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

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 11/15/2018
25,289 208.77 0.8%
10,615 158.69 1.5%
715 -9.55 -1.3%
7,259 122.64 1.7%
2,730 28.62 1.1%
YTD
2.3%
0.0%
-1.2%
5.2%
2.1%
Tom's Targets    Overview: 11/14/2018
26,800 or 24,500 by 12/01/2018
11,000 or 10,100 by 12/01/2018
710 or 750 by 12/01/2018
6,900 or 7,700 by 12/01/2018
2,650 or 2,800 by 12/01/2018

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

July 2018 Headlines


Archives


Tuesday 7/31/18. Intraday Market Direction: Dow

The index dropped by -0.6% or -144.23 points. Since 10/01/1928 the index made 663 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 343 occasions.
     Average loss was -0.7% on 320 occasions.
Expect the index to close higher 51.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 165/279 or 59.1% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

Today shows a mix to two chart patterns, which really isn't unusual. When confronted with a similar situation, see what the patterns have to say and go from there.

In this case, the red line shows an inverted and descending scallop. Notice that point D is below B and there's an upward curve between the two patterns. Is it complete? It looks to be but maybe not.

The second pattern is a measured move down. It begins at AB with the first leg, the corrective phase is BC, and the second leg is CD.

In well-behaved measured moves, the second leg will equal the first. So it looks as if CD is shorter than AB. So expect move of a downward move.

However, the stats say that price will rise back up to the corrective phase (BC). Thus, we could see the index drop (having the scallop grow taller) followed by a recovery to BC.

Or not...

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,373.73    
 Monthly S1  24,340.28  966.55   
 Weekly S2  24,688.56  348.28   
 Monthly Pivot  24,963.76  275.20   
 Weekly S1  24,997.69  33.93   
 Daily S2  25,152.01  154.32   
 Daily S1  25,229.42  77.41   
 Low  25,287.38  57.96   
 Weekly Pivot  25,292.47  5.09   Yes! The Weekly Pivot is close to the Low.
 Close  25,306.83  14.36   Yes! The Close is close to the Weekly Pivot.
 Daily Pivot  25,364.79  57.96   
 61.8% Down from Intraday High  25,368.66  3.87   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  25,393.77  25.11   
 38.2% Down from Intraday High  25,418.88  25.11   
 Open  25,439.32  20.44   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  25,442.20  2.88   Yes! The Daily R1 is close to the Open.
 High  25,500.16  57.96   
 Daily R2  25,577.57  77.41   
 Weekly R1  25,601.60  24.03   
 Weekly R2  25,896.38  294.77   
 Monthly R1  25,930.31  33.93   
 Monthly R2  26,553.79  623.48   

Monday 7/30/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utlities on the daily scale.

This is a chart of the Dow utilities on the daily scale.

The two green lines form a down-sloping channel.

That's a pattern where the two green lines are parallel. Eventually, the stock or index will pierce one of the trendlines and close outside of the boundary. That's a breakout.

The two red lines really don't form a chart pattern at all. Why? Because there are not enough trendline touches.

However, let's pretend there are more trendline touches. Then we'd have a symmetrical triangle.

A symmetrical triangle has two converging trendlines with one sloping up and one sloping down. The apex of the triangle, where the two trendlines join, is a support or resistance area.

A close outside the trendline boundary means a breakout.

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A Brief Look Back

Picture of a lizard 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 13.83 points.
Tuesday: Up 197.65 points.
Wednesday: Up 172.16 points.
Thursday: Up 112.97 points.
Friday: Down 76.01 points.

For the Week...

The Dow industrials were up 392.94 points or 1.6%.
The Nasdaq composite was down 82.78 points or 1.1%.
The S&P 500 index was up 16.99 points or 0.6%.

Year to Date...

Dow Industrials
     4.4% down from the high of 26,616.71 on 01/26/2018.
     9.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     2.5% down from the high of 7,933.31 on 07/25/2018.
     16.7% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     1.9% down from the high of 2,872.87 on 01/26/2018.
     11.3% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,257  25,354  25,467  25,564  25,677 
Weekly  24,737  25,094  25,341  25,698  25,944 
Monthly  23,422  24,436  25,012  26,026  26,602 
S&P500 (^GSPC): Daily  2,789  2,804  2,823  2,839  2,858 
Weekly  2,768  2,793  2,821  2,846  2,874 
Monthly  2,630  2,725  2,786  2,881  2,942 
Nasdaq (^IXIC): Daily  7,585  7,661  7,775  7,852  7,966 
Weekly  7,556  7,646  7,790  7,881  8,024 
Monthly  7,183  7,460  7,697  7,974  8,211 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 4 weeks up 18.1%   Expect a reversal soon. 
 1 month up 54.7%   Expect a random direction. 
 S & P 500 (^GSPC) 4 weeks up 17.6%   Expect a reversal soon. 
 4 months up 29.3%   The trend may continue. 
 Nasdaq composite (^IXIC) 2 weeks down 15.8%   Expect a reversal soon. 
 4 months up 21.5%   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
33Pipe bottom
12Triangle, symmetrical
9Double Bottom, Adam and Adam
6Head-and-shoulders top
6Triple bottom
5Pipe top
5Broadening top
4Triple top
4Dead-cat bounce
3Triangle, 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, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Healthcare Information
2. Healthcare Information2. Short ETFs
3. Computer Software and Svcs3. Computer Software and Svcs
4. Internet4. E-Commerce
5. Shoe5. Shoe

-- Thomas Bulkowski

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Friday 7/27/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 611 stocks searched, or 3.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 9 bullish chart patterns this week and 9 bearish ones with any remaining (3) 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
DDDDouble Top, Adam and Adam      07/13/201807/24/2018Electronics
ATSGTriangle, symmetrical      06/15/201807/24/2018Air Transport
ARWTriangle, symmetrical      05/29/201807/26/2018Electronics
BOOTRising wedge      06/20/201807/26/2018Shoe
BGFalling wedge      06/15/201807/26/2018Food Processing
CIENScallop, ascending and inverted      06/01/201807/23/2018Telecom. Equipment
CLGXDouble Top, Adam and Adam      06/13/201807/20/2018Information Services
EFXBroadening top      06/11/201807/26/2018Information Services
FBDead-cat bounce      07/26/201807/26/2018E-Commerce
FISRising wedge      06/13/201807/26/2018Computer Software and Svcs
FWRDTriple bottom      06/28/201807/25/2018Trucking/Transp. Leasing
GMETriangle, symmetrical      06/21/201807/24/2018Retail (Special Lines)
HLITTriangle, symmetrical      06/14/201807/26/2018Telecom. Equipment
LXUDead-cat bounce      07/26/201807/26/2018Building Materials
DGXDouble Top, Adam and Eve      06/25/201807/23/2018Medical Services
SKXDead-cat bounce      07/20/201807/20/2018Shoe
STMPTriangle, symmetrical      07/10/201807/24/2018Internet
TOLTriple top      06/26/201807/20/2018Homebuilding
TMKHead-and-shoulders complex bottom      05/29/201807/25/2018Insurance (Diversified)
TZOODead-cat bounce      07/25/201807/25/2018Internet
WSODouble Top, Eve and Eve      07/11/201807/24/2018Retail Building Supply

 

Weekly screen for chart patterns ending between 07/19/2018 and 07/26/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
3D Systems (DDD)
Industry: Electronics
Industry RS rank: 43 out of 58
Stock RS rank: 75 out of 604
7/26/18 close: $13.17
1 Month avg volatility: $0.62. Volatility stop (for downward breakout): $15.05 or 14.3% above the close.
Change YTD: 52.43%
Volume: 3,445,000 shares. 3 month avg: 3,031,971 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: Double Top, Adam and Adam reversal pattern from 07/13/2018 to 07/24/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Air Transport Services Group (ATSG)
Industry: Air Transport
Industry RS rank: 46 out of 58
Stock RS rank: 486 out of 604
7/26/18 close: $22.95
1 Month avg volatility: $0.58. Volatility stop (for upward breakout): $21.70 or 5.4% below the close.
Change YTD: -0.82%
Volume: 298,600 shares. 3 month avg: 530,657 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 06/15/2018 to 07/24/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Arrow Electronics (ARW)
Industry: Electronics
Industry RS rank: 43 out of 58
Stock RS rank: 449 out of 604
7/26/18 close: $76.42
1 Month avg volatility: $1.37. Volatility stop (for upward breakout): $72.56 or 5.1% below the close.
Change YTD: -4.96%
Volume: 370,800 shares. 3 month avg: 447,163 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 05/29/2018 to 07/26/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Boot Barn Holdings Inc (BOOT)
Industry: Shoe
Industry RS rank: 4 out of 58
Stock RS rank: 30 out of 604
7/26/18 close: $25.03
1 Month avg volatility: $0.83. Volatility stop (for downward breakout): $27.12 or 8.3% above the close.
Change YTD: 44.43%
Volume: 539,400 shares. 3 month avg: 434,749 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Rising wedge reversal pattern from 06/20/2018 to 07/26/2018
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Bunge Ltd (BG)
Industry: Food Processing
Industry RS rank: 36 out of 58
Stock RS rank: 505 out of 604
7/26/18 close: $68.48
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $65.66 or 4.1% below the close.
Change YTD: 2.09%
Volume: 888,500 shares. 3 month avg: 1,268,517 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: Falling wedge from 06/15/2018 to 07/26/2018
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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Ciena Corp (CIEN)
Industry: Telecom. Equipment
Industry RS rank: 18 out of 58
Stock RS rank: 87 out of 604
7/26/18 close: $25.86
1 Month avg volatility: $0.45. Volatility stop (for upward breakout): $24.72 or 4.4% below the close.
Change YTD: 23.55%
Volume: 1,789,900 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: Scallop, ascending and inverted continuation pattern from 06/01/2018 to 07/23/2018
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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CoreLogic Inc (CLGX)
Industry: Information Services
Industry RS rank: 25 out of 58
Stock RS rank: 248 out of 604
7/26/18 close: $50.00
1 Month avg volatility: $0.92. Volatility stop (for downward breakout): $54.68 or 9.4% above the close.
Change YTD: 8.20%
Volume: 2,983,100 shares. 3 month avg: 487,489 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 06/13/2018 to 07/20/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Equifax Inc (EFX)
Industry: Information Services
Industry RS rank: 25 out of 58
Stock RS rank: 346 out of 604
7/26/18 close: $123.25
1 Month avg volatility: $1.73. Volatility stop (for downward breakout): $128.45 or 4.2% above the close.
Change YTD: 4.52%
Volume: 2,976,500 shares. 3 month avg: 3,458,600 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: Broadening top reversal pattern from 06/11/2018 to 07/26/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Facebook (FB)
Industry: E-Commerce
Industry RS rank: 8 out of 58
Stock RS rank: 392 out of 604
7/26/18 close: $176.26
1 Month avg volatility: $3.71. Volatility stop (for downward breakout): $187.55 or 6.4% above the close.
Change YTD: -0.11%
Volume: 169,387,800 shares. 3 month avg: 16,363,594 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 07/26/2018 to 07/26/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Fidelity National Information Svcs (FIS)
Industry: Computer Software and Svcs
Industry RS rank: 3 out of 58
Stock RS rank: 188 out of 604
7/26/18 close: $109.13
1 Month avg volatility: $1.18. Volatility stop (for downward breakout): $111.97 or 2.6% above the close.
Change YTD: 15.98%
Volume: 835,100 shares. 3 month avg: 1,473,917 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: Rising wedge reversal pattern from 06/13/2018 to 07/26/2018
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Forward Air Corp (FWRD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 38 out of 58
Stock RS rank: 289 out of 604
7/26/18 close: $62.58
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $56.68 or 9.4% below the close.
Change YTD: 8.95%
Volume: 297,600 shares. 3 month avg: 140,032 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 06/28/2018 to 07/25/2018
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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GameStop Corp (GME)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 30 out of 58
Stock RS rank: 483 out of 604
7/26/18 close: $14.81
1 Month avg volatility: $0.49. Volatility stop (for upward breakout): $13.53 or 8.7% below the close.
Change YTD: -17.49%
Volume: 1,689,200 shares. 3 month avg: 3,063,175 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/21/2018 to 07/24/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Harmonic Inc (HLIT)
Industry: Telecom. Equipment
Industry RS rank: 18 out of 58
Stock RS rank: 120 out of 604
7/26/18 close: $4.40
1 Month avg volatility: $0.12. Volatility stop (for upward breakout): $4.09 or 7.2% below the close.
Change YTD: 4.76%
Volume: 208,300 shares. 3 month avg: 585,235 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/14/2018 to 07/26/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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LSB Industries Inc (LXU)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 41 out of 58
Stock RS rank: 572 out of 604
7/26/18 close: $6.68
1 Month avg volatility: $0.33. Volatility stop (for downward breakout): $7.84 or 17.3% above the close.
Change YTD: -23.74%
Volume: 483,700 shares. 3 month avg: 278,209 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: Dead-cat bounce continuation pattern from 07/26/2018 to 07/26/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Quest Diagnostics (DGX)
Industry: Medical Services
Industry RS rank: 24 out of 58
Stock RS rank: 268 out of 604
7/26/18 close: $107.34
1 Month avg volatility: $1.80. Volatility stop (for downward breakout): $112.79 or 5.1% above the close.
Change YTD: 8.99%
Volume: 1,099,900 shares. 3 month avg: 1,490,418 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: Double Top, Adam and Eve reversal pattern from 06/25/2018 to 07/23/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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Skechers USA Inc (SKX)
Industry: Shoe
Industry RS rank: 4 out of 58
Stock RS rank: 586 out of 604
7/26/18 close: $27.68
1 Month avg volatility: $1.00. Volatility stop (for downward breakout): $30.11 or 8.8% above the close.
Change YTD: -26.85%
Volume: 4,062,700 shares. 3 month avg: 3,234,920 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 07/20/2018 to 07/20/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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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: 5 out of 58
Stock RS rank: 34 out of 604
7/26/18 close: $279.40
1 Month avg volatility: $7.21. Volatility stop (for upward breakout): $263.84 or 5.6% below the close.
Change YTD: 48.62%
Volume: 134,000 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: Triangle, symmetrical continuation pattern from 07/10/2018 to 07/24/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Toll Brothers (TOL)
Industry: Homebuilding
Industry RS rank: 58 out of 58
Stock RS rank: 582 out of 604
7/26/18 close: $35.68
1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $37.59 or 5.4% above the close.
Change YTD: -25.70%
Volume: 3,408,800 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: Triple top reversal pattern from 06/26/2018 to 07/20/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Torchmark Corp (TMK)
Industry: Insurance (Diversified)
Industry RS rank: 33 out of 58
Stock RS rank: 408 out of 604
7/26/18 close: $86.78
1 Month avg volatility: $1.16. Volatility stop (for upward breakout): $82.55 or 4.9% below the close.
Change YTD: -4.33%
Volume: 894,600 shares. 3 month avg: 431,386 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: Head-and-shoulders complex bottom reversal pattern from 05/29/2018 to 07/25/2018
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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Travelzoo Inc. (TZOO)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 5 out of 58
Stock RS rank: 7 out of 604
7/26/18 close: $13.35
1 Month avg volatility: $1.38. Volatility stop (for downward breakout): $16.50 or 23.6% above the close.
Change YTD: 106.98%
Volume: 364,800 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 Friday.
 
Chart pattern: Dead-cat bounce continuation pattern from 07/25/2018 to 07/25/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Watsco, Inc (WSO)
Industry: Retail Building Supply
Industry RS rank: 51 out of 58
Stock RS rank: 402 out of 604
7/26/18 close: $166.00
1 Month avg volatility: $3.40. Volatility stop (for downward breakout): $177.10 or 6.7% above the close.
Change YTD: -2.38%
Volume: 782,900 shares. 3 month avg: 222,320 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 07/11/2018 to 07/24/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

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Thursday 7/26/18. Intraday Market Direction: Nasdaq

The index climbed by 1.2% or 91.47 points. Since 02/05/1971 the index made 160 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 103 occasions.
     Average loss was -1.0% on 57 occasions.
Expect the index to close higher 64.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 148/269 or 55.0% of the time.
     The prediction of the index closing lower has been right 46/91 or 50.5% 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.

Shown in red is a chart pattern that appears often enough, but I don't focus on it. It's a V-bottom. My problem with them is that I could never figure out how to trade them.

I drew a few others in green, just to show you more examples, but also to study what happens after the pattern ends.

With the probabilities suggesting a higher close, at 64%, I guess that's the way to bet. Personally, I think the index will close lower. Why? Because the index has already move up a lot, and on Tuesday, the first V-bottom, the index move horizontally to down thereafter.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,292.06    
 Monthly S1  7,612.15  320.09   
 Weekly S2  7,732.13  119.98   
 Monthly Pivot  7,739.65  7.52   Yes! The Monthly Pivot is close to the Weekly S2.
 Daily S2  7,806.89  67.24   
 Weekly S1  7,832.18  25.30   
 Low  7,838.76  6.58   Yes! The Low is close to the Weekly S1.
 Open  7,839.09  0.33   Yes! The Open is close to the Low.
 Weekly Pivot  7,849.67  10.58   
 Daily S1  7,869.56  19.90   
 61.8% Down from Intraday High  7,874.88  5.31   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  7,886.04  11.16   
 38.2% Down from Intraday High  7,897.19  11.16   
 Daily Pivot  7,901.44  4.24   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  7,932.24  30.80   
 High  7,933.31  1.07   Yes! The High is close to the Close.
 Weekly R1  7,949.72  16.41   
 Daily R1  7,964.11  14.39   
 Weekly R2  7,967.21  3.09   Yes! The Weekly R2 is close to the Daily R1.
 Daily R2  7,995.99  28.78   
 Monthly R1  8,059.74  63.75   
 Monthly R2  8,187.24  127.50   

Wednesday 7/25/18. A Look At Indicators

Picture of the chart pattern indicator

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

The bearish vertical bar which appeared during the past week has disappeared. That means the green bar on the far right, is still active.

The indicator is bullish. But notice how the thin blue indicator line dipped during the week. That's a sign of weakness, I think.

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, 24% 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 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 508 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Both lines dipped this week compared to a week ago.

Yes, the overall trend of the red line, the more sensitive of the red and blue lines, remains upward, but it seems to be struggling to move higher.

To sum this up, the CPI is in jeopardy of turning bearish. The two lines here are worse this week than last. Hmm. Doesn't sound good, does it?

-- Thomas Bulkowski

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Tuesday 7/24/18. Intraday Market Direction: Dow

The index dropped by -0.1% or -13.83 points. Since 10/01/1928 the index made 1315 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 681 occasions.
     Average loss was -0.7% on 634 occasions.
Expect the index to close higher 51.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 164/278 or 59.0% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

I hesitate to call the red-lined pattern a descending triangle because there's too few touches of the trendlines.

However, it'll suit our purposes, which is making money.

The pattern suggests continued weakness. You can see how the index has been trending lower since Wednesday. The top red line shows the downward trend.

It's possible that the pinching action of the two red lines will suggest an upward move (not sure why...maybe it's more accurate to write a "big" move, either up or down). That's in agreement with the above probabilities, which are really close to random now.

My guess is that the index will drop some to near or touch the bottom trendline and then rebound. That could take one day or two.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,534.16    
 Monthly S1  24,289.23  755.06   
 Monthly Pivot  24,752.27  463.05   
 Weekly S2  24,844.07  91.80   
 Daily S2  24,938.24  94.17   
 Weekly S1  24,944.18  5.94   Yes! The Weekly S1 is close to the Daily S2.
 Low  24,983.33  39.15   
 Daily S1  24,991.26  7.93   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  25,020.81  29.55   
 50% Down from Intraday High  25,032.39  11.58   
 Daily Pivot  25,036.36  3.97   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Open  25,036.90  0.54   Yes! The Open is close to the Daily Pivot.
 38.2% Down from Intraday High  25,043.97  7.07   Yes! The 38.2% Down from Intraday High is close to the Open.
 Close  25,044.29  0.32   Yes! The Close is close to the 38.2% Down from Intraday High.
 Weekly Pivot  25,079.75  35.46   
 High  25,081.45  1.70   Yes! The High is close to the Weekly Pivot.
 Daily R1  25,089.38  7.93   Yes! The Daily R1 is close to the High.
 Daily R2  25,134.48  45.09   
 Weekly R1  25,179.86  45.38   
 Weekly R2  25,315.43  135.57   
 Monthly R1  25,507.34  191.91   
 Monthly R2  25,970.38  463.05   

Monday 7/23/18. Market Monday: The Week Ahead

My Prediction

Picture of the S and P on the daily scale.

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

Price is following an upward channel, but how do you draw it?

Locate three major turning points, which I have marked ABC. Two of them with be minor highs or two of them will be minor lows.

I show AC as the two minor lows. Draw a line connecting the bottoms of those two valleys (AC) and extend it into the future.

At B, draw a line parallel to AC and extend it into the future.

This is what's called a three-point channel. It can be a bit more involved than I describe here, so click the link for more information.

$ $ $

I released new research on overhead resistance.

Here's what I learned.

  1. Stocks perform better when overhead resistance is present.
  2. Stocks priced at $20 or below outperform higher priced issues.
  3. Superior performance when overhead resistance is present occurs at nearly all decade price levels from $10 to $200 (the one exception: $30, where stocks facing no overhead resistance outperformed).
  4. The stocks peaked, on average, about midway through each period (peaked in 4 days for the 1 week period, for example)

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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 44.95 points.
Tuesday: Up 55.53 points.
Wednesday: Up 79.4 points.
Thursday: Down 134.79 points.
Friday: Down 6.38 points.

For the Week...

The Dow industrials were up 38.71 points or 0.2%.
The Nasdaq composite was down 5.78 points or 0.1%.
The S&P 500 index was up 0.52 points or 0.0%.

Year to Date...

Dow Industrials
     5.9% down from the high of 26,616.71 on 01/26/2018.
     7.3% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     0.6% down from the high of 7,867.15 on 07/17/2018.
     17.9% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     2.5% down from the high of 2,872.87 on 01/26/2018.
     10.6% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  24,918  24,988  25,056  25,126  25,194 
Weekly  24,849  24,953  25,084  25,189  25,320 
Monthly  23,539  24,298  24,757  25,517  25,975 
S&P500 (^GSPC): Daily  2,794  2,798  2,804  2,808  2,814 
Weekly  2,775  2,788  2,803  2,816  2,830 
Monthly  2,645  2,724  2,770  2,848  2,895 
Nasdaq (^IXIC): Daily  7,788  7,804  7,832  7,848  7,876 
Weekly  7,695  7,757  7,812  7,875  7,930 
Monthly  7,255  7,537  7,702  7,985  8,150 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks up 24.0%   Expect a reversal soon. 
 1 month up 54.7%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 24.1%   Expect a reversal soon. 
 4 months up 29.3%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week down 28.1%   The trend may continue. 
 4 months up 21.5%   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
33Pipe bottom
11Double Bottom, Adam and Adam
10Double Top, Adam and Adam
9Triangle, symmetrical
6Broadening top
6Triple bottom
5Pipe top
4Head-and-shoulders top
4Head-and-shoulders bottom
3Triangle, 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, 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. Healthcare Information1. Short ETFs
2. Short ETFs2. Healthcare Information
3. Computer Software and Svcs3. Computer Software and Svcs
4. E-Commerce4. Internet
5. Shoe5. Shoe

-- Thomas Bulkowski

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Friday 7/20/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 19 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 612 stocks searched, or 3.1%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 6 bullish chart patterns this week and 7 bearish ones with any remaining (6) 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
BBBYPipe top      07/02/201807/09/2018Retail (Special Lines)
BKHPipe top      07/02/201807/09/2018Electric Utility (West)
CALBroadening top      05/31/201807/19/2018Shoe
CRHTriangle, symmetrical      06/27/201807/18/2018Cement and Aggregates
ETFCDouble Bottom, Adam and Adam      07/06/201807/13/2018Securities Brokerage
FOETriple bottom      05/29/201807/16/2018Chemical (Specialty)
GESBroadening top      06/07/201807/17/2018Apparel
HLITTriangle, symmetrical      06/14/201807/19/2018Telecom. Equipment
HIGHead-and-shoulders bottom      06/05/201807/13/2018Insurance (Prop/Casualty)
IBPTriple bottom      07/03/201807/17/2018Retail Building Supply
MGEEPipe top      07/02/201807/09/2018Electric Utility (Central)
MOSDiamond bottom      06/28/201807/19/2018Chemical (Diversified)
PCGPipe top      07/02/201807/09/2018Electric Utility (West)
PPGDouble Bottom, Adam and Adam      07/02/201807/16/2018Chemical (Diversified)
RMBSDouble Bottom, Adam and Adam      07/02/201807/13/2018Semiconductor Cap Equip.
SCHWDouble Bottom, Adam and Adam      07/06/201807/13/2018Securities Brokerage
TGTTriangle, ascending      06/27/201807/18/2018Retail Store
VCBroadening top, right-angled and ascending      05/17/201807/19/2018Electronics
XELDiamond top      06/28/201807/19/2018Electric Utility (West)

 

Weekly screen for chart patterns ending between 07/12/2018 and 07/19/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
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: 24 out of 58
Stock RS rank: 530 out of 605
7/19/18 close: $19.23
1 Month avg volatility: $0.76. Volatility stop (for downward breakout): $20.93 or 8.8% above the close.
Change YTD: -15.32%
Volume: 3,628,200 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: Pipe top reversal pattern from 07/02/2018 to 07/09/2018
WARNING: A dead-cat bounce occurred on 04/12/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 10/11/2018.
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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Black Hills Corp (BKH)
Industry: Electric Utility (West)
Industry RS rank: 19 out of 58
Stock RS rank: 127 out of 605
7/19/18 close: $60.90
1 Month avg volatility: $1.09. Volatility stop (for downward breakout): $63.33 or 4.0% above the close.
Change YTD: 1.31%
Volume: 564,500 shares. 3 month avg: 512,838 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 07/02/2018 to 07/09/2018
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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Caleres (CAL)
Industry: Shoe
Industry RS rank: 3 out of 58
Stock RS rank: 132 out of 605
7/19/18 close: $36.26
1 Month avg volatility: $0.93. Volatility stop (for downward breakout): $38.30 or 5.6% above the close.
Change YTD: 7.69%
Volume: 379,400 shares. 3 month avg: 329,342 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 reversal pattern from 05/31/2018 to 07/19/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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CRH plc (CRH)
Industry: Cement and Aggregates
Industry RS rank: 42 out of 58
Stock RS rank: 380 out of 605
7/19/18 close: $35.31
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $34.34 or 2.8% below the close.
Change YTD: -2.19%
Volume: 435,100 shares. 3 month avg: 546,094 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 06/27/2018 to 07/18/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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E-Trade Financial Corp (ETFC)
Industry: Securities Brokerage
Industry RS rank: 39 out of 58
Stock RS rank: 134 out of 605
7/19/18 close: $61.21
1 Month avg volatility: $1.34. Volatility stop (for upward breakout): $58.27 or 4.8% below the close.
Change YTD: 23.48%
Volume: 3,787,700 shares. 3 month avg: 2,308,982 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: Double Bottom, Adam and Adam reversal pattern from 07/06/2018 to 07/13/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 20 out of 58
Stock RS rank: 425 out of 605
7/19/18 close: $21.74
1 Month avg volatility: $0.49. Volatility stop (for upward breakout): $20.25 or 6.9% below the close.
Change YTD: -7.84%
Volume: 527,500 shares. 3 month avg: 594,032 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: Triple bottom reversal pattern from 05/29/2018 to 07/16/2018
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 8 out of 58
Stock RS rank: 50 out of 605
7/19/18 close: $23.50
1 Month avg volatility: $0.73. Volatility stop (for downward breakout): $25.06 or 6.6% above the close.
Change YTD: 39.22%
Volume: 535,100 shares. 3 month avg: 1,269,442 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 06/07/2018 to 07/17/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Harmonic Inc (HLIT)
Industry: Telecom. Equipment
Industry RS rank: 26 out of 58
Stock RS rank: 172 out of 605
7/19/18 close: $4.38
1 Month avg volatility: $0.14. Volatility stop (for upward breakout): $4.01 or 8.4% below the close.
Change YTD: 4.29%
Volume: 180,200 shares. 3 month avg: 585,235 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/14/2018 to 07/19/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 32 out of 58
Stock RS rank: 405 out of 605
7/19/18 close: $52.67
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $51.09 or 3.0% below the close.
Change YTD: -6.41%
Volume: 1,882,500 shares. 3 month avg: 2,032,532 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 06/05/2018 to 07/13/2018
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price hits measure rule target 74% of the time.

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Installed Building Products Inc (IBP)
Industry: Retail Building Supply
Industry RS rank: 37 out of 58
Stock RS rank: 548 out of 605
7/19/18 close: $59.35
1 Month avg volatility: $1.70. Volatility stop (for upward breakout): $53.75 or 9.4% below the close.
Change YTD: -21.86%
Volume: 260,600 shares. 3 month avg: 201,345 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triple bottom reversal pattern from 07/03/2018 to 07/17/2018
WARNING: A dead-cat bounce occurred on 02/28/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/29/2018.
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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MGE Energy Inc (MGEE)
Industry: Electric Utility (Central)
Industry RS rank: 12 out of 58
Stock RS rank: 208 out of 605
7/19/18 close: $63.95
1 Month avg volatility: $1.09. Volatility stop (for downward breakout): $66.48 or 4.0% above the close.
Change YTD: 1.35%
Volume: 52,000 shares. 3 month avg: 83,160 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 07/02/2018 to 07/09/2018
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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Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 46 out of 58
Stock RS rank: 163 out of 605
7/19/18 close: $28.20
1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $26.76 or 5.1% below the close.
Change YTD: 9.90%
Volume: 3,525,200 shares. 3 month avg: 4,715,435 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: Diamond bottom reversal pattern from 06/28/2018 to 07/19/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 19 out of 58
Stock RS rank: 372 out of 605
7/19/18 close: $42.26
1 Month avg volatility: $0.97. Volatility stop (for downward breakout): $44.68 or 5.7% above the close.
Change YTD: -5.73%
Volume: 5,583,800 shares. 3 month avg: 5,870,049 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 07/02/2018 to 07/09/2018
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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PPG Industries Inc (PPG)
Industry: Chemical (Diversified)
Industry RS rank: 46 out of 58
Stock RS rank: 419 out of 605
7/19/18 close: $106.39
1 Month avg volatility: $1.74. Volatility stop (for upward breakout): $99.87 or 6.1% below the close.
Change YTD: -8.93%
Volume: 2,543,700 shares. 3 month avg: 1,342,054 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 07/02/2018 to 07/16/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Rambus Inc (RMBS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 44 out of 58
Stock RS rank: 446 out of 605
7/19/18 close: $13.18
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $12.52 or 5.0% below the close.
Change YTD: -7.31%
Volume: 772,400 shares. 3 month avg: 963,789 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: Double Bottom, Adam and Adam reversal pattern from 07/02/2018 to 07/13/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Schwab, Charles Corporation (SCHW)
Industry: Securities Brokerage
Industry RS rank: 39 out of 58
Stock RS rank: 394 out of 605
7/19/18 close: $52.88
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $50.47 or 4.6% below the close.
Change YTD: 2.94%
Volume: 6,194,400 shares. 3 month avg: 6,527,123 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 07/06/2018 to 07/13/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Target (TGT)
Industry: Retail Store
Industry RS rank: 16 out of 58
Stock RS rank: 272 out of 605
7/19/18 close: $78.46
1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $74.08 or 5.6% below the close.
Change YTD: 20.25%
Volume: 5,176,100 shares. 3 month avg: 6,916,209 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 06/27/2018 to 07/18/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Visteon Corp (VC)
Industry: Electronics
Industry RS rank: 45 out of 58
Stock RS rank: 379 out of 605
7/19/18 close: $129.66
1 Month avg volatility: $3.75. Volatility stop (for downward breakout): $138.46 or 6.8% above the close.
Change YTD: 3.61%
Volume: 303,400 shares. 3 month avg: 325,660 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 05/17/2018 to 07/19/2018
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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Xcel Energy, Inc (XEL)
Industry: Electric Utility (West)
Industry RS rank: 19 out of 58
Stock RS rank: 299 out of 605
7/19/18 close: $45.91
1 Month avg volatility: $0.75. Volatility stop (for downward breakout): $47.69 or 3.9% above the close.
Change YTD: -4.57%
Volume: 2,906,800 shares. 3 month avg: 3,202,808 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond top reversal pattern from 06/28/2018 to 07/19/2018
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Thursday 7/19/18. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -0.68 points. Since 02/05/1971 the index made 653 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 371 occasions.
     Average loss was -0.9% on 282 occasions.
Expect the index to close higher 56.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 148/268 or 55.2% of the time.
     The prediction of the index closing lower has been right 46/91 or 50.5% 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.

Today's chart looks a lot like the chart of the Dow two days ago.

This time, though, the rectangle top has a slight upward tilt to it. I suppose you can call it a channel, but it's flat enough for me. It doesn't matter much anyway.

The green pattern is called an ascending and inverted scallop. Price rises in an inverted fishing-hook shape. Price should rise after the end but it's struggling to do that as the chart shows.

I show two other scallops, in blue. These are wider than the green one. I found that when you see three progressively smaller scallops, like you see here, expect price to drop.

Oddly the reverse is also true: 3 scallops that get progressively wider. Both configurations are rare, though.

So maybe we'll see the index drop in the coming days.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,281.88    
 Monthly S1  7,568.16  286.28   
 Weekly S2  7,651.24  83.08   
 Monthly Pivot  7,705.84  54.60   
 Weekly S1  7,752.84  47.00   
 Weekly Pivot  7,798.18  45.34   
 Daily S2  7,806.07  7.89   
 Low  7,822.83  16.76   
 Daily S1  7,830.26  7.43   
 61.8% Down from Intraday High  7,838.47  8.21   
 50% Down from Intraday High  7,843.30  4.83   
 Daily Pivot  7,847.01  3.71   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  7,848.13  1.12   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  7,854.44  6.31   
 Open  7,859.43  4.99   
 High  7,863.77  4.34   
 Daily R1  7,871.20  7.43   
 Daily R2  7,887.95  16.76   
 Weekly R1  7,899.78  11.83   
 Weekly R2  7,945.12  45.34   
 Monthly R1  7,992.12  47.00   
 Monthly R2  8,129.80  137.68   

Wednesday 7/18/18. A Look At Indicators

Picture of the chart pattern indicator

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

The vertical green bar on the far right says the indicator remains bullish.

Notice the U-shaped dip in the indicator (the thin blue line near chart bottom, to the right of the green line). That suggests weakness, I think.

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 22%.
The fewest was 16% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 509 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Neither line has budged from a week ago.

I think that means the index is in a trading range (not trending).

It also suggests the index is going to move soon. That is, a period of high volatility follows a period of low volatility. Maybe earning's reports will cause market turbulence.

-- Thomas Bulkowski

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Tuesday 7/17/18. Intraday Market Direction: Dow

The index climbed by 0.2% or 44.95 points. Since 10/01/1928 the index made 1302 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 710 occasions.
     Average loss was -0.5% on 592 occasions.
Expect the index to close higher 54.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 163/277 or 58.8% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

Notice how the index moved horizontally for much of the past two days. That horizontal movement is called a rectangle, a rectangle top, to be exact.

Price bounces between horizontal or nearly horizontal lines...until it decides to trend. That's what we could be seeing now.

I drew the top line thinner so you could see that the index appears to have pierced the top trendline. That suggests, but does not guarantee, the direction of the new trend (upward).

$ $ $

I updated performance statistics on bump-and-run reversal bottoms. It's a complicated pattern but it performs well, much to my surprise.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,415.85    
 Monthly S1  24,240.10  824.26   
 Weekly S2  24,350.55  110.45   
 Weekly S1  24,707.46  356.90   
 Monthly Pivot  24,821.47  114.01   
 Weekly Pivot  24,875.33  53.87   
 Daily S2  24,946.03  70.70   
 Low  24,979.64  33.61   
 Daily S1  25,005.20  25.56   
 61.8% Down from Intraday High  25,015.08  9.88   
 Open  25,025.58  10.50   
 50% Down from Intraday High  25,026.03  0.45   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  25,036.97  10.95   
 Daily Pivot  25,038.80  1.83   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  25,064.36  25.56   
 High  25,072.41  8.05   Yes! The High is close to the Close.
 Daily R1  25,097.97  25.56   
 Daily R2  25,131.57  33.61   
 Weekly R1  25,232.24  100.66   
 Weekly R2  25,400.11  167.88   
 Monthly R1  25,645.72  245.61   
 Monthly R2  26,227.09  581.36   

Monday 7/16/18. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

I show the Nasdaq composite on the daily scale.

This is an unusual chart this time because it doesn't really show any chart patterns.

I drew two lines. The red one is a support line. The index touched it a few times at the start but upward momentum has taken the index away from the line.

That's actually good news. But it could also mean momentum will slow and price will fall.

The green line represents overhead resistance. Again, the index touches the line near the start but not recently. This line has only two touches, so that's not as good as the bottom trendline, which has three touches.

Because the index is closer to the green line, it suggests a down turn is coming.

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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 320.11 points.
Tuesday: Up 143.07 points.
Wednesday: Down 219.21 points.
Thursday: Up 224.44 points.
Friday: Up 94.52 points.

For the Week...

The Dow industrials were up 562.93 points or 2.3%.
The Nasdaq composite was up 137.59 points or 1.8%.
The S&P 500 index was up 41.49 points or 1.5%.

Year to Date...

Dow Industrials
     6.0% down from the high of 26,616.71 on 01/26/2018.
     7.2% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     0.2% down from the high of 7,843.52 on 07/13/2018.
     18.0% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     2.5% down from the high of 2,872.87 on 01/26/2018.
     10.6% up from the low of 2,532.69 on 02/09/2018.

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 07/13/2018, the CPI had:

2 bearish patterns,
21 bullish patterns,
376 patterns waiting for breakout.
The CPI signal is 91.3%, 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  24,831  24,925  24,984  25,078  25,137 
Weekly  24,336  24,677  24,860  25,202  25,385 
Monthly  23,401  24,210  24,806  25,616  26,212 
S&P500 (^GSPC): Daily  2,786  2,794  2,799  2,807  2,812 
Weekly  2,755  2,778  2,791  2,814  2,827 
Monthly  2,653  2,727  2,766  2,840  2,878 
Nasdaq (^IXIC): Daily  7,784  7,805  7,824  7,845  7,864 
Weekly  7,642  7,734  7,789  7,881  7,936 
Monthly  7,272  7,549  7,696  7,973  8,120 
  • 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 31.6%   The trend may continue. 
 1 month up 54.7%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 32.9%   The trend may continue. 
 4 months up 29.3%   The trend may continue. 
 Nasdaq composite (^IXIC) 2 weeks up 34.4%   The trend may continue. 
 4 months up 21.5%   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 0 days.

 Found Chart Pattern Name
18Pipe bottom
13Double Top, Adam and Adam
8Triangle, symmetrical
6Broadening top
6Head-and-shoulders top
5Triangle, descending
5Pipe top
5Triple bottom
3Double Top, Eve and Eve
3Triple top

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Healthcare Information2. Healthcare Information
3. Computer Software and Svcs3. Internet
4. Internet4. Shoe
5. Shoe5. Computer Software and Svcs

-- Thomas Bulkowski

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Friday 7/13/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 612 stocks searched, or 1.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 13 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 14 bullish chart patterns this week and 5 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
DDDPipe bottom      06/25/201807/02/2018Electronics
ACIWPipe bottom      06/25/201807/02/2018IT Services
AGOPipe bottom      06/25/201807/02/2018Insurance (Life)
BIGTriangle, descending      06/06/201807/12/2018Retail Store
CLNEPipe top      06/25/201807/02/2018Natural Gas (Distributor)
CONNPipe bottom      06/25/201807/02/2018Retail (Special Lines)
CSODPipe bottom      06/25/201807/02/2018E-Commerce
EFIIPipe bottom      06/25/201807/02/2018Computers and Peripherals
EFXBroadening top      06/11/201807/11/2018Information Services
EXPDDiamond bottom      06/25/201807/12/2018Air Transport
FEYEPipe bottom      06/25/201807/02/2018Computer Software and Svcs
GOOGLPipe bottom      06/25/201807/02/2018Internet
HQYPipe bottom      06/25/201807/02/2018Healthcare Information
LBTriple top      06/06/201807/10/2018Apparel
MDCABroadening top      06/11/201807/10/2018Advertising
NBRBroadening bottom      06/19/201807/10/2018Oilfield Svcs/Equipment
PTENBroadening top, right-angled and descending      06/14/201807/12/2018Oilfield Svcs/Equipment
RGSPipe bottom      06/25/201807/02/2018Toiletries/Cosmetics
RCKYDiamond top      06/14/201807/12/2018Shoe
SNPSPipe bottom      06/25/201807/02/2018Computer Software and Svcs
WEXRectangle top      06/05/201807/06/2018Information Services
QTECPipe bottom      06/25/201807/02/2018Electronics
SMHPipe bottom      06/25/201807/02/2018Semiconductor

 

Weekly screen for chart patterns ending between 07/05/2018 and 07/12/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
3D Systems (DDD)
Industry: Electronics
Industry RS rank: 43 out of 58
Stock RS rank: 19 out of 605
7/12/18 close: $15.76
1 Month avg volatility: $0.60. Volatility stop (for upward breakout): $13.76 or 12.7% below the close.
Change YTD: 82.41%
Volume: 2,474,200 shares. 3 month avg: 3,031,971 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: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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ACI Worldwide (ACIW)
Industry: IT Services
Industry RS rank: 8 out of 58
Stock RS rank: 124 out of 605
7/12/18 close: $26.47
1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $25.04 or 5.4% below the close.
Change YTD: 16.76%
Volume: 321,400 shares. 3 month avg: 464,565 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: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Assured Guaranty Ltd. (AGO)
Industry: Insurance (Life)
Industry RS rank: 53 out of 58
Stock RS rank: 177 out of 605
7/12/18 close: $37.60
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $36.21 or 3.7% below the close.
Change YTD: 11.01%
Volume: 561,600 shares. 3 month avg: 1,068,715 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Big Lots Inc. (BIG)
Industry: Retail Store
Industry RS rank: 13 out of 58
Stock RS rank: 578 out of 605
7/12/18 close: $41.18
1 Month avg volatility: $1.04. Volatility stop (for downward breakout): $43.61 or 5.9% above the close.
Change YTD: -26.66%
Volume: 920,000 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 Friday.
 
Chart pattern: Triangle, descending reversal pattern from 06/06/2018 to 07/12/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Clean Energy Fuels Corp. (CLNE)
Industry: Natural Gas (Distributor)
Industry RS rank: 23 out of 58
Stock RS rank: 43 out of 605
7/12/18 close: $2.83
1 Month avg volatility: $0.24. Volatility stop (for downward breakout): $3.35 or 18.4% above the close.
Change YTD: 39.41%
Volume: 982,500 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: Pipe top reversal pattern from 06/25/2018 to 07/02/2018
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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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 29 out of 58
Stock RS rank: 264 out of 605
7/12/18 close: $36.10
1 Month avg volatility: $1.34. Volatility stop (for upward breakout): $32.98 or 8.6% below the close.
Change YTD: 1.55%
Volume: 450,200 shares. 3 month avg: 567,568 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Cornerstone OnDemand Inc (CSOD)
Industry: E-Commerce
Industry RS rank: 6 out of 58
Stock RS rank: 47 out of 605
7/12/18 close: $52.45
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $47.74 or 9.0% below the close.
Change YTD: 48.46%
Volume: 570,500 shares. 3 month avg: 697,858 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 7 out of 58
Stock RS rank: 138 out of 605
7/12/18 close: $33.79
1 Month avg volatility: $0.73. Volatility stop (for upward breakout): $31.93 or 5.5% below the close.
Change YTD: 14.43%
Volume: 436,600 shares. 3 month avg: 733,492 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Equifax Inc (EFX)
Industry: Information Services
Industry RS rank: 17 out of 58
Stock RS rank: 233 out of 605
7/12/18 close: $128.55
1 Month avg volatility: $1.82. Volatility stop (for downward breakout): $132.74 or 3.3% above the close.
Change YTD: 9.01%
Volume: 965,500 shares. 3 month avg: 3,458,600 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: Broadening top reversal pattern from 06/11/2018 to 07/11/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Expeditors International of Washington (EXPD)
Industry: Air Transport
Industry RS rank: 54 out of 58
Stock RS rank: 168 out of 605
7/12/18 close: $72.97
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $69.49 or 4.8% below the close.
Change YTD: 12.80%
Volume: 825,800 shares. 3 month avg: 1,055,643 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond bottom reversal pattern from 06/25/2018 to 07/12/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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FireEye Inc (FEYE)
Industry: Computer Software and Svcs
Industry RS rank: 3 out of 58
Stock RS rank: 122 out of 605
7/12/18 close: $17.35
1 Month avg volatility: $0.41. Volatility stop (for upward breakout): $16.08 or 7.3% below the close.
Change YTD: 21.75%
Volume: 2,411,100 shares. 3 month avg: 3,815,435 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Google (GOOGL)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 58
Stock RS rank: 207 out of 605
7/12/18 close: $1,201.26
1 Month avg volatility: $21.58. Volatility stop (for upward breakout): $1,129.94 or 5.9% below the close.
Change YTD: 14.04%
Volume: 2,204,300 shares. 3 month avg: 1,574,874 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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HealthEquity, Inc (HQY)
Industry: Healthcare Information
Industry RS rank: 1 out of 58
Stock RS rank: 20 out of 605
7/12/18 close: $79.96
1 Month avg volatility: $2.21. Volatility stop (for upward breakout): $74.86 or 6.4% below the close.
Change YTD: 68.20%
Volume: 377,700 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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L Brands, Inc. (LB)
Industry: Apparel
Industry RS rank: 20 out of 58
Stock RS rank: 592 out of 605
7/12/18 close: $32.34
1 Month avg volatility: $1.03. Volatility stop (for downward breakout): $36.41 or 12.6% above the close.
Change YTD: -46.30%
Volume: 14,735,500 shares. 3 month avg: 4,494,122 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triple top reversal pattern from 06/06/2018 to 07/10/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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MDC Pateners Inc (MDCA)
Industry: Advertising
Industry RS rank: 33 out of 58
Stock RS rank: 601 out of 605
7/12/18 close: $5.65
1 Month avg volatility: $0.29. Volatility stop (for downward breakout): $6.29 or 11.3% above the close.
Change YTD: -42.05%
Volume: 438,300 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 06/11/2018 to 07/10/2018
WARNING: A dead-cat bounce occurred on 05/10/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 08/09/2018 and a 38% chance by 11/08/2018.
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Nabors Industries, Ltd. (NBR)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 46 out of 58
Stock RS rank: 532 out of 605
7/12/18 close: $6.32
1 Month avg volatility: $0.30. Volatility stop (for upward breakout): $5.67 or 10.2% below the close.
Change YTD: -6.65%
Volume: 13,262,000 shares. 3 month avg: 10,861,705 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 bottom reversal pattern from 06/19/2018 to 07/10/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Patterson-UTI Energy Inc. (PTEN)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 46 out of 58
Stock RS rank: 577 out of 605
7/12/18 close: $17.46
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $15.87 or 9.1% below the close.
Change YTD: -24.12%
Volume: 3,001,800 shares. 3 month avg: 3,925,269 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, right-angled and descending continuation pattern from 06/14/2018 to 07/12/2018
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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Regis Corp (RGS)
Industry: Toiletries/Cosmetics
Industry RS rank: 15 out of 58
Stock RS rank: 121 out of 605
7/12/18 close: $17.49
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $16.53 or 5.5% below the close.
Change YTD: 13.87%
Volume: 124,200 shares. 3 month avg: 193,511 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Rocky Brands Inc (RCKY)
Industry: Shoe
Industry RS rank: 5 out of 58
Stock RS rank: 25 out of 605
7/12/18 close: $29.60
1 Month avg volatility: $1.38. Volatility stop (for downward breakout): $33.46 or 13.0% above the close.
Change YTD: 57.87%
Volume: 109,000 shares. 3 month avg: 41,775 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond top reversal pattern from 06/14/2018 to 07/12/2018
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Synopsys Inc (SNPS)
Industry: Computer Software and Svcs
Industry RS rank: 3 out of 58
Stock RS rank: 284 out of 605
7/12/18 close: $91.48
1 Month avg volatility: $1.35. Volatility stop (for upward breakout): $86.47 or 5.5% below the close.
Change YTD: 7.32%
Volume: 892,400 shares. 3 month avg: 998,728 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: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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WEX Inc (WEX)
Industry: Information Services
Industry RS rank: 17 out of 58
Stock RS rank: 41 out of 605
7/12/18 close: $195.75
1 Month avg volatility: $3.43. Volatility stop (for upward breakout): $186.80 or 4.6% below the close.
Change YTD: 38.60%
Volume: 368,300 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 06/05/2018 to 07/06/2018
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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First Trust NASDAQ 100 Tech Sector ETF (QTEC)
Industry: Electronics
Industry RS rank: 43 out of 58
Stock RS rank: 216 out of 605
7/12/18 close: $80.60
1 Month avg volatility: $1.02. Volatility stop (for upward breakout): $77.35 or 4.0% below the close.
Change YTD: 12.04%
Volume: 113,600 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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VanEck Vectors Semiconductor (SMH)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 18 out of 58
Stock RS rank: 265 out of 605
7/12/18 close: $105.20
1 Month avg volatility: $1.66. Volatility stop (for upward breakout): $100.47 or 4.5% below the close.
Change YTD: 7.56%
Volume: 5,980,000 shares. 3 month avg: 5,341,171 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 06/25/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Thursday 7/12/18. Intraday Market Direction: Nasdaq

The index dropped by -0.5% or -42.59 points. Since 02/05/1971 the index made 340 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 165 occasions.
     Average loss was -1.0% on 175 occasions.
Expect the index to close lower 51.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 148/268 or 55.2% of the time.
     The prediction of the index closing lower has been right 46/90 or 51.1% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The chart shows a terrific example of a symmetrical triangle.

The chart pattern (shown here between the red lines) sports two converging trendlines, with the top one sloping down and the bottom one sloping up.

They merge at the apex. Often directly above the apex, price will reverse. The reversal may not last long but it's a reliable signal. Here's a page where I discuss my research on this behavior.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,260.55    
 Weekly S2  7,365.80  105.25   
 Monthly S1  7,488.58  122.78   
 Weekly S1  7,541.20  52.62   
 Weekly Pivot  7,618.51  77.30   
 Monthly Pivot  7,647.59  29.08   
 Daily S2  7,668.87  21.28   
 Daily S1  7,692.74  23.87   
 Low  7,696.58  3.84   Yes! The Low is close to the Daily S1.
 Open  7,698.51  1.93   Yes! The Open is close to the Low.
 61.8% Down from Intraday High  7,716.28  17.77   
 Close  7,716.61  0.33   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  7,720.45  3.84   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  7,722.37  1.92   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  7,728.46  6.09   
 Daily R1  7,744.32  15.86   
 High  7,748.16  3.84   Yes! The High is close to the Daily R1.
 Daily R2  7,772.03  23.87   
 Weekly R1  7,793.91  21.88   
 Weekly R2  7,871.22  77.30   
 Monthly R1  7,875.62  4.40   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  8,034.63  159.01   

Wednesday 7/11/18. A Look At Indicators

Picture of the chart pattern indicator

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

The picture shows a vertical green bar on the far right of the chart, but don't get too excited.

Trump is making noises about putting tariffs on almost all imported Chinese goods. And if that happens, the market isn't going to like the news. So expect a bumpy ride or maybe a large drop in the future (like September, historically the weakest month of the year).

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 26%.
The fewest was 16% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 509 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 15%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Both lines over the past week made substantial gains as the above numbers show. That's also reflected on the upward slope of the red and blue lines.

Together, the two charts suggest an improving market, but maybe that's looking in the rearview mirror.

I'm getting concerned about a downturn...

-- Thomas Bulkowski

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Tuesday 7/10/18. Intraday Market Direction: Dow

The index climbed by 1.3% or 320.11 points. Since 10/01/1928 the index made 254 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 136 occasions.
     Average loss was -0.9% on 118 occasions.
Expect the index to close higher 53.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 162/276 or 58.7% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The curved red line shows a chart pattern. Do you know what it's called?

It's an inverted and ascending scallop. Price trends higher at the start of the pattern, often following a straight (diagonal, really) line higher. Then it curves over at the top and retraces a portion of the up move.

After that, price resumes the upward rise. In this case, the index gapped open higher.

But notice the trend at A and B. I drew two blue lines to make this clear.

Upward momentum is slowing. And I wasn't impressed with so many industries not participating in today's (Monday's) upward move, despite the 320 point rise.

The above probabilities suggests the index will close higher on Tuesday. I'm not so sure. Trade carefully.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,319.92    
 Weekly S2  24,015.42  695.49   
 Monthly S1  24,048.26  32.84   
 Weekly S1  24,396.00  347.75   
 Daily S2  24,419.09  23.09   Yes! The Daily S2 is close to the Weekly S1.
 Weekly Pivot  24,458.15  39.06   
 Low  24,518.43  60.28   
 Open  24,519.20  0.77   Yes! The Open is close to the Low.
 Daily S1  24,597.84  78.64   
 61.8% Down from Intraday High  24,624.66  26.82   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  24,657.47  32.81   
 38.2% Down from Intraday High  24,690.29  32.81   
 Daily Pivot  24,697.18  6.89   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Monthly Pivot  24,725.54  28.36   
 Close  24,776.59  51.05   
 High  24,796.52  19.93   Yes! The High is close to the Close.
 Weekly R1  24,838.73  42.21   
 Daily R1  24,875.93  37.20   
 Weekly R2  24,900.88  24.95   Yes! The Weekly R2 is close to the Daily R1.
 Daily R2  24,975.27  74.39   
 Monthly R1  25,453.88  478.61   
 Monthly R2  26,131.16  677.29   

Monday 7/9/18. 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.

I struggled for a moment to find any patterns in this picture but found a broadening top (but it could be a broadening bottom, too). That chart pattern appears within the two diverging red lines.

Top and bottom is determined by how price enters the chart pattern. From the bottom, and the pattern is usually a top. If price enters the pattern from the top, then the pattern is usually a bottom. However, if price overshoots or undershoots the start of the pattern, I ignore the 10 days or so leading to the start of the pattern.

This figure shows undershoot (A).

Since price has bounced off the bottom trendline, it's assumed that it'll make its way to the top trendline. At this point in time, it's hard to believe it'll make it all the way up there.

However, if someone surrenders in the China-US trade war, maybe that'll be the catalyst for a zip higher.

Just don't hold your breath.

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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 35.77 points.
Tuesday: Down 132.36 points.
Thursday: Up 181.92 points.
Friday: Up 99.74 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 185.07 points or 0.8%.
The Nasdaq composite was up 178.09 points or 2.4%.
The S&P 500 index was up 41.45 points or 1.5%.

Year to Date...

Dow Industrials
     8.1% down from the high of 26,616.71 on 01/26/2018.
     4.8% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.5% down from the high of 7,806.60 on 06/20/2018.
     16.0% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     3.9% down from the high of 2,872.87 on 01/26/2018.
     9.0% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 07/06/2018, the CPI had:

4 bearish patterns,
79 bullish patterns,
420 patterns waiting for breakout.
The CPI signal is 95.2%, which is bullish (>= 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  24,181  24,319  24,419  24,557  24,658 
Weekly  23,909  24,183  24,351  24,625  24,794 
Monthly  23,213  23,835  24,619  25,240  26,024 
S&P500 (^GSPC): Daily  2,722  2,741  2,753  2,772  2,783 
Weekly  2,676  2,718  2,741  2,783  2,807 
Monthly  2,648  2,704  2,748  2,804  2,847 
Nasdaq (^IXIC): Daily  7,550  7,619  7,658  7,727  7,765 
Weekly  7,356  7,522  7,609  7,775  7,862 
Monthly  7,251  7,470  7,638  7,857  8,025 
  • 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 44.4%   Expect a random direction. 
 1 month up 54.7%   Expect a random direction. 
 S & P 500 (^GSPC) 1 week up 45.0%   Expect a random direction. 
 4 months up 29.3%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week up 46.8%   Expect a random direction. 
 4 months up 21.5%   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 7 days.

 Found Chart Pattern Name
14Pipe top
14Double Top, Adam and Adam
12Head-and-shoulders top
12Triangle, symmetrical
7Pipe bottom
7Double Top, Adam and Eve
6Triple top
5Triangle, descending
5Double Top, Eve and Eve
5Rising wedge

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Healthcare Information2. Healthcare Information
3. Internet3. Internet
4. Shoe4. Shoe
5. Computer Software and Svcs5. Computer Software and Svcs

-- Thomas Bulkowski

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Friday 7/6/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 6 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 613 stocks searched, or 1.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 3 bullish chart patterns this week and 1 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is 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
CVXTriangle, symmetrical      05/22/201807/05/2018Petroleum (Integrated)
IDTIScallop, ascending and inverted      05/03/201807/02/2018Semiconductor
JBLUTriangle, descending      05/24/201807/02/2018Air Transport
NWLV bottoms      05/15/201807/02/2018Household Products
TJXDiamond top      06/07/201807/05/2018Retail Store
WEXRectangle top      06/05/201807/05/2018Information Services

 

Weekly screen for chart patterns ending between 06/28/2018 and 07/05/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Chevron Corp (CVX)
Industry: Petroleum (Integrated)
Industry RS rank: 20 out of 58
Stock RS rank: 374 out of 606
7/5/18 close: $123.98
1 Month avg volatility: $2.21. Volatility stop (for upward breakout): $119.41 or 3.7% below the close.
Change YTD: -0.97%
Volume: 4,988,300 shares. 3 month avg: 5,172,805 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/22/2018 to 07/05/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Integrated Device Technology (IDTI)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 19 out of 58
Stock RS rank: 221 out of 606
7/5/18 close: $33.23
1 Month avg volatility: $0.71. Volatility stop (for upward breakout): $30.61 or 7.9% below the close.
Change YTD: 11.77%
Volume: 1,323,700 shares. 3 month avg: 1,569,362 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: Scallop, ascending and inverted continuation pattern from 05/03/2018 to 07/02/2018
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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JetBlue Airways Corporation (JBLU)
Industry: Air Transport
Industry RS rank: 56 out of 58
Stock RS rank: 472 out of 606
7/5/18 close: $19.28
1 Month avg volatility: $0.34. Volatility stop (for downward breakout): $19.99 or 3.7% above the close.
Change YTD: -13.70%
Volume: 2,649,900 shares. 3 month avg: 6,141,268 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, descending reversal pattern from 05/24/2018 to 07/02/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Newell Brands Inc (NWL)
Industry: Household Products
Industry RS rank: 50 out of 58
Stock RS rank: 520 out of 606
7/5/18 close: $27.15
1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $24.95 or 8.1% below the close.
Change YTD: -12.14%
Volume: 5,717,900 shares. 3 month avg: 7,205,206 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: V bottoms from 05/15/2018 to 07/02/2018
WARNING: A dead-cat bounce occurred on 01/25/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 07/26/2018.

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TJX Companies Inc (TJX)
Industry: Retail Store
Industry RS rank: 14 out of 58
Stock RS rank: 72 out of 606
7/5/18 close: $95.07
1 Month avg volatility: $1.40. Volatility stop (for downward breakout): $98.43 or 3.5% above the close.
Change YTD: 24.34%
Volume: 2,595,300 shares. 3 month avg: 4,406,445 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond top reversal pattern from 06/07/2018 to 07/05/2018
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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WEX Inc (WEX)
Industry: Information Services
Industry RS rank: 17 out of 58
Stock RS rank: 53 out of 606
7/5/18 close: $191.25
1 Month avg volatility: $3.89. Volatility stop (for upward breakout): $181.51 or 5.1% below the close.
Change YTD: 35.42%
Volume: 366,800 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 06/05/2018 to 07/05/2018
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Wednesday 7/4/18. Website Support!

I haven't written a post like this in years, so I'm overdue.

To support the operation of this website, you can do any or all of the following.

  • When shopping on Amazon.com, do so through this website.
  • How do you do this? Visit this site first and click on one of my book images on the left. That will take you to Amazon.com and pass a referral code to them. Then you can shop for whatever you wish (you DON'T have to buy the book). They pay for the referral and it doesn't change the cost of anything you buy.

    Each time you wish to buy something on Amazon.com, you must come through this website as described above, or else I won't get the referral.

  • Click on an ad.
  • If you have ad blocker turned off and see an ad that interests you, click on it. Do NOT click on an ad just to generate money for this site. Google gets upset when you do this and it's not ethnical anyway.
  • Make a donation.
  • You can make a financial donation. Here's the link for the donation page or you can click the button at the top left of this page (Donate is the button in red). It'll explain how its done.
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

Above is a list of my non-fiction work. You can buy any of those books and the publisher will kick back a buck or two to me. For more information on those books, read this. That page also lists corrections to the book text, so you may want to review that, too.

Picture of Bumper Picture of Head's Law

These two books are my fiction work. Since I get to price them, they are cheap, especially the ebook versions.

For Bumper's story:

Read an excerpt (577k, pdf)

Buy it here: Paperback  Kindle   Nook

For Head's Law:

Read an excerpt (220k, pdf)

Buy it here:  Paperback  Kindle  Nook

In January, I had over 70,000 people visit the site. A new record. If everyone of them contributed $1 to the site, I'd be able to pay another month's worth of health insurance premium.  

Thanks for your support.

-- Thomas Bulkowski

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Tuesday 7/3/18. Intraday Market Direction: Dow

The index climbed by 0.1% or 35.77 points. Since 10/01/1928 the index made 1330 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 686 occasions.
     Average loss was -0.6% on 644 occasions.
Expect the index to close higher 51.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 162/275 or 58.9% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

I was surprised that the Dow closed higher today. It was down about 200 points when I checked, but it came back.

You can see how low it opened this morning (Monday) and spent the rest of the day trying to recover.

A triple bottom appears at ABC. It suggests more of an upward move tomorrow, but there's no guarantee. I say it's bullish because the pattern is bullish and because the move so far (above the horizontal red line) hasn't stretched far enough yet.

The rule-of-thumb I use is the pattern's height added to the breakout price.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,163.45    
 Weekly S2  23,719.33  555.87   
 Monthly S1  23,735.32  15.99   Yes! The Monthly S1 is close to the Weekly S2.
 Daily S2  23,992.86  257.54   
 Weekly S1  24,013.25  20.39   Yes! The Weekly S1 is close to the Daily S2.
 Low  24,077.56  64.31   
 Daily S1  24,150.02  72.46   
 Open  24,161.53  11.51   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  24,169.95  8.42   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  24,198.49  28.54   
 38.2% Down from Intraday High  24,227.03  28.54   
 Daily Pivot  24,234.72  7.69   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot  24,291.14  56.42   
 Close  24,307.18  16.04   Yes! The Close is close to the Weekly Pivot.
 High  24,319.42  12.24   Yes! The High is close to the Close.
 Daily R1  24,391.88  72.46   
 Daily R2  24,476.58  84.70   
 Monthly Pivot  24,569.07  92.49   
 Weekly R1  24,585.06  15.99   Yes! The Weekly R1 is close to the Monthly Pivot.
 Weekly R2  24,862.95  277.88   
 Monthly R1  25,140.94  277.99   
 Monthly R2  25,974.69  833.76   

Monday 7/2/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

This is a chart of the Dow transports on the daily scale.

I drew two horizontal red lines connecting peaks and valleys, highlighting what I believe is or was support and resistance.

You can consider this a chart pattern, a rectangle bottom, to be exact. Price moves from the bottom trendline to the top, crossing from side to side several times along its length.

The index breaks out upward from the rectangle in mid May only to return back into the rectangle this month, in a classic throwback.

It's possible the index has turned upward here to make another run at an upward breakout.

Or this could just be a fake out and we'll see price continue to the lower red line or perhaps even further below it.

As I write this, the chart pattern indicator has turned bearish, and there's not much indication of an upturn coming.

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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 328.09 points.
Tuesday: Up 30.31 points.
Wednesday: Down 165.52 points.
Thursday: Up 98.46 points.
Friday: Up 55.36 points.

For the Week...

The Dow industrials were down 309.48 points or 1.3%.
The Nasdaq composite was down 182.52 points or 2.4%.
The S&P 500 index was down 36.51 points or 1.3%.

Year to Date...

Dow Industrials
     8.8% down from the high of 26,616.71 on 01/26/2018.
     4.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     3.8% down from the high of 7,806.60 on 06/20/2018.
     13.3% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     5.4% down from the high of 2,872.87 on 01/26/2018.
     7.3% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 06/29/2018, the CPI had:

17 bearish patterns,
5 bullish patterns,
243 patterns waiting for breakout.
The CPI signal is 22.7%, which is bearish (<= 35%).

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  24,110  24,191  24,350  24,431  24,590 
Weekly  23,707  23,989  24,279  24,561  24,851 
Monthly  23,152  23,711  24,557  25,117  25,963 
S&P500 (^GSPC): Daily  2,701  2,710  2,727  2,735  2,752 
Weekly  2,665  2,692  2,719  2,746  2,773 
Monthly  2,614  2,666  2,729  2,781  2,844 
Nasdaq (^IXIC): Daily  7,458  7,484  7,529  7,555  7,600 
Weekly  7,303  7,407  7,523  7,627  7,743 
Monthly  7,105  7,308  7,557  7,760  8,009 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 10.6%   Expect a reversal soon. 
 1 month down 21.6%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 13.7%   Expect a reversal soon. 
 3 months up 38.6%   The trend may continue. 
 Nasdaq composite (^IXIC) 2 weeks down 15.9%   Expect a reversal soon. 
 3 months up 30.7%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
21Pipe bottom
17Double Top, Adam and Adam
16Pipe top
13Triangle, symmetrical
13Head-and-shoulders top
10Double Bottom, Adam and Adam
8Double Top, Adam and Eve
6Triangle, descending
6Triple bottom
6Rising wedge

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Healthcare Information2. Healthcare Information
3. Internet3. Internet
4. Shoe4. Shoe
5. Computer Software and Svcs5. Computer Software and Svcs

-- Thomas Bulkowski

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