ago, the average was 11%.
The peak was 10% on 12/09/2016.
And the bottom was 32% on 02/11/2016.

Both the red a and blue lines have moved horizontally over the past week, also suggesting indecision.

The red line moved up a smidgen, but the blue line held constant. The red lines appears to be the more sensitive of the two.

The two charts, taken together, suggest that the markets are waiting for companies to report earnings. I just have a feeling that those reports will be weak and send the market tumbling.

-- Thomas Bulkowski

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Tuesday 1/17/17. The Week Ahead

My Prediction

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

The chart is of the S&P 500 index on the daily scale.

I show two lines. They are not trendlines.

Rather, they endeavor to show the relationship between the length of the rise compared to the length of the horizontal move. My feeling is that the two should be proportional.

What does that mean? It's hard to describe, but the two lines look almost proportional to me. I suspect another up move is coming.

The thinking here is that after a steep move upward, the index is going to rest for a time. How long is unknown but it's often proportional to the move up.

Long upward runs or steep runs will require more of a rest.

I think that maybe a few more days to say, oh, a week and it'll look like the index is setup for another move, breaking out of the horizontal travel. Let's just hope the move is up.

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 76.42 points.
Tuesday: Down 31.85 points.
Wednesday: Up 98.75 points.
Thursday: Down 63.28 points.
Friday: Down 5.27 points.

For the Week...

The Dow industrials were down 78.07 points or 0.4%.
The Nasdaq composite was up 53.06 points or 1.0%.
The S&P 500 index was down 2.3401 points or 0.1%.

Year to Date...

Dow Industrials
     0.6% down from the high of 19,999.63 on 01/06/2017.
     0.6% up from the low of 19,770.47 on 01/12/2017.
Nasdaq
     0.2% down from the high of 5,584.26 on 01/13/2017.
     3.3% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.3% down from the high of 2,282.10 on 01/06/2017.
     1.3% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 01/13/2017, the CPI had:

10 bearish patterns,
30 bullish patterns,
350 patterns waiting for breakout.
The CPI signal is 75.0%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  19,793  19,839  19,896  19,942  19,998 
Weekly  19,674  19,780  19,877  19,983  20,079 
Monthly  19,460  19,673  19,836  20,049  20,213 
S&P500 (^GSPC): Daily  2,268  2,271  2,275  2,278  2,282 
Weekly  2,244  2,260  2,269  2,285  2,294 
Monthly  2,215  2,245  2,263  2,293  2,312 
Nasdaq (^IXIC): Daily  5,545  5,559  5,572  5,587  5,599 
Weekly  5,464  5,519  5,552  5,607  5,639 
Monthly  5,298  5,436  5,510  5,648  5,722 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.8%   The trend may continue. 
 3 months up 29.9%   The trend may continue. 
 S & P 500 (^GSPC) 1 week down 27.5%   The trend may continue. 
 3 months up 36.9%   The trend may continue. 
 Nasdaq composite (^IXIC) 2 weeks up 33.4%   The trend may continue. 
 3 months up 28.2%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 0 days.

 Found Chart Pattern Name
31Triangle, symmetrical
10Rectangle top
6Channel
6Pipe bottom
5Triangle, ascending
5Head-and-shoulders top
4Rising wedge
3Triangle, descending
3Double Bottom, Adam and Adam
3Flag, high and tight

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. Securities Brokerage1. Securities Brokerage
2. Insurance (Life)2. Insurance (Life)
3. Semiconductor3. Semiconductor
4. Semiconductor Cap Equip.4. Semiconductor Cap Equip.
5. Trucking/Transp. Leasing5. Computers and Peripherals
50. Shoe50. Medical Supplies
51. Electric Utility (West)51. Electric Utility (Central)
52. Furn/Home Furnishings52. Apparel
53. Toiletries/Cosmetics53. Electric Utility (West)
54. Household Products54. Household Products
55. Short ETFs55. Toiletries/Cosmetics
56. Apparel56. Short ETFs
57. Electric Utility (East)57. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/13/17. 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 28 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 4.5%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 3 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 20 bullish chart patterns this week and 2 bearish ones with any remaining (5) 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.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
DDDPipe bottom      12/27/201601/03/2017Electronics
APCBroadening top, right-angled and descending      12/20/201601/12/2017Petroleum (Producing)
CXRectangle bottom      12/19/201601/12/2017Cement and Aggregates
CLRRectangle bottom      12/15/201601/06/2017Petroleum (Producing)
CRHTriangle, ascending      12/02/201601/12/2017Cement and Aggregates
CMIChannel      12/16/201601/11/2017Machinery
^DJUChannel      07/22/201601/12/2017None
EFXChannel      12/07/201601/12/2017Information Services
RETriangle, ascending      12/14/201601/09/2017Insurance (Prop/Casualty)
HIGRectangle top      12/05/201601/12/2017Insurance (Prop/Casualty)
HGGDead-cat bounce      01/10/201701/10/2017Retail (Special Lines)
ICONRectangle top      11/11/201601/12/2017Shoe
INFNTriangle, symmetrical      12/02/201601/12/2017Telecom. Equipment
NSPChannel      11/10/201601/12/2017Human Resources
IBKRPipe bottom      12/27/201601/03/2017Securities Brokerage
LNCRectangle top      12/12/201601/12/2017Insurance (Life)
PAYXTriangle, symmetrical      12/21/201601/11/2017IT Services
PFGRectangle top      12/16/201601/12/2017Insurance (Diversified)
PEGRectangle top      12/16/201601/12/2017Electric Utility (East)
KWRTriangle, descending      12/15/201601/12/2017Chemical (Specialty)
SMGRectangle top      12/13/201601/09/2017Chemical (Basic)
SRETriangle, symmetrical      12/13/201601/12/2017Electric Utility (West)
SSYSPipe bottom      12/27/201601/03/2017Electronics
TXNTriangle, ascending      11/29/201601/12/2017Semiconductor
UTXChannel      11/14/201601/11/2017Diversified Co.
VRSNBroadening wedge, descending      11/10/201601/10/2017Internet
YUMERectangle top      12/09/201601/12/2017Advertising
DOGRectangle bottom      12/13/201601/12/2017Short ETFs
DXDRectangle bottom      12/13/201601/12/2017Short ETFs
IATRectangle top      12/08/201601/12/2017Long ETFs
ILFBroadening bottom      11/22/201601/10/2017Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 01/05/2017 and 01/12/2017. 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.
 
3D Systems (DDD)
Industry: Electronics
Industry RS rank: 7 out of 56
Stock RS rank: 279 out of 613
1/12/17 close: $15.65
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $13.59 or 13.2% below the close.
Change YTD: 17.76%
Volume: 2,714,200 shares. 3 month avg: 2,829,405 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 12/27/2016 to 01/03/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Anadarko Petroleum Corp. (APC)
Industry: Petroleum (Producing)
Industry RS rank: 20 out of 56
Stock RS rank: 84 out of 613
1/12/17 close: $71.49
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $67.98 or 4.9% below the close.
Change YTD: 2.52%
Volume: 3,127,600 shares. 3 month avg: 4,510,651 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 12/20/2016 to 01/12/2017
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.

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Cemex SA de CV (CX)
Industry: Cement and Aggregates
Industry RS rank: 17 out of 56
Stock RS rank: 131 out of 613
1/12/17 close: $8.03
1 Month avg volatility: $0.21. Volatility stop (for downward breakout): $8.48 or 5.6% above the close.
Change YTD: 0.00%
Volume: 10,238,100 shares. 3 month avg: 13,612,386 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: Rectangle bottom continuation pattern from 12/19/2016 to 01/12/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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Continental Resources Inc. (CLR)
Industry: Petroleum (Producing)
Industry RS rank: 20 out of 56
Stock RS rank: 173 out of 613
1/12/17 close: $51.37
1 Month avg volatility: $1.66. Volatility stop (for downward breakout): $55.33 or 7.7% above the close.
Change YTD: -0.33%
Volume: 2,641,100 shares. 3 month avg: 2,855,638 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: Rectangle bottom continuation pattern from 12/15/2016 to 01/06/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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CRH plc (CRH)
Industry: Cement and Aggregates
Industry RS rank: 17 out of 56
Stock RS rank: 146 out of 613
1/12/17 close: $34.65
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $33.76 or 2.6% below the close.
Change YTD: 0.79%
Volume: 533,300 shares. 3 month avg: 1,052,362 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, ascending reversal pattern from 12/02/2016 to 01/12/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Cummins Inc. (CMI)
Industry: Machinery
Industry RS rank: 12 out of 56
Stock RS rank: 155 out of 613
1/12/17 close: $138.56
1 Month avg volatility: $2.37. Volatility stop (for upward breakout): $129.31 or 6.7% below the close.
Change YTD: 1.38%
Volume: 2,600,300 shares. 3 month avg: 1,603,883 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 12/16/2016 to 01/11/2017

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DJ 15 Utilities (^DJU)
Industry: None
Industry RS rank is unavailable.
1/12/17 close: $657.77
1 Month avg volatility: $7.62. Volatility stop (for upward breakout): $638.37 or 3.0% below the close.
Change YTD: -0.28%
Volume: 37,986,000 shares. 3 month avg: 27,267,188 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: Channel from 07/22/2016 to 01/12/2017

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Equifax Inc (EFX)
Industry: Information Services
Industry RS rank: 36 out of 56
Stock RS rank: 512 out of 613
1/12/17 close: $120.86
1 Month avg volatility: $1.42. Volatility stop (for upward breakout): $116.33 or 3.8% below the close.
Change YTD: 2.22%
Volume: 508,600 shares. 3 month avg: 872,135 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: Channel from 12/07/2016 to 01/12/2017

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Everest Re Group Ltd (RE)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 19 out of 56
Stock RS rank: 122 out of 613
1/12/17 close: $219.78
1 Month avg volatility: $2.77. Volatility stop (for upward breakout): $212.42 or 3.4% below the close.
Change YTD: 1.56%
Volume: 268,900 shares. 3 month avg: 308,911 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, ascending reversal pattern from 12/14/2016 to 01/09/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 19 out of 56
Stock RS rank: 226 out of 613
1/12/17 close: $48.23
1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $46.34 or 3.9% below the close.
Change YTD: 1.22%
Volume: 1,882,000 shares. 3 month avg: 2,415,637 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 top continuation pattern from 12/05/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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hhgregg, Inc (HGG)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 25 out of 56
Stock RS rank: 612 out of 613
1/12/17 close: $0.71
1 Month avg volatility: $0.09. Volatility stop (for downward breakout): $0.93 or 31.5% above the close.
Change YTD: -50.35%
Volume: 442,900 shares. 3 month avg: 152,206 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 continuation pattern from 01/10/2017 to 01/10/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Iconix Brand Group Inc. (ICON)
Industry: Shoe
Industry RS rank: 50 out of 56
Stock RS rank: 32 out of 613
1/12/17 close: $10.15
1 Month avg volatility: $0.41. Volatility stop (for upward breakout): $9.08 or 10.5% below the close.
Change YTD: 8.67%
Volume: 1,124,200 shares. 3 month avg: 680,995 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: Rectangle top continuation pattern from 11/11/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Infinera Corp. (INFN)
Industry: Telecom. Equipment
Industry RS rank: 13 out of 56
Stock RS rank: 594 out of 613
1/12/17 close: $8.70
1 Month avg volatility: $0.24. Volatility stop (for upward breakout): $8.11 or 6.8% below the close.
Change YTD: 2.47%
Volume: 1,097,100 shares. 3 month avg: 1,842,880 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 12/02/2016 to 01/12/2017
WARNING: A dead-cat bounce occurred on 07/28/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/26/2017.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 18 out of 56
Stock RS rank: 513 out of 613
1/12/17 close: $70.60
1 Month avg volatility: $1.60. Volatility stop (for upward breakout): $66.90 or 5.2% below the close.
Change YTD: -0.49%
Volume: 84,600 shares. 3 month avg: 153,926 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 11/10/2016 to 01/12/2017

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Interactive Brokers Group Inc (IBKR)
Industry: Securities Brokerage
Industry RS rank: 1 out of 56
Stock RS rank: 286 out of 613
1/12/17 close: $38.68
1 Month avg volatility: $0.78. Volatility stop (for upward breakout): $36.87 or 4.7% below the close.
Change YTD: 5.94%
Volume: 432,900 shares. 3 month avg: 448,874 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 12/27/2016 to 01/03/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 15 out of 613
1/12/17 close: $66.54
1 Month avg volatility: $1.43. Volatility stop (for upward breakout): $62.31 or 6.4% below the close.
Change YTD: 0.41%
Volume: 948,100 shares. 3 month avg: 1,692,028 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 top continuation pattern from 12/12/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Paychex Inc (PAYX)
Industry: IT Services
Industry RS rank: 35 out of 56
Stock RS rank: 376 out of 613
1/12/17 close: $61.34
1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $59.19 or 3.5% below the close.
Change YTD: 0.76%
Volume: 1,070,200 shares. 3 month avg: 2,151,565 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 12/21/2016 to 01/11/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Principal Financial Group Inc (PFG)
Industry: Insurance (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 54 out of 613
1/12/17 close: $58.87
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $56.14 or 4.6% below the close.
Change YTD: 1.75%
Volume: 1,551,500 shares. 3 month avg: 1,642,454 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 top continuation pattern from 12/16/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Public Service Enterprise Group PEG (PEG)
Industry: Electric Utility (East)
Industry RS rank: 56 out of 56
Stock RS rank: 447 out of 613
1/12/17 close: $44.07
1 Month avg volatility: $0.62. Volatility stop (for upward breakout): $42.55 or 3.5% below the close.
Change YTD: 0.43%
Volume: 1,973,800 shares. 3 month avg: 2,744,722 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: Rectangle top continuation pattern from 12/16/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Quaker Chemical (KWR)
Industry: Chemical (Specialty)
Industry RS rank: 16 out of 56
Stock RS rank: 59 out of 613
1/12/17 close: $128.35
1 Month avg volatility: $2.49. Volatility stop (for downward breakout): $134.72 or 5.0% above the close.
Change YTD: 0.32%
Volume: 85,000 shares. 3 month avg: 72,745 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 Monday.
 
Chart pattern: Triangle, descending reversal pattern from 12/15/2016 to 01/12/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Scotts Miracle-Gro Co. (SMG)
Industry: Chemical (Basic)
Industry RS rank: 27 out of 56
Stock RS rank: 90 out of 613
1/12/17 close: $92.94
1 Month avg volatility: $1.40. Volatility stop (for upward breakout): $89.66 or 3.5% below the close.
Change YTD: -2.73%
Volume: 324,200 shares. 3 month avg: 567,342 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 12/13/2016 to 01/09/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Sempra Energy (SRE)
Industry: Electric Utility (West)
Industry RS rank: 49 out of 56
Stock RS rank: 525 out of 613
1/12/17 close: $101.84
1 Month avg volatility: $1.74. Volatility stop (for upward breakout): $97.81 or 4.0% below the close.
Change YTD: 1.19%
Volume: 806,800 shares. 3 month avg: 1,283,788 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 12/13/2016 to 01/12/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Stratasys Ltd (SSYS)
Industry: Electronics
Industry RS rank: 7 out of 56
Stock RS rank: 585 out of 613
1/12/17 close: $18.84
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $16.83 or 10.7% below the close.
Change YTD: 13.91%
Volume: 418,600 shares. 3 month avg: 994,612 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 12/27/2016 to 01/03/2017
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Texas Instruments Inc. (TXN)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 164 out of 613
1/12/17 close: $74.85
1 Month avg volatility: $1.00. Volatility stop (for upward breakout): $72.10 or 3.7% below the close.
Change YTD: 2.58%
Volume: 4,408,200 shares. 3 month avg: 5,203,314 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 11/29/2016 to 01/12/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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United Technologies Corp (UTX)
Industry: Diversified Co.
Industry RS rank: 28 out of 56
Stock RS rank: 306 out of 613
1/12/17 close: $110.82
1 Month avg volatility: $1.19. Volatility stop (for upward breakout): $107.32 or 3.2% below the close.
Change YTD: 1.09%
Volume: 2,644,600 shares. 3 month avg: 3,362,035 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 11/14/2016 to 01/11/2017

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Verisign (VRSN)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 56
Stock RS rank: 445 out of 613
1/12/17 close: $81.00
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $76.92 or 5.0% below the close.
Change YTD: 6.48%
Volume: 556,200 shares. 3 month avg: 845,032 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening wedge, descending reversal pattern from 11/10/2016 to 01/10/2017
Breakout is upward 79% of the time.
Average rise: 33%.
Break-even failure rate: 6%.
Throwbacks occur 53% of the time.
Price hits measure rule target 79% of the time.

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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 38 out of 56
Stock RS rank: 409 out of 613
1/12/17 close: $3.60
1 Month avg volatility: $0.14. Volatility stop (for upward breakout): $3.33 or 7.6% below the close.
Change YTD: 0.56%
Volume: 37,000 shares. 3 month avg: 65,717 shares.
This security may be thinly traded (less than 100k 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: Rectangle top continuation pattern from 12/09/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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DJIA short 1x ProShares (DOG)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 510 out of 613
1/12/17 close: $18.91
1 Month avg volatility: $0.10. Volatility stop (for downward breakout): $19.23 or 1.7% above the close.
Change YTD: -0.68%
Volume: 779,400 shares. 3 month avg: 885,914 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/12/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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DJIA short 2x ProShares (DXD)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 573 out of 613
1/12/17 close: $14.00
1 Month avg volatility: $0.15. Volatility stop (for downward breakout): $14.48 or 3.4% above the close.
Change YTD: -1.27%
Volume: 1,297,500 shares. 3 month avg: 1,298,454 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/12/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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iShares DJ US Regional Banks (IAT)
Industry: Long ETFs
Industry RS rank: 29 out of 56
Stock RS rank: 53 out of 613
1/12/17 close: $45.27
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $43.54 or 3.8% below the close.
Change YTD: -0.24%
Volume: 210,600 shares. 3 month avg: 287,972 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 top continuation pattern from 12/08/2016 to 01/12/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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S and P Latin America 40 Index fund (ILF)
Industry: Investment Co. (Foreign)
Industry RS rank: 32 out of 56
Stock RS rank: 259 out of 613
1/12/17 close: $29.33
1 Month avg volatility: $0.40. Volatility stop (for upward breakout): $28.41 or 3.1% below the close.
Change YTD: 6.35%
Volume: 1,146,600 shares. 3 month avg: 1,974,643 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening bottom reversal pattern from 11/22/2016 to 01/10/2017
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Thursday 1/12/17. Intraday Market Direction: Nasdaq

The index climbed by 0.2% or 11.83 points. Since 02/05/1971 the index made 639 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 370 occasions.
     Average loss was -0.8% on 269 occasions.
Expect the index to close higher 57.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 120/207 or 58.0% of the time.
     The prediction of the index closing lower has been right 41/80 or 51.2% 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.

The chart shows two lines. Let's talk about the red one first.

I started drawing the line (A) from the lowest price on the chart, connecting the minor lows. Notice that recent price action has pierced the line, near B.

Now, it looks as if the index is pulling back to the trendline. If you look closely, you'll see that the index dropped to form a double bottom (C), completing the pullback during the drop from B to C.

The index has recovered and formed a valid double bottom, confirmed when the index closed above the peak between the two bottoms.

Now, the index is hitting overhead resistance setup by the prior two peaks. I show that resistance with a magenta line. I guess it's probably cyan in color.

But it looks like a triple top. That will only become a valid pattern when the index closes below the lowest valley between the three peaks.

That hasn't happened yet, of course.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,149.23    
 Monthly S1  5,356.44  207.21   
 Weekly S2  5,360.86  4.42   
 Monthly Pivot  5,446.48  85.62   
 Weekly S1  5,462.25  15.77   
 Weekly Pivot  5,499.39  37.13   
 Daily S2  5,510.54  11.15   
 Low  5,524.03  13.49   
 Daily S1  5,537.09  13.06   
 61.8% Down from Intraday High  5,539.33  2.24   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  5,544.06  4.73   
 38.2% Down from Intraday High  5,548.78  4.73   
 Daily Pivot  5,550.59  1.81   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Open  5,550.72  0.13   Yes! The Open is close to the Daily Pivot.
 Close  5,563.65  12.93   
 High  5,564.08  0.43   Yes! The High is close to the Close.
 Daily R1  5,577.14  13.06   
 Daily R2  5,590.64  13.49   
 Weekly R1  5,600.78  10.15   
 Weekly R2  5,637.92  37.13   
 Monthly R1  5,653.69  15.77   
 Monthly R2  5,743.73  90.04   

Wednesday 1/11/17. A Look At Indicators

Picture of the chart pattern indicator

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

The chart shows weakness, denoted by the red vertical bar on the far right. It's a bearish signal.

Don't panic. Okay, panic for a bit, but then come back to earth.

Signals can appear or disappear for a week, so we won't know if the indicator is serious until next week.

I think it's possible that the index will move sideways to down for a while, making the move proportional to the fast, November 2016 climb. And with earnings season starting, look out.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Monday, 16% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 19%.
The fewest was 14% on 12/09/2016.
And the most was 69% on 02/11/2016.
Shown as a blue line on the above chart...
The 518 stocks in my database are down an average of 12% from their yearly high.
A week ago, the average was 12%.
The peak was 10% on 12/09/2016.
And the bottom was 32% on 02/11/2016.

The past week showed that the market regained strength. The red line moved up three percentage points, from 19% bearish to 16%. You can see the quick move higher on the chart.

The blue like is more sedate. Over the past week, it's been flat.

The CPI chart shows a bearish signal. The red line in this chart is bullish. Which chart do I believe?

I suppose both charts can be right, depending on how far you look into the future. I'm fond of the CPI chart. The red and blue lines, with those, I'm not sure what to make of them yet.

I still think the market is weak and I've been selling a few positions to capture profits in the new year.

-- Thomas Bulkowski

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Tuesday 1/10/17. New Book Released: Head's Law

I released my first novel (fiction): Head's Law!

I show a copy of that new book on the lower right. Links below the image will take you to Amazon where you can buy either the kindle e-book ($3.99) or the paperback ($9.99).

I decided to self publish this book not to make money (I'm making $1.40 on the e-book, and ~$2.00 on the paperback), but as a birthday present for my mom. She in her mid 80s, and I thought it would be a nice gift. It's dedicated to her, too.

Here's what the back cover says:

For ten years, no gear has survived birth. No one knows why. Mayor Head doesn't consider that a problem. He makes money when others die. But when a freak event jolts baby Freeman to life, Freeman begins changing the world in unexpected ways.

Will Mayor Head let Freeman and his friends live to create a better world, or will Head's Law kill them as it has so many others?

As uplifting as Bach's Jonathan Livingston Seagull and as rebellious as Ayn Rand's Anthem, Head's Law is as unique as it is thrilling, a science fiction masterpiece with non-stop action.

This debut novel from one of America's most talented writers, will not only capture your heart, but keep it pounding to the very end.

Picture of the head's law.
Kindle
Paperback

When you self publish, you'll sell about 200 copies, mostly to friends and family. That's about break even for me (I hired a friend to help with publication). Harry Potter author J.K. Rowling sold just 1,200 copies of her post-potter book (I don't recall the title, but it received good reviews) when she published it under a pen name. That is, until someone figured out she wrote it. Then sales ballooned.

So please take a look by clicking on one of the associated links. There's a nook version coming but paperwork is hold up publication.

Thanks! -- Tom

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Tuesday 1/10/17. Intraday Market Direction: Dow

The index dropped by -0.4% or -76.42 points. Since 10/01/1928 the index made 885 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 449 occasions.
     Average loss was -0.6% on 436 occasions.
Expect the index to close higher 50.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 130/216 or 60.2% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

I drew the red trendline connecting the bottom of the index. This trendline follows the 1-2-3 trend change method outlined by Victor Sperandeo.

You start from the lowest price on the chart and draw a line to the highest peak so that the line doesn't cross any prices until after the peak. The lowest low on the chart is where the red line begins and the peak is at the Head. Draw a line to connect those two points (thin blue line) and swing the line downward from the Head (green arrow) until the line does not cross price until after the peak.

Anyway, it shows that the index has dropped below the trendline. That, of course, does not mean a trend change from up to down.

I also show a head-and-shoulders top chart pattern. It confirms as a valid pattern when the index closes below the neckline. You can use the red line as the neckline in this example.

The above probabilities suggest a higher close on Tuesday but this chart looks weak to me. The index might open lower but then rebound to close higher. My guess is it'll go down and stay down for the count.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  18,817.61    
 Monthly S1  19,352.50  534.88   
 Weekly S2  19,663.95  311.45   
 Monthly Pivot  19,676.06  12.12   
 Weekly S1  19,775.66  99.60   
 Daily S2  19,849.78  74.12   
 Daily S1  19,868.58  18.80   
 Close  19,887.38  18.80   
 Low  19,887.38  0.00   Yes! The Low is close to the Close.
 Weekly Pivot  19,887.65  0.27   Yes! The Weekly Pivot is close to the Low.
 Daily Pivot  19,906.18  18.53   
 61.8% Down from Intraday High  19,908.92  2.74   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  19,915.58  6.66   
 38.2% Down from Intraday High  19,922.23  6.65   
 Daily R1  19,924.98  2.75   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  19,931.41  6.43   
 High  19,943.78  12.37   
 Daily R2  19,962.58  18.80   
 Weekly R1  19,999.36  36.78   
 Weekly R2  20,111.35  111.98   
 Monthly R1  20,210.95  99.60   
 Monthly R2  20,534.51  323.57   

Monday 1/9/17. Market Monday: The Week Ahead

My Prediction

Picture of the nasdaq on the daily scale.

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

The index made it to a new high (A), so I switched my target ("Tom's Targets," top of page) to up and adjusted the numbers.

My feeling is that the index will coast higher, round over, and drop back to about where it is now.

How long it'll take to do that is unknown, but it could make the trip by mid month. My guess is that it'll take a big longer.

Protecting the move on the upside is a trendline, B. I drew the one on the bottom first, then decided to add the top one.

These two act as an upward sloping channel. I'm thinking that the index will remain longer in the channel, but eventually break out of it going sideways.

It looks as if we have another day or two of "up" move before it touches the top of the channel and drops.

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A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Up 119.16 points.
Wednesday: Up 60.4 points.
Thursday: Down 42.87 points.
Friday: Up 64.51 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 201.2 points or 1.0%.
The Nasdaq composite was up 137.94 points or 2.6%.
The S&P 500 index was up 38.1499 points or 1.7%.

Year to Date...

Dow Industrials
     0.2% down from the high of 19,999.63 on 01/06/2017.
     0.9% up from the low of 19,775.93 on 01/03/2017.
Nasdaq
     0.3% down from the high of 5,536.52 on 01/06/2017.
     2.3% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.2% down from the high of 2,282.10 on 01/06/2017.
     1.4% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/06/2017, the CPI had:

5 bearish patterns,
11 bullish patterns,
161 patterns waiting for breakout.
The CPI signal is 68.8%, 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  19,767  19,865  19,933  20,031  20,098 
Weekly  19,689  19,827  19,913  20,050  20,137 
Monthly  18,843  19,403  19,702  20,262  20,560 
S&P500 (^GSPC): Daily  2,256  2,267  2,274  2,285  2,292 
Weekly  2,231  2,254  2,268  2,291  2,305 
Monthly  2,155  2,216  2,249  2,310  2,343 
Nasdaq (^IXIC): Daily  5,460  5,490  5,513  5,544  5,567 
Weekly  5,347  5,434  5,485  5,572  5,624 
Monthly  5,135  5,328  5,432  5,625  5,730 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 42.8%   Expect a random direction. 
 3 months up 29.9%   The trend may continue. 
 S & P 500 (^GSPC) 1 week up 42.3%   Expect a random direction. 
 3 months up 36.9%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week up 44.9%   Expect a random direction. 
 3 months up 28.2%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 7 days.

 Found Chart Pattern Name
28Triangle, symmetrical
11Pipe top
8Double Top, Adam and Adam
8Flag, high and tight
6Head-and-shoulders top
4Rectangle top
4Rising wedge
4Triangle, ascending
4Triple top
3Pipe 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.

Note: Something went wrong with my computer (probably because of taking off Monday) and it shows a duplicate of the prior week in the following table.

This WeekLast Week
1. Securities Brokerage1. Securities Brokerage
2. Insurance (Life)2. Insurance (Life)
3. Semiconductor3. Semiconductor
4. Semiconductor Cap Equip.4. Semiconductor Cap Equip.
5. Computers and Peripherals5. Computers and Peripherals
50. Medical Supplies50. Medical Supplies
51. Electric Utility (Central)51. Electric Utility (Central)
52. Apparel52. Apparel
53. Electric Utility (West)53. Electric Utility (West)
54. Household Products54. Household Products
55. Toiletries/Cosmetics55. Toiletries/Cosmetics
56. Short ETFs56. Short ETFs
57. Electric Utility (East)57. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/6/17. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 3.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

Excluding ETFs, there were 13 bullish chart patterns this week and 3 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AXETriangle, ascending      12/02/201601/05/2017Electronics
BSETTriangle, symmetrical      12/09/201601/05/2017Furn/Home Furnishings
CTSHTriangle, symmetrical      12/07/201601/03/2017IT Services
CVGTriangle, descending      11/29/201612/30/2016Computer Software and Svcs
ELTriangle, symmetrical      12/01/201601/03/2017Toiletries/Cosmetics
FFGFalling wedge      12/12/201601/03/2017Insurance (Life)
FLIRTriangle, symmetrical      12/09/201601/05/2017Aerospace/Defense
GMEFalling wedge      12/13/201601/05/2017Retail (Special Lines)
HNIRising wedge      11/28/201612/30/2016Furn/Home Furnishings
ICONRectangle top      11/11/201601/05/2017Shoe
KTriangle, symmetrical      11/22/201601/04/2017Food Processing
KELYATriangle, symmetrical      12/19/201601/05/2017Human Resources
KSSDead-cat bounce      01/05/201701/05/2017Retail Store
MSRectangle top      12/13/201601/05/2017Securities Brokerage
SYMCTriangle, symmetrical      11/21/201601/05/2017Computer Software and Svcs
TRVDouble Top, Adam and Adam      12/21/201601/03/2017Insurance (Prop/Casualty)
YUMERectangle top      12/09/201601/05/2017Advertising
DOGRectangle bottom      12/13/201601/05/2017Short ETFs
DXDRectangle bottom      12/13/201601/05/2017Short ETFs
FXIPipe bottom      12/19/201612/27/2016Investment Co. (Foreign)
IATRectangle top      12/08/201601/05/2017Long ETFs

 

Weekly screen for chart patterns ending between 12/29/2016 and 01/05/2017. 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.
 
Anixter International Inc (AXE)
Industry: Electronics
Industry RS rank: 7 out of 56
Stock RS rank: 31 out of 613
1/5/17 close: $82.20
1 Month avg volatility: $2.01. Volatility stop (for upward breakout): $77.33 or 5.9% below the close.
Change YTD: 1.42%
Volume: 68,000 shares. 3 month avg: 159,032 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, ascending reversal pattern from 12/02/2016 to 01/05/2017
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Bassett Furniture Industries Inc (BSET)
Industry: Furn/Home Furnishings
Industry RS rank: 37 out of 56
Stock RS rank: 164 out of 613
1/5/17 close: $30.25
1 Month avg volatility: $0.96. Volatility stop (for upward breakout): $28.08 or 7.2% below the close.
Change YTD: -0.49%
Volume: 16,800 shares. 3 month avg: 29,972 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: Triangle, symmetrical continuation pattern from 12/09/2016 to 01/05/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Cognizant Technology Solutions Corp (CTSH)
Industry: IT Services
Industry RS rank: 35 out of 56
Stock RS rank: 416 out of 613
1/5/17 close: $57.09
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $55.12 or 3.5% below the close.
Change YTD: 1.89%
Volume: 5,152,400 shares. 3 month avg: 7,173,946 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 12/07/2016 to 01/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Convergys Corporation (CVG)
Industry: Computer Software and Svcs
Industry RS rank: 23 out of 56
Stock RS rank: 398 out of 613
1/5/17 close: $25.58
1 Month avg volatility: $0.57. Volatility stop (for downward breakout): $26.76 or 4.6% above the close.
Change YTD: 4.15%
Volume: 642,900 shares. 3 month avg: 672,269 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 11/29/2016 to 12/30/2016
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.

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Estee Lauder, Cos (EL)
Industry: Toiletries/Cosmetics
Industry RS rank: 53 out of 56
Stock RS rank: 572 out of 613
1/5/17 close: $78.60
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $75.29 or 4.2% below the close.
Change YTD: 2.76%
Volume: 1,505,000 shares. 3 month avg: 1,935,014 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 12/01/2016 to 01/03/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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FBL Financial Group (FFG)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 107 out of 613
1/5/17 close: $76.35
1 Month avg volatility: $1.62. Volatility stop (for upward breakout): $72.96 or 4.4% below the close.
Change YTD: -2.30%
Volume: 12,500 shares. 3 month avg: 28,165 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: Falling wedge from 12/12/2016 to 01/03/2017
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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Flir Systems Inc (FLIR)
Industry: Aerospace/Defense
Industry RS rank: 24 out of 56
Stock RS rank: 218 out of 613
1/5/17 close: $36.41
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $35.15 or 3.5% below the close.
Change YTD: 0.61%
Volume: 807,600 shares. 3 month avg: 728,797 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 12/09/2016 to 01/05/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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GameStop Corp (GME)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 20 out of 56
Stock RS rank: 491 out of 613
1/5/17 close: $25.00
1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $23.61 or 5.6% below the close.
Change YTD: -1.03%
Volume: 3,028,100 shares. 3 month avg: 2,631,375 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: Falling wedge from 12/13/2016 to 01/05/2017
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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HNI (HON Industries) (HNI)
Industry: Furn/Home Furnishings
Industry RS rank: 37 out of 56
Stock RS rank: 249 out of 613
1/5/17 close: $53.10
1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $58.18 or 9.6% above the close.
Change YTD: -5.04%
Volume: 278,300 shares. 3 month avg: 223,302 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: Rising wedge reversal pattern from 11/28/2016 to 12/30/2016
WARNING: A dead-cat bounce occurred on 09/20/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 03/21/2017.
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Iconix Brand Group Inc. (ICON)
Industry: Shoe
Industry RS rank: 40 out of 56
Stock RS rank: 52 out of 613
1/5/17 close: $9.47
1 Month avg volatility: $0.40. Volatility stop (for upward breakout): $8.48 or 10.5% below the close.
Change YTD: 1.39%
Volume: 605,500 shares. 3 month avg: 653,997 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: Rectangle top continuation pattern from 11/11/2016 to 01/05/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Kellogg Co (K)
Industry: Food Processing
Industry RS rank: 42 out of 56
Stock RS rank: 553 out of 613
1/5/17 close: $73.11
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $70.50 or 3.6% below the close.
Change YTD: -0.81%
Volume: 1,316,900 shares. 3 month avg: 1,616,532 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/22/2016 to 01/04/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Kelly Services A (KELYA)
Industry: Human Resources
Industry RS rank: 16 out of 56
Stock RS rank: 193 out of 613
1/5/17 close: $22.78
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $21.69 or 4.8% below the close.
Change YTD: -0.61%
Volume: 44,500 shares. 3 month avg: 107,420 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 12/19/2016 to 01/05/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Kohls Corporation (KSS)
Industry: Retail Store
Industry RS rank: 43 out of 56
Stock RS rank: 267 out of 613
1/5/17 close: $42.01
1 Month avg volatility: $2.15. Volatility stop (for downward breakout): $56.18 or 33.7% above the close.
Change YTD: -14.93%
Volume: 26,811,900 shares. 3 month avg: 4,309,958 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 01/05/2017 to 01/05/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Morgan Stanley (MS)
Industry: Securities Brokerage
Industry RS rank: 1 out of 56
Stock RS rank: 18 out of 613
1/5/17 close: $43.22
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $40.53 or 6.2% below the close.
Change YTD: 2.30%
Volume: 9,784,100 shares. 3 month avg: 12,266,754 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 12/13/2016 to 01/05/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Symantec Corp (SYMC)
Industry: Computer Software and Svcs
Industry RS rank: 23 out of 56
Stock RS rank: 179 out of 613
1/5/17 close: $24.65
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $23.28 or 5.6% below the close.
Change YTD: 3.18%
Volume: 7,463,200 shares. 3 month avg: 8,351,063 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 11/21/2016 to 01/05/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Travelers Companies Inc, The (TRV)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 22 out of 56
Stock RS rank: 427 out of 613
1/5/17 close: $118.33
1 Month avg volatility: $1.30. Volatility stop (for downward breakout): $122.11 or 3.2% above the close.
Change YTD: -3.34%
Volume: 2,688,000 shares. 3 month avg: 1,894,072 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: Double Top, Adam and Adam reversal pattern from 12/21/2016 to 01/03/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 39 out of 56
Stock RS rank: 464 out of 613
1/5/17 close: $3.56
1 Month avg volatility: $0.14. Volatility stop (for upward breakout): $3.26 or 8.4% below the close.
Change YTD: -0.56%
Volume: 31,500 shares. 3 month avg: 67,508 shares.
This security may be thinly traded (less than 100k 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: Rectangle top continuation pattern from 12/09/2016 to 01/05/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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DJIA short 1x ProShares (DOG)
Industry: Short ETFs
Industry RS rank: 56 out of 56
Stock RS rank: 556 out of 613
1/5/17 close: $18.91
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $19.21 or 1.6% above the close.
Change YTD: -0.68%
Volume: 495,200 shares. 3 month avg: 877,709 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/05/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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DJIA short 2x ProShares (DXD)
Industry: Short ETFs
Industry RS rank: 56 out of 56
Stock RS rank: 598 out of 613
1/5/17 close: $13.99
1 Month avg volatility: $0.16. Volatility stop (for downward breakout): $14.46 or 3.4% above the close.
Change YTD: -1.34%
Volume: 1,078,000 shares. 3 month avg: 1,320,897 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/05/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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FTSE/Xinhua China 25 index fund (FXI)
Industry: Investment Co. (Foreign)
Industry RS rank: 27 out of 56
Stock RS rank: 322 out of 613
1/5/17 close: $36.02
1 Month avg volatility: $0.30. Volatility stop (for upward breakout): $35.28 or 2.1% below the close.
Change YTD: 3.77%
Volume: 23,946,100 shares. 3 month avg: 19,269,394 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 12/19/2016 to 12/27/2016
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.

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iShares DJ US Regional Banks (IAT)
Industry: Long ETFs
Industry RS rank: 29 out of 56
Stock RS rank: 57 out of 613
1/5/17 close: $45.29
1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $43.73 or 3.5% below the close.
Change YTD: -0.20%
Volume: 394,800 shares. 3 month avg: 266,532 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 top continuation pattern from 12/08/2016 to 01/05/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Thursday 1/5/17. Intraday Market Direction: Nasdaq

The index climbed by 0.9% or 47.92 points. Since 02/05/1971 the index made 278 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 185 occasions.
     Average loss was -0.9% on 93 occasions.
Expect the index to close higher 66.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 119/206 or 57.8% of the time.
     The prediction of the index closing lower has been right 41/80 or 51.2% 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.

I drew two horizontal red lines. They are thin ones, because intraday support and resistance is weaker than on the daily charts. Regardless, the index might turn if it touches those lines.

Also, the blue trendline (A) is curved. This could signal a horizontal move. Clearly, it's a slackening of upward momentum. Or it could mean the upward trend is over. In that case, it's a pullback. Normally, I associate pullbacks with the breakout from a chart pattern. I saw that on my daily charts today, hence the warning that a resumption of the downward move might be coming.

The above probabilities suggest an upward move, though, a higher close on Thursday.

$ $ $

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

-- Thomas Bulkowski

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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,135.03    
 Monthly S1  5,306.02  170.98   
 Weekly S2  5,313.27  7.26   
 Weekly S1  5,395.14  81.86   
 Monthly Pivot  5,409.19  14.06   
 Daily S2  5,424.42  15.23   
 Low  5,440.24  15.82   
 Open  5,440.91  0.67   Yes! The Open is close to the Low.
 Daily S1  5,450.71  9.80   
 Weekly Pivot  5,453.75  3.04   Yes! The Weekly Pivot is close to the Daily S1.
 61.8% Down from Intraday High  5,456.33  2.57   Yes! The 61.8% Down from Intraday High is close to the Weekly Pivot.
 50% Down from Intraday High  5,461.29  4.97   
 38.2% Down from Intraday High  5,466.26  4.97   
 Daily Pivot  5,466.53  0.27   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  5,477.00  10.47   
 High  5,482.35  5.35   
 Daily R1  5,492.82  10.47   
 Daily R2  5,508.64  15.82   
 Weekly R1  5,535.62  26.98   
 Monthly R1  5,580.18  44.56   
 Weekly R2  5,594.23  14.06   
 Monthly R2  5,683.35  89.12   

Wednesday 1/4/17. A Look At Indicators

Picture of the chart pattern indicator

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

The chart pattern indicator signaled a bearish turn almost two trading weeks ago as the right red bar shows.

Notice, however, that the indicator has soared in the last three trading days. Hmm.

It could mean that as brief as this retrace has been, it will end soon. I'm not convinced that will happen. The move up from the November low was too far, too fast for such a brief retrace.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Friday, 19% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 18%.
The fewest was 14% on 12/09/2016.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 519 stocks in my database are down an average of 12% from their yearly high.
A week ago, the average was 12%.
The peak was 10% on 12/09/2016.
And the bottom was 32% on 02/11/2016.

I drew two bright green lines on the chart. Perhaps you should wear shades while viewing.

Anyway, they highlight the trend of the two lines.

The downward trend is pronounced on the red line. That fell over the past week, but the blue line held steady. To me, they both suggest weakness in the index.

$ $ $

I released a new version of Patternz: 5.15. This version allows a moving average and the chart pattern indictor has options to make the chart clearer.

What else did you want in the program? Let me know by emailing me:

$ $ $

The time of my grandfather clock was slowing down an unusual amount so over the weekend I lubricated the mechanism. Now it won't chime. Yes, the chime switch is on.

I used the same lube as I use on my bike chain. It's a wax solution, and I thought it would work better (won't collect dirt). But it turns out, the wax hardens (no surprise there) and freezes the flywheel controlling the chiming. Oops.

By jiggling the weight up and down, I was able to get it to work again without tearing it apart. In the past, I've used a 3-in-1 oil spray lubricant. That works, but only for a time.

-- Thomas Bulkowski

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Tuesday 1/3/17. The Year Behind and Ahead

Picture of the year's prediction 2016.

This looks like it's a complicated picture, but it's not. Let's go through it.

In my year ago blog post, I predicted the Dow industrials would close the year at 20,265. We fell just short of that, at 19,762.

That's the first time that the prediction has been very very close.

This chart shows the Dow over the year and the prediction I made a year ago.

The prediction said we'd have a weak January followed by a move up going into April. The market would be week until mid July when it would gather strength to finish the year strongly.

Of course, the year started off weak and it started rising a month after the prediction (mid February instead of mid January).

Price bottomed in June, about two weeks ahead of schedule. It recovered but coasted lower until the straight-line run began in November.

Annual Performance
Dow transports20.4%
Dow utilities14.2%
Dow industrials13.4%
S&P 5009.5%
Nasdaq7.5%

For the historical record, here's how the indices performed this year.

As the table on the right shows, the big winner was the Dow transports with a gain of 20.4% for the year.

Behind that, the utilities posted a good gain, 14.2%. None of these results include dividends, so the utility index actually did better than that shown in the table.

The Dow industrials were close behind with a gain of 13.4%.

The Nasdaq ended the year in last place with a gain of 7.5%.

Picture of the year's prediction 2017.

The above chart is what my software is predicting for 2017. The market should be strong until mid February where we peak (the first magenta line).

It'll ease lower going into April and then shoot upward going into July.

The Dow will form a double top, peaking for the year in October before heading lower, closing the year at 21,265.

This picture doesn't look bad but you should see what happens in 2018. After peak in 2017, the index will continue lower.

I'll update the 10 year prediction here shortly, but you can visit the monthly forecast out to 2021 now. I made that in 2011.

Visit the link to learn how I made these predictions. And remember, they are rarely accurate. But if you need something to power your nightmares, the charts at the link will help.

-- Thomas Bulkowski

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