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

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 10/22/2018
25,317 -126.93 -0.5%
10,436 -3.05 0.0%
742 -4.28 -0.6%
7,469 19.60 0.3%
2,756 -11.90 -0.4%
YTD
2.4%
-1.7%
2.6%
8.2%
3.1%
Tom's Targets    Overview: 10/11/2018
26,000 or 24,600 by 11/01/2018
10,200 or 11,100 by 11/01/2018
755 or 715 by 11/01/2018
7,700 or 7,200 by 11/01/2018
2,850 or 2,700 by 11/01/2018

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

October 2018 Headlines


Archives


Tuesday 10/23/18. Intraday Market Direction: Dow

The index dropped by -0.5% or -126.93 points. Since 10/01/1928 the index made 751 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 376 occasions.
     Average loss was -0.7% on 375 occasions.
Expect the index to close higher 50.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 174/289 or 60.2% of the time.
     The prediction of the index closing lower has been right 35/69 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The intraday picture shows several patterns. Let's start from the left.

A double bottom appears at AB. This confirms as a valid chart pattern when the index closes above the horizontal blue line. Unfortunately, the index didn't climb far enough to fulfill the measure rule.

The measure rule gives a price target. For many chart patterns, the measure rule is the height of the chart pattern added to the breakout price (for upward breakouts).

Double top CD confirms in the same way as AB (a close below the blue line). It also hasn't met its measure rule target. At least, not yet.

Now we see, outlined in red, a descending triangle. To me, it suggests a downward breakout is coming, but we'll have to see.

$ $ $

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

© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,670.96    
 Monthly S1  24,494.18  823.23   
 Weekly S2  24,875.36  381.18   
 Daily S2  25,046.31  170.95   
 Weekly S1  25,096.39  50.08   
 Daily S1  25,181.86  85.47   
 Low  25,236.05  54.19   
 Close  25,317.41  81.36   
 61.8% Down from Intraday High  25,360.31  42.90   
 Daily Pivot  25,371.60  11.29   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  25,398.70  27.10   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  25,437.08  38.38   
 Weekly Pivot  25,457.03  19.95   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Open  25,492.14  35.11   
 Daily R1  25,507.15  15.01   Yes! The Daily R1 is close to the Open.
 High  25,561.34  54.19   
 Weekly R1  25,678.06  116.72   
 Daily R2  25,696.89  18.83   Yes! The Daily R2 is close to the Weekly R1.
 Monthly Pivot  25,723.00  26.11   Yes! The Monthly Pivot is close to the Daily R2.
 Weekly R2  26,038.70  315.71   
 Monthly R1  26,546.22  507.52   
 Monthly R2  27,775.04  1,228.81   

Monday 10/22/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

Not much is happening on this chart of the Dow Transports on the daily scale.

The index is in the process of forming a double bottom at AB.

This chart pattern won't confirm as a valid one until the index closes above C. It has a ways to go to get there and you might think it's too far away.

Maybe not.

Look at the rise from the DE bottom. To confirmed this double bottom, the index had to close above F, which it did.

So if everyone were to jump into the market, we could push the index back up and confirm this double bottom.

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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 89.44 points.
Tuesday: Up 547.87 points.
Wednesday: Down 91.74 points.
Thursday: Down 327.23 points.
Friday: Up 64.89 points.

For the Week...

The Dow industrials were up 104.35 points or 0.4%.
The Nasdaq composite was down 47.86 points or 0.6%.
The S&P 500 index was up 0.65 points or 0.0%.

Year to Date...

Dow Industrials
     5.6% down from the high of 26,951.81 on 10/03/2018.
     9.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     8.4% down from the high of 8,133.30 on 08/30/2018.
     12.3% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     5.9% down from the high of 2,940.91 on 09/21/2018.
     9.3% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 10/19/2018, the CPI had:

36 bearish patterns,
11 bullish patterns,
346 patterns waiting for breakout.
The CPI signal is 23.4%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,209  25,327  25,468  25,585  25,726 
Weekly  24,918  25,181  25,499  25,763  26,081 
Monthly  23,713  24,579  25,765  26,631  27,817 
S&P500 (^GSPC): Daily  2,738  2,753  2,775  2,790  2,813 
Weekly  2,710  2,739  2,778  2,807  2,846 
Monthly  2,576  2,672  2,806  2,902  3,037 
Nasdaq (^IXIC): Daily  7,332  7,391  7,487  7,545  7,641 
Weekly  7,236  7,343  7,507  7,613  7,777 
Monthly  6,777  7,113  7,610  7,946  8,443 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 45.0%   Expect a random direction. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 45.6%   Expect a random direction. 
 1 month down 21.9%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.0%   Expect a reversal soon. 
 2 months down 15.5%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
32Double Top, Adam and Adam
24Head-and-shoulders top
12Triple top
11Pipe top
9Double Top, Adam and Eve
8Double Top, Eve and Adam
7Triangle, symmetrical
5Double Top, Eve and Eve
5Broadening top
4Diamond top

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Healthcare Information2. Healthcare Information
3. Medical Services3. Medical Services
4. Computers and Peripherals4. Medical Supplies
5. Electric Utility (Central)5. Computers and Peripherals

-- Thomas Bulkowski

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Friday 10/19/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 5 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 604 stocks searched, or 0.8%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 2 bullish chart patterns this week and 1 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ANTMBroadening top      09/17/201810/18/2018Medical Services
LANCDouble Bottom, Adam and Adam      10/03/201810/12/2018Food Processing
MGEEDiamond bottom      09/26/201810/18/2018Electric Utility (Central)
NXGNTriple bottom      10/02/201810/12/2018Healthcare Information
SWNTriangle, symmetrical      09/04/201810/18/2018Natural Gas (Diversified)

 

Weekly screen for chart patterns ending between 10/11/2018 and 10/18/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Anthem (ANTM)
Industry: Medical Services
Industry RS rank: 3 out of 58
Stock RS rank: 60 out of 597
10/18/18 close: $281.19
1 Month avg volatility: $4.46. Volatility stop (for downward breakout): $291.47 or 3.7% above the close.
Change YTD: 24.97%
Volume: 903,800 shares. 3 month avg: 1,801,302 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: Broadening top reversal pattern from 09/17/2018 to 10/18/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

Top

Lancaster Colony Corp (LANC)
Industry: Food Processing
Industry RS rank: 14 out of 58
Stock RS rank: 71 out of 597
10/18/18 close: $150.71
1 Month avg volatility: $2.95. Volatility stop (for upward breakout): $143.68 or 4.7% below the close.
Change YTD: 16.64%
Volume: 73,700 shares. 3 month avg: 112,417 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: Double Bottom, Adam and Adam reversal pattern from 10/03/2018 to 10/12/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

Top

MGE Energy Inc (MGEE)
Industry: Electric Utility (Central)
Industry RS rank: 7 out of 58
Stock RS rank: 168 out of 597
10/18/18 close: $62.43
1 Month avg volatility: $1.58. Volatility stop (for upward breakout): $58.49 or 6.3% below the close.
Change YTD: -1.06%
Volume: 30,800 shares. 3 month avg: 83,160 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Diamond bottom reversal pattern from 09/26/2018 to 10/18/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

Top

NextGen Healthcare Inc (NXGN)
Industry: Healthcare Information
Industry RS rank: 2 out of 58
Stock RS rank: 31 out of 597
10/18/18 close: $19.79
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $18.29 or 7.6% below the close.
Change YTD: 45.73%
Volume: 221,000 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple bottom reversal pattern from 10/02/2018 to 10/12/2018
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

Top

Southwestern Energy Company (SWN)
Industry: Natural Gas (Diversified)
Industry RS rank: 17 out of 58
Stock RS rank: 59 out of 597
10/18/18 close: $5.55
1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $4.90 or 11.8% below the close.
Change YTD: -4.80%
Volume: 18,246,600 shares. 3 month avg: 16,683,949 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/04/2018 to 10/18/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Thursday 10/18/18. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -2.79 points. Since 02/05/1971 the index made 658 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 372 occasions.
     Average loss was -0.9% on 286 occasions.
Expect the index to close higher 56.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 153/277 or 55.2% of the time.
     The prediction of the index closing lower has been right 48/94 or 51.1% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

Two symmetrical triangles appear on the chart. That's the good news.

Look at the one outlined in blue. That's the first one. Notice how it broke out downward just before the triangle's apex (yes, it's hard to see). Then the index reversed and made a strong push upward.

If we use that as a template for the red triangle, we should see a downward breakout on Thursday followed by a strong upward move going into the weekend. The bullish signal I mentioned in Wednesday's post has disappeared, leaving a bearish signal in place. That is another indicator of weakness coming.

I'm hoping it's very short term (a day or two).

$ $ $

I updated the performance statistics for double tops and bottoms (all types of each).

$ $ $

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

© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,841.37    
 Weekly S2  7,046.45  205.09   
 Monthly S1  7,242.03  195.58   
 Weekly S1  7,344.58  102.54   
 Daily S2  7,518.03  173.45   
 Low  7,563.09  45.06   
 Weekly Pivot  7,572.16  9.07   Yes! The Weekly Pivot is close to the Low.
 Daily S1  7,580.36  8.20   Yes! The Daily S1 is close to the Weekly Pivot.
 61.8% Down from Intraday High  7,604.12  23.75   
 50% Down from Intraday High  7,616.79  12.67   
 Daily Pivot  7,625.43  8.64   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  7,629.46  4.04   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  7,642.70  13.24   
 Open  7,669.26  26.56   
 High  7,670.49  1.23   Yes! The High is close to the Open.
 Monthly Pivot  7,674.71  4.22   Yes! The Monthly Pivot is close to the High.
 Daily R1  7,687.76  13.06   
 Daily R2  7,732.83  45.06   
 Weekly R1  7,870.29  137.46   
 Monthly R1  8,075.37  205.09   
 Weekly R2  8,097.87  22.50   
 Monthly R2  8,508.05  410.17   

Wednesday 10/17/18. A Look At Indicators

Picture of the chart pattern indicator

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

I see a green bar! Yippee!

Not so fast. I'm talking about the vertical green bar on the far right of the chart. Yes, it's green now, but it could disappear tomorrow (or up to a week from now) if the market turns down.

Still, it's a good sign for perma-bulls like me.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Tuesday, 38% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 35%.
The fewest was 15% on 01/26/2018.
And the most was 45% on 10/11/2018.
Shown as a blue line on the above chart...
The 501 stocks in my database are down an average of 18% from their yearly high.
A week ago, the average was 17%.
The peak was 9% on 01/22/2018.
And the bottom was 21% on 10/11/2018.

This past week was brutal for many stocks. Both the red and blue lines are lower than where they were a week ago.

Today's big up-move is why you see the two lines curving up. We'll have to wait and see if the uptrend continues. I'm hoping that the market will make a V-shaped bottom.

-- Thomas Bulkowski

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Tuesday 10/16/18. Intraday Market Direction: Dow

The index dropped by -0.4% or -89.44 points. Since 10/01/1928 the index made 896 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 456 occasions.
     Average loss was -0.6% on 440 occasions.
Expect the index to close higher 50.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 173/288 or 60.1% of the time.
     The prediction of the index closing lower has been right 35/69 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The two red lines show promise. Why?

Because it's an ascending triangle. Those breakout upward most often.

That's not a guarantee, of course, but as I said, it's promising.

$ $ $

I updated the statistics on diamond tops and diamond bottoms.

$ $ $

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

© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,648.67    
 Weekly S2  23,923.25  274.58   
 Monthly S1  24,449.61  526.36   
 Weekly S1  24,586.90  137.29   
 Daily S2  25,087.08  500.18   
 Daily S1  25,168.81  81.74   
 Low  25,243.88  75.07   
 Close  25,250.55  6.67   Yes! The Close is close to the Low.
 Daily Pivot  25,325.62  75.07   
 Open  25,332.46  6.84   Yes! The Open is close to the Daily Pivot.
 61.8% Down from Intraday High  25,335.00  2.54   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  25,363.15  28.15   
 38.2% Down from Intraday High  25,391.30  28.15   
 Daily R1  25,407.35  16.06   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 High  25,482.42  75.07   
 Weekly Pivot  25,563.42  81.00   
 Daily R2  25,564.16  0.74   Yes! The Daily R2 is close to the Weekly Pivot.
 Monthly Pivot  25,700.71  136.55   
 Weekly R1  26,227.07  526.36   
 Monthly R1  26,501.65  274.58   
 Weekly R2  27,203.59  701.94   
 Monthly R2  27,752.75  549.16   

Monday 10/15/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily chart.

Not much is going on, so I obscured it with lines.

The red and blue ones are symmetrical triangles. Each pair of colored lines converge but neither triangle is an exceptional one.

Notice how the downward breakout from the red triangle reverses near the bottom of the blue triangle.

Often, you'll see the apex of a triangle be a support or resistance point. In this case, though, the index dropped below the blue triangle's apex.

Beyond that, what else is there to say?

 

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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 39.73 points.
Tuesday: Down 56.21 points.
Wednesday: Down 831.83 points.
Thursday: Down 545.91 points.
Friday: Up 287.16 points.

For the Week...

The Dow industrials were down 1107.06 points or 4.2%.
The Nasdaq composite was down 291.56 points or 3.7%.
The S&P 500 index was down 118.44 points or 4.1%.

Year to Date...

Dow Industrials
     6.0% down from the high of 26,951.81 on 10/03/2018.
     8.5% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     7.8% down from the high of 8,133.30 on 08/30/2018.
     13.1% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     5.9% down from the high of 2,940.91 on 09/21/2018.
     9.3% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 10/12/2018, the CPI had:

4 bearish patterns,
2 bullish patterns,
72 patterns waiting for breakout.
The CPI signal is 33.3%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  24,806  25,073  25,268  25,535  25,730 
Weekly  23,953  24,647  25,593  26,287  27,233 
Monthly  23,678  24,509  25,731  26,561  27,783 
S&P500 (^GSPC): Daily  2,711  2,739  2,757  2,785  2,804 
Weekly  2,607  2,687  2,791  2,871  2,975 
Monthly  2,576  2,671  2,806  2,902  3,037 
Nasdaq (^IXIC): Daily  7,314  7,405  7,461  7,553  7,608 
Weekly  6,998  7,247  7,524  7,773  8,049 
Monthly  6,793  7,145  7,626  7,978  8,459 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 10.3%   Expect a reversal soon. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 6.4%   Expect a reversal soon. 
 1 month down 21.9%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks down 15.5%   Expect a reversal soon. 
 2 months down 15.5%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 1 days.

 Found Chart Pattern Name
26Double Top, Adam and Adam
25Head-and-shoulders top
15Double Top, Adam and Eve
14Pipe top
14Triple top
10Double Top, Eve and Eve
10Triangle, symmetrical
6Double Top, Eve and Adam
5Double Bottom, Adam and Adam
4Broadening top

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Healthcare Information
2. Healthcare Information2. Short ETFs
3. Medical Services3. Computers and Peripherals
4. Medical Supplies4. Medical Supplies
5. Computers and Peripherals5. Biotechnology

-- Thomas Bulkowski

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Friday 10/12/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 22 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 604 stocks searched, or 3.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 3 bullish chart patterns this week and 15 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALBDouble Top, Adam and Adam      09/21/201810/05/2018Chemical (Diversified)
AMZNPipe top      09/24/201810/01/2018Internet
AMEDBroadening top, right-angled and descending      08/27/201810/11/2018Medical Services
AGOTriple top      09/25/201810/09/2018Insurance (Life)
CMTLPipe top      09/24/201810/01/2018Telecom. Equipment
DECKPipe top      09/24/201810/01/2018Shoe
XOMTriple top      09/25/201810/09/2018Petroleum (Integrated)
FISHead-and-shoulders top      08/27/201810/05/2018Computer Software and Svcs
GPROPipe top      09/24/201810/01/2018Electronics
IPGTriple top      08/30/201810/05/2018Advertising
LBScallop, ascending and inverted      09/05/201810/08/2018Apparel
LAWSHead-and-shoulders top      08/21/201810/05/2018Metal Fabricating
LNCDouble Top, Adam and Eve      09/20/201810/05/2018Insurance (Life)
MRKDouble Top, Adam and Adam      10/03/201810/10/2018Drug
MUHorn top      09/17/201810/01/2018Semiconductor
RGAHead-and-shoulders top      09/14/201810/09/2018Insurance (Life)
SMGTriangle, symmetrical      09/14/201810/08/2018Chemical (Basic)
TDOCPipe top      09/24/201810/01/2018Healthcare Information
TSCOHead-and-shoulders complex top      08/24/201810/09/2018Retail Building Supply
UNMDouble Top, Adam and Eve      09/24/201810/08/2018Insurance (Diversified)
VFCHead-and-shoulders top      09/14/201810/09/2018Apparel
VRTXPipe top      09/24/201810/01/2018Biotechnology

 

Weekly screen for chart patterns ending between 10/04/2018 and 10/11/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Albemarle Corp. (ALB)
Industry: Chemical (Diversified)
Industry RS rank: 41 out of 58
Stock RS rank: 287 out of 597
10/11/18 close: $94.91
1 Month avg volatility: $2.24. Volatility stop (for downward breakout): $100.87 or 6.3% above the close.
Change YTD: -25.79%
Volume: 947,200 shares. 3 month avg: 1,363,352 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/21/2018 to 10/05/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Amazon.com Inc. (AMZN)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 28 out of 58
Stock RS rank: 76 out of 597
10/11/18 close: $1,719.36
1 Month avg volatility: $47.71. Volatility stop (for downward breakout): $1,850.82 or 7.7% above the close.
Change YTD: 47.02%
Volume: 13,858,000 shares. 3 month avg: 3,583,803 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Amedisys Inc (AMED)
Industry: Medical Services
Industry RS rank: 3 out of 58
Stock RS rank: 11 out of 597
10/11/18 close: $113.49
1 Month avg volatility: $4.06. Volatility stop (for upward breakout): $105.00 or 7.5% below the close.
Change YTD: 115.31%
Volume: 470,700 shares. 3 month avg: 412,928 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 08/27/2018 to 10/11/2018
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

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Assured Guaranty Ltd. (AGO)
Industry: Insurance (Life)
Industry RS rank: 40 out of 58
Stock RS rank: 211 out of 597
10/11/18 close: $40.26
1 Month avg volatility: $0.73. Volatility stop (for downward breakout): $43.00 or 6.8% above the close.
Change YTD: 18.87%
Volume: 361,900 shares. 3 month avg: 1,068,715 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triple top reversal pattern from 09/25/2018 to 10/09/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Comtech Telecommunications Corp (CMTL)
Industry: Telecom. Equipment
Industry RS rank: 36 out of 58
Stock RS rank: 265 out of 597
10/11/18 close: $31.73
1 Month avg volatility: $1.28. Volatility stop (for downward breakout): $35.03 or 10.4% above the close.
Change YTD: 43.44%
Volume: 170,500 shares. 3 month avg: 255,535 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Deckers Outdoor Corp (DECK)
Industry: Shoe
Industry RS rank: 21 out of 58
Stock RS rank: 170 out of 597
10/11/18 close: $104.68
1 Month avg volatility: $3.37. Volatility stop (for downward breakout): $112.72 or 7.7% above the close.
Change YTD: 30.44%
Volume: 445,500 shares. 3 month avg: 637,325 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Exxon Mobil Corp. (XOM)
Industry: Petroleum (Integrated)
Industry RS rank: 17 out of 58
Stock RS rank: 232 out of 597
10/11/18 close: $81.93
1 Month avg volatility: $1.11. Volatility stop (for downward breakout): $86.40 or 5.5% above the close.
Change YTD: -2.04%
Volume: 11,747,600 shares. 3 month avg: 15,538,298 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: Triple top reversal pattern from 09/25/2018 to 10/09/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Fidelity National Information Svcs (FIS)
Industry: Computer Software and Svcs
Industry RS rank: 19 out of 58
Stock RS rank: 227 out of 597
10/11/18 close: $102.03
1 Month avg volatility: $1.59. Volatility stop (for downward breakout): $106.43 or 4.3% above the close.
Change YTD: 8.44%
Volume: 1,668,700 shares. 3 month avg: 1,473,917 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 08/27/2018 to 10/05/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 48 out of 58
Stock RS rank: 51 out of 597
10/11/18 close: $6.19
1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $7.00 or 13.1% above the close.
Change YTD: -19.61%
Volume: 7,092,900 shares. 3 month avg: 5,624,629 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 39 out of 58
Stock RS rank: 398 out of 597
10/11/18 close: $21.70
1 Month avg volatility: $0.45. Volatility stop (for downward breakout): $23.40 or 7.8% above the close.
Change YTD: 7.64%
Volume: 6,229,000 shares. 3 month avg: 6,516,800 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple top reversal pattern from 08/30/2018 to 10/05/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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L Brands, Inc. (LB)
Industry: Apparel
Industry RS rank: 46 out of 58
Stock RS rank: 530 out of 597
10/11/18 close: $30.28
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $28.19 or 6.9% below the close.
Change YTD: -49.72%
Volume: 11,443,200 shares. 3 month avg: 4,494,122 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 09/05/2018 to 10/08/2018
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price hits measure rule target 61% of the time.

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Lawson Products (LAWS)
Industry: Metal Fabricating
Industry RS rank: 49 out of 58
Stock RS rank: 92 out of 597
10/11/18 close: $29.70
1 Month avg volatility: $1.44. Volatility stop (for downward breakout): $34.02 or 14.6% above the close.
Change YTD: 17.62%
Volume: 12,600 shares. 3 month avg: 11,408 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 08/21/2018 to 10/05/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 40 out of 58
Stock RS rank: 380 out of 597
10/11/18 close: $64.46
1 Month avg volatility: $1.56. Volatility stop (for downward breakout): $70.87 or 9.9% above the close.
Change YTD: -16.14%
Volume: 1,198,200 shares. 3 month avg: 1,171,931 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: Double Top, Adam and Eve reversal pattern from 09/20/2018 to 10/05/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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Merck and Co., Inc. (MRK)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 11 out of 58
Stock RS rank: 64 out of 597
10/11/18 close: $68.78
1 Month avg volatility: $1.13. Volatility stop (for downward breakout): $72.79 or 5.8% above the close.
Change YTD: 22.23%
Volume: 7,495,900 shares. 3 month avg: 11,487,503 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 10/03/2018 to 10/10/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Micron Technology (MU)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 42 out of 58
Stock RS rank: 507 out of 597
10/11/18 close: $41.97
1 Month avg volatility: $1.44. Volatility stop (for downward breakout): $45.80 or 9.1% above the close.
Change YTD: 2.07%
Volume: 48,066,800 shares. 3 month avg: 38,182,855 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Horn top reversal pattern from 09/17/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 21%.
Break-even failure rate: 7%.
Pullbacks occur 33% of the time.
Price hits measure rule target 70% of the time.

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Reinsurance Group of America (RGA)
Industry: Insurance (Life)
Industry RS rank: 40 out of 58
Stock RS rank: 422 out of 597
10/11/18 close: $137.52
1 Month avg volatility: $2.75. Volatility stop (for downward breakout): $146.57 or 6.6% above the close.
Change YTD: -11.81%
Volume: 233,800 shares. 3 month avg: 326,800 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 09/14/2018 to 10/09/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Scotts Miracle-Gro Co. (SMG)
Industry: Chemical (Basic)
Industry RS rank: 35 out of 58
Stock RS rank: 435 out of 597
10/11/18 close: $73.61
1 Month avg volatility: $1.74. Volatility stop (for upward breakout): $69.85 or 5.1% below the close.
Change YTD: -31.20%
Volume: 340,200 shares. 3 month avg: 327,891 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 09/14/2018 to 10/08/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Teladoc, Inc (TDOC)
Industry: Healthcare Information
Industry RS rank: 2 out of 58
Stock RS rank: 18 out of 597
10/11/18 close: $63.00
1 Month avg volatility: $4.04. Volatility stop (for downward breakout): $74.42 or 18.1% above the close.
Change YTD: 76.47%
Volume: 2,538,400 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Tractor Supply Co (TSCO)
Industry: Retail Building Supply
Industry RS rank: 32 out of 58
Stock RS rank: 32 out of 597
10/11/18 close: $85.23
1 Month avg volatility: $1.91. Volatility stop (for downward breakout): $91.60 or 7.5% above the close.
Change YTD: 14.02%
Volume: 2,228,400 shares. 3 month avg: 2,128,008 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: Head-and-shoulders complex top reversal pattern from 08/24/2018 to 10/09/2018
Breakout is downward 100% of the time.
Average decline: 23%.
Break-even failure rate: 4%.
Pullbacks occur 67% of the time.
Price hits measure rule target 53% of the time.

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Unum Group (UNM)
Industry: Insurance (Diversified)
Industry RS rank: 29 out of 58
Stock RS rank: 533 out of 597
10/11/18 close: $37.16
1 Month avg volatility: $1.08. Volatility stop (for downward breakout): $41.14 or 10.7% above the close.
Change YTD: -32.30%
Volume: 1,881,600 shares. 3 month avg: 1,168,134 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 Eve reversal pattern from 09/24/2018 to 10/08/2018
WARNING: A dead-cat bounce occurred on 05/02/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 10/31/2018.
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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V. F. Corp (VFC)
Industry: Apparel
Industry RS rank: 46 out of 58
Stock RS rank: 164 out of 597
10/11/18 close: $85.55
1 Month avg volatility: $1.69. Volatility stop (for downward breakout): $91.14 or 6.5% above the close.
Change YTD: 15.61%
Volume: 2,076,500 shares. 3 month avg: 2,795,366 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: Head-and-shoulders top reversal pattern from 09/14/2018 to 10/09/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Vertex Pharmaceuticals (VRTX)
Industry: Biotechnology
Industry RS rank: 5 out of 58
Stock RS rank: 161 out of 597
10/11/18 close: $175.66
1 Month avg volatility: $3.95. Volatility stop (for downward breakout): $185.73 or 5.7% above the close.
Change YTD: 17.22%
Volume: 2,382,000 shares. 3 month avg: 1,548,174 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 09/24/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Thursday 10/11/18. 2018 Forecast Review

Picture of the Dow forecast for 2018

Instead of discussing how the Nasdaq is hurting, I thought it would be interesting to look at the 2018 forecast. That's what I show in the above chart.

This is not my prediction, rather, it's based on a 10-year cycle in the Dow (taken before Wednesday's close, by the way). That means you average each day's close with all years ending in 8, then plot it. I excluded the 2007-2009 bear market because I believe it was an anomaly.

The chart shows that the index is about ready to catch the forecast. Oddly, if you inverted the forecast, it would fit reality better, so far.

Any, if the forecast is correct, then we can ignore the short-term downtrend and be happy that the Dow will close over 28,000 for the year.

Keep in mind that this forecast is rarely correct (it matches about once ever decade. See 2016).

-- Thomas Bulkowski

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Wednesday 10/10/18. A Look At Indicators

Picture of the chart pattern indicator

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

As the chart shows, the bearish red bar on the far right of the chart indicates trouble.

That signal is more than a week old, so it's a valid signal (meaning signals can change for up to a week, but not longer).

The market has dropped, as the indicator predicted, but is more of a decline ahead? If you look at the peak in mid August on the CPI line (thin blue one at bottom of the chart), the market and CPI have been diverging (bearish) for months now. I don't see any suggestion of a near-term recovery (not sure what 'near-term' means).

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Tuesday, 35% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 31%.
The fewest was 15% on 01/26/2018.
And the most was 35% on 10/09/2018.
Shown as a blue line on the above chart...
The 501 stocks in my database are down an average of 17% from their yearly high.
A week ago, the average was 15%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Two weeks ago, the red line was at 26% and it's now 35% bearish and that's down from 31% a week ago. Ouch. That's a steep decline for the red line, but you can see that on the chart.

The blue line is more sedate, but it's still weak, dropping two percentage points from a week ago, which is also a huge drop.

So both charts are bearish this week. Two cases: The charts are bearish, meaning a continued decline over the next week. Or we could be near the bottom and expect a reversal.

I'm hoping we're near the bottom, but we might not be. Especially since quarterly reports will be coming out soon.

-- Thomas Bulkowski

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Tuesday 10/9/18. Intraday Market Direction: Dow

The index climbed by 0.2% or 39.73 points. Since 10/01/1928 the index made 1309 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 714 occasions.
     Average loss was -0.5% on 595 occasions.
Expect the index to close higher 54.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 173/287 or 60.3% of the time.
     The prediction of the index closing lower has been right 35/69 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

Let's tear this picture apart piece by piece, beginning in order, starting from A.

At point A, I must have tuned into the index because it was off 200 or so points when I looked. At B, after the close, I was surprised at how well the index had recovered.

Circled in blue at C is a head-and-shoulders top. The height of the pattern, from C to D, subtracted from D, gives a target which wasn't met.

Circled in green is a more successful head-and-shoulders top. The index drops from the peak to E, fulfilling the measure rule. That's how chart patterns are supposed to work.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  25,200.15    
 Monthly S1  25,843.46  643.32   
 Weekly S2  25,930.13  86.67   
 Daily S2  26,106.81  176.68   
 Weekly S1  26,208.46  101.64   
 Low  26,223.09  14.63   Yes! The Low is close to the Weekly S1.
 Daily S1  26,296.80  73.71   
 61.8% Down from Intraday High  26,340.08  43.29   
 50% Down from Intraday High  26,376.22  36.14   
 Monthly Pivot  26,397.64  21.42   Yes! The Monthly Pivot is close to the 50% Down from Intraday High.
 Open  26,399.45  1.81   Yes! The Open is close to the Monthly Pivot.
 38.2% Down from Intraday High  26,412.36  12.91   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  26,413.07  0.71   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  26,486.78  73.71   
 High  26,529.35  42.57   
 Weekly Pivot  26,580.13  50.78   
 Daily R1  26,603.06  22.92   Yes! The Daily R1 is close to the Weekly Pivot.
 Daily R2  26,719.33  116.28   
 Weekly R1  26,858.46  139.12   
 Monthly R1  27,040.95  182.50   
 Weekly R2  27,230.13  189.18   
 Monthly R2  27,595.13  364.99   

Monday 10/8/18. Market Monday: The Week Ahead

My Prediction

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

This is a chart of the S&P 500 index, SPX, really, on the daily scale.

A small double top appears at AB. It confirms as a valid chart pattern when the index closes below the lowest valley between the two peaks.

I show that as a horizontal red line, C.

Double tops don't bother me as much as they used to. The stats say the resulting decline often isn't much to worry about, but my pain tolerance maybe be much higher than yours.

However, it does appear the indices are headed lower, at least for a few more days.

$ $ $

I released version 7.5 of Patternz. It better handles intraday quote files, and uses a subscription to Tiingo to get news.

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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 192.9 points.
Tuesday: Up 122.73 points.
Wednesday: Up 54.45 points.
Thursday: Down 200.91 points.
Friday: Down 180.43 points.

For the Week...

The Dow industrials were down 11.26 points or 0.0%.
The Nasdaq composite was down 257.9 points or 3.2%.
The S&P 500 index was down 28.41 points or 1.0%.

Year to Date...

Dow Industrials
     1.9% down from the high of 26,951.81 on 10/03/2018.
     13.3% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     4.2% down from the high of 8,133.30 on 08/30/2018.
     17.5% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     1.9% down from the high of 2,940.91 on 09/21/2018.
     13.9% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 10/05/2018, the CPI had:

34 bearish patterns,
15 bullish patterns,
159 patterns waiting for breakout.
The CPI signal is 30.6%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,101  26,274  26,475  26,648  26,849 
Weekly  25,917  26,182  26,567  26,832  27,217 
Monthly  25,187  25,817  26,384  27,014  27,582 
S&P500 (^GSPC): Daily  2,848  2,867  2,888  2,907  2,929 
Weekly  2,828  2,857  2,898  2,927  2,969 
Monthly  2,820  2,853  2,897  2,930  2,974 
Nasdaq (^IXIC): Daily  7,616  7,702  7,802  7,889  7,989 
Weekly  7,479  7,634  7,871  8,025  8,262 
Monthly  7,479  7,634  7,871  8,025  8,262 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 15.1%   Expect a reversal soon. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 13.3%   Expect a reversal soon. 
 1 month down 21.9%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 27.9%   The trend may continue. 
 2 months down 15.5%   Expect a reversal soon. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season will be starting in about 8 days.

 Found Chart Pattern Name
16Double Top, Adam and Adam
15Triangle, symmetrical
14Head-and-shoulders top
14Pipe bottom
13Double Bottom, Adam and Adam
9Double Top, Eve and Eve
9Triple top
7Double Top, Adam and Eve
5Broadening top
5Double Top, Eve and Adam

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

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

 

 

 

 

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

This WeekLast Week
1. Healthcare Information1. Healthcare Information
2. Short ETFs2. Computers and Peripherals
3. Computers and Peripherals3. Medical Services
4. Medical Supplies4. Short ETFs
5. Biotechnology5. Medical Supplies

-- Thomas Bulkowski

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Friday 10/5/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 605 stocks searched, or 3.5%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 7 bearish ones with any remaining (9) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
BAXDouble Top, Adam and Adam      09/20/201810/01/2018Medical Supplies
BBWTriple top      09/04/201809/28/2018Retail (Special Lines)
CHSBroadening bottom      09/14/201810/03/2018Apparel
CHDDouble Top, Eve and Adam      09/21/201810/02/2018Household Products
CLXDouble Top, Eve and Adam      09/21/201810/02/2018Household Products
CLHead-and-shoulders top      08/20/201810/02/2018Household Products
CSGSPipe top      09/17/201809/24/2018IT Services
EFIITriangle, ascending      07/20/201810/04/2018Computers and Peripherals
HBIDouble Top, Adam and Adam      09/21/201810/01/2018Apparel
HOLXFlag      09/21/201810/04/2018Medical Supplies
HONDouble Top, Adam and Adam      09/21/201810/01/2018Aerospace/Defense
HURCTriangle, symmetrical      09/12/201810/04/2018Machinery
IDXXHead-and-shoulders top      07/26/201810/01/2018Drug
LOWDouble Top, Adam and Adam      09/21/201809/28/2018Retail Building Supply
NKEDouble Top, Adam and Adam      09/21/201810/01/2018Shoe
OMCLTriple top      09/06/201809/28/2018Healthcare Information
PAYXBroadening top      09/10/201810/02/2018IT Services
PICOTriangle, ascending      08/09/201810/03/2018Diversified Co.
SCHWBroadening bottom      08/20/201810/04/2018Securities Brokerage
TGTHead-and-shoulders top      08/22/201810/02/2018Retail Store
VEEVDouble Top, Eve and Adam      09/17/201809/28/2018Healthcare Information

 

Weekly screen for chart patterns ending between 09/27/2018 and 10/04/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Baxter International, Inc. (BAX)
Industry: Medical Supplies
Industry RS rank: 4 out of 58
Stock RS rank: 182 out of 598
10/4/18 close: $74.25
1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $77.29 or 4.1% above the close.
Change YTD: 14.87%
Volume: 3,137,200 shares. 3 month avg: 2,457,589 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/20/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Build-A-Bear Workshop Inc (BBW)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 37 out of 58
Stock RS rank: 506 out of 598
10/4/18 close: $8.33
1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $9.51 or 14.2% above the close.
Change YTD: -9.46%
Volume: 112,900 shares. 3 month avg: 99,982 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple top reversal pattern from 09/04/2018 to 09/28/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Chicos FAS Inc. (CHS)
Industry: Apparel
Industry RS rank: 43 out of 58
Stock RS rank: 522 out of 598
10/4/18 close: $8.05
1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $7.44 or 7.6% below the close.
Change YTD: -8.73%
Volume: 1,862,500 shares. 3 month avg: 2,783,222 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Broadening bottom reversal pattern from 09/14/2018 to 10/03/2018
WARNING: A dead-cat bounce occurred on 05/30/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 11/28/2018.
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Church and Dwight Co Inc (CHD)
Industry: Household Products
Industry RS rank: 46 out of 58
Stock RS rank: 181 out of 598
10/4/18 close: $58.30
1 Month avg volatility: $0.86. Volatility stop (for downward breakout): $60.43 or 3.7% above the close.
Change YTD: 16.20%
Volume: 1,592,700 shares. 3 month avg: 2,023,622 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 09/21/2018 to 10/02/2018
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Clorox Co, The (CLX)
Industry: Household Products
Industry RS rank: 46 out of 58
Stock RS rank: 228 out of 598
10/4/18 close: $146.58
1 Month avg volatility: $2.33. Volatility stop (for downward breakout): $151.79 or 3.6% above the close.
Change YTD: -1.45%
Volume: 1,117,500 shares. 3 month avg: 971,306 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, Eve and Adam reversal pattern from 09/21/2018 to 10/02/2018
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Colgate-Palmolive Co (CL)
Industry: Household Products
Industry RS rank: 46 out of 58
Stock RS rank: 492 out of 598
10/4/18 close: $64.92
1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $67.19 or 3.5% above the close.
Change YTD: -13.96%
Volume: 3,707,900 shares. 3 month avg: 3,441,685 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: Head-and-shoulders top reversal pattern from 08/20/2018 to 10/02/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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CSG Systems International Inc (CSGS)
Industry: IT Services
Industry RS rank: 14 out of 58
Stock RS rank: 531 out of 598
10/4/18 close: $38.92
1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $41.02 or 5.4% above the close.
Change YTD: -11.18%
Volume: 130,400 shares. 3 month avg: 127,302 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 09/17/2018 to 09/24/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 58
Stock RS rank: 97 out of 598
10/4/18 close: $34.65
1 Month avg volatility: $0.73. Volatility stop (for upward breakout): $32.33 or 6.7% below the close.
Change YTD: 17.34%
Volume: 373,800 shares. 3 month avg: 733,492 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 07/20/2018 to 10/04/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Hanesbrand Inc. (HBI)
Industry: Apparel
Industry RS rank: 43 out of 58
Stock RS rank: 488 out of 598
10/4/18 close: $17.23
1 Month avg volatility: $0.40. Volatility stop (for downward breakout): $18.62 or 8.1% above the close.
Change YTD: -17.60%
Volume: 5,287,100 shares. 3 month avg: 6,164,918 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/21/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Hologic Inc (HOLX)
Industry: Medical Supplies
Industry RS rank: 4 out of 58
Stock RS rank: 271 out of 598
10/4/18 close: $40.53
1 Month avg volatility: $0.62. Volatility stop (for upward breakout): $39.07 or 3.6% below the close.
Change YTD: -5.19%
Volume: 1,624,600 shares. 3 month avg: 3,130,522 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Flag continuation pattern from 09/21/2018 to 10/04/2018
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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Honeywell International Inc (HON)
Industry: Aerospace/Defense
Industry RS rank: 41 out of 58
Stock RS rank: 212 out of 598
10/4/18 close: $164.71
1 Month avg volatility: $1.70. Volatility stop (for downward breakout): $169.27 or 2.8% above the close.
Change YTD: 7.40%
Volume: 2,979,100 shares. 3 month avg: 2,744,942 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/21/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Hurco Companies Inc. (HURC)
Industry: Machinery
Industry RS rank: 51 out of 58
Stock RS rank: 355 out of 598
10/4/18 close: $45.37
1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $43.11 or 5.0% below the close.
Change YTD: 7.51%
Volume: 8,900 shares. 3 month avg: 26,271 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/12/2018 to 10/04/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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IDEXX Laboratories, Inc (IDXX)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 17 out of 58
Stock RS rank: 128 out of 598
10/4/18 close: $231.11
1 Month avg volatility: $5.15. Volatility stop (for downward breakout): $248.50 or 7.5% above the close.
Change YTD: 47.79%
Volume: 643,000 shares. 3 month avg: 512,494 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/26/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Lowes Companies, Inc (LOW)
Industry: Retail Building Supply
Industry RS rank: 47 out of 58
Stock RS rank: 99 out of 598
10/4/18 close: $110.78
1 Month avg volatility: $1.75. Volatility stop (for downward breakout): $115.33 or 4.1% above the close.
Change YTD: 19.20%
Volume: 5,608,300 shares. 3 month avg: 6,401,252 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/21/2018 to 09/28/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Nike Inc (NKE)
Industry: Shoe
Industry RS rank: 20 out of 58
Stock RS rank: 166 out of 598
10/4/18 close: $80.18
1 Month avg volatility: $1.32. Volatility stop (for downward breakout): $85.12 or 6.2% above the close.
Change YTD: 28.19%
Volume: 9,159,700 shares. 3 month avg: 10,538,462 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: Double Top, Adam and Adam reversal pattern from 09/21/2018 to 10/01/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Omnicell, Inc (OMCL)
Industry: Healthcare Information
Industry RS rank: 1 out of 58
Stock RS rank: 26 out of 598
10/4/18 close: $67.63
1 Month avg volatility: $1.77. Volatility stop (for downward breakout): $72.12 or 6.6% above the close.
Change YTD: 39.44%
Volume: 196,300 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triple top reversal pattern from 09/06/2018 to 09/28/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Paychex Inc (PAYX)
Industry: IT Services
Industry RS rank: 14 out of 58
Stock RS rank: 168 out of 598
10/4/18 close: $72.39
1 Month avg volatility: $1.12. Volatility stop (for downward breakout): $75.23 or 3.9% above the close.
Change YTD: 6.33%
Volume: 2,455,900 shares. 3 month avg: 2,048,471 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Broadening top reversal pattern from 09/10/2018 to 10/02/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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PICO Holdings (PICO)
Industry: Diversified Co.
Industry RS rank: 32 out of 58
Stock RS rank: 293 out of 598
10/4/18 close: $12.13
1 Month avg volatility: $0.23. Volatility stop (for upward breakout): $11.67 or 3.8% below the close.
Change YTD: -5.23%
Volume: 44,400 shares. 3 month avg: 140,617 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 08/09/2018 to 10/03/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Schwab, Charles Corporation (SCHW)
Industry: Securities Brokerage
Industry RS rank: 55 out of 58
Stock RS rank: 380 out of 598
10/4/18 close: $51.68
1 Month avg volatility: $0.90. Volatility stop (for upward breakout): $49.00 or 5.2% below the close.
Change YTD: 0.60%
Volume: 8,712,800 shares. 3 month avg: 6,527,123 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening bottom reversal pattern from 08/20/2018 to 10/04/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Target (TGT)
Industry: Retail Store
Industry RS rank: 16 out of 58
Stock RS rank: 153 out of 598
10/4/18 close: $84.84
1 Month avg volatility: $1.30. Volatility stop (for downward breakout): $89.11 or 5.0% above the close.
Change YTD: 30.02%
Volume: 5,473,200 shares. 3 month avg: 6,916,209 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 08/22/2018 to 10/02/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Veeva Systems Inc (VEEV)
Industry: Healthcare Information
Industry RS rank: 1 out of 58
Stock RS rank: 57 out of 598
10/4/18 close: $98.14
1 Month avg volatility: $3.06. Volatility stop (for downward breakout): $110.74 or 12.8% above the close.
Change YTD: 75.31%
Volume: 2,494,400 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 09/17/2018 to 09/28/2018
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Thursday 10/4/18. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 25.54 points. Since 02/05/1971 the index made 638 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 350 occasions.
     Average loss was -0.6% on 288 occasions.
Expect the index to close higher 54.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 153/276 or 55.4% of the time.
     The prediction of the index closing lower has been right 47/93 or 50.5% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The ABCD pattern I show on the chart is a measured move down. CD is supposed to equal the length of AB, but it doesn't in many cases, such as this one.

After the pattern ends, price often returns to the corrective phase, BC. We see that at E.

Notice that I drew a green line of overhead resistance. Price bumps up against it and reverses. In the last hours of the day, the index dropped away from that green line. We'll have to see if the index rises to the line and pierces it (which would probably setup a good trend run) or continue lower.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,751.40    
 Weekly S2  7,843.95  92.55   
 Monthly S1  7,888.25  44.30   
 Weekly S1  7,934.52  46.27   
 Daily S2  7,988.45  53.93   
 Weekly Pivot  8,003.04  14.59   
 Daily S1  8,006.77  3.73   Yes! The Daily S1 is close to the Weekly Pivot.
 Monthly Pivot  8,010.77  4.00   Yes! The Monthly Pivot is close to the Daily S1.
 Low  8,012.03  1.26   Yes! The Low is close to the Monthly Pivot.
 Close  8,025.09  13.06   
 61.8% Down from Intraday High  8,028.04  2.95   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  8,030.35  2.31   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  8,032.98  2.63   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Open  8,034.65  1.67   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  8,037.92  3.27   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily R1  8,048.67  10.75   
 High  8,053.93  5.26   
 Daily R2  8,072.25  18.32   
 Weekly R1  8,093.61  21.36   
 Monthly R1  8,147.62  54.01   
 Weekly R2  8,162.13  14.51   
 Monthly R2  8,270.14  108.01   

Wednesday 10/3/18. A Look At Indicators

Picture of the chart pattern indicator

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

Bearish divergence, that's what the brown lines (far right) on the chart indicate. And we are seeing the effect of that.

The indicator has turned bearish, denoted by the vertical red line on the chart's right side. I think it's been in existence long enough for the signal to remain. In other words, the signal can change for up to a week, but is usually stable after three days.

It's a warning of coming weakness, but I'm not so sure of that. Clearly, though, some stocks have taking a pasting in recent days.

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On Tuesday, 31% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 26%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 502 stocks in my database are down an average of 15% from their yearly high.
A week ago, the average was 14%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

Both lines have suffered compared to a week ago. Notice how the more sensitive red line has dropped. This is the steepest decline I've ever seen (during one week).

Could it signal a bottom is near? Or could it signal continuing weakness?

The two charts, when combined, do not show a rosy picture, do they? Maybe this month will show an 'October surprise' after a fairly mild September.

-- Thomas Bulkowski

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Tuesday 10/2/18. Intraday Market Direction: Dow

The index climbed by 0.7% or 192.9 points. Since 10/01/1928 the index made 663 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 365 occasions.
     Average loss was -0.6% on 298 occasions.
Expect the index to close higher 55.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 172/286 or 60.1% of the time.
     The prediction of the index closing lower has been right 35/69 or 50.7% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

Today, the index made a good push higher until it reached overhead resistance, conveniently shown as the horizontal blue line.

After that, it was all downhill.

The pattern outlined in red is not a channel because it's too short. Rather, it's a flag. It's not a high and tight flag. Some of you are confused with the two.

This flag doesn't have much of a flagpole, so that's a worry. I'm concerned that price will continue to drop. In well behaved flags, price resumes trending in the original direction (up, in this case).

If it fulfills the measure rule target, look for the index to reach just below 27,000.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  25,289.07    
 Monthly S1  25,970.14  681.07   
 Weekly S2  26,209.56  239.42   
 Monthly Pivot  26,369.65  160.09   
 Weekly S1  26,430.39  60.74   
 Daily S2  26,519.82  89.43   
 Weekly Pivot  26,570.16  50.35   
 Daily S1  26,585.51  15.35   
 Low  26,596.05  10.54   Yes! The Low is close to the Daily S1.
 Open  26,598.36  2.31   Yes! The Open is close to the Low.
 61.8% Down from Intraday High  26,650.27  51.91   
 Close  26,651.21  0.94   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  26,661.75  10.54   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  26,667.02  5.27   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  26,683.76  16.75   
 Daily R1  26,727.44  43.68   
 High  26,737.98  10.54   Yes! The High is close to the Daily R1.
 Weekly R1  26,790.99  53.01   
 Daily R2  26,803.68  12.69   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  26,930.76  127.09   
 Monthly R1  27,050.72  119.96   
 Monthly R2  27,450.23  399.51   

Monday 10/1/18. Market Monday: The Week Ahead

My Prediction

Picture of the nasdaq on the daily scale.

This is a chart of the Nasdaq composite on the daily scale.

The red portion shows how the short-term trend is higher. Also notice that the index is near the top of the channel, suggesting an upward breakout.

What happens next?

The index is in the lower half of the green channel. Good news or bad? There's more room for an upward move until it bumps up against the top of the channel. That's the good news.

The top of the channel should pose as overhead resistance, but the index could blow through it anyway. It will sooner or later, of course.

The bad news? The channel is long. Price has bounced from side to side a lot already. Maybe it's time for a breakout? Maybe downward since it's in the lower half of the green channel. The middle of the channel is a resistance area, too. Think 'Andrew's Pitchfork.'

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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 181.45 points.
Tuesday: Down 69.84 points.
Wednesday: Down 106.93 points.
Thursday: Up 54.65 points.
Friday: Up 18.38 points.

For the Week...

The Dow industrials were down 285.19 points or 1.1%.
The Nasdaq composite was up 59.39 points or 0.7%.
The S&P 500 index was down 15.69 points or 0.5%.

Year to Date...

Dow Industrials
     1.2% down from the high of 26,769.16 on 09/21/2018.
     13.3% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.1% down from the high of 8,133.30 on 08/30/2018.
     21.4% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     0.9% down from the high of 2,940.91 on 09/21/2018.
     15.1% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 09/28/2018, the CPI had:

26 bearish patterns,
18 bullish patterns,
314 patterns waiting for breakout.
The CPI signal is 40.9%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,320  26,389  26,453  26,522  26,585 
Weekly  26,145  26,302  26,506  26,662  26,866 
Monthly  25,225  25,842  26,305  26,922  27,386 
S&P500 (^GSPC): Daily  2,901  2,907  2,914  2,921  2,927 
Weekly  2,888  2,901  2,916  2,929  2,944 
Monthly  2,827  2,871  2,906  2,949  2,984 
Nasdaq (^IXIC): Daily  7,993  8,020  8,042  8,069  8,092 
Weekly  7,851  7,949  8,010  8,108  8,169 
Monthly  7,758  7,902  8,018  8,162  8,277 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.3%   The trend may continue. 
 3 months up 33.7%   The trend may continue. 
 S & P 500 (^GSPC) 1 week down 26.6%   The trend may continue. 
 6 months up 15.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 46.9%   Expect a random direction. 
 1 month down 25.9%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
17Triangle, symmetrical
17Pipe bottom
15Double Bottom, Adam and Adam
11Head-and-shoulders top
9Pipe top
8Double Top, Adam and Adam
7Double Top, Eve and Eve
7Double Top, Adam and Eve
6Broadening top
6Flag

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

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

 

 

 

 

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

This WeekLast Week
1. Healthcare Information1. Healthcare Information
2. Computers and Peripherals2. Computers and Peripherals
3. Medical Services3. Medical Services
4. Short ETFs4. Short ETFs
5. Medical Supplies5. Medical Supplies

-- Thomas Bulkowski

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