Bulkowski's Blog: ThePatternSite.com
As of 10/18/2019
  Indus: 26,770 -255.68 -0.9%  
  Trans: 10,509 +12.56 +0.1%  
  Utils: 866 +3.67 +0.4%  
  Nasdaq: 8,090 -67.31 -0.8%  
  S&P 500: 2,986 -11.75 -0.4%  
YTD
 +14.8%  
 +14.6%  
 +21.5%  
 +21.9%  
 +19.1%  
  Targets    Overview: 10/14/2019  
  Up arrow27,600 or 26,000 by 11/01/2019
  Up arrow10,880 or 9,700 by 11/01/2019
  Up arrow900 or 845 by 11/01/2019
  Up arrow8,225 or 7,700 by 11/01/2019
  Up arrow3,050 or 2,900 by 11/01/2019
As of 10/18/2019
  Indus: 26,770 -255.68 -0.9%  
  Trans: 10,509 +12.56 +0.1%  
  Utils: 866 +3.67 +0.4%  
  Nasdaq: 8,090 -67.31 -0.8%  
  S&P 500: 2,986 -11.75 -0.4%  
YTD
 +14.8%  
 +14.6%  
 +21.5%  
 +21.9%  
 +19.1%  
  Targets    Overview: 10/14/2019  
  Up arrow27,600 or 26,000 by 11/01/2019
  Up arrow10,880 or 9,700 by 11/01/2019
  Up arrow900 or 845 by 11/01/2019
  Up arrow8,225 or 7,700 by 11/01/2019
  Up arrow3,050 or 2,900 by 11/01/2019

 

October 2019 Headlines

Archives


Monday 10/21/19. The Week Ahead: Turning Down

My Prediction

Picture of the Dow industrials on the daily scale.

The chart shows the Dow industrials, on the daily scale.

I drew two trendlines, one along the tops (almost) and one along the bottoms.

The pattern outlined by the lines is a symmetrical triangle. In the pattern, price bounces between two trendlines, converging at the triangle's apex.

Price breaks out upward 60% of the time from a symmetrical triangle.

That's the good news. The bad news is that price is heading lower. You can see that by the last top touch and price heading lower.

It could be that the index drops to the bottom of the pattern before rebounding. What would be the cause? A non-agreement in the China trade war. Maybe impeachment of Trump.

Or maybe Trump causing a "Wag the dog" scenario to turn attention to some new calamity to deflect his impeachment.

My guess is that the index won't drop that far before heading back up to stage an upward breakout.

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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 29.23 points.
Tuesday: Up 237.44 points.
Wednesday: Down 22.82 points.
Thursday: Up 23.9 points.
Friday: Down 255.68 points.

For the Week...

The Dow industrials were down 46.39 points or 0.2%.
The Nasdaq composite was up 32.5 points or 0.4%.
The S&P 500 index was up 15.93 points or 0.5%.

Year to Date...

Dow Industrials
     2.3% down from the high of 27,398.68 on 07/16/2019.
     18.3% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     3.0% down from the high of 8,339.64 on 07/26/2019.
     25.3% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     1.4% down from the high of 3,027.98 on 07/26/2019.
     22.2% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 10/18/2019, the CPI had:

17 bearish patterns,
26 bullish patterns,
245 patterns waiting for breakout.
The CPI signal is 60.5%, which is neutral (between 35% and 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,605  26,687  26,853  26,936  27,101 
Weekly  26,509  26,640  26,880  27,010  27,251 
Monthly  25,067  25,918  26,595  27,447  28,124 
S&P500 (^GSPC): Daily  2,964  2,975  2,988  2,999  3,011 
Weekly  2,940  2,963  2,986  3,009  3,031 
Monthly  2,789  2,887  2,955  3,053  3,121 
Nasdaq (^IXIC): Daily  7,985  8,037  8,097  8,149  8,209 
Weekly  7,956  8,023  8,103  8,170  8,250 
Monthly  7,472  7,781  8,009  8,318  8,546 

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 27.8%   The trend may continue. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks up 35.6%   The trend may continue. 
 2 months up 46.1%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 29.6%   The trend may continue. 
 2 months up 39.0%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
16Pipe bottom
11Double Bottom, Adam and Adam
11Triangle, symmetrical
10Double Top, Adam and Adam
7Double Top, Eve and Adam
6Triple top
5Dead-cat bounce
4Double Top, Eve and Eve
4Flag
4Head-and-shoulders 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. Homebuilding1. Cement and Aggregates
2. Cement and Aggregates2. Homebuilding
3. Chemical (Basic)3. Chemical (Basic)
4. Trucking/Transp. Leasing4. Telecom. Equipment
5. Insurance (Prop/Casualty)5. Insurance (Prop/Casualty)

-- Thomas Bulkowski

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Friday 10/18/19. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 7 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 587 stocks searched, or 1.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 13 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 18 bullish chart patterns this week and 1 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AMEDPipe bottom      09/30/201910/07/2019Medical Services
AXERising wedge      09/16/201910/11/2019Electronics
BECNTriple bottom      10/03/201910/14/2019Retail Building Supply
BOOTPipe bottom      09/30/201910/07/2019Shoe
CLNEPipe bottom      09/30/201910/07/2019Natural Gas (Distributor)
CMIPipe bottom      09/30/201910/07/2019Machinery
ESVPipe bottom      09/30/201910/07/2019Oilfield Svcs/Equipment
EFXPipe bottom      09/30/201910/07/2019Information Services
HTLDHead-and-shoulders complex bottom      09/18/201910/15/2019Trucking/Transp. Leasing
JBHTPipe bottom      09/30/201910/07/2019Trucking/Transp. Leasing
HURCTriangle, symmetrical      08/21/201910/17/2019Machinery
KALUTriangle, symmetrical      09/13/201910/17/2019Metals and Mining (Div.)
LEGPipe bottom      09/30/201910/07/2019Furn/Home Furnishings
LOWPipe bottom      09/30/201910/07/2019Retail Building Supply
MRTNPipe bottom      09/30/201910/07/2019Trucking/Transp. Leasing
NVDAScallop, ascending      09/12/201910/15/2019Semiconductor
ORITriangle, ascending      09/04/201910/17/2019Insurance (Prop/Casualty)
TXTPipe bottom      09/30/201910/07/2019Diversified Co.
RIGPipe bottom      09/30/201910/07/2019Oilfield Svcs/Equipment
WEXPipe bottom      09/30/201910/07/2019Information Services

 

Weekly screen for chart patterns ending between 10/10/2019 and 10/17/2019. 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.
 
Amedisys Inc (AMED)
Industry: Medical Services
Industry RS rank: 9 out of 58
Stock RS rank: 91 out of 582
10/17/19 close: $134.64
1 Month avg volatility: $3.67. Volatility stop (for upward breakout): $124.99 or 7.2% below the close.
Change YTD: 14.97%
Volume: 224,600 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 Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Anixter International Inc (AXE)
Industry: Electronics
Industry RS rank: 45 out of 58
Stock RS rank: 136 out of 582
10/17/19 close: $69.33
1 Month avg volatility: $1.51. Volatility stop (for downward breakout): $72.35 or 4.4% above the close.
Change YTD: 27.66%
Volume: 163,900 shares. 3 month avg: 173,640 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: Rising wedge reversal pattern from 09/16/2019 to 10/11/2019
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Beacon Roofing Supply Inc. (BECN)
Industry: Retail Building Supply
Industry RS rank: 20 out of 58
Stock RS rank: 459 out of 582
10/17/19 close: $32.70
1 Month avg volatility: $0.96. Volatility stop (for upward breakout): $30.45 or 6.9% below the close.
Change YTD: 3.09%
Volume: 638,300 shares. 3 month avg: 811,195 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 bottom reversal pattern from 10/03/2019 to 10/14/2019
WARNING: A dead-cat bounce occurred on 08/07/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 11/06/2019 and a 38% chance by 02/05/2020.
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Boot Barn Holdings Inc (BOOT)
Industry: Shoe
Industry RS rank: 24 out of 58
Stock RS rank: 57 out of 582
10/17/19 close: $37.11
1 Month avg volatility: $1.63. Volatility stop (for upward breakout): $33.51 or 9.7% below the close.
Change YTD: 117.91%
Volume: 496,600 shares. 3 month avg: 434,749 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: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Clean Energy Fuels Corp. (CLNE)
Industry: Natural Gas (Distributor)
Industry RS rank: 53 out of 58
Stock RS rank: 525 out of 582
10/17/19 close: $2.30
1 Month avg volatility: $0.08. Volatility stop (for upward breakout): $2.10 or 8.7% below the close.
Change YTD: 33.72%
Volume: 776,400 shares. 3 month avg: 1,021,160 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 bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Cummins Inc. (CMI)
Industry: Machinery
Industry RS rank: 35 out of 58
Stock RS rank: 288 out of 582
10/17/19 close: $167.64
1 Month avg volatility: $3.53. Volatility stop (for upward breakout): $159.21 or 5.0% below the close.
Change YTD: 25.44%
Volume: 649,600 shares. 3 month avg: 1,327,631 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Ensco Rowan plc (ESV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 57 out of 58
Stock RS rank: 580 out of 582
10/17/19 close: $5.30
1 Month avg volatility: $0.46. Volatility stop (for upward breakout): $4.26 or 19.6% below the close.
Change YTD: -62.78%
Volume: 3,410,700 shares. 3 month avg: 16,303,415 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 bottom reversal pattern from 09/30/2019 to 10/07/2019
WARNING: A dead-cat bounce occurred on 08/02/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 11/01/2019 and a 38% chance by 01/31/2020.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Equifax Inc (EFX)
Industry: Information Services
Industry RS rank: 33 out of 58
Stock RS rank: 85 out of 582
10/17/19 close: $146.70
1 Month avg volatility: $2.45. Volatility stop (for upward breakout): $140.05 or 4.5% below the close.
Change YTD: 57.52%
Volume: 481,300 shares. 3 month avg: 3,458,600 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Heartland Express, Inc (HTLD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 4 out of 58
Stock RS rank: 127 out of 582
10/17/19 close: $21.92
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $20.84 or 4.9% below the close.
Change YTD: 19.78%
Volume: 296,200 shares. 3 month avg: 472,148 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 bottom reversal pattern from 09/18/2019 to 10/15/2019
Breakout is upward 100% of the time.
Average rise: 39%.
Break-even failure rate: 4%.
Throwbacks occur 63% of the time.
Price hits measure rule target 74% of the time.

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Hunt, J.B. (JBHT)
Industry: Trucking/Transp. Leasing
Industry RS rank: 4 out of 58
Stock RS rank: 77 out of 582
10/17/19 close: $116.18
1 Month avg volatility: $2.66. Volatility stop (for upward breakout): $110.29 or 5.1% below the close.
Change YTD: 24.87%
Volume: 1,002,500 shares. 3 month avg: 898,451 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Hurco Companies Inc. (HURC)
Industry: Machinery
Industry RS rank: 35 out of 58
Stock RS rank: 501 out of 582
10/17/19 close: $31.99
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $30.56 or 4.5% below the close.
Change YTD: -10.39%
Volume: 11,000 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 Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/21/2019 to 10/17/2019
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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Kaiser Aluminum Corp (KALU)
Industry: Metals and Mining (Div.)
Industry RS rank: 46 out of 58
Stock RS rank: 399 out of 582
10/17/19 close: $98.64
1 Month avg volatility: $2.47. Volatility stop (for upward breakout): $92.48 or 6.2% below the close.
Change YTD: 10.47%
Volume: 88,300 shares. 3 month avg: 141,669 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/13/2019 to 10/17/2019
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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Leggett and Platt (LEG)
Industry: Furn/Home Furnishings
Industry RS rank: 29 out of 58
Stock RS rank: 315 out of 582
10/17/19 close: $43.04
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $40.65 or 5.6% below the close.
Change YTD: 20.09%
Volume: 1,054,800 shares. 3 month avg: 981,391 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Lowes Companies, Inc (LOW)
Industry: Retail Building Supply
Industry RS rank: 20 out of 58
Stock RS rank: 347 out of 582
10/17/19 close: $112.60
1 Month avg volatility: $1.95. Volatility stop (for upward breakout): $108.07 or 4.0% below the close.
Change YTD: 21.91%
Volume: 2,711,500 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 Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Marten Transport Ltd (MRTN)
Industry: Trucking/Transp. Leasing
Industry RS rank: 4 out of 58
Stock RS rank: 191 out of 582
10/17/19 close: $21.52
1 Month avg volatility: $0.60. Volatility stop (for upward breakout): $19.96 or 7.3% below the close.
Change YTD: 32.92%
Volume: 189,800 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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NVidia Corp (NVDA)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 58
Stock RS rank: 250 out of 582
10/17/19 close: $194.29
1 Month avg volatility: $5.29. Volatility stop (for upward breakout): $181.52 or 6.6% below the close.
Change YTD: 45.54%
Volume: 6,564,700 shares. 3 month avg: 15,363,712 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Scallop, ascending continuation pattern from 09/12/2019 to 10/15/2019
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price hits measure rule target 58% of the time.

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Old Republic International Corp (ORI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 6 out of 58
Stock RS rank: 128 out of 582
10/17/19 close: $23.75
1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $23.03 or 3.0% below the close.
Change YTD: 15.46%
Volume: 1,819,500 shares. 3 month avg: 1,253,378 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: Triangle, ascending reversal pattern from 09/04/2019 to 10/17/2019
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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Textron Inc (TXT)
Industry: Diversified Co.
Industry RS rank: 42 out of 58
Stock RS rank: 448 out of 582
10/17/19 close: $47.75
1 Month avg volatility: $1.19. Volatility stop (for upward breakout): $44.81 or 6.2% below the close.
Change YTD: 3.83%
Volume: 3,109,900 shares. 3 month avg: 1,461,508 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Transocean Inc. (RIG)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 57 out of 58
Stock RS rank: 570 out of 582
10/17/19 close: $4.67
1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $4.06 or 13.0% below the close.
Change YTD: -32.71%
Volume: 14,953,900 shares. 3 month avg: 13,612,100 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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WEX Inc (WEX)
Industry: Information Services
Industry RS rank: 33 out of 58
Stock RS rank: 267 out of 582
10/17/19 close: $207.21
1 Month avg volatility: $4.12. Volatility stop (for upward breakout): $198.90 or 4.0% below the close.
Change YTD: 47.94%
Volume: 530,900 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: Pipe bottom reversal pattern from 09/30/2019 to 10/07/2019
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Thursday 10/17/19. Intraday Nasdaq: Bullish?

The index dropped by -0.3% or -23.53 points. Since 02/05/1971 the index made 513 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 277 occasions.
     Average loss was -1.0% on 236 occasions.
Expect the index to close higher 54.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 175/315 or 55.6% of the time.
     The prediction of the index closing lower has been right 53/105 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.

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

Although the chart looks like a descending triangle, it's really a symmetrical triangle. The bottom trendline actually should slope upward, even though I drew it horizontally.

Look at the big picture. Price trends upward from the left to the right on the chart. Now this could be just a pause in the upward move.

Because the sideways move is one day long and because the uptrend is several days long, coupled with the above probabilities suggesting a higher close tomorrow (Thursday), I think we've a good shot of seeing the index move upward again. Today was just an opportunity to catch our breath after yesterday's climb.

$ $ $

I released a new version of Patternz. This has bug fixes.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,478.86    
 Weekly S2  7,729.17  250.31   
 Monthly S1  7,801.52  72.35   
 Weekly S1  7,926.67  125.15   
 Weekly Pivot  8,021.24  94.56   
 Monthly Pivot  8,022.66  1.42   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Daily S2  8,081.80  59.14   
 Daily S1  8,102.99  21.19   
 Low  8,103.38  0.39   Yes! The Low is close to the Daily S1.
 61.8% Down from Intraday High  8,119.72  16.34   
 Open  8,119.81  0.09   Yes! The Open is close to the 61.8% Down from Intraday High.
 Close  8,124.18  4.37   
 Daily Pivot  8,124.57  0.39   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  8,124.77  0.20   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  8,129.81  5.05   
 Daily R1  8,145.76  15.95   
 High  8,146.15  0.39   Yes! The High is close to the Daily R1.
 Daily R2  8,167.34  21.19   
 Weekly R1  8,218.74  51.40   
 Weekly R2  8,313.31  94.56   
 Monthly R1  8,345.32  32.01   
 Monthly R2  8,566.46  221.14   

Wednesday 10/16/19. A Look At Indicators

Picture of the chart pattern indicator

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

The green bar on the far right of the chart shows that the indicator remains bullish. The thin indicator line at the bottom of the chart confirms that, too.

It's headed up and is probably at or near its peak of 100.

One could argue that the indicator doesn't stay up there long and there's nowhere to go but down. That's true, but the drop might be slow, as in the June to July period.

The index is hitting overhead resistance, near the level of prior peaks, too. Another day or two of moving up and it'll be in the thick of it.

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, 33% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 40%.
The fewest was 32% on 09/11/2019.
And the most was 81% on 12/24/2018.
Shown as a blue line on the above chart...
The 485 stocks in my database are down an average of 18% from their yearly high.
A week ago, the average was 21%.
The peak was 17% on 05/03/2019.
And the bottom was 33% on 12/24/2018.

Both lines made improvement this week compared to last. The red line shows tremendous improvement. Of course, the indicators are following price. No surprise there.

The question I have to ask is will it last?

Hard to tell. My guess is yes. At least until the China trade deal falls through, if it does. Maybe the third time of hitting a peak will see price soar on through resistance to mount a new high.

-- Thomas Bulkowski

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Tuesday 10/15/19. An Unusual Email

The index dropped by -0.1% or -29.23 points. Since 10/01/1928 the index made 1335 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 693 occasions.
     Average loss was -0.7% on 642 occasions.
Expect the index to close higher 51.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 193/326 or 59.2% of the time.
     The prediction of the index closing lower has been right 38/76 or 50.0% of the time.

$ $ $

Occasionally I receive emails thanking me for my website and books. However, it's rare to receive one like what you'll read next (used with permission). Thanks for the kind words, C.O.

Mr. Bulkowski:

I wrote to you some 9 years back or so, to tell you of my success trading. Starting with $2k in 2009, by 2011, I had turned it into $430K. Unlike most, my story didn't stop there. I've had only two losing years, 2016 (my father died) and I lost 14%, and 2017, I got married and I lost 12%. Other years I've had returns that could be called major. I have since traded consistently into the high seven figures. Last year was a golden year for me, where I traded a $10K Vacation account into $530K (as well as seeing a near 1,000% return on my major account--a good come back after two down years.)

I'm a 90% Technical Trader that trades everything. Stocks, futures, and Forex. And I've used your two encyclopedias as my tools to trade those markets clearly.

Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book. [pictured on the right] is by far one of the most in depth books I've read on the subject of candlestick charting, and it's also the most accurate, and inaccurate (but it's what I've used to make the most profit on). Using Candlestick patterns isolated, I've seen continuation moves after an engulfing pattern that should've been a reversal, and each of the failure ,or randomness that you attest to I've seen. This makes the book hugely accurate. But, your analogy of three blind men being no better at finding their location together, than apart, I believe is wrong. Not the analogy itself, but the argument that taking Candlestick patterns into consideration in a bigger picture.

[Encyclopedia of Chart Patterns, 2nd Edition, pictured on the right is the second encyclopedia he is referring to] I began to combine them with basic chart patterns. Broadening ascending and descending patterns, Inverted cups, Head and shoulders (complex and simple), Bump and Run patterns, Encyclopedia of Chart Patterns 2nd Edition book. double top, and double bottom, and about 6 or so other patterns that I've found along the way that work across markets, and have been hugely profitable.

It's been a decade since I've started trading. A decade of reading and studying your books, watching and comparing things to the markets, and I must say, your two encyclopedias have produced some of the best and most accurate frames of patterns and their reliability that I've ever seen.

Just thought I'd share that with you. Heartfelt thank you for all you've added to the trading community.

C. O.

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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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  25,049.25    
 Weekly S2  25,772.87  723.63   
 Monthly S1  25,918.30  145.43   
 Weekly S1  26,280.12  361.81   
 Monthly Pivot  26,612.52  332.40   
 Weekly Pivot  26,647.04  34.53   
 Daily S2  26,678.47  31.43   
 Daily S1  26,732.92  54.44   
 Low  26,749.18  16.26   
 Open  26,766.43  17.25   
 Close  26,787.36  20.93   
 61.8% Down from Intraday High  26,796.99  9.63   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  26,803.62  6.64   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  26,811.76  8.13   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  26,826.52  14.77   
 Daily R1  26,858.07  31.54   
 High  26,874.33  16.26   
 Daily R2  26,928.77  54.44   
 Weekly R1  27,154.29  225.51   
 Monthly R1  27,481.57  327.29   
 Weekly R2  27,521.21  39.64   
 Monthly R2  28,175.79  654.57   

Monday 10/14/19. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

The chart of the Dow transports is on the weekly scale, not the daily. I wanted to show the longer-term trend.

I drew two red trendlines, one along the peaks and one along the valleys.

Notice how the index stays between those two lines most of the time. And also notice how the channel slopes downward.

I mentioned earlier in the week about the trendline measure rule, how price moving above a trendline can be reflected by the same amount below the line.

Although I show a channel, the measure rule didn't work in this case, did it? The drop in December 2018 far exceeds the rise in September 2018.

Returning to channel, notice how the index closed about midway up the channel. Also notice that the trends bounce from top to bottom and back again.

The last trendline touch was on the top. So even though the index closed higher by a strong push upward, the chart suggests that the upward move will fail. Price will drop down to the lower trendline.

That's hard to judge, really. The index nearly touched the bottom line yesterday (Thursday), so maybe we're actually going to go higher and tag the top trendline.

If the news about the trade war approaching a settlement is accurate, then perhaps we'll see the top trendline being touched before the bottom one. It could be that we pierce the channel going up, too.

So there you have it. We're either going to touch the top trendline or the bottom one. I feel like Trump. I'm always right even when I'm not. Smiley

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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 95.7 points.
Tuesday: Down 313.98 points.
Wednesday: Up 181.97 points.
Thursday: Up 150.66 points.
Friday: Up 319.92 points.

For the Week...

The Dow industrials were up 242.87 points or 0.9%.
The Nasdaq composite was up 74.57 points or 0.9%.
The S&P 500 index was up 18.26 points or 0.6%.

Year to Date...

Dow Industrials
     2.1% down from the high of 27,398.68 on 07/16/2019.
     18.5% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     3.4% down from the high of 8,339.64 on 07/26/2019.
     24.8% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     1.9% down from the high of 3,027.98 on 07/26/2019.
     21.5% up from the low of 2,443.96 on 01/03/2019.

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 10/11/2019, the CPI had:

3 bearish patterns,
76 bullish patterns,
419 patterns waiting for breakout.
The CPI signal is 96.2%, which is bullish (>= 65%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,522  26,669  26,842  26,989  27,161 
Weekly  25,783  26,300  26,657  27,174  27,531 
Monthly  25,059  25,938  26,622  27,501  28,186 
S&P500 (^GSPC): Daily  2,945  2,958  2,976  2,988  3,006 
Weekly  2,851  2,911  2,952  3,011  3,053 
Monthly  2,783  2,877  2,949  3,043  3,115 
Nasdaq (^IXIC): Daily  8,004  8,031  8,073  8,100  8,142 
Weekly  7,707  7,882  7,999  8,174  8,291 
Monthly  7,456  7,757  8,000  8,301  8,544 

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 47.2%   Expect a random direction. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 47.4%   Expect a random direction. 
 1 month down 21.9%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks up 35.5%   The trend may continue. 
 2 months up 39.0%   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 will be starting in about 2 days.

 Found Chart Pattern Name
21Pipe top
12Double Top, Adam and Adam
8Triangle, symmetrical
6Dead-cat bounce
6Double Top, Eve and Adam
6Triple top
5Head-and-shoulders top
4Pennant
4Flag
3Double Top, Adam and Eve

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

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

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

This WeekLast Week
1. Cement and Aggregates1. Homebuilding
2. Homebuilding2. Cement and Aggregates
3. Chemical (Basic)3. Insurance (Prop/Casualty)
4. Telecom. Equipment4. Toiletries/Cosmetics
5. Insurance (Prop/Casualty)5. Telecom. Equipment

-- Thomas Bulkowski

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Friday 10/11/19. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 12 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 587 stocks searched, or 2.0%. 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 6 bearish ones with any remaining (1) 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
ADTNDead-cat bounce      10/10/201910/10/2019Telecom. Equipment
BCPCTriangle, symmetrical      09/25/201910/10/2019Chemical (Specialty)
BSETHead-and-shoulders complex top      09/13/201910/08/2019Furn/Home Furnishings
CAGBroadening top, right-angled and ascending      07/11/201910/10/2019Food Processing
GPROPipe top      09/23/201909/30/2019Electronics
THGTriangle, symmetrical      09/18/201910/10/2019Insurance (Prop/Casualty)
HELEBroadening top      09/23/201910/07/2019Toiletries/Cosmetics
MYGNTriangle, symmetrical      09/24/201910/10/2019Biotechnology
PATKDiamond top      09/16/201910/10/2019Retail Building Supply
PCGDead-cat bounce      10/10/201910/10/2019Electric Utility (West)
REVFlag, high and tight      08/15/201910/09/2019Toiletries/Cosmetics
SMTCTriangle, symmetrical      09/23/201910/10/2019Semiconductor Cap Equip.

 

Weekly screen for chart patterns ending between 10/03/2019 and 10/10/2019. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
ADTRAN Inc (ADTN)
Industry: Telecom. Equipment
Industry RS rank: 5 out of 58
Stock RS rank: 553 out of 582
10/10/19 close: $8.81
1 Month avg volatility: $0.40. Volatility stop (for downward breakout): $10.02 or 13.8% above the close.
Change YTD: -17.97%
Volume: 1,686,300 shares. 3 month avg: 348,746 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 10/10/2019 to 10/10/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Balchem Corp (BCPC)
Industry: Chemical (Specialty)
Industry RS rank: 38 out of 58
Stock RS rank: 278 out of 582
10/10/19 close: $97.07
1 Month avg volatility: $2.46. Volatility stop (for upward breakout): $91.54 or 5.7% below the close.
Change YTD: 23.89%
Volume: 102,700 shares. 3 month avg: 82,003 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/25/2019 to 10/10/2019
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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Bassett Furniture Industries Inc (BSET)
Industry: Furn/Home Furnishings
Industry RS rank: 34 out of 58
Stock RS rank: 489 out of 582
10/10/19 close: $13.90
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $16.25 or 16.9% above the close.
Change YTD: -30.64%
Volume: 45,000 shares. 3 month avg: 28,538 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 complex top reversal pattern from 09/13/2019 to 10/08/2019
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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ConAgra Brands Inc (CAG)
Industry: Food Processing
Industry RS rank: 19 out of 58
Stock RS rank: 314 out of 582
10/10/19 close: $28.35
1 Month avg volatility: $0.84. Volatility stop (for downward breakout): $30.14 or 6.3% above the close.
Change YTD: 32.72%
Volume: 3,256,100 shares. 3 month avg: 3,423,360 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 07/11/2019 to 10/10/2019
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 49 out of 58
Stock RS rank: 568 out of 582
10/10/19 close: $3.38
1 Month avg volatility: $0.28. Volatility stop (for downward breakout): $4.14 or 22.6% above the close.
Change YTD: -20.28%
Volume: 10,313,800 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 09/23/2019 to 09/30/2019
WARNING: A dead-cat bounce occurred on 10/03/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/02/2020 and a 38% chance by 04/02/2020.
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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Hanover Insurance Group, The (THG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 4 out of 58
Stock RS rank: 82 out of 582
10/10/19 close: $133.92
1 Month avg volatility: $1.92. Volatility stop (for upward breakout): $129.54 or 3.3% below the close.
Change YTD: 14.69%
Volume: 169,000 shares. 3 month avg: 201,215 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/18/2019 to 10/10/2019
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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Helen of Troy Ltd (HELE)
Industry: Toiletries/Cosmetics
Industry RS rank: 8 out of 58
Stock RS rank: 25 out of 582
10/10/19 close: $154.32
1 Month avg volatility: $4.21. Volatility stop (for downward breakout): $162.82 or 5.5% above the close.
Change YTD: 17.64%
Volume: 492,200 shares. 3 month avg: 160,343 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 09/23/2019 to 10/07/2019
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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Myriad Genetics Inc (MYGN)
Industry: Biotechnology
Industry RS rank: 44 out of 58
Stock RS rank: 431 out of 582
10/10/19 close: $28.84
1 Month avg volatility: $1.37. Volatility stop (for upward breakout): $25.66 or 11.0% below the close.
Change YTD: -0.79%
Volume: 304,300 shares. 3 month avg: 906,888 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 09/24/2019 to 10/10/2019
WARNING: A dead-cat bounce occurred on 08/14/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 11/13/2019 and a 38% chance by 02/12/2020.
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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Patrick Industries Inc (PATK)
Industry: Retail Building Supply
Industry RS rank: 17 out of 58
Stock RS rank: 421 out of 582
10/10/19 close: $42.04
1 Month avg volatility: $1.95. Volatility stop (for downward breakout): $46.33 or 10.2% above the close.
Change YTD: 41.98%
Volume: 196,200 shares. 3 month avg: 94,083 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: Diamond top reversal pattern from 09/16/2019 to 10/10/2019
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 10 out of 58
Stock RS rank: 576 out of 582
10/10/19 close: $7.79
1 Month avg volatility: $0.83. Volatility stop (for downward breakout): $10.09 or 29.5% above the close.
Change YTD: -67.20%
Volume: 44,641,000 shares. 3 month avg: 5,870,049 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: Dead-cat bounce continuation pattern from 10/10/2019 to 10/10/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Revlon Inc (REV)
Industry: Toiletries/Cosmetics
Industry RS rank: 8 out of 58
Stock RS rank: 63 out of 582
10/10/19 close: $25.75
1 Month avg volatility: $1.11. Volatility stop (for upward breakout): $23.07 or 10.4% below the close.
Change YTD: 2.22%
Volume: 77,800 shares. 3 month avg: 238,602 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: Flag, high and tight continuation pattern from 08/15/2019 to 10/09/2019
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Semtech Corp (SMTC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 58
Stock RS rank: 352 out of 582
10/10/19 close: $48.78
1 Month avg volatility: $1.61. Volatility stop (for upward breakout): $44.82 or 8.1% below the close.
Change YTD: 6.34%
Volume: 312,500 shares. 3 month avg: 510,991 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/23/2019 to 10/10/2019
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 10/10/19. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 79.96 points. Since 02/05/1971 the index made 230 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 149 occasions.
     Average loss was -0.8% on 81 occasions.
Expect the index to close higher 64.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 174/314 or 55.4% of the time.
     The prediction of the index closing lower has been right 53/105 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, but only 5 days instead of 10 to zoom into the price action.

Here's a useful tip that might not be all that useful. Smile

I drew an up-sloping red trendline along the bottom of price.

Notice how the move up to A, measured vertically from the trendline, mirrors what happens after, on the drop to B.

In other words, the height of A from the trendline is the same as the drop from the trendline to B.

Way cool, huh? It's the measure rule for trendlines.

Unfortunately, it doesn't always work (63% of the time it works, the last time I checked, that is).

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,405.38    
 Weekly S2  7,506.25  100.87   
 Monthly S1  7,654.56  148.31   
 Weekly S1  7,704.99  50.43   
 Daily S2  7,845.33  140.33   
 Low  7,873.52  28.19   
 Daily S1  7,874.53  1.01   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  7,895.45  20.91   
 Open  7,895.96  0.51   Yes! The Open is close to the 61.8% Down from Intraday High.
 Weekly Pivot  7,898.75  2.79   Yes! The Weekly Pivot is close to the Open.
 50% Down from Intraday High  7,902.22  3.47   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 Daily Pivot  7,902.73  0.51   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  7,903.74  1.01   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  7,908.99  5.25   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  7,930.92  21.93   
 Daily R1  7,931.93  1.01   Yes! The Daily R1 is close to the High.
 Monthly Pivot  7,949.18  17.25   
 Daily R2  7,960.13  10.95   
 Weekly R1  8,097.49  137.37   
 Monthly R1  8,198.36  100.87   
 Weekly R2  8,291.25  92.89   
 Monthly R2  8,492.98  201.73   

Wednesday 10/9/19. Indicator Weakness

Picture of the chart pattern indicator

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

The bearish signal remains intact. That's the vertical red bar on the far right of the chart.

Notice how the indicator line shows a heartbeat in October. The indicator attempted to signal a bullish turn but was knocked down again.

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, 40% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 38%.
The fewest was 32% on 09/11/2019.
And the most was 81% on 12/24/2018.
Shown as a blue line on the above chart...
The 485 stocks in my database are down an average of 21% from their yearly high.
A week ago, the average was 20%.
The peak was 17% on 05/03/2019.
And the bottom was 33% on 12/24/2018.

Both lines are worse today than a week ago. Not their fault, of course.

The red and blue lines are just following the indices's squiggles. The red line shows a receding trend quite clearly.

The two charts, taken together, show continued weakness. I'd say, "lookout below!" but I don't want to frighten anyone, and I don't think it's that serious anyway.

-- Thomas Bulkowski

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Tuesday 10/8/19. Slider Quiz! Rectangle Tops

The index dropped by -0.4% or -95.7 points. Since 10/01/1928 the index made 909 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 463 occasions.
     Average loss was -0.7% on 446 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 193/325 or 59.4% of the time.
     The prediction of the index closing lower has been right 38/76 or 50.0% of the time.

$ $ $

I show a another slider quiz featuring the rectangle tops chart pattern.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,946.13    
 Weekly S2  25,119.81  173.68   
 Monthly S1  25,712.08  592.26   
 Weekly S1  25,798.92  86.84   
 Daily S2  26,288.17  489.25   
 Daily S1  26,383.09  94.93   
 Weekly Pivot  26,422.56  39.47   
 Low  26,424.54  1.98   Yes! The Low is close to the Weekly Pivot.
 Close  26,478.02  53.48   
 Open  26,502.33  24.31   
 Monthly Pivot  26,509.40  7.07   Yes! The Monthly Pivot is close to the Open.
 61.8% Down from Intraday High  26,512.90  3.49   Yes! The 61.8% Down from Intraday High is close to the Monthly Pivot.
 Daily Pivot  26,519.47  6.57   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  26,540.19  20.72   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  26,567.48  27.29   
 Daily R1  26,614.39  46.91   
 High  26,655.84  41.45   
 Daily R2  26,750.77  94.93   
 Weekly R1  27,101.67  350.90   
 Monthly R1  27,275.35  173.68   
 Weekly R2  27,725.31  449.97   
 Monthly R2  28,072.67  347.36   

Monday 10/7/19. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the monthly scale.

I show the Dow utilities on the monthly scale.

Why?

Because the utilities as of Friday's close is the best performing index of the five I follow. It's up 23.5%. The Nasdaq is up 20.3% and the Dow industrials are up 13.9%.

The kicker is that none of the numbers I just listed include dividends.

I own three or four utility stocks. They yield like 5% each because I bought them years ago and held on. So I'm getting capital gains plus dividends. That's a potent combination.

If you think the utility index besting the other indices is a one-off, you're wrong. It happened a few years ago, in 2015. The utilities posted a 26% gain, with dividends that's more than double what the Nasdaq posted. The Dow that year was up a paltry 7.5%.

I guess what I'm saying is that you should have a diversified portfolio of stocks so if one sector drops others can take up the slack. That way, you can do well.

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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Up 96.58 points.
Tuesday: Down 343.79 points.
Wednesday: Down 494.42 points.
Thursday: Up 122.42 points.
Friday: Up 372.68 points.

For the Week...

The Dow industrials were down 246.53 points or 0.9%.
The Nasdaq composite was up 42.84 points or 0.5%.
The S&P 500 index was down 9.78 points or 0.3%.

Year to Date...

Dow Industrials
     3.0% down from the high of 27,398.68 on 07/16/2019.
     17.4% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     4.3% down from the high of 8,339.64 on 07/26/2019.
     23.6% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     2.5% down from the high of 3,027.98 on 07/26/2019.
     20.8% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  26,160  26,367  26,479  26,686  26,798 
Weekly  25,152  25,863  26,454  27,165  27,757 
Monthly  24,978  25,776  26,541  27,339  28,105 
S&P500 (^GSPC): Daily  2,906  2,929  2,941  2,964  2,977 
Weekly  2,797  2,874  2,933  3,011  3,070 
Monthly  2,777  2,865  2,943  3,031  3,109 
Nasdaq (^IXIC): Daily  7,869  7,926  7,956  8,013  8,043 
Weekly  7,532  7,757  7,925  8,150  8,317 
Monthly  7,432  7,707  7,975  8,251  8,519 

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 9.3%   Expect a reversal soon. 
 1 month down 21.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 6.8%   Expect a reversal soon. 
 1 month down 21.9%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 48.8%   Expect a random direction. 
 1 month down 26.5%   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 will be starting in about 9 days.

 Found Chart Pattern Name
22Pipe top
14Double Top, Adam and Adam
8Triple top
6Triangle, symmetrical
6Flag, high and tight
6Double Top, Eve and Adam
5Double Bottom, Adam and Adam
4Pennant
4Diamond bottom
4Dead-cat bounce

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

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

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

This WeekLast Week
1. Homebuilding1. Cement and Aggregates
2. Cement and Aggregates2. Homebuilding
3. Insurance (Prop/Casualty)3. Telecom. Equipment
4. Toiletries/Cosmetics4. Insurance (Prop/Casualty)
5. Telecom. Equipment5. Chemical (Basic)

-- Thomas Bulkowski

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Friday 10/4/19. 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.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 587 stocks searched, or 3.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 1 bullish chart patterns this week and 7 bearish ones with any remaining (12) being undecided. The ratio of bullish to bearish patterns suggests the market is bearish.

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
AKAMTriangle, symmetrical      09/06/201910/03/2019E-Commerce
AELDouble Top, Adam and Adam      09/13/201909/27/2019Insurance (Life)
AONHead-and-shoulders top      08/19/201909/27/2019Insurance (Diversified)
ARCBDouble Top, Adam and Eve      09/13/201909/27/2019Trucking/Transp. Leasing
BBYDouble Top, Eve and Adam      09/10/201910/01/2019Retail (Special Lines)
CLSDouble Top, Adam and Adam      09/16/201909/27/2019Electronics
CREETriple top      09/16/201910/01/2019Semiconductor
CMIDouble Top, Eve and Adam      09/13/201910/01/2019Machinery
DOVDouble Top, Adam and Eve      09/13/201909/30/2019Machinery
DRQPipe top      09/16/201909/23/2019Oilfield Svcs/Equipment
EMNDouble Top, Adam and Adam      09/13/201910/01/2019Chemical (Diversified)
FFIVDouble Top, Eve and Eve      09/12/201910/01/2019Internet
GPRODead-cat bounce      10/03/201910/03/2019Electronics
ILMNDouble Top, Adam and Adam      09/20/201910/01/2019Biotechnology
IPGDouble Top, Adam and Adam      09/11/201910/01/2019Advertising
RHIDouble Top, Eve and Adam      09/13/201910/01/2019Human Resources
ROKDouble Top, Adam and Adam      09/13/201910/01/2019Diversified Co.
AMTDDead-cat bounce      10/01/201910/01/2019Securities Brokerage
UNMTriple top      09/13/201910/01/2019Insurance (Diversified)
WSODouble Top, Eve and Adam      09/13/201910/01/2019Retail Building Supply

 

Weekly screen for chart patterns ending between 09/26/2019 and 10/03/2019. 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.
 
Akamai Technologies Inc (AKAM)
Industry: E-Commerce
Industry RS rank: 37 out of 58
Stock RS rank: 44 out of 582
10/3/19 close: $90.90
1 Month avg volatility: $1.93. Volatility stop (for upward breakout): $84.89 or 6.6% below the close.
Change YTD: 48.82%
Volume: 1,727,300 shares. 3 month avg: 2,185,974 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/06/2019 to 10/03/2019
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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American Equity Investment Life Holding (AEL)
Industry: Insurance (Life)
Industry RS rank: 42 out of 58
Stock RS rank: 484 out of 582
10/3/19 close: $22.18
1 Month avg volatility: $0.65. Volatility stop (for downward breakout): $23.80 or 7.3% above the close.
Change YTD: -20.62%
Volume: 336,900 shares. 3 month avg: 625,883 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Adam and Adam reversal pattern from 09/13/2019 to 09/27/2019
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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Aon Corp (AON)
Industry: Insurance (Diversified)
Industry RS rank: 13 out of 58
Stock RS rank: 159 out of 582
10/3/19 close: $187.24
1 Month avg volatility: $3.34. Volatility stop (for downward breakout): $194.19 or 3.7% above the close.
Change YTD: 28.81%
Volume: 651,900 shares. 3 month avg: 1,174,512 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 08/19/2019 to 09/27/2019
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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ArcBest Corp (ARCB)
Industry: Trucking/Transp. Leasing
Industry RS rank: 10 out of 58
Stock RS rank: 442 out of 582
10/3/19 close: $28.08
1 Month avg volatility: $1.13. Volatility stop (for downward breakout): $30.54 or 8.8% above the close.
Change YTD: -18.04%
Volume: 217,100 shares. 3 month avg: 234,063 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 Eve reversal pattern from 09/13/2019 to 09/27/2019
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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Best Buy Co. (BBY)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 35 out of 58
Stock RS rank: 394 out of 582
10/3/19 close: $65.66
1 Month avg volatility: $1.70. Volatility stop (for downward breakout): $69.09 or 5.2% above the close.
Change YTD: 23.98%
Volume: 2,118,500 shares. 3 month avg: 4,325,955 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, Eve and Adam reversal pattern from 09/10/2019 to 10/01/2019
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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Celestica Inc (CLS)
Industry: Electronics
Industry RS rank: 47 out of 58
Stock RS rank: 504 out of 582
10/3/19 close: $6.59
1 Month avg volatility: $0.21. Volatility stop (for downward breakout): $7.29 or 10.6% above the close.
Change YTD: -24.86%
Volume: 252,900 shares. 3 month avg: 557,234 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: Double Top, Adam and Adam reversal pattern from 09/16/2019 to 09/27/2019
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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Cree Inc (CREE)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 23 out of 58
Stock RS rank: 489 out of 582
10/3/19 close: $48.63
1 Month avg volatility: $1.69. Volatility stop (for downward breakout): $52.23 or 7.4% above the close.
Change YTD: 13.69%
Volume: 1,337,600 shares. 3 month avg: 2,005,123 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: Triple top reversal pattern from 09/16/2019 to 10/01/2019
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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Cummins Inc. (CMI)
Industry: Machinery
Industry RS rank: 31 out of 58
Stock RS rank: 322 out of 582
10/3/19 close: $154.99
1 Month avg volatility: $3.53. Volatility stop (for downward breakout): $162.10 or 4.6% above the close.
Change YTD: 15.98%
Volume: 1,447,200 shares. 3 month avg: 1,327,631 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 09/13/2019 to 10/01/2019
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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Dover Corp (DOV)
Industry: Machinery
Industry RS rank: 31 out of 58
Stock RS rank: 288 out of 582
10/3/19 close: $94.57
1 Month avg volatility: $1.65. Volatility stop (for downward breakout): $98.01 or 3.6% above the close.
Change YTD: 33.29%
Volume: 675,500 shares. 3 month avg: 1,038,811 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 09/13/2019 to 09/30/2019
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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Dril-Quip Inc (DRQ)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 57 out of 58
Stock RS rank: 184 out of 582
10/3/19 close: $48.33
1 Month avg volatility: $2.02. Volatility stop (for downward breakout): $52.46 or 8.6% above the close.
Change YTD: 60.94%
Volume: 157,100 shares. 3 month avg: 557,835 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 09/16/2019 to 09/23/2019
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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Eastman Chemical (EMN)
Industry: Chemical (Diversified)
Industry RS rank: 36 out of 58
Stock RS rank: 434 out of 582
10/3/19 close: $70.82
1 Month avg volatility: $1.93. Volatility stop (for downward breakout): $74.69 or 5.5% above the close.
Change YTD: -3.13%
Volume: 790,000 shares. 3 month avg: 1,209,300 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: Double Top, Adam and Adam reversal pattern from 09/13/2019 to 10/01/2019
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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F5 Networks, Inc. (FFIV)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 58
Stock RS rank: 493 out of 582
10/3/19 close: $132.84
1 Month avg volatility: $3.36. Volatility stop (for downward breakout): $140.19 or 5.5% above the close.
Change YTD: -18.02%
Volume: 695,200 shares. 3 month avg: 847,706 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 09/12/2019 to 10/01/2019
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

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GoPro (GPRO)
Industry: Electronics
Industry RS rank: 47 out of 58
Stock RS rank: 557 out of 582
10/3/19 close: $4.16
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $4.81 or 15.7% above the close.
Change YTD: -2.00%
Volume: 30,335,300 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: Dead-cat bounce continuation pattern from 10/03/2019 to 10/03/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Illumina Inc (ILMN)
Industry: Biotechnology
Industry RS rank: 46 out of 58
Stock RS rank: 366 out of 582
10/3/19 close: $297.00
1 Month avg volatility: $7.70. Volatility stop (for downward breakout): $312.41 or 5.2% above the close.
Change YTD: -0.98%
Volume: 835,600 shares. 3 month avg: 759,071 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, Adam and Adam reversal pattern from 09/20/2019 to 10/01/2019
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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Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 22 out of 58
Stock RS rank: 304 out of 582
10/3/19 close: $20.50
1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $21.40 or 4.4% above the close.
Change YTD: -0.63%
Volume: 1,927,000 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: Double Top, Adam and Adam reversal pattern from 09/11/2019 to 10/01/2019
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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Robert Half International (RHI)
Industry: Human Resources
Industry RS rank: 54 out of 58
Stock RS rank: 499 out of 582
10/3/19 close: $52.76
1 Month avg volatility: $1.32. Volatility stop (for downward breakout): $56.71 or 7.5% above the close.
Change YTD: -7.76%
Volume: 1,383,500 shares. 3 month avg: 1,012,069 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, Eve and Adam reversal pattern from 09/13/2019 to 10/01/2019
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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Rockwell Automation Inc (ROK)
Industry: Diversified Co.
Industry RS rank: 45 out of 58
Stock RS rank: 446 out of 582
10/3/19 close: $158.37
1 Month avg volatility: $3.96. Volatility stop (for downward breakout): $166.39 or 5.1% above the close.
Change YTD: 5.24%
Volume: 921,000 shares. 3 month avg: 805,498 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 09/13/2019 to 10/01/2019
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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TD AmeriTrade Holding A (AMTD)
Industry: Securities Brokerage
Industry RS rank: 52 out of 58
Stock RS rank: 554 out of 582
10/3/19 close: $32.85
1 Month avg volatility: $1.26. Volatility stop (for downward breakout): $36.20 or 10.2% above the close.
Change YTD: -32.90%
Volume: 15,533,700 shares. 3 month avg: 2,043,012 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Dead-cat bounce continuation pattern from 10/01/2019 to 10/01/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Unum Group (UNM)
Industry: Insurance (Diversified)
Industry RS rank: 13 out of 58
Stock RS rank: 501 out of 582
10/3/19 close: $26.61
1 Month avg volatility: $0.76. Volatility stop (for downward breakout): $28.40 or 6.7% above the close.
Change YTD: -9.43%
Volume: 2,476,500 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: Triple top reversal pattern from 09/13/2019 to 10/01/2019
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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Watsco, Inc (WSO)
Industry: Retail Building Supply
Industry RS rank: 19 out of 58
Stock RS rank: 141 out of 582
10/3/19 close: $160.28
1 Month avg volatility: $3.15. Volatility stop (for downward breakout): $168.49 or 5.1% above the close.
Change YTD: 15.19%
Volume: 132,600 shares. 3 month avg: 222,320 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 09/13/2019 to 10/01/2019
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 10/3/19. Intraday Market Direction: Nasdaq

The index dropped by -1.6% or -123.43 points. Since 02/05/1971 the index made 87 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.3% on 44 occasions.
     Average loss was -1.3% on 43 occasions.
Expect the index to close higher 50.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 173/313 or 55.3% of the time.
     The prediction of the index closing lower has been right 53/105 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 long red line shows how the index has been dropping over the last 10 days. The movement has been up and down each day, but the downward trend overall is obvious.

Today (Wednesday), the index formed a descending scallop. I show that outlined with a curving red line. Price gapped open lower and formed a cup.

What's next? The above probability says the index will close higher. That's possible, of course. A snapback rise. However, 66% of descending scallops breakout downward.

A downward breakout occurs when price closes below the bottom of the pattern. So it's possible that sometime during the trading day on Thursday, we'll see the index close below the scallop and recover to end the day higher.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,406.91    
 Monthly S1  7,596.08  189.17   
 Weekly S2  7,676.24  80.16   
 Daily S2  7,686.56  10.33   Yes! The Daily S2 is close to the Weekly S2.
 Weekly S1  7,730.74  44.18   
 Daily S1  7,735.91  5.16   Yes! The Daily S1 is close to the Weekly S1.
 Low  7,744.96  9.05   Yes! The Low is close to the Daily S1.
 Close  7,785.25  40.29   
 61.8% Down from Intraday High  7,786.12  0.87   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  7,794.30  8.19   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  7,798.83  4.53   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  7,811.54  12.71   
 Daily R1  7,843.65  32.10   
 Open  7,851.13  7.48   Yes! The Open is close to the Daily R1.
 High  7,852.70  1.57   Yes! The High is close to the Open.
 Daily R2  7,902.04  49.34   
 Monthly Pivot  7,919.94  17.90   
 Weekly Pivot  7,944.79  24.85   
 Weekly R1  7,999.29  54.51   
 Monthly R1  8,109.11  109.82   
 Weekly R2  8,213.34  104.23   
 Monthly R2  8,432.97  219.63   

Wednesday 10/2/19. A Look At Indicators

Picture of the chart pattern indicator

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

The vertical red bar on the far right of the chart says the bearish signal is still in place.

And I had just indicated I thought the market would turn bullish (Tom's Targets, at page top). But my turn signals are typically three days ahead of time. Don't ask me why because I don't know. And I could be wrong altogether.

Still, we have a bearish red bar on the chart. And that signal is old enough that it might be permanent (signals can change for up to a week).

Picture of the percent down indicators

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

Shown as a red line on the above chart...
On 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 36%.
The fewest was 29% on 10/03/2018.
And the most was 81% on 12/24/2018.
Shown as a blue line on the above chart...
The 485 stocks in my database are down an average of 20% from their yearly high.
A week ago, the average was 19%.
The peak was 15% on 10/03/2018.
And the bottom was 33% on 12/24/2018.

Both lines this week are more bearish than they were a week ago, snapshot to snapshot.

Not good.

Coupled with the prior chart, things are still looking bearish. Not 'trend change' bearish, but not positive either. I'd advise caution here. It could be we're about to start another downleg with the index dropping for about a week followed by a return to the corrective phase of a measure move down.

-- Thomas Bulkowski

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Tuesday 10/1/19. Quarterly Prediction Update

Here's a three-slide slideshow, updating the 2019 forecast.

-- Thomas Bulkowski

1 / 3
chart pattern
The prediction you see here is an average of the Dow industrials going back to the 1920s. I take years ending with 9 (1929, 1939, etc) and add the values of the dow together for each day of that year along with the other 9-years. The thinking is that the Dow has a 10-year cycle. See this for more information. In this daily price chart, I removed the effects of the 2009 bear market thinking that a bear market won't happen again this year. The prediction is quite good. It missed in May and August but has followed the index for the most part. The next two weeks or so are going to be bumpy, if this chart is correct. Then it's time to move higher.
2 / 3
chart pattern
This is what the chart looks like with the 2009 bear market included. The 2009 bear market took the forecast down for three months and it's been recovering since. If this chart is correct, we should see the markets move higher almost immediately.
3 / 3
chart pattern
This is the forecast on the weekly scale going out to 2023. The vertical green lines highlight significant turning points. Sometime this month we should start to climb. The markets should do well until 2020 and then we hit a bumpy patch until we close in on March. After June 2020, we should be in another uptrend.

 
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