Bulkowski's Blog: ThePatternSite.com
As of 03/27/2020
  Indus: 21,637 -915.39 -4.1%  
  Trans: 7,699 -346.29 -4.3%  
  Utils: 759 +1.01 +0.1%  
  Nasdaq: 7,502 -295.16 -3.8%  
  S&P 500: 2,541 -88.60 -3.4%  
YTD
-24.2%  
-29.4%  
-13.7%  
-16.4%  
-21.3%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 3/27/20
As of 03/27/2020
  Indus: 21,637 -915.39 -4.1%  
  Trans: 7,699 -346.29 -4.3%  
  Utils: 759 +1.01 +0.1%  
  Nasdaq: 7,502 -295.16 -3.8%  
  S&P 500: 2,541 -88.60 -3.4%  
YTD
-24.2%  
-29.4%  
-13.7%  
-16.4%  
-21.3%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 3/27/20

 

January 2020 Headlines

Archives


Friday 1/31/20. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 596 stocks searched, or 3.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 4 bullish chart patterns this week and 10 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACNTriangle, symmetrical      12/19/201901/30/2020IT Services
ADSBroadening top      12/13/201901/24/2020Information Services
AVYTriple bottom      12/03/201901/27/2020Packaging and Container
CMTLDead-cat bounce      01/29/202001/29/2020Telecom. Equipment
CSODPipe top      01/13/202001/21/2020E-Commerce
EBAYRectangle bottom      10/25/201901/28/2020Internet
WIREPipe top      01/13/202001/21/2020Metals and Mining (Div.)
DHIScallop, ascending      12/12/201901/28/2020Homebuilding
KBALPipe top      01/13/202001/21/2020Furn/Home Furnishings
KLACBroadening top      12/23/201901/30/2020Semiconductor Cap Equip.
OLNPipe top      01/13/202001/21/2020Chemical (Basic)
PKETriangle, descending      09/18/201901/30/2020Chemical (Specialty)
PHMScallop, ascending      12/11/201901/28/2020Homebuilding
QCOMPipe top      01/13/202001/21/2020Telecom. Equipment
TPXDouble Bottom, Eve and Adam      01/06/202001/27/2020Furn/Home Furnishings
TXTBroadening bottom      12/27/201901/29/2020Diversified Co.
TOLScallop, ascending      12/09/201901/24/2020Homebuilding
UPSTriangle, descending      10/31/201901/24/2020Air Transport

 

Weekly screen for chart patterns ending between 01/23/2020 and 01/30/2020. 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.
 
Accenture plc (ACN)
Industry: IT Services
Industry RS rank: 6 out of 58
Stock RS rank: 256 out of 591
1/30/20 close: $208.37
1 Month avg volatility: $2.67. Volatility stop (for upward breakout): $199.86 or 4.1% below the close.
Change YTD: -1.04%
Volume: 1,579,600 shares. 3 month avg: 1,995,040 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/19/2019 to 01/30/2020
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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Alliance Data Systems Corp (ADS)
Industry: Information Services
Industry RS rank: 43 out of 58
Stock RS rank: 576 out of 591
1/30/20 close: $107.18
1 Month avg volatility: $2.69. Volatility stop (for downward breakout): $113.10 or 5.5% above the close.
Change YTD: -4.47%
Volume: 2,129,300 shares. 3 month avg: 546,969 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: Broadening top reversal pattern from 12/13/2019 to 01/24/2020
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Avery Dennison Corp (AVY)
Industry: Packaging and Container
Industry RS rank: 37 out of 58
Stock RS rank: 121 out of 591
1/30/20 close: $136.11
1 Month avg volatility: $2.55. Volatility stop (for upward breakout): $125.50 or 7.8% below the close.
Change YTD: 4.04%
Volume: 656,200 shares. 3 month avg: 661,129 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: Triple bottom reversal pattern from 12/03/2019 to 01/27/2020
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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Comtech Telecommunications Corp (CMTL)
Industry: Telecom. Equipment
Industry RS rank: 48 out of 58
Stock RS rank: 382 out of 591
1/30/20 close: $29.83
1 Month avg volatility: $0.89. Volatility stop (for downward breakout): $31.66 or 6.1% above the close.
Change YTD: -15.95%
Volume: 513,100 shares. 3 month avg: 255,535 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: Dead-cat bounce continuation pattern from 01/29/2020 to 01/29/2020
Breakout is downward 67% of the time.
Average decline: 18%.

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Cornerstone OnDemand Inc (CSOD)
Industry: E-Commerce
Industry RS rank: 22 out of 58
Stock RS rank: 381 out of 591
1/30/20 close: $59.35
1 Month avg volatility: $1.15. Volatility stop (for downward breakout): $62.08 or 4.6% above the close.
Change YTD: 1.37%
Volume: 192,400 shares. 3 month avg: 697,858 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 01/13/2020 to 01/21/2020
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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eBay, Inc. (EBAY)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 524 out of 591
1/30/20 close: $35.06
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $36.33 or 3.6% above the close.
Change YTD: -2.91%
Volume: 12,412,500 shares. 3 month avg: 8,868,903 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Rectangle bottom continuation pattern from 10/25/2019 to 01/28/2020
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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Encore Wire Corp (WIRE)
Industry: Metals and Mining (Div.)
Industry RS rank: 47 out of 58
Stock RS rank: 366 out of 591
1/30/20 close: $55.64
1 Month avg volatility: $1.11. Volatility stop (for downward breakout): $57.91 or 4.1% above the close.
Change YTD: -3.07%
Volume: 112,500 shares. 3 month avg: 88,880 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 Thursday.
 
Chart pattern: Pipe top reversal pattern from 01/13/2020 to 01/21/2020
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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Horton, D.R. Inc. (DHI)
Industry: Homebuilding
Industry RS rank: 1 out of 58
Stock RS rank: 47 out of 591
1/30/20 close: $60.30
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $57.71 or 4.3% below the close.
Change YTD: 14.31%
Volume: 2,413,000 shares. 3 month avg: 4,390,840 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Scallop, ascending continuation pattern from 12/12/2019 to 01/28/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Kimball International, Inc. (KBAL)
Industry: Furn/Home Furnishings
Industry RS rank: 44 out of 58
Stock RS rank: 184 out of 591
1/30/20 close: $19.46
1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $20.77 or 6.8% above the close.
Change YTD: -5.85%
Volume: 69,400 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 top reversal pattern from 01/13/2020 to 01/21/2020
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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KLA-Tencor Corporation (KLAC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 58
Stock RS rank: 59 out of 591
1/30/20 close: $172.92
1 Month avg volatility: $3.82. Volatility stop (for downward breakout): $183.00 or 5.8% above the close.
Change YTD: -2.95%
Volume: 1,444,400 shares. 3 month avg: 1,563,420 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 12/23/2019 to 01/30/2020
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Olin Corp. (OLN)
Industry: Chemical (Basic)
Industry RS rank: 36 out of 58
Stock RS rank: 556 out of 591
1/30/20 close: $15.64
1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $16.76 or 7.2% above the close.
Change YTD: -9.33%
Volume: 2,979,700 shares. 3 month avg: 1,697,154 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe top reversal pattern from 01/13/2020 to 01/21/2020
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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Park Electrochemical (PKE)
Industry: Chemical (Specialty)
Industry RS rank: 46 out of 58
Stock RS rank: 501 out of 591
1/30/20 close: $15.99
1 Month avg volatility: $0.44. Volatility stop (for downward breakout): $16.91 or 5.7% above the close.
Change YTD: -1.72%
Volume: 85,200 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 Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 09/18/2019 to 01/30/2020
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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Pulte Homes Inc. (PHM)
Industry: Homebuilding
Industry RS rank: 1 out of 58
Stock RS rank: 28 out of 591
1/30/20 close: $45.68
1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $43.64 or 4.5% below the close.
Change YTD: 17.73%
Volume: 3,302,700 shares. 3 month avg: 4,812,565 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: Scallop, ascending continuation pattern from 12/11/2019 to 01/28/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Qualcomm Inc. (QCOM)
Industry: Telecom. Equipment
Industry RS rank: 48 out of 58
Stock RS rank: 104 out of 591
1/30/20 close: $87.78
1 Month avg volatility: $2.00. Volatility stop (for downward breakout): $91.86 or 4.7% above the close.
Change YTD: -0.51%
Volume: 8,347,700 shares. 3 month avg: 12,234,022 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 01/13/2020 to 01/21/2020
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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Tempur-pedic Intl (TPX)
Industry: Furn/Home Furnishings
Industry RS rank: 44 out of 58
Stock RS rank: 143 out of 591
1/30/20 close: $93.33
1 Month avg volatility: $2.06. Volatility stop (for upward breakout): $87.64 or 6.1% below the close.
Change YTD: 7.20%
Volume: 946,100 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: Double Bottom, Eve and Adam reversal pattern from 01/06/2020 to 01/27/2020
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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Textron Inc (TXT)
Industry: Diversified Co.
Industry RS rank: 23 out of 58
Stock RS rank: 437 out of 591
1/30/20 close: $46.93
1 Month avg volatility: $0.96. Volatility stop (for upward breakout): $43.56 or 7.2% below the close.
Change YTD: 5.22%
Volume: 2,313,700 shares. 3 month avg: 1,461,508 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening bottom reversal pattern from 12/27/2019 to 01/29/2020
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Toll Brothers (TOL)
Industry: Homebuilding
Industry RS rank: 1 out of 58
Stock RS rank: 65 out of 591
1/30/20 close: $45.16
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $43.01 or 4.8% below the close.
Change YTD: 14.30%
Volume: 1,183,400 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: Scallop, ascending continuation pattern from 12/09/2019 to 01/24/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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United Parcel Service (UPS)
Industry: Air Transport
Industry RS rank: 52 out of 58
Stock RS rank: 479 out of 591
1/30/20 close: $108.00
1 Month avg volatility: $1.91. Volatility stop (for downward breakout): $116.88 or 8.2% above the close.
Change YTD: -7.74%
Volume: 9,468,400 shares. 3 month avg: 2,659,363 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 10/31/2019 to 01/24/2020
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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Thursday 1/30/20. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 5.48 points. Since 02/05/1971 the index made 703 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 391 occasions.
     Average loss was -0.7% on 312 occasions.
Expect the index to close higher 55.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 184/326 or 56.4% of the time.
     The prediction of the index closing lower has been right 54/106 or 50.9% 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 red line (A) shows where price was before the big plunge 3 days ago and where the index stands today.

At the open, it climbed above the red line, closing the gap. However, the index couldn't hold the gain and slumped late in the session.

To me, this shows weakness, but it might be normal rise/retrace behavior as price recovers. However, one can say that 9325 appears to be a resistance area based on the index reaching that level twice today and falling back. Will three times be the charm to push through that resistance? Or perhaps the index will make another plunge downward Time will answer that question.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  8,659.93    
 Monthly S1  8,967.54  307.62   
 Weekly S2  9,155.07  187.53   
 Daily S2  9,204.37  49.29   
 Monthly Pivot  9,209.49  5.12   Yes! The Monthly Pivot is close to the Daily S2.
 Weekly S1  9,215.12  5.63   Yes! The Weekly S1 is close to the Monthly Pivot.
 Daily S1  9,239.76  24.65   
 Low  9,249.04  9.28   
 Close  9,275.16  26.12   
 61.8% Down from Intraday High  9,279.63  4.47   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  9,284.44  4.81   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  9,289.08  4.64   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  9,298.52  9.45   
 Open  9,318.26  19.74   
 Daily R1  9,319.83  1.57   Yes! The Daily R1 is close to the Open.
 High  9,329.11  9.28   
 Weekly Pivot  9,333.27  4.16   Yes! The Weekly Pivot is close to the High.
 Daily R2  9,364.51  31.23   
 Weekly R1  9,393.32  28.81   
 Weekly R2  9,511.47  118.16   
 Monthly R1  9,517.10  5.63   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  9,759.05  241.94   

Wednesday 1/29/20. 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 turned bearish two days ago (that is, Tuesday when the big plunge occurred). The way the indicator is constructed, it seems the signal happened the day before.

Sigh.

That's just the way the indicator works. It can issue these signals for up to a week, falsely claiming to turn before a big market event.

Regardless, the signal is bearish but it's born from a short-time event, the Chinese virus. I don't think it's a lasting drop (in fact, I'm buying the dip).

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, 26% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 22%.
The fewest was 21% on 01/16/2020.
And the most was 55% on 01/29/2019.
Shown as a blue line on the above chart...
The 490 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 12%.
The peak was 11% on 01/16/2020.
And the bottom was 24% on 08/23/2019.

Both lines turned down when compared to their respective values a week ago. As I mentioned above, I don't think this is a lasting concern and markets will recover shortly.

I think that's true even if the virus gets worse (which is likely). It's an overblown reaction to a seasonal problem, so I remain bullish.

-- Thomas Bulkowski

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Tuesday 1/28/20. Slider Quiz!

The index dropped by -1.6% or -453.93 points. Since 10/01/1928 the index made 150 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 71 occasions.
     Average loss was -1.1% on 79 occasions.
Expect the index to close lower 52.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 199/339 or 58.7% of the time.
     The prediction of the index closing lower has been right 39/77 or 50.6% of the time.

$ $ $

I show a another slider quiz featuring the three falling peaks chart pattern.

$ $ $

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

-- Thomas Bulkowski

Top

© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  27,764.84    
 Monthly S1  28,150.32  385.48   
 Daily S2  28,318.03  167.71   
 Weekly S2  28,408.87  90.84   
 Daily S1  28,426.92  18.04   Yes! The Daily S1 is close to the Weekly S2.
 Low  28,440.47  13.55   Yes! The Low is close to the Daily S1.
 Weekly S1  28,472.34  31.87   
 61.8% Down from Intraday High  28,528.83  56.50   
 Close  28,535.80  6.97   Yes! The Close is close to the 61.8% Down from Intraday High.
 Open  28,542.49  6.69   Yes! The Open is close to the Close.
 Daily Pivot  28,549.35  6.86   Yes! The Daily Pivot is close to the Open.
 50% Down from Intraday High  28,556.13  6.78   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  28,583.43  27.29   
 Daily R1  28,658.24  74.81   
 High  28,671.79  13.55   Yes! The High is close to the Daily R1.
 Monthly Pivot  28,761.97  90.18   
 Daily R2  28,780.67  18.70   Yes! The Daily R2 is close to the Monthly Pivot.
 Weekly Pivot  28,906.77  126.10   
 Weekly R1  28,970.24  63.46   
 Monthly R1  29,147.45  177.21   
 Weekly R2  29,404.67  257.22   
 Monthly R2  29,759.10  354.43   

Monday 1/27/20. Market Monday: The Week Ahead

My Prediction

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

This chart might seem like a repeat of one I've shown before. Indeed, if you click on the link, you'll see a similar chart in the Nasdaq.

However, this chart is of the S&P 500 index, on the daily scale.

The index is rising in a channel. Look at how long this channel has lasted...almost 4 months! It's fattened my wallet and I trust your portfolio has been helped as well.

On Friday, over concerns about the new China virus dampening commerce, the indices stumbled.

While this concern might linger, I don't think it's a show stopper. It won't hold the indices down for long. A temporary setback is easy to say about the China trade war and other foreign affairs because we've seen them before, and recently. But the virus is new. Of course, I was around for SARS but I don't recall the impact on world markets.

I believe any uneasiness will blow over quickly, and it'll be a buying opportunity when the markets bottom.

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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 152.06 points.
Wednesday: Down 9.77 points.
Thursday: Down 26.18 points.
Friday: Down 170.36 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 358.37 points or 1.2%.
The Nasdaq composite was down 74.03 points or 0.8%.
The S&P 500 index was down 34.16 points or 1.0%.

Year to Date...

Dow Industrials
     1.3% down from the high of 29,373.62 on 01/17/2020.
     2.0% up from the low of 28,418.63 on 01/06/2020.
Nasdaq
     1.4% down from the high of 9,451.43 on 01/24/2020.
     4.2% up from the low of 8,943.50 on 01/06/2020.
S&P 500
     1.3% down from the high of 3,337.77 on 01/22/2020.
     2.5% up from the low of 3,214.64 on 01/06/2020.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  28,595  28,792  29,041  29,238  29,486 
Weekly  28,560  28,775  29,058  29,273  29,556 
Monthly  27,916  28,453  28,913  29,450  29,910 
S&P500 (^GSPC): Daily  3,252  3,274  3,303  3,325  3,355 
Weekly  3,249  3,272  3,305  3,328  3,361 
Monthly  3,156  3,226  3,282  3,351  3,407 
Nasdaq (^IXIC): Daily  9,168  9,242  9,347  9,420  9,525 
Weekly  9,168  9,242  9,347  9,420  9,525 
Monthly  8,673  8,994  9,223  9,544  9,772 

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 26.9%   The trend may continue. 
 5 months up 17.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 25.1%   The trend may continue. 
 5 months up 21.3%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 26.5%   The trend may continue. 
 5 months up 14.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
17Triangle, symmetrical
7Triple top
7Double Top, Adam and Adam
6Head-and-shoulders top
5Rising wedge
5Pennant
5Double Bottom, Adam and Adam
5Triangle, descending
5Scallop, ascending
4Triple 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. Homebuilding1. Computers and Peripherals
2. Computers and Peripherals2. Homebuilding
3. Semiconductor3. Semiconductor Cap Equip.
4. Semiconductor Cap Equip.4. Semiconductor
5. Trucking/Transp. Leasing5. Trucking/Transp. Leasing

-- Thomas Bulkowski

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Friday 1/24/20. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 597 stocks searched, or 2.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 6 bearish ones with any remaining (5) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ATRBroadening wedge, ascending      11/22/201901/23/2020Packaging and Container
BSETDouble Top, Eve and Adam      12/20/201901/22/2020Furn/Home Furnishings
BBWFlag, high and tight      12/12/201901/23/2020Retail (Special Lines)
CHKPBroadening bottom      12/31/201901/17/2020E-Commerce
CIENTriangle, symmetrical      12/13/201901/23/2020Telecom. Equipment
EVHFlag, high and tight      11/27/201901/17/2020Healthcare Information
FLSHead-and-shoulders top      01/02/202001/17/2020Machinery
HQYTriangle, symmetrical      01/02/202001/23/2020Healthcare Information
NSPScallop, ascending      12/23/201901/17/2020Human Resources
INTCScallop, ascending      01/02/202001/23/2020Semiconductor
KLICRising wedge      11/15/201901/22/2020Semiconductor Cap Equip.
MTSIScallop, ascending      12/27/201901/23/2020Semiconductor
MUScallop, ascending      01/09/202001/23/2020Semiconductor
OMCHead-and-shoulders top      11/08/201901/21/2020Advertising
RHITriple top      01/02/202001/17/2020Human Resources
TDCBroadening top, right-angled and ascending      12/13/201901/23/2020Computer Software and Svcs

 

Weekly screen for chart patterns ending between 01/16/2020 and 01/23/2020. 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.
 
AptarGroup Inc (ATR)
Industry: Packaging and Container
Industry RS rank: 46 out of 58
Stock RS rank: 454 out of 593
1/23/20 close: $117.37
1 Month avg volatility: $1.51. Volatility stop (for downward breakout): $122.05 or 4.0% above the close.
Change YTD: 1.51%
Volume: 301,000 shares. 3 month avg: 241,254 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening wedge, ascending reversal pattern from 11/22/2019 to 01/23/2020
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price hits measure rule target 58% of the time.

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Bassett Furniture Industries Inc (BSET)
Industry: Furn/Home Furnishings
Industry RS rank: 41 out of 58
Stock RS rank: 102 out of 593
1/23/20 close: $15.24
1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $17.09 or 12.1% above the close.
Change YTD: -8.63%
Volume: 60,800 shares. 3 month avg: 28,538 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 12/20/2019 to 01/22/2020
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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Build-A-Bear Workshop Inc (BBW)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 58
Stock RS rank: 132 out of 593
1/23/20 close: $5.31
1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $4.64 or 12.6% below the close.
Change YTD: 63.89%
Volume: 305,000 shares. 3 month avg: 99,982 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 Friday.
 
Chart pattern: Flag, high and tight continuation pattern from 12/12/2019 to 01/23/2020
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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Check Point Software (CHKP)
Industry: E-Commerce
Industry RS rank: 26 out of 58
Stock RS rank: 381 out of 593
1/23/20 close: $115.51
1 Month avg volatility: $1.72. Volatility stop (for upward breakout): $110.32 or 4.5% below the close.
Change YTD: 4.10%
Volume: 779,700 shares. 3 month avg: 1,143,906 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening bottom reversal pattern from 12/31/2019 to 01/17/2020
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Ciena Corp (CIEN)
Industry: Telecom. Equipment
Industry RS rank: 21 out of 58
Stock RS rank: 463 out of 593
1/23/20 close: $42.50
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $40.90 or 3.8% below the close.
Change YTD: -0.45%
Volume: 1,390,500 shares. 3 month avg: 3,226,991 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/13/2019 to 01/23/2020
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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Evolent Health, Inc (EVH)
Industry: Healthcare Information
Industry RS rank: 31 out of 58
Stock RS rank: 10 out of 593
1/23/20 close: $11.28
1 Month avg volatility: $0.59. Volatility stop (for upward breakout): $9.62 or 14.7% below the close.
Change YTD: 24.64%
Volume: 1,297,300 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: Flag, high and tight continuation pattern from 11/27/2019 to 01/17/2020
WARNING: A dead-cat bounce occurred on 11/27/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/26/2020 and a 38% chance by 05/27/2020.
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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Flowserve Corp (FLS)
Industry: Machinery
Industry RS rank: 40 out of 58
Stock RS rank: 472 out of 593
1/23/20 close: $49.09
1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $50.69 or 3.3% above the close.
Change YTD: -1.37%
Volume: 480,300 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: Head-and-shoulders top reversal pattern from 01/02/2020 to 01/17/2020
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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HealthEquity, Inc (HQY)
Industry: Healthcare Information
Industry RS rank: 31 out of 58
Stock RS rank: 516 out of 593
1/23/20 close: $71.76
1 Month avg volatility: $2.12. Volatility stop (for upward breakout): $66.82 or 6.9% below the close.
Change YTD: -3.12%
Volume: 568,100 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/02/2020 to 01/23/2020
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 53 out of 58
Stock RS rank: 584 out of 593
1/23/20 close: $92.70
1 Month avg volatility: $1.53. Volatility stop (for upward breakout): $88.13 or 4.9% below the close.
Change YTD: 7.74%
Volume: 340,900 shares. 3 month avg: 131,942 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Scallop, ascending continuation pattern from 12/23/2019 to 01/17/2020
WARNING: A dead-cat bounce occurred on 11/04/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/03/2020 and a 38% chance by 05/04/2020.
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Intel Corporation (INTC)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 58
Stock RS rank: 110 out of 593
1/23/20 close: $63.32
1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $61.12 or 3.5% below the close.
Change YTD: 5.80%
Volume: 39,617,700 shares. 3 month avg: 27,019,903 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: Scallop, ascending continuation pattern from 01/02/2020 to 01/23/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Kulicke and Soffa (KLIC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 58
Stock RS rank: 136 out of 593
1/23/20 close: $28.18
1 Month avg volatility: $0.53. Volatility stop (for downward breakout): $29.26 or 3.9% above the close.
Change YTD: 3.58%
Volume: 813,500 shares. 3 month avg: 518,337 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: Rising wedge reversal pattern from 11/15/2019 to 01/22/2020
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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MACOM Technology Solutions Holdings (MTSI)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 58
Stock RS rank: 15 out of 593
1/23/20 close: $30.04
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $27.35 or 9.0% below the close.
Change YTD: 12.93%
Volume: 340,700 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: Scallop, ascending continuation pattern from 12/27/2019 to 01/23/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Micron Technology (MU)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 58
Stock RS rank: 88 out of 593
1/23/20 close: $59.20
1 Month avg volatility: $1.34. Volatility stop (for upward breakout): $56.35 or 4.8% below the close.
Change YTD: 10.08%
Volume: 25,898,400 shares. 3 month avg: 38,182,855 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Scallop, ascending continuation pattern from 01/09/2020 to 01/23/2020
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Omnicom Group (OMC)
Industry: Advertising
Industry RS rank: 35 out of 58
Stock RS rank: 428 out of 593
1/23/20 close: $78.75
1 Month avg volatility: $0.89. Volatility stop (for downward breakout): $80.98 or 2.8% above the close.
Change YTD: -2.80%
Volume: 1,587,000 shares. 3 month avg: 2,548,395 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 top reversal pattern from 11/08/2019 to 01/21/2020
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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Robert Half International (RHI)
Industry: Human Resources
Industry RS rank: 53 out of 58
Stock RS rank: 404 out of 593
1/23/20 close: $62.54
1 Month avg volatility: $0.75. Volatility stop (for downward breakout): $64.24 or 2.7% above the close.
Change YTD: -0.97%
Volume: 783,700 shares. 3 month avg: 1,012,069 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: Triple top reversal pattern from 01/02/2020 to 01/17/2020
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Teradata Corp (TDC)
Industry: Computer Software and Svcs
Industry RS rank: 13 out of 58
Stock RS rank: 577 out of 593
1/23/20 close: $26.63
1 Month avg volatility: $0.64. Volatility stop (for downward breakout): $28.14 or 5.7% above the close.
Change YTD: -0.52%
Volume: 645,300 shares. 3 month avg: 1,378,918 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 12/13/2019 to 01/23/2020
WARNING: A dead-cat bounce occurred on 11/08/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 02/07/2020 and a 38% chance by 05/08/2020.
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Thursday 1/23/20. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 12.96 points. Since 02/05/1971 the index made 702 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 390 occasions.
     Average loss was -0.7% on 312 occasions.
Expect the index to close higher 55.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 183/325 or 56.3% of the time.
     The prediction of the index closing lower has been right 54/106 or 50.9% 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 is continuing to move higher, following a channel. I drew two red lines outlining the channel.

Notice that at points A and B, the index doesn't drop down far enough to touch the bottom channel line. Thus, we might expect that we'll see a turn upward if the index follows what it's done before. There's no evidence that it'll turn, really. I doubt that it'll be afraid of touching the bottom line.

If it does touch the bottom line, then one could argue that it'll keep going lower. For that, though, we'll have to wait and see.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  8,462.38    
 Monthly S1  8,923.07  460.70   
 Weekly S2  9,123.02  199.94   
 Monthly Pivot  9,158.28  35.26   
 Weekly S1  9,253.39  95.12   
 Weekly Pivot  9,323.44  70.04   
 Daily S2  9,335.24  11.80   
 Daily S1  9,359.50  24.27   
 Low  9,375.13  15.63   
 Close  9,383.77  8.64   
 Daily Pivot  9,399.40  15.63   
 61.8% Down from Intraday High  9,399.64  0.24   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  9,407.21  7.57   
 38.2% Down from Intraday High  9,414.78  7.57   
 Open  9,416.61  1.83   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  9,423.66  7.05   
 High  9,439.29  15.63   
 Weekly R1  9,453.81  14.52   
 Daily R2  9,463.56  9.74   
 Weekly R2  9,523.86  60.30   
 Monthly R1  9,618.97  95.12   
 Monthly R2  9,854.18  235.20   

Wednesday 1/22/20. 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 shows a bullish signal as the most recent one. That's the vertical green bar on the far right of the chart.

However, look at the indicator line. That's the thin blue line at the bottom of the chart. It's heading down. It looks to be in the neutral zone right now.

As I've mentioned before in other posts, a big move higher could change the line from down to up, so what you see may not be real for up to a week. Still, if the trend continues, it's bearish.

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, 22% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 23%.
The fewest was 21% on 01/16/2020.
And the most was 57% on 01/23/2019.
Shown as a blue line on the above chart...
The 491 stocks in my database are down an average of 12% from their yearly high.
A week ago, the average was 13%.
The peak was 12% on 01/16/2020.
And the bottom was 24% on 01/23/2019.

Both lines show improvement over the prior week at this time.

The bad new is, well, there really isn't any except to say that both lines have turned down today.

To me, the charts suggest the indices will retrace a portion of their gains in the coming days.

-- Thomas Bulkowski

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Tuesday 1/21/20. Slider Quiz: Head-and-Shoulders Top

I show a another slider quiz featuring the Head-and-shoulders top chart pattern.

-- Thomas Bulkowski

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Monday 1/20/20. Holiday Slider Quiz! Diamond Bottom

I show a another slider quiz featuring the diamond bottom chart pattern.

-- Thomas Bulkowski

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Friday 1/17/20. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 597 stocks searched, or 1.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 3 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 7 bullish chart patterns this week and 2 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
BIGPipe bottom      12/30/201901/06/2020Retail Store
COGRoof, inverted      12/26/201901/16/2020Natural Gas (Diversified)
CLNEPennant      01/07/202001/16/2020Natural Gas (Distributor)
CSGSBroadening top, right-angled and descending      12/18/201901/16/2020IT Services
DRQFalling wedge      12/31/201901/15/2020Oilfield Svcs/Equipment
MTSIPipe bottom      12/30/201901/06/2020Semiconductor
NWYDead-cat bounce      01/10/202001/13/2020Apparel
RLDiamond top      12/18/201901/16/2020Apparel
LUVHead-and-shoulders bottom      12/18/201901/13/2020Air Transport
STMPPipe bottom      12/30/201901/06/2020Internet
SUMHead-and-shoulders top      12/04/201901/10/2020Cement and Aggregates
SRDXFalling wedge      12/16/201901/16/2020Medical Supplies
SNPSPennant      01/10/202001/16/2020Computer Software and Svcs

 

Weekly screen for chart patterns ending between 01/09/2020 and 01/16/2020. 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.
 
Big Lots Inc. (BIG)
Industry: Retail Store
Industry RS rank: 33 out of 58
Stock RS rank: 193 out of 500
1/16/20 close: $28.78
1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $26.37 or 8.4% below the close.
Change YTD: 0.21%
Volume: 1,161,600 shares. 3 month avg: 984,457 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 12/30/2019 to 01/06/2020
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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Cabot Oil and Gas A (COG)
Industry: Natural Gas (Diversified)
Industry RS rank: 56 out of 58
1/16/20 close: $17.37
1 Month avg volatility: $0.44. Volatility stop (for downward breakout): $18.69 or 7.6% above the close.
Change YTD: -0.23%
Volume: 5,302,900 shares. 3 month avg: 5,196,143 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: Roof, inverted reversal pattern from 12/26/2019 to 01/16/2020
Breakout is downward 50% of the time.
Average decline: 17%.
Break-even failure rate: 10%.
Pullbacks occur 56% of the time.
Price hits measure rule target 73% of the time.

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Clean Energy Fuels Corp. (CLNE)
Industry: Natural Gas (Distributor)
Industry RS rank: 57 out of 58
Stock RS rank: 456 out of 500
1/16/20 close: $2.60
1 Month avg volatility: $0.12. Volatility stop (for upward breakout): $2.36 or 9.2% below the close.
Change YTD: 11.11%
Volume: 474,000 shares. 3 month avg: 1,021,160 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: Pennant continuation pattern from 01/07/2020 to 01/16/2020
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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CSG Systems International Inc (CSGS)
Industry: IT Services
Industry RS rank: 17 out of 58
Stock RS rank: 327 out of 500
1/16/20 close: $51.60
1 Month avg volatility: $1.04. Volatility stop (for upward breakout): $48.96 or 5.1% below the close.
Change YTD: -0.35%
Volume: 168,000 shares. 3 month avg: 127,302 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 12/18/2019 to 01/16/2020
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

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Dril-Quip Inc (DRQ)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 52 out of 58
Stock RS rank: 379 out of 500
1/16/20 close: $46.87
1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $43.74 or 6.7% below the close.
Change YTD: -0.09%
Volume: 154,800 shares. 3 month avg: 557,835 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: Falling wedge from 12/31/2019 to 01/15/2020
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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MACOM Technology Solutions Holdings (MTSI)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 58
Stock RS rank: 12 out of 500
1/16/20 close: $28.49
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $26.29 or 7.7% below the close.
Change YTD: 7.11%
Volume: 420,600 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 12/30/2019 to 01/06/2020
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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New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 50 out of 58
1/16/20 close: $0.61
1 Month avg volatility: $0.07. Volatility stop (for downward breakout): $0.78 or 28.9% above the close.
Change YTD: -24.24%
Volume: 116,200 shares. 3 month avg: 105,818 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 01/10/2020 to 01/13/2020
Breakout is downward 67% of the time.
Average decline: 18%.

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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 50 out of 58
Stock RS rank: 300 out of 500
1/16/20 close: $120.31
1 Month avg volatility: $2.02. Volatility stop (for downward breakout): $124.40 or 3.4% above the close.
Change YTD: 2.64%
Volume: 397,500 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 Monday.
 
Chart pattern: Diamond top reversal pattern from 12/18/2019 to 01/16/2020
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Southwest Airlines Company (LUV)
Industry: Air Transport
Industry RS rank: 45 out of 58
Stock RS rank: 346 out of 500
1/16/20 close: $55.30
1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $53.47 or 3.3% below the close.
Change YTD: 2.45%
Volume: 2,950,500 shares. 3 month avg: 5,071,869 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 12/18/2019 to 01/13/2020
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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Stamps.com (STMP)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 37 out of 58
Stock RS rank: 4 out of 500
1/16/20 close: $92.47
1 Month avg volatility: $2.86. Volatility stop (for upward breakout): $80.53 or 12.9% below the close.
Change YTD: 10.72%
Volume: 542,600 shares. 3 month avg: 426,580 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 12/30/2019 to 01/06/2020
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: 22 out of 58
Stock RS rank: 98 out of 500
1/16/20 close: $23.36
1 Month avg volatility: $0.69. Volatility stop (for downward breakout): $24.81 or 6.2% above the close.
Change YTD: -2.26%
Volume: 523,400 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 top reversal pattern from 12/04/2019 to 01/10/2020
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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Surmodics, Inc (SRDX)
Industry: Medical Supplies
Industry RS rank: 15 out of 58
Stock RS rank: 361 out of 500
1/16/20 close: $41.29
1 Month avg volatility: $1.21. Volatility stop (for upward breakout): $38.13 or 7.7% below the close.
Change YTD: -0.34%
Volume: 68,600 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: Falling wedge from 12/16/2019 to 01/16/2020
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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Synopsys Inc (SNPS)
Industry: Computer Software and Svcs
Industry RS rank: 20 out of 58
Stock RS rank: 258 out of 500
1/16/20 close: $149.69
1 Month avg volatility: $2.40. Volatility stop (for upward breakout): $143.42 or 4.2% below the close.
Change YTD: 7.54%
Volume: 794,000 shares. 3 month avg: 998,728 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: Pennant continuation pattern from 01/10/2020 to 01/16/2020
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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Thursday 1/16/20. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 7.37 points. Since 02/05/1971 the index made 701 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 389 occasions.
     Average loss was -0.7% on 312 occasions.
Expect the index to close higher 55.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 182/324 or 56.2% of the time.
     The prediction of the index closing lower has been right 54/106 or 50.9% 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 over the last week has been rising steadily, following an up-sloping trendline. I show that in red.

Notice at the right end of the line the index has dropped below the trendline. Does it mean the composite is going significantly lower?

Maybe, but probably not. You'll see lots of pierces like this over time. Most don't amount to much. The index will retrace some after a pierce and then resume climbing.

This trendline is comparatively long, so a pierce like the one we see today is more significant than for shorter trendlines. At this stage, I'm not worried. I need to see more technical evidence to get excited.

The blue line is drawn using rules for drawing trendlines outlined by Victor Sperandeo. It shows the index has already pierced the trendline several times and not declined much.

Using his methodology, it's getting close to signaling a trend change. All price needs is to close a bit lower and it'll suggest a downward move of significance is upon us. See the link for more information.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  8,397.19    
 Monthly S1  8,827.95  430.75   
 Weekly S2  8,854.10  26.15   
 Monthly Pivot  9,031.57  177.47   
 Weekly S1  9,056.40  24.83   
 Weekly Pivot  9,145.80  89.40   
 Daily S2  9,195.21  49.41   
 Daily S1  9,226.95  31.75   
 Low  9,231.14  4.19   Yes! The Low is close to the Daily S1.
 Open  9,253.76  22.62   
 61.8% Down from Intraday High  9,256.99  3.23   Yes! The 61.8% Down from Intraday High is close to the Open.
 Close  9,258.70  1.71   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  9,262.89  4.19   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  9,264.98  2.09   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  9,272.97  7.99   
 Daily R1  9,294.63  21.67   
 High  9,298.82  4.19   Yes! The High is close to the Daily R1.
 Daily R2  9,330.57  31.75   
 Weekly R1  9,348.10  17.53   
 Weekly R2  9,437.50  89.40   
 Monthly R1  9,462.33  24.83   
 Monthly R2  9,665.95  203.63   

Wednesday 1/15/20. A Look At Indicators

Picture of the chart pattern indicator

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

The bearish (red) bar on the far right of the chart has been replaced by a green bar. That's bullish. It suggests the index will continue higher. But wait...

The signal could disappear. I reminded an e-mailer of that today, in fact. The signal can change for up to a week but is usually solid after three days.

And don't try to trade using this indicator either. Why? Find out here.

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, 22% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 23%.
The fewest was 22% on 01/02/2020.
And the most was 58% on 01/16/2019.
Shown as a blue line on the above chart...
The 491 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 13%.
The peak was 13% on 01/14/2020.
And the bottom was 25% on 01/15/2019.

The more sensitive of the two lines, the red one, shows improvement this week by one percentage point. That's what I used to see over a year ago until the index went crazy.

So it's a low volatility signal. If that interpretation is correct then a more violent period is coming.

-- Thomas Bulkowski

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Tuesday 1/14/20. Slider Quiz!

The index climbed by 0.3% or 83.28 points. Since 10/01/1928 the index made 1106 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 611 occasions.
     Average loss was -0.6% on 495 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 198/338 or 58.6% of the time.
     The prediction of the index closing lower has been right 39/77 or 50.6% of the time.

$ $ $

I show a another slider quiz featuring the triple top chart pattern.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  27,365.37    
 Monthly S1  28,136.21  770.84   
 Weekly S2  28,187.81  51.60   
 Weekly S1  28,547.43  359.62   
 Monthly Pivot  28,572.64  25.21   
 Weekly Pivot  28,778.25  205.61   
 Daily S2  28,788.32  10.07   
 Low  28,819.43  31.11   
 Daily S1  28,847.68  28.25   
 61.8% Down from Intraday High  28,853.99  6.31   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  28,864.67  10.68   
 Open  28,869.01  4.34   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  28,875.35  6.34   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  28,878.80  3.45   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  28,907.05  28.25   
 High  28,909.91  2.86   Yes! The High is close to the Close.
 Daily R1  28,938.16  28.25   
 Daily R2  28,969.28  31.11   
 Weekly R1  29,137.87  168.59   
 Monthly R1  29,343.48  205.61   
 Weekly R2  29,368.69  25.21   
 Monthly R2  29,779.91  411.22   

Monday 1/13/20. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

I show the Nasdaq composite on the daily scale.

Nothing much exciting appears on the chart.

I drew two up-sloping trendlines which hug price peaks on the top and valleys on the bottom. The combination forms a channel.

Right now, the index has touched the top of the channel and has come down some. Will the drop continue?

Hard to tell, but my guess is yes. That's especially true if Iran take further action against the US or its allies.

I don't know if the markets will care much about the impeachment trial which is coming. Maybe Trump will sign the first installment of the China trade pact. The markets might like that.

So there is good news to push the index higher and potential news to push it lower.

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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 68.5 points.
Tuesday: Down 119.7 points.
Wednesday: Up 161.41 points.
Thursday: Up 211.81 points.
Friday: Down 133.13 points.

For the Week...

The Dow industrials were up 188.89 points or 0.7%.
The Nasdaq composite was up 158.09 points or 1.8%.
The S&P 500 index was up 30.5 points or 0.9%.

Year to Date...

Dow Industrials
     0.6% down from the high of 29,009.07 on 01/10/2020.
     1.4% up from the low of 28,418.63 on 01/06/2020.
Nasdaq
     0.6% down from the high of 9,235.20 on 01/10/2020.
     2.6% up from the low of 8,943.50 on 01/06/2020.
S&P 500
     0.5% down from the high of 3,282.99 on 01/10/2020.
     1.6% up from the low of 3,214.64 on 01/06/2020.

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 01/10/2020, the CPI had:

5 bearish patterns,
6 bullish patterns,
204 patterns waiting for breakout.
The CPI signal is 54.5%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  28,654  28,739  28,874  28,959  29,094 
Weekly  28,160  28,492  28,750  29,082  29,341 
Monthly  27,338  28,081  28,545  29,288  29,752 
S&P500 (^GSPC): Daily  3,248  3,256  3,270  3,279  3,292 
Weekly  3,186  3,226  3,254  3,294  3,323 
Monthly  3,068  3,167  3,225  3,324  3,382 
Nasdaq (^IXIC): Daily  9,122  9,151  9,193  9,221  9,263 
Weekly  8,827  9,003  9,119  9,295  9,411 
Monthly  8,371  8,775  9,005  9,409  9,639 

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 47.0%   Expect a random direction. 
 5 months up 17.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 48.0%   Expect a random direction. 
 5 months up 21.3%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 5 weeks up 14.5%   Expect a reversal soon. 
 5 months up 14.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 3 days.

 Found Chart Pattern Name
25Triangle, symmetrical
9Triangle, descending
8Double Bottom, Adam and Adam
8Diamond top
6Pennant
6Double Top, Adam and Adam
6Triple top
6Broadening top
5Rising wedge
5Head-and-shoulders bottom

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

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

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

This WeekLast Week
1. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Trucking/Transp. Leasing2. Semiconductor
3. Computers and Peripherals3. Trucking/Transp. Leasing
4. Semiconductor4. Homebuilding
5. Homebuilding5. Computers and Peripherals

-- Thomas Bulkowski

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Friday 1/10/20. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 597 stocks searched, or 3.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 10 bullish chart patterns this week and 6 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AIGTriangle, symmetrical      11/25/201901/07/2020Insurance (Prop/Casualty)
ARCBTriangle, descending      11/26/201901/08/2020Trucking/Transp. Leasing
ACGLRising wedge      11/27/201901/09/2020Insurance (Prop/Casualty)
BBBYDead-cat bounce      01/09/202001/09/2020Retail (Special Lines)
CENXDouble Top, Adam and Adam      12/13/201901/07/2020Metals and Mining (Div.)
CIENTriangle, symmetrical      12/13/201901/09/2020Telecom. Equipment
CNATriangle, symmetrical      12/03/201901/09/2020Insurance (Prop/Casualty)
WIRETriangle, symmetrical      11/11/201901/09/2020Metals and Mining (Div.)
ERADouble Top, Adam and Adam      12/18/201901/06/2020Air Transport
GISTriangle, symmetrical      10/10/201901/09/2020Food Processing
JKHYTriple bottom      12/11/201901/06/2020IT Services
LHDouble Bottom, Adam and Adam      12/10/201901/03/2020Medical Services
MSFTDiamond top      12/24/201901/07/2020Computer Software and Svcs
MSBroadening top      12/16/201901/06/2020Securities Brokerage
ORITriangle, symmetrical      12/05/201901/06/2020Insurance (Prop/Casualty)
OXMDouble Top, Eve and Eve      12/12/201901/08/2020Apparel
PETSHead-and-shoulders complex bottom      11/05/201901/03/2020Medical Services
RLBroadening top      12/18/201901/09/2020Apparel
ROKRectangle top      12/16/201901/07/2020Diversified Co.
TZOOTriangle, symmetrical      12/18/201901/09/2020Internet

 

Weekly screen for chart patterns ending between 01/02/2020 and 01/09/2020. 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.
 
American International Group (AIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
1/9/20 close: $52.28
1 Month avg volatility: $0.71. Volatility stop (for upward breakout): $50.23 or 3.9% below the close.
Change YTD: 1.85%
Volume: 3,219,800 shares. 3 month avg: 5,185,998 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/25/2019 to 01/07/2020
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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ArcBest Corp (ARCB)
Industry: Trucking/Transp. Leasing
Industry RS rank: 2 out of 58
Stock RS rank: 252 out of 400
1/9/20 close: $27.52
1 Month avg volatility: $0.67. Volatility stop (for downward breakout): $29.30 or 6.5% above the close.
Change YTD: -0.29%
Volume: 118,800 shares. 3 month avg: 234,063 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 11/26/2019 to 01/08/2020
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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Arch Capital Group Ltd (ACGL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
Stock RS rank: 179 out of 400
1/9/20 close: $43.60
1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $44.66 or 2.4% above the close.
Change YTD: 1.66%
Volume: 1,326,300 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: Rising wedge reversal pattern from 11/27/2019 to 01/09/2020
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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Bed Bath and Beyond (BBBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 11 out of 58
Stock RS rank: 139 out of 400
1/9/20 close: $13.45
1 Month avg volatility: $0.76. Volatility stop (for downward breakout): $16.43 or 22.1% above the close.
Change YTD: -22.25%
Volume: 40,302,100 shares. 3 month avg: 4,821,077 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: Dead-cat bounce continuation pattern from 01/09/2020 to 01/09/2020
Breakout is downward 67% of the time.
Average decline: 18%.

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Century Aluminum Co. (CENX)
Industry: Metals and Mining (Div.)
Industry RS rank: 37 out of 58
Stock RS rank: 362 out of 400
1/9/20 close: $7.06
1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $8.11 or 14.8% above the close.
Change YTD: -6.05%
Volume: 3,009,700 shares. 3 month avg: 2,285,742 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 12/13/2019 to 01/07/2020
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Ciena Corp (CIEN)
Industry: Telecom. Equipment
Industry RS rank: 26 out of 58
1/9/20 close: $42.10
1 Month avg volatility: $1.03. Volatility stop (for upward breakout): $39.87 or 5.3% below the close.
Change YTD: -1.38%
Volume: 1,905,300 shares. 3 month avg: 3,226,991 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/13/2019 to 01/09/2020
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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CNA Financial Corp (CNA)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
1/9/20 close: $45.14
1 Month avg volatility: $0.57. Volatility stop (for upward breakout): $43.54 or 3.6% below the close.
Change YTD: 0.74%
Volume: 142,200 shares. 3 month avg: 204,923 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/03/2019 to 01/09/2020
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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Encore Wire Corp (WIRE)
Industry: Metals and Mining (Div.)
Industry RS rank: 37 out of 58
Stock RS rank: 363 out of 400
1/9/20 close: $56.83
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $54.33 or 4.4% below the close.
Change YTD: -0.99%
Volume: 152,800 shares. 3 month avg: 88,880 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 Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/11/2019 to 01/09/2020
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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Era Group Inc (ERA)
Industry: Air Transport
Industry RS rank: 38 out of 58
Stock RS rank: 180 out of 400
1/9/20 close: $9.71
1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $10.73 or 10.5% above the close.
Change YTD: -4.52%
Volume: 67,600 shares. 3 month avg: 78,248 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 12/18/2019 to 01/06/2020
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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General Mills Inc (GIS)
Industry: Food Processing
Industry RS rank: 30 out of 58
1/9/20 close: $52.38
1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $50.27 or 4.0% below the close.
Change YTD: -2.20%
Volume: 3,842,000 shares. 3 month avg: 4,139,065 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/10/2019 to 01/09/2020
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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Jack Henry and Associates (JKHY)
Industry: IT Services
Industry RS rank: 17 out of 58
Stock RS rank: 257 out of 400
1/9/20 close: $148.62
1 Month avg volatility: $1.65. Volatility stop (for upward breakout): $144.14 or 3.0% below the close.
Change YTD: 2.03%
Volume: 301,700 shares. 3 month avg: 329,005 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: Triple bottom reversal pattern from 12/11/2019 to 01/06/2020
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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Labratory Corp of America (LH)
Industry: Medical Services
Industry RS rank: 19 out of 58
Stock RS rank: 391 out of 400
1/9/20 close: $174.91
1 Month avg volatility: $2.53. Volatility stop (for upward breakout): $169.08 or 3.3% below the close.
Change YTD: 3.39%
Volume: 827,600 shares. 3 month avg: 674,168 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 12/10/2019 to 01/03/2020
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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Microsoft Corp (MSFT)
Industry: Computer Software and Svcs
Industry RS rank: 23 out of 58
Stock RS rank: 128 out of 400
1/9/20 close: $162.09
1 Month avg volatility: $1.69. Volatility stop (for downward breakout): $165.60 or 2.2% above the close.
Change YTD: 2.78%
Volume: 20,485,800 shares. 3 month avg: 21,460,729 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: Diamond top reversal pattern from 12/24/2019 to 01/07/2020
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Morgan Stanley (MS)
Industry: Securities Brokerage
Industry RS rank: 18 out of 58
Stock RS rank: 103 out of 400
1/9/20 close: $52.06
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $53.42 or 2.6% above the close.
Change YTD: 1.84%
Volume: 7,308,000 shares. 3 month avg: 7,779,832 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top reversal pattern from 12/16/2019 to 01/06/2020
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Old Republic International Corp (ORI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
1/9/20 close: $22.41
1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $21.51 or 4.0% below the close.
Change YTD: 0.18%
Volume: 1,334,600 shares. 3 month avg: 1,253,378 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/05/2019 to 01/06/2020
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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Oxford Industries (OXM)
Industry: Apparel
Industry RS rank: 44 out of 58
Stock RS rank: 339 out of 400
1/9/20 close: $72.42
1 Month avg volatility: $1.82. Volatility stop (for downward breakout): $79.44 or 9.7% above the close.
Change YTD: -3.98%
Volume: 194,300 shares. 3 month avg: 144,562 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 12/12/2019 to 01/08/2020
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

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PetMed Express Inc. (PETS)
Industry: Medical Services
Industry RS rank: 19 out of 58
Stock RS rank: 18 out of 400
1/9/20 close: $23.69
1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $21.97 or 7.2% below the close.
Change YTD: 0.72%
Volume: 520,000 shares. 3 month avg: 739,945 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders complex bottom reversal pattern from 11/05/2019 to 01/03/2020
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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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 44 out of 58
Stock RS rank: 268 out of 400
1/9/20 close: $117.93
1 Month avg volatility: $2.30. Volatility stop (for downward breakout): $124.69 or 5.7% above the close.
Change YTD: 0.61%
Volume: 877,000 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 Monday.
 
Chart pattern: Broadening top reversal pattern from 12/18/2019 to 01/09/2020
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Rockwell Automation Inc (ROK)
Industry: Diversified Co.
Industry RS rank: 12 out of 58
Stock RS rank: 40 out of 400
1/9/20 close: $207.17
1 Month avg volatility: $3.02. Volatility stop (for upward breakout): $198.93 or 4.0% below the close.
Change YTD: 2.22%
Volume: 676,100 shares. 3 month avg: 805,498 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 12/16/2019 to 01/07/2020
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Travelzoo Inc. (TZOO)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 36 out of 58
1/9/20 close: $10.80
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $9.86 or 8.7% below the close.
Change YTD: 0.93%
Volume: 50,100 shares. 3 month avg: 22,411 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 12/18/2019 to 01/09/2020
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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Thursday 1/9/20. Intraday Market Direction: Nasdaq

The index climbed by 0.7% or 60.66 points. Since 02/05/1971 the index made 425 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 261 occasions.
     Average loss was -0.7% on 164 occasions.
Expect the index to close higher 61.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 181/323 or 56.0% of the time.
     The prediction of the index closing lower has been right 54/106 or 50.9% 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, but only for the last 5 days.

Why? Because I wanted to highlight the strong drop near the end of the session. I show that in the chart as the drop from B to A. Notice how it mirrors the rise from C to D.

I drew a red trendline along the bottoms. What does it show?

It suggests there's more space for the index to drop. That is, the space between the trendline at A and price above it.

The above probabilities suggest a higher close. Maybe we'll have both. A drip followed by a rise to close the day higher. The chart pattern indicator is still bearish, though, so I expect weakness.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  8,227.99    
 Monthly S1  8,678.62  450.62   
 Weekly S2  8,859.71  181.10   
 Monthly Pivot  8,886.02  26.31   
 Weekly S1  8,994.48  108.45   
 Daily S2  9,009.66  15.18   
 Weekly Pivot  9,043.95  34.29   
 Low  9,059.38  15.43   
 Open  9,068.03  8.65   Yes! The Open is close to the Low.
 Daily S1  9,069.45  1.42   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  9,101.21  31.76   
 50% Down from Intraday High  9,114.13  12.92   
 Daily Pivot  9,119.17  5.04   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  9,127.06  7.89   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  9,129.24  2.18   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  9,168.89  39.65   
 Weekly R1  9,178.72  9.83   Yes! The Weekly R1 is close to the High.
 Daily R1  9,178.96  0.24   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2  9,228.19  49.23   
 Daily R2  9,228.68  0.49   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1  9,336.65  107.97   
 Monthly R2  9,544.05  207.41   

Wednesday 1/8/20. 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 has turned bearish, as denoted by the vertical red line on the right of the chart.

Of higher interest is the indicator line near the bottom of the chart. It's taken a dive toward 0, and it started falling well before the red bar appeared.

To me, that's not a good omen. When combined with slide 4 on the yearly forecast, maybe this is the start of the downturn.

Please note that the signal can change for up to a week, meaning it could disappear but it usually stable after 3 trading days.

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, 23% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 23%.
The fewest was 22% on 01/02/2020.
And the most was 61% on 01/08/2019.
Shown as a blue line on the above chart...
The 491 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 13%.
The peak was 13% on 12/26/2019.
And the bottom was 26% on 01/08/2019.

The two lines remain unchanged from a week ago. I don't know if that's really true because the indicator wasn't run the last two times due to the holidays.

The red line is the more sensitive of the two and it peaked a week ago. That means things are getting worse...

-- Thomas Bulkowski

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Tuesday 1/7/20. Slider Quiz!

The index climbed by 0.2% or 68.5 points. Since 10/01/1928 the index made 1323 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 718 occasions.
     Average loss was -0.5% on 605 occasions.
Expect the index to close higher 54.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 198/337 or 58.8% of the time.
     The prediction of the index closing lower has been right 39/77 or 50.6% of the time.

$ $ $

I show a another slider quiz featuring the triple bottom chart pattern.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  26,752.77    
 Monthly S1  27,728.07  975.31   
 Weekly S2  28,154.58  426.51   
 Monthly Pivot  28,300.44  145.86   
 Daily S2  28,320.62  20.18   Yes! The Daily S2 is close to the Monthly Pivot.
 Low  28,418.63  98.01   
 Weekly S1  28,428.98  10.35   Yes! The Weekly S1 is close to the Low.
 Open  28,465.50  36.52   
 Daily S1  28,512.00  46.50   
 61.8% Down from Intraday High  28,529.18  17.18   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  28,563.32  34.15   
 38.2% Down from Intraday High  28,597.47  34.15   
 Daily Pivot  28,610.01  12.54   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot  28,650.89  40.88   
 Close  28,703.38  52.49   
 High  28,708.02  4.64   Yes! The High is close to the Close.
 Daily R1  28,801.39  93.37   
 Daily R2  28,899.40  98.01   
 Weekly R1  28,925.29  25.89   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  29,147.20  221.91   
 Monthly R1  29,275.74  128.54   
 Monthly R2  29,848.11  572.36   

Monday 1/6/20. 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.

The index seems to be climbing upward following a narrow channel. I highlight that channel by the two nearly-parallel red lines on the chart.

The up-sloping channel shows the index nearing the top of it and backing away. The theory about channels is that price will bounce from one trendline to the other...until it pierces the channel wall.

As you can see, the index continues to bounce between the lines.

There are events which can push the index out of the channel. A war with Iran is one of them. Solution of the China trade war is another.

We'll have to wait and see if the breakout will be upward or down, but you can rest assured that it will happen. When it'll happen is an unanswered question.

 

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 183.12 points.
Tuesday: Up 76.3 points.
Thursday: Up 330.36 points.
Friday: Down 233.92 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 10.38 points or 0.0%.
The Nasdaq composite was up 14.15 points or 0.2%.
The S&P 500 index was down 5.17 points or 0.2%.

Year to Date...

Dow Industrials
     0.8% down from the high of 28,872.80 on 01/02/2020.
     0.5% up from the low of 28,500.36 on 01/03/2020.
Nasdaq
     0.8% down from the high of 9,093.43 on 01/02/2020.
     0.5% up from the low of 8,976.43 on 01/03/2020.
S&P 500
     0.7% down from the high of 3,258.14 on 01/02/2020.
     0.4% up from the low of 3,222.34 on 01/03/2020.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  28,401  28,518  28,617  28,734  28,833 
Weekly  28,132  28,383  28,628  28,880  29,124 
Monthly  26,730  27,682  28,278  29,230  29,825 
S&P500 (^GSPC): Daily  3,211  3,223  3,234  3,247  3,258 
Weekly  3,189  3,212  3,235  3,258  3,281 
Monthly  3,000  3,117  3,188  3,305  3,376 
Nasdaq (^IXIC): Daily  8,932  8,976  9,021  9,066  9,110 
Weekly  8,824  8,922  9,008  9,106  9,192 
Monthly  8,192  8,606  8,850  9,264  9,508 

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 27.0%   The trend may continue. 
 5 months up 17.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 25.3%   The trend may continue. 
 5 months up 21.3%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 4 weeks up 23.2%   Expect a reversal soon. 
 5 months up 14.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 10 days.

 Found Chart Pattern Name
24Triangle, symmetrical
9Rectangle top
8Triangle, descending
8Diamond top
7Double Bottom, Adam and Adam
6Pipe bottom
5Pennant
5Island bottom
5Broadening top
5Triangle, 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. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Semiconductor2. Semiconductor
3. Trucking/Transp. Leasing3. Trucking/Transp. Leasing
4. Homebuilding4. Homebuilding
5. Computers and Peripherals5. Computers and Peripherals

-- Thomas Bulkowski

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Friday 1/3/20. Year-end Review and Forecast to 2024

Here's the 2019 market performance review and forecast of the years 2020 to 2024, presented in a slider format.

-- Thomas Bulkowski


Wednesday-Thursday 1/1/20. Site Support

Happy new year everyone.

If you wish to support the website, then try one of these options.

  1. Perhaps the best way is come to this site and click on an image of one of my books. You'll find the images either along the left side or at the bottom of the page. The click will take you to Amazon.com. The link passes a code to them and I receive a small referral fee but only if you buy something while there. You do NOT need to buy the book. It's just a vehicle to get you to Amazon with the referral code.

    So each time you want to use Amazon.com to buy something, come to this site first. The referral is free, it's easy, and it supports this site.

    Unfortunately, I think this approach only works for those in the United States.

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-- Thomas Bulkowski

 
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Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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