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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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Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 08/13/2018
25,188 -125.44 -0.5%
11,021 -69.80 -0.6%
724 0.96 0.1%
7,820 -19.40 -0.2%
2,822 -11.65 -0.4%
YTD
1.9%
3.8%
0.2%
13.3%
5.5%
Tom's Targets    Overview: 07/31/2018
25,900 or 24,800 by 08/15/2018
11,300 or 10,500 by 08/15/2018
750 or 700 by 08/15/2018
8,250 or 7,600 by 09/01/2018
2,900 or 2,775 by 09/01/2018

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

January 2018 Headlines


Archives


Wednesday 1/31/18. 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 indicator turned bearish yesterday and it appeared on Tom's Targets with medium strength. Today's drop only added to the carnage.

The chart shows the signal as the vertical red bar on the far right of the chart.

It's possible that this signal will disappear if the market makes a good move higher in the next week.

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 16%.
The fewest was 15% on 02/21/2017.
And the most was 30% on 08/21/2017.
Shown as a blue line on the above chart...
The 516 stocks in my database are down an average of 10% from their yearly high.
A week ago, the average was 9%.
The peak was 9% on 01/22/2018.
And the bottom was 16% on 08/21/2017.

Both lines turned down over the last week, probably being pulled lower by performance of today (Tuesday) and yesterday.

Thus, both charts are in agreement. Does this mean sustained weakness in the markets? Hard to tell. Clearly it's not a positive development, but guys like me will wait for the indices to firm up and then buy the dip. That will help the markets recover and any drop to moderate.

I'm still bullish, but I didn't expect this kind of weakness. Of course, no one ever expects the unexpected, as the actors on Monty Python used to say.

-- Thomas Bulkowski

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Tuesday 1/30/18. Intraday Market Direction: Dow

The index dropped by -0.7% or -177.23 points. Since 10/01/1928 the index made 567 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 277 occasions.
     Average loss was -0.9% on 290 occasions.
Expect the index to close lower 51.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/260 or 59.2% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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 Dow industrials on the 5 minute scale.

$ $ $

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

Let's talk about the 1-2-3 trend change method. This method was created by Victor Sperandeo and I tested it. Sigh. I can't find the link for the test. Maybe it's in one of my books.

Anyway, the first test is a pierce of a trendline. That happens near 3 on the chart. Right at the start, I'm violating his method for drawing a trendline. You're supposed to start with the lowest low on the chart and draw it such that price crosses the trendline only AFTER the highest peak (after the lowest low) on the chart. If I drew that, there'd be nothing to blog about. So pretend the trendline begins where it's supposed to, at the lowest low.

Following that, price attempts to make a new high. In this case, the attempt is at 2, a feeble one to reach the high at 1. I'm not even sure that it qualifies, though.

Finally, price must close below a recent low. The low is at 3 and price closed below it today, at the close.

The theory with the method is that price has changed trend now, and we'll see it drop in the coming days.

Stay tuned to find out if it works this time. I have my doubts.

If we consider that this 10-day chart really starts last Wednesday, the day the trendline starts, then we can imagine a drop proportional to the four trading days. Thus, the index might drop, but it probably won't drop far, at least not on this scale.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,013.25    
 Monthly S1  25,226.36  1,213.12   
 Weekly S2  25,701.55  475.19   
 Monthly Pivot  25,921.54  219.98   
 Weekly S1  26,070.52  148.98   
 Daily S2  26,321.01  250.50   
 Weekly Pivot  26,343.61  22.60   
 Daily S1  26,380.25  36.63   
 Low  26,435.34  55.09   
 Close  26,439.48  4.14   Yes! The Close is close to the Low.
 Daily Pivot  26,494.57  55.09   
 61.8% Down from Intraday High  26,501.64  7.07   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  26,522.12  20.48   
 38.2% Down from Intraday High  26,542.60  20.48   
 Daily R1  26,553.81  11.21   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  26,584.28  30.47   
 High  26,608.90  24.62   
 Daily R2  26,668.13  59.23   
 Weekly R1  26,712.58  44.44   
 Weekly R2  26,985.67  273.10   
 Monthly R1  27,134.65  148.98   
 Monthly R2  27,829.83  695.17   

Monday 1/29/18. Market Monday: The Week Ahead

My Prediction

Picture of the S and P on the daily scale.

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

This chart appears similar to the Nasdaq a week ago.

Both charts are rising at a fever pitch. I show the rising trend with the green arrows on this chart. Note how steep the arrows are.

Of course, such climbs can and do last much longer than people like me expect, so I'm not calling for a bear market to begin. Nor am I expecting a big downward break.

If it happens, I'll help prop up the market by spending my remaining cash on stocks or ETFs.

My feeling is that the tax cut will boost the bottom lines of most companies, powering their stocks higher as well.

I'm hoping that this year will beat the performance of last year and I've repositioned my portfolio to take advantage of that belief.

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Up 142.88 points.
Tuesday: Down 3.79 points.
Wednesday: Up 41.31 points.
Thursday: Up 140.67 points.
Friday: Up 223.92 points.

For the Week...

The Dow industrials were up 544.99 points or 2.1%.
The Nasdaq composite was up 169.39 points or 2.3%.
The S&P 500 index was up 62.57 points or 2.2%.

Year to Date...

Dow Industrials
     0.0% down from the high of 26,616.71 on 01/26/2018.
     7.6% up from the low of 24,741.70 on 01/02/2018.
Nasdaq
     0.0% down from the high of 7,505.77 on 01/26/2018.
     8.4% up from the low of 6,924.08 on 01/02/2018.
S&P 500
     0.0% down from the high of 2,872.87 on 01/26/2018.
     7.1% up from the low of 2,682.36 on 01/02/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/26/2018, the CPI had:

7 bearish patterns,
50 bullish patterns,
216 patterns waiting for breakout.
The CPI signal is 87.7%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,362  26,489  26,553  26,680  26,744 
Weekly  25,761  26,189  26,403  26,831  27,045 
Monthly  24,072  25,345  25,981  27,253  27,889 
S&P500 (^GSPC): Daily  2,837  2,855  2,864  2,882  2,891 
Weekly  2,787  2,830  2,851  2,894  2,916 
Monthly  2,607  2,740  2,806  2,939  3,006 
Nasdaq (^IXIC): Daily  7,406  7,456  7,481  7,531  7,555 
Weekly  7,275  7,390  7,448  7,563  7,621 
Monthly  6,703  7,104  7,305  7,707  7,907 
  • 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) 4 weeks up 19.0%   Expect a reversal soon. 
 10 months up 0.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 4 weeks up 18.4%   Expect a reversal soon. 
 10 months up 0.0%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 4 weeks up 21.3%   Expect a reversal soon. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
15Triangle, symmetrical
9Triangle, ascending
9Double Top, Adam and Adam
6Broadening top
5Rectangle top
5Pipe bottom
4Head-and-shoulders top
3Double Top, Eve and Adam
3Double Top, Eve and Eve
3Triple top

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

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

 

 

 

 

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

This WeekLast Week
1. Trucking/Transp. Leasing1. Trucking/Transp. Leasing
2. Human Resources2. Retail Building Supply
3. Retail Building Supply3. Apparel
4. Apparel4. Homebuilding
5. Semiconductor5. Retail (Special Lines)
50. Electric Utility (East)50. Household Products
51. Natural Gas (Distributor)51. Drug
52. Advertising52. Electric Utility (East)
53. Healthcare Information53. Chemical (Specialty)
54. Household Products54. Electric Utility (Central)
55. Chemical (Specialty)55. Advertising
56. Electric Utility (Central)56. Furn/Home Furnishings
57. Furn/Home Furnishings57. Healthcare Information
58. Electric Utility (West)58. Electric Utility (West)
59. Short ETFs59. Short ETFs

-- Thomas Bulkowski

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Friday 1/26/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 619 stocks searched, or 3.4%. 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 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
AVPTriangle, ascending      11/01/201701/25/2018Toiletries/Cosmetics
BCPCTriangle, symmetrical      12/21/201701/24/2018Chemical (Specialty)
BERYBroadening top      11/16/201701/22/2018Packaging and Container
CONNTriangle, ascending      12/07/201701/25/2018Retail (Special Lines)
CWPennant      01/16/201801/25/2018Machinery
EGNHead-and-shoulders complex top      12/26/201701/23/2018Natural Gas (Diversified)
ERATriangle, ascending      10/03/201701/25/2018Air Transport
MLMBroadening top      01/03/201801/22/2018Cement and Aggregates
MSScallop, ascending      12/13/201701/19/2018Securities Brokerage
NWLDead-cat bounce      01/25/201801/25/2018Household Products
JWNDouble Top, Adam and Adam      01/12/201801/22/2018Retail Store
NUSScallop, ascending      12/22/201701/24/2018Toiletries/Cosmetics
RGSDiamond bottom      12/18/201701/24/2018Toiletries/Cosmetics
REVTriangle, ascending      12/06/201701/25/2018Toiletries/Cosmetics
RLITriple bottom      01/03/201801/24/2018Insurance (Prop/Casualty)
TUESRectangle top      09/28/201701/25/2018Retail Store
UPSFlag      01/16/201801/25/2018Air Transport
WGLRectangle top      06/16/201701/25/2018Natural Gas (Distributor)
WSMDouble Top, Adam and Adam      01/16/201801/23/2018Retail (Special Lines)
DBATriangle, symmetrical      11/30/201701/24/2018Investment Co. (Domestic)
XLIFlag      01/17/201801/25/2018Investment Co. (Domestic)

 

Weekly screen for chart patterns ending between 01/18/2018 and 01/25/2018. 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.
 
Avon Products (AVP)
Industry: Toiletries/Cosmetics
Industry RS rank: 27 out of 58
Stock RS rank: 602 out of 611
1/25/18 close: $2.35
1 Month avg volatility: $0.10. Volatility stop (for upward breakout): $2.10 or 10.9% below the close.
Change YTD: 9.30%
Volume: 2,023,400 shares. 3 month avg: 3,898,403 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, ascending reversal pattern from 11/01/2017 to 01/25/2018
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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Balchem Corp (BCPC)
Industry: Chemical (Specialty)
Industry RS rank: 53 out of 58
Stock RS rank: 410 out of 611
1/25/18 close: $81.82
1 Month avg volatility: $1.72. Volatility stop (for upward breakout): $76.73 or 6.2% below the close.
Change YTD: 1.51%
Volume: 136,900 shares. 3 month avg: 82,003 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 Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/21/2017 to 01/24/2018
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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Berry Global Group Inc (BERY)
Industry: Packaging and Container
Industry RS rank: 43 out of 58
Stock RS rank: 409 out of 611
1/25/18 close: $59.95
1 Month avg volatility: $0.97. Volatility stop (for downward breakout): $62.32 or 4.0% above the close.
Change YTD: 2.18%
Volume: 607,900 shares. 3 month avg: 894,866 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: Broadening top reversal pattern from 11/16/2017 to 01/22/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 58
Stock RS rank: 22 out of 611
1/25/18 close: $35.05
1 Month avg volatility: $1.57. Volatility stop (for upward breakout): $31.67 or 9.6% below the close.
Change YTD: -1.41%
Volume: 249,400 shares. 3 month avg: 567,568 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 12/07/2017 to 01/25/2018
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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Curtiss-Wright (CW)
Industry: Machinery
Industry RS rank: 12 out of 58
Stock RS rank: 72 out of 611
1/25/18 close: $132.43
1 Month avg volatility: $1.86. Volatility stop (for upward breakout): $127.13 or 4.0% below the close.
Change YTD: 8.68%
Volume: 168,200 shares. 3 month avg: 230,622 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: Pennant continuation pattern from 01/16/2018 to 01/25/2018
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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Energen Corp (EGN)
Industry: Natural Gas (Diversified)
Industry RS rank: 47 out of 58
Stock RS rank: 418 out of 611
1/25/18 close: $55.52
1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $60.92 or 9.7% above the close.
Change YTD: -3.56%
Volume: 1,134,800 shares. 3 month avg: 929,683 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders complex top reversal pattern from 12/26/2017 to 01/23/2018
Breakout is downward 100% of the time.
Average decline: 23%.
Break-even failure rate: 4%.
Pullbacks occur 67% of the time.
Price hits measure rule target 53% of the time.

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Era Group Inc (ERA)
Industry: Air Transport
Industry RS rank: 42 out of 58
Stock RS rank: 258 out of 611
1/25/18 close: $10.71
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $9.75 or 8.9% below the close.
Change YTD: -0.37%
Volume: 49,700 shares. 3 month avg: 78,248 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: Triangle, ascending reversal pattern from 10/03/2017 to 01/25/2018
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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Martin Marietta Materials, Inc (MLM)
Industry: Cement and Aggregates
Industry RS rank: 40 out of 58
Stock RS rank: 417 out of 611
1/25/18 close: $238.14
1 Month avg volatility: $4.82. Volatility stop (for downward breakout): $248.88 or 4.5% above the close.
Change YTD: 7.74%
Volume: 652,500 shares. 3 month avg: 575,872 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: Broadening top reversal pattern from 01/03/2018 to 01/22/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Morgan Stanley (MS)
Industry: Securities Brokerage
Industry RS rank: 15 out of 58
Stock RS rank: 209 out of 611
1/25/18 close: $56.81
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $54.96 or 3.3% below the close.
Change YTD: 8.27%
Volume: 9,153,700 shares. 3 month avg: 7,779,832 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: Scallop, ascending continuation pattern from 12/13/2017 to 01/19/2018
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Newell Brands Inc (NWL)
Industry: Household Products
Industry RS rank: 51 out of 58
Stock RS rank: 610 out of 611
1/25/18 close: $24.81
1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $29.57 or 19.2% above the close.
Change YTD: -19.71%
Volume: 73,643,100 shares. 3 month avg: 7,205,206 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: Dead-cat bounce continuation pattern from 01/25/2018 to 01/25/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Nordstrom Inc (JWN)
Industry: Retail Store
Industry RS rank: 17 out of 58
Stock RS rank: 426 out of 611
1/25/18 close: $49.50
1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $53.66 or 8.4% above the close.
Change YTD: 4.47%
Volume: 1,927,600 shares. 3 month avg: 2,612,688 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 01/12/2018 to 01/22/2018
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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Nu Skin Enterprises, Inc (NUS)
Industry: Toiletries/Cosmetics
Industry RS rank: 27 out of 58
Stock RS rank: 306 out of 611
1/25/18 close: $72.45
1 Month avg volatility: $1.23. Volatility stop (for upward breakout): $69.54 or 4.0% below the close.
Change YTD: 6.18%
Volume: 256,700 shares. 3 month avg: 417,486 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: Scallop, ascending continuation pattern from 12/22/2017 to 01/24/2018
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Regis Corp (RGS)
Industry: Toiletries/Cosmetics
Industry RS rank: 27 out of 58
Stock RS rank: 27 out of 611
1/25/18 close: $15.89
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $14.91 or 6.2% below the close.
Change YTD: 3.45%
Volume: 95,500 shares. 3 month avg: 193,511 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond bottom reversal pattern from 12/18/2017 to 01/24/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Revlon Inc (REV)
Industry: Toiletries/Cosmetics
Industry RS rank: 27 out of 58
Stock RS rank: 384 out of 611
1/25/18 close: $23.00
1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $21.40 or 7.0% below the close.
Change YTD: 5.50%
Volume: 60,900 shares. 3 month avg: 238,602 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/06/2017 to 01/25/2018
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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RLI Corp (RLI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 44 out of 58
Stock RS rank: 339 out of 611
1/25/18 close: $63.45
1 Month avg volatility: $1.11. Volatility stop (for upward breakout): $59.80 or 5.8% below the close.
Change YTD: 4.60%
Volume: 479,600 shares. 3 month avg: 149,782 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: Triple bottom reversal pattern from 01/03/2018 to 01/24/2018
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 17 out of 58
Stock RS rank: 7 out of 611
1/25/18 close: $3.32
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $2.88 or 13.1% below the close.
Change YTD: 20.73%
Volume: 123,500 shares. 3 month avg: 391,566 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: Rectangle top continuation pattern from 09/28/2017 to 01/25/2018
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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United Parcel Service (UPS)
Industry: Air Transport
Industry RS rank: 42 out of 58
Stock RS rank: 262 out of 611
1/25/18 close: $131.29
1 Month avg volatility: $2.05. Volatility stop (for upward breakout): $125.61 or 4.3% below the close.
Change YTD: 10.19%
Volume: 3,151,200 shares. 3 month avg: 2,659,363 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 01/16/2018 to 01/25/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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WGL Holdings (WGL)
Industry: Natural Gas (Distributor)
Industry RS rank: 49 out of 58
Stock RS rank: 475 out of 611
1/25/18 close: $84.66
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $83.34 or 1.6% below the close.
Change YTD: -1.37%
Volume: 163,800 shares. 3 month avg: 264,052 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: Rectangle top continuation pattern from 06/16/2017 to 01/25/2018
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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Williams-Sonoma Inc. (WSM)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 58
Stock RS rank: 243 out of 611
1/25/18 close: $53.15
1 Month avg volatility: $1.26. Volatility stop (for downward breakout): $56.72 or 6.7% above the close.
Change YTD: 2.80%
Volume: 1,735,600 shares. 3 month avg: 1,925,938 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 01/16/2018 to 01/23/2018
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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PowerShares DB Agriculture (DBA)
Industry: Investment Co. (Domestic)
Industry RS rank: 29 out of 58
Stock RS rank: 510 out of 611
1/25/18 close: $18.74
1 Month avg volatility: $0.14. Volatility stop (for upward breakout): $18.46 or 1.5% below the close.
Change YTD: -0.05%
Volume: 656,800 shares. 3 month avg: 755,308 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, symmetrical continuation pattern from 11/30/2017 to 01/24/2018
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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SPDR Industrial Select Sector (XLI)
Industry: Investment Co. (Domestic)
Industry RS rank: 29 out of 58
Stock RS rank: 274 out of 611
1/25/18 close: $79.74
1 Month avg volatility: $0.60. Volatility stop (for upward breakout): $77.88 or 2.3% below the close.
Change YTD: 4.96%
Volume: 12,073,500 shares. 3 month avg: 8,744,860 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 01/17/2018 to 01/25/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Thursday 1/25/18. Intraday Market Direction: Nasdaq

The index dropped by -0.6% or -45.23 points. Since 02/05/1971 the index made 310 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 137 occasions.
     Average loss was -1.0% on 173 occasions.
Expect the index to close lower 55.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 142/252 or 56.3% of the time.
     The prediction of the index closing lower has been right 43/85 or 50.6% 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 the red trendline beneath price. Notice that today's drop (H) didn't quite make it down to the trendline. You could interpret that as a sign of strength.

I also show a head-and-shoulders bottom at SHS, which marks the turn. It hasn't confirmed yet.

What does that mean?

The index hasn't closed above the blue neckline, meaning the pattern is just squiggles on the price chart so far.

I looked at today's chart pattern indicator and saw that it made a big drop. It's not in bear territory, but it suggests to me that tomorrow's (Thursday's) action will see the broader market drop.

Of course, I could be wrong and we'll see the index zoom higher. If that's the case, my portfolio will thank you.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,742.70    
 Monthly S1  7,078.88  336.18   
 Weekly S2  7,188.67  109.79   
 Monthly Pivot  7,207.63  18.96   
 Weekly S1  7,301.87  94.24   
 Daily S2  7,316.47  14.61   
 Weekly Pivot  7,319.12  2.65   Yes! The Weekly Pivot is close to the Daily S2.
 Daily S1  7,365.77  46.64   
 Low  7,376.75  10.98   
 Close  7,415.06  38.31   
 61.8% Down from Intraday High  7,418.61  3.55   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  7,426.04  7.44   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  7,431.54  5.49   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Weekly R1  7,432.32  0.78   Yes! The Weekly R1 is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  7,444.46  12.15   
 Weekly R2  7,449.57  5.11   Yes! The Weekly R2 is close to the 38.2% Down from Intraday High.
 Open  7,474.16  24.59   
 Daily R1  7,475.34  1.18   Yes! The Daily R1 is close to the Open.
 High  7,486.32  10.98   
 Daily R2  7,535.61  49.29   
 Monthly R1  7,543.81  8.20   Yes! The Monthly R1 is close to the Daily R2.
 Monthly R2  7,672.56  128.75   

Wednesday 1/24/18. 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.

This week, the chart pattern indicator supports the upward move in the index.

What's alarming about this chart, is the upward curving trend of the index. That upward curve can't continue indefinitely.

But the CPI is pegged against the top of its range.

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 16%.
The fewest was 14% on 01/25/2017.
And the most was 30% on 08/21/2017.
Shown as a blue line on the above chart...
The 516 stocks in my database are down an average of 9% from their yearly high.
A week ago, the average was 9%.
The peak was 9% on 01/22/2018.
And the bottom was 16% on 08/21/2017.

Week-over-week, the two lines haven't budged at all. Both are the same as a week ago, according to the above numbers.

I suppose that's good news because they are much higher than the lows in November and the trend is upward, too.

So every bull should have a smile on their faces, right? Maybe not. This could be a sign of over exuberance and a coming retrace. Trade cautiously.

-- Thomas Bulkowski

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Tuesday 1/23/18. Intraday Market Direction: Dow

The index climbed by 0.5% or 142.88 points. Since 10/01/1928 the index made 914 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 497 occasions.
     Average loss was -0.6% on 417 occasions.
Expect the index to close higher 54.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/259 or 59.5% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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 Dow industrials on the 5 minute scale.

$ $ $

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

Sometimes you have a day like today where nothing much happens in the trading world, at least on this chart.

A look at the chart shows a red trendline I drew underneath price. Notice how the index is pulling away from the line. That's a sign of increasing momentum.

It'll return to the trendline sooner or later just as it did Friday (C, the most recent touch).

If you look at the touch before that, A, you'll see that the index moved away from the line then plunged toward it at B, recovered and touched it again at C.

The lesson here is that it can be several days before momentum wanes and the index returns to the trendline. Or it can happen quickly (as in the plunge to B).

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,081.84    
 Monthly S1  25,148.22  1,066.38   
 Weekly S2  25,573.24  425.02   
 Monthly Pivot  25,650.82  77.58   
 Weekly S1  25,893.92  243.10   
 Daily S2  25,894.25  0.33   Yes! The Daily S2 is close to the Weekly S1.
 Low  25,974.65  80.40   
 Weekly Pivot  26,023.67  49.02   
 Open  26,025.32  1.65   Yes! The Open is close to the Weekly Pivot.
 Daily S1  26,054.42  29.10   
 61.8% Down from Intraday High  26,066.55  12.13   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  26,094.94  28.39   
 38.2% Down from Intraday High  26,123.33  28.39   
 Daily Pivot  26,134.83  11.50   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  26,214.60  79.77   
 High  26,215.23  0.63   Yes! The High is close to the Close.
 Daily R1  26,295.00  79.77   
 Weekly R1  26,344.35  49.35   
 Daily R2  26,375.41  31.06   
 Weekly R2  26,474.10  98.69   
 Monthly R1  26,717.20  243.10   
 Monthly R2  27,219.80  502.60   

Monday 1/22/18. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq composite on the daily scale.

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

I drew two up-sloping trendlines which form a channel. Those are the parallel red lines.

Notice how the trend since the first of the year has turned upward. The slope is too steep to be sustainable for the long term.

So, in the coming days/weeks, you'll likely see the index break the upward trend to retrace and resume the upward move at a slower pace.

When will that happen? Timing isn't clear. You could see a big one-day drop which frightens novice traders and investors. That fear could grow like a snowball and force the index lower. Maybe much lower.

Or the index will just move higher but not at such a torrid pace.

We'll just have to wait and see how this plays out.

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A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Down 10.33 points.
Wednesday: Up 322.79 points.
Thursday: Down 97.84 points.
Friday: Up 53.91 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 268.53 points or 1.0%.
The Nasdaq composite was up 75.32 points or 1.0%.
The S&P 500 index was up 24.06 points or 0.9%.

Year to Date...

Dow Industrials
     0.3% down from the high of 26,153.42 on 01/18/2018.
     5.4% up from the low of 24,741.70 on 01/02/2018.
Nasdaq
     0.0% down from the high of 7,336.38 on 01/19/2018.
     6.0% up from the low of 6,924.08 on 01/02/2018.
S&P 500
     0.0% down from the high of 2,810.33 on 01/19/2018.
     4.8% up from the low of 2,682.36 on 01/02/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/19/2018, the CPI had:

2 bearish patterns,
42 bullish patterns,
279 patterns waiting for breakout.
The CPI signal is 95.5%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,900  25,986  26,029  26,115  26,158 
Weekly  25,526  25,799  25,976  26,249  26,426 
Monthly  24,034  25,053  25,603  26,622  27,172 
S&P500 (^GSPC): Daily  2,794  2,802  2,806  2,814  2,818 
Weekly  2,755  2,783  2,796  2,824  2,838 
Monthly  2,609  2,710  2,760  2,861  2,911 
Nasdaq (^IXIC): Daily  7,284  7,310  7,323  7,349  7,362 
Weekly  7,162  7,249  7,293  7,380  7,423 
Monthly  6,716  7,026  7,181  7,491  7,646 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks up 24.4%   Expect a reversal soon. 
 10 months up 0.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks up 23.8%   Expect a reversal soon. 
 10 months up 0.0%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks up 28.2%   The trend may continue. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
17Triangle, symmetrical
9Double Top, Adam and Adam
7Rectangle top
6Triangle, ascending
6Head-and-shoulders bottom
5Broadening top
4Rising wedge
4Triangle, descending
4Double Bottom, Adam and Adam
3Double Top, Eve and Adam

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

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

 

 

 

 

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

This WeekLast Week
1. Trucking/Transp. Leasing1. Semiconductor
2. Retail Building Supply2. Homebuilding
3. Apparel3. Financial Services
4. Homebuilding4. Retail Building Supply
5. Retail (Special Lines)5. Trucking/Transp. Leasing
50. Household Products50. Insurance (Prop/Casualty)
51. Drug51. Electric Utility (Central)
52. Electric Utility (East)52. Furn/Home Furnishings
53. Chemical (Specialty)53. Household Products
54. Electric Utility (Central)54. Drug
55. Advertising55. Chemical (Specialty)
56. Furn/Home Furnishings56. Electric Utility (West)
57. Healthcare Information57. Advertising
58. Electric Utility (West)58. Healthcare Information
59. Short ETFs59. Short ETFs

-- Thomas Bulkowski

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Friday 1/19/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 14 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 619 stocks searched, or 2.3%. 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 8 bullish chart patterns this week and 5 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ADMBroadening bottom      12/26/201701/17/2018Food Processing
ASNARectangle bottom      06/06/201701/18/2018Apparel
BBBYPipe bottom      01/02/201801/08/2018Retail (Special Lines)
BRCTriangle, symmetrical      11/16/201701/18/2018Chemical (Diversified)
BMYTriangle, symmetrical      10/20/201701/12/2018Drug
CFDouble Top, Adam and Adam      01/05/201801/12/2018Chemical (Basic)
EQTTriangle, symmetrical      01/03/201801/17/2018Natural Gas (Diversified)
FORMTriple top      12/18/201701/16/2018Semiconductor
NSPBroadening top      12/08/201701/18/2018Human Resources
JBLUBroadening top      12/04/201701/16/2018Air Transport
PDLIRoof      11/15/201701/18/2018Biotechnology
RDCDouble Top, Eve and Eve      01/04/201801/12/2018Oilfield Svcs/Equipment
TPXTriple top      12/19/201701/16/2018Furn/Home Furnishings
TUESRectangle top      09/28/201701/18/2018Retail Store
WGLRectangle top      06/16/201701/18/2018Natural Gas (Distributor)

 

Weekly screen for chart patterns ending between 01/11/2018 and 01/18/2018. 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.
 
Archer-Daniels-Midland Co (ADM)
Industry: Food Processing
Industry RS rank: 45 out of 58
Stock RS rank: 468 out of 611
1/18/18 close: $40.48
1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $39.36 or 2.8% below the close.
Change YTD: 1.00%
Volume: 2,481,000 shares. 3 month avg: 3,092,757 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening bottom reversal pattern from 12/26/2017 to 01/17/2018
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 3 out of 58
Stock RS rank: 523 out of 611
1/18/18 close: $2.11
1 Month avg volatility: $0.12. Volatility stop (for downward breakout): $2.39 or 13.2% above the close.
Change YTD: -10.21%
Volume: 1,194,500 shares. 3 month avg: 2,861,685 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Rectangle bottom continuation pattern from 06/06/2017 to 01/18/2018
WARNING: A dead-cat bounce occurred on 12/05/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/06/2018 and a 38% chance by 06/05/2018.
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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Bed Bath and Beyond (BBBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 58
Stock RS rank: 573 out of 611
1/18/18 close: $23.21
1 Month avg volatility: $0.78. Volatility stop (for upward breakout): $21.49 or 7.4% below the close.
Change YTD: 2.20%
Volume: 3,717,100 shares. 3 month avg: 4,821,077 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: Pipe bottom reversal pattern from 01/02/2018 to 01/08/2018
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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Brady Corp (BRC)
Industry: Chemical (Diversified)
Industry RS rank: 39 out of 58
Stock RS rank: 277 out of 611
1/18/18 close: $38.45
1 Month avg volatility: $0.61. Volatility stop (for upward breakout): $37.02 or 3.7% below the close.
Change YTD: 1.45%
Volume: 133,500 shares. 3 month avg: 204,463 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/16/2017 to 01/18/2018
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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Bristol-Myers Squibb Company (BMY)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 49 out of 58
Stock RS rank: 299 out of 611
1/18/18 close: $61.83
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $59.23 or 4.2% below the close.
Change YTD: 0.90%
Volume: 7,904,100 shares. 3 month avg: 5,378,746 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 10/20/2017 to 01/12/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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CF Industries Holdings, Inc. (CF)
Industry: Chemical (Basic)
Industry RS rank: 16 out of 58
Stock RS rank: 101 out of 611
1/18/18 close: $40.08
1 Month avg volatility: $1.01. Volatility stop (for downward breakout): $43.06 or 7.4% above the close.
Change YTD: -5.78%
Volume: 6,214,100 shares. 3 month avg: 3,754,700 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, Adam and Adam reversal pattern from 01/05/2018 to 01/12/2018
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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Equitable Resources, Inc (EQT)
Industry: Natural Gas (Diversified)
Industry RS rank: 44 out of 58
Stock RS rank: 536 out of 611
1/18/18 close: $57.15
1 Month avg volatility: $1.24. Volatility stop (for upward breakout): $54.59 or 4.5% below the close.
Change YTD: 0.40%
Volume: 2,169,900 shares. 3 month avg: 3,960,946 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/03/2018 to 01/17/2018
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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FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 8 out of 58
Stock RS rank: 253 out of 611
1/18/18 close: $15.50
1 Month avg volatility: $0.63. Volatility stop (for downward breakout): $16.91 or 9.1% above the close.
Change YTD: -0.96%
Volume: 1,221,200 shares. 3 month avg: 748,688 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: Triple top reversal pattern from 12/18/2017 to 01/16/2018
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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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 11 out of 58
Stock RS rank: 13 out of 611
1/18/18 close: $59.50
1 Month avg volatility: $1.56. Volatility stop (for downward breakout): $65.42 or 10.0% above the close.
Change YTD: 3.75%
Volume: 336,500 shares. 3 month avg: 131,942 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 12/08/2017 to 01/18/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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JetBlue Airways Corporation (JBLU)
Industry: Air Transport
Industry RS rank: 34 out of 58
Stock RS rank: 488 out of 611
1/18/18 close: $22.48
1 Month avg volatility: $0.47. Volatility stop (for downward breakout): $23.59 or 4.9% above the close.
Change YTD: 0.63%
Volume: 2,396,300 shares. 3 month avg: 6,141,268 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 12/04/2017 to 01/16/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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PDL BioPharma Inc (PDLI)
Industry: Biotechnology
Industry RS rank: 37 out of 58
Stock RS rank: 280 out of 611
1/18/18 close: $2.75
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $3.00 or 9.2% above the close.
Change YTD: 0.36%
Volume: 1,152,600 shares. 3 month avg: 1,844,088 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Roof reversal pattern from 11/15/2017 to 01/18/2018
Breakout is downward 84% of the time.
Average decline: 16%.
Break-even failure rate: 13%.
Pullbacks occur 56% of the time.
Price hits measure rule target 68% of the time.

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Rowan Companies (RDC)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 25 out of 58
Stock RS rank: 76 out of 611
1/18/18 close: $15.92
1 Month avg volatility: $0.57. Volatility stop (for downward breakout): $17.63 or 10.8% above the close.
Change YTD: 1.99%
Volume: 2,050,500 shares. 3 month avg: 3,463,314 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 01/04/2018 to 01/12/2018
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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Tempur-pedic Intl (TPX)
Industry: Furn/Home Furnishings
Industry RS rank: 55 out of 58
Stock RS rank: 349 out of 611
1/18/18 close: $60.65
1 Month avg volatility: $1.38. Volatility stop (for downward breakout): $65.44 or 7.9% above the close.
Change YTD: -3.25%
Volume: 538,100 shares. 3 month avg: 985,960 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triple top reversal pattern from 12/19/2017 to 01/16/2018
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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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 10 out of 58
Stock RS rank: 12 out of 611
1/18/18 close: $3.22
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $2.89 or 10.4% below the close.
Change YTD: 17.09%
Volume: 132,700 shares. 3 month avg: 391,566 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: Rectangle top continuation pattern from 09/28/2017 to 01/18/2018
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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WGL Holdings (WGL)
Industry: Natural Gas (Distributor)
Industry RS rank: 48 out of 58
Stock RS rank: 447 out of 611
1/18/18 close: $84.72
1 Month avg volatility: $0.50. Volatility stop (for upward breakout): $83.73 or 1.2% below the close.
Change YTD: -1.30%
Volume: 413,200 shares. 3 month avg: 264,052 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: Rectangle top continuation pattern from 06/16/2017 to 01/18/2018
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 1/18/18. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 74.59 points. Since 02/05/1971 the index made 218 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 145 occasions.
     Average loss was -0.9% on 73 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 142/251 or 56.6% of the time.
     The prediction of the index closing lower has been right 43/85 or 50.6% 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 discussed in a prior blog about the slope of trendlines and how, after a trendline break, the slope often lessens.

But look at this chart. Notice how the slope increases in the three trendlines. The most recent trendline, the one which happened today (Wednesday), has a slope which is unsustainable (too steep).

Indeed, the index appears to have broken the most recent trendline.

All of this suggests the index is going to drop. When? I don't know. It could happen as soon as Thursday. Enthusiasm is awfully high now, and that enthusiasm can push the index much higher, but it also warns of a quick, steep drop when investors run for the exits (sell as a group).

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,698.07    
 Monthly S1  6,998.17  300.11   
 Weekly S2  7,071.28  73.11   
 Monthly Pivot  7,131.72  60.44   
 Weekly S1  7,184.78  53.06   
 Daily S2  7,198.95  14.17   
 Weekly Pivot  7,225.02  26.07   
 Low  7,229.32  4.30   Yes! The Low is close to the Weekly Pivot.
 Daily S1  7,248.61  19.29   
 Open  7,257.77  9.16   
 61.8% Down from Intraday High  7,259.90  2.13   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  7,269.34  9.44   
 38.2% Down from Intraday High  7,278.78  9.44   
 Daily Pivot  7,278.99  0.20   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  7,298.28  19.29   
 High  7,309.36  11.08   
 Daily R1  7,328.65  19.29   
 Weekly R1  7,338.52  9.87   
 Daily R2  7,359.03  20.51   
 Weekly R2  7,378.76  19.73   
 Monthly R1  7,431.82  53.06   
 Monthly R2  7,565.37  133.54   

Wednesday 1/17/18. 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.

Notice how the indicator has dropped precipitously today (Tuesday, after the close). I show that circled in magenta. At least I think it's magenta.

The indicator hasn't hit bearish territory, though. It's probably ventured into the neutral zone.

The Dow only fell 10 points today, but my portfolio got whacked. My guess is your holdings probably did, too. Maybe the transports show clearer the damage. They were down almost 150 points. That's equivalent to a drop of 371 points in the Dow.

Is this the start of a retrace or even a correction? Hard to tell. The 2018 chart predicts a sharp drop in January. This could be it.

Let's check 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 Friday, 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 18%.
The fewest was 14% on 01/25/2017.
And the most was 30% on 08/21/2017.
Shown as a blue line on the above chart...
The 516 stocks in my database are down an average of 9% from their yearly high.
A week ago, the average was 10%.
The peak was 9% on 01/12/2018.
And the bottom was 16% on 08/21/2017.

This chart and the above stats say, "What? Me worry?" as if nothing happened to the broader market today. The trend for both red and blue lines is bullish.

The more sensitive red line improved by two percentage points. Even the blue one improved by a point.

My guess is it'll take more than one bummer session to drive the lines lower.

The two charts, taken together, are a contradiction. The CPI line's trend is bearish. The above chart is bullish. Maybe the CPI chart is a prediction of coming events. Let's wait and see what happens.

I feel fortunate that I did some pruning, now complete, to my portfolio. That freed up 10% to 15% of cash, which I haven't used yet. I can't find much worth buying at these prices.

-- Thomas Bulkowski

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Friday 1/12/18. 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 617 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 9 bullish chart patterns this week and 8 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
DDDPipe bottom      12/26/201701/02/2018Electronics
AESDiamond top      11/21/201701/08/2018Electric Utility (East)
AMNTriangle, ascending      12/14/201701/10/2018Human Resources
AIZHead-and-shoulders complex top      12/12/201701/09/2018Insurance (Diversified)
BERYBroadening top      11/16/201701/08/2018Packaging and Container
CAGHead-and-shoulders top      12/04/201701/05/2018Food Processing
CTSTriangle, symmetrical      11/29/201701/10/2018Electronics
XRAYHead-and-shoulders top      11/06/201701/08/2018Medical Supplies
FICOBroadening top      12/04/201701/11/2018IT Services
FFGHead-and-shoulders bottom      12/15/201701/09/2018Insurance (Life)
FTNTTriangle, descending      12/19/201701/11/2018Computer Software and Svcs
FRDTriangle, symmetrical      12/05/201701/11/2018Building Materials
GISDouble Top, Eve and Adam      12/27/201701/08/2018Food Processing
GPRODead-cat bounce      01/08/201801/08/2018Electronics
DHIBroadening wedge, ascending      12/06/201701/10/2018Homebuilding
ITWTriangle, ascending      12/01/201701/11/2018Metal Fabricating
PFETriangle, symmetrical      12/18/201701/11/2018Drug
KWRDouble Bottom, Adam and Adam      12/14/201701/10/2018Chemical (Specialty)
SEEDouble Top, Adam and Eve      12/19/201701/08/2018Packaging and Container
TEVAFlag, high and tight      11/13/201701/11/2018Drug
WGLRectangle top      06/16/201701/11/2018Natural Gas (Distributor)

 

Weekly screen for chart patterns ending between 01/04/2018 and 01/11/2018. 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: 22 out of 58
Stock RS rank: 607 out of 609
1/11/18 close: $10.30
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $8.76 or 14.9% below the close.
Change YTD: 19.21%
Volume: 2,750,800 shares. 3 month avg: 3,031,971 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 12/26/2017 to 01/02/2018
WARNING: A dead-cat bounce occurred on 11/01/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/31/2018 and a 38% chance by 05/02/2018.
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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AES Corp (AES)
Industry: Electric Utility (East)
Industry RS rank: 49 out of 58
Stock RS rank: 479 out of 609
1/11/18 close: $10.96
1 Month avg volatility: $0.20. Volatility stop (for downward breakout): $11.38 or 3.8% above the close.
Change YTD: 1.20%
Volume: 8,111,600 shares. 3 month avg: 5,494,342 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond top reversal pattern from 11/21/2017 to 01/08/2018
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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AMN Healthcare (AMN)
Industry: Human Resources
Industry RS rank: 13 out of 58
Stock RS rank: 98 out of 609
1/11/18 close: $49.15
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $46.31 or 5.8% below the close.
Change YTD: -1.01%
Volume: 524,900 shares. 3 month avg: 549,046 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 12/14/2017 to 01/10/2018
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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Assurant Inc (AIZ)
Industry: Insurance (Diversified)
Industry RS rank: 45 out of 58
Stock RS rank: 542 out of 609
1/11/18 close: $95.79
1 Month avg volatility: $1.58. Volatility stop (for downward breakout): $99.91 or 4.3% above the close.
Change YTD: -5.01%
Volume: 461,000 shares. 3 month avg: 454,446 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders complex top reversal pattern from 12/12/2017 to 01/09/2018
Breakout is downward 100% of the time.
Average decline: 23%.
Break-even failure rate: 4%.
Pullbacks occur 67% of the time.
Price hits measure rule target 53% of the time.

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Berry Global Group Inc (BERY)
Industry: Packaging and Container
Industry RS rank: 44 out of 58
Stock RS rank: 416 out of 609
1/11/18 close: $60.73
1 Month avg volatility: $0.85. Volatility stop (for downward breakout): $62.45 or 2.8% above the close.
Change YTD: 3.51%
Volume: 776,600 shares. 3 month avg: 894,866 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 11/16/2017 to 01/08/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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ConAgra Brands Inc (CAG)
Industry: Food Processing
Industry RS rank: 46 out of 58
Stock RS rank: 349 out of 609
1/11/18 close: $36.76
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $38.14 or 3.8% above the close.
Change YTD: -2.42%
Volume: 2,705,000 shares. 3 month avg: 3,423,360 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: Head-and-shoulders top reversal pattern from 12/04/2017 to 01/05/2018
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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CTS Corp (CTS)
Industry: Electronics
Industry RS rank: 22 out of 58
Stock RS rank: 160 out of 609
1/11/18 close: $27.70
1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $25.51 or 7.9% below the close.
Change YTD: 7.57%
Volume: 73,700 shares. 3 month avg: 73,662 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: Triangle, symmetrical continuation pattern from 11/29/2017 to 01/10/2018
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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Dentsply International, Inc. (XRAY)
Industry: Medical Supplies
Industry RS rank: 41 out of 58
Stock RS rank: 462 out of 609
1/11/18 close: $64.25
1 Month avg volatility: $1.14. Volatility stop (for downward breakout): $66.61 or 3.7% above the close.
Change YTD: -2.40%
Volume: 6,574,400 shares. 3 month avg: 1,979,632 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 11/06/2017 to 01/08/2018
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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Fair Isaac Corp (FICO)
Industry: IT Services
Industry RS rank: 26 out of 58
Stock RS rank: 322 out of 609
1/11/18 close: $160.25
1 Month avg volatility: $2.40. Volatility stop (for downward breakout): $166.02 or 3.6% above the close.
Change YTD: 4.60%
Volume: 198,900 shares. 3 month avg: 162,437 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 12/04/2017 to 01/11/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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FBL Financial Group (FFG)
Industry: Insurance (Life)
Industry RS rank: 29 out of 58
Stock RS rank: 324 out of 609
1/11/18 close: $73.40
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $68.49 or 6.7% below the close.
Change YTD: 5.38%
Volume: 15,300 shares. 3 month avg: 25,002 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: Head-and-shoulders bottom reversal pattern from 12/15/2017 to 01/09/2018
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price hits measure rule target 74% of the time.

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Fortinet Inc (FTNT)
Industry: Computer Software and Svcs
Industry RS rank: 24 out of 58
Stock RS rank: 328 out of 609
1/11/18 close: $44.26
1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $46.35 or 4.7% above the close.
Change YTD: 1.30%
Volume: 1,271,000 shares. 3 month avg: 1,532,971 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 12/19/2017 to 01/11/2018
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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Friedman Industries Inc (FRD)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 16 out of 58
Stock RS rank: 445 out of 609
1/11/18 close: $5.51
1 Month avg volatility: $0.17. Volatility stop (for upward breakout): $5.14 or 6.6% below the close.
Change YTD: -0.90%
Volume: 8,800 shares. 3 month avg: 27,460 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/05/2017 to 01/11/2018
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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General Mills Inc (GIS)
Industry: Food Processing
Industry RS rank: 46 out of 58
Stock RS rank: 370 out of 609
1/11/18 close: $58.09
1 Month avg volatility: $0.80. Volatility stop (for downward breakout): $60.38 or 3.9% above the close.
Change YTD: -2.02%
Volume: 2,878,400 shares. 3 month avg: 4,139,065 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: Double Top, Eve and Adam reversal pattern from 12/27/2017 to 01/08/2018
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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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 22 out of 58
Stock RS rank: 589 out of 609
1/11/18 close: $6.15
1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $6.88 or 11.9% above the close.
Change YTD: -20.13%
Volume: 5,239,300 shares. 3 month avg: 5,624,629 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 01/08/2018 to 01/08/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Horton, D.R. Inc. (DHI)
Industry: Homebuilding
Industry RS rank: 4 out of 58
Stock RS rank: 49 out of 609
1/11/18 close: $52.04
1 Month avg volatility: $0.83. Volatility stop (for downward breakout): $53.95 or 3.7% above the close.
Change YTD: 1.90%
Volume: 4,152,500 shares. 3 month avg: 4,390,840 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening wedge, ascending reversal pattern from 12/06/2017 to 01/10/2018
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price hits measure rule target 58% of the time.

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Illinois Tool Works Inc. (ITW)
Industry: Metal Fabricating
Industry RS rank: 23 out of 58
Stock RS rank: 279 out of 609
1/11/18 close: $169.00
1 Month avg volatility: $1.90. Volatility stop (for upward breakout): $163.20 or 3.4% below the close.
Change YTD: 1.29%
Volume: 830,200 shares. 3 month avg: 1,139,580 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 12/01/2017 to 01/11/2018
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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Pfizer Inc. (PFE)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 50 out of 58
Stock RS rank: 351 out of 609
1/11/18 close: $36.56
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $35.65 or 2.5% below the close.
Change YTD: 0.94%
Volume: 14,313,900 shares. 3 month avg: 16,141,055 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/18/2017 to 01/11/2018
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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Quaker Chemical (KWR)
Industry: Chemical (Specialty)
Industry RS rank: 52 out of 58
Stock RS rank: 410 out of 609
1/11/18 close: $156.90
1 Month avg volatility: $2.99. Volatility stop (for upward breakout): $144.62 or 7.8% below the close.
Change YTD: 4.05%
Volume: 96,800 shares. 3 month avg: 69,343 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/14/2017 to 01/10/2018
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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Sealed Air Corp (SEE)
Industry: Packaging and Container
Industry RS rank: 44 out of 58
Stock RS rank: 403 out of 609
1/11/18 close: $48.65
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $50.08 or 2.9% above the close.
Change YTD: -1.32%
Volume: 2,727,400 shares. 3 month avg: 2,419,223 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Eve reversal pattern from 12/19/2017 to 01/08/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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Teva Pharmaceutical Industries (TEVA)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 50 out of 58
Stock RS rank: 598 out of 609
1/11/18 close: $21.74
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $18.62 or 14.3% below the close.
Change YTD: 14.54%
Volume: 35,163,300 shares. 3 month avg: 26,334,894 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 11/13/2017 to 01/11/2018
WARNING: A dead-cat bounce occurred on 11/02/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/01/2018 and a 38% chance by 05/03/2018.
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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WGL Holdings (WGL)
Industry: Natural Gas (Distributor)
Industry RS rank: 47 out of 58
Stock RS rank: 437 out of 609
1/11/18 close: $85.79
1 Month avg volatility: $0.49. Volatility stop (for upward breakout): $84.42 or 1.6% below the close.
Change YTD: -0.06%
Volume: 187,000 shares. 3 month avg: 264,052 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: Rectangle top continuation pattern from 06/16/2017 to 01/11/2018
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 1/11/18. Intraday Market Direction: Nasdaq

The index dropped by -0.1% or -10.01 points. Since 02/05/1971 the index made 576 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 316 occasions.
     Average loss was -0.8% on 260 occasions.
Expect the index to close higher 54.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 141/250 or 56.4% of the time.
     The prediction of the index closing lower has been right 43/85 or 50.6% 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.

This looks suspiciously like Tuesday's chart.

I show a long red trendline under the index, spanning about a week. The line climbs at a sustainable rate -- not steep enough to poop out too quickly, but steep enough to keep people's interest.

Here's the interesting part.

Notice the second red line, yes, the shorter one. It's slope is just about parallel to the longer line. I've not seen that before.

Often when you see a trendline break, the security will trend, but at a slower, more shallow, slope. This time it's different.

$ $ $

I updated the statistics on the Big W chart pattern and the performance over time page for all chart patterns.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,605.34    
 Weekly S2  6,858.60  253.27   
 Monthly S1  6,879.45  20.85   
 Weekly S1  7,006.09  126.63   
 Monthly Pivot  7,008.25  2.16   Yes! The Monthly Pivot is close to the Weekly S1.
 Weekly Pivot  7,071.56  63.32   
 Daily S2  7,097.06  25.49   
 Low  7,111.52  14.46   
 Daily S1  7,125.31  13.79   
 61.8% Down from Intraday High  7,127.84  2.53   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Open  7,129.83  1.99   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  7,132.88  3.05   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  7,137.92  5.04   
 Daily Pivot  7,139.78  1.86   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  7,153.57  13.79   
 High  7,154.24  0.67   Yes! The High is close to the Close.
 Daily R1  7,168.03  13.79   
 Daily R2  7,182.50  14.46   
 Weekly R1  7,219.05  36.55   
 Monthly R1  7,282.36  63.32   
 Weekly R2  7,284.52  2.16   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  7,411.16  126.63   

Wednesday 1/10/18. 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 indicator continues to climb, despite how thin the air is getting at this level.

I'm doing my part to keep it up, too. For the past few weeks, I've been adjusting my portfolio by slimming my holdings of utility stocks and moving the funds into more promising securities.

Why? Because I expect this year to produce exceptional gains, just like in 2017.

The chart shows the CPI dropping even as the index has climbed. That's a sign of weakness. While the Dow might climb by 100 points, I don't think the broader market is following that lead.

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, 18% 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 01/25/2017.
And the most was 30% on 08/21/2017.
Shown as a blue line on the above chart...
The 516 stocks in my database are down an average of 10% from their yearly high.
A week ago, the average was 12%.
The peak was 10% on 03/01/2017.
And the bottom was 16% on 08/21/2017.

The blue line is the star performer this week. That's the first time I can remember when the blue line significantly outperformed the red line. Usually the red line leads the way.

The blue line jumped 2 percentage points compared to the red's 1 point move. Both are bullish moves and that's good news for those of us long (that is, not short).

-- Thomas Bulkowski

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Tuesday 1/9/18. Intraday Market Direction: Dow

The index dropped by -0.1% or -12.87 points. Since 10/01/1928 the index made 1309 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 678 occasions.
     Average loss was -0.7% on 631 occasions.
Expect the index to close higher 51.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 153/258 or 59.3% of the time.
     The prediction of the index closing lower has been right 32/65 or 49.2% 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 Dow industrials on the 5 minute scale.

$ $ $

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

As the chart shows, the index has followed an upward-sloping trend, highlighted quite cleverly by the red line.

Notice at the end, though, that the index has pierced the trendline. Rest assured that it's not a sell signal. At least not yet.

One way to tell is to use the 1-2-3 trend change method. In essence, you'll look for a trendline break, a test of that breakout (pullback), and a resumption of the downward move. Only the trendline break has happened so far. Read the link for more information.

$ $ $

I made another release of Patternz, version 6.9, to correct a bug I introduced on the Chart Pattern Indicator form. The red and green bars turned black because I outlined each bar with a black border. So I removed the black border and restored its appearance.

Also note that I changed the default candle colors from red/green to black/white on all chart forms. If you don't like those colors, then go to the Chart Form, Setup button, and pick the ones you like.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,457.01    
 Monthly S1  24,370.00  913.00   
 Weekly S2  24,550.07  180.07   
 Monthly Pivot  24,834.90  284.82   
 Weekly S1  24,916.54  81.64   
 Weekly Pivot  25,108.16  191.63   
 Daily S2  25,200.22  92.06   
 Low  25,235.41  35.19   
 Daily S1  25,241.61  6.20   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  25,264.66  23.05   
 50% Down from Intraday High  25,273.70  9.04   
 Daily Pivot  25,276.80  3.10   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  25,282.74  5.94   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  25,283.00  0.26   Yes! The Close is close to the 38.2% Down from Intraday High.
 Open  25,308.40  25.40   
 High  25,311.99  3.59   Yes! The High is close to the Open.
 Daily R1  25,318.19  6.20   Yes! The Daily R1 is close to the High.
 Daily R2  25,353.38  35.19   
 Weekly R1  25,474.63  121.25   
 Weekly R2  25,666.25  191.63   
 Monthly R1  25,747.89  81.64   
 Monthly R2  26,212.79  464.89   

Monday 1/8/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

The index has been rising, following a channel. I show that channel in red.

Problem. Notice how the index is near the top of the channel. That suggests it'll retrace and drop to the bottom of the channel.

If the index continues to rise, the slope of that will become untenable. In other words, the index will rise too quickly and it'll drop, probably sharply. After that, the rise will likely continue but at a slower pace (more shallow rise).

Of course, the index could drop outright. However, I think the case for that scenario is slim. I think when corporate earnings come in after the tax changes kick in, you'll see the indices responding positively.

One possibility that would take the markets down is a war with N. Korea. With the possibility of South Korea, Japan, Guam and other territories being hit, the markets wouldn't like it. Then there's the possibility of hacking attacks on our infrastructure (electric grids come to mind).

$ $ $

I released a new version of Patternz with many of the features you asked for implemented. The charts appear much better, too, in this version.

I got google quotes working again, but found yahoo broke the Analyze form, so I removed it. Click the link for more information.

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A Brief Look Back

Picture of a thermometer.

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 104.79 points.
Wednesday: Up 98.67 points.
Thursday: Up 152.45 points.
Friday: Up 220.74 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 576.65 points or 2.3%.
The Nasdaq composite was up 233.17 points or 3.4%.
The S&P 500 index was up 69.54 points or 2.6%.

Year to Date...

Dow Industrials
     0.0% down from the high of 25,299.79 on 01/05/2018.
     2.2% up from the low of 24,741.70 on 01/02/2018.
Nasdaq
     0.0% down from the high of 7,137.04 on 01/05/2018.
     3.1% up from the low of 6,924.08 on 01/02/2018.
S&P 500
     0.0% down from the high of 2,743.45 on 01/05/2018.
     2.3% up from the low of 2,682.36 on 01/02/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/05/2018, the CPI had:

1 bearish patterns,
17 bullish patterns,
142 patterns waiting for breakout.
The CPI signal is 94.4%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,048  25,172  25,236  25,360  25,424 
Weekly  24,554  24,925  25,112  25,483  25,671 
Monthly  23,461  24,379  24,839  25,756  26,217 
S&P500 (^GSPC): Daily  2,723  2,733  2,738  2,748  2,754 
Weekly  2,662  2,703  2,723  2,764  2,784 
Monthly  2,559  2,651  2,697  2,789  2,835 
Nasdaq (^IXIC): Daily  7,084  7,110  7,124  7,150  7,164 
Weekly  6,853  6,995  7,066  7,208  7,279 
Monthly  6,600  6,868  7,003  7,271  7,405 
  • 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 45.1%   Expect a random direction. 
 10 months up 0.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 44.9%   Expect a random direction. 
 10 months up 0.0%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 46.5%   Expect a random direction. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 8 days.

 Found Chart Pattern Name
16Triangle, symmetrical
12Pipe bottom
9Double Top, Adam and Adam
7Head-and-shoulders top
7Rectangle top
5Broadening top
5Head-and-shoulders bottom
4Broadening bottom
4Rising wedge
4Triple top

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

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

 

 

 

 

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

This WeekLast Week
1. Semiconductor1. Trucking/Transp. Leasing
2. Homebuilding2. Human Resources
3. Financial Services3. Homebuilding
4. Retail Building Supply4. Securities Brokerage
5. Trucking/Transp. Leasing5. Semiconductor
50. Insurance (Prop/Casualty)50. Electric Utility (West)
51. Electric Utility (Central)51. Drug
52. Furn/Home Furnishings52. Food Processing
53. Household Products53. Cement and Aggregates
54. Drug54. Chemical (Specialty)
55. Chemical (Specialty)55. Household Products
56. Electric Utility (West)56. Advertising
57. Advertising57. Short ETFs
58. Healthcare Information57. Short ETFs
59. Short ETFs57. Short ETFs

-- Thomas Bulkowski

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Saturday Supplement 1/6/18. Tax Law Change

Picture of my dog.

I've been searching for the answer to changes to the IRS code about selling designated shares. I visited the IRS website and saw the senate version of the bill which mandated FIFO (first-in, first-out selling) and skimmed the actual tax bill about how cap gains are treated. Do we have to sell FIFO or can we designate specific shares? Couldn't find it in the final version and thought it's either not there or I missed it. Turns out it's not in the final bill.

Yippee!

I talked to two brokers and found the answer at a third one. This is from Vanguard.

Tax cost of securities. The new law preserves the longstanding ability of fund investors to specifically identify shares of a security to be sold, giving them the flexibility to manage the timing of the recognition of their capital gains and losses. The Senate proposal would have eliminated this ability and generally required shares of a security to be sold after December 31, 2017, on a first-in, first-out (FIFO) basis or, in the case of fund and dividend reinvestment plan shares, average-cost basis. Maintaining this policy offers greater flexibility and reduces the tax burden for many investors, as mandatory FIFO requirements generally would have resulted in high capital gains taxes, particularly for long-term investors.

-- Thomas Bulkowski

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Friday 1/5/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 616 stocks searched, or 2.8%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 12 bullish chart patterns this week and 2 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AMNTriangle, ascending      12/14/201701/04/2018Human Resources
ASNARectangle bottom      06/06/201701/04/2018Apparel
BSETPipe top      12/18/201712/26/2017Furn/Home Furnishings
CHSTriangle, symmetrical      12/04/201701/03/2018Apparel
CLRising wedge      10/30/201701/03/2018Household Products
EFIITriangle, symmetrical      11/06/201701/02/2018Computers and Peripherals
GDHead-and-shoulders bottom      11/17/201701/03/2018Aerospace/Defense
HIGDouble Top, Adam and Adam      12/20/201712/29/2017Insurance (Prop/Casualty)
LNCTriangle, symmetrical      12/08/201701/03/2018Insurance (Life)
NCSTriangle, symmetrical      12/12/201701/04/2018Building Materials
NWYFlag, high and tight      11/02/201701/04/2018Apparel
OMIRectangle bottom      11/22/201701/04/2018Medical Supplies
PESFlag, high and tight      11/28/201701/04/2018Oilfield Svcs/Equipment
TGTriangle, symmetrical      11/29/201701/04/2018Chemical (Specialty)
WGLRectangle top      06/16/201701/04/2018Natural Gas (Distributor)
EWIRectangle top      09/11/201701/04/2018Investment Co. (Foreign)
EWSBroadening top      11/27/201701/04/2018Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 12/28/2017 and 01/04/2018. 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.
 
AMN Healthcare (AMN)
Industry: Human Resources
Industry RS rank: 11 out of 58
Stock RS rank: 131 out of 608
1/4/18 close: $48.85
1 Month avg volatility: $1.26. Volatility stop (for upward breakout): $45.83 or 6.2% below the close.
Change YTD: -1.61%
Volume: 437,800 shares. 3 month avg: 549,046 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 12/14/2017 to 01/04/2018
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 10 out of 58
Stock RS rank: 466 out of 608
1/4/18 close: $2.14
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $2.58 or 20.5% above the close.
Change YTD: -8.94%
Volume: 5,084,200 shares. 3 month avg: 2,861,685 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Rectangle bottom continuation pattern from 06/06/2017 to 01/04/2018
WARNING: A dead-cat bounce occurred on 12/05/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 03/06/2018 and a 38% chance by 06/05/2018.
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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Bassett Furniture Industries Inc (BSET)
Industry: Furn/Home Furnishings
Industry RS rank: 51 out of 58
Stock RS rank: 533 out of 608
1/4/18 close: $36.35
1 Month avg volatility: $1.29. Volatility stop (for downward breakout): $40.38 or 11.1% above the close.
Change YTD: -3.32%
Volume: 34,300 shares. 3 month avg: 28,538 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: Pipe top reversal pattern from 12/18/2017 to 12/26/2017
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Chicos FAS Inc. (CHS)
Industry: Apparel
Industry RS rank: 10 out of 58
Stock RS rank: 531 out of 608
1/4/18 close: $8.68
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $7.40 or 14.8% below the close.
Change YTD: -1.59%
Volume: 4,633,200 shares. 3 month avg: 2,783,222 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/04/2017 to 01/03/2018
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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Colgate-Palmolive Co (CL)
Industry: Household Products
Industry RS rank: 52 out of 58
Stock RS rank: 444 out of 608
1/4/18 close: $75.33
1 Month avg volatility: $0.81. Volatility stop (for downward breakout): $77.58 or 3.0% above the close.
Change YTD: -0.16%
Volume: 2,451,500 shares. 3 month avg: 3,441,685 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 10/30/2017 to 01/03/2018
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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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 22 out of 58
Stock RS rank: 600 out of 608
1/4/18 close: $30.48
1 Month avg volatility: $0.68. Volatility stop (for upward breakout): $28.91 or 5.1% below the close.
Change YTD: 3.22%
Volume: 371,700 shares. 3 month avg: 733,492 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/06/2017 to 01/02/2018
WARNING: A dead-cat bounce occurred on 10/27/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/26/2018 and a 38% chance by 04/27/2018.
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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General Dynamics Corp (GD)
Industry: Aerospace/Defense
Industry RS rank: 14 out of 58
Stock RS rank: 443 out of 608
1/4/18 close: $205.21
1 Month avg volatility: $2.37. Volatility stop (for upward breakout): $197.09 or 4.0% below the close.
Change YTD: 0.87%
Volume: 1,470,900 shares. 3 month avg: 1,076,035 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 11/17/2017 to 01/03/2018
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price hits measure rule target 74% of the time.

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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
Stock RS rank: 403 out of 608
1/4/18 close: $55.40
1 Month avg volatility: $0.90. Volatility stop (for downward breakout): $57.51 or 3.8% above the close.
Change YTD: -1.56%
Volume: 1,592,500 shares. 3 month avg: 2,032,532 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: Double Top, Adam and Adam reversal pattern from 12/20/2017 to 12/29/2017
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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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 35 out of 58
Stock RS rank: 266 out of 608
1/4/18 close: $78.93
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $75.46 or 4.4% below the close.
Change YTD: 2.68%
Volume: 866,900 shares. 3 month avg: 1,171,931 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/08/2017 to 01/03/2018
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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NCI Building Systems Inc. (NCS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 17 out of 58
Stock RS rank: 282 out of 608
1/4/18 close: $19.50
1 Month avg volatility: $0.61. Volatility stop (for upward breakout): $18.12 or 7.1% below the close.
Change YTD: 1.04%
Volume: 456,800 shares. 3 month avg: 632,900 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 12/12/2017 to 01/04/2018
WARNING: A dead-cat bounce occurred on 09/07/2017. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 03/08/2018.
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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New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 10 out of 58
Stock RS rank: 3 out of 608
1/4/18 close: $3.03
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $2.70 or 10.7% below the close.
Change YTD: 5.94%
Volume: 175,500 shares. 3 month avg: 105,818 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 11/02/2017 to 01/04/2018
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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Owens and Minor Inc (OMI)
Industry: Medical Supplies
Industry RS rank: 46 out of 58
Stock RS rank: 602 out of 608
1/4/18 close: $19.22
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $20.84 or 8.4% above the close.
Change YTD: 1.80%
Volume: 733,700 shares. 3 month avg: 1,318,423 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 bottom continuation pattern from 11/22/2017 to 01/04/2018
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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Pioneer Energy Services (PES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 12 out of 58
Stock RS rank: 6 out of 608
1/4/18 close: $3.80
1 Month avg volatility: $0.18. Volatility stop (for upward breakout): $2.99 or 21.3% below the close.
Change YTD: 24.59%
Volume: 1,983,600 shares. 3 month avg: 605,192 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 11/28/2017 to 01/04/2018
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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Tredegar Corp (TG)
Industry: Chemical (Specialty)
Industry RS rank: 53 out of 58
Stock RS rank: 133 out of 608
1/4/18 close: $19.35
1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $18.27 or 5.6% below the close.
Change YTD: 0.78%
Volume: 32,200 shares. 3 month avg: 64,734 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 11/29/2017 to 01/04/2018
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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WGL Holdings (WGL)
Industry: Natural Gas (Distributor)
Industry RS rank: 45 out of 58
Stock RS rank: 437 out of 608
1/4/18 close: $85.87
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $84.86 or 1.2% below the close.
Change YTD: 0.03%
Volume: 224,700 shares. 3 month avg: 264,052 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Rectangle top continuation pattern from 06/16/2017 to 01/04/2018
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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MSCI Italy Index (EWI)
Industry: Investment Co. (Foreign)
Industry RS rank: 30 out of 58
Stock RS rank: 293 out of 608
1/4/18 close: $31.43
1 Month avg volatility: $0.20. Volatility stop (for upward breakout): $31.02 or 1.3% below the close.
Change YTD: 2.78%
Volume: 1,753,700 shares. 3 month avg: 908,545 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rectangle top continuation pattern from 09/11/2017 to 01/04/2018
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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MSCI Singapore Index (EWS)
Industry: Investment Co. (Foreign)
Industry RS rank: 30 out of 58
Stock RS rank: 279 out of 608
1/4/18 close: $26.98
1 Month avg volatility: $0.12. Volatility stop (for downward breakout): $27.30 or 1.2% above the close.
Change YTD: 3.89%
Volume: 999,500 shares. 3 month avg: 575,032 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top reversal pattern from 11/27/2017 to 01/04/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Thursday 1/4/18. Bitcoin Bonanza!

Picture of bitcoin vs usd.

Due to popular demand, I show a picture of the crypto currency BTCUSD (bitcoin/usd), taken as of midday 1/3/18. I grabbed the data from yahoo.com

It's a complicated chart, so let's go through it.

Points A, B, C, D, E mark the start of high and tight flags. That means during the following two months (after each point), or less, the crypto doubled in price.

Notice how green circle G matches or is similar to circle F. Circle F and what happened after could help you determine what is going to happen next (after H).

For all of you Elliott wavers, and I'm not one of them, look at the green and magenta wave above the price chart. I marked the turns 1, 3, 5, and 7 as advancing waves. Legs 2, 4, 6, and A are corrective waves.

The two legs, 7A, could be an extension or the start of a simple ABC correction. I show that as the ABC pattern in magenta. Point 7 corresponds to G, and A corresponds to the retrace at H on the price chart.

I'm just showing you what might happen using the green circles and Elliott wave. If I've botched the Elliott wave analysis, then ignore it.

There's a double top at IJ. The crypto closed below the horizontal line, a line drawn connecting the lowest valley between the two peaks. It suggests there's more of a down move coming. In stocks, at least, drops from most double tops don't amount to much. In this case, if a bunch of amateur traders panic, then it could force bitcoin down more than expected.

You might also consider that the slide from the peak at J has a nice smooth trend along the tops (the blue line at H). It suggests a flag (NOT a high and tight flag). A close above the downward trend (shown here as a blue, down-sloping trendline, H), which might already have happened, could mean the start of a new uptrend.

For what it's worth, that's my analysis of the crypto currency BTCUSD.

-- Thomas Bulkowski


Wednesday 1/3/18. The Year Behind and Ahead

Annual Performance
Nasdaq28.2%
Dow industrials25.1%
S&P 50019.4%
Dow transports17.3%
Dow utilities9.7%

For the historical record, the table on the right shows how the indices performed this year. Please note that dividends are not included in the results. The results are from pure price appreciation.

I show the five indices I track, listed from the best to the worst performance.

The Nasdaq powered to a huge gain, 28.2%

Following that, the Dow had a good showing, too, up 25.1% for the year.

The utilities were the laggards this year with a gain of 9.7%.

How did you do? From my experience, when the indices make monster gains, like they did in 2017, I often fall short, based on a few results shown here.

Picture of the year's prediction 2018.

The above chart shows the performance of the Dow industrials as the black price bars.

The prediction for the Dow appears as the red line. Note: The numbers do not include the 2007-2009 bear market.

I'm hoping that the 2008 bear market will not repeat this year (or last), so I excluded it from the 2017 and 2018 charts.

As the chart shows, the prediction was more optimistic than the actual Dow until October. Even removing 2007 from the prediction, the prediction tumbled due to weak historical October results.

By year's end, the predicted close fell far short of the actual.

Picture of the year's prediction 2018.

This is the prediction for 2018. Both charts assume the Dow has a 10 year cycle. You simple average all years ending in 8 and plot the result. Again, I removed 2008 from the totals because of the belief the bear market won't repeat this year.

The yearly low is supposed to happen soon, in the next week or so.

After that, look for a strong recovery which takes us up to the peak in summer (July).

Following that, look for the index to drop going into the historically weak fall, September (or late August if the chart is correct).

Then we have a strong rally, pushing the close up to 28,300 and change.

This chart isn't my guess for the year. Rather, it's based on simple math, of how the Dow performed in prior decades. For more information, read my article.

-- Thomas Bulkowski

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Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.