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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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Industrials (^DJI):
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As of 06/22/2017
21,397 -12.74 -0.1%
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727 -2.42 -0.3%
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21,600 or 21,000 by 07/01/2017
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720 or 745 by 07/01/2017
6,300 or 6,000 by 07/01/2017
2,525 or 2,390 by 07/01/2017

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November 2014 Headlines


Archives


Friday 11/28/14. 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 600 stocks searched, or 2.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 4 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 12 bullish chart patterns this week and 2 bearish ones with any remaining (5) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ADTNPipe bottom      11/10/201411/17/2014Telecom. Equipment
AMDPipe bottom      11/10/201411/17/2014Semiconductor
AESTriangle, symmetrical      10/07/201411/26/2014Electric Utility (East)
ASNABroadening top, right-angled and ascending      10/21/201411/26/2014Apparel
CVXTriangle, symmetrical      10/31/201411/25/2014Petroleum (Integrated)
CIENPipe bottom      11/10/201411/17/2014Telecom. Equipment
CNLTriangle, ascending      10/20/201411/26/2014Electric Utility (Central)
DTVRectangle top      11/03/201411/26/2014Telecom. Equipment
EOGDouble Top, Adam and Adam      11/10/201411/21/2014Natural Gas (Distributor)
HAYNBroadening top      10/29/201411/21/2014Building Materials
HOLXFlag      11/07/201411/26/2014Medical Supplies
ICONPipe bottom      11/10/201411/17/2014Shoe
INFADiamond top      11/11/201411/26/2014E-Commerce
IIINScallop, ascending and inverted      10/09/201411/21/2014Building Materials
KLACDead-cat bounce      11/26/201411/26/2014Semiconductor Cap Equip.
NEWPTriangle, symmetrical      11/05/201411/26/2014Precision Instrument
PAYXPennant      11/07/201411/26/2014Computer Software and Svcs
PNWDiamond top      11/03/201411/26/2014Electric Utility (West)
TZOOTriangle, symmetrical      11/03/201411/26/2014Internet
EWTBroadening top      10/28/201411/21/2014Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 11/20/2014 and 11/27/2014. 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.
 
ADTRAN Inc (ADTN)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 53
Stock RS rank: 458 out of 592
11/26/14 close: $20.99
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $19.41 or 7.5% below the close.
Change YTD: -22.29%
Volume: 999,700 shares. 3 month avg: 708,162 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 bottom reversal pattern from 11/10/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

Top

Advanced Micro Devices, Inc (AMD)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 53
Stock RS rank: 570 out of 592
11/26/14 close: $2.84
1 Month avg volatility: $0.08. Volatility stop (for upward breakout): $2.63 or 7.3% below the close.
Change YTD: -26.61%
Volume: 10,560,700 shares. 3 month avg: 19,777,751 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 bottom reversal pattern from 11/10/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

Top

AES Corp (AES)
Industry: Electric Utility (East)
Industry RS rank: 23 out of 53
Stock RS rank: 343 out of 592
11/26/14 close: $13.82
1 Month avg volatility: $0.30. Volatility stop (for upward breakout): $13.19 or 4.6% below the close.
Change YTD: -4.76%
Volume: 3,397,000 shares. 3 month avg: 5,062,245 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 10/07/2014 to 11/26/2014
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

Top

Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 16 out of 53
Stock RS rank: 542 out of 592
11/26/14 close: $13.38
1 Month avg volatility: $0.41. Volatility stop (for downward breakout): $14.47 or 8.2% above the close.
Change YTD: -36.79%
Volume: 1,541,300 shares. 3 month avg: 1,864,417 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, right-angled and ascending reversal pattern from 10/21/2014 to 11/26/2014
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.

Top

Chevron Corp (CVX)
Industry: Petroleum (Integrated)
Industry RS rank: 47 out of 53
Stock RS rank: 427 out of 592
11/26/14 close: $115.11
1 Month avg volatility: $1.83. Volatility stop (for upward breakout): $111.36 or 3.3% below the close.
Change YTD: -7.85%
Volume: 6,715,800 shares. 3 month avg: 7,036,806 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/31/2014 to 11/25/2014
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

Top

Ciena Corp (CIEN)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 53
Stock RS rank: 532 out of 592
11/26/14 close: $16.74
1 Month avg volatility: $0.46. Volatility stop (for upward breakout): $15.71 or 6.1% below the close.
Change YTD: -30.05%
Volume: 1,501,900 shares. 3 month avg: 3,646,528 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 11/10/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

Top

Cleco Corp (CNL)
Industry: Electric Utility (Central)
Industry RS rank: 24 out of 53
Stock RS rank: 302 out of 592
11/26/14 close: $53.98
1 Month avg volatility: $0.33. Volatility stop (for upward breakout): $53.05 or 1.7% below the close.
Change YTD: 15.79%
Volume: 419,500 shares. 3 month avg: 639,148 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 10/20/2014 to 11/26/2014
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

Top

DirecTV Group Inc. (DTV)
Industry: Telecom. Equipment
Industry RS rank: 43 out of 53
Stock RS rank: 292 out of 592
11/26/14 close: $87.15
1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $85.26 or 2.2% below the close.
Change YTD: 26.19%
Volume: 2,199,700 shares. 3 month avg: 2,797,348 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 11/03/2014 to 11/26/2014
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.

Top

EOG Resources (EOG)
Industry: Natural Gas (Distributor)
Industry RS rank: 28 out of 53
Stock RS rank: 453 out of 592
11/26/14 close: $94.07
1 Month avg volatility: $2.84. Volatility stop (for downward breakout): $102.31 or 8.8% above the close.
Change YTD: 12.09%
Volume: 5,346,300 shares. 3 month avg: 5,604,095 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 11/10/2014 to 11/21/2014
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.

Top

Haynes International Inc. (HAYN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 53
Stock RS rank: 508 out of 592
11/26/14 close: $47.79
1 Month avg volatility: $1.62. Volatility stop (for downward breakout): $51.78 or 8.4% above the close.
Change YTD: -13.49%
Volume: 17,400 shares. 3 month avg: 43,348 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening top reversal pattern from 10/29/2014 to 11/21/2014
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

Top

Hologic Inc (HOLX)
Industry: Medical Supplies
Industry RS rank: 4 out of 53
Stock RS rank: 198 out of 592
11/26/14 close: $26.48
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $25.49 or 3.8% below the close.
Change YTD: 18.48%
Volume: 1,492,400 shares. 3 month avg: 2,163,698 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: Flag continuation pattern from 11/07/2014 to 11/26/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

Top

Iconix Brand Group Inc. (ICON)
Industry: Shoe
Industry RS rank: 3 out of 53
Stock RS rank: 422 out of 592
11/26/14 close: $40.51
1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $38.68 or 4.5% below the close.
Change YTD: 2.04%
Volume: 279,800 shares. 3 month avg: 689,705 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: Pipe bottom reversal pattern from 11/10/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

Top

Informatica Corporation (INFA)
Industry: E-Commerce
Industry RS rank: 2 out of 53
Stock RS rank: 405 out of 592
11/26/14 close: $36.47
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $37.85 or 3.8% above the close.
Change YTD: -12.12%
Volume: 1,038,600 shares. 3 month avg: 1,482,646 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: Diamond top reversal pattern from 11/11/2014 to 11/26/2014
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

Top

Insteel Industries Inc (IIIN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 53
Stock RS rank: 164 out of 592
11/26/14 close: $22.70
1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $21.17 or 6.7% below the close.
Change YTD: -0.13%
Volume: 22,500 shares. 3 month avg: 57,709 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 10/09/2014 to 11/21/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

Top

KLA-Tencor Corporation (KLAC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 11 out of 53
Stock RS rank: 49 out of 592
11/26/14 close: $67.34
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $63.97 or 5.0% below the close.
Change YTD: 4.46%
Volume: 2,726,200 shares. 3 month avg: 1,935,845 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Dead-cat bounce from 11/26/2014 to 11/26/2014

Top

Newport Corporation (NEWP)
Industry: Precision Instrument
Industry RS rank: 20 out of 53
Stock RS rank: 414 out of 592
11/26/14 close: $17.86
1 Month avg volatility: $0.46. Volatility stop (for upward breakout): $16.81 or 5.9% below the close.
Change YTD: -1.16%
Volume: 147,400 shares. 3 month avg: 169,097 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/05/2014 to 11/26/2014
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

Top

Paychex Inc (PAYX)
Industry: Computer Software and Svcs
Industry RS rank: 18 out of 53
Stock RS rank: 147 out of 592
11/26/14 close: $47.35
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $46.29 or 2.2% below the close.
Change YTD: 4.00%
Volume: 1,788,200 shares. 3 month avg: 2,188,991 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: Pennant continuation pattern from 11/07/2014 to 11/26/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price hits measure rule target 60% of the time.

Top

Pinnacle West Capital Corp (PNW)
Industry: Electric Utility (West)
Industry RS rank: 12 out of 53
Stock RS rank: 172 out of 592
11/26/14 close: $62.37
1 Month avg volatility: $0.99. Volatility stop (for downward breakout): $64.60 or 3.6% above the close.
Change YTD: 17.86%
Volume: 453,500 shares. 3 month avg: 838,549 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: Diamond top reversal pattern from 11/03/2014 to 11/26/2014
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

Top

Travelzoo Inc. (TZOO)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 44 out of 53
Stock RS rank: 578 out of 592
11/26/14 close: $12.62
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $11.71 or 7.2% below the close.
Change YTD: -40.81%
Volume: 32,200 shares. 3 month avg: 67,729 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 Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/03/2014 to 11/26/2014
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

Top

MSCI Taiwan Index (EWT)
Industry: Investment Co. (Foreign)
Industry RS rank: 46 out of 53
Stock RS rank: 308 out of 592
11/26/14 close: $15.84
1 Month avg volatility: $0.10. Volatility stop (for downward breakout): $16.06 or 1.4% above the close.
Change YTD: 9.85%
Volume: 4,172,600 shares. 3 month avg: 7,523,351 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 10/28/2014 to 11/21/2014
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

Top


Thursday 11/27/14. Turkey Day!

Picture of my compost pile

For those of you not outside protesting, have a happy holiday. And if you are outside protesting, keep warm and stay safe. When you vandalize anything, you're embarrassing America.

I'm spending this day in an unusual fashion. I ordered a meal from the local grocery store. All I have to do is warm it up...I think. Throw in a salad and a pie, and it's not cheap, about $20 per person. But I'm looking forward to not cooking (except for warming the stuff but they did say it could take 2 hours, so that sounds like cooking and not warming to me).

Over the weekend, I'll be completing a wall around my compost pile. It's more of a snake pit than a compost pile since I don't turn the dirt (you're supposed to rotate the dirt from bottom to top to help keep it aerated). But it's a large area, about 20 feet long by 10 wide and when I dig into the dirt, I invariably harm or kill some flat snakes. That's what they are called, flat snakes. They are about the length of a pencil and just as thick, gray looking. They eat insects and burrow into the topsoil.

I'm turning the compost pile into a flower bed. The picture shows the pile behind the windmill. It's that large bricked area that's raised about three feet. I'll be building a wall behind the tall vine on the left. The vine and windmill obscure the area but the wall will be eight feet long with a ramp and steps to the top of the pile.

And don't forget to visit Amazon.com. through this site. They pay for the referral and that helps keep this website free.

-- Thomas Bulkowski


Wednesday 11/26/14. Chart Pattern Indicator: What's It Say?

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.

I drew a thin red line where the indicator showed its recent weakness, just to see how the index behaved at that point.

The index moved horizontally there, but not for long. Strength returned and sent the indicator soaring again. Now, it's in bullish territory after leaving the neutral zone to the Klingons.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

This chart highlights the white neutral area that I mentioned in the last chart. The indicator is showing solid green, suggesting a continuation of the bullish run.

This is a holiday week, so volume is probably lighter than average. That might allow wider swings in the indices (more volatile than average).

-- Thomas Bulkowski

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Tuesday 11/25/14.Symmetrical Triangle in the Dow. Good Omen?

The index climbed by 0.0% or 7.84 points. Since 10/01/1928 the index made 1210 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 641 occasions.
     Average loss was -0.7% on 569 occasions.
Expect the index to close higher 53.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 86/134 or 64.2% of the time.
     The prediction of the index closing lower has been right 22/40 or 55.0% 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.

Outlined in red is a symmetrical triangle. Those have price action that forms lower highs and higher lows. The up and down price waves converge.

The breakout from a symmetrical triangle, on the daily charts in stocks, is upward 54% of the time.

I expect a strong move either upward or downward, perhaps as soon as Tuesday. This is based on the narrowing price action. However, it's a holiday week.

My studies of holidays suggests that the market will close higher on Wednesday and lower on Friday.

$ $ $

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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,500.60    
 Monthly S1  16,659.25  1,158.65   
 Monthly Pivot  17,277.04  617.79   
 Weekly S2  17,481.27  204.23   
 Weekly S1  17,649.58  168.32   
 Daily S2  17,760.04  110.46   
 Weekly Pivot  17,772.21  12.17   
 Daily S1  17,788.97  16.76   
 Low  17,793.19  4.22   Yes! The Low is close to the Daily S1.
 Open  17,812.63  19.44   
 61.8% Down from Intraday High  17,816.90  4.27   Yes! The 61.8% Down from Intraday High is close to the Open.
 Close  17,817.90  1.00   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  17,822.12  4.22   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  17,824.23  2.11   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,831.55  7.32   
 Daily R1  17,851.05  19.50   
 High  17,855.27  4.22   Yes! The High is close to the Daily R1.
 Daily R2  17,884.20  28.93   
 Weekly R1  17,940.52  56.32   
 Weekly R2  18,063.15  122.62   
 Monthly R1  18,435.69  372.54   
 Monthly R2  19,053.48  617.79   

Monday 11/24/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

I received an email from Dave asking if the major indices are showing broadening tops. I show a picture of one in the Dow transports using the daily scale.

Notice that the red line doesn't touch at A because it doesn't quite line up with the adjacent minor low. This is more blatant at B. At B price is in the middle of an uptrend so there is no minor high touch. You can't count it as a touch when it's in the middle of a trend like it is at B. Only touches at minor highs and minor lows count.

For broadening patterns, I prefer to have at least five touches total, three on one side and two on the other, to be a valid pattern. With just two touches, you can call all sort of patterns broadening tops and you'd be wrong.

In this case, you have two touches on the top and two to three on the bottom. However, clearly the index it making broadening swings from up to down. So yes, it's a broadening top.

It has already broken out upward and formed a flag at C.

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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 13.01 points.
Tuesday: Up 40.07 points.
Wednesday: Down 2.09 points.
Thursday: Up 33.27 points.
Friday: Up 91.06 points.

For the Week...

The Dow industrials were up 175.32 points or 1.0%.
The Nasdaq composite was up 24.43 points or 0.5%.
The S&P 500 index was up 23.68 points or 1.2%.

Year to Date...

Dow Industrials
     0.5% down from the high of 17,894.83 on 11/21/2014.
     16.1% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.8% down from the high of 4,751.60 on 11/21/2014.
     19.4% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     0.4% down from the high of 2,071.46 on 11/21/2014.
     18.7% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Gross domestic product8:30 TBMeasures economic activity; GDP deflator measures inflation.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Initial jobless claims8:30 WC+Counts people filing for state unemployment benefits.
Durable goods orders8:30 WBMeasures orders, shipments of goods with lifespans >3 years.
Personal income & consumption8:30 WC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 WC+Covers durables, non-durables, and services.
Chicago purchasing managers index9:45 WBMonitors regional manufacturing activity.
Michigan sentiment9:55 WB-Consumer sentiment: Measures strength of consumer spending.
New home sales10:00 WC+Shows sales of single-family homes.
Crude inventories10:30 W?My guess: Measures oil inventory.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 11/21/2014, the CPI had:

3 bearish patterns,
31 bullish patterns,
269 patterns waiting for breakout.
The CPI signal is 91.2%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,635  17,722  17,809  17,896  17,982 
Weekly  17,479  17,644  17,770  17,935  18,061 
Monthly  15,498  16,654  17,274  18,430  19,051 
S&P500 (^GSPC): Daily  2,049  2,056  2,064  2,071  2,079 
Weekly  2,019  2,041  2,056  2,078  2,093 
Monthly  1,793  1,928  2,000  2,135  2,207 
Nasdaq (^IXIC): Daily  4,671  4,692  4,722  4,743  4,773 
Weekly  4,608  4,660  4,706  4,759  4,804 
Monthly  4,059  4,386  4,569  4,896  5,079 
  • 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) 5 weeks up 8.6%   Expect a reversal soon. 
 2 months up 40.2%   Expect a random direction. 
 S & P 500 (^GSPC) 5 weeks up 9.3%   Expect a reversal soon. 
 2 months up 42.1%   Expect a random direction. 
 Nasdaq composite (^IXIC) 5 weeks up 6.5%   Expect a reversal soon. 
 2 months up 40.5%   Expect a random direction. 

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the 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.

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

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

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
22Flag
13Scallop, ascending and inverted
13Triangle, symmetrical
10Head-and-shoulders bottom
9Pennant
6Broadening wedge, descending
5Diamond top
4Broadening top
3Double Bottom, Adam and Adam
3Pipe bottom

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. Biotechnology1. E-Commerce
2. E-Commerce2. Biotechnology
3. Shoe3. Semiconductor Cap Equip.
4. Medical Supplies4. Securities Brokerage
5. Air Transport5. Information Services
50. Natural Gas (Diversified)50. Toiletries/Cosmetics
51. Toiletries/Cosmetics51. Natural Gas (Diversified)
52. Petroleum (Producing)52. Petroleum (Producing)
53. Oilfield Svcs/Equipment53. Oilfield Svcs/Equipment
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

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Friday 11/21/14. Access Problems?

If you are having problems accessing this site, then send me an email. One user reported such a problem. I recently (about 2 weeks ago) changed some code to prevent robots from grabbing information from this site. That my be the cause of these access problems.

Send an email to me at:

-- Thomas Bulkowski


Friday 11/21/14. Pattern Trading Setups for the Weekend.

This post begins a change for Friday's post but, hopefully, you won't notice a difference.

I changed the software needed to build this post to archive old posts of this nature. That means you'll be able to look back at last Friday's post and find chart patterns from that week.

I will not, however, go back and create prior posts.

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 29 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 600 stocks searched, or 4.8%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 17 bullish chart patterns this week and 1 bearish ones with any remaining (7) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALBFlag      11/11/201411/20/2014Chemical (Diversified)
ADSScallop, ascending and inverted      10/15/201411/20/2014Information Services
AMATDiamond top      11/11/201411/20/2014Semiconductor Cap Equip.
AIZFlag      11/06/201411/20/2014Insurance (Diversified)
CBTTriangle, symmetrical      10/16/201411/20/2014Chemical (Diversified)
CGNXScallop, ascending and inverted      10/28/201411/19/2014Precision Instrument
CRHScallop, ascending and inverted      10/16/201411/14/2014Cement and Aggregates
^DJUScallop, ascending and inverted      10/15/201411/14/2014None
^DJTFlag      11/12/201411/20/2014None
FSTTriangle, symmetrical      09/19/201411/19/2014Petroleum (Producing)
GFFRectangle bottom      03/21/201411/20/2014Building Materials
GESTriangle, symmetrical      11/04/201411/18/2014Apparel
ILMNScallop, ascending and inverted      10/15/201411/17/2014Biotechnology
IIINDouble Top, Adam and Adam      11/06/201411/14/2014Building Materials
LScallop, ascending and inverted      10/15/201411/18/2014Insurance (Prop/Casualty)
NOVDiamond top      10/21/201411/20/2014Oilfield Svcs/Equipment
NCSScallop, ascending and inverted      10/15/201411/17/2014Building Materials
NJRScallop, ascending and inverted      10/08/201411/19/2014Natural Gas (Distributor)
OXYTriangle, symmetrical      10/16/201411/20/2014Petroleum (Producing)
PREScallop, ascending and inverted      10/16/201411/18/2014Insurance (Prop/Casualty)
PEGScallop, ascending and inverted      10/16/201411/14/2014Electric Utility (East)
STRScallop, ascending and inverted      10/16/201411/17/2014Natural Gas (Diversified)
ROSTBroadening top, right-angled and ascending      10/23/201411/20/2014Retail (Special Lines)
UILScallop, ascending and inverted      10/01/201411/14/2014Electric Utility (East)
PAYFlag      11/06/201411/20/2014Computer Software and Svcs
IGEDiamond top      10/22/201411/19/2014Petroleum (Integrated)
EPPDouble Top, Adam and Adam      10/31/201411/14/2014Investment Co. (Foreign)
PXJTriangle, symmetrical      10/15/201411/20/2014Oilfield Svcs/Equipment
IXCDiamond top      10/21/201411/20/2014Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 11/13/2014 and 11/20/2014. 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.
 
Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 31 out of 53
Stock RS rank: 479 out of 593
11/20/14 close: $61.55
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $58.60 or 4.8% below the close.
Change YTD: -2.90%
Volume: 1,183,700 shares. 3 month avg: 1,289,231 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: Flag continuation pattern from 11/11/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Alliance Data Systems Corp (ADS)
Industry: Information Services
Industry RS rank: 12 out of 53
Stock RS rank: 136 out of 593
11/20/14 close: $284.83
1 Month avg volatility: $4.93. Volatility stop (for upward breakout): $268.43 or 5.8% below the close.
Change YTD: 8.33%
Volume: 385,300 shares. 3 month avg: 631,275 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/20/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Applied Materials (AMAT)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 10 out of 53
Stock RS rank: 185 out of 593
11/20/14 close: $22.63
1 Month avg volatility: $0.49. Volatility stop (for downward breakout): $23.67 or 4.6% above the close.
Change YTD: 28.00%
Volume: 9,402,400 shares. 3 month avg: 13,286,403 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: Diamond top reversal pattern from 11/11/2014 to 11/20/2014
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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Assurant Inc (AIZ)
Industry: Insurance (Diversified)
Industry RS rank: 41 out of 53
Stock RS rank: 348 out of 593
11/20/14 close: $67.97
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $65.78 or 3.2% below the close.
Change YTD: 2.41%
Volume: 737,600 shares. 3 month avg: 492,372 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: Flag continuation pattern from 11/06/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Cabot Corp. (CBT)
Industry: Chemical (Diversified)
Industry RS rank: 31 out of 53
Stock RS rank: 533 out of 593
11/20/14 close: $46.32
1 Month avg volatility: $1.37. Volatility stop (for upward breakout): $42.45 or 8.4% below the close.
Change YTD: -9.88%
Volume: 305,400 shares. 3 month avg: 438,660 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/16/2014 to 11/20/2014
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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Cognex (CGNX)
Industry: Precision Instrument
Industry RS rank: 22 out of 53
Stock RS rank: 127 out of 593
11/20/14 close: $40.48
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $37.57 or 7.2% below the close.
Change YTD: 6.02%
Volume: 409,800 shares. 3 month avg: 713,928 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: Scallop, ascending and inverted continuation pattern from 10/28/2014 to 11/19/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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CRH plc (CRH)
Industry: Cement and Aggregates
Industry RS rank: 29 out of 53
Stock RS rank: 536 out of 593
11/20/14 close: $22.46
1 Month avg volatility: $0.32. Volatility stop (for upward breakout): $21.48 or 4.4% below the close.
Change YTD: -12.09%
Volume: 252,700 shares. 3 month avg: 863,914 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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DJ 15 Utilities (^DJU)
Industry: None
Industry RS rank is unavailable.
11/20/14 close: $593.79
1 Month avg volatility: $7.99. Volatility stop (for upward breakout): $575.29 or 3.1% below the close.
Change YTD: 21.04%
Volume: 8,765,100 shares. 3 month avg: 11,891,680 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
11/20/14 close: $9,053.67
1 Month avg volatility: $108.77. Volatility stop (for upward breakout): $8,745.88 or 3.4% below the close.
Change YTD: 22.34%
Volume: 13,370,500 shares. 3 month avg: 15,003,935 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 11/12/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Forest Oil Corp (FST)
Industry: Petroleum (Producing)
Industry RS rank: 51 out of 53
Stock RS rank: 591 out of 593
11/20/14 close: $1.08
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $0.67 or 38.3% below the close.
Change YTD: -70.08%
Volume: 3,655,500 shares. 3 month avg: 2,677,200 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/19/2014 to 11/19/2014
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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Griffon Corp (GFF)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 168 out of 593
11/20/14 close: $12.60
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $13.16 or 4.4% above the close.
Change YTD: -4.62%
Volume: 85,000 shares. 3 month avg: 160,094 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: Rectangle bottom continuation pattern from 03/21/2014 to 11/20/2014
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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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 17 out of 53
Stock RS rank: 523 out of 593
11/20/14 close: $22.19
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $20.78 or 6.3% below the close.
Change YTD: -28.58%
Volume: 624,900 shares. 3 month avg: 1,087,265 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/04/2014 to 11/18/2014
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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Illumina Inc (ILMN)
Industry: Biotechnology
Industry RS rank: 1 out of 53
Stock RS rank: 95 out of 593
11/20/14 close: $186.26
1 Month avg volatility: $5.70. Volatility stop (for upward breakout): $173.83 or 6.7% below the close.
Change YTD: 68.42%
Volume: 900,700 shares. 3 month avg: 1,227,162 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Insteel Industries Inc (IIIN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 169 out of 593
11/20/14 close: $22.51
1 Month avg volatility: $0.61. Volatility stop (for downward breakout): $23.96 or 6.4% above the close.
Change YTD: -0.97%
Volume: 41,700 shares. 3 month avg: 57,315 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 11/06/2014 to 11/14/2014
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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Loews Corp (L)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 53
Stock RS rank: 380 out of 593
11/20/14 close: $42.74
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $41.58 or 2.7% below the close.
Change YTD: -11.40%
Volume: 811,000 shares. 3 month avg: 1,139,332 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/18/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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National Oilwell Varco (NOV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 496 out of 593
11/20/14 close: $72.36
1 Month avg volatility: $2.02. Volatility stop (for downward breakout): $76.63 or 5.9% above the close.
Change YTD: -9.02%
Volume: 3,239,600 shares. 3 month avg: 4,179,609 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: Diamond top reversal pattern from 10/21/2014 to 11/20/2014
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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NCI Building Systems Inc. (NCS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 118 out of 593
11/20/14 close: $19.24
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $17.67 or 8.2% below the close.
Change YTD: 9.69%
Volume: 143,600 shares. 3 month avg: 279,302 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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New Jersey Resources Corp (NJR)
Industry: Natural Gas (Distributor)
Industry RS rank: 27 out of 53
Stock RS rank: 255 out of 593
11/20/14 close: $57.56
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $55.13 or 4.2% below the close.
Change YTD: 24.48%
Volume: 93,300 shares. 3 month avg: 214,766 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: Scallop, ascending and inverted continuation pattern from 10/08/2014 to 11/19/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Occidental Petroleum Corp (OXY)
Industry: Petroleum (Producing)
Industry RS rank: 51 out of 53
Stock RS rank: 488 out of 593
11/20/14 close: $86.87
1 Month avg volatility: $1.80. Volatility stop (for upward breakout): $82.40 or 5.2% below the close.
Change YTD: -8.65%
Volume: 3,743,600 shares. 3 month avg: 4,873,691 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/16/2014 to 11/20/2014
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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PartnerRe Ltd (PRE)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 53
Stock RS rank: 267 out of 593
11/20/14 close: $115.55
1 Month avg volatility: $1.30. Volatility stop (for upward breakout): $111.50 or 3.5% below the close.
Change YTD: 9.60%
Volume: 199,300 shares. 3 month avg: 330,012 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/18/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Public Service Enterprise Group PEG (PEG)
Industry: Electric Utility (East)
Industry RS rank: 20 out of 53
Stock RS rank: 259 out of 593
11/20/14 close: $40.63
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $38.94 or 4.2% below the close.
Change YTD: 26.81%
Volume: 2,308,200 shares. 3 month avg: 3,499,238 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Questar Corp. (STR)
Industry: Natural Gas (Diversified)
Industry RS rank: 49 out of 53
Stock RS rank: 340 out of 593
11/20/14 close: $24.07
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $23.05 or 4.3% below the close.
Change YTD: 4.70%
Volume: 1,570,600 shares. 3 month avg: 1,048,003 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Ross Stores (ROST)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 16 out of 53
Stock RS rank: 87 out of 593
11/20/14 close: $83.21
1 Month avg volatility: $1.25. Volatility stop (for downward breakout): $86.04 or 3.4% above the close.
Change YTD: 11.05%
Volume: 2,358,800 shares. 3 month avg: 1,662,658 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 10/23/2014 to 11/20/2014
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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UIL Holdings Corp (UIL)
Industry: Electric Utility (East)
Industry RS rank: 20 out of 53
Stock RS rank: 217 out of 593
11/20/14 close: $39.84
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $37.93 or 4.8% below the close.
Change YTD: 2.81%
Volume: 469,500 shares. 3 month avg: 395,935 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: Scallop, ascending and inverted continuation pattern from 10/01/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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VeriFone Systems, Inc (PAY)
Industry: Computer Software and Svcs
Industry RS rank: 18 out of 53
Stock RS rank: 190 out of 593
11/20/14 close: $36.80
1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $34.61 or 6.0% below the close.
Change YTD: 37.21%
Volume: 821,700 shares. 3 month avg: 1,659,549 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: Flag continuation pattern from 11/06/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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iShares SP Natural resources (oil) (IGE)
Industry: Petroleum (Integrated)
Industry RS rank: 46 out of 53
Stock RS rank: 470 out of 593
11/20/14 close: $42.61
1 Month avg volatility: $0.81. Volatility stop (for downward breakout): $44.26 or 3.9% above the close.
Change YTD: -1.80%
Volume: 151,000 shares. 3 month avg: 333,711 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond top reversal pattern from 10/22/2014 to 11/19/2014
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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MSCI Pacific ex-Japan Index fund (EPP)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 439 out of 593
11/20/14 close: $46.74
1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $47.44 or 1.5% above the close.
Change YTD: 0.02%
Volume: 370,000 shares. 3 month avg: 755,734 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 10/31/2014 to 11/14/2014
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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PowerShares Dynamic Oil Services (PXJ)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 551 out of 593
11/20/14 close: $21.63
1 Month avg volatility: $0.59. Volatility stop (for upward breakout): $20.09 or 7.1% below the close.
Change YTD: -16.29%
Volume: 196,800 shares. 3 month avg: 35,889 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/15/2014 to 11/20/2014
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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S and P Global Energy Sector Index fund (IXC)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 490 out of 593
11/20/14 close: $41.38
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $42.75 or 3.3% above the close.
Change YTD: -4.26%
Volume: 109,800 shares. 3 month avg: 186,683 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: Diamond top reversal pattern from 10/21/2014 to 11/20/2014
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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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 29 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 600 stocks searched, or 4.8%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 17 bullish chart patterns this week and 1 bearish ones with any remaining (7) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALBFlag      11/11/201411/20/2014Chemical (Diversified)
ADSScallop, ascending and inverted      10/15/201411/20/2014Information Services
AMATDiamond top      11/11/201411/20/2014Semiconductor Cap Equip.
AIZFlag      11/06/201411/20/2014Insurance (Diversified)
CBTTriangle, symmetrical      10/16/201411/20/2014Chemical (Diversified)
CGNXScallop, ascending and inverted      10/28/201411/19/2014Precision Instrument
CRHScallop, ascending and inverted      10/16/201411/14/2014Cement and Aggregates
^DJUScallop, ascending and inverted      10/15/201411/14/2014None
^DJTFlag      11/12/201411/20/2014None
FSTTriangle, symmetrical      09/19/201411/19/2014Petroleum (Producing)
GFFRectangle bottom      03/21/201411/20/2014Building Materials
GESTriangle, symmetrical      11/04/201411/18/2014Apparel
ILMNScallop, ascending and inverted      10/15/201411/17/2014Biotechnology
IIINDouble Top, Adam and Adam      11/06/201411/14/2014Building Materials
LScallop, ascending and inverted      10/15/201411/18/2014Insurance (Prop/Casualty)
NOVDiamond top      10/21/201411/20/2014Oilfield Svcs/Equipment
NCSScallop, ascending and inverted      10/15/201411/17/2014Building Materials
NJRScallop, ascending and inverted      10/08/201411/19/2014Natural Gas (Distributor)
OXYTriangle, symmetrical      10/16/201411/20/2014Petroleum (Producing)
PREScallop, ascending and inverted      10/16/201411/18/2014Insurance (Prop/Casualty)
PEGScallop, ascending and inverted      10/16/201411/14/2014Electric Utility (East)
STRScallop, ascending and inverted      10/16/201411/17/2014Natural Gas (Diversified)
ROSTBroadening top, right-angled and ascending      10/23/201411/20/2014Retail (Special Lines)
UILScallop, ascending and inverted      10/01/201411/14/2014Electric Utility (East)
PAYFlag      11/06/201411/20/2014Computer Software and Svcs
IGEDiamond top      10/22/201411/19/2014Petroleum (Integrated)
EPPDouble Top, Adam and Adam      10/31/201411/14/2014Investment Co. (Foreign)
PXJTriangle, symmetrical      10/15/201411/20/2014Oilfield Svcs/Equipment
IXCDiamond top      10/21/201411/20/2014Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 11/13/2014 and 11/20/2014. 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.
 
Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 31 out of 53
Stock RS rank: 479 out of 593
11/20/14 close: $61.55
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $58.60 or 4.8% below the close.
Change YTD: -2.90%
Volume: 1,183,700 shares. 3 month avg: 1,289,231 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: Flag continuation pattern from 11/11/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Alliance Data Systems Corp (ADS)
Industry: Information Services
Industry RS rank: 12 out of 53
Stock RS rank: 136 out of 593
11/20/14 close: $284.83
1 Month avg volatility: $4.93. Volatility stop (for upward breakout): $268.43 or 5.8% below the close.
Change YTD: 8.33%
Volume: 385,300 shares. 3 month avg: 631,275 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/20/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Applied Materials (AMAT)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 10 out of 53
Stock RS rank: 185 out of 593
11/20/14 close: $22.63
1 Month avg volatility: $0.49. Volatility stop (for downward breakout): $23.67 or 4.6% above the close.
Change YTD: 28.00%
Volume: 9,402,400 shares. 3 month avg: 13,286,403 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: Diamond top reversal pattern from 11/11/2014 to 11/20/2014
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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Assurant Inc (AIZ)
Industry: Insurance (Diversified)
Industry RS rank: 41 out of 53
Stock RS rank: 348 out of 593
11/20/14 close: $67.97
1 Month avg volatility: $0.82. Volatility stop (for upward breakout): $65.78 or 3.2% below the close.
Change YTD: 2.41%
Volume: 737,600 shares. 3 month avg: 492,372 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: Flag continuation pattern from 11/06/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Cabot Corp. (CBT)
Industry: Chemical (Diversified)
Industry RS rank: 31 out of 53
Stock RS rank: 533 out of 593
11/20/14 close: $46.32
1 Month avg volatility: $1.37. Volatility stop (for upward breakout): $42.45 or 8.4% below the close.
Change YTD: -9.88%
Volume: 305,400 shares. 3 month avg: 438,660 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/16/2014 to 11/20/2014
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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Cognex (CGNX)
Industry: Precision Instrument
Industry RS rank: 22 out of 53
Stock RS rank: 127 out of 593
11/20/14 close: $40.48
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $37.57 or 7.2% below the close.
Change YTD: 6.02%
Volume: 409,800 shares. 3 month avg: 713,928 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: Scallop, ascending and inverted continuation pattern from 10/28/2014 to 11/19/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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CRH plc (CRH)
Industry: Cement and Aggregates
Industry RS rank: 29 out of 53
Stock RS rank: 536 out of 593
11/20/14 close: $22.46
1 Month avg volatility: $0.32. Volatility stop (for upward breakout): $21.48 or 4.4% below the close.
Change YTD: -12.09%
Volume: 252,700 shares. 3 month avg: 863,914 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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DJ 15 Utilities (^DJU)
Industry: None
Industry RS rank is unavailable.
11/20/14 close: $593.79
1 Month avg volatility: $7.99. Volatility stop (for upward breakout): $575.29 or 3.1% below the close.
Change YTD: 21.04%
Volume: 8,765,100 shares. 3 month avg: 11,891,680 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
11/20/14 close: $9,053.67
1 Month avg volatility: $108.77. Volatility stop (for upward breakout): $8,745.88 or 3.4% below the close.
Change YTD: 22.34%
Volume: 13,370,500 shares. 3 month avg: 15,003,935 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag continuation pattern from 11/12/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Forest Oil Corp (FST)
Industry: Petroleum (Producing)
Industry RS rank: 51 out of 53
Stock RS rank: 591 out of 593
11/20/14 close: $1.08
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $0.67 or 38.3% below the close.
Change YTD: -70.08%
Volume: 3,655,500 shares. 3 month avg: 2,677,200 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/19/2014 to 11/19/2014
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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Griffon Corp (GFF)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 168 out of 593
11/20/14 close: $12.60
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $13.16 or 4.4% above the close.
Change YTD: -4.62%
Volume: 85,000 shares. 3 month avg: 160,094 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: Rectangle bottom continuation pattern from 03/21/2014 to 11/20/2014
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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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 17 out of 53
Stock RS rank: 523 out of 593
11/20/14 close: $22.19
1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $20.78 or 6.3% below the close.
Change YTD: -28.58%
Volume: 624,900 shares. 3 month avg: 1,087,265 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/04/2014 to 11/18/2014
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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Illumina Inc (ILMN)
Industry: Biotechnology
Industry RS rank: 1 out of 53
Stock RS rank: 95 out of 593
11/20/14 close: $186.26
1 Month avg volatility: $5.70. Volatility stop (for upward breakout): $173.83 or 6.7% below the close.
Change YTD: 68.42%
Volume: 900,700 shares. 3 month avg: 1,227,162 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Insteel Industries Inc (IIIN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 169 out of 593
11/20/14 close: $22.51
1 Month avg volatility: $0.61. Volatility stop (for downward breakout): $23.96 or 6.4% above the close.
Change YTD: -0.97%
Volume: 41,700 shares. 3 month avg: 57,315 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 11/06/2014 to 11/14/2014
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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Loews Corp (L)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 53
Stock RS rank: 380 out of 593
11/20/14 close: $42.74
1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $41.58 or 2.7% below the close.
Change YTD: -11.40%
Volume: 811,000 shares. 3 month avg: 1,139,332 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/18/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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National Oilwell Varco (NOV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 496 out of 593
11/20/14 close: $72.36
1 Month avg volatility: $2.02. Volatility stop (for downward breakout): $76.63 or 5.9% above the close.
Change YTD: -9.02%
Volume: 3,239,600 shares. 3 month avg: 4,179,609 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: Diamond top reversal pattern from 10/21/2014 to 11/20/2014
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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NCI Building Systems Inc. (NCS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 24 out of 53
Stock RS rank: 118 out of 593
11/20/14 close: $19.24
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $17.67 or 8.2% below the close.
Change YTD: 9.69%
Volume: 143,600 shares. 3 month avg: 279,302 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: Scallop, ascending and inverted continuation pattern from 10/15/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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New Jersey Resources Corp (NJR)
Industry: Natural Gas (Distributor)
Industry RS rank: 27 out of 53
Stock RS rank: 255 out of 593
11/20/14 close: $57.56
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $55.13 or 4.2% below the close.
Change YTD: 24.48%
Volume: 93,300 shares. 3 month avg: 214,766 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: Scallop, ascending and inverted continuation pattern from 10/08/2014 to 11/19/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Occidental Petroleum Corp (OXY)
Industry: Petroleum (Producing)
Industry RS rank: 51 out of 53
Stock RS rank: 488 out of 593
11/20/14 close: $86.87
1 Month avg volatility: $1.80. Volatility stop (for upward breakout): $82.40 or 5.2% below the close.
Change YTD: -8.65%
Volume: 3,743,600 shares. 3 month avg: 4,873,691 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/16/2014 to 11/20/2014
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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PartnerRe Ltd (PRE)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 53
Stock RS rank: 267 out of 593
11/20/14 close: $115.55
1 Month avg volatility: $1.30. Volatility stop (for upward breakout): $111.50 or 3.5% below the close.
Change YTD: 9.60%
Volume: 199,300 shares. 3 month avg: 330,012 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/18/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Public Service Enterprise Group PEG (PEG)
Industry: Electric Utility (East)
Industry RS rank: 20 out of 53
Stock RS rank: 259 out of 593
11/20/14 close: $40.63
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $38.94 or 4.2% below the close.
Change YTD: 26.81%
Volume: 2,308,200 shares. 3 month avg: 3,499,238 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Questar Corp. (STR)
Industry: Natural Gas (Diversified)
Industry RS rank: 49 out of 53
Stock RS rank: 340 out of 593
11/20/14 close: $24.07
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $23.05 or 4.3% below the close.
Change YTD: 4.70%
Volume: 1,570,600 shares. 3 month avg: 1,048,003 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: Scallop, ascending and inverted continuation pattern from 10/16/2014 to 11/17/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Ross Stores (ROST)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 16 out of 53
Stock RS rank: 87 out of 593
11/20/14 close: $83.21
1 Month avg volatility: $1.25. Volatility stop (for downward breakout): $86.04 or 3.4% above the close.
Change YTD: 11.05%
Volume: 2,358,800 shares. 3 month avg: 1,662,658 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 10/23/2014 to 11/20/2014
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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UIL Holdings Corp (UIL)
Industry: Electric Utility (East)
Industry RS rank: 20 out of 53
Stock RS rank: 217 out of 593
11/20/14 close: $39.84
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $37.93 or 4.8% below the close.
Change YTD: 2.81%
Volume: 469,500 shares. 3 month avg: 395,935 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: Scallop, ascending and inverted continuation pattern from 10/01/2014 to 11/14/2014
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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VeriFone Systems, Inc (PAY)
Industry: Computer Software and Svcs
Industry RS rank: 18 out of 53
Stock RS rank: 190 out of 593
11/20/14 close: $36.80
1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $34.61 or 6.0% below the close.
Change YTD: 37.21%
Volume: 821,700 shares. 3 month avg: 1,659,549 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: Flag continuation pattern from 11/06/2014 to 11/20/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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iShares SP Natural resources (oil) (IGE)
Industry: Petroleum (Integrated)
Industry RS rank: 46 out of 53
Stock RS rank: 470 out of 593
11/20/14 close: $42.61
1 Month avg volatility: $0.81. Volatility stop (for downward breakout): $44.26 or 3.9% above the close.
Change YTD: -1.80%
Volume: 151,000 shares. 3 month avg: 333,711 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond top reversal pattern from 10/22/2014 to 11/19/2014
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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MSCI Pacific ex-Japan Index fund (EPP)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 439 out of 593
11/20/14 close: $46.74
1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $47.44 or 1.5% above the close.
Change YTD: 0.02%
Volume: 370,000 shares. 3 month avg: 755,734 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 10/31/2014 to 11/14/2014
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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PowerShares Dynamic Oil Services (PXJ)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 551 out of 593
11/20/14 close: $21.63
1 Month avg volatility: $0.59. Volatility stop (for upward breakout): $20.09 or 7.1% below the close.
Change YTD: -16.29%
Volume: 196,800 shares. 3 month avg: 35,889 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/15/2014 to 11/20/2014
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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S and P Global Energy Sector Index fund (IXC)
Industry: Investment Co. (Foreign)
Industry RS rank: 47 out of 53
Stock RS rank: 490 out of 593
11/20/14 close: $41.38
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $42.75 or 3.3% above the close.
Change YTD: -4.26%
Volume: 109,800 shares. 3 month avg: 186,683 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: Diamond top reversal pattern from 10/21/2014 to 11/20/2014
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 11/20/14. Intraday Market Direction: Nasdaq

The index dropped by -0.6% or -26.73 points. Since 02/05/1971 the index made 286 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 124 occasions.
     Average loss was -1.1% on 162 occasions.
Expect the index to close lower 56.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 73/126 or 57.9% of the time.
     The prediction of the index closing lower has been right 26/53 or 49.1% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

This chart is interesting because of the three-day wide head-and-shoulders top. I show that as a left shoulder (LS), head, and right shoulder (RS). Right now, it's just squiggles on a price chart. Do you know why?

Answer: Because the index has to close below the neckline before it becomes a valid chart pattern. The neckline is the red line on the chart. It connects the two armpits.

How long will it take before it confirms? You can use price mirrors to answer that. Just remember that it's a guess because no one knows.

$ $ $

An interesting development in the CPI chart (not shown). The indicator is approaching a bearish signal.

$ $ $

Good news! I finished my Christmas shopping! What is even more surprising is that I had Christmas shopping to do in the first place. I'm single, so in the past I didn't have anything to buy. This year I bought some things for a friend. Women like power tools, don't they?

$ $ $

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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  3,911.96    
 Monthly S1  4,293.84  381.87   
 Monthly Pivot  4,498.47  204.64   
 Weekly S2  4,591.82  93.34   
 Weekly S1  4,633.76  41.95   
 Daily S2  4,635.40  1.63   Yes! The Daily S2 is close to the Weekly S1.
 Daily S1  4,655.55  20.16   
 Low  4,655.72  0.17   Yes! The Low is close to the Daily S1.
 Weekly Pivot  4,668.44  12.72   
 61.8% Down from Intraday High  4,671.18  2.75   Yes! The 61.8% Down from Intraday High is close to the Weekly Pivot.
 Close  4,675.71  4.53   
 Daily Pivot  4,675.88  0.17   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  4,675.96  0.08   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  4,680.74  4.78   
 Open  4,694.78  14.04   
 Daily R1  4,696.03  1.25   Yes! The Daily R1 is close to the Open.
 High  4,696.20  0.17   Yes! The High is close to the Daily R1.
 Weekly R1  4,710.38  14.18   
 Daily R2  4,716.36  5.97   
 Weekly R2  4,745.06  28.70   
 Monthly R1  4,880.35  135.29   
 Monthly R2  5,084.98  204.64   

Wednesday 11/19/14. Market Direction: CPI

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 again, shows divergence just like it did last week and the week before that. Or does it?

Notice the indicator has moved up today. So did the index. Thus, they are convergent, not divergent. Does this mean another bull run in the markets? Not yet. We could see the indices tumble in which case the indicator would roll over and head toward zero.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

The indicator moved into neutral territory for a few days but is bullish again. Remember, signals can change for up to a week.

-- Thomas Bulkowski

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Tuesday 11/18/14. Intraday Market Direction: Dow

The index climbed by 0.1% or 13.01 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 646 occasions.
     Average loss was -0.6% on 612 occasions.
Expect the index to close higher 51.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 85/133 or 63.9% of the time.
     The prediction of the index closing lower has been right 22/40 or 55.0% 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 shows a support or resistance area, depending on how price approaches it. I drew it near the price bottoms but it looks formidable. However, on the intraday scale, such as this is, it is not as strong as it is on the daily or weekly charts.

Anyway, the blue line highlights a recent converging trend. It forms what looks like a descending triangle or even a symmetrical triangle. The breakout from those patterns can be in any direction.

The above probabilities say Tuesday will close upward. That looks good to me since that support is underneath. However, the chart pattern indicator is neutral, looking weak. A world event could change things for the worse, of course.

$ $ $

My health insurance plan expires at the end of January due to its non-compliance with the unaffordable care act (Obamacare). The cheapest new plan was for a 51% higher premium. Wow. The next time you ask why I show ads on this website or plug my books, it's to help pay for these unexpected costs. The holidays are coming, so open your wallet and buy a dozen or two of my books as gifts. I'll need the money when the insurance rates go up.

$ $ $

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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,219.09    
 Monthly S1  16,433.42  1,214.33   
 Monthly Pivot  17,069.45  636.03   
 Weekly S2  17,460.49  391.04   
 Weekly S1  17,554.12  93.63   
 Daily S2  17,574.95  20.83   
 Low  17,606.81  31.86   
 Daily S1  17,611.35  4.54   Yes! The Daily S1 is close to the Low.
 Weekly Pivot  17,629.80  18.45   
 Open  17,631.85  2.05   Yes! The Open is close to the Weekly Pivot.
 61.8% Down from Intraday High  17,632.88  1.04   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  17,640.94  8.05   
 Daily Pivot  17,643.21  2.27   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  17,647.75  4.54   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  17,648.99  1.24   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  17,675.07  26.08   
 Daily R1  17,679.61  4.54   Yes! The Daily R1 is close to the High.
 Daily R2  17,711.47  31.86   
 Weekly R1  17,723.43  11.96   
 Weekly R2  17,799.11  75.68   
 Monthly R1  18,283.78  484.67   
 Monthly R2  18,919.81  636.03   

Monday 11/17/14. Market Monday: The Week Ahead

My Prediction

Picture of the CPI on the daily scale.

I show a picture of the chart pattern indicator. against the S&P 500 index on the daily scale.

Notice how the indicator has dropped dramatically. It's now in neutral territory. Combined with how the index has curled over, it's my belief that we are about to retrace the gains from the October low.

That means a drop to, oh, 1950, maybe 1975, and I expect it to happen next week.

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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 39.81 points.
Tuesday: Up 1.16 points.
Wednesday: Down 2.7 points.
Thursday: Up 40.59 points.
Friday: Down 18.05 points.

For the Week...

The Dow industrials were up 60.81 points or 0.3%.
The Nasdaq composite was up 56.01 points or 1.2%.
The S&P 500 index was up 7.9 points or 0.4%.

Year to Date...

Dow Industrials
     0.4% down from the high of 17,705.48 on 11/13/2014.
     15.0% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.3% down from the high of 4,703.11 on 11/13/2014.
     18.8% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     0.3% down from the high of 2,046.18 on 11/13/2014.
     17.4% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Industrial production9:15 MB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 MB-Gauges economic activity, hints of inflation.
Producer price index8:30 TB-Measures wholesale goods cost. An indication of future inflation.
Housing starts8:30 WB-Number of homes beginning construction.
Building permits8:30 WB-Measures building permits for new construction.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Minutes2:00 W?Minutes of the prior Federal Reserve meeting.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Consumer price index8:30 ThB+Inflation report. Measures cost of goods and services.
Existing home sales10:00 ThCCounts sales of used homes.
Leading indicators10:00 ThD-Summary of already known reports.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
2017 equity LEAPS addedMonday
VIX expiresWednesday
A.M. settled index options cease trading.Thursday
Expiring equity and P.M. settled index options cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, and cash-settled currency options expireSaturday

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

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Swing and Position Traders: Chart Pattern Indicator

As of 11/14/2014, the CPI had:

15 bearish patterns,
21 bullish patterns,
402 patterns waiting for breakout.
The CPI signal is 58.3%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,586  17,611  17,637  17,662  17,688 
Weekly  17,456  17,545  17,625  17,715  17,795 
Monthly  15,215  16,425  17,065  18,275  18,915 
S&P500 (^GSPC): Daily  2,032  2,036  2,039  2,043  2,046 
Weekly  2,023  2,031  2,039  2,047  2,055 
Monthly  1,743  1,892  1,969  2,117  2,194 
Nasdaq (^IXIC): Daily  4,656  4,672  4,681  4,697  4,705 
Weekly  4,596  4,642  4,673  4,719  4,749 
Monthly  3,916  4,302  4,503  4,889  5,089 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 4 weeks up 15.7%   Expect a reversal soon. 
 2 months up 40.2%   Expect a random direction. 
 S & P 500 (^GSPC) 4 weeks up 16.4%   Expect a reversal soon. 
 2 months up 42.1%   Expect a random direction. 
 Nasdaq composite (^IXIC) 4 weeks up 17.1%   Expect a reversal soon. 
 2 months up 40.5%   Expect a random direction. 

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the 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.

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

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

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
18Flag
16Pipe bottom
11Head-and-shoulders bottom
9Pennant
7Triangle, symmetrical
7Broadening wedge, descending
6Double Bottom, Adam and Adam
4Broadening bottom
3Rectangle bottom
3Pipe 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. E-Commerce1. E-Commerce
2. Biotechnology2. Biotechnology
3. Semiconductor Cap Equip.3. Air Transport
4. Securities Brokerage4. Shoe
5. Information Services5. Securities Brokerage
50. Toiletries/Cosmetics50. Metal Fabricating
51. Natural Gas (Diversified)51. Toiletries/Cosmetics
52. Petroleum (Producing)52. Petroleum (Producing)
53. Oilfield Svcs/Equipment53. Oilfield Svcs/Equipment
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

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Saturday 11/15/14. Book Fair.

Picture of my books.

I've been asked how I was able to retire at 36. I worked and saved my disposable income. With those savings, I bought stocks and held them until they ripened enough to be sold. It's a process almost anyone can follow. For details, read my Trading Basics book, chapter 1. It explains the process.

In fact, the three books of the Evolution of a Trader series I wrote describe my journey from buy-and-hold investor to day trader and back, sharing my discoveries along the way.

Trading Basics is the first in the series. The next two are: Fundamental Analysis and Position Trading and Swing and Day Trading.

Getting Started in Chart Patterns, Second Edition is a recent addition to my library. The publisher asks that authors rewrite 20% of the book in each new edition. Instead, I rewrote almost the entire book. I think you'll find this a low-cost entertaining read.

For those who like the visual approach to trading, sample my Visual Guide to Chart Patterns book. It has a number of quizzes which are a blast to take.

My Encyclopedia of Chart Patterns, Second Edition is one of the best in class. It's a popular book since it provides a complete analysis of each of 53 chart and 10 event patterns. If you thought the information provided on this website is fantastic, and it is, buy a copy of this book. You'll be amazed at what you don't know.

Encyclopedia of Candlestick Charts had its cover changed. That's unfortunate since the sunrise artwork of the original I thought was spectacular. The new cover is, well, yawn. The old version appears in the picture above. The new version on the upper left margin of the page.

My Trading Classic Chart Patterns book also had its cover redone (original appears in the figure). Apparently the publisher rented the artwork for a set period and needed to have it replaced. This book discusses a scoring system to help improve the odds of picking chart patterns for a successful trade.

If you use Amazon.com to buy anything, then please do so through this website. Click on a picture of one of my books along the left page margin. That will take you to Amazon where you can spend your hard earned money. They pay for the referral. You don't have to buy the book. You can buy anything while there. The referral fee doesn't increase your cost in any way, but it does help me subsidize this website and keep it free.

Thanks -- Thomas Bulkowski


Friday 11/14/14. 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 24 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 601 stocks searched, or 4.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

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

Excluding ETFs, there were 8 bullish chart patterns this week and 2 bearish ones with any remaining (12) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ANFFlag      11/10/201411/13/2014Apparel
BATriangle, symmetrical      10/22/201411/12/2014Aerospace/Defense
CNODiamond top      10/31/201411/07/2014Insurance (Diversified)
CROXPipe bottom      10/27/201411/03/2014Shoe
ESVBroadening wedge, ascending      10/14/201411/13/2014Oilfield Svcs/Equipment
REFlag      11/06/201411/13/2014Insurance (Prop/Casualty)
FOETriangle, symmetrical      10/21/201411/07/2014Chemical (Specialty)
FISVPennant      10/31/201411/12/2014Computer Software and Svcs
GSOLTriangle, symmetrical      10/23/201411/13/2014Advertising
GFFRectangle bottom      03/21/201411/07/2014Building Materials
HTLDTriangle, symmetrical      10/22/201411/13/2014Trucking/Transp. Leasing
NSPPennant      11/10/201411/12/2014Human Resources
IPGPennant      11/04/201411/12/2014Advertising
IVCFlag      10/28/201411/13/2014Medical Supplies
JCPBroadening top, right-angled and descending      10/23/201411/13/2014Retail Store
MROHead-and-shoulders top      10/22/201411/07/2014Petroleum (Integrated)
MCOFlag      10/31/201411/12/2014Information Services
PCGPennant      11/04/201411/12/2014Electric Utility (West)
KWRFlag      11/04/201411/13/2014Chemical (Specialty)
RMBSTriangle, symmetrical      10/17/201411/13/2014Semiconductor Cap Equip.
TFXFlag      10/31/201411/12/2014Diversified Co.
VMCFlag      11/07/201411/13/2014Cement and Aggregates
ITAPennant      11/05/201411/07/2014Aerospace/Defense
IATFlag      11/10/201411/13/2014Long ETFs
PPAFlag      10/31/201411/12/2014Aerospace/Defense

 

Weekly screen for chart patterns ending between 11/06/2014 and 11/13/2014. 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.
 
Abercrombie and Fitch Co. (ANF)
Industry: Apparel
Industry RS rank: 27 out of 53
Stock RS rank: 554 out of 594
Close as of 11/13/2014: $28.90
1 Month average volatility: $1.21. Volatility based stop (assuming upward breakout): $26.26 or 9.2% below the close.
Change YTD: -12.18%
Volume: 2,423,600 shares
3 month avg volume: 2,660,775 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Flag continuation pattern from 11/10/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

Boeing Company, The (BA)
Industry: Aerospace/Defense
Industry RS rank: 18 out of 53
Stock RS rank: 394 out of 594
Close as of 11/13/2014: $128.53
1 Month average volatility: $2.11. Volatility based stop (assuming upward breakout): $121.53 or 5.5% below the close.
Change YTD: -5.83%
Volume: 5,813,800 shares
3 month avg volume: 3,922,535 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/22/2014 to 11/12/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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CNO Financial Group, Inc (CNO)
Industry: Insurance (Diversified)
Industry RS rank: 38 out of 53
Stock RS rank: 238 out of 594
Close as of 11/13/2014: $17.90
1 Month average volatility: $0.38. Volatility based stop (assuming downward breakout): $18.85 or 5.3% above the close.
Change YTD: 1.19%
Volume: 883,900 shares
3 month avg volume: 1,357,034 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Diamond top reversal pattern from 10/31/2014 to 11/07/2014
Performance rank: 7 out of 21.
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price meets the measure rule target 76% of the time.

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CROCS Inc (CROX)
Industry: Shoe
Industry RS rank: 6 out of 53
Stock RS rank: 511 out of 594
Close as of 11/13/2014: $12.51
1 Month average volatility: $0.35. Volatility based stop (assuming upward breakout): $11.72 or 6.4% below the close.
Change YTD: -21.42%
Volume: 710,500 shares
3 month avg volume: 1,065,631 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/27/2014 to 11/03/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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ENSCO International (ESV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 53 out of 53
Stock RS rank: 551 out of 594
Close as of 11/13/2014: $38.76
1 Month average volatility: $1.58. Volatility based stop (assuming downward breakout): $42.62 or 10.0% above the close.
Change YTD: -32.21%
Volume: 5,839,100 shares
3 month avg volume: 4,588,477 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Broadening wedge, ascending reversal pattern from 10/14/2014 to 11/13/2014
Performance rank: 14 out of 21.
Breakout is downward 73% of the time.
Average decline: 17%.
Break-even failure rate: 11%.
Pullbacks occur 57% of the time.
Price meets the measure rule target 58% of the time.

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Everest Re Group Ltd (RE)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 19 out of 53
Stock RS rank: 237 out of 594
Close as of 11/13/2014: $170.78
1 Month average volatility: $2.33. Volatility based stop (assuming upward breakout): $164.52 or 3.7% below the close.
Change YTD: 9.57%
Volume: 319,700 shares
3 month avg volume: 286,915 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Flag continuation pattern from 11/06/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 32 out of 53
Stock RS rank: 322 out of 594
Close as of 11/13/2014: $12.99
1 Month average volatility: $0.42. Volatility based stop (assuming upward breakout): $12.10 or 6.9% below the close.
Change YTD: 1.25%
Volume: 269,400 shares
3 month avg volume: 556,752 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/21/2014 to 11/07/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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Fiserv, Inc (FISV)
Industry: Computer Software and Svcs
Industry RS rank: 17 out of 53
Stock RS rank: 125 out of 594
Close as of 11/13/2014: $70.37
1 Month average volatility: $1.02. Volatility based stop (assuming upward breakout): $67.68 or 3.8% below the close.
Change YTD: 19.17%
Volume: 1,260,400 shares
3 month avg volume: 1,053,480 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pennant continuation pattern from 10/31/2014 to 11/12/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price meets the measure rule target 60% of the time.

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Global Sources Ltd (GSOL)
Industry: Advertising
Industry RS rank: 16 out of 53
Stock RS rank: 518 out of 594
Close as of 11/13/2014: $7.10
1 Month average volatility: $0.29. Volatility based stop (assuming upward breakout): $6.39 or 10.0% below the close.
Change YTD: -12.67%
Volume: 20,400 shares
3 month avg volume: 26,289 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/23/2014 to 11/13/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

Top

Griffon Corp (GFF)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 53
Stock RS rank: 183 out of 594
Close as of 11/13/2014: $12.61
1 Month average volatility: $0.28. Volatility based stop (assuming downward breakout): $13.32 or 5.7% above the close.
Change YTD: -4.54%
Volume: 113,700 shares
3 month avg volume: 164,278 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rectangle bottom continuation pattern from 03/21/2014 to 11/07/2014
Performance rank: 12 out of 21.
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price meets the measure rule target 50% of the time.

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Heartland Express, Inc (HTLD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 25 out of 53
Stock RS rank: 77 out of 594
Close as of 11/13/2014: $25.53
1 Month average volatility: $0.74. Volatility based stop (assuming upward breakout): $23.81 or 6.8% below the close.
Change YTD: 30.12%
Volume: 408,600 shares
3 month avg volume: 390,495 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/22/2014 to 11/13/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

Top

Insperity (NSP)
Industry: Human Resources
Industry RS rank: 41 out of 53
Stock RS rank: 226 out of 594
Close as of 11/13/2014: $33.25
1 Month average volatility: $0.75. Volatility based stop (assuming upward breakout): $31.68 or 4.7% below the close.
Change YTD: -7.97%
Volume: 63,500 shares
3 month avg volume: 106,783 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pennant continuation pattern from 11/10/2014 to 11/12/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price meets the measure rule target 60% of the time.

Top

Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 16 out of 53
Stock RS rank: 228 out of 594
Close as of 11/13/2014: $19.41
1 Month average volatility: $0.35. Volatility based stop (assuming upward breakout): $18.64 or 4.0% below the close.
Change YTD: 9.66%
Volume: 2,398,300 shares
3 month avg volume: 4,715,397 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pennant continuation pattern from 11/04/2014 to 11/12/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price meets the measure rule target 60% of the time.

Top

Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 7 out of 53
Stock RS rank: 409 out of 594
Close as of 11/13/2014: $15.99
1 Month average volatility: $0.66. Volatility based stop (assuming upward breakout): $14.56 or 8.9% below the close.
Change YTD: -31.11%
Volume: 130,600 shares
3 month avg volume: 168,732 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Flag continuation pattern from 10/28/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

JC Penney Company Inc (JCP)
Industry: Retail Store
Industry RS rank: 9 out of 53
Stock RS rank: 524 out of 594
Close as of 11/13/2014: $7.10
1 Month average volatility: $0.34. Volatility based stop (assuming upward breakout): $6.24 or 12.1% below the close.
Change YTD: -22.40%
Volume: 55,304,900 shares
3 month avg volume: 22,670,506 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 10/23/2014 to 11/13/2014
Performance rank: 23 out of 23.
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price meets the measure rule target 63% of the time.

Top

Marathon Oil (MRO)
Industry: Petroleum (Integrated)
Industry RS rank: 48 out of 53
Stock RS rank: 496 out of 594
Close as of 11/13/2014: $31.95
1 Month average volatility: $1.06. Volatility based stop (assuming downward breakout): $34.74 or 8.7% above the close.
Change YTD: -9.49%
Volume: 8,212,800 shares
3 month avg volume: 6,331,980 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 10/22/2014 to 11/07/2014
Performance rank: 1 out of 21.
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price meets the measure rule target 55% of the time.

Top

Moodys Corp (MCO)
Industry: Information Services
Industry RS rank: 8 out of 53
Stock RS rank: 89 out of 594
Close as of 11/13/2014: $100.90
1 Month average volatility: $1.43. Volatility based stop (assuming upward breakout): $97.31 or 3.6% below the close.
Change YTD: 28.58%
Volume: 1,224,200 shares
3 month avg volume: 1,019,085 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Flag continuation pattern from 10/31/2014 to 11/12/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 13 out of 53
Stock RS rank: 166 out of 594
Close as of 11/13/2014: $49.77
1 Month average volatility: $0.93. Volatility based stop (assuming upward breakout): $47.78 or 4.0% below the close.
Change YTD: 23.56%
Volume: 3,588,200 shares
3 month avg volume: 3,323,591 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pennant continuation pattern from 11/04/2014 to 11/12/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price meets the measure rule target 60% of the time.

Top

Quaker Chemical (KWR)
Industry: Chemical (Specialty)
Industry RS rank: 32 out of 53
Stock RS rank: 186 out of 594
Close as of 11/13/2014: $82.87
1 Month average volatility: $2.06. Volatility based stop (assuming upward breakout): $78.00 or 5.9% below the close.
Change YTD: 7.53%
Volume: 31,200 shares
3 month avg volume: 49,638 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Monday.
 
Chart pattern: Flag continuation pattern from 11/04/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

Rambus Inc (RMBS)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 392 out of 594
Close as of 11/13/2014: $11.32
1 Month average volatility: $0.44. Volatility based stop (assuming upward breakout): $10.44 or 7.8% below the close.
Change YTD: 19.54%
Volume: 454,900 shares
3 month avg volume: 731,308 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 10/17/2014 to 11/13/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

Top

Teleflex Inc (TFX)
Industry: Diversified Co.
Industry RS rank: 44 out of 53
Stock RS rank: 244 out of 594
Close as of 11/13/2014: $114.64
1 Month average volatility: $1.76. Volatility based stop (assuming upward breakout): $110.90 or 3.3% below the close.
Change YTD: 22.14%
Volume: 217,500 shares
3 month avg volume: 225,512 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Flag continuation pattern from 10/31/2014 to 11/12/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

Vulcan Materials (VMC)
Industry: Cement and Aggregates
Industry RS rank: 37 out of 53
Stock RS rank: 254 out of 594
Close as of 11/13/2014: $65.58
1 Month average volatility: $1.55. Volatility based stop (assuming upward breakout): $61.81 or 5.7% below the close.
Change YTD: 10.37%
Volume: 842,500 shares
3 month avg volume: 1,101,751 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Flag continuation pattern from 11/07/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top

DJ US Aerospace and defense (ITA)
Industry: Aerospace/Defense
Industry RS rank: 18 out of 53
Stock RS rank: 343 out of 594
Close as of 11/13/2014: $111.81
1 Month average volatility: $1.42. Volatility based stop (assuming upward breakout): $108.63 or 2.8% below the close.
Change YTD: 5.80%
Volume: 55,500 shares
3 month avg volume: 38,943 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pennant continuation pattern from 11/05/2014 to 11/07/2014
Breakout is upward 61% of the time.
Average rise: 25%.
Break-even failure rate: 2%.
Throwbacks occur 47% of the time.
Price meets the measure rule target 60% of the time.

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iShares DJ US Regional Banks (IAT)
Industry: Long ETFs
Industry RS rank: 11 out of 53
Stock RS rank: 286 out of 594
Close as of 11/13/2014: $34.48
1 Month average volatility: $0.41. Volatility based stop (assuming upward breakout): $33.64 or 2.4% below the close.
Change YTD: 4.30%
Volume: 15,800 shares
3 month avg volume: 166,728 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Flag continuation pattern from 11/10/2014 to 11/13/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

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PowerShares Aerospace and Defense (PPA)
Industry: Aerospace/Defense
Industry RS rank: 18 out of 53
Stock RS rank: 310 out of 594
Close as of 11/13/2014: $33.91
1 Month average volatility: $0.39. Volatility based stop (assuming upward breakout): $33.04 or 2.6% below the close.
Change YTD: 9.28%
Volume: 714,400 shares
3 month avg volume: 53,118 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Flag continuation pattern from 10/31/2014 to 11/12/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

Top


Thursday 11/13/14. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 14.57 points. Since 02/05/1971 the index made 582 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 320 occasions.
     Average loss was -0.7% on 262 occasions.
Expect the index to close higher 55.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 72/125 or 57.6% of the time.
     The prediction of the index closing lower has been right 26/53 or 49.1% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The red trendline shows momentum (slope) lower than the blue trendline. The slope of the blue line, on this dimension (aspect ratio of width to height) looks sustainable. That means it's not too steep.

Point A is a double bottom. This one is what's called a continuation pattern since the trend going into the "bottom" is from the bottom and not the top. A recent study I finished about a month ago shows that these continuation double bottoms have no performance difference from regular double bottoms.

I don't see anything on this chart to say the uptrend is ending. Thus, I look for a higher close on Thursday.

$ $ $

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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  3,944.39    
 Monthly S1  4,309.76  365.37   
 Monthly Pivot  4,481.97  172.21   
 Weekly S2  4,582.15  100.18   
 Weekly S1  4,628.64  46.49   
 Daily S2  4,631.03  2.39   Yes! The Daily S2 is close to the Weekly S1.
 Weekly Pivot  4,641.41  10.38   
 Low  4,643.78  2.37   Yes! The Low is close to the Weekly Pivot.
 Open  4,644.63  0.85   Yes! The Open is close to the Low.
 Daily S1  4,653.08  8.45   
 61.8% Down from Intraday High  4,657.07  3.99   
 50% Down from Intraday High  4,661.18  4.11   
 38.2% Down from Intraday High  4,665.29  4.11   
 Daily Pivot  4,665.83  0.54   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  4,675.13  9.30   
 High  4,678.58  3.45   Yes! The High is close to the Close.
 Daily R1  4,687.88  9.30   
 Weekly R1  4,687.90  0.02   Yes! The Weekly R1 is close to the Daily R1.
 Daily R2  4,700.63  12.73   
 Weekly R2  4,700.67  0.04   Yes! The Weekly R2 is close to the Daily R2.
 Monthly R1  4,847.34  146.67   
 Monthly R2  5,019.55  172.21   

Wednesday 11/12/14. Market Direction: CPI

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.

Nothing much has changed in the charts since last Wednesday. The indicator is still diverging with the index. That suggests the index is going to drop and follow the indicator.

The question is timing. When will this happen? I don't have an answer. Divergence can continue for weeks, sometimes months.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

The indicator is still in bullish territory. When the indicator weakens, the green bars will be replaced by white ones. That's when we'll know the trend has likely changed. It's also possible that red bars will appear without a white transition. As you can see from the chart, that's rare. It'll probably take a violent drop in the index for that to happen.

-- Thomas Bulkowski

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Tuesday 11/11/14. Intraday Market Direction: Dow

The index climbed by 0.2% or 39.81 points. Since 10/01/1928 the index made 1237 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 676 occasions.
     Average loss was -0.5% on 561 occasions.
Expect the index to close higher 54.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 84/132 or 63.6% of the time.
     The prediction of the index closing lower has been right 22/40 or 55.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

I drew two lines on the chart. The first is the red arc along price tops. This suggests a slowing of upward momentum. It does not guarantee a downward move, but it is highly suggestive of one. It is possible that the index will resume a new upward move at a high velocity.

The blue line when combined with the red one shows how the high-low price range over time has narrowed. If you are a user of Bollinger bands, you will notice a narrowing of the bands. Narrow bands lead to wide ones. By that, I mean periods of low volatility (which we see here) precede periods of high volatility. Thus look for the index to make a big move. When is anyone's guess. Which direction? Probably down, but that's a guess, 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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,294.52    
 Monthly S1  16,454.13  1,159.61   
 Monthly Pivot  17,014.73  560.60   
 Weekly S2  17,192.17  177.44   
 Weekly S1  17,402.96  210.78   
 Weekly Pivot  17,489.14  86.19   
 Daily S2  17,520.01  30.87   
 Low  17,547.51  27.50   
 Daily S1  17,566.88  19.37   
 Open  17,568.98  2.10   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  17,575.92  6.94   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  17,584.69  8.77   
 38.2% Down from Intraday High  17,593.46  8.78   
 Daily Pivot  17,594.37  0.91   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  17,613.74  19.37   
 High  17,621.87  8.13   
 Daily R1  17,641.24  19.37   
 Daily R2  17,668.73  27.50   
 Weekly R1  17,699.93  31.19   
 Weekly R2  17,786.11  86.19   
 Monthly R1  18,174.34  388.23   
 Monthly R2  18,734.94  560.60   

Monday 11/10/14. 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.

There is not much exciting to report. I show support at the blue line, B. You can raise the line some to line it up with the peaks in June and October. That's where support near B really begins.

However, I expect that a reversal would stop where the red letter A is. That's about midway up the straight-line run shown beginning at the bottom of the red line.

The red line moves up at a good clip but has turned horizontal as the index struggles to find a new direction. Looking at my utility stocks, they have resumed moving up, so that is what I expect to happen here. What surprises me is that the large white candle (the highest one on the chart) followed by a quick reversal (the tall black candle) was so violent. And yet the stocks seem not alarmed.

Although I seem to be repeating myself, I expect a retrace in this uptrend on all indices, but have yet to see much of a hint that it's coming. One hint, the chart pattern indicator, continues to show bearish divergence, so at least one warning sign is present. Have your cash ready to buy the dip.

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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 24.28 points.
Tuesday: Up 17.6 points.
Wednesday: Up 100.69 points.
Thursday: Up 69.94 points.
Friday: Up 19.46 points.

For the Week...

The Dow industrials were up 183.41 points or 1.1%.
The Nasdaq composite was up 1.79 points or 0.0%.
The S&P 500 index was up 13.87 points or 0.7%.

Year to Date...

Dow Industrials
     0.0% down from the high of 17,575.33 on 11/07/2014.
     14.6% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.5% down from the high of 4,654.18 on 11/03/2014.
     17.4% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     0.1% down from the high of 2,034.26 on 11/07/2014.
     16.9% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

The economic calendar is unavailable at press time. However, you can find a version of it here. Just be sure you're looking at the right week.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 11/07/2014, the CPI had:

6 bearish patterns,
23 bullish patterns,
334 patterns waiting for breakout.
The CPI signal is 79.3%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,466  17,520  17,548  17,602  17,630 
Weekly  17,179  17,376  17,476  17,673  17,773 
Monthly  15,281  16,428  17,001  18,148  18,722 
S&P500 (^GSPC): Daily  2,021  2,027  2,030  2,036  2,040 
Weekly  1,989  2,011  2,022  2,044  2,056 
Monthly  1,749  1,890  1,962  2,104  2,176 
Nasdaq (^IXIC): Daily  4,594  4,613  4,626  4,645  4,658 
Weekly  4,568  4,600  4,627  4,660  4,686 
Monthly  3,930  4,281  4,468  4,819  5,005 
  • 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 20.6%   Expect a reversal soon. 
 2 months up 40.2%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 20.6%   Expect a reversal soon. 
 2 months up 42.1%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 22.8%   Expect a reversal soon. 
 2 months up 40.5%   Expect a random direction. 

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the 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.

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

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

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
67Pipe bottom
10Head-and-shoulders bottom
9Flag
7Double Bottom, Adam and Adam
7Broadening wedge, descending
5Broadening bottom
5Pipe top
5Broadening top
4Pennant
4Triangle, symmetrical

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. E-Commerce1. Biotechnology
2. Biotechnology2. E-Commerce
3. Air Transport3. Air Transport
4. Shoe4. Shoe
5. Securities Brokerage5. Long ETFs
50. Metal Fabricating50. Short ETFs
51. Toiletries/Cosmetics51. Natural Gas (Diversified)
52. Petroleum (Producing)52. Petroleum (Producing)
53. Oilfield Svcs/Equipment53. Toiletries/Cosmetics
54. Short ETFs54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Thursday 11/6/14. Intraday Market Direction: Nasdaq

The index dropped by -0.1% or -2.92 points. Since 02/05/1971 the index made 529 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 288 occasions.
     Average loss was -0.9% on 241 occasions.
Expect the index to close higher 54.4% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 71/124 or 57.3% of the time.
     The prediction of the index closing lower has been right 26/53 or 49.1% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The index has been trending higher following the red trendline, that is, until the last three days. Since Thursday, the index has made a series of lower highs (although I did cut through one price bar). That's bearish. The blue line shows the trend.

However, this downward trend could also be a pause before another upward run. If the index moves up, then the pattern would become a measured move up.

I thought that the indices were topping out, but the Dow continued upward today even as the Nasdaq dropped. Thus, we have a kind of divergence with some indices showing weakness and some showing strength. In short, I don't know which way the indices are headed.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  3,934.70    
 Monthly S1  4,277.71  343.01   
 Weekly S2  4,379.62  101.91   
 Monthly Pivot  4,459.61  79.99   
 Weekly S1  4,500.17  40.56   
 Weekly Pivot  4,570.84  70.67   
 Daily S2  4,583.62  12.78   
 Daily S1  4,602.17  18.55   
 Low  4,607.73  5.56   
 Close  4,620.72  12.99   
 61.8% Down from Intraday High  4,624.03  3.31   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  4,626.28  2.25   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  4,629.06  2.78   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  4,634.09  5.03   
 Daily R1  4,644.83  10.74   
 Open  4,649.47  4.64   
 High  4,650.39  0.92   Yes! The High is close to the Open.
 Daily R2  4,668.94  18.55   
 Weekly R1  4,691.39  22.45   
 Weekly R2  4,762.06  70.67   
 Monthly R1  4,802.62  40.56   
 Monthly R2  4,984.52  181.90   

Wednesday 11/5/14. Market Direction: CPI

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 is an interesting chart and it shows what I feel.

What does that mean?

I think the upward move has ended. The straight-line run is turning and this chart, with the indicator headed lower and the index moving up with one down day, signals a trend change. I'm looking for the index to retrace a portion of its gains for the next week or so.

Picture of the chart pattern indicator

This is another view of the CPI only it shows signal changes.

This chart still shows a bullish indicator, but I expect that to change.

-- Thomas Bulkowski

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Tuesday 11/4/14. Intraday Market Direction: Dow

The index dropped by -0.1% or -24.28 points. Since 10/01/1928 the index made 1243 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 646 occasions.
     Average loss was -0.8% on 597 occasions.
Expect the index to close higher 52.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 83/131 or 63.4% of the time.
     The prediction of the index closing lower has been right 22/40 or 55.0% 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.

This is an interesting chart because of the change in trend from moving up at a steady but good clip (A) to traveling horizontally (B).

For the last two sessions, the index has confined its movement between the top blue and bottom red line. The breakout from this trading range may well decide the direction the market takes over a longer term, say days or even a week, instead of intraday.

A measured move up chart pattern suggests a resumption of the upward move. But things are heating up in the Ukraine and the elections are tomorrow (Tuesday). Although we may not know the outcome of the voting for a few more weeks due to recounts, that could push the indices around some.

The above probabilities suggest a higher close tomorrow. It sounds like the republicans have the momentum going into the elections and they are pro business, which the market likes, so I'm also anticipating an upward close.

$ $ $

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

-- Thomas Bulkowski

Top

© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  15,331.88    
 Monthly S1  16,349.06  1,017.18   
 Weekly S2  16,498.16  149.10   
 Monthly Pivot  16,872.30  374.14   
 Weekly S1  16,932.20  59.90   
 Weekly Pivot  17,163.87  231.67   
 Daily S2  17,301.45  137.58   
 Daily S1  17,333.84  32.40   
 Low  17,339.85  6.01   Yes! The Low is close to the Daily S1.
 Close  17,366.24  26.39   
 61.8% Down from Intraday High  17,366.90  0.66   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  17,372.25  5.35   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  17,375.25  3.00   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  17,383.60  8.35   
 Open  17,390.90  7.30   
 Daily R1  17,404.64  13.74   
 High  17,410.65  6.01   Yes! The High is close to the Daily R1.
 Daily R2  17,443.05  32.40   
 Weekly R1  17,597.91  154.86   
 Weekly R2  17,829.58  231.67   
 Monthly R1  17,889.48  59.90   
 Monthly R2  18,412.72  523.24   

Monday 11/3/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

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

I show a broadening top chart pattern, outlined here in red.

I believe the upper trendline is going to be a boundary that the Dow will have difficulty penetrating and remaining above. Yes, it will poke its head above the line, but my guess is the market will swat it down and the index will begin a retrace.

That's the only clue I see that indicates trouble ahead. It's possible, of course, that the index will blow through the top of the broadening pattern. In which case, I'll be first in line at the bank to profit from the 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: Up 12.53 points.
Tuesday: Up 187.81 points.
Wednesday: Down 31.44 points.
Thursday: Up 221.11 points.
Friday: Up 195.1 points.

For the Week...

The Dow industrials were up 585.11 points or 3.5%.
The Nasdaq composite was up 147.02 points or 3.3%.
The S&P 500 index was up 53.47 points or 2.7%.

Year to Date...

Dow Industrials
     0.0% down from the high of 17,395.54 on 10/31/2014.
     13.4% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.2% down from the high of 4,641.51 on 10/31/2014.
     17.4% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     0.1% down from the high of 2,019.26 on 09/19/2014.
     16.1% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Construction spending10:00 MDCovers residential/non-residential/public spending on new construction.
Auto & truck sales2:00 MC-Monthly sales of domestically produced vehicles.
Trade balance8:30 TC+Signals balance of exports & imports.
Factory orders10:00 TD+Durable/non-durable goods orders w/factory inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Productivity & costs8:30 ThD+Cost of producing a unit of output.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Consumer credit3:00 FD-Measures auto, credit card and other debt.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 10/31/2014, the CPI had:

4 bearish patterns,
56 bullish patterns,
224 patterns waiting for breakout.
The CPI signal is 93.3%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  17,145  17,268  17,332  17,454  17,518 
Weekly  16,506  16,948  17,172  17,614  17,838 
Monthly  15,340  16,365  16,880  17,906  18,421 
S&P500 (^GSPC): Daily  1,995  2,007  2,012  2,024  2,029 
Weekly  1,929  1,974  1,996  2,040  2,063 
Monthly  1,755  1,886  1,952  2,084  2,150 
Nasdaq (^IXIC): Daily  4,605  4,618  4,630  4,643  4,655 
Weekly  4,383  4,507  4,574  4,698  4,765 
Monthly  3,938  4,284  4,463  4,809  4,988 
  • 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 29.7%   The trend may continue. 
 1 month up 53.2%   Expect a random direction. 
 S & P 500 (^GSPC) 2 weeks up 29.7%   The trend may continue. 
 1 month up 53.9%   Expect a random direction. 
 Nasdaq composite (^IXIC) 2 weeks up 30.2%   The trend may continue. 
 1 month up 48.4%   Expect a random direction. 

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the 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.

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

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

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
53Pipe bottom
8Head-and-shoulders top
7Head-and-shoulders bottom
6Double Bottom, Adam and Adam
6Broadening wedge, descending
5Broadening bottom
4Rectangle top
4Triangle, symmetrical
4Broadening top
3Rectangle bottom

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. Due to running my program on Saturday instead of Friday, last week's table is incorrect.

This WeekLast Week
1. Biotechnology1. Biotechnology
2. E-Commerce2. E-Commerce
3. Air Transport3. Air Transport
4. Shoe4. Shoe
5. Long ETFs5. Long ETFs
50. Short ETFs50. Short ETFs
51. Natural Gas (Diversified)51. Natural Gas (Diversified)
52. Petroleum (Producing)52. Petroleum (Producing)
53. Toiletries/Cosmetics53. Toiletries/Cosmetics
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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