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

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 05/26/2017
21,080 -2.67 0.0%
9,176 12.36 0.1%
720 -0.08 0.0%
6,210 4.93 0.1%
2,416 0.75 0.0%
YTD
6.7%
1.5%
9.2%
15.4%
7.9%
Tom's Targets    Overview: 05/15/2017
21,400 or 20,450 by 06/01/2017
9,500 or 8,700 by 06/01/2017
730 or 700 by 06/15/2017
6,350 or 6,000 by 06/01/2017
2,450 or 2,375 by 06/15/2017

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

May 2017 Headlines


Archives


Monday 5/29/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily scale.

Buried in the OHLC price chart is an ascending triangle. I show it highlighted in red.

It broke out downward, which ascending triangles do 36% of the time, according to my book, Chart Patterns: After the BuyChart Patterns: After the Buy.

I show a picture of the book on the left in case you want to buy a copy and catch up with the rest of the trading community.

Anyway, this triangle busted, meaning it reversed direction and closed above the top of the triangle.

The same book will tell you that a downward breakout from an ascending triangle busts 44% of the time in stocks on the daily charts. If they single bust (breakout downward, reverse, and keep rising), a perfect trade, traded enough, will average 49%. Wow.

Don't expect the index to rise that far, of course. It could rise farther.

Have a good holiday weekend. I'll catch you on the far side. I'll be working on my giraffe, a wooden sculpture with a fat torso, very long neck (about 30") and modest sized-ears. I'll post a pic of it on my facebook account, like I do most personal stuff, when it's done.

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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 89.99 points.
Tuesday: Up 43.08 points.
Wednesday: Up 74.51 points.
Thursday: Up 70.53 points.
Friday: Down 2.67 points.

For the Week...

The Dow industrials were up 275.44 points or 1.3%.
The Nasdaq composite was up 126.49 points or 2.1%.
The S&P 500 index was up 34.09 points or 1.4%.

Year to Date...

Dow Industrials
     0.4% down from the high of 21,169.11 on 03/01/2017.
     7.1% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.1% down from the high of 6,217.34 on 05/25/2017.
     15.0% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.1% down from the high of 2,418.71 on 05/25/2017.
     7.6% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 05/26/2017, the CPI had:

10 bearish patterns,
33 bullish patterns,
399 patterns waiting for breakout.
The CPI signal is 76.7%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  21,032  21,056  21,075  21,099  21,117 
Weekly  20,765  20,923  21,018  21,175  21,270 
Monthly  20,356  20,718  20,915  21,277  21,474 
S&P500 (^GSPC): Daily  2,410  2,413  2,415  2,418  2,419 
Weekly  2,375  2,396  2,407  2,427  2,439 
Monthly  2,330  2,373  2,396  2,439  2,462 
Nasdaq (^IXIC): Daily  6,191  6,201  6,206  6,216  6,221 
Weekly  6,055  6,133  6,175  6,253  6,295 
Monthly  5,886  6,048  6,133  6,295  6,380 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 42.5%   Expect a random direction. 
 2 months up 39.7%   The trend may continue. 
 S & P 500 (^GSPC) 1 week up 42.4%   Expect a random direction. 
 2 months up 42.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 1 week up 45.5%   Expect a random direction. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
10Double Top, Adam and Adam
9Dead-cat bounce
9Pipe top
7Triangle, symmetrical
6Broadening top
6Double Bottom, Adam and Adam
5Triangle, descending
4Diamond top
4Triple top
4Double Top, Eve and Adam

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

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

 

 

 

 

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

This WeekLast Week
1. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Semiconductor2. Semiconductor
3. Medical Supplies3. Homebuilding
4. Internet4. Computers and Peripherals
5. Precision Instrument5. Medical Services
50. Retail (Special Lines)50. Retail (Special Lines)
51. Retail Store51. Retail Store
52. Trucking/Transp. Leasing52. Oilfield Svcs/Equipment
53. Short ETFs53. Trucking/Transp. Leasing
54. Oilfield Svcs/Equipment54. Petroleum (Producing)
55. Petroleum (Producing)55. Short ETFs
56. Furn/Home Furnishings56. Furn/Home Furnishings
57. Apparel57. Apparel

-- Thomas Bulkowski

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Friday 5/26/17. 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 602 stocks searched, or 1.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 4 bullish chart patterns this week and 4 bearish ones with any remaining (2) 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
AEISChannel      04/29/201605/25/2017Semiconductor
BGHorn bottom      05/01/201705/15/2017Food Processing
GPSBroadening top, right-angled and ascending      01/17/201705/25/2017Apparel
GSOLFlag, high and tight      03/28/201705/25/2017Advertising
IDATriple bottom      05/03/201705/19/2017Electric Utility (West)
IVCTriangle, symmetrical      05/09/201705/24/2017Medical Supplies
JCOMBroadening top, right-angled and ascending      02/16/201705/19/2017Internet
MONTriangle, descending      04/21/201705/25/2017Chemical (Diversified)
OMITriangle, descending      05/09/201705/25/2017Medical Supplies
PANWDiamond top      05/05/201705/25/2017Computer Software and Svcs

 

Weekly screen for chart patterns ending between 05/18/2017 and 05/25/2017. 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: 3 out of 56
Stock RS rank: 25 out of 594
5/25/17 close: $76.79
1 Month avg volatility: $2.09. Volatility stop (for upward breakout): $72.26 or 5.9% below the close.
Change YTD: 40.26%
Volume: 359,000 shares. 3 month avg: 434,757 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: Channel from 04/29/2016 to 05/25/2017

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Bunge Ltd (BG)
Industry: Food Processing
Industry RS rank: 38 out of 56
Stock RS rank: 85 out of 594
5/25/17 close: $83.22
1 Month avg volatility: $2.27. Volatility stop (for upward breakout): $76.90 or 7.6% below the close.
Change YTD: 15.20%
Volume: 2,989,200 shares. 3 month avg: 1,703,466 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: Horn bottom reversal pattern from 05/01/2017 to 05/15/2017
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.

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Gap Inc. (GPS)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 510 out of 594
5/25/17 close: $22.02
1 Month avg volatility: $0.68. Volatility stop (for downward breakout): $23.92 or 8.6% above the close.
Change YTD: -1.87%
Volume: 6,869,300 shares. 3 month avg: 5,813,078 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: Broadening top, right-angled and ascending reversal pattern from 01/17/2017 to 05/25/2017
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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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 33 out of 56
Stock RS rank: 1 out of 594
5/25/17 close: $21.45
1 Month avg volatility: $0.41. Volatility stop (for upward breakout): $20.28 or 5.5% below the close.
Change YTD: 142.37%
Volume: 377,700 shares. 3 month avg: 30,762 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: Flag, high and tight continuation pattern from 03/28/2017 to 05/25/2017
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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IDACORP Inc (IDA)
Industry: Electric Utility (West)
Industry RS rank: 12 out of 56
Stock RS rank: 214 out of 594
5/25/17 close: $86.31
1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $83.39 or 3.4% below the close.
Change YTD: 7.15%
Volume: 125,600 shares. 3 month avg: 203,328 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: Triple bottom reversal pattern from 05/03/2017 to 05/19/2017
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 2 out of 56
Stock RS rank: 67 out of 594
5/25/17 close: $14.65
1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $13.23 or 9.7% below the close.
Change YTD: 12.26%
Volume: 93,700 shares. 3 month avg: 283,832 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/09/2017 to 05/24/2017
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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J2 Global Communications Inc. (JCOM)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 56
Stock RS rank: 223 out of 594
5/25/17 close: $84.89
1 Month avg volatility: $1.74. Volatility stop (for downward breakout): $88.90 or 4.7% above the close.
Change YTD: 3.78%
Volume: 355,300 shares. 3 month avg: 375,692 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 02/16/2017 to 05/19/2017
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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Monsanto Co (MON)
Industry: Chemical (Diversified)
Industry RS rank: 30 out of 56
Stock RS rank: 197 out of 594
5/25/17 close: $116.53
1 Month avg volatility: $0.58. Volatility stop (for downward breakout): $117.73 or 1.0% above the close.
Change YTD: 10.76%
Volume: 831,400 shares. 3 month avg: 2,033,140 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 04/21/2017 to 05/25/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Owens and Minor Inc (OMI)
Industry: Medical Supplies
Industry RS rank: 2 out of 56
Stock RS rank: 447 out of 594
5/25/17 close: $32.17
1 Month avg volatility: $0.53. Volatility stop (for downward breakout): $33.44 or 4.0% above the close.
Change YTD: -8.84%
Volume: 652,100 shares. 3 month avg: 689,768 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, descending reversal pattern from 05/09/2017 to 05/25/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Palto Alto Networks Inc (PANW)
Industry: Computer Software and Svcs
Industry RS rank: 10 out of 56
Stock RS rank: 509 out of 594
5/25/17 close: $117.64
1 Month avg volatility: $2.31. Volatility stop (for downward breakout): $123.99 or 5.4% above the close.
Change YTD: -5.93%
Volume: 1,237,300 shares. 3 month avg: 2,210,932 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: Diamond top reversal pattern from 05/05/2017 to 05/25/2017
WARNING: A dead-cat bounce occurred on 03/01/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/31/2017 and a 38% chance by 08/30/2017.
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Thursday 5/25/17. Intraday Market Direction: Nasdaq

The index climbed by 0.4% or 24.31 points. Since 02/05/1971 the index made 580 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 369 occasions.
     Average loss was -0.7% on 211 occasions.
Expect the index to close higher 63.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 128/223 or 57.4% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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.

Highlighted in red is an ascending triangle. It looks suspiciously like the one we saw in the Dow two days ago. I drew the bottom of the pattern with a thin red line. It helps show that the breakout from this triangle was downward.

Then it busted, setting the stage for a strong rally.

However, being late in the trading session, only a portion of that rally appears on the chart. Meanwhile, the chart pattern indicator has flipped to bearish, erasing a bullish signal from yesterday.

So there you have it. The busted triangle suggests a strong rally will unfold, but the CPI has turned bearish. Maybe that's the difference between short- and long-term signals.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,698.50    
 Monthly S1  5,930.76  232.26   
 Weekly S2  5,936.65  5.89   
 Weekly S1  6,049.83  113.19   
 Monthly Pivot  6,050.46  0.63   Yes! The Monthly Pivot is close to the Weekly S1.
 Weekly Pivot  6,110.00  59.54   
 Daily S2  6,129.39  19.39   
 Low  6,139.33  9.94   
 Daily S1  6,146.20  6.87   
 61.8% Down from Intraday High  6,149.55  3.35   
 50% Down from Intraday High  6,152.71  3.16   
 Open  6,154.18  1.47   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  6,155.87  1.69   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  6,156.15  0.28   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  6,163.02  6.87   
 High  6,166.09  3.07   
 Daily R1  6,172.96  6.87   
 Daily R2  6,182.91  9.94   
 Weekly R1  6,223.18  40.28   
 Monthly R1  6,282.72  59.54   
 Weekly R2  6,283.35  0.63   Yes! The Weekly R2 is close to the Monthly R1.
 Monthly R2  6,402.42  119.07   

Wednesday 5/24/17. A Look At Indicators

Picture of the chart pattern indicator

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

The chart pattern indicator has turned bullish a few days ago, as the green vertical bar on the far right of the chart attests.

If you look at the thin blue indicator line, the signal just barely made it into bullish territory, so it's weak.

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, 25% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 24%.
The fewest was 14% on 12/09/2016.
And the most was 45% on 06/27/2016.
Shown as a blue line on the above chart...
The 504 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 12/09/2016.
And the bottom was 22% on 06/27/2016.

This week, both lines are lower than they were a week ago.

Because the index is peaking near overhead resistance, this weakness could be an early warning of a trend change from up to down, or even just weakness that will take the indices lower for a time.

The red line seems the more sensitive of the two, and easier to see the prevailing trend. The bearish divergence between the red line and the index is startling. It began in late February with a small peak in the red line and continues to this day. That's bearish.

-- Thomas Bulkowski

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Tuesday 5/23/17. Intraday Market Direction: Dow

The index climbed by 0.4% or 89.99 points. Since 10/01/1928 the index made 1059 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 555 occasions.
     Average loss was -0.5% on 504 occasions.
Expect the index to close higher 52.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 137/233 or 58.8% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The industrials didn't move much on Monday.

I show, highlighted in red, an ascending triangle. It's difficult to see because the trading range was narrow.

It has yet to breakout.

Looming above the triangle is resistance, highlighted in green. This was setup by last Monday's and Tuesday's trading, but I extended the green line back in time to see if it highlighted anything else of interest (like catching a peak or valley for additional support/resistance).

If we use price mirrors on the chart, we can expect the index to drop on Tuesday. That will mirror the drop last Thursday, but the drop could be a day later (Wednesday). Monday's move mirrors the move a week ago Friday. I'm not sure how to include last Monday and Tuesday's move. It's possible that we'll move up on Tuesday (mirroring the Monday/Tuesday move) for two days before dropping. Does any of this make sense (cents)?

$ $ $

I released a new version of Patternz which fixes a bug on the update form. Please note: the software won't work with yahoo quotes, only google. The next (coming soon) release will provide another source for stock quotes.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,090.41    
 Weekly S2  20,347.19  256.78   
 Monthly S1  20,492.62  145.43   
 Weekly S1  20,621.01  128.39   
 Monthly Pivot  20,781.76  160.75   
 Weekly Pivot  20,827.27  45.51   
 Daily S2  20,835.65  8.38   
 Low  20,860.16  24.51   
 Daily S1  20,865.24  5.08   Yes! The Daily S1 is close to the Low.
 Open  20,867.77  2.53   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  20,880.83  13.06   
 50% Down from Intraday High  20,887.21  6.38   
 Daily Pivot  20,889.75  2.54   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  20,893.59  3.84   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  20,894.83  1.24   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  20,914.26  19.43   
 Daily R1  20,919.34  5.08   Yes! The Daily R1 is close to the High.
 Daily R2  20,943.85  24.51   
 Weekly R1  21,101.09  157.24   
 Monthly R1  21,183.97  82.88   
 Weekly R2  21,307.35  123.38   
 Monthly R2  21,473.11  165.76   

Monday 5/22/17. Market Monday: The Week Ahead

My Prediction

Picture of the SP 500 on the daily scale.

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

Now that yahoo has discontinued their quote service, I had to manually update this security because google doesn't provide a quote on it either (I'll probably switch to SPX).

Anyway, shown is a potential Adam & Eve double top. Adam refers to a narrow, spike type peak but Eve is more rounded looking and wider.

I consider the two bars at A to be the Adam part and the wider of two weeks before B to be the Eve peak. Yes, it's too subjective and not really to my liking eyeballing such stuff...

There's a slight performance difference between the various combinations of Adam and Eve peaks (and valleys, too, for double bottoms).

This chart pattern hasn't confirmed yet, either. That means it's just squiggles on the price chart until the index closes below C.

With the rebound after the recent plunge two trading days ago, I'm not sure the double top will confirm. Guess we'll have to wait and see.

$ $ $

I'll be working on a new patternz version. A user found a problem with the year when getting google quotes. No, I don't have a fix for yahoo quotes, either. If one becomes available, I'll consider fixing the code.

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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 85.33 points.
Tuesday: Down 2.19 points.
Wednesday: Down 372.82 points.
Thursday: Up 56.09 points.
Friday: Up 141.82 points.

For the Week...

The Dow industrials were down 91.77 points or 0.4%.
The Nasdaq composite was down 37.53 points or 0.6%.
The S&P 500 index was down 9.1699 points or 0.4%.

Year to Date...

Dow Industrials
     1.7% down from the high of 21,169.11 on 03/01/2017.
     5.7% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     1.4% down from the high of 6,170.16 on 05/16/2017.
     12.7% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     1.0% down from the high of 2,405.77 on 05/16/2017.
     6.1% up from the low of 2,245.13 on 01/03/2017.

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 1 of 3 half triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  20,614  20,709  20,783  20,879  20,952 
Weekly  20,317  20,561  20,797  21,041  21,277 
Monthly  20,060  20,433  20,752  21,124  21,443 
S&P500 (^GSPC): Daily  2,362  2,372  2,380  2,390  2,399 
Weekly  2,327  2,354  2,380  2,407  2,433 
Monthly  2,300  2,341  2,373  2,414  2,447 
Nasdaq (^IXIC): Daily  6,051  6,067  6,087  6,103  6,123 
Weekly  5,910  5,997  6,084  6,170  6,257 
Monthly  5,672  5,878  6,024  6,230  6,376 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 16.4%   Expect a reversal soon. 
 1 month down 21.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 15.1%   Expect a reversal soon. 
 1 month down 21.6%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 27.9%   The trend may continue. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
14Double Top, Adam and Adam
10Triangle, symmetrical
10Pipe top
9Dead-cat bounce
7Broadening top
7Triangle, ascending
7Rectangle top
7Double Top, Eve and Adam
4Head-and-shoulders bottom
4Triple 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. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Semiconductor2. Semiconductor
3. Homebuilding3. Electronics
4. Computers and Peripherals4. Computers and Peripherals
5. Medical Services5. Homebuilding
50. Retail (Special Lines)50. Petroleum (Integrated)
51. Retail Store51. Retail Store
52. Oilfield Svcs/Equipment52. Trucking/Transp. Leasing
53. Trucking/Transp. Leasing53. Oilfield Svcs/Equipment
54. Petroleum (Producing)54. Petroleum (Producing)
55. Short ETFs55. Furn/Home Furnishings
56. Furn/Home Furnishings56. Short ETFs
57. Apparel57. Apparel

-- Thomas Bulkowski

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Friday 5/19/17. 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 608 stocks searched, or 2.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEISChannel      04/29/201605/18/2017Semiconductor
ASNADead-cat bounce      05/18/201705/18/2017Apparel
EDTriangle, ascending      05/04/201705/18/2017Electric Utility (East)
CCKDouble Top, Adam and Adam      05/05/201705/15/2017Packaging and Container
CYTriangle, descending      03/06/201705/16/2017Semiconductor
FISVTriangle, ascending      05/03/201705/18/2017IT Services
FORMDouble Top, Adam and Adam      05/05/201705/16/2017Semiconductor
NJRTriangle, symmetrical      04/27/201705/18/2017Natural Gas (Distributor)
OXMHorn top      04/24/201705/08/2017Apparel
POTTriangle, symmetrical      04/21/201705/16/2017Chemical (Diversified)
PCLNPipe top      05/01/201705/08/2017Internet
SHWHead-and-shoulders top      04/28/201705/16/2017Chemical (Basic)
SMRTDead-cat bounce      05/18/201705/18/2017Apparel
VCDouble Top, Adam and Adam      04/28/201705/12/2017Electronics

 

Weekly screen for chart patterns ending between 05/11/2017 and 05/18/2017. 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: 2 out of 56
Stock RS rank: 22 out of 600
5/18/17 close: $76.19
1 Month avg volatility: $2.10. Volatility stop (for upward breakout): $69.11 or 9.3% below the close.
Change YTD: 39.16%
Volume: 490,900 shares. 3 month avg: 436,798 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: Channel from 04/29/2016 to 05/18/2017

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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 598 out of 600
5/18/17 close: $2.06
1 Month avg volatility: $0.21. Volatility stop (for downward breakout): $2.51 or 22.0% above the close.
Change YTD: -66.72%
Volume: 31,495,500 shares. 3 month avg: 3,932,871 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: Dead-cat bounce continuation pattern from 05/18/2017 to 05/18/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Con Edison, Inc (ED)
Industry: Electric Utility (East)
Industry RS rank: 18 out of 56
Stock RS rank: 172 out of 600
5/18/17 close: $79.92
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $77.52 or 3.0% below the close.
Change YTD: 8.47%
Volume: 1,554,400 shares. 3 month avg: 1,589,014 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 05/04/2017 to 05/18/2017
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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Crown Holdings Inc (CCK)
Industry: Packaging and Container
Industry RS rank: 40 out of 56
Stock RS rank: 325 out of 600
5/18/17 close: $55.67
1 Month avg volatility: $0.66. Volatility stop (for downward breakout): $57.44 or 3.2% above the close.
Change YTD: 5.90%
Volume: 716,200 shares. 3 month avg: 846,582 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 05/05/2017 to 05/15/2017
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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Cypress Semiconductor (CY)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 56
Stock RS rank: 86 out of 600
5/18/17 close: $13.13
1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $14.00 or 6.6% above the close.
Change YTD: 14.77%
Volume: 9,926,100 shares. 3 month avg: 7,256,518 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, descending reversal pattern from 03/06/2017 to 05/16/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Fiserv, Inc (FISV)
Industry: IT Services
Industry RS rank: 29 out of 56
Stock RS rank: 143 out of 600
5/18/17 close: $120.04
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $116.19 or 3.2% below the close.
Change YTD: 12.95%
Volume: 716,900 shares. 3 month avg: 879,248 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 05/03/2017 to 05/18/2017
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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FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 2 out of 56
Stock RS rank: 105 out of 600
5/18/17 close: $13.20
1 Month avg volatility: $0.55. Volatility stop (for downward breakout): $14.39 or 9.1% above the close.
Change YTD: 17.86%
Volume: 1,027,100 shares. 3 month avg: 534,843 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 05/05/2017 to 05/16/2017
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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New Jersey Resources Corp (NJR)
Industry: Natural Gas (Distributor)
Industry RS rank: 31 out of 56
Stock RS rank: 135 out of 600
5/18/17 close: $40.25
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $38.65 or 4.0% below the close.
Change YTD: 13.38%
Volume: 431,000 shares. 3 month avg: 455,732 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/27/2017 to 05/18/2017
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Oxford Industries (OXM)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 563 out of 600
5/18/17 close: $53.63
1 Month avg volatility: $1.44. Volatility stop (for downward breakout): $56.98 or 6.3% above the close.
Change YTD: -10.81%
Volume: 153,400 shares. 3 month avg: 185,932 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 top reversal pattern from 04/24/2017 to 05/08/2017
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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Potash Corp of Saskatchewan Inc. (POT)
Industry: Chemical (Diversified)
Industry RS rank: 30 out of 56
Stock RS rank: 491 out of 600
5/18/17 close: $15.89
1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $15.18 or 4.5% below the close.
Change YTD: -12.16%
Volume: 5,376,700 shares. 3 month avg: 5,354,382 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 04/21/2017 to 05/16/2017
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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Priceline.com (PCLN)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 112 out of 600
5/18/17 close: $1,796.03
1 Month avg volatility: $24.45. Volatility stop (for downward breakout): $1,863.06 or 3.7% above the close.
Change YTD: 22.51%
Volume: 502,500 shares. 3 month avg: 460,006 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 05/01/2017 to 05/08/2017
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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Sherwin-Williams Co (SHW)
Industry: Chemical (Basic)
Industry RS rank: 24 out of 56
Stock RS rank: 66 out of 600
5/18/17 close: $331.22
1 Month avg volatility: $4.04. Volatility stop (for downward breakout): $340.79 or 2.9% above the close.
Change YTD: 23.25%
Volume: 702,200 shares. 3 month avg: 525,235 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 04/28/2017 to 05/16/2017
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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Stein Mart Inc. (SMRT)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 600 out of 600
5/18/17 close: $1.13
1 Month avg volatility: $0.15. Volatility stop (for downward breakout): $1.65 or 46.3% above the close.
Change YTD: -79.38%
Volume: 6,864,600 shares. 3 month avg: 726,717 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 05/18/2017 to 05/18/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Visteon Corp (VC)
Industry: Electronics
Industry RS rank: 8 out of 56
Stock RS rank: 62 out of 600
5/18/17 close: $99.90
1 Month avg volatility: $2.24. Volatility stop (for downward breakout): $104.80 or 4.9% above the close.
Change YTD: 24.35%
Volume: 360,700 shares. 3 month avg: 379,308 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 04/28/2017 to 05/12/2017
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 5/18/17. Intraday Market Direction: Nasdaq

The index dropped by -2.6% or -158.63 points. Since 02/05/1971 the index made 31 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.4% on 19 occasions.
     Average loss was -1.5% on 12 occasions.
Expect the index to close higher 61.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 127/222 or 57.2% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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.

As the picture shows, WOW!

I didn't know this was going to happen either, but at least I thought the market outlook was bearish (see yesterday's post). Let me be clear: this drop hurt.

A double top appears last week at DE. This confirmed when the index closed below the horizontal blue line. It also fulfilled the measure rule, which in this case is the height of the chart pattern subtracted from the value of the blue line by bottoming at F.

Today's (Wednesday's) slide, shows what an ABC correction looks like.

After trending higher, price drops in leg A, recovers a portion of that drop to B, followed by a resumption of the down move in leg C.

As you can see, another up and down move happens after C. That could mean the ABC correction is really a motive wave down.

What does that mean?

The 8 wave cycle when the primary trend is downward.

A motive wave is an Elliott wave term and it means price drops in a stair-step fashion of three drops and two rises.

I show an example of a motive wave down in the chart. Legs 1 through 5 is the motive wave followed by a bullish ABC correction.

It suggests but does not guarantee that we'll see the markets recover soon, maybe as soon as Thursday. Just don't expect all of your losses to be recovered in one session.

Also note that the above probabilities suggest a higher close on Thursday (61% of the time). Again, no guarantee but maybe this is a shopping opportunity (buy the dip)?

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,655.28    
 Monthly S1  5,833.26  177.98   
 Daily S2  5,934.47  101.21   
 Daily S1  5,972.86  38.38   
 Monthly Pivot  5,983.13  10.27   Yes! The Monthly Pivot is close to the Daily S1.
 Low  6,009.48  26.35   
 Close  6,011.24  1.76   Yes! The Close is close to the Low.
 Weekly S1  6,013.61  2.37   Yes! The Weekly S1 is close to the Close.
 Weekly S2  6,015.99  2.37   Yes! The Weekly S2 is close to the Weekly S1.
 Daily Pivot  6,047.86  31.88   
 61.8% Down from Intraday High  6,052.79  4.93   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  6,066.17  13.38   
 Weekly R1  6,070.93  4.76   Yes! The Weekly R1 is close to the 50% Down from Intraday High.
 Weekly Pivot  6,073.31  2.37   Yes! The Weekly Pivot is close to the Weekly R1.
 38.2% Down from Intraday High  6,079.56  6.25   Yes! The 38.2% Down from Intraday High is close to the Weekly Pivot.
 Daily R1  6,086.25  6.69   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  6,108.62  22.37   
 High  6,122.87  14.25   
 Weekly R2  6,130.63  7.76   Yes! The Weekly R2 is close to the High.
 Monthly R1  6,161.11  30.48   
 Daily R2  6,161.25  0.14   Yes! The Daily R2 is close to the Monthly R1.
 Monthly R2  6,310.98  149.73   

Wednesday 5/17/17. 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 was red yesterday but it disappeared today (really a Monday-Tuesday comparison), leaving a green signal on the chart.

That's bullish. However, there is bearish divergence showing (see the diverging red lines on the far right of the chart). That means the indicator is trending down even as the market rises. The theory says that the market often follows the indicator lower.

The Dow futures this morning are down 161, suggesting a bad day for the indices, at least at the open.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Friday, 25% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 24%.
The fewest was 14% on 12/09/2016.
And the most was 45% on 06/27/2016.
Shown as a blue line on the above chart...
The 505 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 12%.
The peak was 9% on 12/09/2016.
And the bottom was 22% on 06/27/2016.

Both lines this week show a deteriorating market, meaning it has turned more bearish.

$ $ $

Patternz users: It appears that yahoo has stopped offering free quotes, so the patternz program won't work with yahoo as the source during updates. Try switching to google.

-- Thomas Bulkowski

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

The index climbed by 0.4% or 85.33 points. Since 10/01/1928 the index made 1058 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 555 occasions.
     Average loss was -0.5% on 503 occasions.
Expect the index to close higher 52.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 137/232 or 59.1% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The red line (b) is a trendline connecting the highest high to the lowest low such that price does not cross the line until after the lowest low.

It shows the index breaking through the trendline last Thursday only to settle back and coast lower to A. At A, the index zipped higher.

Yesterday (Monday), the index formed a potential head-and-shoulders top (LHR). This is only a potential one because the index has not closed below the blue neckline.

The neckline joins the two armpits. Dow futures this morning are slightly positive (36 points), indicating a bullish but weak open. It's possible the head-and-shoulders will confirm and the index will drop. The above probabilities say that's unlikely.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,119.45    
 Monthly S1  20,550.69  431.25   
 Weekly S2  20,694.61  143.92   
 Monthly Pivot  20,810.80  116.18   
 Weekly S1  20,838.28  27.48   
 Daily S2  20,891.60  53.32   
 Low  20,923.63  32.03   
 Open  20,923.63  0.00   Yes! The Open is close to the Low.
 Daily S1  20,936.77  13.14   
 Weekly Pivot  20,942.56  5.79   Yes! The Weekly Pivot is close to the Daily S1.
 61.8% Down from Intraday High  20,953.12  10.56   
 50% Down from Intraday High  20,962.23  9.11   
 Daily Pivot  20,968.80  6.57   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  20,971.34  2.54   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  20,981.94  10.60   
 High  21,000.83  18.89   
 Daily R1  21,013.97  13.14   
 Daily R2  21,046.00  32.03   
 Weekly R1  21,086.23  40.23   
 Weekly R2  21,190.51  104.29   
 Monthly R1  21,242.04  51.53   
 Monthly R2  21,502.15  260.10   

Monday 5/15/17. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

I show a picture of the Nasdaq composite on the daily scale.

At first glance, I didn't see anything worth discussing really, so I had to search.

I found a diamond top, outlined here in red, but that chart pattern ended about a month ago.

The index made a strong upward breakout. Now, the chart pattern indicator is signaling weakness and the index looks tired, too.

I have a feeling that the markets will drop in the coming week. It's just a feeling, though, and I'm frequently wrong about that.

 

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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 5.34 points.
Tuesday: Down 36.5 points.
Wednesday: Down 32.67 points.
Thursday: Down 23.69 points.
Friday: Down 22.81 points.

For the Week...

The Dow industrials were down 110.33 points or 0.5%.
The Nasdaq composite was up 20.47 points or 0.3%.
The S&P 500 index was down 8.3901 points or 0.3%.

Year to Date...

Dow Industrials
     1.3% down from the high of 21,169.11 on 03/01/2017.
     6.2% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.2% down from the high of 6,133.00 on 05/09/2017.
     13.4% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.5% down from the high of 2,403.87 on 05/09/2017.
     6.5% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 05/12/2017, the CPI had:

42 bearish patterns,
7 bullish patterns,
323 patterns waiting for breakout.
The CPI signal is 14.3%, 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  20,848  20,872  20,894  20,919  20,941 
Weekly  20,666  20,781  20,914  21,029  21,162 
Monthly  20,091  20,494  20,782  21,185  21,474 
S&P500 (^GSPC): Daily  2,385  2,388  2,390  2,393  2,395 
Weekly  2,370  2,380  2,392  2,403  2,414 
Monthly  2,300  2,345  2,375  2,420  2,449 
Nasdaq (^IXIC): Daily  6,099  6,110  6,116  6,128  6,134 
Weekly  6,053  6,087  6,110  6,144  6,167 
Monthly  5,692  5,907  6,020  6,234  6,348 
  • 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 28.7%   The trend may continue. 
 1 month down 21.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.4%   The trend may continue. 
 2 months up 42.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 4 weeks up 21.4%   Expect a reversal soon. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
14Pipe bottom
13Triangle, symmetrical
10Rectangle top
9Broadening top
9Double Bottom, Adam and Adam
8Double Bottom, Adam and Eve
8Double Top, Adam and Adam
7Head-and-shoulders bottom
7Dead-cat bounce
6Pipe 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. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Semiconductor2. Electronics
3. Electronics3. Medical Services
4. Computers and Peripherals4. Semiconductor
5. Homebuilding5. Computers and Peripherals
50. Petroleum (Integrated)50. Natural Gas (Diversified)
51. Retail Store51. Furn/Home Furnishings
52. Trucking/Transp. Leasing52. Food Processing
53. Oilfield Svcs/Equipment53. Petroleum (Integrated)
54. Petroleum (Producing)54. Oilfield Svcs/Equipment
55. Furn/Home Furnishings55. Apparel
56. Short ETFs56. Petroleum (Producing)
57. Apparel57. Short ETFs

-- Thomas Bulkowski

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Friday 5/12/17. 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 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 608 stocks searched, or 2.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 4 bullish chart patterns this week and 8 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
AEISChannel      04/29/201605/11/2017Semiconductor
ALKFalling wedge      03/22/201705/11/2017Air Transport
ARCBDead-cat bounce      05/05/201705/05/2017Trucking/Transp. Leasing
ATOBroadening top      04/07/201705/08/2017Natural Gas (Diversified)
BMRNPipe top      04/24/201705/01/2017Biotechnology
CHKPBroadening top      03/24/201705/08/2017E-Commerce
DUKTriangle, symmetrical      03/20/201705/11/2017Electric Utility (East)
GESDouble Top, Eve and Adam      04/26/201705/10/2017Apparel
HAYNPipe top      04/24/201705/01/2017Building Materials
IPIFlag, high and tight      03/16/201705/11/2017Chemical (Diversified)
JKHYDiamond top      04/26/201705/10/2017IT Services
REVDead-cat bounce      05/05/201705/05/2017Toiletries/Cosmetics
SAIAPipe top      04/24/201705/01/2017Trucking/Transp. Leasing
TREXPipe top      04/24/201705/01/2017Building Materials
WWWTriple bottom      04/05/201705/05/2017Shoe
EWWDiamond top      03/28/201705/11/2017Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 05/04/2017 and 05/11/2017. 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: 2 out of 56
Stock RS rank: 11 out of 600
5/11/17 close: $78.65
1 Month avg volatility: $1.90. Volatility stop (for upward breakout): $73.62 or 6.4% below the close.
Change YTD: 43.65%
Volume: 345,500 shares. 3 month avg: 429,935 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: Channel from 04/29/2016 to 05/11/2017

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Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 36 out of 56
Stock RS rank: 223 out of 600
5/11/17 close: $83.65
1 Month avg volatility: $1.69. Volatility stop (for upward breakout): $78.99 or 5.6% below the close.
Change YTD: -5.73%
Volume: 1,802,700 shares. 3 month avg: 1,432,771 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Falling wedge from 03/22/2017 to 05/11/2017
Breakout is upward 68% of the time.
Average rise: 32%.
Break-even failure rate: 11%.
Throwbacks occur 56% of the time.
Price hits measure rule target 70% of the time.

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ArcBest Corp (ARCB)
Industry: Trucking/Transp. Leasing
Industry RS rank: 50 out of 56
Stock RS rank: 589 out of 600
5/11/17 close: $18.10
1 Month avg volatility: $1.02. Volatility stop (for downward breakout): $20.34 or 12.4% above the close.
Change YTD: -34.54%
Volume: 333,500 shares. 3 month avg: 222,142 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/05/2017 to 05/05/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Atmos Energy Corp (ATO)
Industry: Natural Gas (Diversified)
Industry RS rank: 51 out of 56
Stock RS rank: 267 out of 600
5/11/17 close: $80.79
1 Month avg volatility: $1.00. Volatility stop (for downward breakout): $82.82 or 2.5% above the close.
Change YTD: 8.95%
Volume: 332,600 shares. 3 month avg: 374,502 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: Broadening top reversal pattern from 04/07/2017 to 05/08/2017
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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BioMarin Pharmaceutical Inc (BMRN)
Industry: Biotechnology
Industry RS rank: 43 out of 56
Stock RS rank: 481 out of 600
5/11/17 close: $89.31
1 Month avg volatility: $2.46. Volatility stop (for downward breakout): $95.14 or 6.5% above the close.
Change YTD: 7.81%
Volume: 750,900 shares. 3 month avg: 1,157,152 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 04/24/2017 to 05/01/2017
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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Check Point Software (CHKP)
Industry: E-Commerce
Industry RS rank: 26 out of 56
Stock RS rank: 98 out of 600
5/11/17 close: $105.72
1 Month avg volatility: $1.30. Volatility stop (for downward breakout): $108.92 or 3.0% above the close.
Change YTD: 25.17%
Volume: 633,600 shares. 3 month avg: 1,000,066 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top reversal pattern from 03/24/2017 to 05/08/2017
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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Duke Energy Corp (DUK)
Industry: Electric Utility (East)
Industry RS rank: 40 out of 56
Stock RS rank: 354 out of 600
5/11/17 close: $83.00
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $80.55 or 3.0% below the close.
Change YTD: 6.93%
Volume: 2,362,000 shares. 3 month avg: 2,891,335 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 03/20/2017 to 05/11/2017
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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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 55 out of 56
Stock RS rank: 580 out of 600
5/11/17 close: $10.93
1 Month avg volatility: $0.29. Volatility stop (for downward breakout): $12.13 or 11.0% above the close.
Change YTD: -9.67%
Volume: 1,147,000 shares. 3 month avg: 1,594,122 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 04/26/2017 to 05/10/2017
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Haynes International Inc. (HAYN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 15 out of 56
Stock RS rank: 472 out of 600
5/11/17 close: $36.22
1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $39.99 or 10.4% above the close.
Change YTD: -15.75%
Volume: 100,800 shares. 3 month avg: 78,277 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 04/24/2017 to 05/01/2017
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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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 33 out of 56
Stock RS rank: 1 out of 600
5/11/17 close: $2.36
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $1.95 or 17.3% below the close.
Change YTD: 13.46%
Volume: 2,160,100 shares. 3 month avg: 1,776,568 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 03/16/2017 to 05/11/2017
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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Jack Henry and Associates (JKHY)
Industry: IT Services
Industry RS rank: 27 out of 56
Stock RS rank: 199 out of 600
5/11/17 close: $96.65
1 Month avg volatility: $1.26. Volatility stop (for downward breakout): $99.92 or 3.4% above the close.
Change YTD: 8.86%
Volume: 398,300 shares. 3 month avg: 269,942 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: Diamond top reversal pattern from 04/26/2017 to 05/10/2017
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Revlon Inc (REV)
Industry: Toiletries/Cosmetics
Industry RS rank: 41 out of 56
Stock RS rank: 586 out of 600
5/11/17 close: $20.95
1 Month avg volatility: $0.78. Volatility stop (for downward breakout): $22.72 or 8.4% above the close.
Change YTD: -28.13%
Volume: 201,800 shares. 3 month avg: 158,246 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/05/2017 to 05/05/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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SAIA Inc (SAIA)
Industry: Trucking/Transp. Leasing
Industry RS rank: 50 out of 56
Stock RS rank: 303 out of 600
5/11/17 close: $43.65
1 Month avg volatility: $1.30. Volatility stop (for downward breakout): $46.76 or 7.1% above the close.
Change YTD: -1.13%
Volume: 99,700 shares. 3 month avg: 174,391 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 04/24/2017 to 05/01/2017
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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Trex Company (TREX)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 15 out of 56
Stock RS rank: 314 out of 600
5/11/17 close: $64.92
1 Month avg volatility: $2.03. Volatility stop (for downward breakout): $69.25 or 6.7% above the close.
Change YTD: 0.81%
Volume: 209,500 shares. 3 month avg: 266,018 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 04/24/2017 to 05/01/2017
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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Wolverine World Wide (WWW)
Industry: Shoe
Industry RS rank: 42 out of 56
Stock RS rank: 204 out of 600
5/11/17 close: $25.11
1 Month avg volatility: $0.58. Volatility stop (for upward breakout): $23.45 or 6.6% below the close.
Change YTD: 14.40%
Volume: 1,332,200 shares. 3 month avg: 822,460 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: Triple bottom reversal pattern from 04/05/2017 to 05/05/2017
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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MSCI Mexico Investable Mkt idx (EWW)
Industry: Investment Co. (Foreign)
Industry RS rank: 25 out of 56
Stock RS rank: 344 out of 600
5/11/17 close: $52.02
1 Month avg volatility: $0.66. Volatility stop (for downward breakout): $53.43 or 2.7% above the close.
Change YTD: 18.31%
Volume: 1,279,600 shares. 3 month avg: 3,093,717 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond top reversal pattern from 03/28/2017 to 05/11/2017
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Thursday 5/11/17. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 8.55 points. Since 02/05/1971 the index made 657 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 365 occasions.
     Average loss was -0.8% on 292 occasions.
Expect the index to close higher 55.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 127/221 or 57.5% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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 shows a potential double top at AB.

I write 'potential' because it's not a valid double top until price confirms it. Confirmation happens when the index closes below C. That hasn't happened yet.

What does this mean for tomorrow's (Thursday's) trading?

I think the chart shows resistance, so my guess is the index will drop. It might not go down far enough to confirm the double top, but it's something to look for.

Two days ago (DE), there was a similar situation. The index gapped up higher at the open, never confirming DE as a double top. So if you're bullish, that could happen this time, too.

Check the futures before the market open to see which scenario is likely to unfold.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,714.77    
 Monthly S1  5,921.95  207.19   
 Monthly Pivot  6,012.34  90.38   
 Weekly S2  6,045.61  33.27   
 Weekly S1  6,087.37  41.77   
 Daily S2  6,093.78  6.41   
 Weekly Pivot  6,095.05  1.27   Yes! The Weekly Pivot is close to the Daily S2.
 Low  6,103.87  8.82   
 Daily S1  6,111.46  7.59   
 61.8% Down from Intraday High  6,114.48  3.02   
 50% Down from Intraday High  6,117.75  3.28   
 38.2% Down from Intraday High  6,121.03  3.28   
 Daily Pivot  6,121.55  0.52   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Open  6,121.64  0.09   Yes! The Open is close to the Daily Pivot.
 Close  6,129.14  7.50   
 High  6,131.64  2.50   Yes! The High is close to the Close.
 Weekly R1  6,136.81  5.17   
 Daily R1  6,139.23  2.42   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2  6,144.49  5.26   
 Daily R2  6,149.32  4.83   
 Monthly R1  6,219.52  70.20   
 Monthly R2  6,309.91  90.38   

Wednesday 5/10/17. 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 (the thin blue line) shows bearish divergence with the index. I show that with magenta lines at A.

That means the index will likely follow the indicator down but it's not a guarantee. Clearly, though, the market "structure" (whatever that means) is weakening.

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, 24% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 22%.
The fewest was 14% on 12/09/2016.
And the most was 45% on 06/27/2016.
Shown as a blue line on the above chart...
The 505 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 12%.
The peak was 9% on 12/09/2016.
And the bottom was 22% on 06/27/2016.

The red line, the one that shows the number of stocks in my database down more than 20%, continues trending down. This past period, it made a sharp, two point drop.

The blue line also dropped, although that's hard to see on the chart. Both of the lines plus a weak CPI reading suggests the index is going lower. However, the Dow futures are off just 27 points this morning (about 45 minutes before the open on Wednesday). Usually triple digit moves tend to last. A 27 point drop is a yawn.

-- Thomas Bulkowski

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Tuesday 5/9/17. Intraday Market Direction: Dow

The index climbed by 0.0% or 5.34 points. Since 10/01/1928 the index made 1258 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 668 occasions.
     Average loss was -0.6% on 590 occasions.
Expect the index to close higher 53.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 137/231 or 59.3% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The image reminds me of a cup with handle pattern. The cup I highlight in red, A, as a gentle rounded turn.

The handle is less well defined but I show what I believe is the handle in green (B).

Together, they suggest an upward move today. Indeed, the futures are up 15 minutes before the open, but it won't be a strong open (the number is like 32). The above probabilities suggest a higher close today, too.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,129.56    
 Monthly S1  20,570.92  441.36   
 Weekly S2  20,796.73  225.81   
 Monthly Pivot  20,820.91  24.18   
 Weekly S1  20,904.51  83.60   
 Daily S2  20,953.57  49.06   
 Weekly Pivot  20,955.72  2.16   Yes! The Weekly Pivot is close to the Daily S2.
 Low  20,971.05  15.33   
 Daily S1  20,982.92  11.87   
 61.8% Down from Intraday High  20,988.94  6.02   
 Open  20,991.26  2.32   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  20,994.47  3.21   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  21,000.00  5.53   
 Daily Pivot  21,000.41  0.41   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  21,012.28  11.87   
 High  21,017.89  5.61   
 Daily R1  21,029.76  11.87   
 Daily R2  21,047.25  17.48   
 Weekly R1  21,063.50  16.25   
 Weekly R2  21,114.71  51.22   
 Monthly R1  21,262.27  147.56   
 Monthly R2  21,512.26  249.99   

Monday 5/8/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily scale. Yes, it's true.

No identifiable patterns appear to guide how the markets might move in the coming week.

However, a potential double top appears at red line A.

Why is it a potential one instead of an actual double top?

The answer is because price hasn't closed below the lowest price between the two tops. Graphically, that means the index has to close below the blue line at B.

Note that a pullback or handle to the double top appears at C. This shallow dip could mean an upward breakout will occur. I don't know if that's true but I think it's like a partial decline. Those tend to predict upward breakouts, so I'm hopeful for a bullish move.

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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 27.05 points.
Tuesday: Up 36.43 points.
Wednesday: Up 8.01 points.
Thursday: Down 6.43 points.
Friday: Up 55.47 points.

For the Week...

The Dow industrials were up 66.43 points or 0.3%.
The Nasdaq composite was up 53.15 points or 0.9%.
The S&P 500 index was up 15.09 points or 0.6%.

Year to Date...

Dow Industrials
     0.8% down from the high of 21,169.11 on 03/01/2017.
     6.8% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.0% down from the high of 6,102.72 on 05/02/2017.
     13.0% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.1% down from the high of 2,400.98 on 03/01/2017.
     6.9% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 05/05/2017, the CPI had:

13 bearish patterns,
19 bullish patterns,
300 patterns waiting for breakout.
The CPI signal is 59.4%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  20,871  20,939  20,973  21,041  21,075 
Weekly  20,795  20,901  20,954  21,060  21,113 
Monthly  20,128  20,567  20,819  21,259  21,510 
S&P500 (^GSPC): Daily  2,386  2,393  2,396  2,403  2,406 
Weekly  2,373  2,386  2,393  2,406  2,412 
Monthly  2,306  2,352  2,376  2,423  2,446 
Nasdaq (^IXIC): Daily  6,056  6,078  6,090  6,112  6,123 
Weekly  6,036  6,068  6,086  6,118  6,135 
Monthly  5,705  5,903  6,003  6,201  6,300 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks up 22.6%   Expect a reversal soon. 
 2 months up 39.7%   The trend may continue. 
 S & P 500 (^GSPC) 3 weeks up 23.0%   Expect a reversal soon. 
 2 months up 42.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 27.4%   The trend may continue. 
 7 months up 3.3%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
15Triangle, symmetrical
13Pipe bottom
10Rectangle top
9Head-and-shoulders bottom
9Double Bottom, Adam and Eve
9Double Bottom, Adam and Adam
8Double Top, Adam and Adam
8Triangle, descending
6Triangle, ascending
5Broadening 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. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Electronics2. Electronics
3. Medical Services3. Human Resources
4. Semiconductor4. Building Materials
5. Computers and Peripherals5. Homebuilding
50. Natural Gas (Diversified)50. Petroleum (Integrated)
51. Furn/Home Furnishings51. Toiletries/Cosmetics
52. Food Processing52. Natural Gas (Diversified)
53. Petroleum (Integrated)53. Furn/Home Furnishings
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment
55. Apparel55. Apparel
56. Petroleum (Producing)56. Petroleum (Producing)
57. Short ETFs57. Short ETFs

-- Thomas Bulkowski

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Friday 5/5/17. 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 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 609 stocks searched, or 3.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 7 bearish ones with any remaining (6) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEISChannel      04/29/201605/04/2017Semiconductor
AMDDead-cat bounce      05/02/201705/02/2017Semiconductor
AEEBroadening top      04/04/201705/02/2017Electric Utility (Central)
ARWDouble Bottom, Adam and Adam      04/13/201705/01/2017Electronics
AVPDead-cat bounce      05/04/201705/04/2017Toiletries/Cosmetics
CGIDead-cat bounce      05/02/201705/02/2017Trucking/Transp. Leasing
CXDouble Top, Eve and Adam      04/05/201705/02/2017Cement and Aggregates
CVXChannel      12/12/201605/04/2017Petroleum (Integrated)
CHSDiamond bottom      03/08/201705/01/2017Apparel
DUKTriangle, symmetrical      03/20/201705/04/2017Electric Utility (East)
KELYABroadening bottom      02/10/201704/28/2017Human Resources
MTRXDead-cat bounce      04/28/201705/04/2017Oilfield Svcs/Equipment
OTEXRectangle top      01/25/201705/04/2017E-Commerce
OMIBroadening top, right-angled and descending      03/27/201705/01/2017Medical Supplies
PANWDouble Bottom, Adam and Eve      04/05/201704/28/2017Computer Software and Svcs
PDLIRectangle bottom      12/02/201605/04/2017Biotechnology
TUESDead-cat bounce      05/04/201705/04/2017Retail Store
WLKTriple top      03/17/201705/02/2017Chemical (Basic)
THDTriangle, descending      04/06/201705/04/2017Investment Co. (Foreign)
XLKBroadening top, right-angled and ascending      02/24/201705/02/2017Investment Co. (Domestic)

 

Weekly screen for chart patterns ending between 04/27/2017 and 05/04/2017. 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: 5 out of 56
Stock RS rank: 24 out of 601
5/4/17 close: $74.29
1 Month avg volatility: $1.82. Volatility stop (for upward breakout): $69.10 or 7.0% below the close.
Change YTD: 35.69%
Volume: 470,700 shares. 3 month avg: 458,105 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: Channel from 04/29/2016 to 05/04/2017

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Advanced Micro Devices, Inc (AMD)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 5 out of 56
Stock RS rank: 27 out of 601
5/4/17 close: $10.10
1 Month avg volatility: $0.50. Volatility stop (for downward breakout): $11.55 or 14.4% above the close.
Change YTD: -10.93%
Volume: 76,926,200 shares. 3 month avg: 74,071,468 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: Dead-cat bounce continuation pattern from 05/02/2017 to 05/02/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Ameren (AEE)
Industry: Electric Utility (Central)
Industry RS rank: 40 out of 56
Stock RS rank: 327 out of 601
5/4/17 close: $54.81
1 Month avg volatility: $0.66. Volatility stop (for downward breakout): $56.17 or 2.5% above the close.
Change YTD: 4.48%
Volume: 1,469,500 shares. 3 month avg: 1,565,831 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 04/04/2017 to 05/02/2017
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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Arrow Electronics (ARW)
Industry: Electronics
Industry RS rank: 2 out of 56
Stock RS rank: 172 out of 601
5/4/17 close: $75.25
1 Month avg volatility: $1.26. Volatility stop (for upward breakout): $70.16 or 6.8% below the close.
Change YTD: 5.54%
Volume: 1,093,800 shares. 3 month avg: 599,282 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 04/13/2017 to 05/01/2017
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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Avon Products (AVP)
Industry: Toiletries/Cosmetics
Industry RS rank: 48 out of 56
Stock RS rank: 598 out of 601
5/4/17 close: $3.62
1 Month avg volatility: $0.20. Volatility stop (for downward breakout): $4.64 or 28.3% above the close.
Change YTD: -28.17%
Volume: 26,115,000 shares. 3 month avg: 6,656,729 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/04/2017 to 05/04/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Celadon Group Inc. (CGI)
Industry: Trucking/Transp. Leasing
Industry RS rank: 33 out of 56
Stock RS rank: 601 out of 601
5/4/17 close: $1.65
1 Month avg volatility: $0.53. Volatility stop (for downward breakout): $2.80 or 69.8% above the close.
Change YTD: -76.92%
Volume: 3,309,200 shares. 3 month avg: 1,003,486 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 05/02/2017 to 05/02/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Cemex SA de CV (CX)
Industry: Cement and Aggregates
Industry RS rank: 17 out of 56
Stock RS rank: 466 out of 601
5/4/17 close: $8.60
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $9.38 or 9.1% above the close.
Change YTD: 7.10%
Volume: 8,727,500 shares. 3 month avg: 9,432,885 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 Adam reversal pattern from 04/05/2017 to 05/02/2017
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Chevron Corp (CVX)
Industry: Petroleum (Integrated)
Industry RS rank: 50 out of 56
Stock RS rank: 485 out of 601
5/4/17 close: $104.81
1 Month avg volatility: $1.46. Volatility stop (for upward breakout): $101.23 or 3.4% below the close.
Change YTD: -10.95%
Volume: 8,025,500 shares. 3 month avg: 6,409,528 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: Channel from 12/12/2016 to 05/04/2017

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Chicos FAS Inc. (CHS)
Industry: Apparel
Industry RS rank: 54 out of 56
Stock RS rank: 243 out of 601
5/4/17 close: $13.52
1 Month avg volatility: $0.38. Volatility stop (for upward breakout): $12.73 or 5.8% below the close.
Change YTD: -6.05%
Volume: 2,265,900 shares. 3 month avg: 2,486,948 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Diamond bottom reversal pattern from 03/08/2017 to 05/01/2017
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Duke Energy Corp (DUK)
Industry: Electric Utility (East)
Industry RS rank: 47 out of 56
Stock RS rank: 423 out of 601
5/4/17 close: $82.59
1 Month avg volatility: $0.74. Volatility stop (for upward breakout): $80.39 or 2.7% below the close.
Change YTD: 6.40%
Volume: 2,110,400 shares. 3 month avg: 2,943,235 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 03/20/2017 to 05/04/2017
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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Kelly Services A (KELYA)
Industry: Human Resources
Industry RS rank: 3 out of 56
Stock RS rank: 260 out of 601
5/4/17 close: $22.02
1 Month avg volatility: $0.49. Volatility stop (for upward breakout): $20.77 or 5.7% below the close.
Change YTD: -3.93%
Volume: 71,300 shares. 3 month avg: 112,772 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening bottom reversal pattern from 02/10/2017 to 04/28/2017
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Matrix Service Co. (MTRX)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 56
Stock RS rank: 596 out of 601
5/4/17 close: $10.50
1 Month avg volatility: $0.68. Volatility stop (for downward breakout): $12.32 or 17.3% above the close.
Change YTD: -53.74%
Volume: 337,400 shares. 3 month avg: 234,503 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 04/28/2017 to 05/04/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Open Text Corp (OTEX)
Industry: E-Commerce
Industry RS rank: 39 out of 56
Stock RS rank: 301 out of 601
5/4/17 close: $34.50
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $33.47 or 3.0% below the close.
Change YTD: 11.63%
Volume: 380,500 shares. 3 month avg: 501,495 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 01/25/2017 to 05/04/2017
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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Owens and Minor Inc (OMI)
Industry: Medical Supplies
Industry RS rank: 19 out of 56
Stock RS rank: 476 out of 601
5/4/17 close: $33.07
1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $31.76 or 4.0% below the close.
Change YTD: -6.29%
Volume: 859,000 shares. 3 month avg: 731,020 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 03/27/2017 to 05/01/2017
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

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Palto Alto Networks Inc (PANW)
Industry: Computer Software and Svcs
Industry RS rank: 31 out of 56
Stock RS rank: 577 out of 601
5/4/17 close: $115.64
1 Month avg volatility: $2.07. Volatility stop (for upward breakout): $109.20 or 5.6% below the close.
Change YTD: -7.52%
Volume: 2,368,700 shares. 3 month avg: 2,146,351 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: Double Bottom, Adam and Eve reversal pattern from 04/05/2017 to 04/28/2017
WARNING: A dead-cat bounce occurred on 03/01/2017. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/31/2017 and a 38% chance by 08/30/2017.
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 5%.
Throwbacks occur 59% of the time.
Price hits measure rule target 66% of the time.

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PDL BioPharma Inc (PDLI)
Industry: Biotechnology
Industry RS rank: 23 out of 56
Stock RS rank: 590 out of 601
5/4/17 close: $2.23
1 Month avg volatility: $0.09. Volatility stop (for downward breakout): $2.49 or 11.5% above the close.
Change YTD: 5.19%
Volume: 1,474,100 shares. 3 month avg: 1,826,786 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rectangle bottom continuation pattern from 12/02/2016 to 05/04/2017
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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Tuesday Morning Corp (TUES)
Industry: Retail Store
Industry RS rank: 46 out of 56
Stock RS rank: 599 out of 601
5/4/17 close: $2.20
1 Month avg volatility: $0.18. Volatility stop (for downward breakout): $2.56 or 16.3% above the close.
Change YTD: -59.26%
Volume: 4,770,600 shares. 3 month avg: 582,965 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: Dead-cat bounce continuation pattern from 05/04/2017 to 05/04/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Westlake Chemical Corp (WLK)
Industry: Chemical (Basic)
Industry RS rank: 14 out of 56
Stock RS rank: 212 out of 601
5/4/17 close: $60.56
1 Month avg volatility: $1.65. Volatility stop (for downward breakout): $65.75 or 8.6% above the close.
Change YTD: 8.16%
Volume: 1,224,900 shares. 3 month avg: 932,048 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: Triple top reversal pattern from 03/17/2017 to 05/02/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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MSCI Thailand Invest Mkt Index (THD)
Industry: Investment Co. (Foreign)
Industry RS rank: 38 out of 56
Stock RS rank: 399 out of 601
5/4/17 close: $77.55
1 Month avg volatility: $0.47. Volatility stop (for downward breakout): $78.58 or 1.3% above the close.
Change YTD: 7.57%
Volume: 280,200 shares. 3 month avg: 178,280 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, descending reversal pattern from 04/06/2017 to 05/04/2017
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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SPDR Technology Select Sector (XLK)
Industry: Investment Co. (Domestic)
Industry RS rank: 28 out of 56
Stock RS rank: 257 out of 601
5/4/17 close: $54.77
1 Month avg volatility: $0.34. Volatility stop (for downward breakout): $55.54 or 1.4% above the close.
Change YTD: 13.25%
Volume: 7,560,900 shares. 3 month avg: 8,016,640 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 02/24/2017 to 05/02/2017
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Thursday 5/4/17. Intraday Market Direction: Nasdaq

The index dropped by -0.4% or -22.82 points. Since 02/05/1971 the index made 415 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 212 occasions.
     Average loss was -1.0% on 203 occasions.
Expect the index to close higher 51.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 126/220 or 57.3% of the time.
     The prediction of the index closing lower has been right 42/82 or 51.2% 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 pierced a long running upward trend, highlighted by the blue line. That suggests a trend change from up to sideways (or even down). The red line highlights the horizontal move.

The red line also shows overhead resistance. Notice that Wednesday's action stopped when it neared the line.

This could mean a temporary move below the blue line before a new upward trend appears. Indeed, the Dow futures are up 51 points about 45 minutes before the open today (Thursday). That suggests the index will gap open higher this morning, but the number is not large enough to suggest a sustained upward move. I think all of this means is the market is waiting earnings news and will react accordingly. And that means higher volatility.

I really don't know which direction (up, down, or sideways) the market will take. My guess is all of this shows weakness, so I'm leaning toward a lower close today.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,667.34    
 Monthly S1  5,869.95  202.60   
 Weekly S2  5,935.16  65.21   
 Monthly Pivot  5,971.99  36.84   
 Weekly S1  6,003.85  31.86   
 Weekly Pivot  6,038.95  35.09   
 Daily S2  6,043.92  4.97   
 Low  6,053.28  9.36   
 Daily S1  6,058.23  4.95   
 61.8% Down from Intraday High  6,062.33  4.09   
 50% Down from Intraday High  6,065.12  2.79   
 Daily Pivot  6,067.60  2.48   
 38.2% Down from Intraday High  6,067.91  0.32   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  6,072.55  4.64   
 Open  6,075.04  2.49   
 High  6,076.96  1.92   Yes! The High is close to the Open.
 Daily R1  6,081.91  4.95   
 Daily R2  6,091.28  9.36   
 Weekly R1  6,107.64  16.37   
 Weekly R2  6,142.74  35.09   
 Monthly R1  6,174.60  31.86   
 Monthly R2  6,276.64  102.05   

Wednesday 5/3/17. 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.

This chart shows no signal changes over the past week. The indicator remains bullish with the green vertical line on the far right being the most recent signal.

However, a week ago, the signal appeared to have hit the ceiling and since then, it has dropped. In other words, the markets have weakened over the past week.

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, 22% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 21%.
The fewest was 14% on 12/09/2016.
And the most was 45% on 06/27/2016.
Shown as a blue line on the above chart...
The 507 stocks in my database are down an average of 12% from their yearly high.
A week ago, the average was 12%.
The peak was 9% on 12/09/2016.
And the bottom was 22% on 06/27/2016.

This chart also shows a weakening of the markets. The red line has dropped slightly (one percentage point) over the past week but the blue line has held steady.

Taken together, the two charts show a softening situation. This is earning season, so we'll be seeing some stocks gap higher on news and some getting slaughtered.

$ $ $

Picture of my tears for bumper book.

My new book, Tears for Bumper is now available as a nook book.

Nook book. That has a nice ring. I need four more sales before Barnes and Noble releases the money they owe me, so if you would like to read about sad tears, happy tears, tears for Bumper as my dog and I forged a life together, then please click on the link and spend like crazy. Thanks! Tell your friends Tom sent you.

P.S. I'm still working on the paperback. The manuscript has over 30 photographs and I have to order proofs to check how the pictures are being rendered before I release the book to the world.

-- Thomas Bulkowski

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Tuesday 5/2/17. Intraday Market Direction: Dow

The index dropped by -0.1% or -27.05 points. Since 10/01/1928 the index made 1291 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 668 occasions.
     Average loss was -0.7% on 623 occasions.
Expect the index to close higher 51.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 136/230 or 59.1% of the time.
     The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The only thing new that's remarkable on this chart is how long the rectangle is.

I show the rectangle top bordered by red lines. I call it a top because I disregard the overshoot at the start of the pattern. That's where price rises above the top of the pattern for up to a week or so (more in this case).

Breakouts from rect tops are upward 68% of the time. So that's the way to bet. However, it's earnings season and lots of stocks are taking hits for not living up to expectations.

You can also call this rectangle a channel because it has a pronounced slope to it. Rectangles are horizontal beasts, so this is really a channel. The above probabilities suggest Tuesday's close will be higher.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  20,096.62    
 Monthly S1  20,505.04  408.42   
 Weekly S2  20,555.34  50.30   
 Weekly S1  20,734.40  179.06   
 Monthly Pivot  20,787.97  53.57   
 Daily S2  20,851.25  63.28   
 Daily S1  20,882.35  31.11   
 Low  20,898.38  16.03   
 Weekly Pivot  20,902.65  4.27   Yes! The Weekly Pivot is close to the Low.
 Close  20,913.46  10.81   
 61.8% Down from Intraday High  20,928.27  14.81   
 Daily Pivot  20,929.49  1.22   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  20,937.50  8.01   
 38.2% Down from Intraday High  20,946.73  9.23   
 Daily R1  20,960.59  13.86   
 Open  20,962.73  2.14   Yes! The Open is close to the Daily R1.
 High  20,976.62  13.89   
 Daily R2  21,007.73  31.11   
 Weekly R1  21,081.71  73.98   
 Monthly R1  21,196.39  114.68   
 Weekly R2  21,249.96  53.57   
 Monthly R2  21,479.32  229.36   

Monday 5/1/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

I show the Dow transports on the daily scale.

A double bottom appears at AB. This confirms as a valid chart pattern when the index rises above the peak (c) between the two bottoms.

That happens at D.

A throwback occurs at E, where price breaks out of the pattern a day before the peak at D and then curls back down to E.

Often, this looping action is a prelude to a resumption of the up move.

Nothing is guaranteed, of course, so price could just continue down in spite of my belief that the transports will climb.

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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 216.13 points.
Tuesday: Up 232.23 points.
Wednesday: Down 21.03 points.
Thursday: Up 6.24 points.
Friday: Down 40.82 points.

For the Week...

The Dow industrials were up 392.75 points or 1.9%.
The Nasdaq composite was up 137.09 points or 2.3%.
The S&P 500 index was up 35.5101 points or 1.5%.

Year to Date...

Dow Industrials
     1.1% down from the high of 21,169.11 on 03/01/2017.
     6.4% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.4% down from the high of 6,074.04 on 04/28/2017.
     12.0% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.7% down from the high of 2,400.98 on 03/01/2017.
     6.2% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 04/28/2017, the CPI had:

6 bearish patterns,
8 bullish patterns,
208 patterns waiting for breakout.
The CPI signal is 57.1%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  20,891  20,916  20,952  20,977  21,013 
Weekly  20,564  20,752  20,912  21,100  21,259 
Monthly  20,106  20,523  20,797  21,214  21,488 
S&P500 (^GSPC): Daily  2,375  2,380  2,387  2,391  2,398 
Weekly  2,355  2,370  2,384  2,399  2,413 
Monthly  2,292  2,338  2,368  2,414  2,444 
Nasdaq (^IXIC): Daily  6,021  6,034  6,054  6,068  6,087 
Weekly  5,927  5,987  6,031  6,091  6,134 
Monthly  5,659  5,853  5,964  6,158  6,268 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 30.4%   The trend may continue. 
 1 month up 52.3%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 31.4%   The trend may continue. 
 1 month up 53.9%   Expect a random direction. 
 Nasdaq composite (^IXIC) 2 weeks up 33.6%   The trend may continue. 
 6 months up 10.2%   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
23Triangle, symmetrical
12Pipe bottom
10Head-and-shoulders bottom
10Rectangle top
9Head-and-shoulders top
9Triangle, descending
7Double Bottom, Adam and Eve
7Double Bottom, Adam and Adam
6Triangle, ascending
5Broadening 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. Semiconductor Cap Equip.1. Semiconductor Cap Equip.
2. Electronics2. Human Resources
3. Human Resources3. Electronics
4. Building Materials4. Semiconductor
5. Homebuilding5. Homebuilding
50. Petroleum (Integrated)50. Petroleum (Integrated)
51. Toiletries/Cosmetics51. Toiletries/Cosmetics
52. Natural Gas (Diversified)52. Natural Gas (Diversified)
53. Furn/Home Furnishings53. Oilfield Svcs/Equipment
54. Oilfield Svcs/Equipment54. Furn/Home Furnishings
55. Apparel55. Petroleum (Producing)
56. Petroleum (Producing)56. Apparel
57. Short ETFs57. Short ETFs

-- Thomas Bulkowski

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