Subscribe to RSS feeds Bulkowski Blog via RSS

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

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of Bumper.
Kindle
Paperback
Nook
Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.
Bulkowski's Blog: ThePatternSite.com
Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 11/21/2017
23,591 160.50 0.7%
9,615 92.77 1.0%
758 2.01 0.3%
6,862 71.77 1.1%
2,599 16.89 0.7%
YTD
19.4%
6.3%
14.9%
27.5%
16.1%
Tom's Targets    Overview: 11/14/2017
23,700 or 22,800 by 12/01/2017
9,300 or 9,800 by 12/01/2017
800 or 750 by 12/01/2017
7,000 or 6,500 by 12/01/2017
2,625 or 2,540 by 12/01/2017

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

September 2011 Headlines


Archives


Thursday 9/29/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -2.2% or -55.25 points. Since 02/05/1971 the index made 39 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.4% on 14 occasions.
     Average loss was -1.9% on 25 occasions.
Look for the index to close lower 64.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 4/9 or 44.4% of the time.
     The prediction of the index closing lower has been right 4/7 or 57.1% of the time.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

A broadening bottom appeared early in the session (outlined by the blue lines). The chart pattern did not reveal the breakout until price closed below the bottom of the pattern (A) at B (a close below the red line).

A measured move down pattern from CDEF helps define a target for how low the index will drop.

Additionally, extending the bottom of the broadening bottom (which I show as a green line) shows another method to determine where price might reverse. It comes close to turning point D.

For tomorrow, I believe that the index will reverse since it's coming upon a support area marked by peaks during the last four days. The index could coast lower at the open and drop to 2,470 or so before finding a firm ground to stand on. I think that the index will close higher, which places me at odds with the above probabilities.

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

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,184.65    
 Weekly S2  2,295.25  110.60   
 Monthly S1  2,338.12  42.86   
 Weekly S1  2,393.42  55.30   
 Daily S2  2,438.76  45.34   
 Daily S1  2,465.17  26.41   
 Monthly Pivot  2,490.74  25.57   
 Low  2,491.07  0.33   Yes! The Low is close to the Monthly Pivot.
 Close  2,491.58  0.51   Yes! The Close is close to the Low.
 Daily Pivot  2,517.48  25.90   
 Weekly Pivot  2,518.39  0.91   Yes! The Weekly Pivot is close to the Daily Pivot.
 61.8% Down from Intraday High  2,521.14  2.75   Yes! The 61.8% Down from Intraday High is close to the Weekly Pivot.
 50% Down from Intraday High  2,530.43  9.29   
 38.2% Down from Intraday High  2,539.72  9.29   
 Daily R1  2,543.89  4.17   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  2,557.86  13.97   
 High  2,569.79  11.93   
 Daily R2  2,596.20  26.41   
 Weekly R1  2,616.56  20.36   
 Monthly R1  2,644.21  27.65   
 Weekly R2  2,741.53  97.33   
 Monthly R2  2,796.83  55.30   

Tuesday 9/27/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 2.5% or 272.38 points. Since 10/01/1928 the index made 42 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 23 occasions.
     Average loss was -1.0% on 19 occasions.
Look for the index to close higher 54.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 9/12 or 75.0% of the time.
     The prediction of the index closing lower has been right 3/4 or 75.0% of the time.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

The only thing of interest I see is a busted double top. A and B form the twin peaks of a potential double top. Price must close below C to validate the chart pattern as a true double top. That didn't happen. Instead, price moved higher. That was a buy signal. Price continued moving higher in a straight line run up to the close. Will it continue tomorrow?

My guess is that the morning will see a retrace. On the 10 day chart, the index is pushing into overhead resistance from 11,000 to 11,150. After that, it's clear until 11,250 where additional resistance builds. The index may wobble up and down going into the afternoon before it closes higher at day's end.

Alternatively, it could drop back to 10.950 (a support area).

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

-- Thomas Bulkowski

Top 

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,999.58    
 Weekly S2  10,110.66  111.08   
 Monthly S1  10,521.72  411.06   
 Weekly S1  10,577.26  55.54   
 Daily S2  10,672.00  94.74   
 Low  10,771.78  99.78   
 Open  10,771.78  0.00   Yes! The Open is close to the Low.
 Daily S1  10,857.93  86.15   
 61.8% Down from Intraday High  10,880.92  22.99   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  10,914.63  33.71   
 38.2% Down from Intraday High  10,948.35  33.71   
 Daily Pivot  10,957.71  9.36   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  11,043.86  86.15   
 High  11,057.49  13.63   Yes! The High is close to the Close.
 Weekly Pivot  11,063.74  6.25   Yes! The Weekly Pivot is close to the High.
 Monthly Pivot  11,119.28  55.54   
 Daily R1  11,143.64  24.36   Yes! The Daily R1 is close to the Monthly Pivot.
 Daily R2  11,243.42  99.78   
 Weekly R1  11,530.34  286.92   
 Monthly R1  11,641.42  111.08   
 Weekly R2  12,016.82  375.40   
 Monthly R2  12,238.98  222.16   

Monday 9/26/11. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq composite on the weekly scale.

I show a picture of the Nasdaq composite on the weekly scale with two predictions of the future direction of the markets.

The first is the drop from C to D. That move would complete a measured move down chart pattern. The extent of the move (location of D) is not accurate. I just drew D in at an approximate location within the support zone shown between the two blue lines.

The idea behind a measured move down is that the CD move is approximately the same (both in time and price) as the AB move. That would put the destination (D) somewhere in the support area.

Alternatively, the index could just rise higher, into the green resistance area shown between the two green lines. If the market recovers, the index could rise back up to A in the next several weeks.

Keep in mind that September is often the worst performing month of the year. The link shows that's true for the Dow Industrials and the S&P 500, but not so much for the Nasdaq. Mutual funds do their end-of-quarter/year window dressing (buying and selling stocks to make their portfolios look better) and that tends to rattle the markets.

$ $ $

When I tried to view the website this morning (Sunday), a notice saying that the website had been hacked appeared. Perhaps you have seen this message, too. Indeed, a hacker broke into the server where the site is hosted and dropped off a file that made the message appear. I found it on my site and removed it, restoring service. If you see the message again, it's probably because my ISP hasn't found out how it was done or how to prevent it. If I see the problem, I'll fix it if I'm able.

Top

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 108.08 points.
Tuesday: Up 7.65 points.
Wednesday: Down 283.82 points.
Thursday: Down 391.01 points.
Friday: Up 37.65 points.

For the Week...

The Dow industrials were down 737.61 points or 6.4%.
The Nasdaq composite was down 139.08 points or 5.3%.
The S&P 500 index was down 79.58 points or 6.5%.

Year to Date...

Dow Industrials
     16.3% down from the high of 12,876.00 on 05/02/2011.
     1.6% up from the low of 10,597.14 on 09/22/2011.
Nasdaq
     14.0% down from the high of 2,887.75 on 05/02/2011.
     6.5% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     17.1% down from the high of 1,370.58 on 05/02/2011.
     3.2% up from the low of 1,101.54 on 08/09/2011.

Top

Economic Reports

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

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

Options Expiration

No options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 09/23/2011, the CPI had:

10 bearish patterns,
4 bullish patterns,
134 patterns waiting for breakout.
The CPI signal is 28.6%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  10,570  10,671  10,740  10,840  10,909 
Weekly  10,020  10,396  10,973  11,349  11,926 
Monthly  9,909  10,340  11,028  11,460  12,148 
S&P 500 (^GSPC): Daily  1,113  1,125  1,133  1,145  1,154 
Weekly  1,051  1,094  1,157  1,200  1,263 
Monthly  1,044  1,090  1,160  1,207  1,277 
Nasdaq (^IXIC): Daily  2,418  2,451  2,471  2,503  2,523 
Weekly  2,292  2,388  2,516  2,611  2,739 
Monthly  2,182  2,333  2,488  2,639  2,794 
  • 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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 31.1%  The trend may continue.
 5 months down 3.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week down 32.0%  The trend may continue.
 5 months down 0.0%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week down 34.1%  The trend may continue.
 5 months down 1.9%  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 indexes, based on the most recent trend of closes.

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
57Head-and-shoulders top
50Triangle, symmetrical
18Head-and-shoulders bottom
17Double Top, Adam and Adam
16Horn top
14Double Bottom, Adam and Adam
11Broadening bottom
8Pipe top
8Triple bottom
7Triangle, descending

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

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

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Household Products
2. Electric Utility (East)2. Apparel
3. Household Products3. Electric Utility (East)
4. Apparel4. Drug
5. Shoe5. Shoe
48. Insurance (Life)48. Insurance (Life)
49. Securities Brokerage49. Human Resources
50. Human Resources50. Securities Brokerage
51. Homebuilding51. Homebuilding
52. Coal52. Coal

-- Thomas Bulkowski

Top


Thursday 9/22/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index dropped by -2.0% or -52.05 points. Since 02/05/1971 the index made 53 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.5% on 25 occasions.
     Average loss was -0.9% on 28 occasions.
Look for the index to close lower 52.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 4/9 or 44.4% of the time.
     The prediction of the index closing lower has been right 3/6 or 50.0% of the time.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Due to the large decrease after 3:00, the chart seems compressed on the linear price scale. A small double top appears at A and B. The chart pattern confirms as a valid chart pattern when the index closes below the low, at C.

Later, after noon, points D, E, and F form a triple top. That confirms as a valid reversal at G when price closes below the horizontal red line. This second pattern was the one to short but holding a short position from the earlier double top would also have worked well.

Looking forward, I feel that such steep declines in the index precede a bounce back up. The above probabilities suggest that's not the case 52.8% of the time. In other words, price tends to close lower the next day after a 2% drop in the Nasdaq.

I expect the index to open lower and then rebound. It is near weak support from 5 trading days ago. Whether that will actually be strong enough to support the index remains to be seen.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,210.92    
 Weekly S2  2,345.74  134.83   
 Monthly S1  2,374.55  28.81   
 Weekly S1  2,441.97  67.41   
 Daily S2  2,487.15  45.18   
 Monthly Pivot  2,500.92  13.77   
 Daily S1  2,512.67  11.75   
 Weekly Pivot  2,534.62  21.95   
 Low  2,537.46  2.84   Yes! The Low is close to the Weekly Pivot.
 Close  2,538.19  0.73   Yes! The Close is close to the Low.
 Daily Pivot  2,562.98  24.79   
 61.8% Down from Intraday High  2,566.43  3.45   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  2,575.38  8.95   
 38.2% Down from Intraday High  2,584.32  8.95   
 Daily R1  2,588.50  4.18   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  2,601.06  12.56   
 High  2,613.29  12.23   
 Weekly R1  2,630.85  17.56   
 Daily R2  2,638.81  7.96   
 Monthly R1  2,664.55  25.74   
 Weekly R2  2,723.50  58.95   
 Monthly R2  2,790.92  67.41   

Tuesday 9/20/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -0.9% or -108.08 points. Since 10/01/1928 the index made 393 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 184 occasions.
     Average loss was -0.8% on 209 occasions.
Look for the index to close lower 53.2% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 9/12 or 75.0% of the time.
     The prediction of the index closing lower has been right 3/3 or 100.0% of the time.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

This is an interesting chart and I hope that some of you were able to recognize the trading opportunity. Many of you may recognize a cup-with-handle as AEB with the handle sliding to C.

It's not a cup because price has to rise 30% leading to the left cup rim (from D to A), according to O'Neil. That, of course, is nearly impossible for an index. You can call it a rounding bottom and be on firmer footing.

The depth of the turn from E to B projected upward from B gives an exit target. I have not done the math, but the target looks close to where the index topped out today in the final hour.

Looking ahead to tomorrow, housing numbers come out in the morning, but the markets might be quiet pending the Federal Reserve's meeting announcement on Wednesday afternoon.

My guess is the markets will suffer in the morning and close the day lower. That's what the probabilities say and with a 100% win record, who am I to argue?

If D begins a 5-wave move higher (DA, AE, EB, BC and C to the peak near the close), then we should see an ABC correction taking place from the peak on down.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  10,390.99    
 Weekly S2  10,545.04  154.05   
 Monthly S1  10,896.00  350.96   
 Weekly S1  10,973.02  77.02   
 Daily S2  11,136.12  163.10   
 Weekly Pivot  11,252.75  116.62   
 Low  11,255.25  2.50   Yes! The Low is close to the Weekly Pivot.
 Daily S1  11,268.57  13.32   Yes! The Daily S1 is close to the Low.
 Monthly Pivot  11,306.42  37.85   
 61.8% Down from Intraday High  11,351.35  44.93   
 50% Down from Intraday High  11,381.04  29.69   
 Daily Pivot  11,387.69  6.66   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  11,401.01  13.32   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  11,410.72  9.71   Yes! The 38.2% Down from Intraday High is close to the Close.
 Open  11,506.67  95.95   
 High  11,506.82  0.15   Yes! The High is close to the Open.
 Daily R1  11,520.14  13.32   Yes! The Daily R1 is close to the High.
 Daily R2  11,639.26  119.13   
 Weekly R1  11,680.73  41.47   
 Monthly R1  11,811.43  130.70   
 Weekly R2  11,960.46  149.03   
 Monthly R2  12,221.85  261.39   

Monday 9/19/11. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show a picture of the Dow utilities on the daily scale because the index is leading the market higher.

Price, at C, is approaching the height of the prior peaks, A and B. This is good news since I bought several utility stocks as the index approached the correction lows in August. They are up 11% now.

If you were to look at the Nasdaq composite, you would also see that the index has broken out of the congestion area and is moving higher. The Dow industrials and S&P 500 indices are still struggling to break free.

My guess is that the market will continue to recover in the weeks that follow. We might get a throwback to the congestion area just for fun. The Dow industrials and S&P look as if they have formed head-and-shoulders tops, which is a worrisome sign. Regardless, I look for the index to continue moving up in the short term.

Top

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 68.99 points.
Tuesday: Up 44.73 points.
Wednesday: Up 140.88 points.
Thursday: Up 186.45 points.
Friday: Up 75.91 points.

For the Week...

The Dow industrials were up 516.96 points or 4.7%.
The Nasdaq composite was up 154.32 points or 6.3%.
The S&P 500 index was up 61.78 points or 5.4%.

Year to Date...

Dow Industrials
     10.6% down from the high of 12,876.00 on 05/02/2011.
     8.5% up from the low of 10,604.07 on 08/09/2011.
Nasdaq
     9.2% down from the high of 2,887.75 on 05/02/2011.
     12.5% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     11.3% down from the high of 1,370.58 on 05/02/2011.
     10.4% up from the low of 1,101.54 on 08/09/2011.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
Housing starts8:30 TB-Number of homes beginning construction.
Building permits8:30 TB-Measures building permits for new construction.
Existing home sales10:00 WCCounts sales of used homes.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Rate decision2:15 W?The Federal Reserves reports on interest rate changes.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Leading indicators10:00 ThD-Summary of already known reports.

Options Expiration

VIX expiration on Wednesday. No other options expire this week.

Top

Swing and Position Traders: Chart Pattern Indicator

As of 09/16/2011, the CPI had:

2 bearish patterns,
36 bullish patterns,
423 patterns waiting for breakout.
The CPI signal is 94.7%, 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  11,358  11,434  11,483  11,559  11,608 
Weekly  10,581  11,045  11,289  11,753  11,996 
Monthly  10,427  10,968  11,342  11,883  12,258 
S&P 500 (^GSPC): Daily  1,198  1,207  1,214  1,223  1,229 
Weekly  1,107  1,161  1,191  1,245  1,275 
Monthly  1,080  1,148  1,189  1,257  1,299 
Nasdaq (^IXIC): Daily  2,591  2,606  2,617  2,633  2,643 
Weekly  2,374  2,498  2,563  2,687  2,752 
Monthly  2,239  2,431  2,529  2,721  2,819 
  • 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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 43.1%  Expect a random direction.
 5 months down 3.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 1 week up 40.6%  Expect a random direction.
 5 months down 0.0%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week up 39.9%  The trend may continue.
 1 month up 47.9%  Expect a random direction.

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

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
97Double Bottom, Adam and Adam
36Triangle, symmetrical
23Double Bottom, Adam and Eve
23Pipe bottom
19Head-and-shoulders bottom
8Triple bottom
7Horn bottom
7Horn top
6Pipe top
5Double Bottom, 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, indexes, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Household Products1. Short ETFs
2. Apparel2. Household Products
3. Electric Utility (East)3. Drug
4. Drug4. Electric Utility (East)
5. Shoe5. Apparel
48. Insurance (Life)48. Insurance (Life)
49. Human Resources49. Coal
50. Securities Brokerage50. Securities Brokerage
51. Homebuilding51. Human Resources
52. Coal52. Homebuilding

-- Thomas Bulkowski

Top


Thursday 9/15/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 1.6% or 40.4 points. Since 02/05/1971 the index made 65 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 34 occasions.
     Average loss was -1.0% on 31 occasions.
Look for the index to close higher 52.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 3/8 or 37.5% of the time.
     The prediction of the index closing lower has been right 3/6 or 50.0% of the time.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Not much occurred today in terms of chart patterns. Price moved up following a nicely formed channel. Notice how the index punched through the top of the channel (A) only to falter and then close below the bottom of the channel (B).

I've started posting my research on busted chart patterns. Today's Nasdaq move is an example of it busting an up-sloping channel. Thus, even though the probabilities suggest a higher close, I am going to say the index will close lower. I believe that the new downward trend shown in the last half-hour will continue. The new downtrend could be the beginning of an simple ABC correction. That suggests the index will drop, retrace, and drop again.

On the 10-day view, 5 minute scale, the close is resting near support at 2560-2570. If that support holds, then the index could post a second higher close. The economic reports due out today are not important ones, but any large shift in the results could influence the closing direction.

So, you can take your pick of a lower or higher close.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,225.33    
 Weekly S2  2,364.30  138.97   
 Monthly S1  2,398.94  34.64   
 Weekly S1  2,468.42  69.48   
 Daily S2  2,483.40  14.97   
 Monthly Pivot  2,505.26  21.86   
 Weekly Pivot  2,518.44  13.18   
 Low  2,519.80  1.36   Yes! The Low is close to the Weekly Pivot.
 Daily S1  2,527.97  8.17   
 Open  2,548.45  20.48   
 61.8% Down from Intraday High  2,550.73  2.28   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  2,560.29  9.56   
 Daily Pivot  2,564.38  4.09   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,569.85  5.47   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  2,572.55  2.70   Yes! The Close is close to the 38.2% Down from Intraday High.
 High  2,600.78  28.23   
 Daily R1  2,608.95  8.17   
 Weekly R1  2,622.56  13.61   
 Daily R2  2,645.36  22.79   
 Weekly R2  2,672.58  27.22   
 Monthly R1  2,678.87  6.29   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  2,785.19  106.32   

Tuesday 9/13/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index climbed by 0.6% or 68.99 points. Since 10/01/1928 the index made 777 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 429 occasions.
     Average loss was -0.7% on 348 occasions.
Look for the index to close higher 55.2% of the time.
Since inception on 6/14/2011:
     The prediction of the index closing higher has been right 8/11 or 72.7% of the time.
     The prediction of the index closing lower has been right 3/3 or 100.0% of the time.

I show a picture of the Dow industrials on the 5-minute scale from Monday's trading.

I added a reliability assessment ("The prediction of the index closing...") to the above predictions. That will help you gauge how reliable the predictions have been.

Looking at the chart, we see a descending triangle chart pattern. They breakout downward 64% of the time, and that's what happened in this case. However, the down move was short lived. In fact, the pattern "busted" when the index closed above the top trendline at A. Often when a pattern busts, it shows a strong move in the new direction.

The strength of the new move up suggests a continuation at the opening bell tomorrow. However, the height of the last candle, being so short, suggests a continuation move might be a trap that sees the index retrace before moving higher. In either case, look for the index to finish the day higher than yesterday's close.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  10,014.57    
 Monthly S1  10,537.85  523.27   
 Weekly S2  10,612.21  74.37   
 Daily S2  10,745.37  133.15   
 Low  10,824.76  79.39   
 Weekly S1  10,836.67  11.91   Yes! The Weekly S1 is close to the Low.
 Daily S1  10,903.24  66.58   
 61.8% Down from Intraday High  10,915.40  12.15   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  10,943.39  28.00   
 38.2% Down from Intraday High  10,971.39  28.00   
 Daily Pivot  10,982.64  11.24   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Open  10,990.01  7.37   Yes! The Open is close to the Daily Pivot.
 Close  11,061.12  71.11   
 High  11,062.03  0.91   Yes! The High is close to the Close.
 Monthly Pivot  11,127.34  65.31   
 Daily R1  11,140.51  13.17   Yes! The Daily R1 is close to the Monthly Pivot.
 Weekly Pivot  11,156.98  16.47   Yes! The Weekly Pivot is close to the Daily R1.
 Daily R2  11,219.91  62.92   
 Weekly R1  11,381.44  161.53   
 Monthly R1  11,650.62  269.18   
 Weekly R2  11,701.75  51.14   
 Monthly R2  12,240.11  538.36   

Monday 9/12/11. Market Monday: The Week Ahead

My Prediction

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

I show a picture of the S&P 500 index on the daily scale along with an inset of the Dow industrials. First, the S&P.

Price has been making higher highs and higher lows. That's the definition of an up trend. As the red lines show, the index has climbed in a tall upward-sloping channel. The index has touched the bottom trendline and closed higher (not up for the day but above the trendline). Will it continue to stay within the channel and bounce higher on Monday?

Let's look at the Dow. It is also following an up-sloping channel, highlighted in blue in the inset. It also has shown higher highs and higher lows...until the last week.

Twice the index dipped below the bottom blue trendline and on Friday it closed below the line. That suggests the index is going to continue lower. That doesn't always happen, of course.

So, you have two views. The S&P shows an intact upward channel, but the Dow has punched through it as if leading the way down.

Since the Dow has pushed through twice, my guess is it could drop more, say, to the August low at B (at least). As for the S&P, it may follow the Dow lower over the coming week, especially if economic reports come in weaker than expected.

Supporting this bearish view is that four of five indices have closed below 12 monthly SMA (see below). In the past, that has signaled the start of a bear market -- but not always. The last time I sold a good portion of my portfolio, the market moved higher. This time around, I'm gun shy. I remain bullish over the long term (longer than 6 months).

For this week, I expect the market to bounce higher on Monday as a retrace of the big move down on Friday. Then on Wednesday and Thursday economic reports come out that will flatten any bulls. All of this, of course, is just a guess.

Top

A Brief Look Back

Picture of a flower from my garden.

The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Holiday or other weird event!
Tuesday: Down 100.96 points.
Wednesday: Up 275.56 points.
Thursday: Down 119.05 points.
Friday: Down 303.68 points.

For the Week...

The Dow industrials were down 248.13 points or 2.2%.
The Nasdaq composite was down 12.34 points or 0.5%.
The S&P 500 index was down 19.74 points or 1.7%.

Year to Date...

Dow Industrials
     14.6% down from the high of 12,876.00 on 05/02/2011.
     3.7% up from the low of 10,604.07 on 08/09/2011.
Nasdaq
     14.5% down from the high of 2,887.75 on 05/02/2011.
     5.8% up from the low of 2,331.65 on 08/09/2011.
S&P 500
     15.8% down from the high of 1,370.58 on 05/02/2011.
     4.8% up from the low of 1,101.54 on 08/09/2011.

Top

Economic Reports

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

ReportTimeA-F
Rating
Description
International trade8:30 TC+Import/export prices, trade balance. US economy vs others.
Treasury budget2:00 TDTracks budget deficit. Important in April (tax filing).
Producer price index8:30 WB-Measures wholesale goods cost. An indication of future inflation.
Retail sales8:30 WA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 WC-Reports manufacturing, wholesale, retail inventories.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Consumer price index8:30 ThB+Inflation report. Measures cost of goods and services.
Industrial production9:15 ThB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 ThB-Gauges economic activity, hints of inflation.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
2014 Equity LEAPS addedMonday
VIX expiresWednesday
A.M. settled index options cease trading.Thursday
Expiring equity, P.M. settled index options and treasury/interest rate options classes cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, cash-settled currency and treasury/interest rate options expireSaturday

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

Top

Swing and Position Traders: Chart Pattern Indicator

As of 09/09/2011, the CPI had:

39 bearish patterns,
0 bullish patterns,
363 patterns waiting for breakout.
The CPI signal is 0.0%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  10,715  10,854  11,074  11,213  11,433 
Weekly  10,589  10,791  11,134  11,335  11,679 
Monthly  9,992  10,492  11,104  11,605  12,217 
S&P 500 (^GSPC): Daily  1,126  1,140  1,163  1,177  1,200 
Weekly  1,102  1,128  1,166  1,192  1,231 
Monthly  1,033  1,094  1,162  1,223  1,291 
Nasdaq (^IXIC): Daily  2,414  2,441  2,480  2,507  2,545 
Weekly  2,329  2,399  2,484  2,553  2,638 
Monthly  2,190  2,329  2,470  2,609  2,750 
  • 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

Top

Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 20.1%  Expect a reversal soon.
 5 months down 3.9%  Expect a reversal soon.
 S & P 500 (^GSPC) 2 weeks down 20.6%  Expect a reversal soon.
 5 months down 0.0%  Expect a reversal soon.
 Nasdaq composite (^IXIC) 1 week down 34.2%  The trend may continue.
 5 months down 1.9%  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 indexes, based on the most recent trend of closes.

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

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

Buy-and-Hold: 12-Month SMA

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

Top

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
90Double Bottom, Adam and Adam
28Pipe bottom
23Double Bottom, Adam and Eve
15Triangle, symmetrical
9Head-and-shoulders bottom
6Horn bottom
4Triple bottom
4Double Bottom, Eve and Eve
3Big W
3Triangle, descending

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

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

 

 

 

 

The following industries, of 52 that I follow, were the best (1) and worst (52) performing.

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Household Products2. Electric Utility (East)
3. Drug3. Household Products
4. Electric Utility (East)4. Electric Utility (Central)
5. Apparel5. Drug
48. Insurance (Life)48. Insurance (Life)
49. Coal49. Human Resources
50. Securities Brokerage50. Securities Brokerage
51. Human Resources51. Homebuilding
52. Homebuilding52. Coal

-- Thomas Bulkowski

Top


Thursday 9/8/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 3.0% or 75.11 points. Since 02/05/1971 the index made 12 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.1% on 5 occasions.
     Average loss was -0.8% on 7 occasions.
Look for the index to close lower.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

The index moved higher almost from the opening bell. The up trend continued until near the close when it formed a peak (A), dipped, and returned to the prior peak (B). That double peak, to me, is a warning sign. Price could drop at the scent of overhead resistance. Indications of a reversal appear only as a small white candle at B. Based on the probabilities, the index should close lower tomorrow (Thursday). That would be understandable, given that the move up was so large. Thus, I expect a retrace of today's up move.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,094.35    
 Monthly S1  2,321.65  227.29   
 Weekly S2  2,401.06  79.41   
 Weekly S1  2,475.00  73.94   
 Daily S2  2,493.71  18.71   
 Low  2,507.52  13.81   
 Open  2,511.50  3.98   Yes! The Open is close to the Low.
 Daily S1  2,521.33  9.83   
 61.8% Down from Intraday High  2,523.34  2.02   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  2,528.23  4.89   
 38.2% Down from Intraday High  2,533.12  4.89   
 Daily Pivot  2,535.13  2.02   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot  2,543.29  8.16   
 Close  2,548.94  5.65   
 High  2,548.94  0.00   Yes! The High is close to the Close.
 Monthly Pivot  2,558.94  10.00   
 Daily R1  2,562.75  3.80   Yes! The Daily R1 is close to the Monthly Pivot.
 Daily R2  2,576.55  13.81   
 Weekly R1  2,617.23  40.68   
 Weekly R2  2,685.52  68.29   
 Monthly R1  2,786.24  100.72   
 Monthly R2  3,023.53  237.30   

Tuesday 9/6/11. Trading Tuesday: Dow

Picture of the Dow industrials on the 5 minute scale.

The index dropped by -2.2% or -253.31 points. Since 10/01/1928 the index made 56 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 30 occasions.
     Average loss was -0.6% on 26 occasions.
Look for the index to close higher.

I show a picture of the Dow industrials on the 5-minute scale from Friday's trading.

A Eve & Eve double top appears around noon in the index (at A and B). Price confirmed the chart pattern when it closed below the red horizontal line. That line could pose a challenge to the index when it moves up, just as it did at 1:30 and 2:00. However, the resistance will likely be muted since the earlier tests had burned off some of that resistance.

I get the feeling that price will open lower because of the weakness shown near the close (tall black candles easing lower). Nevertheless, look for the index to close the day higher.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  9,697.23    
 Monthly S1  10,468.75  771.51   
 Weekly S2  10,883.99  415.25   
 Daily S2  11,033.79  149.80   
 Weekly S1  11,062.13  28.33   
 Daily S1  11,137.03  74.90   
 Low  11,211.35  74.32   
 Close  11,240.26  28.91   
 Daily Pivot  11,314.58  74.32   
 61.8% Down from Intraday High  11,318.61  4.03   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  11,351.75  33.13   
 Monthly Pivot  11,375.58  23.84   Yes! The Monthly Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  11,384.88  9.29   Yes! The 38.2% Down from Intraday High is close to the Monthly Pivot.
 Weekly Pivot  11,389.48  4.61   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Daily R1  11,417.82  28.33   
 Open  11,492.06  74.24   
 High  11,492.14  0.08   Yes! The High is close to the Open.
 Weekly R1  11,567.62  75.48   
 Daily R2  11,595.37  27.76   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  11,894.97  299.60   
 Monthly R1  12,147.10  252.12   
 Monthly R2  13,053.93  906.84   

Thursday 9/1/11. Trading Thursday: Nasdaq

Picture of the Nasdaq composite on the 5 minute scale.

The index climbed by 0.1% or 3.35 points. Since 02/05/1971 the index made 577 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 319 occasions.
     Average loss was -0.9% on 258 occasions.
Look for the index to close higher.

I show a picture of the Nasdaq composite on the 5-minute scale from Wednesday's trading.

Two chart patterns grabbed my attention. First, is a measured move down, shown as CDEA. Leg CD is nearly the length of leg EA and the slope is similar.

The second pattern is an Adam & Adam double bottom at A and B. It confirmed as a valid pattern when the index closed above the peak between bottoms A and B. Now, the index is throwing back to the top of the chart pattern.

I expect the index to continue dropping at the open (although it could just resume moving up) and then close higher.

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

-- Thomas Bulkowski

Top

© 2011 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  2,060.21    
 Weekly S2  2,318.83  258.63   
 Monthly S1  2,319.83  1.00   Yes! The Monthly S1 is close to the Weekly S2.
 Weekly S1  2,449.15  129.31   
 Weekly Pivot  2,467.59  18.45   
 Daily S2  2,529.09  61.49   
 Daily S1  2,554.27  25.19   
 Low  2,557.74  3.47   Yes! The Low is close to the Daily S1.
 61.8% Down from Intraday High  2,578.31  20.57   
 Close  2,579.46  1.15   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot  2,582.93  3.47   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High  2,584.66  1.73   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Open  2,589.75  5.09   Yes! The Open is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  2,591.01  1.26   Yes! The 38.2% Down from Intraday High is close to the Open.
 Monthly Pivot  2,591.28  0.26   Yes! The Monthly Pivot is close to the 38.2% Down from Intraday High.
 Weekly R1  2,597.91  6.63   
 Daily R1  2,608.11  10.21   
 High  2,611.58  3.47   Yes! The High is close to the Daily R1.
 Weekly R2  2,616.35  4.77   Yes! The Weekly R2 is close to the High.
 Daily R2  2,636.77  20.41   
 Monthly R1  2,850.90  214.14   
 Monthly R2  3,122.35  271.44   

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