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

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Busted
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 05/23/2017
20,938 43.08 0.2%
9,010 45.02 0.5%
711 1.33 0.2%
6,139 5.09 0.1%
2,398 4.40 0.2%
YTD
5.9%
-0.4%
7.7%
14.0%
7.1%
Tom's Targets    Overview: 05/15/2017
21,400 or 20,450 by 06/01/2017
9,500 or 8,700 by 06/01/2017
685 or 720 by 06/01/2017
6,350 or 6,000 by 06/01/2017
2,330 or 2,450 by 06/01/2017

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July 2011 Headlines


Archives


Thursday 7/28/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -2.6% or -75.17 points. Since 02/05/1971 the index made 26 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.5% on 17 occasions.
     Average loss was -1.4% on 9 occasions.
Look for the index to close higher.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Having such a large one-day drop -- 2.6% -- means there have been few similar declines in the past. When they have happened, the market has recovered the next day. That is what I expect to happen tomorrow. Let's look at the chart.

At C and D, the index formed two bottoms near the same price level, but the index didn't close above the long blue line near 2,800 to confirm a double bottom. Thus, the two bottoms were just a support area that the index burrowed through.

Near the close, the index found support at A and B. If it confirms -- price closes above the blue line -- then expect the index to move higher, probably reaching the CD area of overhead resistance. It will likely struggle here, but if the news out of Washington is good, expect the index to continue higher in a strong bull run.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, 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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© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,479.29    
 Monthly S1  2,622.04  142.75   
 Weekly S2  2,671.50  49.46   
 Weekly S1  2,718.15  46.64   
 Daily S2  2,720.36  2.21   Yes! The Daily S2 is close to the Weekly S1.
 Daily S1  2,742.57  22.22   
 Monthly Pivot  2,750.49  7.92   
 Low  2,761.00  10.51   
 Close  2,764.79  3.79   Yes! The Close is close to the Low.
 Daily Pivot  2,783.22  18.43   
 61.8% Down from Intraday High  2,785.01  1.80   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot  2,790.43  5.42   Yes! The Weekly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  2,792.43  2.00   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 38.2% Down from Intraday High  2,799.85  7.42   
 Daily R1  2,805.43  5.59   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  2,823.62  18.19   
 High  2,823.86  0.24   Yes! The High is close to the Open.
 Weekly R1  2,837.08  13.22   
 Daily R2  2,846.08  9.00   
 Monthly R1  2,893.24  47.16   
 Weekly R2  2,909.36  16.12   
 Monthly R2  3,021.69  112.33   

Tuesday 7/26/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -0.7% or -88.36 points. Since 10/01/1928 the index made 531 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 255 occasions.
     Average loss was -0.8% on 276 occasions.
Look for the index to close lower.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

After tumbling at the opening, the Dow recovered in a rounding top chart pattern. Along the way, it formed a Adam & Adam double top at A and B. Clearly the drop between the two very minor peaks is small, so one can argue it's not a valid pattern. However, on the wider view, there is a head-and-shoulders top chart pattern. The left shoulder (LS) and right shoulder (RS) mirror themselves around the head (AB). When price closes below (C) the neckline, which is the blue straight line, it validates the chart pattern as a real one.

Price seems to have found a bottom near 12,600, at the support zone. However, I expect the index to drop and form a second bottom at around 12,560 or 12,540. It could just recover and move up, staging an upward breakout of the rounding top when it closes above the high at B. The opening minutes will probably give a better guess as to which scenario plays out.

I think it will drop in the opening minutes and then recover to close higher. That is at odds with the probabilities described above, so I am likely wrong.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, 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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© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,528.26    
 Monthly S1  12,060.53  532.27   
 Weekly S2  12,091.62  31.09   
 Weekly S1  12,342.21  250.59   
 Monthly Pivot  12,407.21  65.00   
 Daily S2  12,463.22  56.01   
 Daily S1  12,528.01  64.79   
 Low  12,539.19  11.18   Yes! The Low is close to the Daily S1.
 Weekly Pivot  12,546.82  7.63   Yes! The Weekly Pivot is close to the Low.
 Close  12,592.80  45.98   
 61.8% Down from Intraday High  12,592.96  0.16   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  12,603.98  11.02   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  12,609.57  5.59   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  12,626.18  16.61   
 Daily R1  12,668.77  42.59   
 Open  12,679.72  10.95   Yes! The Open is close to the Daily R1.
 High  12,679.95  0.23   Yes! The High is close to the Open.
 Daily R2  12,744.74  64.79   
 Weekly R1  12,797.41  52.67   
 Monthly R1  12,939.48  142.07   
 Weekly R2  13,002.02  62.54   
 Monthly R2  13,286.16  284.14   

Monday 7/25/11. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily chart and it's a scary one.

The index has formed a 2B top. That is a second peak (B) which tops out near a prior one (A) -- at, slightly above, or slightly below. When that happens, price tends to drop. It may not drop far but it usually goes down.

If that happens, it could take the index back down To C.

What would send it tumbling? Failure to raise the debt ceiling sounds like a good answer. My guess is that the index will suffer this week as the politicians scramble to pass a bill by August 2. I'm not sure the index will tumble all the way to C, but who knows?

Of course, if and when congress sends a bill to the president for signing in time, then the index should pop. Thus, look for the index to drop in the coming days and then move back up.

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A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 94.57 points.
Tuesday: Up 202.26 points.
Wednesday: Down 15.51 points.
Thursday: Up 152.5 points.
Friday: Down 43.25 points.

For the Week...

The Dow industrials were up 201.43 points or 1.6%.
The Nasdaq composite was up 69.03 points or 2.5%.
The S&P 500 index was up 28.88 points or 2.2%.

Year to Date...

Dow Industrials
     1.5% down from the high of 12,876.00 on 05/02/2011.
     9.7% up from the low of 11,555.48 on 03/16/2011.
Nasdaq
     1.0% down from the high of 2,887.75 on 05/02/2011.
     10.0% up from the low of 2,599.88 on 06/16/2011.
S&P 500
     1.9% down from the high of 1,370.58 on 05/02/2011.
     7.7% up from the low of 1,249.05 on 03/16/2011.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
New home sales10:00 TC+Shows sales of single-family homes.
Durable goods orders8:30 WBMeasures orders, shipments of goods with lifespans >3 years.
Crude inventories10:30 W?My guess: Measures oil inventory.
FEDs Beige book2:00 W?Reports on economic conditions.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Gross domestic product8:30 FBMeasures economic activity; GDP deflator measures inflation.
Chicago purchasing managers index9:45 FBMonitors regional manufacturing activity.
Michigan sentiment9:55 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 07/22/2011, the CPI had:

10 bearish patterns,
16 bullish patterns,
380 patterns waiting for breakout.
The CPI signal is 61.5%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,592  12,637  12,689  12,733  12,785 
Weekly  12,121  12,401  12,576  12,856  13,031 
Monthly  11,558  12,119  12,437  12,998  13,316 
S&P 500 (^GSPC): Daily  1,334  1,339  1,343  1,348  1,352 
Weekly  1,278  1,312  1,329  1,363  1,380 
Monthly  1,228  1,286  1,321  1,380  1,415 
Nasdaq (^IXIC): Daily  2,819  2,839  2,851  2,871  2,883 
Weekly  2,703  2,781  2,822  2,900  2,941 
Monthly  2,511  2,685  2,782  2,956  3,053 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.7%  Expect a random direction.
 1 month up 51.8%  Expect a random direction.
 S & P 500 (^GSPC) 1 week up 41.2%  Expect a random direction.
 1 month up 54.1%  Expect a random direction.
 Nasdaq composite (^IXIC) 1 week up 40.1%  Expect a random direction.
 1 month up 48.2%  Expect a random direction.

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

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

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

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
31Head-and-shoulders bottom
19Double Bottom, Adam and Adam
16Triangle, symmetrical
9Pipe top
9Broadening bottom
8Double Bottom, Eve and Adam
6Broadening wedge, descending
6Triple bottom
5Double Bottom, Adam and Eve
5Broadening top, right-angled and descending

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, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Apparel1. Apparel
2. Natural Gas (Diversified)2. Medical Supplies
3. Shoe3. Natural Gas (Diversified)
4. Toiletries/Cosmetics4. Shoe
5. Medical Supplies5. Toiletries/Cosmetics
48. Semiconductor48. Human Resources
49. Insurance (Life)49. Coal
50. Short ETFs50. Semiconductor
51. Securities Brokerage51. Homebuilding
52. Homebuilding52. Securities Brokerage

-- Thomas Bulkowski

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Thursday 7/21/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -0.4% or -12.29 points. Since 02/05/1971 the index made 356 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 177 occasions.
     Average loss was -1.2% on 179 occasions.
Look for the index to close lower.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading. The chart pattern -- a head-and-shoulders bottom -- reminds me of Tuesday's blog of the Dow industrials. That had a head-and-shoulders bottom, too.

However, in this example, it's not a head-and-shoulders bottom yet. Why?

Price has not closed above the blue neckline. Thus, it's just squiggles on the chart. What is my guess as to Thursday's trading?

I expect the index to find support at the head. After that, I expect the index to rise, but probably not rise above Wednesday's open. As the probabilities above show, the number of up closes about matched the number of down closes, so the closing direction is a coin toss.

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

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,485.29    
 Monthly S1  2,649.76  164.47   
 Weekly S2  2,718.53  68.77   
 Monthly Pivot  2,764.35  45.82   
 Weekly S1  2,766.38  2.03   Yes! The Weekly S1 is close to the Monthly Pivot.
 Daily S2  2,789.22  22.84   
 Daily S1  2,801.72  12.51   
 Weekly Pivot  2,803.75  2.03   Yes! The Weekly Pivot is close to the Daily S1.
 Low  2,808.18  4.43   
 Close  2,814.23  6.05   
 61.8% Down from Intraday High  2,820.20  5.97   
 Daily Pivot  2,820.69  0.49   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  2,823.92  3.23   
 38.2% Down from Intraday High  2,827.63  3.71   
 Daily R1  2,833.19  5.56   
 Open  2,839.39  6.20   
 High  2,839.65  0.26   Yes! The High is close to the Open.
 Weekly R1  2,851.60  11.95   
 Daily R2  2,852.16  0.56   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  2,888.97  36.81   
 Monthly R1  2,928.82  39.85   
 Monthly R2  3,043.41  114.59   

Tuesday 7/19/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -0.8% or -94.57 points. Since 10/01/1928 the index made 475 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 245 occasions.
     Average loss was -0.9% on 230 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

After an opening drop, the index moved sideways and formed a head-and-shoulders bottom (LS = left shoulder, RS = right shoulder). When price closed above the blue neckline, it confirmed the chart pattern as valid. Around 2:30, the index threw back to the neckline but then began a recovery going into the close.

If you include the two valleys just after 10:00 and at 2:30, then you have a complex head-and-shoulders bottom. You still have the simple head-and-shoulders, but you also have another chart pattern with additional shoulders.

In both cases, the patterns predict an upward move and that is what I expect tomorrow. Look for the index to move up at the start and close higher at day's end.

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

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,442.50    
 Monthly S1  11,913.83  471.33   
 Daily S2  12,206.52  292.69   
 Weekly S2  12,232.61  26.09   
 Daily S1  12,295.84  63.23   
 Low  12,296.23  0.39   Yes! The Low is close to the Daily S1.
 Weekly S1  12,308.89  12.66   Yes! The Weekly S1 is close to the Low.
 Monthly Pivot  12,333.86  24.97   
 61.8% Down from Intraday High  12,364.62  30.76   
 Close  12,385.16  20.54   
 Daily Pivot  12,385.55  0.39   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  12,385.75  0.20   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  12,406.87  21.13   
 Daily R1  12,474.87  68.00   
 Open  12,475.11  0.24   Yes! The Open is close to the Daily R1.
 High  12,475.26  0.15   Yes! The High is close to the Open.
 Weekly Pivot  12,482.36  7.10   Yes! The Weekly Pivot is close to the High.
 Weekly R1  12,558.64  76.27   
 Daily R2  12,564.58  5.94   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  12,732.11  167.53   
 Monthly R1  12,805.19  73.08   
 Monthly R2  13,225.22  420.03   

Monday 7/18/11. 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 and it's a target rich environment.

Begin with pattern A, which is an inverted and ascending scallop. BC is an Adam & Adam double bottom. D is a pennant, and EFG is a head-and-shoulders top.

Let's talk about the pennant, D. It begins at C when price anchors the flagpole. The pole extends up to the peak at D. This flagpole should be a straight line run with few or no pauses along the way, just as you see here. Price moves up in a strong push higher. Then it forms the pennant, which sees price retrace in a narrowing trend.

Notice that the two red trendlines converge. If the trendlines were parallel, they would outline a flag. Also notice that the pennant slants against the short-term price trend. By that, I mean the retrace is downward whereas the flagpole is upward. The slant can be in any direction, so be flexible when searching for pennants. A downward retrace in an upward price trend is typical for pennants and what you see most often.

According to my best-selling Encyclopedia of Chart Patterns, Second Edition book, pictured on the right, pennants breakout upward 61% of the time.

I heard on TV that if the politicians cannot make an agreement on raising the debt ceiling by this Friday, then it is in danger of not happening. I am hoping that they will agree. That means the pennant would breakout upward and send the Dow to a new yearly high. As the statistics below say, the Dow is only 3.1% below the May 2 high.

Between now and Friday (or after), look for the market to be volatile.

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A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 151.44 points.
Tuesday: Down 58.88 points.
Wednesday: Up 44.73 points.
Thursday: Down 54.49 points.
Friday: Up 42.61 points.

For the Week...

The Dow industrials were down 177.47 points or 1.4%.
The Nasdaq composite was down 70.01 points or 2.4%.
The S&P 500 index was down 27.66 points or 2.1%.

Year to Date...

Dow Industrials
     3.1% down from the high of 12,876.00 on 05/02/2011.
     8.0% up from the low of 11,555.48 on 03/16/2011.
Nasdaq
     3.4% down from the high of 2,887.75 on 05/02/2011.
     7.3% up from the low of 2,599.88 on 06/16/2011.
S&P 500
     4.0% down from the high of 1,370.58 on 05/02/2011.
     5.4% up from the low of 1,249.05 on 03/16/2011.

Top 

Economic Reports

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

ReportTimeA-F
Rating
Description
Housing starts8:30 TB-Number of homes beginning construction.
Building permits8:30 TB-Measures building permits for new construction.
Existing home sales10:00 WCCounts sales of used homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Leading indicators10:00 ThD-Summary of already known reports.

Options Expiration

OptionDate
VIX expiresWednesday

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Swing and Position Traders: Chart Pattern Indicator

As of 07/15/2011, the CPI had:

11 bearish patterns,
13 bullish patterns,
231 patterns waiting for breakout.
The CPI signal is 54.2%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,365  12,422  12,464  12,521  12,562 
Weekly  12,264  12,372  12,514  12,622  12,764 
Monthly  11,474  11,977  12,365  12,868  13,257 
S&P 500 (^GSPC): Daily  1,304  1,310  1,314  1,320  1,324 
Weekly  1,285  1,301  1,322  1,337  1,359 
Monthly  1,212  1,264  1,310  1,362  1,409 
Nasdaq (^IXIC): Daily  2,761  2,775  2,783  2,797  2,805 
Weekly  2,710  2,750  2,796  2,835  2,881 
Monthly  2,477  2,633  2,756  2,913  3,035 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 30.5%  The trend may continue.
 1 month up 51.8%  Expect a random direction.
 S & P 500 (^GSPC) 1 week down 31.5%  The trend may continue.
 3 months down 5.9%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week down 34.0%  The trend may continue.
 1 month up 48.2%  Expect a random direction.

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

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

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

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
34Double Bottom, Adam and Adam
27Head-and-shoulders bottom
21Pipe bottom
20Triple bottom
13Triangle, symmetrical
12Double Bottom, Eve and Adam
9Double Bottom, Adam and Eve
8Broadening wedge, descending
7Broadening bottom
7Double Bottom, Eve and Eve

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, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Apparel1. Apparel
2. Medical Supplies2. Medical Supplies
3. Natural Gas (Diversified)3. Shoe
4. Shoe4. Toiletries/Cosmetics
5. Toiletries/Cosmetics5. Natural Gas (Diversified)
48. Human Resources48. Human Resources
49. Coal49. Coal
50. Semiconductor50. Homebuilding
51. Homebuilding51. Short ETFs
52. Securities Brokerage52. Alternate Energy

-- Thomas Bulkowski

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Thursday 7/14/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 0.5% or 15.01 points. Since 02/05/1971 the index made 477 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 337 occasions.
     Average loss was -0.9% on 140 occasions.
Look for the index to close higher.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Price made a nice run up after 10:00, as shown on the chart. After that, price consolidated and formed a chart pattern called a head-and-shoulders top (LS = left shoulder, RS = right shoulder).

Price from that pattern breaks out downward when it pierces the neckline, a line that connects the armpits. When the neckline slopes downward, as in this case, I use a horizontal line drawn from the right armpit to confirm the pattern and signal an entry. I show that with a blue line.

The reason I don't use a down-sloping neckline is because if the line slopes steeply enough, price won't hit it.

If you were to look at Tuesday's trading, you will see that the index formed a support area at 2790, where I have drawn a red line. I believe that this area will support the index, so look for it to move higher and close higher for the day.

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, 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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© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,479.52    
 Monthly S1  2,638.22  158.70   
 Monthly Pivot  2,758.58  120.36   
 Weekly S2  2,759.68  1.10   Yes! The Weekly S2 is close to the Monthly Pivot.
 Daily S2  2,767.83  8.15   
 Weekly S1  2,778.30  10.47   
 Daily S1  2,782.37  4.07   
 Low  2,789.57  7.20   
 Close  2,796.92  7.35   
 Open  2,800.88  3.96   
 61.8% Down from Intraday High  2,803.43  2.55   Yes! The 61.8% Down from Intraday High is close to the Open.
 Daily Pivot  2,804.12  0.68   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  2,807.72  3.60   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  2,812.00  4.28   
 Daily R1  2,818.66  6.67   
 High  2,825.86  7.20   
 Weekly Pivot  2,828.62  2.76   Yes! The Weekly Pivot is close to the High.
 Daily R2  2,840.41  11.79   
 Weekly R1  2,847.24  6.83   
 Weekly R2  2,897.56  50.32   
 Monthly R1  2,917.28  19.72   
 Monthly R2  3,037.64  120.36   

Tuesday 7/12/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -1.2% or -151.44 points. Since 10/01/1928 the index made 255 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 116 occasions.
     Average loss was -0.8% on 139 occasions.
Look for the index to close lower.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

There is not much to report but the chart looks interesting nonetheless. The big spike down in the opening minutes catches your attention as it does mine. After that, price bobbled up and down, moving horizontally, and forming a descending triangle. Those breakout downward most often. In fact, one could argue that a breakout occurred just after 3:00 when price closed below the lower trendline. Since the breakout didn't amount to much, you could redraw the line to include it in the pattern.

Of course, shorting at that time would have been a mistake.

In the closing minutes, price broke out upward from the triangle. That suggests that tomorrow (Tuesday) will see price retrace some of today's losses. That may happen at the open, but as the above probabilities say, look for the index to close lower. And let me add this: I am pleased at how often the probabilities are right. Having said that is like tempting fate... (meaning we could close higher).

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, 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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© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  11,482.70    
 Monthly S1  11,994.23  511.53   
 Daily S2  12,358.43  364.20   
 Monthly Pivot  12,374.06  15.63   Yes! The Monthly Pivot is close to the Daily S2.
 Weekly S2  12,384.94  10.88   Yes! The Weekly S2 is close to the Monthly Pivot.
 Daily S1  12,432.09  47.15   
 Weekly S1  12,445.35  13.26   Yes! The Weekly S1 is close to the Daily S1.
 Low  12,470.30  24.95   
 Close  12,505.76  35.46   
 61.8% Down from Intraday High  12,541.18  35.42   
 Daily Pivot  12,543.97  2.79   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  12,563.07  19.10   
 38.2% Down from Intraday High  12,584.96  21.89   
 Weekly Pivot  12,599.62  14.66   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Daily R1  12,617.63  18.01   Yes! The Daily R1 is close to the Weekly Pivot.
 Open  12,655.62  37.99   
 High  12,655.84  0.22   Yes! The High is close to the Open.
 Weekly R1  12,660.03  4.19   Yes! The Weekly R1 is close to the High.
 Daily R2  12,729.51  69.48   
 Weekly R2  12,814.30  84.79   
 Monthly R1  12,885.59  71.29   
 Monthly R2  13,265.42  379.83   

Monday 7/11/11. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

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

Price has formed what appears to be an Eve & Eve double top at A and B. It is not confirmed, meaning price has not closed below the low at C, so it is just squiggles on a chart.

Point B is also a 2B top. Price has climbed up to the value of the prior high (A), give or take, and stalled. The chart pattern suggests a retrace from here, but the statistics suggest it will not close below C (a 62% probability of a higher move). In fact, it could rise as some of the other indices are doing.

What do I think will happen? Some of the utility companies will be saddled with additional costs next year because of mandated pollution controls on their smokestack emissions. That news might cause the index to drop but I don't see it going very far down, especially with the other indices projected to continue moving higher. Of course, with Europe making noise on their debt problems and the US has the debt ceiling to worry about in 2 weeks, the road to prosperity could get bumpy. However, I expect the debt ceiling to be raised and that the markets will respond by moving up. I think the utility index will follow that up trend, too.

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A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Tuesday: Down 12.9 points.
Wednesday: Up 56.15 points.
Thursday: Up 93.47 points.
Friday: Down 62.29 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 74.43 points or 0.6%.
The Nasdaq composite was up 43.78 points or 1.6%.
The S&P 500 index was up 4.13 points or 0.3%.

Year to Date...

Dow Industrials
     1.7% down from the high of 12,876.00 on 05/02/2011.
     9.5% up from the low of 11,555.48 on 03/16/2011.
Nasdaq
     1.0% down from the high of 2,887.75 on 05/02/2011.
     10.0% up from the low of 2,599.88 on 06/16/2011.
S&P 500
     2.0% down from the high of 1,370.58 on 05/02/2011.
     7.6% up from the low of 1,249.05 on 03/16/2011.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Trade balance8:30 TC+Signals balance of exports & imports.
International trade8:30 WC+Import/export prices, trade balance. US economy vs others.
Crude inventories10:30 W?My guess: Measures oil inventory.
Treasury budget2:00 WDTracks budget deficit. Important in April (tax filing).
FOMC Minutes2:00 W?Minutes of the prior Federal Reserve meeting.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Retail sales8:30 ThA-Reports total retail sales (not services). Are people spending?
Producer price index8:30 ThB-Measures wholesale goods cost. An indication of future inflation.
Business inventories10:00 ThC-Reports manufacturing, wholesale, retail inventories.
Consumer price index8:30 FB+Inflation report. Measures cost of goods and services.
Industrial production9:15 FB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 FB-Gauges economic activity, hints of inflation.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
A.M. settled index options cease trading.Thursday
Expiring equity, P.M. settled index options and treasury/interest rate options classes cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, cash-settled currency and treasury/interest rate options expireSaturday

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

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Swing and Position Traders: Chart Pattern Indicator

As of 07/08/2011, the CPI had:

2 bearish patterns,
10 bullish patterns,
267 patterns waiting for breakout.
The CPI signal is 83.3%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,497  12,577  12,648  12,728  12,798 
Weekly  12,435  12,546  12,650  12,761  12,865 
Monthly  11,533  12,095  12,425  12,987  13,316 
S&P 500 (^GSPC): Daily  1,325  1,334  1,343  1,353  1,362 
Weekly  1,318  1,331  1,344  1,357  1,369 
Monthly  1,221  1,282  1,319  1,381  1,418 
Nasdaq (^IXIC): Daily  2,821  2,841  2,850  2,870  2,879 
Weekly  2,781  2,820  2,850  2,889  2,919 
Monthly  2,500  2,680  2,780  2,959  3,059 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 31.1%  The trend may continue.
 1 month up 51.8%  Expect a random direction.
 S & P 500 (^GSPC) 2 weeks up 29.3%  The trend may continue.
 1 month up 54.1%  Expect a random direction.
 Nasdaq composite (^IXIC) 3 weeks up 17.9%  Expect a reversal soon.
 1 month up 48.2%  Expect a random direction.

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

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

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

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

Earnings season will be starting in about 3 days.

 Found Chart Pattern Name
41Pipe bottom
38Double Bottom, Adam and Adam
26Head-and-shoulders bottom
24Triple bottom
18Triangle, symmetrical
12Double Bottom, Adam and Eve
11Double Bottom, Eve and Adam
9Broadening wedge, descending
9Double Bottom, Eve and Eve
9Triangle, descending

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, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Apparel1. Medical Supplies
2. Medical Supplies2. Toiletries/Cosmetics
3. Shoe3. Natural Gas (Diversified)
4. Toiletries/Cosmetics4. Biotechnology
5. Natural Gas (Diversified)5. Shoe
48. Human Resources48. Human Resources
49. Coal49. Cement and Aggregates
50. Homebuilding50. Coal
51. Short ETFs51. Alternate Energy
52. Alternate Energy52. Securities Brokerage
53. Securities Brokerage53. Short ETFs

-- Thomas Bulkowski

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Thursday 7/7/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 0.3% or 8.25 points. Since 02/05/1971 the index made 544 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 301 occasions.
     Average loss was -0.7% on 243 occasions.
Look for the index to close higher.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

A head-and-shoulders top chart pattern formed over the lunch hour, from 12:00 to 2:00. The drop after price pierced the red neckline didn't amount to much, if you call a drop of less than 10 points to be insignificant... A pullback to the neckline followed as time closed on 3:00.

After that, a Adam & Adam double bottom appeared at A and B. Coupled with the probability of price closing higher, the double bottom has confirmed and it also suggests the index will move up tomorrow (Thursday). That's my guess, too. The index may stall at 2835, site of the two shoulders and it could also stall at the price level of the head.

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

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,520.95    
 Weekly S2  2,595.95  74.99   
 Monthly S1  2,677.49  81.54   
 Weekly S1  2,714.98  37.50   
 Monthly Pivot  2,756.41  41.43   
 Weekly Pivot  2,766.59  10.17   
 Daily S2  2,802.51  35.92   
 Low  2,812.80  10.29   
 Daily S1  2,818.26  5.46   
 Open  2,821.42  3.16   
 61.8% Down from Intraday High  2,822.75  1.33   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  2,825.82  3.07   
 Daily Pivot  2,828.56  2.73   
 38.2% Down from Intraday High  2,828.90  0.34   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  2,834.02  5.12   
 High  2,838.85  4.83   
 Daily R1  2,844.31  5.46   
 Daily R2  2,854.61  10.29   
 Weekly R1  2,885.62  31.02   
 Monthly R1  2,912.95  27.32   
 Weekly R2  2,937.23  24.28   
 Monthly R2  2,991.87  54.65   

Tuesday 7/5/11. Market Monday on Tuesday: The Week Ahead

My Prediction

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

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

The straight-line run up of the last few days has helped my net worth, but not as much as it hurt it on the way down. That is the way it goes.

The red line shows overhead resistance. Will the index be able to push through that? My guess is to say no, it won't, at least not on Tuesday. And that is because the run up needs a rest and why not rest on a holiday shortened week?

Results from a study of holidays confirms that the market closes lower the day after the July 4 holiday. That will begin a consolidation period in which the index moves sideways to down. Following that, however, expect another race to a new high.

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A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 108.98 points.
Tuesday: Up 145.13 points.
Wednesday: Up 72.73 points.
Thursday: Up 152.92 points.
Friday: Up 168.43 points.

For the Week...

The Dow industrials were up 648.19 points or 5.4%.
The Nasdaq composite was up 163.14 points or 6.1%.
The S&P 500 index was up 71.22 points or 5.6%.

Year to Date...

Dow Industrials
     2.3% down from the high of 12,876.00 on 05/02/2011.
     8.9% up from the low of 11,555.48 on 03/16/2011.
Nasdaq
     2.5% down from the high of 2,887.75 on 05/02/2011.
     8.3% up from the low of 2,599.88 on 06/16/2011.
S&P 500
     2.3% down from the high of 1,370.58 on 05/02/2011.
     7.3% up from the low of 1,249.05 on 03/16/2011.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Factory orders10:00 TD+Durable/non-durable goods orders w/factory inventories.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Crude inventories10:30 Th?My guess: Measures oil inventory.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Wholesale inventories10:00 FD-Wholesale sales and inventory statistics.
Consumer credit3:00 FD-Measures auto, credit card and other debt.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 07/01/2011, the CPI had:

2 bearish patterns,
152 bullish patterns,
197 patterns waiting for breakout.
The CPI signal is 98.7%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  12,336  12,459  12,528  12,651  12,720 
Weekly  11,709  12,146  12,371  12,808  13,033 
Monthly  11,614  12,098  12,347  12,832  13,081 
S&P 500 (^GSPC): Daily  1,310  1,325  1,333  1,348  1,356 
Weekly  1,243  1,291  1,316  1,365  1,390 
Monthly  1,227  1,283  1,314  1,371  1,401 
Nasdaq (^IXIC): Daily  2,752  2,784  2,801  2,833  2,850 
Weekly  2,590  2,703  2,761  2,874  2,931 
Monthly  2,515  2,665  2,750  2,901  2,986 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.6%  Expect a random direction.
 1 month up 51.8%  Expect a random direction.
 S & P 500 (^GSPC) 1 week up 41.1%  Expect a random direction.
 1 month up 54.1%  Expect a random direction.
 Nasdaq composite (^IXIC) 2 weeks up 25.5%  The trend may continue.
 1 month up 48.2%  Expect a random direction.

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

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

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

Buy-and-Hold: 12-Month SMA

This indicator warns of an index moving into or out of a bear market. It's based on a 12-month simple moving average of monthly closing prices, so it only changes monthly. See 12-Month Moving Average for more details.
Dow Industrials: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

Earnings season will be starting in about 10 days.

 Found Chart Pattern Name
35Pipe bottom
27Double Bottom, Adam and Adam
16Triple bottom
14Triangle, symmetrical
12Head-and-shoulders bottom
9Triangle, descending
7Broadening wedge, descending
6Head-and-shoulders top
5Broadening bottom
5Broadening top, right-angled and descending

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, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Medical Supplies1. Medical Supplies
2. Toiletries/Cosmetics2. Toiletries/Cosmetics
3. Natural Gas (Diversified)3. Natural Gas (Diversified)
4. Biotechnology4. Biotechnology
5. Shoe5. Petroleum (Integrated)
48. Human Resources48. Semiconductor
49. Cement and Aggregates49. Cement and Aggregates
50. Coal50. Coal
51. Alternate Energy51. Human Resources
52. Securities Brokerage52. Securities Brokerage
53. Short ETFs53. Alternate Energy

-- Thomas Bulkowski

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