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As of 05/17/2019
  Industrials: 25,764 -98.68 -0.4%  
  Transports: 10,492 -113.76 -1.1%  
  Utilities: 790 +3.91 +0.5%  
  Nasdaq: 7,816 -81.77 -1.0%  
  S&P 500: 2,860 -16.79 -0.6%  
YTD
 +10.4%  
 +14.4%  
 +10.8%  
 +17.8%  
 +14.1%  
  Tom's Targets    Overview: 05/14/2019  
  Up arrow26,600 or 25,000 by 06/01/2019
  Up arrow10,700 or 10,000 by 06/01/2019
  Up arrow825 or 755 by 06/01/2019
  Up arrow8,100 or 7,400 by 06/01/2019
  Up arrow2,900 or 2,740 by 06/01/2019
As of 05/17/2019
  Industrials: 25,764 -98.68 -0.4%  
  Transports: 10,492 -113.76 -1.1%  
  Utilities: 790 +3.91 +0.5%  
  Nasdaq: 7,816 -81.77 -1.0%  
  S&P 500: 2,860 -16.79 -0.6%  
YTD
 +10.4%  
 +14.4%  
 +10.8%  
 +17.8%  
 +14.1%  
  Tom's Targets    Overview: 05/14/2019  
  Up arrow26,600 or 25,000 by 06/01/2019
  Up arrow10,700 or 10,000 by 06/01/2019
  Up arrow825 or 755 by 06/01/2019
  Up arrow8,100 or 7,400 by 06/01/2019
  Up arrow2,900 or 2,740 by 06/01/2019

Written by and copyright © 2005-2019 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 2019 Headlines


Archives


Thursday 1/31/19. Busted Double Top in Nasdaq

The index climbed by 2.2% or 154.79 points. Since 02/05/1971 the index made 38 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.2% on 22 occasions.
     Average loss was -0.6% on 16 occasions.
Expect the index to close higher 57.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 158/287 or 55.1% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

Peaks A and B are a potential double top. I write potential because the pattern did not confirm as a valid chart pattern. What does that mean?

It means the index did not close below the bottom at C before closing above the highest peak in the pattern (A).

It busted the potential downward breakout at D when it closed above A.

And that suggests continued strength. I have my doubts, though. I still think the index is due to retrace its gains since the December low. Notice how peaks ABD have the makings of a triple top.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,857.67    
 Monthly S1  6,520.37  662.71   
 Monthly Pivot  6,852.88  332.50   
 Weekly S2  6,882.29  29.42   
 Daily S2  7,014.25  131.95   
 Weekly S1  7,032.69  18.44   
 Low  7,065.57  32.88   
 Open  7,094.79  29.22   
 Daily S1  7,098.66  3.87   Yes! The Daily S1 is close to the Open.
 Weekly Pivot  7,103.62  4.96   Yes! The Weekly Pivot is close to the Daily S1.
 61.8% Down from Intraday High  7,117.42  13.80   
 50% Down from Intraday High  7,133.44  16.02   
 38.2% Down from Intraday High  7,149.46  16.02   
 Daily Pivot  7,149.99  0.53   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  7,183.08  33.09   
 High  7,201.31  18.23   
 Daily R1  7,234.40  33.09   
 Weekly R1  7,254.02  19.61   
 Daily R2  7,285.73  31.71   
 Weekly R2  7,324.95  39.23   
 Monthly R1  7,515.58  190.63   
 Monthly R2  7,848.09  332.50   

Wednesday 1/30/19. 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.

A frightening trend of this chart appears as shown by the thin blue line near the bottom of the chart.

Notice how the indicator has been heading lower. The index, meanwhile, has been rising (for the most part). That's a sign of bearish divergence.

Just remember that the blue-line can change for up to a week. If it were to move up, it would not erase the entire downturn. The chart would still show bearish divergence.

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 Tuesday, 56% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 57%.
The fewest was 17% on 01/30/2018.
And the most was 80% on 12/24/2018.
Shown as a blue line on the above chart...
The 496 stocks in my database are down an average of 24% from their yearly high.
A week ago, the average was 25%.
The peak was 11% on 01/30/2018.
And the bottom was 33% on 12/24/2018.

Both lines show improvement from the reading a week ago. Both lines are rising, following the index higher (or in concert with a rising index).

This chart is bullish. The prior chart is bearish. Which is right?

My feeling is the prior chart shows the correct market posture. I expect the indices to retrace a portion of their recent gains. But it's also possible the indices will move sideway and consolidate their gains for two weeks or so.

-- Thomas Bulkowski

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Tuesday 1/29/19. Head-and-Shoulders in the Dow?

The index dropped by -0.8% or -208.98 points. Since 10/01/1928 the index made 509 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 267 occasions.
     Average loss was -0.9% on 242 occasions.
Expect the index to close higher 52.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 179/298 or 60.1% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The Dow dropped at the open and then spent most of the day recovering.

During that recovery, it began to take on the shape of a head-and-shoulders top chart pattern.

I show that on the chart as the left shoulder (LS), head, and right shoulder (RS?). It hasn't confirmed as a valid chart pattern yet because the index has not closed below the neckline. The neckline is the diagonal red line.

However, this is a bearish pattern. Whether it fulfills as a valid pattern or not may depend on world or Washington events.

$ $ $

I updated the statistics of rounding tops.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,552.68    
 Monthly S1  22,540.45  1,987.77   
 Monthly Pivot  23,700.30  1,159.85   
 Weekly S2  23,928.39  228.09   
 Daily S2  24,210.01  281.62   
 Weekly S1  24,228.30  18.30   Yes! The Weekly S1 is close to the Daily S2.
 Low  24,323.94  95.64   
 Daily S1  24,369.11  45.17   
 61.8% Down from Intraday High  24,428.24  59.13   
 50% Down from Intraday High  24,460.46  32.22   
 Daily Pivot  24,483.05  22.59   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  24,492.68  9.63   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  24,528.22  35.54   
 Weekly Pivot  24,544.23  16.01   Yes! The Weekly Pivot is close to the Close.
 Open  24,596.98  52.75   
 High  24,596.98  0.00   Yes! The High is close to the Open.
 Daily R1  24,642.15  45.17   
 Daily R2  24,756.09  113.93   
 Weekly R1  24,844.14  88.06   
 Weekly R2  25,160.07  315.92   
 Monthly R1  25,688.07  528.00   
 Monthly R2  26,847.92  1,159.85   

Monday 1/28/19. Market Monday: The Week Ahead

My Prediction

Picture of the nasdaq on the daily scale.

Last week, I expected the Dow to turn down, but it climbed higher than I expected.

This chart shows the Nasdaq composite on the daily scale.

In a similar prediction, here's what I expect to happen.

I think the indices have climbed too far too fast. So I'm looking for the index to retrace following the green line.

That line intersects overhead resistance setup by prior peaks (the down-sloping red trendline). In my trading, I once avoided taking a position in Southwest Airlines because of a similar trendline resistance overhead. And I was right.

Perhaps we'll see the same thing happen this time. So I'm looking for the index to rise for a few more days followed by a retrace. That retrace should take the index below the horizontal red line.

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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 301.87 points.
Wednesday: Up 171.14 points.
Thursday: Down 22.38 points.
Friday: Up 183.96 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 30.85 points or 0.1%.
The Nasdaq composite was up 7.63 points or 0.1%.
The S&P 500 index was down 5.95 points or 0.2%.

Year to Date...

Dow Industrials
     0.5% down from the high of 24,860.15 on 01/25/2019.
     9.3% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     0.3% down from the high of 7,185.38 on 01/18/2019.
     11.0% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     0.4% down from the high of 2,675.47 on 01/18/2019.
     9.0% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/25/2019, the CPI had:

1 bearish patterns,
35 bullish patterns,
277 patterns waiting for breakout.
The CPI signal is 97.2%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  24,575  24,656  24,758  24,839  24,941 
Weekly  23,998  24,368  24,614  24,983  25,230 
Monthly  20,622  22,680  23,770  25,827  26,918 
S&P500 (^GSPC): Daily  2,650  2,657  2,665  2,672  2,680 
Weekly  2,590  2,628  2,650  2,687  2,710 
Monthly  2,233  2,449  2,562  2,778  2,891 
Nasdaq (^IXIC): Daily  7,087  7,126  7,150  7,189  7,214 
Weekly  6,876  7,021  7,098  7,242  7,319 
Monthly  5,852  6,508  6,847  7,503  7,842 
  • 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) 5 weeks up 13.3%   Expect a reversal soon. 
 1 month up 54.2%   Expect a random direction. 
 S & P 500 (^GSPC) 1 week down 26.0%   The trend may continue. 
 1 month up 55.5%   Expect a random direction. 
 Nasdaq composite (^IXIC) 5 weeks up 11.8%   Expect a reversal soon. 
 1 month up 46.8%   Expect a random direction. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
65Double Bottom, Adam and Adam
21Pipe bottom
10Head-and-shoulders bottom
6Double Bottom, Eve and Adam
6Triangle, symmetrical
5Double Bottom, Adam and Eve
3Triple bottom
2Dead-cat bounce
2Pipe top
2Flag, high and tight

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

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

 

 

 

 

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

This WeekLast Week
1. Precision Instrument1. Precision Instrument
2. Short ETFs2. Household Products
3. Electric Utility (Central)3. Short ETFs
4. Electric Utility (East)4. Electric Utility (Central)
5. Household Products5. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/25/19. 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 8 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 598 stocks searched, or 1.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 6 bullish chart patterns this week and 1 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALBTriangle, symmetrical      12/26/201801/24/2019Chemical (Diversified)
BECNTriangle, ascending      10/10/201801/24/2019Retail Building Supply
FMCDouble Top, Eve and Adam      01/10/201901/18/2019Chemical (Basic)
GPSTriangle, symmetrical      11/20/201801/24/2019Apparel
HLPipe top      01/07/201901/14/2019Metals and Mining (Div.)
HURCTriangle, symmetrical      12/28/201801/24/2019Machinery
MDCATriangle, symmetrical      11/28/201801/24/2019Advertising
PCGFlag, high and tight      01/15/201901/24/2019Electric Utility (West)

 

Weekly screen for chart patterns ending between 01/17/2019 and 01/24/2019. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 37 out of 58
Stock RS rank: 449 out of 592
1/24/19 close: $74.02
1 Month avg volatility: $2.42. Volatility stop (for upward breakout): $68.82 or 7.0% below the close.
Change YTD: -3.96%
Volume: 1,660,300 shares. 3 month avg: 1,363,352 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/26/2018 to 01/24/2019
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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Beacon Roofing Supply Inc. (BECN)
Industry: Retail Building Supply
Industry RS rank: 39 out of 58
Stock RS rank: 397 out of 592
1/24/19 close: $34.77
1 Month avg volatility: $1.44. Volatility stop (for upward breakout): $31.05 or 10.7% below the close.
Change YTD: 9.62%
Volume: 432,000 shares. 3 month avg: 811,195 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 10/10/2018 to 01/24/2019
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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FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 45 out of 58
Stock RS rank: 332 out of 592
1/24/19 close: $77.80
1 Month avg volatility: $1.97. Volatility stop (for downward breakout): $82.59 or 6.2% above the close.
Change YTD: 5.19%
Volume: 556,300 shares. 3 month avg: 1,151,138 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 01/10/2019 to 01/18/2019
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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Gap Inc. (GPS)
Industry: Apparel
Industry RS rank: 55 out of 58
Stock RS rank: 405 out of 592
1/24/19 close: $25.25
1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $23.31 or 7.7% below the close.
Change YTD: -1.98%
Volume: 2,159,600 shares. 3 month avg: 5,662,882 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 11/20/2018 to 01/24/2019
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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Hecla Mining Co. (HL)
Industry: Metals and Mining (Div.)
Industry RS rank: 42 out of 58
Stock RS rank: 546 out of 592
1/24/19 close: $2.36
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $2.67 or 13.3% above the close.
Change YTD: 0.00%
Volume: 2,906,300 shares. 3 month avg: 4,539,271 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 top reversal pattern from 01/07/2019 to 01/14/2019
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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Hurco Companies Inc. (HURC)
Industry: Machinery
Industry RS rank: 24 out of 58
Stock RS rank: 395 out of 592
1/24/19 close: $37.33
1 Month avg volatility: $1.87. Volatility stop (for upward breakout): $32.95 or 11.7% below the close.
Change YTD: 4.57%
Volume: 10,600 shares. 3 month avg: 26,271 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/28/2018 to 01/24/2019
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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MDC Pateners Inc (MDCA)
Industry: Advertising
Industry RS rank: 7 out of 58
Stock RS rank: 569 out of 592
1/24/19 close: $2.86
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $2.50 or 12.5% below the close.
Change YTD: 9.58%
Volume: 116,500 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/28/2018 to 01/24/2019
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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PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 19 out of 58
Stock RS rank: 589 out of 592
1/24/19 close: $13.95
1 Month avg volatility: $1.68. Volatility stop (for upward breakout): $3.93 or 71.8% below the close.
Change YTD: -41.26%
Volume: 82,019,400 shares. 3 month avg: 5,870,049 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: Flag, high and tight continuation pattern from 01/15/2019 to 01/24/2019
WARNING: A dead-cat bounce occurred on 01/07/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 04/08/2019 and a 38% chance by 07/08/2019.
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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Thursday 1/24/19. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 5.41 points. Since 02/05/1971 the index made 687 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 379 occasions.
     Average loss was -0.7% on 308 occasions.
Expect the index to close higher 55.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 157/286 or 54.9% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

What I find odd is that the Dow rose 171 points but the Nasdaq climbed only 5 (0.7% versus 0.08%), a factor of about 10 on a percentage basis. In other words, the advance was a narrow one, effecting Dow stocks.

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

Not much is happening on this chart.

You might thing that bottoms A and B have formed a double bottom. That's not the case, though. Yes, the two bottoms are not at the same price, but I make allowances now and again.

Rather, the sticking point is the index has to close above the pattern's top. So far, it's only made it up about halfway.

Maybe Thursday's move will provide enough lift.

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

-- Thomas Bulkowski

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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,805.23    
 Monthly S1  6,415.50  610.27   
 Weekly S2  6,734.98  319.48   
 Monthly Pivot  6,800.44  65.46   
 Weekly S1  6,880.37  79.93   
 Daily S2  6,889.66  9.29   Yes! The Daily S2 is close to the Weekly S1.
 Low  6,953.23  63.57   
 Daily S1  6,957.72  4.49   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  7,003.51  45.79   
 50% Down from Intraday High  7,019.04  15.53   
 Daily Pivot  7,021.28  2.24   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  7,025.77  4.49   Yes! The Close is close to the Daily Pivot.
 Weekly Pivot  7,032.88  7.11   Yes! The Weekly Pivot is close to the Close.
 38.2% Down from Intraday High  7,034.57  1.69   Yes! The 38.2% Down from Intraday High is close to the Weekly Pivot.
 Open  7,061.65  27.08   
 High  7,084.85  23.20   
 Daily R1  7,089.34  4.49   Yes! The Daily R1 is close to the High.
 Daily R2  7,152.90  63.57   
 Weekly R1  7,178.27  25.37   
 Weekly R2  7,330.78  152.50   
 Monthly R1  7,410.71  79.93   
 Monthly R2  7,795.65  384.94   

Wednesday 1/23/19. 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.

You'll notice that the indicator took a huge dive on Tuesday after the Dow's 300 point plunge.

I expected a retrace and it comes right on time. I don't expect this downturn to be a big give back, but it could see the index (Dow) drop back to 23,500. That's about 2,475 on this 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 Tuesday, 57% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 60%.
The fewest was 15% on 01/26/2018.
And the most was 80% on 12/24/2018.
Shown as a blue line on the above chart...
The 496 stocks in my database are down an average of 25% from their yearly high.
A week ago, the average was 26%.
The peak was 9% on 01/23/2018.
And the bottom was 33% on 12/24/2018.

Both lines show improvement over a week ago. Today's big drop in the Dow didn't seem to affect the lines much. Yes, there was a drop but not a significant plunge.

However, if the index continues to drop then the lines will react, too, starting with the more sensitive red one.

My guess is that the lines and the index will turn lower, beginning a retrace over the coming week or so.

-- Thomas Bulkowski

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Friday 1/18/19. 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 9 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 598 stocks searched, or 1.5%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 2 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 6 bullish chart patterns this week and 3 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming 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
ASNAHead-and-shoulders complex bottom      11/29/201801/14/2019Apparel
EETriple bottom      12/26/201801/14/2019Electric Utility (West)
EFIIDead-cat bounce      01/16/201901/16/2019Computers and Peripherals
EQTRising wedge      12/24/201801/17/2019Natural Gas (Diversified)
EXCPipe bottom      12/26/201801/04/2019Electric Utility (East)
FFGHead-and-shoulders bottom      12/06/201801/15/2019Insurance (Life)
FEPipe bottom      12/26/201801/04/2019Electric Utility (East)
IVCFlag, high and tight      12/21/201801/16/2019Medical Supplies
LZBPennant      01/09/201901/17/2019Furn/Home Furnishings
NEUHead-and-shoulders top      12/31/201801/14/2019Chemical (Specialty)
PEGDouble Bottom, Adam and Adam      12/26/201801/14/2019Electric Utility (East)

 

Weekly screen for chart patterns ending between 01/10/2019 and 01/17/2019. 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.
 
Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 55 out of 58
Stock RS rank: 366 out of 592
1/17/19 close: $3.08
1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $2.51 or 18.5% below the close.
Change YTD: 22.71%
Volume: 2,120,200 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: Head-and-shoulders complex bottom reversal pattern from 11/29/2018 to 01/14/2019
Breakout is upward 100% of the time.
Average rise: 39%.
Break-even failure rate: 4%.
Throwbacks occur 63% of the time.
Price hits measure rule target 74% of the time.

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El Paso Electric (EE)
Industry: Electric Utility (West)
Industry RS rank: 23 out of 58
Stock RS rank: 409 out of 592
1/17/19 close: $50.50
1 Month avg volatility: $1.43. Volatility stop (for upward breakout): $46.21 or 8.5% below the close.
Change YTD: 0.74%
Volume: 587,700 shares. 3 month avg: 249,891 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: Triple bottom reversal pattern from 12/26/2018 to 01/14/2019
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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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: 30 out of 58
Stock RS rank: 536 out of 592
1/17/19 close: $23.54
1 Month avg volatility: $1.12. Volatility stop (for downward breakout): $26.14 or 11.1% above the close.
Change YTD: -5.08%
Volume: 1,560,800 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 Wednesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 01/16/2019 to 01/16/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Equitable Resources, Inc (EQT)
Industry: Natural Gas (Diversified)
Industry RS rank: 50 out of 58
Stock RS rank: 588 out of 592
1/17/19 close: $20.96
1 Month avg volatility: $1.06. Volatility stop (for downward breakout): $23.18 or 10.6% above the close.
Change YTD: 10.96%
Volume: 3,904,600 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 Tuesday.
 
Chart pattern: Rising wedge reversal pattern from 12/24/2018 to 01/17/2019
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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Exelon Corp. (EXC)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 55 out of 592
1/17/19 close: $46.02
1 Month avg volatility: $1.03. Volatility stop (for upward breakout): $43.54 or 5.4% below the close.
Change YTD: 2.04%
Volume: 3,965,200 shares. 3 month avg: 5,244,875 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/26/2018 to 01/04/2019
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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FBL Financial Group (FFG)
Industry: Insurance (Life)
Industry RS rank: 18 out of 58
Stock RS rank: 389 out of 592
1/17/19 close: $70.39
1 Month avg volatility: $1.59. Volatility stop (for upward breakout): $67.00 or 4.8% below the close.
Change YTD: 7.22%
Volume: 11,700 shares. 3 month avg: 18,072 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: Head-and-shoulders bottom reversal pattern from 12/06/2018 to 01/15/2019
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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FirstEnergy Corp. (FE)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 63 out of 592
1/17/19 close: $38.71
1 Month avg volatility: $0.92. Volatility stop (for upward breakout): $36.48 or 5.8% below the close.
Change YTD: 3.09%
Volume: 4,620,600 shares. 3 month avg: 4,155,280 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/26/2018 to 01/04/2019
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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Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 21 out of 58
Stock RS rank: 590 out of 592
1/17/19 close: $5.26
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $4.43 or 15.8% below the close.
Change YTD: 22.33%
Volume: 531,800 shares. 3 month avg: 553,063 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Flag, high and tight continuation pattern from 12/21/2018 to 01/16/2019
WARNING: A dead-cat bounce occurred on 11/06/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/05/2019 and a 38% chance by 05/07/2019.
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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La-Z-Boy Inc (LZB)
Industry: Furn/Home Furnishings
Industry RS rank: 34 out of 58
Stock RS rank: 204 out of 592
1/17/19 close: $29.98
1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $27.90 or 6.9% below the close.
Change YTD: 8.19%
Volume: 292,000 shares. 3 month avg: 437,505 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: Pennant continuation pattern from 01/09/2019 to 01/17/2019
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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NewMarket Corp. (NEU)
Industry: Chemical (Specialty)
Industry RS rank: 10 out of 58
Stock RS rank: 189 out of 592
1/17/19 close: $400.00
1 Month avg volatility: $9.66. Volatility stop (for downward breakout): $421.81 or 5.5% above the close.
Change YTD: -2.93%
Volume: 42,600 shares. 3 month avg: 31,329 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 12/31/2018 to 01/14/2019
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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Public Service Enterprise Group PEG (PEG)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 149 out of 592
1/17/19 close: $52.21
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $49.03 or 6.1% below the close.
Change YTD: 0.31%
Volume: 4,588,800 shares. 3 month avg: 3,334,326 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/26/2018 to 01/14/2019
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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Thursday 1/17/19. Intraday Market Direction: Nasdaq

The index climbed by 0.2% or 10.86 points. Since 02/05/1971 the index made 667 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 385 occasions.
     Average loss was -0.7% on 282 occasions.
Expect the index to close higher 57.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 156/285 or 54.7% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

Not much happens in this pic. I outlined in red a descending triangle. Those breakout downward most often (64% of the time), according to my research. This is not the same pattern that I wrote about two days ago. That pattern was an ascending triangle.

The difference between the two is an ascending triangle has an up-sloping bottom. A descending triangle has a down-sloping top.

$ $ $

I updated the performance statistics of rectangle bottoms.

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

-- Thomas Bulkowski

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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,794.88    
 Monthly S1  6,414.78  619.91   
 Weekly S2  6,672.52  257.73   
 Monthly Pivot  6,810.08  137.56   
 Weekly S1  6,853.60  43.53   
 Weekly Pivot  6,922.49  68.88   
 Daily S2  6,995.97  73.48   
 Daily S1  7,015.33  19.36   
 Low  7,028.12  12.79   
 Open  7,033.75  5.63   
 Close  7,034.69  0.94   Yes! The Close is close to the Open.
 Daily Pivot  7,047.48  12.79   
 61.8% Down from Intraday High  7,047.80  0.32   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  7,053.88  6.08   
 38.2% Down from Intraday High  7,059.95  6.08   
 Daily R1  7,066.84  6.89   
 High  7,079.63  12.79   
 Daily R2  7,098.99  19.36   
 Weekly R1  7,103.57  4.58   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  7,172.46  68.88   
 Monthly R1  7,429.98  257.53   
 Monthly R2  7,825.28  395.29   

Wednesday 1/16/19. 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 recovered nicely from a huge dip (not shown but it happened within a week). As you may know, the signals may change for up to a week.

I thought the big dip meant a coming plunge, but today's action pulled the indicator higher, and erased the dip.

So now we're left with a bullish signal and the indicator is bumping against a ceiling of 100. One could argue that the indicator never stays that high for long and there's nowhere else to go but lower. And that means the market is going to tumble (retrace, really).

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 Tuesday, 58% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 61%.
The fewest was 15% on 01/26/2018.
And the most was 80% on 12/24/2018.
Shown as a blue line on the above chart...
The 496 stocks in my database are down an average of 25% from their yearly high.
A week ago, the average was 27%.
The peak was 9% on 01/22/2018.
And the bottom was 33% on 12/24/2018.

Both lines have recovered following or leading the market higher. Actually they appear both in synch, moving higher and lower in tandem.

So the lines are doing well and so is the market.

Overall, I must say both charts look bullish. I'm surprised that we haven't seen any retrace. My guess is it's coming. And soon.

-- Thomas Bulkowski

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Tuesday 1/15/19. Intraday Market Direction: Dow

The index dropped by -0.4% or -86.11 points. Since 10/01/1928 the index made 900 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 458 occasions.
     Average loss was -0.6% on 442 occasions.
Expect the index to close higher 50.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 178/297 or 59.9% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

This chart shows an interesting pattern building. It's called an ascending triangle.

That's a pattern with a flat top (horizontal red line) and an up-sloping bottom. The two lines converge at the triangle apex (not shown on this chart).

Research shows that ascending triangles breakout upward 70% of the time, but that figure might be dated. The CPI is heading lower, so that's a clue of trouble coming.

$ $ $

I released version 7.9 of Patternz. This fixes additional bugs that have been around for a while, but unknown to me. Laurent found the first one and more testing found others. Thanks, Laurent!

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,189.57    
 Monthly S1  22,049.71  1,860.13   
 Weekly S2  23,028.88  979.17   
 Weekly S1  23,469.36  440.48   
 Monthly Pivot  23,572.66  103.30   
 Daily S2  23,680.33  107.67   
 Weekly Pivot  23,742.07  61.74   
 Low  23,765.24  23.17   
 Daily S1  23,795.09  29.85   
 61.8% Down from Intraday High  23,841.51  46.42   
 50% Down from Intraday High  23,865.07  23.56   
 Daily Pivot  23,879.99  14.92   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Open  23,880.53  0.54   Yes! The Open is close to the Daily Pivot.
 38.2% Down from Intraday High  23,888.63  8.10   Yes! The 38.2% Down from Intraday High is close to the Open.
 Close  23,909.84  21.21   
 High  23,964.90  55.06   
 Daily R1  23,994.75  29.85   
 Daily R2  24,079.65  84.91   
 Weekly R1  24,182.55  102.90   
 Weekly R2  24,455.26  272.71   
 Monthly R1  25,432.80  977.54   
 Monthly R2  26,955.75  1,522.96   

Monday 1/14/19. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily scale.

Let me tell you what I think will happen.

The index has cruised higher over the last week, with only one down day. My guess is the upward run is about over. We'll hit overhead resistance and fall back down.

I drew a horizontal red line where the index will hit overhead resistance. I think it'll approach, maybe not touch that line, before rounding lower. So I drew a downward-curving red line connecting to the horizontal one to show the path.

The index may not drop as far as shown or it might drop further. And there's also a chance that the China trade war or the shutdown will be resolved and the index will not only rise higher but shoot upward.

$ $ $

I released version 7.8 of Patternz. Version 7.7 fixes a bug in annotations and 7.8 fixes a bug with trade status reporting.

$ $ $

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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 98.19 points.
Tuesday: Up 256.1 points.
Wednesday: Up 91.67 points.
Thursday: Up 122.8 points.
Friday: Down 5.97 points.

For the Week...

The Dow industrials were up 562.79 points or 2.4%.
The Nasdaq composite was up 232.62 points or 3.5%.
The S&P 500 index was up 64.32 points or 2.5%.

Year to Date...

Dow Industrials
     0.1% down from the high of 24,014.78 on 01/10/2019.
     6.0% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     0.3% down from the high of 6,991.37 on 01/10/2019.
     8.0% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     0.1% down from the high of 2,597.82 on 01/10/2019.
     6.2% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 01/11/2019, the CPI had:

2 bearish patterns,
50 bullish patterns,
399 patterns waiting for breakout.
The CPI signal is 96.2%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  23,732  23,864  23,930  24,062  24,128 
Weekly  23,058  23,527  23,771  24,240  24,484 
Monthly  20,218  22,107  23,601  25,490  26,984 
S&P500 (^GSPC): Daily  2,571  2,584  2,590  2,603  2,609 
Weekly  2,500  2,548  2,573  2,621  2,646 
Monthly  2,189  2,392  2,550  2,754  2,912 
Nasdaq (^IXIC): Daily  6,918  6,945  6,960  6,987  7,002 
Weekly  6,651  6,811  6,901  7,061  7,151 
Monthly  5,774  6,373  6,789  7,388  7,804 
  • 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 26.1%   The trend may continue. 
 1 month up 54.2%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 26.3%   The trend may continue. 
 1 month up 55.5%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 28.8%   The trend may continue. 
 1 month up 46.8%   Expect a random direction. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 2 days.

 Found Chart Pattern Name
89Pipe bottom
67Double Bottom, Adam and Adam
10Head-and-shoulders top
10Triple top
9Head-and-shoulders bottom
8Double Bottom, Adam and Eve
6Double Top, Adam and Eve
6Double Top, Adam and Adam
5Double Bottom, Eve and Adam
4Diamond bottom

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

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

 

 

 

 

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

This WeekLast Week
1. Precision Instrument1. Short ETFs
2. Short ETFs2. Precision Instrument
3. Household Products3. Toiletries/Cosmetics
4. Electric Utility (Central)4. Household Products
5. Electric Utility (East)5. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/11/19. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 598 stocks searched, or 1.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 20 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 23 bullish chart patterns this week and 2 bearish ones with any remaining (5) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACETPipe bottom      12/24/201812/31/2018Chemical (Diversified)
AESPipe bottom      12/26/201801/03/2019Electric Utility (East)
ALKPipe bottom      12/24/201812/31/2018Air Transport
ACGLDouble Bottom, Adam and Adam      12/24/201801/04/2019Insurance (Prop/Casualty)
CRLPipe bottom      12/24/201812/31/2018Biotechnology
CINFDouble Bottom, Adam and Adam      01/03/201901/08/2019Insurance (Prop/Casualty)
DTEPipe bottom      12/26/201801/02/2019Electric Utility (Central)
EXCPipe bottom      12/26/201801/04/2019Electric Utility (East)
FOEPipe bottom      12/24/201812/31/2018Chemical (Specialty)
FEPipe bottom      12/26/201801/04/2019Electric Utility (East)
FLSPipe bottom      12/24/201812/31/2018Machinery
FTNTDouble Bottom, Adam and Adam      12/24/201801/04/2019Computer Software and Svcs
INOVRising wedge      12/13/201801/10/2019Healthcare Information
IPIHorn bottom      12/17/201812/31/2018Chemical (Diversified)
JCPPipe bottom      12/24/201812/31/2018Retail Store
KBALPipe bottom      12/24/201812/31/2018Furn/Home Furnishings
MHOPipe bottom      12/24/201812/31/2018Homebuilding
NFGPipe bottom      12/24/201812/31/2018Natural Gas (Diversified)
NWLPipe bottom      12/24/201812/31/2018Household Products
OGEPipe bottom      12/26/201801/02/2019Electric Utility (Central)
PDCOPipe bottom      12/24/201812/31/2018Medical Supplies
PCGDead-cat bounce      01/07/201901/07/2019Electric Utility (West)
PESPipe bottom      12/24/201812/31/2018Oilfield Svcs/Equipment
PLXSDouble Bottom, Adam and Adam      12/26/201801/04/2019Electronics
PPLHead-and-shoulders bottom      12/18/201801/04/2019Electric Utility (East)
RHTTriangle, symmetrical      12/27/201801/10/2019Computer Software and Svcs
RLIPennant      12/28/201801/10/2019Insurance (Prop/Casualty)
SWNPipe bottom      12/24/201812/31/2018Natural Gas (Diversified)
SRDXPipe bottom      12/24/201812/31/2018Medical Supplies
TPXPipe bottom      12/24/201812/31/2018Furn/Home Furnishings

 

Weekly screen for chart patterns ending between 01/03/2019 and 01/10/2019. 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.
 
Aceto Corp (ACET)
Industry: Chemical (Diversified)
Industry RS rank: 30 out of 58
Stock RS rank: 588 out of 592
1/10/19 close: $1.22
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $0.93 or 23.4% below the close.
Change YTD: 45.24%
Volume: 153,300 shares. 3 month avg: 395,892 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
WARNING: A dead-cat bounce occurred on 11/09/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/08/2019 and a 38% chance by 05/10/2019.
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: 5 out of 58
Stock RS rank: 29 out of 592
1/10/19 close: $15.34
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $14.08 or 8.2% below the close.
Change YTD: 6.09%
Volume: 3,837,100 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: Pipe bottom reversal pattern from 12/26/2018 to 01/03/2019
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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Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 45 out of 58
Stock RS rank: 84 out of 592
1/10/19 close: $63.40
1 Month avg volatility: $2.14. Volatility stop (for upward breakout): $55.18 or 13.0% below the close.
Change YTD: 4.19%
Volume: 1,694,100 shares. 3 month avg: 1,966,126 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Arch Capital Group Ltd (ACGL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 23 out of 58
Stock RS rank: 209 out of 592
1/10/19 close: $27.12
1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $25.06 or 7.6% below the close.
Change YTD: 1.50%
Volume: 618,700 shares. 3 month avg: 517,168 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: Double Bottom, Adam and Adam reversal pattern from 12/24/2018 to 01/04/2019
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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Charles River Labs Intl (CRL)
Industry: Biotechnology
Industry RS rank: 11 out of 58
Stock RS rank: 107 out of 592
1/10/19 close: $119.59
1 Month avg volatility: $4.10. Volatility stop (for upward breakout): $107.82 or 9.9% below the close.
Change YTD: 5.66%
Volume: 438,500 shares. 3 month avg: 379,248 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Cincinnati Financial Corp (CINF)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 23 out of 58
Stock RS rank: 46 out of 592
1/10/19 close: $77.30
1 Month avg volatility: $1.87. Volatility stop (for upward breakout): $71.08 or 8.1% below the close.
Change YTD: -0.15%
Volume: 478,200 shares. 3 month avg: 534,966 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/03/2019 to 01/08/2019
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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DTE Energy Company (DTE)
Industry: Electric Utility (Central)
Industry RS rank: 4 out of 58
Stock RS rank: 81 out of 592
1/10/19 close: $111.70
1 Month avg volatility: $2.42. Volatility stop (for upward breakout): $104.60 or 6.4% below the close.
Change YTD: 1.27%
Volume: 1,011,000 shares. 3 month avg: 979,609 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: Pipe bottom reversal pattern from 12/26/2018 to 01/02/2019
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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Exelon Corp. (EXC)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 60 out of 592
1/10/19 close: $45.79
1 Month avg volatility: $1.01. Volatility stop (for upward breakout): $42.89 or 6.3% below the close.
Change YTD: 1.53%
Volume: 4,351,400 shares. 3 month avg: 5,244,875 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/26/2018 to 01/04/2019
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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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 8 out of 58
Stock RS rank: 438 out of 592
1/10/19 close: $16.86
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $14.99 or 11.1% below the close.
Change YTD: 7.53%
Volume: 467,300 shares. 3 month avg: 594,032 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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FirstEnergy Corp. (FE)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 64 out of 592
1/10/19 close: $38.58
1 Month avg volatility: $0.95. Volatility stop (for upward breakout): $35.94 or 6.9% below the close.
Change YTD: 2.74%
Volume: 4,078,200 shares. 3 month avg: 4,155,280 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/26/2018 to 01/04/2019
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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Flowserve Corp (FLS)
Industry: Machinery
Industry RS rank: 10 out of 58
Stock RS rank: 145 out of 592
1/10/19 close: $41.63
1 Month avg volatility: $1.67. Volatility stop (for upward breakout): $36.67 or 11.9% below the close.
Change YTD: 9.50%
Volume: 780,700 shares. 3 month avg: 1,457,883 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Fortinet Inc (FTNT)
Industry: Computer Software and Svcs
Industry RS rank: 6 out of 58
Stock RS rank: 44 out of 592
1/10/19 close: $73.21
1 Month avg volatility: $2.83. Volatility stop (for upward breakout): $64.52 or 11.9% below the close.
Change YTD: 3.95%
Volume: 1,513,400 shares. 3 month avg: 1,532,971 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: Double Bottom, Adam and Adam reversal pattern from 12/24/2018 to 01/04/2019
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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Inovalon Holdings Inc (INOV)
Industry: Healthcare Information
Industry RS rank: 14 out of 58
Stock RS rank: 5 out of 592
1/10/19 close: $14.25
1 Month avg volatility: $0.72. Volatility stop (for downward breakout): $16.18 or 13.6% above the close.
Change YTD: 0.49%
Volume: 438,500 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: Rising wedge reversal pattern from 12/13/2018 to 01/10/2019
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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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 30 out of 58
Stock RS rank: 446 out of 592
1/10/19 close: $3.20
1 Month avg volatility: $0.17. Volatility stop (for upward breakout): $2.75 or 14.1% below the close.
Change YTD: 23.08%
Volume: 551,000 shares. 3 month avg: 1,190,495 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Horn bottom reversal pattern from 12/17/2018 to 12/31/2018
WARNING: A dead-cat bounce occurred on 08/02/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/31/2019.
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price hits measure rule target 76% of the time.

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JC Penney Company Inc (JCP)
Industry: Retail Store
Industry RS rank: 26 out of 58
Stock RS rank: 574 out of 592
1/10/19 close: $1.28
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $1.01 or 21.2% below the close.
Change YTD: 23.08%
Volume: 11,178,900 shares. 3 month avg: 17,298,666 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
WARNING: A dead-cat bounce occurred on 08/16/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 02/14/2019.
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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Kimball International, Inc. (KBAL)
Industry: Furn/Home Furnishings
Industry RS rank: 33 out of 58
Stock RS rank: 269 out of 592
1/10/19 close: $15.21
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $13.96 or 8.2% below the close.
Change YTD: 7.19%
Volume: 63,200 shares. 3 month avg: 102,372 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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M/I Homes, Inc. (MHO)
Industry: Homebuilding
Industry RS rank: 38 out of 58
Stock RS rank: 292 out of 592
1/10/19 close: $24.85
1 Month avg volatility: $0.96. Volatility stop (for upward breakout): $22.66 or 8.8% below the close.
Change YTD: 18.22%
Volume: 145,600 shares. 3 month avg: 256,088 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 12/24/2018 to 12/31/2018
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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National Fuel Gas (NFG)
Industry: Natural Gas (Diversified)
Industry RS rank: 55 out of 58
Stock RS rank: 174 out of 592
1/10/19 close: $54.27
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $50.69 or 6.6% below the close.
Change YTD: 6.04%
Volume: 385,600 shares. 3 month avg: 355,354 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Newell Brands Inc (NWL)
Industry: Household Products
Industry RS rank: 3 out of 58
Stock RS rank: 492 out of 592
1/10/19 close: $20.55
1 Month avg volatility: $0.92. Volatility stop (for upward breakout): $17.79 or 13.4% below the close.
Change YTD: 10.54%
Volume: 4,718,200 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: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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OGE Energy Corp (OGE)
Industry: Electric Utility (Central)
Industry RS rank: 4 out of 58
Stock RS rank: 36 out of 592
1/10/19 close: $40.11
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $37.62 or 6.2% below the close.
Change YTD: 2.35%
Volume: 1,590,200 shares. 3 month avg: 1,006,480 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/26/2018 to 01/02/2019
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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Patterson Companies Inc. (PDCO)
Industry: Medical Supplies
Industry RS rank: 15 out of 58
Stock RS rank: 234 out of 592
1/10/19 close: $21.61
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $19.19 or 11.2% below the close.
Change YTD: 9.92%
Volume: 1,240,800 shares. 3 month avg: 1,885,975 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 21 out of 58
Stock RS rank: 586 out of 592
1/10/19 close: $17.76
1 Month avg volatility: $1.38. Volatility stop (for downward breakout): $21.97 or 23.7% above the close.
Change YTD: -25.22%
Volume: 24,711,500 shares. 3 month avg: 5,870,049 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: Dead-cat bounce continuation pattern from 01/07/2019 to 01/07/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Pioneer Energy Services (PES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 58 out of 58
Stock RS rank: 590 out of 592
1/10/19 close: $1.89
1 Month avg volatility: $0.18. Volatility stop (for upward breakout): $1.37 or 27.7% below the close.
Change YTD: 53.66%
Volume: 621,200 shares. 3 month avg: 605,192 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
WARNING: A dead-cat bounce occurred on 07/31/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/29/2019.
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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Plexus Corp (PLXS)
Industry: Electronics
Industry RS rank: 46 out of 58
Stock RS rank: 355 out of 592
1/10/19 close: $53.98
1 Month avg volatility: $2.01. Volatility stop (for upward breakout): $48.98 or 9.3% below the close.
Change YTD: 5.68%
Volume: 100,700 shares. 3 month avg: 160,228 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/26/2018 to 01/04/2019
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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PPL Corporation (PPL)
Industry: Electric Utility (East)
Industry RS rank: 5 out of 58
Stock RS rank: 104 out of 592
1/10/19 close: $29.57
1 Month avg volatility: $0.74. Volatility stop (for upward breakout): $27.62 or 6.6% below the close.
Change YTD: 4.38%
Volume: 4,402,200 shares. 3 month avg: 3,908,818 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: Head-and-shoulders bottom reversal pattern from 12/18/2018 to 01/04/2019
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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Red Hat, Inc (RHT)
Industry: Computer Software and Svcs
Industry RS rank: 6 out of 58
Stock RS rank: 24 out of 592
1/10/19 close: $174.50
1 Month avg volatility: $1.32. Volatility stop (for upward breakout): $171.39 or 1.8% below the close.
Change YTD: -0.65%
Volume: 2,629,400 shares. 3 month avg: 1,583,828 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/27/2018 to 01/10/2019
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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RLI Corp (RLI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 23 out of 58
Stock RS rank: 155 out of 592
1/10/19 close: $68.33
1 Month avg volatility: $1.59. Volatility stop (for upward breakout): $63.99 or 6.4% below the close.
Change YTD: -0.96%
Volume: 61,000 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: Pennant continuation pattern from 12/28/2018 to 01/10/2019
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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Southwestern Energy Company (SWN)
Industry: Natural Gas (Diversified)
Industry RS rank: 55 out of 58
Stock RS rank: 462 out of 592
1/10/19 close: $4.30
1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $3.63 or 15.6% below the close.
Change YTD: 26.10%
Volume: 20,156,500 shares. 3 month avg: 16,683,949 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Surmodics, Inc (SRDX)
Industry: Medical Supplies
Industry RS rank: 15 out of 58
Stock RS rank: 367 out of 592
1/10/19 close: $50.79
1 Month avg volatility: $2.80. Volatility stop (for upward breakout): $43.82 or 13.7% below the close.
Change YTD: 7.47%
Volume: 58,800 shares. 3 month avg: 37,286 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: Pipe bottom reversal pattern from 12/24/2018 to 12/31/2018
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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Tempur-pedic Intl (TPX)
Industry: Furn/Home Furnishings
Industry RS rank: 33 out of 58
Stock RS rank: 212 out of 592
1/10/19 close: $47.84
1 Month avg volatility: $2.10. Volatility stop (for upward breakout): $42.89 or 10.4% below the close.
Change YTD: 15.56%
Volume: 580,200 shares. 3 month avg: 985,960 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 12/24/2018 to 12/31/2018
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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Thursday 1/10/19. Intraday Market Direction: Nasdaq

The index climbed by 0.9% or 60.08 points. Since 02/05/1971 the index made 292 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 191 occasions.
     Average loss was -0.8% on 101 occasions.
Expect the index to close higher 65.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 155/284 or 54.6% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The chart pattern at AB might be a double top but the index has to close below the bottom of the chart pattern to confirm it as a valid double top. I don't think that has happened yet.

Of interest is the nicely-shaped big W at CD. A big W is a double bottom with a tall left side and the hope that the right side will see price rise to match the left.

In this example, that happened and price continued to rise.

$ $ $

I released version 7.6 of Patternz. I added pennants to the chart patterns found, added chart annotations, fixed bugs, and so on.

If you already have version 7.6, then you'll have to remove that version before installing this one (this applies to 2 users).

Also, I received an email requesting what I call annotations (hover the mouse over a price bar and the prices appear automatically). I can't find your email and I told you to right click the mouse button to get the price data. But I've implemented annotations in this version. You'll find it on the Setup form (Chart form then Setup button. It'll be on the upper left of the form. Check annotations and they'll appear on the charts).

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,581.58    
 Monthly S1  6,269.33  687.75   
 Weekly S2  6,421.41  152.08   
 Weekly S1  6,689.24  267.84   
 Weekly Pivot  6,724.97  35.72   
 Daily S2  6,861.63  136.66   
 Monthly Pivot  6,877.92  16.29   
 Low  6,899.56  21.64   
 Daily S1  6,909.35  9.79   
 Open  6,923.06  13.71   
 61.8% Down from Intraday High  6,932.28  9.22   
 50% Down from Intraday High  6,942.39  10.11   
 Daily Pivot  6,947.29  4.90   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  6,952.50  5.21   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  6,957.08  4.58   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  6,985.22  28.14   
 Weekly R1  6,992.80  7.58   Yes! The Weekly R1 is close to the High.
 Daily R1  6,995.01  2.21   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2  7,028.53  33.51   
 Daily R2  7,032.95  4.42   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1  7,565.67  532.72   
 Monthly R2  8,174.26  608.59   

Wednesday 1/9/19. 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.

As the chart shows, the indicator made a nice recovery since bottoming in January. Will it continue?

My guess is no. The candles are looking thin. I think I saw a doji and that's an indication of uncertainty. The move up looks like it's about to round over.

But we'll have to wait and see. It's been a nice ride up, though.

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 Tuesday, 61% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 68%.
The fewest was 15% on 01/26/2018.
And the most was 80% on 12/24/2018.
Shown as a blue line on the above chart...
The 496 stocks in my database are down an average of 27% from their yearly high.
A week ago, the average was 29%.
The peak was 9% on 01/22/2018.
And the bottom was 33% on 12/24/2018.

The last time I looked at this chart was about three weeks ago (holidays). Now we see the effects of the turn.

The lines are rising again. Yippee! Both the red and blue lines have made good upward progress from the prior week.

One could argue that there's nowhere to go but up.

Look at the red line. Notice that it shows an ugly double bottom. That's a double bottom with unequal bottoms (the second higher than the first). It's a sign of a trend change. So that's good news if the two lines continue to rise.

-- Thomas Bulkowski

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Tuesday 1/8/19. Intraday Market Direction: Dow

The index climbed by 0.4% or 98.19 points. Since 10/01/1928 the index made 1086 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 574 occasions.
     Average loss was -0.5% on 512 occasions.
Expect the index to close higher 52.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 177/296 or 59.8% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The red and green curved lines are two distinct chart patterns. Do you know what they are?

These two are like squirrels in my back yard. Despite how often I chase them away, they are still around. In other words, these patterns are everywhere.

The two are called scallops, ascending and inverted.

I found that when they appear in a herd, three in a row, the size of them tends to diminish as price rises. That means a downward turn is imminent. But I've also seen them get larger and then a downturn comes. So either way works.

In this example, notice that the green one is smaller than the red one. So be prepared for a downward turn. No guarantee, of course.

$ $ $

I updated stats on pennants. You can find a comparison of pattern performance over time on my time performance page.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  19,473.68    
 Monthly S1  21,502.52  2,028.83   
 Weekly S2  22,349.24  846.72   
 Weekly S1  22,940.29  591.06   
 Daily S2  23,120.74  180.45   
 Weekly Pivot  23,229.47  108.72   
 Low  23,301.59  72.12   
 Daily S1  23,326.05  24.46   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  23,449.10  123.05   
 Open  23,474.26  25.16   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  23,494.66  20.40   Yes! The 50% Down from Intraday High is close to the Open.
 Daily Pivot  23,506.89  12.23   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  23,531.35  24.46   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  23,540.23  8.88   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  23,687.74  147.51   
 Daily R1  23,712.20  24.46   Yes! The Daily R1 is close to the High.
 Monthly Pivot  23,741.36  29.17   Yes! The Monthly Pivot is close to the Daily R1.
 Weekly R1  23,820.52  79.16   
 Daily R2  23,893.04  72.52   
 Weekly R2  24,109.70  216.65   
 Monthly R1  25,770.20  1,660.50   
 Monthly R2  28,009.04  2,238.85   

Monday 1/7/19. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

This is the Dow transports on the daily scale.

I see two likely paths, although there are more (like the index moving sideways in a choppy scenario). So let's call the red line wishful thinking and the green one an exercise in the futility of seeing a chart pattern form.

The red line, if it follows the trajectory shown here, will be a V-shaped bottom (V-bottom). It could grow an extension. That is a "handle" on the right of the V. An extension will be obvious because the price will move sideways for a time before resuming the upward run.

Anyway, price rises and rises in a nice move higher, in the best case, mirroring the downward move because it'll be a straight upward climb. That's unlikely. The index might rise, but my guess is it'll be a bumpy ride.

Did I mention the V-bottom is the scenario I prefer?

The green path could be one the index follows. Price rises for a time and then drops, forming a potential double bottom.

The forecast for 2019 shows this scenario except that the green line continues lower.

So a scare about the China trade deal falling through would send the markets tumbling, following the green line.

You have to ask yourself why I chose green to be down and red to be up. Answer: No idea.

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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 265.06 points.
Wednesday: Up 18.78 points.
Thursday: Down 660.02 points.
Friday: Up 746.94 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 370.76 points or 1.6%.
The Nasdaq composite was up 154.34 points or 2.3%.
The S&P 500 index was up 46.2 points or 1.9%.

Year to Date...

Dow Industrials
     0.4% down from the high of 23,518.64 on 01/04/2019.
     3.5% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     0.3% down from the high of 6,760.69 on 01/04/2019.
     4.4% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     0.2% down from the high of 2,538.07 on 01/04/2019.
     3.6% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/04/2019, the CPI had:

0 bearish patterns,
98 bullish patterns,
488 patterns waiting for breakout.
The CPI signal is 100.0%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  22,659  23,046  23,282  23,670  23,906 
Weekly  22,317  22,875  23,197  23,755  24,077 
Monthly  19,441  21,437  23,709  25,705  27,976 
S&P500 (^GSPC): Daily  2,451  2,491  2,515  2,555  2,579 
Weekly  2,411  2,471  2,505  2,565  2,599 
Monthly  2,106  2,319  2,560  2,773  3,013 
Nasdaq (^IXIC): Daily  6,478  6,609  6,685  6,815  6,891 
Weekly  6,349  6,544  6,652  6,847  6,956 
Monthly  5,509  6,124  6,805  7,420  8,102 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 34.2%   The trend may continue. 
 1 month up 54.2%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 35.0%   The trend may continue. 
 1 month up 55.5%   Expect a random direction. 
 Nasdaq composite (^IXIC) 2 weeks up 34.0%   The trend may continue. 
 1 month up 46.8%   Expect a random direction. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 9 days.

 Found Chart Pattern Name
11Head-and-shoulders top
11Pipe bottom
11Triple top
7Island top
7Double Top, Adam and Adam
6Broadening top
6Double Top, Adam and Eve
6Double Bottom, Adam and Adam
5Long Island
4Triangle, ascending

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Precision Instrument2. Precision Instrument
3. Toiletries/Cosmetics3. Household Products
4. Household Products4. Electric Utility (Central)
5. Electric Utility (East)5. Toiletries/Cosmetics

-- Thomas Bulkowski

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Friday 1/4/19. 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 6 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 598 stocks searched, or 1.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 11 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 14 bullish chart patterns this week and 1 bearish ones with any remaining (2) 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
ANFPipe bottom      12/17/201812/24/2018Apparel
ASNAPipe bottom      12/17/201812/24/2018Apparel
CROXPipe bottom      12/17/201812/24/2018Shoe
DODouble Bottom, Eve and Adam      12/20/201801/02/2019Oilfield Svcs/Equipment
DDSPipe bottom      12/17/201812/24/2018Retail Store
BOOMTriangle, descending      11/27/201801/03/2019Metal Fabricating
GEHorn bottom      12/10/201812/24/2018Diversified Co.
GESPipe bottom      12/17/201812/24/2018Apparel
HSYDiamond bottom      12/18/201801/03/2019Food Processing
NFXPipe bottom      12/17/201812/24/2018Natural Gas (Diversified)
PKEPipe bottom      12/17/201812/24/2018Chemical (Specialty)
RLPipe bottom      12/17/201812/24/2018Apparel
REVPipe bottom      12/17/201812/24/2018Toiletries/Cosmetics
SUMHead-and-shoulders bottom      12/14/201801/02/2019Cement and Aggregates
TOLTriangle, ascending      10/23/201801/03/2019Homebuilding
TREXPipe bottom      12/17/201812/24/2018Building Materials
WLKPipe bottom      12/17/201812/24/2018Chemical (Basic)

 

Weekly screen for chart patterns ending between 12/27/2018 and 01/03/2019. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Abercrombie and Fitch Co. (ANF)
Industry: Apparel
Industry RS rank: 47 out of 58
Stock RS rank: 394 out of 592
1/3/19 close: $19.77
1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $17.63 or 10.8% below the close.
Change YTD: -1.40%
Volume: 2,207,000 shares. 3 month avg: 2,821,334 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 47 out of 58
Stock RS rank: 441 out of 592
1/3/19 close: $2.75
1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $2.11 or 23.3% below the close.
Change YTD: 9.56%
Volume: 3,403,800 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: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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CROCS Inc (CROX)
Industry: Shoe
Industry RS rank: 7 out of 58
Stock RS rank: 3 out of 592
1/3/19 close: $27.07
1 Month avg volatility: $1.30. Volatility stop (for upward breakout): $24.20 or 10.6% below the close.
Change YTD: 4.20%
Volume: 1,087,400 shares. 3 month avg: 1,230,068 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Diamond Offshore (DO)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 58 out of 58
Stock RS rank: 567 out of 592
1/3/19 close: $10.40
1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $8.39 or 19.3% below the close.
Change YTD: 10.17%
Volume: 3,190,100 shares. 3 month avg: 2,441,012 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: Double Bottom, Eve and Adam reversal pattern from 12/20/2018 to 01/02/2019
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 4%.
Throwbacks occur 57% of the time.
Price hits measure rule target 66% of the time.

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Dilliards Inc (DDS)
Industry: Retail Store
Industry RS rank: 20 out of 58
Stock RS rank: 504 out of 592
1/3/19 close: $62.13
1 Month avg volatility: $2.76. Volatility stop (for upward breakout): $56.25 or 9.5% below the close.
Change YTD: 3.02%
Volume: 444,000 shares. 3 month avg: 658,302 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 12/17/2018 to 12/24/2018
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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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 42 out of 58
Stock RS rank: 439 out of 592
1/3/19 close: $34.83
1 Month avg volatility: $1.48. Volatility stop (for downward breakout): $38.60 or 10.8% above the close.
Change YTD: -0.83%
Volume: 99,500 shares. 3 month avg: 60,208 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, descending reversal pattern from 11/27/2018 to 01/03/2019
WARNING: A dead-cat bounce occurred on 07/27/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 01/25/2019.
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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General Electric Co (GE)
Industry: Diversified Co.
Industry RS rank: 32 out of 58
Stock RS rank: 540 out of 592
1/3/19 close: $8.06
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $6.99 or 13.2% below the close.
Change YTD: 6.47%
Volume: 122,833,500 shares. 3 month avg: 74,714,158 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Horn bottom reversal pattern from 12/10/2018 to 12/24/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price hits measure rule target 76% of the time.

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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 47 out of 58
Stock RS rank: 160 out of 592
1/3/19 close: $20.56
1 Month avg volatility: $1.01. Volatility stop (for upward breakout): $17.99 or 12.5% below the close.
Change YTD: -1.01%
Volume: 618,000 shares. 3 month avg: 1,269,442 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Hershey Company, The (HSY)
Industry: Food Processing
Industry RS rank: 11 out of 58
Stock RS rank: 33 out of 592
1/3/19 close: $106.24
1 Month avg volatility: $2.31. Volatility stop (for upward breakout): $100.29 or 5.6% below the close.
Change YTD: -0.88%
Volume: 1,240,300 shares. 3 month avg: 973,146 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 bottom reversal pattern from 12/18/2018 to 01/03/2019
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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Newfield Exploration Company (NFX)
Industry: Natural Gas (Diversified)
Industry RS rank: 52 out of 58
Stock RS rank: 571 out of 592
1/3/19 close: $15.28
1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $13.13 or 14.1% below the close.
Change YTD: 4.23%
Volume: 5,512,900 shares. 3 month avg: 2,658,254 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Park Electrochemical (PKE)
Industry: Chemical (Specialty)
Industry RS rank: 9 out of 58
Stock RS rank: 284 out of 592
1/3/19 close: $20.44
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $19.05 or 6.8% below the close.
Change YTD: 13.12%
Volume: 671,900 shares. 3 month avg: 70,862 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 bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 47 out of 58
Stock RS rank: 383 out of 592
1/3/19 close: $100.68
1 Month avg volatility: $4.02. Volatility stop (for upward breakout): $92.39 or 8.2% below the close.
Change YTD: -2.69%
Volume: 1,157,800 shares. 3 month avg: 1,365,482 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: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Revlon Inc (REV)
Industry: Toiletries/Cosmetics
Industry RS rank: 4 out of 58
Stock RS rank: 5 out of 592
1/3/19 close: $25.88
1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $22.91 or 11.5% below the close.
Change YTD: 2.74%
Volume: 48,200 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: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
WARNING: A dead-cat bounce occurred on 10/29/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/28/2019 and a 38% chance by 04/29/2019.
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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Summit Materials Inc (SUM)
Industry: Cement and Aggregates
Industry RS rank: 56 out of 58
Stock RS rank: 577 out of 592
1/3/19 close: $12.70
1 Month avg volatility: $0.74. Volatility stop (for upward breakout): $10.80 or 15.0% below the close.
Change YTD: 2.42%
Volume: 1,333,400 shares. 3 month avg: 1,204,178 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: Head-and-shoulders bottom reversal pattern from 12/14/2018 to 01/02/2019
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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Toll Brothers (TOL)
Industry: Homebuilding
Industry RS rank: 43 out of 58
Stock RS rank: 230 out of 592
1/3/19 close: $33.20
1 Month avg volatility: $1.42. Volatility stop (for upward breakout): $30.03 or 9.6% below the close.
Change YTD: 0.82%
Volume: 1,368,400 shares. 3 month avg: 2,237,614 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 10/23/2018 to 01/03/2019
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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Trex Company (TREX)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 49 out of 58
Stock RS rank: 188 out of 592
1/3/19 close: $60.78
1 Month avg volatility: $2.63. Volatility stop (for upward breakout): $53.72 or 11.6% below the close.
Change YTD: 2.39%
Volume: 690,300 shares. 3 month avg: 245,355 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Westlake Chemical Corp (WLK)
Industry: Chemical (Basic)
Industry RS rank: 38 out of 58
Stock RS rank: 541 out of 592
1/3/19 close: $65.23
1 Month avg volatility: $2.85. Volatility stop (for upward breakout): $59.47 or 8.8% below the close.
Change YTD: -1.42%
Volume: 602,200 shares. 3 month avg: 812,517 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: Pipe bottom reversal pattern from 12/17/2018 to 12/24/2018
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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Thursday 1/3/19. Intraday Market Direction: Nasdaq

The index climbed by 0.5% or 30.66 points. Since 02/05/1971 the index made 550 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 372 occasions.
     Average loss was -0.7% on 178 occasions.
Expect the index to close higher 67.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 155/283 or 54.8% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The index tumbled to A, showing a rocky start.

Then it rebounded to form a three-hump pattern. It's not completed because the index can rise or decline from here. But right now, the BCD pattern looks like an unconfirmed head-and-shoulders top.

That suggests price is going to drop tomorrow, but as I said, it's a guess. The probabilities, above, suggest a higher close 67% of the time. Those are good odds.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,484.53    
 Weekly S2  6,019.42  534.89   
 Monthly S1  6,075.24  55.82   
 Weekly S1  6,342.68  267.44   
 Daily S2  6,435.35  92.67   
 Low  6,506.88  71.53   
 Open  6,506.91  0.03   Yes! The Open is close to the Low.
 Weekly Pivot  6,513.43  6.52   Yes! The Weekly Pivot is close to the Open.
 Daily S1  6,550.64  37.21   
 61.8% Down from Intraday High  6,578.25  27.61   
 50% Down from Intraday High  6,600.29  22.05   
 Daily Pivot  6,622.18  21.88   
 38.2% Down from Intraday High  6,622.34  0.16   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  6,665.94  43.60   
 High  6,693.71  27.77   
 Daily R1  6,737.47  43.76   
 Monthly Pivot  6,780.87  43.40   
 Daily R2  6,809.01  28.13   
 Weekly R1  6,836.69  27.68   
 Weekly R2  7,007.44  170.75   
 Monthly R1  7,371.58  364.14   
 Monthly R2  8,077.21  705.64   

Wednesday 1/2/19. The Year Behind and Ahead

Annual Performance
Dow utilities-1.4%
Nasdaq-3.9%
Dow industrials-5.6%
S&P 500-6.2%
Dow transports-13.6%

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 price appreciation only.

The Dow utilities were the winner this year and it probably posted a gain if you include dividends.

The biggest loser was the Dow transports with a 13.6% loss. Ouch.

How did you do? My final numbers aren't in yet... I was fortunate to cash out of some big winners early in the year.

Picture of the CPI

The above chart shows the chart pattern indicator for 2018. The green vertical bar on the far right edge of the chart is the most recent bullish signal. The indicator did quite well at calling the major turns, but it's easy to call those turns when you have a 1-week window to make your guess. In other words, it's like saying "See that exit you just drove past? You should have turned there."

Picture of the year's prediction 2019.

The red line is the forecast for 2018 and the black bars are the Dow industrials on the daily scale.

Earlier in 2008, probably around the August blog post, I received an email questioning the inclusion of 2007-2009 bear market data in the forecast. I thought the person made a good case, that the 2008 bear market wouldn't recur this year. So I removed the bear market data and posted the results.

Clearly that was a mistake. If you include the 2008 bear market data in the forecast, then the above chart is what you get.

Notice that if you invert the red line, it tracks quite closely the Dow industrials. The ending close isn't the same, but it's a very good prediction in my view.

Unfortunately, I've no idea ahead of time whether we'll need to invert the forecast or not.

Picture of the year's prediction 2019.

This is the forecast for 2019, made after the close on 12/31/2018. The idea here is that the Dow has a 10-year cycle, so if you average the years ending in 9 (for 2019), you'll get the chart. The chart is not a guess. Rather, it's based on a mathematical calculation which you can do if you desire. If you want details of how this prediction works, click the link.

Anyway, notice that the market remains weak until late February or early March 2019 when it bottoms. After that, the Dow makes a nice bullish run.

If the prediction is correct, then you should start to bottom fish (begin buying) in late February.

Picture of the year's prediction 2019 on.

This chart shows the longer term prediction. Notice that the lowest close on this monthly scale is different from the lowest close on the prior, daily, chart.

There's a reason for that. The monthly scale, this chart, is the most accurate, followed by the weekly (not shown) and daily (prior chart).

This chart shows weakness in 2019, as I've mentioned, followed by nice upward run to early 2021. A little turbulence sets in for about a year until mid 2022. Then it's up, up, and away until 2028 (notice a weak year happens a decade after 2018...).

-- Thomas Bulkowski

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Written by and copyright © 2005-2019 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.