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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 03/27/2017
20,551 -45.74 -0.2%
8,935 6.33 0.1%
702 -3.50 -0.5%
5,840 11.63 0.2%
2,342 -2.39 -0.1%
YTD
4.0%
-1.2%
6.5%
8.5%
4.6%
Tom's Targets    Overview: 03/14/2017
20,100 or 21,250 by 04/15/2017
8,500 or 9,500 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,275 or 2,425 by 04/15/2017
Mutt Losers: None YTD
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

June 2016 Headlines


Archives


Thursday 6/30/16. Intraday Market Direction: Nasdaq

The index climbed by 1.9% or 87.38 points. Since 02/05/1971 the index made 60 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 32 occasions.
     Average loss was -1.1% on 28 occasions.
Expect the index to close higher 53.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 108/186 or 58.1% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% 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 potential double bottom at AB (later confirmed as valid) gave me the confidence to believe the turn in the indices was at hand. I reported on that Monday night (for Tuesday's blog).

Of course, I've been expecting a turn since the weekend and have been surprised that the indices dropped so far instead of rising.

So what happens now?

I show overhead resistance at the green and red lines, created by the horizontal price movement days ago.

Because the resistance is intraday and not on the daily chart, the highlighted resistance might be feeble.

However, the sharp drop followed by a retrace could be a pullback. If that's the case, then expect the index to drop again. A pause or retrace also makes sense because of the strong rebound these last two 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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,537.55    
 Weekly S2  4,584.28  46.73   
 Monthly S1  4,658.40  74.12   
 Weekly S1  4,681.77  23.37   
 Daily S2  4,711.14  29.38   
 Low  4,732.34  21.20   
 Open  4,732.93  0.59   Yes! The Open is close to the Low.
 Daily S1  4,745.20  12.27   
 61.8% Down from Intraday High  4,753.45  8.25   
 50% Down from Intraday High  4,759.96  6.52   
 Daily Pivot  4,766.39  6.43   
 38.2% Down from Intraday High  4,766.48  0.09   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,779.25  12.77   
 High  4,787.59  8.34   
 Weekly Pivot  4,795.90  8.31   
 Daily R1  4,800.45  4.54   Yes! The Daily R1 is close to the Weekly Pivot.
 Monthly Pivot  4,819.27  18.82   
 Daily R2  4,821.64  2.37   Yes! The Daily R2 is close to the Monthly Pivot.
 Weekly R1  4,893.39  71.74   
 Monthly R1  4,940.12  46.73   
 Weekly R2  5,007.52  67.40   
 Monthly R2  5,100.99  93.47   

Wednesday 6/29/16. 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 chart shows a green bar on the far right. That is a bullish signal, but it's not as strong as one might expect.

Why? Because the indicator is just over the neutral threshold. If tomorrow's trading forces prices down, then there's a good chance the green bar will disappear.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 46% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 38%.
The fewest was 26% on 07/13/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 535 stocks in my database are down an average of 23% from their yearly high.
A week ago, the average was 19%.
The peak was 15% on 07/14/2015.
And the bottom was 32% on 02/11/2016.

The numbers above tell the story of carnage wrecked by Brexit.

The red line plummeted as almost half (46%) the stocks I follow were down at least 20% from their 1-year high.

The blue line also dropped, pushing the average decline from 19% to 23%.

-- Thomas Bulkowski

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Tuesday 6/28/16. Intraday Market Direction: Dow

The index dropped by -1.5% or -260.51 points. Since 10/01/1928 the index made 171 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 82 occasions.
     Average loss was -0.9% on 89 occasions.
Expect the index to close lower 52.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 118/196 or 60.2% of the time.
     The prediction of the index closing lower has been right 31/59 or 52.5% 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.

$ $ $

I think we will see the indices begin to move higher on Tuesday. That's a guess, but this decline is way overblown, in my opinion. As I mentioned in a prior post, I'm using this event as a buying opportunity to add to existing positions (I bought more shares today).

Instead of discussing Monday's drop, let's focus on the recovery.

After a bear market ends, do stocks that decline least perform best?

No. Stocks that dropped the most during a bear market bounce back further than do those that retained more of their value on the way down.

Stocks with drops more than the median 49% in the 2000 to 2002 bear market gained a median 107% a year after the bear market ended. This compares to a median rise of just 29% for those stocks making a more shallow bear market drop (that is, they dropped less than 49%).

When you are searching for stocks to buy now, look for those stocks that have declined most, and not those that have declined least.

For more information on this study, read price recovery.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,833.05    
 Weekly S2  16,847.82  14.77   Yes! The Weekly S2 is close to the Monthly S2.
 Daily S2  16,894.05  46.23   
 Monthly S1  16,986.64  92.60   
 Weekly S1  16,994.03  7.39   Yes! The Weekly S1 is close to the Monthly S1.
 Daily S1  17,017.14  23.11   Yes! The Daily S1 is close to the Weekly S1.
 Low  17,063.08  45.94   
 Close  17,140.24  77.16   
 61.8% Down from Intraday High  17,174.67  34.43   
 Daily Pivot  17,186.18  11.50   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,209.14  22.97   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,243.62  34.47   
 Daily R1  17,309.27  65.66   
 Open  17,355.21  45.94   
 High  17,355.21  0.00   Yes! The High is close to the Open.
 Daily R2  17,478.31  123.10   
 Weekly Pivot  17,502.55  24.24   Yes! The Weekly Pivot is close to the Daily R2.
 Monthly Pivot  17,509.94  7.39   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Weekly R1  17,648.76  138.82   
 Monthly R1  17,663.53  14.77   Yes! The Monthly R1 is close to the Weekly R1.
 Weekly R2  18,157.28  493.75   
 Monthly R2  18,186.83  29.55   

Monday 6/27/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials forecast on the daily scale.

The indices took a tumble on news of Brexit.

I used this as a buying opportunity to add to existing positions at a cheaper price. My feeling is that the indices will recover in short order. Yes, you might see the indices fall on Monday but I believe it could be two years or longer for Brexit to complete, so there is plenty of time for the economies of the world to absorb the news and recover.

Look at the chart. I show these forecasts at the start of each year. You can click on the link and read how they are created.

Notice the sharp plunge predicted to end in mid July (A). Clearly the start of this plunge occurred today (Friday) instead of a few days from now (B).

Also notice how the index will recover going into year end.

Let me mention that this prediction is rarely accurate, so do not expect the Dow to reach over 20,000 at year end. However, I am hopeful that the indices will recover quickly.

I used this opportunity to buy the dip, but I'm NOT recommending that you buy here. I could be wrong about all of this.

Addendum

With all of the nervous talk about the world's economy going to zero, this is how I think Monday is going to play out.

The market will likely be down in the morning, at the open (but it could surprise and open up a bit). You'll see the nervous people selling out to the smart money.

The smart money will buy up shares quietly and then push the indices higher. This might not happen all on Monday but I think you'll see the market rebound over the coming days.

That's just a guess, but my thinking is that the Brexit fears are overblown and the market is over sold. If you have a longer term horizon, the I think you'll do well.

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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 129.71 points.
Tuesday: Up 24.86 points.
Wednesday: Down 48.9 points.
Thursday: Up 230.24 points.
Friday: Down 610.32 points.

For the Week...

The Dow industrials were down 274.41 points or 1.6%.
The Nasdaq composite was down 92.36 points or 1.9%.
The S&P 500 index was down 33.81 points or 1.6%.

Year to Date...

Dow Industrials
     4.2% down from the high of 18,167.63 on 04/20/2016.
     12.6% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     5.5% down from the high of 4,980.14 on 06/06/2016.
     11.8% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     3.9% down from the high of 2,120.55 on 06/08/2016.
     12.6% up from the low of 1,810.10 on 02/11/2016.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Gross domestic product8:30 TBMeasures economic activity; GDP deflator measures inflation.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Personal income & consumption8:30 WC+Measures sources of income to predict future demand.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Chicago purchasing managers index9:45 ThBMonitors regional manufacturing activity.
Construction spending10:00 FDCovers residential/non-residential/public spending on new construction.
Auto & truck sales2:00 FC-Monthly sales of domestically produced vehicles.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 06/24/2016, the CPI had:

154 bearish patterns,
14 bullish patterns,
221 patterns waiting for breakout.
The CPI signal is 8.3%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  16,978  17,189  17,568  17,779  18,158 
Weekly  16,935  17,168  17,589  17,822  18,244 
Monthly  16,920  17,160  17,597  17,837  18,274 
S&P500 (^GSPC): Daily  1,987  2,012  2,058  2,083  2,129 
Weekly  1,980  2,009  2,061  2,090  2,142 
Monthly  1,976  2,006  2,064  2,094  2,151 
Nasdaq (^IXIC): Daily  4,635  4,672  4,735  4,771  4,835 
Weekly  4,561  4,634  4,772  4,846  4,984 
Monthly  4,514  4,611  4,796  4,893  5,077 
  • 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 down 16.3%   Expect a reversal soon. 
 1 month down 19.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 7.3%   Expect a reversal soon. 
 1 month down 20.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.4%   Expect a reversal soon. 
 1 month down 26.1%   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
18Head-and-shoulders bottom
16Triangle, symmetrical
8Head-and-shoulders top
6Broadening top
5Double Top, Adam and Adam
4Rising wedge
4Double Bottom, Adam and Adam
4Double Bottom, Adam and Eve
4Broadening bottom
4Triangle, ascending

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

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

 

 

 

 

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

This WeekLast Week
1. Cement and Aggregates1. Natural Gas (Diversified)
2. Natural Gas (Diversified)2. Petroleum (Producing)
3. Electric Utility (West)3. Cement and Aggregates
4. Electric Utility (Central)4. Metal Fabricating
5. Petroleum (Producing)5. Natural Gas (Distributor)
50. Information Services50. Insurance (Life)
51. Electronics51. Information Services
52. Insurance (Life)52. Short ETFs
53. Retail (Special Lines)53. Apparel
54. Drug54. Retail (Special Lines)
55. Apparel55. Drug
56. Biotechnology56. Biotechnology
57. Securities Brokerage57. Securities Brokerage

-- Thomas Bulkowski

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Friday 6/24/16. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 2.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 1 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 8 bullish chart patterns this week and 3 bearish ones with any remaining (6) 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
ACNBroadening top      05/25/201606/23/2016IT Services
ANTMDouble Top, Adam and Adam      06/09/201606/20/2016Medical Services
ADSKTriangle, descending      04/12/201606/21/2016Computer Software and Svcs
COHPipe bottom      06/06/201606/13/2016Apparel
CCRNTriangle, symmetrical      05/10/201606/23/2016Human Resources
ETHTriangle, symmetrical      04/26/201606/23/2016Furn/Home Furnishings
FEDouble Top, Adam and Adam      06/10/201606/20/2016Electric Utility (East)
FMCTriangle, symmetrical      06/01/201606/23/2016Chemical (Basic)
LXKTriangle, symmetrical      04/27/201606/23/2016Computers and Peripherals
NJRFlag      06/09/201606/23/2016Natural Gas (Distributor)
NWLTriangle, ascending      05/10/201606/23/2016Household Products
POTTriangle, symmetrical      03/17/201606/23/2016Chemical (Diversified)
SAIABroadening bottom      05/26/201606/20/2016Trucking/Transp. Leasing
SOFlag      06/14/201606/23/2016Electric Utility (East)
SWXPennant      06/10/201606/23/2016Natural Gas (Distributor)
TJXBroadening top      05/27/201606/22/2016Retail Store
WGLPennant      06/10/201606/23/2016Natural Gas (Distributor)
XLPTriangle, ascending      05/10/201606/23/2016Household Products

 

Weekly screen for chart patterns ending between 06/16/2016 and 06/23/2016. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Accenture plc (ACN)
Industry: IT Services
Industry RS rank: 32 out of 56
Stock RS rank: 172 out of 630
6/23/16 close: $118.91
1 Month avg volatility: $1.41. Volatility stop (for downward breakout): $121.73 or 2.4% above the close.
Change YTD: 13.79%
Volume: 2,858,800 shares. 3 month avg: 2,209,314 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: Broadening top reversal pattern from 05/25/2016 to 06/23/2016
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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Anthem (ANTM)
Industry: Medical Services
Industry RS rank: 39 out of 56
Stock RS rank: 498 out of 630
6/23/16 close: $128.67
1 Month avg volatility: $2.14. Volatility stop (for downward breakout): $134.56 or 4.6% above the close.
Change YTD: -7.72%
Volume: 3,328,500 shares. 3 month avg: 1,762,675 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 06/09/2016 to 06/20/2016
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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Autodesk Inc (ADSK)
Industry: Computer Software and Svcs
Industry RS rank: 38 out of 56
Stock RS rank: 466 out of 630
6/23/16 close: $59.06
1 Month avg volatility: $1.05. Volatility stop (for downward breakout): $61.18 or 3.6% above the close.
Change YTD: -3.07%
Volume: 1,410,200 shares. 3 month avg: 1,727,812 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, descending reversal pattern from 04/12/2016 to 06/21/2016
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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Coach Inc. (COH)
Industry: Apparel
Industry RS rank: 53 out of 56
Stock RS rank: 85 out of 630
6/23/16 close: $40.43
1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $38.71 or 4.3% below the close.
Change YTD: 23.53%
Volume: 2,485,800 shares. 3 month avg: 3,735,672 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 06/06/2016 to 06/13/2016
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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Cross Country Healthcare Inc (CCRN)
Industry: Human Resources
Industry RS rank: 28 out of 56
Stock RS rank: 559 out of 630
6/23/16 close: $14.02
1 Month avg volatility: $0.45. Volatility stop (for upward breakout): $13.01 or 7.2% below the close.
Change YTD: -14.46%
Volume: 129,100 shares. 3 month avg: 279,411 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/10/2016 to 06/23/2016
WARNING: A dead-cat bounce occurred on 03/10/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/08/2016.
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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Ethan Allen Interiors Inc (ETH)
Industry: Furn/Home Furnishings
Industry RS rank: 24 out of 56
Stock RS rank: 130 out of 630
6/23/16 close: $33.00
1 Month avg volatility: $0.57. Volatility stop (for upward breakout): $31.72 or 3.9% below the close.
Change YTD: 18.62%
Volume: 214,000 shares. 3 month avg: 178,092 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 04/26/2016 to 06/23/2016
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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FirstEnergy Corp. (FE)
Industry: Electric Utility (East)
Industry RS rank: 9 out of 56
Stock RS rank: 371 out of 630
6/23/16 close: $33.16
1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $34.17 or 3.0% above the close.
Change YTD: 4.51%
Volume: 4,121,800 shares. 3 month avg: 4,365,508 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 06/10/2016 to 06/20/2016
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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FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 33 out of 56
Stock RS rank: 92 out of 630
6/23/16 close: $49.30
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $46.77 or 5.1% below the close.
Change YTD: 25.99%
Volume: 1,651,600 shares. 3 month avg: 1,558,335 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 06/01/2016 to 06/23/2016
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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Lexmark International Inc. (LXK)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 44 out of 56
Stock RS rank: 125 out of 630
6/23/16 close: $37.98
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $36.95 or 2.7% below the close.
Change YTD: 17.04%
Volume: 726,400 shares. 3 month avg: 1,226,351 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/27/2016 to 06/23/2016
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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New Jersey Resources Corp (NJR)
Industry: Natural Gas (Distributor)
Industry RS rank: 8 out of 56
Stock RS rank: 182 out of 630
6/23/16 close: $36.54
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $35.27 or 3.5% below the close.
Change YTD: 10.86%
Volume: 397,700 shares. 3 month avg: 499,149 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 06/09/2016 to 06/23/2016
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Newell Rubbermaid Inc (NWL)
Industry: Household Products
Industry RS rank: 22 out of 56
Stock RS rank: 199 out of 630
6/23/16 close: $49.46
1 Month avg volatility: $0.68. Volatility stop (for upward breakout): $47.62 or 3.7% below the close.
Change YTD: 12.21%
Volume: 3,065,000 shares. 3 month avg: 5,646,323 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, ascending reversal pattern from 05/10/2016 to 06/23/2016
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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Potash Corp of Saskatchewan Inc. (POT)
Industry: Chemical (Diversified)
Industry RS rank: 13 out of 56
Stock RS rank: 464 out of 630
6/23/16 close: $17.48
1 Month avg volatility: $0.57. Volatility stop (for upward breakout): $15.94 or 8.8% below the close.
Change YTD: 2.10%
Volume: 17,196,500 shares. 3 month avg: 9,115,640 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 03/17/2016 to 06/23/2016
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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SAIA Inc (SAIA)
Industry: Trucking/Transp. Leasing
Industry RS rank: 23 out of 56
Stock RS rank: 112 out of 630
6/23/16 close: $26.01
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $23.95 or 7.9% below the close.
Change YTD: 16.90%
Volume: 136,500 shares. 3 month avg: 291,243 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 bottom reversal pattern from 05/26/2016 to 06/20/2016
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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Southern Company (SO)
Industry: Electric Utility (East)
Industry RS rank: 9 out of 56
Stock RS rank: 249 out of 630
6/23/16 close: $51.06
1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $49.57 or 2.9% below the close.
Change YTD: 9.13%
Volume: 4,063,400 shares. 3 month avg: 4,842,791 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Flag continuation pattern from 06/14/2016 to 06/23/2016
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Southwest Gas Corp. (SWX)
Industry: Natural Gas (Distributor)
Industry RS rank: 8 out of 56
Stock RS rank: 21 out of 630
6/23/16 close: $74.76
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $71.95 or 3.8% below the close.
Change YTD: 35.53%
Volume: 144,400 shares. 3 month avg: 201,402 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pennant continuation pattern from 06/10/2016 to 06/23/2016
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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TJX Companies Inc (TJX)
Industry: Retail Store
Industry RS rank: 42 out of 56
Stock RS rank: 270 out of 630
6/23/16 close: $76.88
1 Month avg volatility: $0.91. Volatility stop (for downward breakout): $79.70 or 3.7% above the close.
Change YTD: 8.42%
Volume: 2,115,300 shares. 3 month avg: 3,194,389 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 05/27/2016 to 06/22/2016
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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WGL Holdings (WGL)
Industry: Natural Gas (Distributor)
Industry RS rank: 8 out of 56
Stock RS rank: 302 out of 630
6/23/16 close: $68.05
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $65.19 or 4.2% below the close.
Change YTD: 8.03%
Volume: 230,600 shares. 3 month avg: 255,506 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: Pennant continuation pattern from 06/10/2016 to 06/23/2016
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

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SPDR Consumer Staples Select Sector (XLP)
Industry: Household Products
Industry RS rank: 22 out of 56
Stock RS rank: 303 out of 630
6/23/16 close: $54.14
1 Month avg volatility: $0.41. Volatility stop (for upward breakout): $53.05 or 2.0% below the close.
Change YTD: 7.23%
Volume: 5,629,600 shares. 3 month avg: 10,834,734 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 05/10/2016 to 06/23/2016
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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Thursday 6/23/16. Intraday Market Direction: Nasdaq

The index dropped by -0.2% or -10.44 points. Since 02/05/1971 the index made 467 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 241 occasions.
     Average loss was -0.9% on 226 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 107/185 or 57.8% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% 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.

Look at the red lines first. You might think that the red lines show a descending triangle.

However, point A touches the red line, forming a valley but point B does not. The index could continue lower, not forming a minor low touch at all. So the bottom red line has only one touch. I've recently required five trendline touches, not four, to assure a properly identified triangle.

Now look at the blue line. The start of the line on the left is a nice tight congestion region were I would expect to see support or resistance form in the future when the index approached or touched it. And yet the index just blows through the region four times.

Now look at the green line. Will it act as support? The region to the left of the start of the line is another nice and tight consolidation region. But intraday, as the blue line suggests, these support or resistance areas don't work that well. And that makes it even more difficult to predict where price might turn.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,528.85    
 Monthly S1  4,681.09  152.23   
 Weekly S2  4,719.58  38.49   
 Weekly S1  4,776.45  56.87   
 Daily S2  4,800.49  24.04   
 Daily S1  4,816.90  16.42   
 Low  4,830.00  13.10   
 Monthly Pivot  4,830.61  0.61   Yes! The Monthly Pivot is close to the Low.
 Close  4,833.32  2.71   Yes! The Close is close to the Monthly Pivot.
 Weekly Pivot  4,835.65  2.33   Yes! The Weekly Pivot is close to the Close.
 Daily Pivot  4,846.42  10.77   
 Open  4,846.68  0.26   Yes! The Open is close to the Daily Pivot.
 61.8% Down from Intraday High  4,847.55  0.87   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  4,852.96  5.42   
 38.2% Down from Intraday High  4,858.38  5.42   
 Daily R1  4,862.83  4.45   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 High  4,875.93  13.10   
 Daily R2  4,892.35  16.42   
 Weekly R1  4,892.52  0.17   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  4,951.72  59.20   
 Monthly R1  4,982.85  31.13   
 Monthly R2  5,132.37  149.53   

Wednesday 6/22/16. A Look At Indicators

Picture of the chart pattern indicator

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

The indicator flipped to green yesterday but the signal disappeared today. Thus, the bearish red bar on the left is still in force.

The signal appearing and disappearing can happen for up to a week before a signal becomes valid. Thus, it makes the indicator impossible to trade. It's like your GPS telling you that the turn you didn't take a hundred yards back was the correct exit.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 38% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 39%.
The fewest was 25% on 06/23/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 535 stocks in my database are down an average of 19% from their yearly high.
A week ago, the average was 19%.
The peak was 13% on 06/23/2015.
And the bottom was 32% on 02/11/2016.

The red line ticked up on a strengthening market in the stocks I follow.

The blue line, however, was flat from last week.

That's what the above numbers say.

-- Thomas Bulkowski

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Tuesday 6/21/16. Intraday Market Direction: Dow

The index climbed by 0.7% or 129.71 points. Since 10/01/1928 the index made 643 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 352 occasions.
     Average loss was -0.7% on 291 occasions.
Expect the index to close higher 54.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 117/195 or 60.0% of the time.
     The prediction of the index closing lower has been right 31/59 or 52.5% 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 Dow industrials on the 5 minute scale.

$ $ $

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

A flag appears to the right of B. The move from A to B is the flagpole.

It is my belief that if a flag doesn't have a flagpole associated with it, then it's not a flag.

If the flag behaves typically, you'll see the index move higher tomorrow, reaching 18,000 or perhaps a bit higher.

Since this is an intraday flag (and not on the daily charts), it's harder to gauge the reaction. Notice that the slope of the flag is downward. That's typical, even though flags can slope in any direction (down, up, sideways).

The AB flagpole isn't that long, either, compared to the length of the flag. It's not proportional and that concerns me.

We'll have to wait and see if bullish enthusiasm pushes the index higher or if it just drops. I'm hoping for an upward move.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  17,020.90    
 Weekly S2  17,301.16  280.26   
 Monthly S1  17,412.88  111.73   
 Weekly S1  17,553.01  140.13   
 Daily S2  17,619.88  66.86   
 Daily S1  17,712.37  92.50   
 Monthly Pivot  17,723.06  10.68   Yes! The Monthly Pivot is close to the Daily S1.
 Weekly Pivot  17,723.15  0.09   Yes! The Weekly Pivot is close to the Monthly Pivot.
 Open  17,736.87  13.72   Yes! The Open is close to the Weekly Pivot.
 Low  17,736.87  0.00   Yes! The Low is close to the Open.
 Close  17,804.87  68.00   
 61.8% Down from Intraday High  17,816.89  12.03   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  17,829.37  12.47   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,841.62  12.25   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,866.33  24.72   
 Daily R1  17,921.86  55.53   
 High  17,946.36  24.50   
 Weekly R1  17,975.00  28.64   
 Daily R2  18,038.86  63.85   
 Monthly R1  18,115.04  76.19   
 Weekly R2  18,145.14  30.09   
 Monthly R2  18,425.22  280.08   

Monday 6/20/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

I show the Dow transports on the daily scale.

A double top appears at peaks 1, 2. At first glance, I thought the three peaks (1, 2, and, yes, 3) were a head-and-shoulders top but 1 and 2 are too close together (in price) to form a left shoulder-head pair.

The double top confirmed as a valid chart pattern when it closed below horizontal line 4.

The double top pulled back to peak 3 before dropping.

Tom's Targets, at the top of this page, at the time of this post, show I anticipate the index dropping further. Now I'm not so sure.

Friday's move up suggests strength. And yet, the string of black candles heading lower from 3 suggests a retrace is overdue. The retrace could be forming now.

That is, price will retrace a bit and then drop more.

$ $ $

I visited the emergency room last night. For more details (it's a bit gruesome), see my Facebook page.

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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 132.86 points.
Tuesday: Down 57.66 points.
Wednesday: Down 34.65 points.
Thursday: Up 92.93 points.
Friday: Down 57.94 points.

For the Week...

The Dow industrials were down 190.18 points or 1.1%.
The Nasdaq composite was down 94.21 points or 1.9%.
The S&P 500 index was down 24.85 points or 1.2%.

Year to Date...

Dow Industrials
     2.7% down from the high of 18,167.63 on 04/20/2016.
     14.4% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     3.6% down from the high of 4,980.14 on 06/06/2016.
     14.0% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     2.3% down from the high of 2,120.55 on 06/08/2016.
     14.4% up from the low of 1,810.10 on 02/11/2016.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Existing home sales10:00 WCCounts sales of used homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
New home sales10:00 ThC+Shows sales of single-family homes.
Durable goods orders8:30 FBMeasures orders, shipments of goods with lifespans >3 years.
Michigan sentiment10:00 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 06/17/2016, the CPI had:

20 bearish patterns,
5 bullish patterns,
180 patterns waiting for breakout.
The CPI signal is 20.0%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,540  17,607  17,670  17,738  17,801 
Weekly  17,258  17,467  17,680  17,889  18,102 
Monthly  16,978  17,326  17,680  18,029  18,382 
S&P500 (^GSPC): Daily  2,055  2,063  2,071  2,079  2,086 
Weekly  2,025  2,048  2,073  2,096  2,121 
Monthly  1,978  2,025  2,073  2,119  2,167 
Nasdaq (^IXIC): Daily  4,767  4,783  4,809  4,826  4,852 
Weekly  4,709  4,754  4,825  4,871  4,941 
Monthly  4,518  4,659  4,820  4,961  5,121 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.4%   The trend may continue. 
 1 month down 19.9%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 15.0%   Expect a reversal soon. 
 1 month down 20.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks down 17.2%   Expect a reversal soon. 
 1 month down 26.1%   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
17Triangle, symmetrical
15Head-and-shoulders bottom
14Double Bottom, Adam and Adam
12Pipe bottom
7Head-and-shoulders top
6Triple bottom
4Double Bottom, Adam and Eve
4Dead-cat bounce
4Rising wedge
4Triangle, ascending

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

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

 

 

 

 

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

This WeekLast Week
1. Natural Gas (Diversified)1. Electric Utility (Central)
2. Petroleum (Producing)2. Electric Utility (West)
3. Cement and Aggregates3. Cement and Aggregates
4. Metal Fabricating4. Electric Utility (East)
5. Natural Gas (Distributor)5. Natural Gas (Diversified)
50. Insurance (Life)50. Electronics
51. Information Services51. Information Services
52. Short ETFs52. Drug
53. Apparel53. Biotechnology
54. Retail (Special Lines)54. Short ETFs
55. Drug55. Apparel
56. Biotechnology56. Securities Brokerage
57. Securities Brokerage57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 6/17/16. 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 5 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 0.8%. 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 2 bearish ones with any remaining (0) 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
CEBroadening bottom      05/09/201606/14/2016Chemical (Basic)
HHSFlag, high and tight      06/10/201606/10/2016Advertising
HOLXBroadening bottom      04/29/201606/16/2016Medical Supplies
ORIHead-and-shoulders top      05/12/201606/13/2016Insurance (Prop/Casualty)
SWNPipe top      05/31/201606/06/2016Natural Gas (Diversified)

 

Weekly screen for chart patterns ending between 06/09/2016 and 06/16/2016. 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.
 
Celanese Corp (CE)
Industry: Chemical (Basic)
Industry RS rank: 25 out of 56
Stock RS rank: 294 out of 630
6/16/16 close: $69.76
1 Month avg volatility: $1.13. Volatility stop (for upward breakout): $65.97 or 5.4% below the close.
Change YTD: 3.61%
Volume: 788,200 shares. 3 month avg: 825,592 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening bottom reversal pattern from 05/09/2016 to 06/14/2016
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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Harte-Hanks Inc (HHS)
Industry: Advertising
Industry RS rank: 24 out of 56
Stock RS rank: 626 out of 630
6/16/16 close: $1.76
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $1.39 or 21.0% below the close.
Change YTD: -45.68%
Volume: 665,600 shares. 3 month avg: 519,235 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 06/10/2016 to 06/10/2016
WARNING: A dead-cat bounce occurred on 03/14/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/12/2016.
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Hologic Inc (HOLX)
Industry: Medical Supplies
Industry RS rank: 14 out of 56
Stock RS rank: 509 out of 630
6/16/16 close: $33.70
1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $31.37 or 6.9% below the close.
Change YTD: -12.90%
Volume: 4,726,000 shares. 3 month avg: 4,191,045 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening bottom reversal pattern from 04/29/2016 to 06/16/2016
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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Old Republic International Corp (ORI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 35 out of 56
Stock RS rank: 357 out of 630
6/16/16 close: $18.46
1 Month avg volatility: $0.22. Volatility stop (for downward breakout): $18.92 or 2.5% above the close.
Change YTD: 0.13%
Volume: 884,000 shares. 3 month avg: 1,850,962 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: Head-and-shoulders top reversal pattern from 05/12/2016 to 06/13/2016
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Southwestern Energy Company (SWN)
Industry: Natural Gas (Diversified)
Industry RS rank: 1 out of 56
Stock RS rank: 1 out of 630
6/16/16 close: $12.80
1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $14.77 or 15.4% above the close.
Change YTD: 80.03%
Volume: 11,947,200 shares. 3 month avg: 16,423,888 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 05/31/2016 to 06/06/2016
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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Thursday 6/16/16. Intraday Market Direction: Nasdaq

The index dropped by -0.2% or -8.62 points. Since 02/05/1971 the index made 466 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 240 occasions.
     Average loss was -0.9% on 226 occasions.
Expect the index to close higher 51.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 106/184 or 57.6% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The index formed a double bottom at A and a double top at B.

If the index drops further, the green line shows where the double bottom hit bottom, and the index could find support there.

If the index were to climb instead, the double top at B should pose overhead resistance, at least for a while.

To me, it looks as if the index is searching for a bottom and it could turn upward.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,529.39    
 Monthly S1  4,682.16  152.77   
 Weekly S2  4,799.03  116.87   
 Daily S2  4,806.74  7.71   
 Weekly S1  4,816.98  10.24   
 Daily S1  4,820.83  3.85   
 Low  4,830.33  9.50   
 Monthly Pivot  4,831.15  0.82   Yes! The Monthly Pivot is close to the Low.
 Close  4,834.93  3.78   
 Daily Pivot  4,844.43  9.50   
 61.8% Down from Intraday High  4,844.73  0.30   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  4,849.17  4.45   
 38.2% Down from Intraday High  4,853.62  4.45   
 Open  4,855.08  1.46   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  4,858.52  3.44   Yes! The Daily R1 is close to the Open.
 High  4,868.02  9.50   
 Daily R2  4,882.11  14.10   
 Weekly Pivot  4,898.56  16.45   
 Weekly R1  4,916.51  17.95   
 Monthly R1  4,983.92  67.41   
 Weekly R2  4,998.09  14.17   
 Monthly R2  5,132.91  134.82   

Wednesday 6/15/16. A Look At Indicators

Picture of the chart pattern indicator

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

The indicator signaled a bearish turn almost a week ago.

If you look at the indicator, though (the blue line), it has turned upward in the last few days. That suggests this downturn will be short lived. I don't know that for a fact, but I'm hopeful.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 39% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 36%.
The fewest was 24% on 06/18/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 535 stocks in my database are down an average of 19% from their yearly high.
A week ago, the average was 18%.
The peak was 13% on 06/23/2015.
And the bottom was 32% on 02/11/2016.

The above numbers, accompanied by the chart, shows that stocks in my database took a hit during the last week.

Of course, the markets have been struggling over that period, and it's reflected in the above numbers.

-- Thomas Bulkowski

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Tuesday 6/14/16. Intraday Market Direction: Dow

The index dropped by -0.7% or -132.86 points. Since 10/01/1928 the index made 563 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 275 occasions.
     Average loss was -0.9% on 288 occasions.
Expect the index to close lower 51.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 117/195 or 60.0% of the time.
     The prediction of the index closing lower has been right 30/58 or 51.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The chart shows a triple top, cleverly labeled 1, 2, 3. It confirms as a valid chart pattern when the index closes below the red line at A.

I drew the green line at a support region, based on the two valleys on the left. It's a weak region, so I don't know if price will hit it and rebound. My guess is yes, it will rebound at the line. I expect the index to continue dropping at or near the open on Tuesday, followed by a rebound later in the day. That's a guess, of course, since no one can reliably predict the market direction.

Also notice that the height of the triple top, from highest peak (1) to lowest valley (A), subtracted from A, the breakout price, is the measure rule for triple tops. The index dropped far enough to fulfill the measure rule prediction.

You can use the height of the pattern, intraday, to help predict an exit 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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,996.77    
 Monthly S1  17,364.62  367.86   
 Daily S2  17,623.77  259.15   
 Weekly S2  17,638.46  14.69   Yes! The Weekly S2 is close to the Daily S2.
 Daily S1  17,678.13  39.67   
 Weekly S1  17,685.47  7.34   Yes! The Weekly S1 is close to the Daily S1.
 Monthly Pivot  17,698.93  13.46   Yes! The Monthly Pivot is close to the Weekly S1.
 Low  17,731.35  32.42   
 Close  17,732.48  1.13   Yes! The Close is close to the Low.
 Daily Pivot  17,785.70  53.22   
 61.8% Down from Intraday High  17,793.21  7.50   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  17,812.31  19.11   
 Open  17,830.50  18.19   
 38.2% Down from Intraday High  17,831.42  0.92   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily R1  17,840.06  8.63   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Weekly Pivot  17,859.35  19.29   
 High  17,893.28  33.93   
 Weekly R1  17,906.36  13.08   Yes! The Weekly R1 is close to the High.
 Daily R2  17,947.63  41.27   
 Monthly R1  18,066.78  119.15   
 Weekly R2  18,080.24  13.46   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  18,401.09  320.85   

Monday 6/13/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily scale.

Two chart patterns appear on this chart.

The first is a head-and-shoulders top, which I marked as LHR for left shoulder, head, and right shoulder. It confirms as valid head-and-shoulders when the index closes below the red line.

The index drops only to B before pulling back to A and then dropping back to C.

Then the index recovered and moved up to D. When it closed above the blue line, it confirmed the BC bottom as a double bottom.

I think it means the utility index is going higher.

$ $ $

The below picture of a snake is similar to the one that was resting on the sidewalk as I rode my bicycle by it. I estimate the snake as being five to six foot long.

The variety I saw was black on top with orange and yellow on the lower half. I saw a similar one in my back yard about a few feet from where I used to be sitting on the grass, working on a wall. Fortunately, I had just stood up and went inside the house. When I came back, there he was, right where I used to be sitting.

He was long, too, about five feet.

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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 113.27 points.
Tuesday: Up 17.95 points.
Wednesday: Up 66.77 points.
Thursday: Down 19.86 points.
Friday: Down 119.85 points.

For the Week...

The Dow industrials were up 58.28 points or 0.3%.
The Nasdaq composite was down 47.97 points or 1.0%.
The S&P 500 index was down 3.06 points or 0.1%.

Year to Date...

Dow Industrials
     1.7% down from the high of 18,167.63 on 04/20/2016.
     15.6% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     1.7% down from the high of 4,980.14 on 06/06/2016.
     16.3% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     1.2% down from the high of 2,120.55 on 06/08/2016.
     15.8% up from the low of 1,810.10 on 02/11/2016.

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Economic Reports

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

ReportTimeA-F
Rating
Description
International trade8:30 TC+Import/export prices, trade balance. US economy vs others.
Retail sales8:30 TA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 TC-Reports manufacturing, wholesale, retail inventories.
Producer price index8:30 WB-Measures wholesale goods cost. An indication of future inflation.
Capacity utilization9:15 WB-Gauges economic activity, hints of inflation.
Industrial production9:15 WB-Production of utilities, mines, and manufacturers.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Rate decision2:00 W?The Federal Reserves reports on interest rate changes.
Consumer price index8:30 ThB+Inflation report. Measures cost of goods and services.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Building permits8:30 FB-Measures building permits for new construction.
Housing starts8:30 FB-Number of homes beginning construction.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
VIX expiresWednesday
A.M. settled index options cease trading.Thursday
Expiring equity and P.M. settled index options cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, and cash-settled currency options expireFriday

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

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,746  17,806  17,872  17,932  17,999 
Weekly  17,683  17,774  17,904  17,995  18,125 
Monthly  17,041  17,453  17,743  18,155  18,445 
S&P500 (^GSPC): Daily  2,079  2,087  2,099  2,107  2,118 
Weekly  2,072  2,084  2,102  2,114  2,133 
Monthly  1,986  2,041  2,081  2,136  2,175 
Nasdaq (^IXIC): Daily  4,860  4,877  4,898  4,915  4,935 
Weekly  4,819  4,857  4,918  4,956  5,018 
Monthly  4,549  4,722  4,851  5,024  5,153 
  • 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 41.8%   Expect a random direction. 
 5 months up 13.1%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.2%   The trend may continue. 
 1 month down 20.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.6%   The trend may continue. 
 1 month down 26.1%   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
21Triangle, symmetrical
16Double Bottom, Adam and Adam
16Pipe bottom
14Head-and-shoulders bottom
8Head-and-shoulders top
7Double Bottom, Eve and Eve
6Triangle, ascending
5Double Top, Adam and Adam
5Triple bottom
4Broadening 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. Electric Utility (Central)1. Electric Utility (Central)
2. Electric Utility (West)2. Electric Utility (West)
3. Cement and Aggregates3. Electric Utility (East)
4. Electric Utility (East)4. Cement and Aggregates
5. Natural Gas (Diversified)5. Natural Gas (Diversified)
50. Electronics50. Information Services
51. Information Services51. Homebuilding
52. Drug52. Computers and Peripherals
53. Biotechnology53. Electronics
54. Short ETFs54. Short ETFs
55. Apparel55. Apparel
56. Securities Brokerage56. Securities Brokerage
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 6/10/16. 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 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 2.0%. 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 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
AWIHead-and-shoulders bottom      04/07/201606/03/2016Building Materials
^DJTHead-and-shoulders bottom      05/06/201606/03/2016None
DSTRoof, inverted      04/25/201606/08/2016IT Services
EMNHead-and-shoulders top      03/18/201606/08/2016Chemical (Diversified)
GSOLTriangle, symmetrical      04/07/201606/09/2016Advertising
ICONTriangle, symmetrical      03/08/201606/09/2016Shoe
IIINChannel      05/19/201606/09/2016Building Materials
MUBroadening bottom      03/14/201606/09/2016Semiconductor
SHWTriangle, symmetrical      04/26/201606/09/2016Chemical (Basic)
TLRDDead-cat bounce      06/09/201606/09/2016Retail (Special Lines)
TMORising wedge      04/28/201606/09/2016Precision Instrument
PAYDead-cat bounce      06/08/201606/08/2016Telecom. Equipment
YUMETriangle, descending      05/25/201606/09/2016Advertising

 

Weekly screen for chart patterns ending between 06/02/2016 and 06/09/2016. 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.
 
Armstrong World Industries (AWI)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 42 out of 56
Stock RS rank: 499 out of 630
6/9/16 close: $42.07
1 Month avg volatility: $0.87. Volatility stop (for upward breakout): $39.53 or 6.0% below the close.
Change YTD: -8.00%
Volume: 510,000 shares. 3 month avg: 664,558 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 04/07/2016 to 06/03/2016
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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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
6/9/16 close: $7,882.23
1 Month avg volatility: $93.27. Volatility stop (for upward breakout): $7,637.46 or 3.1% below the close.
Change YTD: 4.97%
Volume: 14,641,000 shares. 3 month avg: 18,119,697 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 05/06/2016 to 06/03/2016
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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DST Systems Inc (DST)
Industry: IT Services
Industry RS rank: 29 out of 56
Stock RS rank: 350 out of 630
6/9/16 close: $119.72
1 Month avg volatility: $1.68. Volatility stop (for downward breakout): $123.96 or 3.5% above the close.
Change YTD: 4.96%
Volume: 86,300 shares. 3 month avg: 197,355 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: Roof, inverted reversal pattern from 04/25/2016 to 06/08/2016
Breakout is downward 50% of the time.
Average decline: 17%.
Break-even failure rate: 10%.
Pullbacks occur 56% of the time.
Price hits measure rule target 73% of the time.

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Eastman Chemical (EMN)
Industry: Chemical (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 381 out of 630
6/9/16 close: $71.78
1 Month avg volatility: $1.40. Volatility stop (for downward breakout): $75.51 or 5.2% above the close.
Change YTD: 6.32%
Volume: 1,780,800 shares. 3 month avg: 1,155,882 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 03/18/2016 to 06/08/2016
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 27 out of 56
Stock RS rank: 304 out of 630
6/9/16 close: $8.72
1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $8.14 or 6.6% below the close.
Change YTD: 11.79%
Volume: 5,000 shares. 3 month avg: 19,251 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/07/2016 to 06/09/2016
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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Iconix Brand Group Inc. (ICON)
Industry: Shoe
Industry RS rank: 45 out of 56
Stock RS rank: 39 out of 630
6/9/16 close: $8.15
1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $7.37 or 9.6% below the close.
Change YTD: 19.33%
Volume: 405,100 shares. 3 month avg: 1,107,751 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 03/08/2016 to 06/09/2016
WARNING: A dead-cat bounce occurred on 12/28/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 06/27/2016.
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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Insteel Industries Inc (IIIN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 42 out of 56
Stock RS rank: 36 out of 630
6/9/16 close: $28.68
1 Month avg volatility: $0.74. Volatility stop (for upward breakout): $26.79 or 6.6% below the close.
Change YTD: 37.09%
Volume: 88,600 shares. 3 month avg: 169,598 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: Channel from 05/19/2016 to 06/09/2016

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Micron Technology (MU)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 22 out of 56
Stock RS rank: 530 out of 630
6/9/16 close: $12.51
1 Month avg volatility: $0.45. Volatility stop (for upward breakout): $11.33 or 9.5% below the close.
Change YTD: -11.65%
Volume: 21,874,200 shares. 3 month avg: 25,907,209 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
Warning: the quarterly earnings announcement is due within the next 3 weeks (but verify to be sure), so consider avoiding a trade.
 
Chart pattern: Broadening bottom reversal pattern from 03/14/2016 to 06/09/2016
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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Sherwin-Williams Co (SHW)
Industry: Chemical (Basic)
Industry RS rank: 37 out of 56
Stock RS rank: 241 out of 630
6/9/16 close: $293.03
1 Month avg volatility: $3.90. Volatility stop (for upward breakout): $282.99 or 3.4% below the close.
Change YTD: 12.88%
Volume: 453,300 shares. 3 month avg: 792,177 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/26/2016 to 06/09/2016
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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Tailored Brands Inc (TLRD)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 56 out of 56
Stock RS rank: 615 out of 630
6/9/16 close: $12.34
1 Month avg volatility: $0.92. Volatility stop (for downward breakout): $16.89 or 36.9% above the close.
Change YTD: -15.94%
Volume: 13,103,200 shares. 3 month avg: 1,325,397 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: Dead-cat bounce continuation pattern from 06/09/2016 to 06/09/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Thermo Electron Corp (TMO)
Industry: Precision Instrument
Industry RS rank: 19 out of 56
Stock RS rank: 161 out of 630
6/9/16 close: $154.15
1 Month avg volatility: $1.99. Volatility stop (for downward breakout): $158.79 or 3.0% above the close.
Change YTD: 8.67%
Volume: 1,002,600 shares. 3 month avg: 1,435,597 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 04/28/2016 to 06/09/2016
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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VeriFone Systems, Inc (PAY)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 56
Stock RS rank: 588 out of 630
6/9/16 close: $20.98
1 Month avg volatility: $0.70. Volatility stop (for downward breakout): $22.85 or 8.9% above the close.
Change YTD: -25.12%
Volume: 8,321,200 shares. 3 month avg: 2,134,263 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: Dead-cat bounce continuation pattern from 06/08/2016 to 06/08/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 27 out of 56
Stock RS rank: 99 out of 630
6/9/16 close: $3.75
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $4.09 or 9.1% above the close.
Change YTD: 6.84%
Volume: 120,600 shares. 3 month avg: 98,646 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 Wednesday.
 
Chart pattern: Triangle, descending reversal pattern from 05/25/2016 to 06/09/2016
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Thursday 6/9/16. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 12.89 points. Since 02/05/1971 the index made 602 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 331 occasions.
     Average loss was -0.7% on 271 occasions.
Expect the index to close higher 55.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 106/183 or 57.9% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% 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.

Two chart patterns appear highlighted on the chart. The first is in blue and it's a broadening formation, right-angled and ascending.

The second is an unconfirmed head-and-shoulders bottom or perhaps an inverted roof.

It looks like a head-and-shoulders to me so I labeled the two shoulders (L, R) and head (H). The index needs to close above the horizontal red line to confirm the chart pattern as a valid one. Until that happens, you're looking at squiggles on the price chart.

If you believe that price mirrors work, and I do, then the index will drop back to Friday's low of about 4,925 (a bit above the 4910 low).

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,581.81    
 Monthly S1  4,778.23  196.41   
 Monthly Pivot  4,874.79  96.57   
 Weekly S2  4,889.59  14.79   
 Weekly S1  4,932.11  42.53   
 Daily S2  4,947.49  15.38   
 Weekly Pivot  4,951.74  4.24   
 Low  4,956.79  5.05   
 Daily S1  4,961.07  4.28   
 61.8% Down from Intraday High  4,965.53  4.46   
 50% Down from Intraday High  4,968.23  2.70   
 Open  4,970.01  1.78   Yes! The Open is close to the 50% Down from Intraday High.
 Daily Pivot  4,970.36  0.35   Yes! The Daily Pivot is close to the Open.
 38.2% Down from Intraday High  4,970.92  0.56   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,974.64  3.72   
 High  4,979.66  5.02   
 Daily R1  4,983.94  4.28   
 Daily R2  4,993.23  9.30   
 Weekly R1  4,994.26  1.03   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  5,013.89  19.62   
 Monthly R1  5,071.21  57.32   
 Monthly R2  5,167.77  96.57   

Wednesday 6/8/16. 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 chart pattern indicator is still in buy mode. Nothing new here.

The stock chart looks like it should reverse because of overhead resistance, but that weakness is not showing in the indicator.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 36% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 38%.
The fewest was 24% on 06/18/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 535 stocks in my database are down an average of 18% from their yearly high.
A week ago, the average was 19%.
The peak was 13% on 06/23/2015.
And the bottom was 32% on 02/11/2016.

Both the blue and red lines continue to move higher, showing a strengthening of stocks in my database. The above numbers agree with that assessment.

I don't see any signs of weakness on these charts, so maybe that should make us nervous. A reversal could happen soon.

-- Thomas Bulkowski

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Tuesday 6/7/16. Intraday Market Direction: Dow

The index climbed by 0.6% or 113.27 points. Since 10/01/1928 the index made 825 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 459 occasions.
     Average loss was -0.6% on 366 occasions.
Expect the index to close higher 55.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 116/194 or 59.8% of the time.
     The prediction of the index closing lower has been right 30/58 or 51.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The chart shows two patterns, one in red and the other blue. Do you know what they are called?

Both are inverted and ascending scallops.

When their height either grows from the lowest pattern to the top (in a set of 3 or more), or shrink, it suggests the end of a trend. We don't see that here because both patterns are about the same size.

The above probabilities suggest a higher close on Tuesday, so it has my vote.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  17,125.13    
 Monthly S1  17,522.73  397.60   
 Weekly S2  17,593.67  70.94   
 Monthly Pivot  17,728.67  135.00   
 Weekly S1  17,757.00  28.33   
 Daily S2  17,770.74  13.74   
 Low  17,822.81  52.07   
 Open  17,825.69  2.88   Yes! The Open is close to the Low.
 Weekly Pivot  17,828.12  2.43   Yes! The Weekly Pivot is close to the Open.
 Daily S1  17,845.53  17.41   
 61.8% Down from Intraday High  17,871.27  25.74   
 50% Down from Intraday High  17,886.24  14.97   
 Daily Pivot  17,897.61  11.36   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  17,901.21  3.61   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  17,920.33  19.12   
 High  17,949.68  29.35   
 Daily R1  17,972.40  22.72   
 Weekly R1  17,991.45  19.04   
 Daily R2  18,024.48  33.03   
 Weekly R2  18,062.57  38.09   
 Monthly R1  18,126.27  63.70   
 Monthly R2  18,332.21  205.94   

Monday 6/6/16. Market Monday: The Week Ahead

My Prediction

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

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

A head-and-shoulders top appears at L (left shoulder), H (head), and R (right shoulder).

From this chart it's hard to tell if the pattern confirmed as a valid one or not. To be confirmed, the index needs to close below the up-sloping red neckline.

The index shows that it made a low at A, but it closed higher.

Regardless, the index pulled back to B where it closed on Friday.

In a number of cases, you can see the index resume the downward breakout direction after a pullback. Because the index is also at the price level of the head (H), the index has reached overhead resistance, giving greater weight to a downward move.

However, the index might plow through that resistance to make a new high. It will do that sooner or later, of course.

If it drops instead, the index could return to the neckline and perhaps move below it.

I don't know which direction the index will take, so we'll just to wait and see.

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A Brief Look Back

Picture of a flower from my garden.

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

Tuesday: Down 86.02 points.
Wednesday: Up 2.47 points.
Thursday: Up 48.89 points.
Friday: Down 31.5 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 66.16 points or 0.4%.
The Nasdaq composite was up 9.02 points or 0.2%.
The S&P 500 index was up 0.07 points or 0.0%.

Year to Date...

Dow Industrials
     2.0% down from the high of 18,167.63 on 04/20/2016.
     15.3% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     0.6% down from the high of 4,971.36 on 06/02/2016.
     17.4% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     0.6% down from the high of 2,111.05 on 04/20/2016.
     16.0% up from the low of 1,810.10 on 02/11/2016.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Productivity & costs8:30 TD+Cost of producing a unit of output.
Consumer credit3:00 TD-Measures auto, credit card and other debt.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Wholesale inventories10:00 ThD-Wholesale sales and inventory statistics.
Treasury budget2:00 FDTracks budget deficit. Important in April (tax filing).

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 06/03/2016, the CPI had:

12 bearish patterns,
27 bullish patterns,
273 patterns waiting for breakout.
The CPI signal is 69.2%, which is bullish (>= 65%).

The chart pattern indicator is bullish 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  17,633  17,720  17,777  17,864  17,920 
Weekly  17,556  17,681  17,790  17,916  18,025 
Monthly  17,087  17,447  17,691  18,051  18,294 
S&P500 (^GSPC): Daily  2,077  2,088  2,096  2,107  2,115 
Weekly  2,076  2,088  2,096  2,108  2,117 
Monthly  1,997  2,048  2,077  2,128  2,156 
Nasdaq (^IXIC): Daily  4,887  4,915  4,937  4,964  4,986 
Weekly  4,879  4,911  4,941  4,973  5,003 
Monthly  4,571  4,757  4,864  5,050  5,157 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.5%   The trend may continue. 
 5 months up 13.1%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks up 21.9%   Expect a reversal soon. 
 4 months up 26.8%   The trend may continue. 
 Nasdaq composite (^IXIC) 4 weeks up 18.8%   Expect a reversal soon. 
 1 month down 26.1%   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
21Triangle, symmetrical
19Pipe bottom
13Head-and-shoulders top
13Double Bottom, Adam and Adam
6Triangle, ascending
5Double Top, Adam and Adam
5Double Bottom, Eve and Eve
4Triple bottom
4Broadening top
4Dead-cat bounce

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. Electric Utility (Central)1. Electric Utility (Central)
2. Electric Utility (West)2. Electric Utility (West)
3. Electric Utility (East)3. Electric Utility (East)
4. Cement and Aggregates4. Cement and Aggregates
5. Natural Gas (Diversified)5. Medical Supplies
50. Information Services50. Biotechnology
51. Homebuilding51. Apparel
52. Computers and Peripherals52. Information Services
53. Electronics53. Electronics
54. Short ETFs54. Computers and Peripherals
55. Apparel55. Homebuilding
56. Securities Brokerage56. Securities Brokerage
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 6/3/16. 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 12 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 1.9%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 6 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 11 bullish chart patterns this week and 5 bearish ones with any remaining (1) 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
ACIWBroadening top      04/04/201606/02/2016IT Services
AEEPipe bottom      05/16/201605/23/2016Electric Utility (Central)
AHSPipe bottom      05/16/201605/23/2016Human Resources
ASHChannel      04/29/201606/02/2016Chemical (Basic)
BBYTriangle, symmetrical      02/19/201606/02/2016Retail (Special Lines)
CONNDead-cat bounce      06/02/201606/02/2016Retail (Special Lines)
ERATriangle, symmetrical      04/22/201605/27/2016Air Transport
GDHead-and-shoulders top      04/27/201605/31/2016Aerospace/Defense
IVCPipe bottom      05/16/201605/23/2016Medical Supplies
LBPipe bottom      05/16/201605/23/2016Apparel
MENTBroadening top      04/04/201606/02/2016Computer Software and Svcs
PMCTriangle, symmetrical      05/05/201606/02/2016Medical Services
SEETriangle, descending      04/29/201606/02/2016Packaging and Container
SHWTriangle, symmetrical      04/26/201606/02/2016Chemical (Basic)
SKXPipe bottom      05/16/201605/23/2016Shoe
SWCTriangle, symmetrical      05/10/201606/02/2016Metals and Mining (Div.)
YUMERectangle bottom      03/15/201605/27/2016Advertising
UNGPipe bottom      05/16/201605/23/2016Natural Gas (Diversified)

 

Weekly screen for chart patterns ending between 05/26/2016 and 06/02/2016. 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.
 
ACI Worldwide (ACIW)
Industry: IT Services
Industry RS rank: 26 out of 56
Stock RS rank: 469 out of 630
6/2/16 close: $21.11
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $22.35 or 5.9% above the close.
Change YTD: -1.36%
Volume: 329,500 shares. 3 month avg: 553,737 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 04/04/2016 to 06/02/2016
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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Ameren (AEE)
Industry: Electric Utility (Central)
Industry RS rank: 1 out of 56
Stock RS rank: 109 out of 630
6/2/16 close: $49.10
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $47.03 or 4.2% below the close.
Change YTD: 13.58%
Volume: 2,410,300 shares. 3 month avg: 1,977,198 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 05/16/2016 to 05/23/2016
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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AMN Healthcare (AHS)
Industry: Human Resources
Industry RS rank: 25 out of 56
Stock RS rank: 33 out of 630
6/2/16 close: $38.76
1 Month avg volatility: $1.40. Volatility stop (for upward breakout): $35.06 or 9.6% below the close.
Change YTD: 24.83%
Volume: 885,500 shares. 3 month avg: 852,388 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 05/16/2016 to 05/23/2016
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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Ashland Inc. (ASH)
Industry: Chemical (Basic)
Industry RS rank: 32 out of 56
Stock RS rank: 298 out of 630
6/2/16 close: $114.53
1 Month avg volatility: $1.64. Volatility stop (for upward breakout): $108.85 or 5.0% below the close.
Change YTD: 11.52%
Volume: 476,700 shares. 3 month avg: 434,017 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: Channel from 04/29/2016 to 06/02/2016

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Best Buy Co. (BBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 56 out of 56
Stock RS rank: 251 out of 630
6/2/16 close: $32.46
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $30.27 or 6.8% below the close.
Change YTD: 6.60%
Volume: 3,802,100 shares. 3 month avg: 4,783,586 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 02/19/2016 to 06/02/2016
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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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 56 out of 56
Stock RS rank: 629 out of 630
6/2/16 close: $8.63
1 Month avg volatility: $0.84. Volatility stop (for downward breakout): $11.58 or 34.2% above the close.
Change YTD: -63.23%
Volume: 6,282,300 shares. 3 month avg: 842,523 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: Dead-cat bounce continuation pattern from 06/02/2016 to 06/02/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Era Group Inc (ERA)
Industry: Air Transport
Industry RS rank: 41 out of 56
Stock RS rank: 510 out of 630
6/2/16 close: $9.95
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $8.71 or 12.5% below the close.
Change YTD: -10.76%
Volume: 63,100 shares. 3 month avg: 128,658 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/22/2016 to 05/27/2016
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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General Dynamics Corp (GD)
Industry: Aerospace/Defense
Industry RS rank: 23 out of 56
Stock RS rank: 401 out of 630
6/2/16 close: $140.13
1 Month avg volatility: $1.69. Volatility stop (for downward breakout): $144.86 or 3.4% above the close.
Change YTD: 2.02%
Volume: 2,087,000 shares. 3 month avg: 1,596,717 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 04/27/2016 to 05/31/2016
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 7 out of 56
Stock RS rank: 622 out of 630
6/2/16 close: $10.99
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $9.94 or 9.5% below the close.
Change YTD: -36.80%
Volume: 385,700 shares. 3 month avg: 458,515 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 05/16/2016 to 05/23/2016
WARNING: A dead-cat bounce occurred on 04/28/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 07/28/2016 and a 38% chance by 10/27/2016.
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: 55 out of 56
Stock RS rank: 591 out of 630
6/2/16 close: $71.33
1 Month avg volatility: $1.74. Volatility stop (for upward breakout): $65.60 or 8.0% below the close.
Change YTD: -25.56%
Volume: 5,401,300 shares. 3 month avg: 3,261,705 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 05/16/2016 to 05/23/2016
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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Mentor Graphics Corp (MENT)
Industry: Computer Software and Svcs
Industry RS rank: 34 out of 56
Stock RS rank: 57 out of 630
6/2/16 close: $21.74
1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $22.67 or 4.3% above the close.
Change YTD: 18.02%
Volume: 785,000 shares. 3 month avg: 1,569,714 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 04/04/2016 to 06/02/2016
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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PharMerica Corp (PMC)
Industry: Medical Services
Industry RS rank: 24 out of 56
Stock RS rank: 574 out of 630
6/2/16 close: $26.46
1 Month avg volatility: $0.88. Volatility stop (for upward breakout): $24.52 or 7.3% below the close.
Change YTD: -24.40%
Volume: 216,600 shares. 3 month avg: 393,089 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/05/2016 to 06/02/2016
WARNING: A dead-cat bounce occurred on 02/26/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/26/2016.
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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Sealed Air Corp (SEE)
Industry: Packaging and Container
Industry RS rank: 17 out of 56
Stock RS rank: 270 out of 630
6/2/16 close: $46.72
1 Month avg volatility: $0.85. Volatility stop (for downward breakout): $48.41 or 3.6% above the close.
Change YTD: 4.75%
Volume: 1,335,500 shares. 3 month avg: 1,775,909 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 04/29/2016 to 06/02/2016
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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Sherwin-Williams Co (SHW)
Industry: Chemical (Basic)
Industry RS rank: 32 out of 56
Stock RS rank: 217 out of 630
6/2/16 close: $292.03
1 Month avg volatility: $3.85. Volatility stop (for upward breakout): $281.60 or 3.6% below the close.
Change YTD: 12.49%
Volume: 534,500 shares. 3 month avg: 813,535 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/26/2016 to 06/02/2016
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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Skechers USA Inc (SKX)
Industry: Shoe
Industry RS rank: 45 out of 56
Stock RS rank: 373 out of 630
6/2/16 close: $31.66
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $29.46 or 7.0% below the close.
Change YTD: 4.80%
Volume: 2,350,300 shares. 3 month avg: 2,918,698 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 05/16/2016 to 05/23/2016
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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Stillwater Mining Co. (SWC)
Industry: Metals and Mining (Div.)
Industry RS rank: 14 out of 56
Stock RS rank: 185 out of 630
6/2/16 close: $9.74
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $8.48 or 12.9% below the close.
Change YTD: 13.65%
Volume: 1,519,600 shares. 3 month avg: 1,844,423 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 05/10/2016 to 06/02/2016
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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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 18 out of 56
Stock RS rank: 67 out of 630
6/2/16 close: $3.82
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $4.15 or 8.7% above the close.
Change YTD: 8.83%
Volume: 172,200 shares. 3 month avg: 101,945 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: Rectangle bottom continuation pattern from 03/15/2016 to 05/27/2016
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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United States Natural Gas (UNG)
Industry: Natural Gas (Diversified)
Industry RS rank: 5 out of 56
Stock RS rank: 519 out of 630
6/2/16 close: $7.25
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $6.83 or 5.8% below the close.
Change YTD: -16.38%
Volume: 7,100,700 shares. 3 month avg: 12,074,112 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 05/16/2016 to 05/23/2016
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 6/2/16. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 4.2 points. Since 02/05/1971 the index made 642 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 355 occasions.
     Average loss was -0.8% on 287 occasions.
Expect the index to close higher 55.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 105/182 or 57.7% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

I drew two red lines that appear almost parallel to each other, following the tops and bottoms of the price trend over the last week.

I like the angle because shallow trendline angles are ones that can continue for a long time. Imagine, for example, that the red lines were nearly vertical. How long would the trend last? A day, maybe two?

The index could bounce for another day between those red two lines but eventually it'll have to pierce one or the other. After five days of continuous uptrend, maybe it's time for the index to makes its move. The weakness of the index to touch the top trendline on Wednesday suggests a downward breakout is coming. The above probabilities say that could happen, but to expect a higher close. If that happens, we both can be right.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,599.59    
 Weekly S2  4,713.63  114.04   
 Monthly S1  4,775.92  62.29   
 Weekly S1  4,832.94  57.02   
 Monthly Pivot  4,854.71  21.77   
 Weekly Pivot  4,883.22  28.51   
 Daily S2  4,909.03  25.81   
 Low  4,923.20  14.17   
 Open  4,928.97  5.77   
 Daily S1  4,930.64  1.67   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  4,936.87  6.23   
 50% Down from Intraday High  4,941.09  4.22   
 Daily Pivot  4,944.81  3.72   
 38.2% Down from Intraday High  4,945.31  0.50   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,952.25  6.94   
 High  4,958.98  6.73   
 Daily R1  4,966.42  7.44   
 Daily R2  4,980.59  14.17   
 Weekly R1  5,002.53  21.94   
 Monthly R1  5,031.04  28.51   
 Weekly R2  5,052.81  21.77   
 Monthly R2  5,109.83  57.02   

Wednesday 6/1/16. A Look At Indicators

Picture of the chart pattern indicator

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

The indicator over the past week moved sharply higher, leaving behind a bullish green bar on the chart.

In the last few days, however, it has rounded over and could be heading lower.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Friday, 38% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 42%.
The fewest was 23% on 06/03/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 535 stocks in my database are down an average of 19% from their yearly high.
A week ago, the average was 21%.
The peak was 13% on 06/23/2015.
And the bottom was 32% on 02/11/2016.

The red line ticked upward, making a big move higher, just like the CPI indicator in the prior chart made.

The blue line also improved, as the statistics describe.

My feeling, however, is that the indices will retrace a portion of the upward move over the last few weeks. The downward curl of the CPI supports this, but not the above numbers.

-- Thomas Bulkowski

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