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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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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/28/2017
20,941 -40.82 -0.2%
9,098 -96.36 -1.0%
704 -3.23 -0.5%
6,048 -1.33 0.0%
2,384 -4.57 -0.2%
YTD
6.0%
0.6%
6.8%
12.3%
6.5%
Tom's Targets    Overview: 04/17/2017
20,100 or 21,150 by 05/01/2017
8,500 or 9,500 by 05/01/2017
725 or 685 by 05/01/2017
6,150 or 5,900 by 05/15/2017
2,275 or 2,425 by 05/01/2017
Mutt Winners: None YTD

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May 2016 Headlines


Archives


Tuesday 5/31/16. A 328% Gain

Picture of the CNO.

I took partial profit on a stock I've owned for years and want to discuss it with you.

Back on February 3, 2010, I bought shares in CNO, filled at 4.96. I show that point at A (monthly scale).

Unfortunately, I didn't log anything regarding the purchase.

As the chart shows, the stock moved up and down in waves before starting a nice upward trend in late 2011, but I wasn't in any hurry to sell.

Starting in 2012, the company began paying dividends, which added to the gain.

I sold 20% of my position today (Friday, 5/27) at 20.29 for three reasons. A cloud bank chart pattern said that the upside would be a slow move higher. It can take as long to push through the cloud as it took to make the climb to the bottom of the cloud.

I show that cloud bank as a thick blue line. The actual cloud is off the chart to the left.

Notice how the stock hit the bottom of the cloud at 18 (thin green line) from 2014 onward and move horizontally.

Another sell reason was diversification. At $5 a share, the cost of the stock didn't amount to much but now that it's above 20, it is one of my larger holdings.

Notice how the stock has moved horizontally since 2014. I haven't made much on the stock during that time, so there might be new positions that would see their values increase faster than CNO going forward. And yet, I feel that the stock still has lots of upside potential, as if it's about to jump off a flat base.

I still have 80% of the position left in my portfolio, so I can participate in more gains.

On the portion that I held over 6 years, I made 328%, including dividends, or over 50% a year.

If you are losing money in your trading or just want to kick back and relax instead of being stressed by your trading with meager gains, consider diversifying your portfolio with different trading styles (day trading, swing, position, buy and hold).

By that, I mean add some positions that you'll hold for a longer-than normal-time. In my case, I don't mind holding onto a stock for years, even though I also trade more frequently.

-- Thomas Bulkowski


Friday 5/27/16. 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 14 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 2.2%. 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 11 bullish chart patterns this week and 1 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACGLTriangle, symmetrical      05/12/201605/26/2016Insurance (Prop/Casualty)
DOTriangle, symmetrical      05/02/201605/24/2016Oilfield Svcs/Equipment
EXPHorn bottom      05/02/201605/16/2016Cement and Aggregates
FOEDiamond top      05/13/201605/24/2016Chemical (Specialty)
ILMNTriangle, symmetrical      05/11/201605/20/2016Biotechnology
IPGTriangle, symmetrical      04/22/201605/26/2016Advertising
KELYATriangle, symmetrical      04/20/201605/26/2016Human Resources
MLHRTriangle, ascending      03/21/201605/26/2016Furn/Home Furnishings
MOSTriangle, symmetrical      05/12/201605/20/2016Chemical (Diversified)
NWYDead-cat bounce      05/20/201605/20/2016Apparel
PESFlag, high and tight      04/05/201605/26/2016Oilfield Svcs/Equipment
RLPipe bottom      05/09/201605/16/2016Apparel
SWNTriangle, symmetrical      05/06/201605/24/2016Natural Gas (Diversified)
IHITriangle, ascending      04/28/201605/26/2016Medical Supplies
EWUBroadening top      04/18/201605/25/2016Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 05/19/2016 and 05/26/2016. 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.
 
Arch Capital Group Ltd (ACGL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 56
Stock RS rank: 335 out of 630
5/26/16 close: $71.87
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $68.50 or 4.7% below the close.
Change YTD: 3.04%
Volume: 402,100 shares. 3 month avg: 335,606 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 05/12/2016 to 05/26/2016
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.

Top

Diamond Offshore (DO)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 149 out of 630
5/26/16 close: $25.30
1 Month avg volatility: $1.13. Volatility stop (for upward breakout): $23.02 or 9.0% below the close.
Change YTD: 19.91%
Volume: 2,187,300 shares. 3 month avg: 2,559,132 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 05/02/2016 to 05/24/2016
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.

Top

Eagle Materials Inc. (EXP)
Industry: Cement and Aggregates
Industry RS rank: 2 out of 56
Stock RS rank: 92 out of 630
5/26/16 close: $79.95
1 Month avg volatility: $1.85. Volatility stop (for upward breakout): $74.56 or 6.8% below the close.
Change YTD: 32.30%
Volume: 1,175,800 shares. 3 month avg: 658,648 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: Horn bottom reversal pattern from 05/02/2016 to 05/16/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price hits measure rule target 76% of the time.

Top

Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 36 out of 56
Stock RS rank: 86 out of 630
5/26/16 close: $13.90
1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $15.37 or 10.5% above the close.
Change YTD: 25.00%
Volume: 697,500 shares. 3 month avg: 730,405 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: Diamond top reversal pattern from 05/13/2016 to 05/24/2016
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

Top

Illumina Inc (ILMN)
Industry: Biotechnology
Industry RS rank: 47 out of 56
Stock RS rank: 550 out of 630
5/26/16 close: $143.12
1 Month avg volatility: $4.02. Volatility stop (for upward breakout): $134.00 or 6.4% below the close.
Change YTD: -25.44%
Volume: 563,600 shares. 3 month avg: 1,457,075 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 05/11/2016 to 05/20/2016
WARNING: A dead-cat bounce occurred on 04/19/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 07/19/2016 and a 38% chance by 10/18/2016.
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.

Top

Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 18 out of 56
Stock RS rank: 280 out of 630
5/26/16 close: $23.49
1 Month avg volatility: $0.31. Volatility stop (for upward breakout): $22.85 or 2.7% below the close.
Change YTD: 0.90%
Volume: 2,756,100 shares. 3 month avg: 4,329,180 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 04/22/2016 to 05/26/2016
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.

Top

Kelly Services A (KELYA)
Industry: Human Resources
Industry RS rank: 28 out of 56
Stock RS rank: 85 out of 630
5/26/16 close: $19.32
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $16.97 or 12.1% below the close.
Change YTD: 19.63%
Volume: 71,200 shares. 3 month avg: 143,648 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 04/20/2016 to 05/26/2016
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.

Top

Miller, Herman (MLHR)
Industry: Furn/Home Furnishings
Industry RS rank: 32 out of 56
Stock RS rank: 344 out of 630
5/26/16 close: $31.22
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $29.70 or 4.9% below the close.
Change YTD: 8.78%
Volume: 162,200 shares. 3 month avg: 338,346 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 03/21/2016 to 05/26/2016
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.

Top

Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 524 out of 630
5/26/16 close: $26.13
1 Month avg volatility: $1.04. Volatility stop (for upward breakout): $23.93 or 8.4% below the close.
Change YTD: -5.29%
Volume: 5,229,100 shares. 3 month avg: 5,713,040 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/12/2016 to 05/20/2016
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.

Top

New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 551 out of 630
5/26/16 close: $1.71
1 Month avg volatility: $0.16. Volatility stop (for downward breakout): $2.04 or 19.2% above the close.
Change YTD: -25.33%
Volume: 230,300 shares. 3 month avg: 231,595 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/20/2016 to 05/20/2016
Breakout is downward 67% of the time.
Average decline: 18%.

Top

Pioneer Energy Services (PES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 8 out of 630
5/26/16 close: $4.03
1 Month avg volatility: $0.24. Volatility stop (for upward breakout): $3.16 or 21.7% below the close.
Change YTD: 85.71%
Volume: 2,273,100 shares. 3 month avg: 776,251 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: Flag, high and tight continuation pattern from 04/05/2016 to 05/26/2016
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.

Top

Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 571 out of 630
5/26/16 close: $93.85
1 Month avg volatility: $2.54. Volatility stop (for upward breakout): $88.62 or 5.6% below the close.
Change YTD: -15.81%
Volume: 887,200 shares. 3 month avg: 1,197,922 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 05/09/2016 to 05/16/2016
WARNING: A dead-cat bounce occurred on 02/04/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/04/2016.
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.

Top

Southwestern Energy Company (SWN)
Industry: Natural Gas (Diversified)
Industry RS rank: 8 out of 56
Stock RS rank: 14 out of 630
5/26/16 close: $13.13
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $11.22 or 14.5% below the close.
Change YTD: 84.67%
Volume: 14,778,900 shares. 3 month avg: 19,751,817 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 05/06/2016 to 05/24/2016
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.

Top

DJ US Medical devices index fund (IHI)
Industry: Medical Supplies
Industry RS rank: 5 out of 56
Stock RS rank: 184 out of 630
5/26/16 close: $130.75
1 Month avg volatility: $1.30. Volatility stop (for upward breakout): $127.99 or 2.1% below the close.
Change YTD: 6.75%
Volume: 56,700 shares. 3 month avg: 117,405 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, ascending reversal pattern from 04/28/2016 to 05/26/2016
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.

Top

MSCI United Kingdom Index (EWU)
Industry: Investment Co. (Foreign)
Industry RS rank: 37 out of 56
Stock RS rank: 380 out of 630
5/26/16 close: $16.47
1 Month avg volatility: $0.15. Volatility stop (for downward breakout): $16.85 or 2.3% above the close.
Change YTD: 2.04%
Volume: 7,598,800 shares. 3 month avg: 3,542,322 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 04/18/2016 to 05/25/2016
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.

Top


Thursday 5/26/16. Intraday Market Direction: Nasdaq

The index climbed by 0.7% or 33.83 points. Since 02/05/1971 the index made 387 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 242 occasions.
     Average loss was -0.8% on 145 occasions.
Expect the index to close higher 62.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 104/181 or 57.5% 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 looked at this chart and wondered where will price go tomorrow (Thursday).

Look at the ABC pattern. Price makes a strong move up from A to B, followed by a sideways move from B to C. That makes sense because price often needs a rest (BC) after a strong move up (AB).

Compare the ABC move with C-B1-C1. The big push occurs from C to B1, just as it did from A to B. Price continued higher on upward momentum and eased over to C1.

Could this move mean another strong push higher (like AB and C-B1) will happen tomorrow?

My gut says no, because trading the markets is not that easy.

Look at the trend going back to the left side of the chart. The index has moved sideways during most of that period. Thus, it appears that the index has stored enough energy to power another push upward.

Looking at the daily chart, we see that the index is reaching overhead resistance, attached with an exhaustion gap. It's not clear that this is an exhaustion gap (it could be a continuation), but combined with overhead resistance, it looks like the index could coast a bit higher on Thursday and then drop.

$ $ $

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

Top

© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,556.59    
 Weekly S2  4,675.30  118.71   
 Monthly S1  4,725.74  50.44   
 Weekly S1  4,785.10  59.36   
 Weekly Pivot  4,788.17  3.08   Yes! The Weekly Pivot is close to the Weekly S1.
 Monthly Pivot  4,847.53  59.36   
 Daily S2  4,857.89  10.36   
 Low  4,872.42  14.53   
 Daily S1  4,876.39  3.97   
 Open  4,877.18  0.79   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  4,885.04  7.86   
 50% Down from Intraday High  4,888.94  3.90   
 Daily Pivot  4,890.92  1.98   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,892.83  1.91   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,894.89  2.06   Yes! The Close is close to the 38.2% Down from Intraday High.
 Weekly R1  4,897.97  3.08   Yes! The Weekly R1 is close to the Close.
 Weekly R2  4,901.04  3.08   Yes! The Weekly R2 is close to the Weekly R1.
 High  4,905.45  4.41   
 Daily R1  4,909.42  3.97   
 Daily R2  4,923.95  14.53   
 Monthly R1  5,016.68  92.73   
 Monthly R2  5,138.47  121.79   

Wednesday 5/25/16. 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 issued a bullish signal a day after the index bottomed.

Strong moves in the market can change signals for up to a week, so this could be a fake out. Or it could be real.

Let's check the next chart and numbers to see what they say.

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, 42% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 43%.
The fewest was 22% on 05/27/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 534 stocks in my database are down an average of 21% 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 says that fewer stocks were suffering during the last week. They improved a smidgen over the last week.

The blue line was flat over the same period.

My feeling is that the indices could still suffer weakness. Think of the uptick today as just a momentary pullback to the breakout from a chart pattern.

-- Thomas Bulkowski

Top


Tuesday 5/24/16. Intraday Market Direction: Dow

The index dropped by 0.0% or -8.01 points. Since 10/01/1928 the index made 1233 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 656 occasions.
     Average loss was -0.7% on 577 occasions.
Expect the index to close higher 53.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 115/192 or 59.9% 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.

Let us look at the possibilities shown in the chart.

The index could form a big M chart pattern. I show a potential one as the red line. The index has to close below the green line before it becomes a valid big M.

If it confirms, then look for the index to drop.

Alternatively, the index could rise. The two blue lines show overhead resistance between them, so I would expect the index to stall or reverse there.

$ $ $

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

-- Thomas Bulkowski

Top

© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,827.32    
 Weekly S2  17,101.87  274.55   
 Monthly S1  17,160.12  58.25   
 Weekly S1  17,297.40  137.28   
 Daily S2  17,437.24  139.84   
 Daily S1  17,465.09  27.84   
 Low  17,480.05  14.96   
 Close  17,492.93  12.88   
 61.8% Down from Intraday High  17,507.04  14.11   
 Open  17,507.04  0.00   Yes! The Open is close to the 61.8% Down from Intraday High.
 Daily Pivot  17,507.89  0.85   Yes! The Daily Pivot is close to the Open.
 50% Down from Intraday High  17,515.38  7.48   
 38.2% Down from Intraday High  17,523.71  8.34   
 Weekly Pivot  17,526.60  2.89   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Daily R1  17,535.74  9.14   
 High  17,550.70  14.96   
 Daily R2  17,578.54  27.84   
 Monthly Pivot  17,663.88  85.33   
 Weekly R1  17,722.13  58.25   
 Weekly R2  17,951.33  229.20   
 Monthly R1  17,996.68  45.35   
 Monthly R2  18,500.44  503.75   

Monday 5/23/16. Market Monday: The Week Ahead

My Prediction

Picture of the nasdaq composite on the daily scale.

I show the Nasdaq composite on the daily scale.

The horizontal line at A marks a support area. How do I know that? Because the index touched the line twice and rebounded.

That, of course, does not say anything about the index finding support there in the future. It might, but it might not.

Much to my surprise, the index has turned and appears to be headed higher as the red line rising to B shows.

This is my guess as to how the index will behave over the coming week or two. I expect it to rise, hit resistance and turn lower.

My targets (Tom's Targets) at the top of this page reflect an earlier view. I thought the index would drop. It still could, of course.

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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 9.79 points.
Tuesday: Down 180.73 points.
Wednesday: Down 3.36 points.
Thursday: Down 91.22 points.
Friday: Up 65.54 points.

For the Week...

The Dow industrials were down 219.56 points or 1.2%.
The Nasdaq composite was up 32.23 points or 0.7%.
The S&P 500 index was up 5.71 points or 0.3%.

Year to Date...

Dow Industrials
     3.7% down from the high of 18,167.63 on 04/20/2016.
     13.3% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     4.0% down from the high of 4,969.32 on 04/20/2016.
     13.3% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     2.8% down from the high of 2,111.05 on 04/20/2016.
     13.4% 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
New home sales10:00 TC+Shows sales of single-family homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Durable goods orders8:30 ThBMeasures orders, shipments of goods with lifespans >3 years.
Gross domestic product8:30 FBMeasures economic activity; GDP deflator measures inflation.
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

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,369  17,435  17,503  17,569  17,638 
Weekly  17,105  17,303  17,529  17,727  17,954 
Monthly  16,830  17,165  17,667  18,002  18,503 
S&P500 (^GSPC): Daily  2,034  2,043  2,051  2,060  2,067 
Weekly  2,004  2,028  2,050  2,074  2,096 
Monthly  1,978  2,015  2,063  2,100  2,148 
Nasdaq (^IXIC): Daily  4,707  4,738  4,760  4,791  4,813 
Weekly  4,634  4,702  4,746  4,814  4,859 
Monthly  4,515  4,642  4,806  4,933  5,097 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 4 weeks down 1.1%   Expect a reversal soon. 
 1 month down 20.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 41.1%   Expect a random direction. 
 1 month down 20.7%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks up 31.7%   The trend may continue. 
 2 months down 15.7%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
18Head-and-shoulders top
18Double Top, Adam and Adam
17Triple top
15Triangle, symmetrical
14Pipe top
6Pipe bottom
6Double Top, Adam and Eve
5Double Top, Eve and Eve
5Flag, high and tight
4Rectangle 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. Electric Utility (East)3. Electric Utility (East)
4. Cement and Aggregates4. Cement and Aggregates
5. Medical Supplies5. Medical Supplies
50. Biotechnology50. Biotechnology
51. Apparel51. Computers and Peripherals
52. Information Services52. Drug
53. Electronics53. Electronics
54. Computers and Peripherals54. Information Services
55. Homebuilding55. Securities Brokerage
56. Securities Brokerage56. Apparel
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 5/20/16. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 1.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 4 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 9 bullish chart patterns this week and 3 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AJRDHorn top      04/25/201605/09/2016Diversified Co.
AMEDTriangle, symmetrical      04/29/201605/19/2016Medical Services
AEPDouble Top, Adam and Adam      05/05/201605/16/2016Electric Utility (Central)
AELPipe bottom      05/02/201605/09/2016Insurance (Life)
EFIIPipe bottom      05/02/201605/09/2016Computers and Peripherals
EGNPipe bottom      05/02/201605/09/2016Natural Gas (Diversified)
FFIVTriangle, ascending      03/22/201605/19/2016Internet
GSOLTriangle, symmetrical      04/07/201605/19/2016Advertising
HIGTriangle, symmetrical      04/27/201605/16/2016Insurance (Prop/Casualty)
HDBroadening top      04/04/201605/17/2016Retail Building Supply
INFNTriangle, symmetrical      05/03/201605/19/2016Telecom. Equipment
LNCPipe bottom      05/02/201605/09/2016Insurance (Life)
ROKHead-and-shoulders top      03/18/201605/17/2016Diversified Co.
TSOScallop, descending      04/28/201605/19/2016Petroleum (Integrated)

 

Weekly screen for chart patterns ending between 05/12/2016 and 05/19/2016. 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.
 
Aerojet Rocketdyne (AJRD)
Industry: Diversified Co.
Industry RS rank: 15 out of 56
Stock RS rank: 157 out of 630
5/19/16 close: $17.03
1 Month avg volatility: $0.54. Volatility stop (for downward breakout): $18.19 or 6.8% above the close.
Change YTD: 8.75%
Volume: 207,500 shares. 3 month avg: 248,505 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Horn top reversal pattern from 04/25/2016 to 05/09/2016
Breakout is downward 100% of the time.
Average decline: 21%.
Break-even failure rate: 7%.
Pullbacks occur 33% of the time.
Price hits measure rule target 70% of the time.

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Amedisys Inc (AMED)
Industry: Medical Services
Industry RS rank: 23 out of 56
Stock RS rank: 27 out of 630
5/19/16 close: $51.19
1 Month avg volatility: $1.78. Volatility stop (for upward breakout): $46.61 or 8.9% below the close.
Change YTD: 30.19%
Volume: 152,600 shares. 3 month avg: 327,277 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 04/29/2016 to 05/19/2016
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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American Electric Power AEP (AEP)
Industry: Electric Utility (Central)
Industry RS rank: 1 out of 56
Stock RS rank: 64 out of 630
5/19/16 close: $63.85
1 Month avg volatility: $1.19. Volatility stop (for downward breakout): $66.25 or 3.8% above the close.
Change YTD: 9.58%
Volume: 2,869,700 shares. 3 month avg: 2,849,942 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 05/05/2016 to 05/16/2016
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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American Equity Investment Life Holding (AEL)
Industry: Insurance (Life)
Industry RS rank: 46 out of 56
Stock RS rank: 618 out of 630
5/19/16 close: $14.91
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $13.35 or 10.5% below the close.
Change YTD: -37.95%
Volume: 725,000 shares. 3 month avg: 1,160,425 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 05/02/2016 to 05/09/2016
WARNING: A dead-cat bounce occurred on 04/06/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 07/06/2016 and a 38% chance by 10/05/2016.
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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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 50 out of 56
Stock RS rank: 490 out of 630
5/19/16 close: $41.20
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $38.68 or 6.1% below the close.
Change YTD: -11.85%
Volume: 414,500 shares. 3 month avg: 403,805 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 05/02/2016 to 05/09/2016
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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Energen Corp (EGN)
Industry: Natural Gas (Diversified)
Industry RS rank: 19 out of 56
Stock RS rank: 571 out of 630
5/19/16 close: $43.31
1 Month avg volatility: $2.21. Volatility stop (for upward breakout): $38.28 or 11.6% below the close.
Change YTD: 5.66%
Volume: 1,413,200 shares. 3 month avg: 2,375,466 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 05/02/2016 to 05/09/2016
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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F5 Networks, Inc. (FFIV)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 34 out of 56
Stock RS rank: 267 out of 630
5/19/16 close: $104.84
1 Month avg volatility: $2.29. Volatility stop (for upward breakout): $99.16 or 5.4% below the close.
Change YTD: 8.13%
Volume: 952,300 shares. 3 month avg: 923,634 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, ascending reversal pattern from 03/22/2016 to 05/19/2016
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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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 11 out of 56
Stock RS rank: 307 out of 630
5/19/16 close: $8.75
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $7.81 or 10.7% below the close.
Change YTD: 12.18%
Volume: 41,800 shares. 3 month avg: 20,045 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 05/19/2016
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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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 21 out of 56
Stock RS rank: 348 out of 630
5/19/16 close: $44.05
1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $42.37 or 3.8% below the close.
Change YTD: 1.36%
Volume: 2,201,400 shares. 3 month avg: 2,522,766 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/27/2016 to 05/16/2016
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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Home Depot, Inc (HD)
Industry: Retail Building Supply
Industry RS rank: 6 out of 56
Stock RS rank: 212 out of 630
5/19/16 close: $131.73
1 Month avg volatility: $2.04. Volatility stop (for downward breakout): $136.21 or 3.4% above the close.
Change YTD: -0.39%
Volume: 4,576,000 shares. 3 month avg: 4,820,783 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 04/04/2016 to 05/17/2016
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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Infinera Corp. (INFN)
Industry: Telecom. Equipment
Industry RS rank: 42 out of 56
Stock RS rank: 615 out of 630
5/19/16 close: $12.16
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $11.14 or 8.4% below the close.
Change YTD: -32.89%
Volume: 2,248,300 shares. 3 month avg: 2,567,526 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 05/03/2016 to 05/19/2016
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 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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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 46 out of 56
Stock RS rank: 535 out of 630
5/19/16 close: $44.38
1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $41.61 or 6.2% below the close.
Change YTD: -11.70%
Volume: 2,499,400 shares. 3 month avg: 2,586,425 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 05/02/2016 to 05/09/2016
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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Rockwell Automation Inc (ROK)
Industry: Diversified Co.
Industry RS rank: 15 out of 56
Stock RS rank: 214 out of 630
5/19/16 close: $110.23
1 Month avg volatility: $1.83. Volatility stop (for downward breakout): $115.03 or 4.4% above the close.
Change YTD: 7.43%
Volume: 1,087,100 shares. 3 month avg: 897,380 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 03/18/2016 to 05/17/2016
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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Tesoro Corporation (TSO)
Industry: Petroleum (Integrated)
Industry RS rank: 45 out of 56
Stock RS rank: 584 out of 630
5/19/16 close: $77.85
1 Month avg volatility: $2.80. Volatility stop (for downward breakout): $86.85 or 11.6% above the close.
Change YTD: -26.12%
Volume: 1,645,300 shares. 3 month avg: 2,358,765 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: Scallop, descending continuation pattern from 04/28/2016 to 05/19/2016
Breakout is downward 66% of the time.
Average decline: 17%.
Break-even failure rate: 15%.
Pullbacks occur 55% of the time.
Price hits measure rule target 30% of the time.

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Thursday 5/19/16. Intraday Market Direction: Nasdaq

The index climbed by 0.5% or 23.39 points. Since 02/05/1971 the index made 517 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 359 occasions.
     Average loss was -0.8% on 158 occasions.
Expect the index to close higher 69.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 104/180 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.

The index has made a large descending triangle, shown here in red.

The breakout direction from descending triangles is often downward, but it can break out upward as well. The actual breakout direction is unknown until it happens.

A breakout occurs when the index closes beyond the red line.

Since price is clustered near the bottom of the chart pattern, it seems more likely that the breakout will be downward.

$ $ $

I discovered a bug in my computer program that updates the 'Wilder RSI' test portfolio. Stocks that were removed from the database and had an open position were never removed. Since it'll be a pain to correct this, I've decided to drop support for the portfolio.

$ $ $

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  4,512.53    
 Monthly S1  4,625.83  113.29   
 Weekly S2  4,651.81  25.98   
 Daily S2  4,677.51  25.70   
 Weekly S1  4,695.46  17.96   
 Low  4,704.49  9.03   
 Open  4,705.78  1.29   Yes! The Open is close to the Low.
 Daily S1  4,708.31  2.53   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  4,726.57  18.25   
 50% Down from Intraday High  4,733.38  6.82   
 Daily Pivot  4,735.30  1.91   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  4,739.12  3.82   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  4,740.20  1.08   Yes! The 38.2% Down from Intraday High is close to the Close.
 Weekly Pivot  4,753.83  13.62   
 High  4,762.28  8.45   
 Daily R1  4,766.10  3.82   Yes! The Daily R1 is close to the High.
 Daily R2  4,793.09  26.98   
 Weekly R1  4,797.48  4.40   Yes! The Weekly R1 is close to the Daily R2.
 Monthly Pivot  4,797.57  0.09   Yes! The Monthly Pivot is close to the Weekly R1.
 Weekly R2  4,855.85  58.27   
 Monthly R1  4,910.87  55.02   
 Monthly R2  5,082.61  171.75   

Wednesday 5/18/16. 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 that the indicator peaked in February and rolled over slowly in March before tumbling recently even as the index climbed.

The indictor turned bearish near or at the start of May as the red vertical line shows.

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, 43% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 43%.
The fewest was 21% on 05/19/2015.
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 21% from their yearly high.
A week ago, the average was 21%.
The peak was 13% on 05/21/2015.
And the bottom was 32% on 02/11/2016.

These two indicators went horizontally this period when compared to the prior week.

It suggests the market is struggling for direction now. That's no help if you trade the trend.

-- Thomas Bulkowski

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Tuesday 5/17/16. Intraday Market Direction: Dow

The index dropped by -0.1% or -9.79 points. Since 10/01/1928 the index made 1265 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 656 occasions.
     Average loss was -0.8% on 609 occasions.
Expect the index to close higher 51.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 115/191 or 60.2% 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.

When I first saw the chart pictured, my impression was of a head-and-shoulders bottom forming. I have identified a left shoulder (LS) and head. The right shoulder (RS) has not completed yet.

I also drew a neckline in red. That line connects the two armpits. When the index closes above the neckline, it confirms the chart pattern as a valid one with the expectation that price will rise.

If this chart pattern plays out as expected, the index should dip after the open and then rebound to close above the red line.

That may not be the case because anything can happen before confirmation.

$ $ $

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  17,196.58    
 Daily S2  17,442.05  245.47   
 Weekly S2  17,447.67  5.62   Yes! The Weekly S2 is close to the Daily S2.
 Monthly S1  17,453.64  5.97   Yes! The Monthly S1 is close to the Weekly S2.
 Open  17,531.76  78.12   
 Low  17,531.76  0.00   Yes! The Low is close to the Open.
 Daily S1  17,576.38  44.62   
 Weekly S1  17,579.19  2.81   Yes! The Weekly S1 is close to the Daily S1.
 61.8% Down from Intraday High  17,617.34  38.15   
 50% Down from Intraday High  17,643.78  26.44   
 Daily Pivot  17,666.09  22.31   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  17,670.22  4.13   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  17,710.71  40.49   
 High  17,755.80  45.09   
 Weekly Pivot  17,756.90  1.10   Yes! The Weekly Pivot is close to the High.
 Daily R1  17,800.42  43.52   
 Monthly Pivot  17,810.64  10.22   Yes! The Monthly Pivot is close to the Daily R1.
 Weekly R1  17,888.42  77.78   
 Daily R2  17,890.13  1.71   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  18,066.13  176.00   
 Monthly R1  18,067.70  1.57   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  18,424.70  356.99   

Monday 5/16/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industryals on the daily scale.

I took this pic during Thursday's market trading.

A head-and-shoulders top appears on the daily chart.

I show that as ABC (left shoulder, right, shoulder, head, respectively).

As I write this, the chart pattern hasn't confirmed as a valid one. Validation occurs if the price at B drops to close below the red, up-sloping, neckline.

If you look at the yearly scale, say, four years worth of data, you'll see that the current price is right at a resistance area setup by peaks in 2015.

It's forming an unconfirmed triple top. To confirm the triple top, the index has to close below 15,400, which is a long way from the 17,600 we're at now.

We could move sideways, which is what we've been doing since April.

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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 34.72 points.
Tuesday: Up 222.44 points.
Wednesday: Down 217.23 points.
Thursday: Holiday or other weird event!
Thursday: Holiday or other weird event!

For the Week...

The Dow industrials were down 29.51 points or 0.2%.
The Nasdaq composite was up 24.53 points or 0.5%.
The S&P 500 index was up 7.32 points or 0.4%.

Year to Date...

Dow Industrials
     2.5% down from the high of 18,167.63 on 04/20/2016.
     14.6% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     4.2% down from the high of 4,969.32 on 04/20/2016.
     13.1% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     2.2% down from the high of 2,111.05 on 04/20/2016.
     14.1% 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
Consumer price index8:30 TB+Inflation report. Measures cost of goods and services.
Housing starts8:30 TB-Number of homes beginning construction.
Building permits8:30 TB-Measures building permits for new construction.
Industrial production9:15 TB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 TB-Gauges economic activity, hints of inflation.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Minutes2:00 W?Minutes of the prior Federal Reserve meeting.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Existing home sales10:00 FCCounts sales of used homes.

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

As of 05/11/2016, the CPI had:

44 bearish patterns,
2 bullish patterns,
439 patterns waiting for breakout.
The CPI signal is 4.3%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,572  17,642  17,780  17,850  17,988 
Weekly  17,505  17,608  17,771  17,874  18,038 
Monthly  17,197  17,454  17,811  18,068  18,425 
S&P500 (^GSPC): Daily  2,052  2,058  2,071  2,077  2,090 
Weekly  2,037  2,051  2,068  2,081  2,098 
Monthly  2,000  2,032  2,072  2,104  2,143 
Nasdaq (^IXIC): Daily  4,726  4,743  4,778  4,795  4,830 
Weekly  4,692  4,726  4,769  4,804  4,846 
Monthly  4,520  4,640  4,805  4,925  5,090 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 10.7%   Expect a reversal soon. 
 1 month down 20.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 41.2%   Expect a random direction. 
 1 month down 20.7%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 43.6%   Expect a random direction. 
 2 months down 15.7%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
30Head-and-shoulders top
19Double Top, Adam and Adam
12Triangle, symmetrical
10Triple top
7Pipe top
7Flag, high and tight
5Pipe bottom
5Dead-cat bounce
4Broadening top, right-angled and ascending
4Triangle, descending

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

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

 

 

 

 

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

This WeekLast Week
1. 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. Medical Supplies5. Medical Supplies
50. Biotechnology50. Biotechnology
51. Computers and Peripherals51. Computers and Peripherals
52. Drug52. Drug
53. Electronics53. Electronics
54. Information Services54. Information Services
55. Securities Brokerage55. Securities Brokerage
56. Apparel56. Apparel
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 5/13/16. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 639 stocks searched, or 1.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 7 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
AAPipe top      04/25/201605/02/2016Metals and Mining (Div.)
CDNSTriangle, ascending      03/30/201605/12/2016Computer Software and Svcs
FDSTriangle, symmetrical      03/09/201605/12/2016Information Services
FICOTriangle, ascending      04/01/201605/12/2016IT Services
GSOLTriangle, symmetrical      04/07/201605/11/2016Advertising
IPIFlag, high and tight      05/09/201605/12/2016Chemical (Diversified)
LXUFlag, high and tight      05/05/201605/12/2016Building Materials
NFGTriangle, symmetrical      04/29/201605/11/2016Natural Gas (Diversified)
WWWHead-and-shoulders top      04/22/201605/09/2016Shoe
IYCRectangle top      03/29/201605/12/2016Retail Store

 

Weekly screen for chart patterns ending between 05/05/2016 and 05/12/2016. 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.
 
Alcoa (AA)
Industry: Metals and Mining (Div.)
Industry RS rank: 9 out of 56
Stock RS rank: 76 out of 631
5/12/16 close: $9.44
1 Month avg volatility: $0.39. Volatility stop (for downward breakout): $10.49 or 11.1% above the close.
Change YTD: -4.36%
Volume: 23,039,700 shares. 3 month avg: 28,873,078 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 04/25/2016 to 05/02/2016
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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Cadence Design Systems Inc (CDNS)
Industry: Computer Software and Svcs
Industry RS rank: 43 out of 56
Stock RS rank: 249 out of 631
5/12/16 close: $23.45
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $22.51 or 4.0% below the close.
Change YTD: 12.69%
Volume: 1,772,200 shares. 3 month avg: 2,830,175 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, ascending reversal pattern from 03/30/2016 to 05/12/2016
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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FactSet Research Systems Inc (FDS)
Industry: Information Services
Industry RS rank: 53 out of 56
Stock RS rank: 473 out of 631
5/12/16 close: $151.66
1 Month avg volatility: $2.63. Volatility stop (for upward breakout): $145.12 or 4.3% below the close.
Change YTD: -6.71%
Volume: 212,800 shares. 3 month avg: 300,526 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 03/09/2016 to 05/12/2016
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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Fair Isaac Corp (FICO)
Industry: IT Services
Industry RS rank: 27 out of 56
Stock RS rank: 29 out of 631
5/12/16 close: $108.79
1 Month avg volatility: $2.18. Volatility stop (for upward breakout): $103.16 or 5.2% below the close.
Change YTD: 15.51%
Volume: 97,900 shares. 3 month avg: 202,018 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, ascending reversal pattern from 04/01/2016 to 05/12/2016
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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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 15 out of 56
Stock RS rank: 361 out of 631
5/12/16 close: $8.77
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $7.76 or 11.5% below the close.
Change YTD: 12.44%
Volume: 19,600 shares. 3 month avg: 20,409 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 05/11/2016
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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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 630 out of 631
5/12/16 close: $1.34
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $0.89 or 33.6% below the close.
Change YTD: -54.58%
Volume: 4,417,000 shares. 3 month avg: 2,237,760 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: Flag, high and tight continuation pattern from 05/09/2016 to 05/12/2016
WARNING: A dead-cat bounce occurred on 02/29/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/30/2016 and a 38% chance by 08/29/2016.
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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LSB Industries Inc (LXU)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 31 out of 56
Stock RS rank: 2 out of 631
5/12/16 close: $14.20
1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $11.26 or 20.7% below the close.
Change YTD: 95.86%
Volume: 4,191,400 shares. 3 month avg: 892,765 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: Flag, high and tight continuation pattern from 05/05/2016 to 05/12/2016
WARNING: A dead-cat bounce occurred on 05/05/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 08/04/2016 and a 38% chance by 11/03/2016.
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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National Fuel Gas (NFG)
Industry: Natural Gas (Diversified)
Industry RS rank: 20 out of 56
Stock RS rank: 104 out of 631
5/12/16 close: $54.74
1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $51.93 or 5.1% below the close.
Change YTD: 28.05%
Volume: 604,600 shares. 3 month avg: 537,858 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/29/2016 to 05/11/2016
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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Wolverine World Wide (WWW)
Industry: Shoe
Industry RS rank: 38 out of 56
Stock RS rank: 393 out of 631
5/12/16 close: $17.89
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $19.50 or 9.0% above the close.
Change YTD: 7.06%
Volume: 1,011,100 shares. 3 month avg: 928,549 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: Head-and-shoulders top reversal pattern from 04/22/2016 to 05/09/2016
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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DJ US consumer svcs index fnd (retail) (IYC)
Industry: Retail Store
Industry RS rank: 42 out of 56
Stock RS rank: 325 out of 631
5/12/16 close: $144.07
1 Month avg volatility: $1.28. Volatility stop (for upward breakout): $140.93 or 2.2% below the close.
Change YTD: -0.40%
Volume: 29,700 shares. 3 month avg: 49,709 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Rectangle top continuation pattern from 03/29/2016 to 05/12/2016
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Thursday 5/12/16. Intraday Market Direction: Nasdaq

The index dropped by -1.0% or -49.19 points. Since 02/05/1971 the index made 139 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 64 occasions.
     Average loss was -1.4% on 75 occasions.
Expect the index to close lower 54.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 104/180 or 57.8% of the time.
     The prediction of the index closing lower has been right 36/74 or 48.6% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The red line shows a chart pattern that many of you may not be familiar with. It's an ascending and inverted scallop (AB).

The key to this pattern is to gauge how far price will retrace. That's why I show the green line, ending at B. This is a support line.

If this were the daily chart, I would be more confident about seeing price stop near the green line. But this is intraday and things on this scale are not as clean.

Anyway, it's a good start though.

Of course, the index could rise instead. That's what happens after the scallop completes. Depending on what happens overnight, you can use the futures premarket to gauge the opening direction. And that will likely tell whether the scallop has more of a retrace to come or if it's done and an upward breakout will follow.

$ $ $

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  4,519.72    
 Weekly S2  4,618.22  98.50   
 Monthly S1  4,640.21  21.98   
 Weekly S1  4,689.46  49.25   
 Daily S2  4,725.92  36.46   
 Daily S1  4,743.30  17.39   
 Weekly Pivot  4,755.51  12.21   
 Low  4,760.36  4.85   Yes! The Low is close to the Weekly Pivot.
 Close  4,760.69  0.33   Yes! The Close is close to the Low.
 Daily Pivot  4,777.75  17.06   
 61.8% Down from Intraday High  4,780.16  2.41   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  4,786.27  6.12   
 38.2% Down from Intraday High  4,792.39  6.12   
 Daily R1  4,795.13  2.74   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  4,799.30  4.17   Yes! The Open is close to the Daily R1.
 Monthly Pivot  4,804.76  5.46   
 High  4,812.19  7.43   
 Weekly R1  4,826.75  14.56   
 Daily R2  4,829.58  2.83   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  4,892.80  63.23   
 Monthly R1  4,925.25  32.44   
 Monthly R2  5,089.80  164.56   

Wednesday 5/11/16. 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 big move up in the index on Tuesday, pushed the indicator into bullish territory.

That chart shows that with the recent green vertical line.

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, 44% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 41%.
The fewest was 22% on 05/18/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 537 stocks in my database are down an average of 21% from their yearly high.
A week ago, the average was 20%.
The peak was 13% on 05/18/2015.
And the bottom was 32% on 02/11/2016.

These two indicators show a mixed signal. The red line is trending down, bearish. The blue line has moved up, but only a bit.

The red line has turned an upward trend into one heading down (bearish). The blue line seems to be continuing higher.

If I had to guess, I'd say the red line will turn and start to trend higher. That feeling is based on my belief that the indices will make new highs soon.

-- Thomas Bulkowski

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Tuesday 5/10/16. Intraday Market Direction: Dow

The index dropped by -0.2% or -34.72 points. Since 10/01/1928 the index made 1150 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 576 occasions.
     Average loss was -0.7% on 574 occasions.
Expect the index to close higher 50.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 114/190 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.

A trendline at A follows the index higher, setting a floor on the beast.

However, there's a measure rule for trendlines when a breakout comes. It says that the height of the move from the trendline to the index (as in the vertical move from A to B) will be mirrored after the breakout. I show that as the drop from A to C.

I just penciled in the blue lines, so don't look for them to be the exact length of the coming move.

Let's assume the breakout is downward. How far will the index drop?

The vertical rise at AB is 110 points. If it were to breakout downward (the breakout price is unknown so I'm guessing here) but it would be a decline to about 17,600.

What happens if the index rises instead?

A rise to 17800 looks about right. It will join peak B and last Tuesday's mid-day peak.

Of course, I suppose the index could just move sideways with very little up or down motion.

As to the measure rule, you should use the largest but most recent rise above the trendline instead of the AB rise. That would mean the small peak slightly to the right of line AC. Using that peak in the measure rule calculation would change things, of course. However, I don't think the bump represents a realistic Dow move, so I used the larger move AB.

$ $ $

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  17,102.52    
 Weekly S2  17,400.91  298.39   
 Monthly S1  17,404.22  3.31   Yes! The Monthly S1 is close to the Weekly S2.
 Weekly S1  17,553.41  149.19   
 Daily S2  17,604.37  50.96   
 Daily S1  17,655.14  50.77   
 Low  17,668.38  13.24   
 Close  17,705.91  37.53   
 61.8% Down from Intraday High  17,712.23  6.32   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  17,719.15  6.92   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,725.77  6.62   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot  17,732.88  7.11   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  17,739.31  6.43   Yes! The 38.2% Down from Intraday High is close to the Weekly Pivot.
 Open  17,743.85  4.54   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  17,769.92  26.07   
 High  17,783.16  13.24   
 Monthly Pivot  17,785.92  2.76   Yes! The Monthly Pivot is close to the High.
 Daily R2  17,833.93  48.01   
 Weekly R1  17,885.38  51.45   
 Weekly R2  18,064.85  179.47   
 Monthly R1  18,087.62  22.77   
 Monthly R2  18,469.32  381.71   

Monday 5/9/16. 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 potential double top appears at AB. Why do I term it a potential double top instead of an actual one?

It's not an actual double top until the index closes below C, the lowest valley between the two tops.

That hasn't happened yet.

Notice that the last candle (the one on the far right) is white. The index closed higher than where it opened, and higher than the day before.

That could mean the turn is here. I suspect it might be, so I haven't adjusted some of my targets ("Tom's Targets" at top of page) even though the indices hit them on Friday.

If the index continues down, look for it to drop to 7375 (not in one day, mind you). I show that with a green line at D.

Alternatively, the index could rise with E showing the target (blue line).

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Up 117.52 points.
Tuesday: Down 140.25 points.
Wednesday: Down 99.65 points.
Thursday: Up 9.45 points.
Friday: Up 79.92 points.

For the Week...

The Dow industrials were down 33.01 points or 0.2%.
The Nasdaq composite was down 39.2 points or 0.8%.
The S&P 500 index was down 8.16 points or 0.4%.

Year to Date...

Dow Industrials
     2.4% down from the high of 18,167.63 on 04/20/2016.
     14.8% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     4.7% down from the high of 4,969.32 on 04/20/2016.
     12.5% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     2.6% down from the high of 2,111.05 on 04/20/2016.
     13.6% 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
Wholesale inventories10:00 TD-Wholesale sales and inventory statistics.
Crude inventories10:30 W?My guess: Measures oil inventory.
Treasury budget2:00 WDTracks budget deficit. Important in April (tax filing).
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
International trade8:30 ThC+Import/export prices, trade balance. US economy vs others.
Producer price index8:30 FB-Measures wholesale goods cost. An indication of future inflation.
Retail sales8:30 FA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 FC-Reports manufacturing, wholesale, retail inventories.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 05/06/2016, the CPI had:

19 bearish patterns,
10 bullish patterns,
321 patterns waiting for breakout.
The CPI signal is 34.5%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,524  17,632  17,689  17,797  17,853 
Weekly  17,412  17,577  17,744  17,909  18,076 
Monthly  17,114  17,427  17,797  18,111  18,481 
S&P500 (^GSPC): Daily  2,033  2,045  2,051  2,063  2,070 
Weekly  2,016  2,037  2,060  2,081  2,104 
Monthly  1,990  2,024  2,067  2,101  2,145 
Nasdaq (^IXIC): Daily  4,667  4,702  4,719  4,753  4,771 
Weekly  4,610  4,673  4,747  4,810  4,885 
Monthly  4,512  4,624  4,797  4,909  5,082 
  • 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 15.7%   Expect a reversal soon. 
 1 month down 20.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 14.6%   Expect a reversal soon. 
 1 month down 20.7%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.5%   Expect a reversal soon. 
 2 months down 15.7%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
33Head-and-shoulders top
21Triangle, symmetrical
19Double Top, Adam and Adam
18Pipe bottom
10Triple top
8Flag, high and tight
7Pipe top
7Triangle, descending
5Broadening top, right-angled and ascending
5Dead-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. Metal Fabricating
4. Cement and Aggregates4. Metals and Mining (Div.)
5. Medical Supplies5. Cement and Aggregates
50. Biotechnology50. Homebuilding
51. Computers and Peripherals51. Biotechnology
52. Drug52. Insurance (Life)
53. Electronics53. Computers and Peripherals
54. Information Services54. Drug
55. Securities Brokerage55. Securities Brokerage
56. Apparel56. Information Services
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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Friday 5/6/16. 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 22 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 640 stocks searched, or 3.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

Excluding ETFs, there were 7 bullish chart patterns this week and 12 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEISDouble Bottom, Adam and Adam      04/21/201604/29/2016Semiconductor
ALBTriangle, symmetrical      04/27/201605/05/2016Chemical (Diversified)
AELPipe top      04/18/201604/25/2016Insurance (Life)
ABCPipe top      04/18/201604/25/2016Biotechnology
CELGPipe top      04/18/201604/25/2016Biotechnology
EDPipe bottom      04/18/201604/25/2016Electric Utility (East)
CMIDouble Top, Adam and Adam      04/19/201605/03/2016Machinery
DTEPipe bottom      04/18/201604/25/2016Electric Utility (Central)
BOOMFlag, high and tight      03/02/201605/02/2016Metal Fabricating
EIGITriangle, symmetrical      03/04/201605/03/2016E-Commerce
FWRDPipe top      04/25/201604/25/2016Trucking/Transp. Leasing
GSOLTriangle, symmetrical      04/07/201605/05/2016Advertising
GBPipe top      04/18/201604/25/2016Electronics
HRSDouble Top, Eve and Eve      03/04/201605/02/2016Telecom. Equipment
HURCTriangle, ascending      03/31/201605/04/2016Machinery
LXUDead-cat bounce      05/05/201605/05/2016Building Materials
MTRXDead-cat bounce      05/05/201605/05/2016Oilfield Svcs/Equipment
MRKBroadening wedge, ascending      02/24/201604/29/2016Drug
NBRHead-and-shoulders top      04/13/201604/29/2016Oilfield Svcs/Equipment
NUSHorn top      04/11/201604/25/2016Toiletries/Cosmetics
SWCDouble Top, Adam and Adam      04/21/201604/29/2016Metals and Mining (Div.)
PAYPipe top      04/18/201604/25/2016Telecom. Equipment
FXIBroadening top, right-angled and ascending      03/16/201605/05/2016Investment Co. (Foreign)
MXIDouble Top, Adam and Adam      04/20/201605/02/2016Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 04/28/2016 and 05/05/2016. 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.
 
Advanced Energy (AEIS)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 37 out of 56
Stock RS rank: 48 out of 632
5/5/16 close: $34.55
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $32.54 or 5.8% below the close.
Change YTD: 22.39%
Volume: 355,800 shares. 3 month avg: 355,808 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 04/21/2016 to 04/29/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 20 out of 56
Stock RS rank: 24 out of 632
5/5/16 close: $67.10
1 Month avg volatility: $1.27. Volatility stop (for upward breakout): $64.23 or 4.3% below the close.
Change YTD: 19.80%
Volume: 1,051,700 shares. 3 month avg: 1,353,672 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: Triangle, symmetrical continuation pattern from 04/27/2016 to 05/05/2016
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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American Equity Investment Life Holding (AEL)
Industry: Insurance (Life)
Industry RS rank: 44 out of 56
Stock RS rank: 619 out of 632
5/5/16 close: $13.58
1 Month avg volatility: $0.72. Volatility stop (for downward breakout): $15.22 or 12.1% above the close.
Change YTD: -43.49%
Volume: 1,228,200 shares. 3 month avg: 1,212,843 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 04/18/2016 to 04/25/2016
WARNING: A dead-cat bounce occurred on 04/06/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 07/06/2016 and a 38% chance by 10/05/2016.
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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AmerisourceBergen Corp (ABC)
Industry: Biotechnology
Industry RS rank: 51 out of 56
Stock RS rank: 527 out of 632
5/5/16 close: $78.00
1 Month avg volatility: $1.57. Volatility stop (for downward breakout): $82.81 or 6.2% above the close.
Change YTD: -24.79%
Volume: 11,878,200 shares. 3 month avg: 2,585,865 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 04/18/2016 to 04/25/2016
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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Celgene Corp (CELG)
Industry: Biotechnology
Industry RS rank: 51 out of 56
Stock RS rank: 528 out of 632
5/5/16 close: $101.71
1 Month avg volatility: $3.06. Volatility stop (for downward breakout): $107.96 or 6.1% above the close.
Change YTD: -15.07%
Volume: 3,407,700 shares. 3 month avg: 5,553,429 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 04/18/2016 to 04/25/2016
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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Con Edison, Inc (ED)
Industry: Electric Utility (East)
Industry RS rank: 4 out of 56
Stock RS rank: 71 out of 632
5/5/16 close: $75.58
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $72.61 or 3.9% below the close.
Change YTD: 17.60%
Volume: 2,004,800 shares. 3 month avg: 1,983,697 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 04/18/2016 to 04/25/2016
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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Cummins Inc. (CMI)
Industry: Machinery
Industry RS rank: 13 out of 56
Stock RS rank: 165 out of 632
5/5/16 close: $113.89
1 Month avg volatility: $2.58. Volatility stop (for downward breakout): $120.50 or 5.8% above the close.
Change YTD: 29.41%
Volume: 1,253,400 shares. 3 month avg: 2,445,157 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 04/19/2016 to 05/03/2016
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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DTE Energy Company (DTE)
Industry: Electric Utility (Central)
Industry RS rank: 1 out of 56
Stock RS rank: 118 out of 632
5/5/16 close: $91.10
1 Month avg volatility: $1.42. Volatility stop (for upward breakout): $87.86 or 3.6% below the close.
Change YTD: 13.61%
Volume: 953,300 shares. 3 month avg: 1,071,129 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 04/18/2016 to 04/25/2016
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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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 8 out of 56
Stock RS rank: 18 out of 632
5/5/16 close: $10.08
1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $8.90 or 11.7% below the close.
Change YTD: 44.21%
Volume: 69,800 shares. 3 month avg: 74,477 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 03/02/2016 to 05/02/2016
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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Endurance International Group Holdings (EIGI)
Industry: E-Commerce
Industry RS rank: 32 out of 56
Stock RS rank: 522 out of 632
5/5/16 close: $9.67
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $8.19 or 15.3% below the close.
Change YTD: -11.53%
Volume: 860,000 shares. 3 month avg: 537,257 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 03/04/2016 to 05/03/2016
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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Forward Air Corp (FWRD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 56
Stock RS rank: 338 out of 632
5/5/16 close: $43.74
1 Month avg volatility: $1.15. Volatility stop (for downward breakout): $46.62 or 6.6% above the close.
Change YTD: 1.70%
Volume: 152,700 shares. 3 month avg: 166,768 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 top reversal pattern from 04/25/2016 to 04/25/2016
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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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 9 out of 56
Stock RS rank: 330 out of 632
5/5/16 close: $8.67
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $7.72 or 11.0% below the close.
Change YTD: 11.15%
Volume: 24,800 shares. 3 month avg: 20,006 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 05/05/2016
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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Greatbatch Inc (GB)
Industry: Electronics
Industry RS rank: 50 out of 56
Stock RS rank: 610 out of 632
5/5/16 close: $32.22
1 Month avg volatility: $1.32. Volatility stop (for downward breakout): $35.34 or 9.7% above the close.
Change YTD: -38.63%
Volume: 246,200 shares. 3 month avg: 402,092 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 04/18/2016 to 04/25/2016
WARNING: A dead-cat bounce occurred on 03/01/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/31/2016 and a 38% chance by 08/30/2016.
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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Harris Corp (HRS)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 56
Stock RS rank: 379 out of 632
5/5/16 close: $74.78
1 Month avg volatility: $1.31. Volatility stop (for downward breakout): $77.49 or 3.6% above the close.
Change YTD: -13.95%
Volume: 1,038,000 shares. 3 month avg: 1,224,168 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 03/04/2016 to 05/02/2016
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

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Hurco Companies Inc. (HURC)
Industry: Machinery
Industry RS rank: 13 out of 56
Stock RS rank: 43 out of 632
5/5/16 close: $33.18
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $31.09 or 6.3% below the close.
Change YTD: 24.92%
Volume: 16,300 shares. 3 month avg: 19,354 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 03/31/2016 to 05/04/2016
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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LSB Industries Inc (LXU)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 56
Stock RS rank: 622 out of 632
5/5/16 close: $8.00
1 Month avg volatility: $0.99. Volatility stop (for downward breakout): $13.29 or 66.1% above the close.
Change YTD: 10.34%
Volume: 3,622,500 shares. 3 month avg: 796,148 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/05/2016 to 05/05/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Matrix Service Co. (MTRX)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 603 out of 632
5/5/16 close: $14.28
1 Month avg volatility: $0.74. Volatility stop (for downward breakout): $19.47 or 36.3% above the close.
Change YTD: -30.48%
Volume: 1,515,400 shares. 3 month avg: 282,346 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: Dead-cat bounce continuation pattern from 05/05/2016 to 05/05/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Merck and Co., Inc. (MRK)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 49 out of 56
Stock RS rank: 322 out of 632
5/5/16 close: $54.09
1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $55.98 or 3.5% above the close.
Change YTD: 2.40%
Volume: 11,224,300 shares. 3 month avg: 10,021,255 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 wedge, ascending reversal pattern from 02/24/2016 to 04/29/2016
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price hits measure rule target 58% of the time.

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Nabors Industries, Ltd. (NBR)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 569 out of 632
5/5/16 close: $8.15
1 Month avg volatility: $0.64. Volatility stop (for downward breakout): $10.05 or 23.3% above the close.
Change YTD: -4.23%
Volume: 8,821,000 shares. 3 month avg: 9,947,820 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 top reversal pattern from 04/13/2016 to 04/29/2016
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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Nu Skin Enterprises, Inc (NUS)
Industry: Toiletries/Cosmetics
Industry RS rank: 18 out of 56
Stock RS rank: 396 out of 632
5/5/16 close: $37.33
1 Month avg volatility: $1.20. Volatility stop (for downward breakout): $40.39 or 8.2% above the close.
Change YTD: -1.48%
Volume: 457,600 shares. 3 month avg: 1,322,837 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Horn top reversal pattern from 04/11/2016 to 04/25/2016
WARNING: A dead-cat bounce occurred on 02/12/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/13/2016 and a 38% chance by 08/12/2016.
Breakout is downward 100% of the time.
Average decline: 21%.
Break-even failure rate: 7%.
Pullbacks occur 33% of the time.
Price hits measure rule target 70% of the time.

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Stillwater Mining Co. (SWC)
Industry: Metals and Mining (Div.)
Industry RS rank: 7 out of 56
Stock RS rank: 81 out of 632
5/5/16 close: $10.38
1 Month avg volatility: $0.62. Volatility stop (for downward breakout): $12.23 or 17.8% above the close.
Change YTD: 21.12%
Volume: 1,762,800 shares. 3 month avg: 1,785,848 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 04/21/2016 to 04/29/2016
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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VeriFone Systems, Inc (PAY)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 56
Stock RS rank: 455 out of 632
5/5/16 close: $27.12
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $28.70 or 5.8% above the close.
Change YTD: -3.21%
Volume: 1,250,800 shares. 3 month avg: 1,284,711 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe top reversal pattern from 04/18/2016 to 04/25/2016
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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FTSE/Xinhua China 25 index fund (FXI)
Industry: Investment Co. (Foreign)
Industry RS rank: 38 out of 56
Stock RS rank: 510 out of 632
5/5/16 close: $32.30
1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $33.43 or 3.5% above the close.
Change YTD: -8.47%
Volume: 32,500,600 shares. 3 month avg: 24,991,302 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 03/16/2016 to 05/05/2016
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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SandP Global Materials Sector Index fund (MXI)
Industry: Investment Co. (Foreign)
Industry RS rank: 38 out of 56
Stock RS rank: 283 out of 632
5/5/16 close: $49.29
1 Month avg volatility: $0.53. Volatility stop (for downward breakout): $50.76 or 3.0% above the close.
Change YTD: 9.51%
Volume: 46,100 shares. 3 month avg: 32,912 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 04/20/2016 to 05/02/2016
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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Thursday 5/5/16. Intraday Market Direction: Nasdaq

The index dropped by -0.8% or -37.58 points. Since 02/05/1971 the index made 239 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 117 occasions.
     Average loss was -1.3% on 122 occasions.
Expect the index to close lower 51.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 104/180 or 57.8% of the time.
     The prediction of the index closing lower has been right 35/73 or 47.9% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

A small head-and-shoulders bottom appears at A. This confirms (I checked it on the 2-day scale) as a valid chart pattern when the index closes above the thin red line.

I drew that line horizontally since price might never close above an up-sloping neckline. The horizontal neckline potentially gets you into a trade sooner, at a better price.

Anyway, that chart pattern is bullish. It suggests the index will close higher on Thursday.

I also drew an up-sloping green line along the bottoms at A. It's tough to see since I didn't want to obscure price movement with a thick line. This also bolsters a bullish rise.

However, should the index turn down, the index could drop to 4650 where it should find additional support. If I'm correct and the index rises, then look for it to reach 4750, maybe 4760.

Keep in mind that I'm guessing here, based on support and resistance.

$ $ $

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  4,583.45    
 Weekly S2  4,619.67  36.21   
 Monthly S1  4,654.55  34.88   
 Weekly S1  4,672.65  18.11   
 Daily S2  4,692.67  20.01   
 Daily S1  4,709.15  16.49   
 Low  4,713.91  4.76   
 Close  4,725.64  11.73   
 61.8% Down from Intraday High  4,728.32  2.68   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  4,730.40  2.07   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  4,732.77  2.38   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Open  4,735.28  2.50   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,737.23  1.95   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily R1  4,746.88  9.66   
 High  4,751.64  4.76   
 Daily R2  4,768.13  16.49   
 Weekly Pivot  4,793.83  25.70   
 Monthly Pivot  4,811.93  18.11   
 Weekly R1  4,846.81  34.88   
 Monthly R1  4,883.03  36.21   
 Weekly R2  4,967.99  84.96   
 Monthly R2  5,040.41  72.43   

Wednesday 5/4/16. 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.

Last Friday, I posted a chart that showed bearish divergence (on my update page) between the indicator and the index. Please note that I post new pictures there each Friday, so you may not see divergence when I post new pictures.

Bearish divergence suggests the index will follow the indicator lower. That's what has been happening for the last two weeks or so, ever since the index peaked in April.

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, 41% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 40%.
The fewest was 21% on 05/08/2015.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 537 stocks in my database are down an average of 20% from their yearly high.
A week ago, the average was 20%.
The peak was 13% on 05/18/2015.
And the bottom was 32% on 02/11/2016.

This chart shows a slight weakening of momentum among stocks I follow. The little red circle shows where the indicator has turned.

-- Thomas Bulkowski

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Tuesday 5/3/16. Intraday Market Direction: Dow

The index climbed by 0.7% or 117.52 points. Since 10/01/1928 the index made 642 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 290 occasions.
Expect the index to close higher 54.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 114/189 or 60.3% 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.

A nice looking double bottom appears at AB. It's just squiggles on the price chart until the index closes above the red line at C.

That happens in this case and the index makes a nice move higher to hit the measure rule target. The measure rule target is the height of the chart pattern (C - A) added to C.

The green line suggests overhead resistance is going to be a problem on Tuesday. The index could turn down but it depends on what company releases earnings, I think. Clearly, there's a lot of overhead resistance the index has to plow through to break into fresh air (over 200 points).

$ $ $

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  17,097.66    
 Weekly S2  17,443.25  345.59   
 Monthly S1  17,494.41  51.16   
 Weekly S1  17,667.21  172.80   
 Daily S2  17,720.43  53.23   
 Low  17,773.71  53.28   
 Open  17,783.78  10.07   Yes! The Open is close to the Low.
 Daily S1  17,805.80  22.02   
 61.8% Down from Intraday High  17,826.67  20.87   
 Monthly Pivot  17,831.02  4.35   Yes! The Monthly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,843.03  12.01   Yes! The 50% Down from Intraday High is close to the Monthly Pivot.
 Daily Pivot  17,859.07  16.04   
 38.2% Down from Intraday High  17,859.39  0.31   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot  17,875.93  16.54   
 Close  17,891.16  15.23   
 High  17,912.35  21.19   
 Daily R1  17,944.44  32.09   
 Daily R2  17,997.71  53.28   
 Weekly R1  18,099.89  102.17   
 Monthly R1  18,227.77  127.88   
 Weekly R2  18,308.61  80.84   
 Monthly R2  18,564.38  255.77   

Monday 5/2/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

After making a strong push higher not only this year but starting back in December, the Dow utility index has run into trouble recently.

I show the index on the daily chart.

Pictured is a head-and-shoulders top with the left shoulder (L), head (H), and right shoulder (R) shown.

The index broke out downward when it closed below the red neckline (A). I drew the line horizontally from the right armpit because for down-sloping necklines (a line connecting the armpits), a close below the line might never happen.

At B, the index has pulled back to the breakout price and coasted a bit above.

This could mark a pause in the upward trend, which I believe to be correct. But it could also mean the index is going down. That's a real possibility, too, since the utilities have been skittish over the past week. I haven't been able to find the reason for the weakness. It wasn't earnings, either.

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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 26.51 points.
Tuesday: Up 13.08 points.
Wednesday: Up 51.23 points.
Thursday: Down 210.79 points.
Friday: Down 57.12 points.

For the Week...

The Dow industrials were down 230.11 points or 1.3%.
The Nasdaq composite was down 130.87 points or 2.7%.
The S&P 500 index was down 26.28 points or 1.3%.

Year to Date...

Dow Industrials
     2.2% down from the high of 18,167.63 on 04/20/2016.
     15.0% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     3.9% down from the high of 4,969.32 on 04/20/2016.
     13.4% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     2.2% down from the high of 2,111.05 on 04/20/2016.
     14.1% 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
Construction spending10:00 MDCovers residential/non-residential/public spending on new construction.
Auto & truck sales2:00 TC-Monthly sales of domestically produced vehicles.
Productivity & costs8:30 WD+Cost of producing a unit of output.
Trade balance8:30 WC+Signals balance of exports & imports.
Factory orders10:00 WD+Durable/non-durable goods orders w/factory inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Consumer credit3:00 FD-Measures auto, credit card and other debt.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 04/29/2016, the CPI had:

27 bearish patterns,
4 bullish patterns,
177 patterns waiting for breakout.
The CPI signal is 12.9%, which is bearish (<= 35%).

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  17,584  17,679  17,747  17,842  17,910 
Weekly  17,404  17,589  17,837  18,022  18,269 
Monthly  17,058  17,416  17,792  18,149  18,525 
S&P500 (^GSPC): Daily  2,042  2,054  2,064  2,075  2,085 
Weekly  2,025  2,045  2,072  2,093  2,120 
Monthly  1,985  2,025  2,068  2,108  2,151 
Nasdaq (^IXIC): Daily  4,708  4,742  4,775  4,809  4,842 
Weekly  4,636  4,706  4,810  4,880  4,985 
Monthly  4,600  4,688  4,829  4,916  5,057 
  • 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 28.0%   The trend may continue. 
 3 months up 27.6%   The trend may continue. 
 S & P 500 (^GSPC) 1 week down 26.9%   The trend may continue. 
 2 months up 41.1%   Expect a random direction. 
 Nasdaq composite (^IXIC) 2 weeks down 16.9%   Expect a reversal soon. 
 1 month down 26.3%   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 either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
34Head-and-shoulders top
22Triangle, symmetrical
18Pipe bottom
14Double Top, Adam and Adam
8Flag, high and tight
8Triple top
7Triangle, descending
5Broadening top, right-angled and ascending
4Rectangle top
4Double Top, Adam and Eve

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

The 10 types of most frequently appearing chart patterns in the stocks, 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. Medical Supplies
2. Electric Utility (West)2. Metal Fabricating
3. Metal Fabricating3. Cement and Aggregates
4. Metals and Mining (Div.)4. Precision Instrument
5. Cement and Aggregates5. Semiconductor Cap Equip.
50. Homebuilding50. Computer Software and Svcs
51. Biotechnology51. Apparel
52. Insurance (Life)52. Electronics
53. Computers and Peripherals53. Homebuilding
54. Drug54. Short ETFs
55. Securities Brokerage55. Information Services
56. Information Services56. Shoe
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski

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