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

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Busted
Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 09/24/2018
26,562 -181.45 -0.7%
11,370 -162.35 -1.4%
721 -6.64 -0.9%
7,993 6.29 0.1%
2,919 -10.30 -0.4%
YTD
7.5%
7.1%
-0.4%
15.8%
9.2%
Tom's Targets    Overview: 09/14/2018
27,000 or 26,100 by 10/01/2018
11,750 or 11,250 by 10/01/2018
755 or 720 by 10/01/2018
8,300 or 7,800 by 10/01/2018
2,975 or 2,890 by 10/15/2018

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

September 2018 Headlines


Archives


Tuesday 9/25/18. Intraday Market Direction: Dow

The index dropped by -0.7% or -181.45 points. Since 10/01/1928 the index made 573 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 281 occasions.
     Average loss was -0.9% on 292 occasions.
Expect the index to close lower 51.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 172/286 or 60.1% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

The index showed a descending scallop chart pattern today.

There's not much of an upward hook on the end of the pattern, and I thought that suggested further deterioration in the index (re: it's going down). Now, I'm not so sure.

Plus, I've been wrong a lot recently, or think I have about my direction calls. So maybe the index will rise instead.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  25,036.79    
 Weekly S2  25,715.04  678.25   
 Monthly S1  25,799.42  84.38   
 Weekly S1  26,138.55  339.13   
 Monthly Pivot  26,284.29  145.74   
 Daily S2  26,445.63  161.34   
 Weekly Pivot  26,453.85  8.22   Yes! The Weekly Pivot is close to the Daily S2.
 Daily S1  26,503.84  49.99   
 Low  26,548.68  44.84   
 Close  26,562.05  13.37   Yes! The Close is close to the Low.
 Daily Pivot  26,606.89  44.84   
 61.8% Down from Intraday High  26,610.28  3.39   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  26,629.31  19.03   
 38.2% Down from Intraday High  26,648.34  19.03   
 Daily R1  26,665.10  16.76   
 Open  26,705.25  40.15   
 High  26,709.94  4.69   Yes! The High is close to the Open.
 Daily R2  26,768.15  58.21   
 Weekly R1  26,877.36  109.21   
 Monthly R1  27,046.92  169.56   
 Weekly R2  27,192.66  145.74   
 Monthly R2  27,531.79  339.13   

Monday 9/24/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

This is a picture of the Dow industrials on the daily scale.

There's not much to see this week. The index has broken above the red trendline, which I arbitrarily drew along recent peaks.

The bottoms appear to be trending higher at a faster rate than the tops, at least for the majority of the time. I show that with the curved trendline.

Taken together, this looks like a rising wedge type behavior, even though the bottom of this example is curved instead of straight.

It suggests momentum is increasing. This upward trend can continue but it does favor a slowing of that momentum, meaning price will either move sideways or drop.

Unfortunately, I have no idea when that might happen. But it will happen.

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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 92.55 points.
Tuesday: Up 184.84 points.
Wednesday: Up 158.8 points.
Thursday: Up 251.22 points.
Friday: Up 86.52 points.

For the Week...

The Dow industrials were up 588.83 points or 2.3%.
The Nasdaq composite was down 23.08 points or 0.3%.
The S&P 500 index was up 24.69 points or 0.8%.

Year to Date...

Dow Industrials
     0.1% down from the high of 26,769.16 on 09/21/2018.
     14.6% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.8% down from the high of 8,133.30 on 08/30/2018.
     20.5% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     0.4% down from the high of 2,940.91 on 09/21/2018.
     15.7% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 09/21/2018, the CPI had:

15 bearish patterns,
29 bullish patterns,
267 patterns waiting for breakout.
The CPI signal is 65.9%, which is bullish (>= 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  26,642  26,693  26,731  26,782  26,820 
Weekly  25,776  26,260  26,514  26,998  27,253 
Monthly  25,097  25,920  26,345  27,168  27,592 
S&P500 (^GSPC): Daily  2,919  2,924  2,933  2,938  2,946 
Weekly  2,864  2,897  2,919  2,952  2,974 
Monthly  2,794  2,862  2,901  2,969  3,009 
Nasdaq (^IXIC): Daily  7,930  7,959  8,008  8,036  8,086 
Weekly  7,811  7,899  7,978  8,066  8,145 
Monthly  7,577  7,782  7,958  8,163  8,338 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks up 32.5%   The trend may continue. 
 3 months up 33.7%   The trend may continue. 
 S & P 500 (^GSPC) 2 weeks up 33.8%   The trend may continue. 
 6 months up 15.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.0%   The trend may continue. 
 1 month down 25.9%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
17Triangle, symmetrical
14Double Bottom, Adam and Adam
14Pipe bottom
12Head-and-shoulders top
10Double Top, Adam and Adam
8Head-and-shoulders bottom
7Double Top, Eve and Eve
6Pipe top
6Rising wedge
6Broadening 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. Healthcare Information1. Healthcare Information
2. Computers and Peripherals2. Short ETFs
3. Medical Services3. Petroleum (Integrated)
4. Short ETFs4. Computers and Peripherals
5. Medical Supplies5. Shoe

-- Thomas Bulkowski

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Friday 9/21/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 607 stocks searched, or 3.0%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 10 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 17 bullish chart patterns this week and 8 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
COGDouble Bottom, Adam and Adam      09/07/201809/17/2018Natural Gas (Diversified)
CXPipe bottom      09/04/201809/10/2018Cement and Aggregates
CNPDouble Top, Adam and Adam      09/06/201809/14/2018Electric Utility (Central)
DOPipe bottom      09/04/201809/10/2018Oilfield Svcs/Equipment
^DJUTriangle, symmetrical      08/01/201809/14/2018None
DTriangle, ascending      08/03/201809/18/2018Electric Utility (East)
DUKHead-and-shoulders top      08/17/201809/18/2018Electric Utility (East)
EGNPipe bottom      09/04/201809/10/2018Natural Gas (Diversified)
ESVPipe bottom      09/04/201809/10/2018Oilfield Svcs/Equipment
EQTDouble Bottom, Adam and Adam      09/11/201809/18/2018Natural Gas (Diversified)
FMCPipe bottom      09/04/201809/10/2018Chemical (Basic)
FCXPipe bottom      09/04/201809/10/2018Metals and Mining (Div.)
GISTriple top      08/03/201809/17/2018Food Processing
IPGTriangle, symmetrical      06/29/201809/20/2018Advertising
IPITriple bottom      08/23/201809/14/2018Chemical (Diversified)
LENTriangle, symmetrical      08/09/201809/20/2018Homebuilding
MTriangle, descending      08/16/201809/19/2018Retail Store
MASTriangle, descending      07/25/201809/20/2018Building Materials
MURPipe bottom      09/04/201809/10/2018Petroleum (Integrated)
NEPipe bottom      09/04/201809/10/2018Oilfield Svcs/Equipment
PATKBroadening top      08/27/201809/20/2018Retail Building Supply
PICOTriangle, ascending      08/09/201809/20/2018Diversified Co.
RLTriangle, symmetrical      07/31/201809/19/2018Apparel
SIGIBroadening top      08/22/201809/14/2018Insurance (Prop/Casualty)
SNPSDouble Top, Eve and Eve      08/27/201809/14/2018Computer Software and Svcs
TEVAPipe bottom      09/04/201809/10/2018Drug
RIGPipe bottom      09/04/201809/10/2018Oilfield Svcs/Equipment
VLOHead-and-shoulders top      07/31/201809/14/2018Petroleum (Integrated)

 

Weekly screen for chart patterns ending between 09/13/2018 and 09/20/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Cabot Oil and Gas A (COG)
Industry: Natural Gas (Diversified)
Industry RS rank: 13 out of 58
Stock RS rank: 462 out of 600
9/20/18 close: $22.90
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $21.38 or 6.7% below the close.
Change YTD: -19.93%
Volume: 7,179,500 shares. 3 month avg: 5,196,143 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 09/07/2018 to 09/17/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Cemex SA de CV (CX)
Industry: Cement and Aggregates
Industry RS rank: 55 out of 58
Stock RS rank: 311 out of 600
9/20/18 close: $7.16
1 Month avg volatility: $0.19. Volatility stop (for upward breakout): $6.74 or 5.9% below the close.
Change YTD: -4.91%
Volume: 4,307,800 shares. 3 month avg: 9,928,860 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 09/04/2018 to 09/10/2018
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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Centerpoint Energy (CNP)
Industry: Electric Utility (Central)
Industry RS rank: 17 out of 58
Stock RS rank: 335 out of 600
9/20/18 close: $28.00
1 Month avg volatility: $0.37. Volatility stop (for downward breakout): $28.79 or 2.8% above the close.
Change YTD: -1.27%
Volume: 2,195,500 shares. 3 month avg: 2,845,400 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 09/06/2018 to 09/14/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 8%.
Pullbacks occur 61% of the time.
Price hits measure rule target 72% of the time.

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Diamond Offshore (DO)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 33 out of 58
Stock RS rank: 192 out of 600
9/20/18 close: $18.41
1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $17.15 or 6.9% below the close.
Change YTD: -0.97%
Volume: 1,124,500 shares. 3 month avg: 2,441,012 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: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018
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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DJ 15 Utilities (^DJU)
Industry: None
Industry RS rank is unavailable.
9/20/18 close: $724.76
1 Month avg volatility: $7.87. Volatility stop (for upward breakout): $699.70 or 3.5% below the close.
Change YTD: 0.19%
Volume: 56,381,800 shares. 3 month avg: 50,790,135 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/01/2018 to 09/14/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Dominion Resources Inc. (D)
Industry: Electric Utility (East)
Industry RS rank: 34 out of 58
Stock RS rank: 339 out of 600
9/20/18 close: $70.32
1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $67.42 or 4.1% below the close.
Change YTD: -13.25%
Volume: 5,143,700 shares. 3 month avg: 2,249,422 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 08/03/2018 to 09/18/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Duke Energy Corp (DUK)
Industry: Electric Utility (East)
Industry RS rank: 34 out of 58
Stock RS rank: 317 out of 600
9/20/18 close: $80.62
1 Month avg volatility: $1.10. Volatility stop (for downward breakout): $82.95 or 2.9% above the close.
Change YTD: -4.15%
Volume: 3,918,200 shares. 3 month avg: 2,571,354 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 08/17/2018 to 09/18/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Energen Corp (EGN)
Industry: Natural Gas (Diversified)
Industry RS rank: 13 out of 58
Stock RS rank: 49 out of 600
9/20/18 close: $80.62
1 Month avg volatility: $1.98. Volatility stop (for upward breakout): $76.53 or 5.1% below the close.
Change YTD: 40.04%
Volume: 1,162,000 shares. 3 month avg: 929,683 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 09/04/2018 to 09/10/2018
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 International (ESV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 33 out of 58
Stock RS rank: 15 out of 600
9/20/18 close: $7.70
1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $7.09 or 7.9% below the close.
Change YTD: 30.51%
Volume: 11,120,300 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 09/04/2018 to 09/10/2018
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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Equitable Resources, Inc (EQT)
Industry: Natural Gas (Diversified)
Industry RS rank: 13 out of 58
Stock RS rank: 413 out of 600
9/20/18 close: $48.49
1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $45.38 or 6.4% below the close.
Change YTD: -14.81%
Volume: 1,982,700 shares. 3 month avg: 3,960,946 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 09/11/2018 to 09/18/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 26 out of 58
Stock RS rank: 221 out of 600
9/20/18 close: $89.55
1 Month avg volatility: $1.59. Volatility stop (for upward breakout): $85.09 or 5.0% below the close.
Change YTD: -5.40%
Volume: 1,545,900 shares. 3 month avg: 1,151,138 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 09/04/2018 to 09/10/2018
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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Freeport-McMoRan Copper and Gold B (FCX)
Industry: Metals and Mining (Div.)
Industry RS rank: 54 out of 58
Stock RS rank: 575 out of 600
9/20/18 close: $14.39
1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $13.40 or 6.9% below the close.
Change YTD: -24.10%
Volume: 21,787,600 shares. 3 month avg: 16,878,592 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: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018
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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General Mills Inc (GIS)
Industry: Food Processing
Industry RS rank: 19 out of 58
Stock RS rank: 422 out of 600
9/20/18 close: $44.37
1 Month avg volatility: $0.91. Volatility stop (for downward breakout): $46.40 or 4.6% above the close.
Change YTD: -25.16%
Volume: 6,018,800 shares. 3 month avg: 4,139,065 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: Triple top reversal pattern from 08/03/2018 to 09/17/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 42 out of 58
Stock RS rank: 399 out of 600
9/20/18 close: $22.67
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $21.80 or 3.8% below the close.
Change YTD: 12.45%
Volume: 2,784,600 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: Triangle, symmetrical continuation pattern from 06/29/2018 to 09/20/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Intrepid Potash Inc (IPI)
Industry: Chemical (Diversified)
Industry RS rank: 36 out of 58
Stock RS rank: 446 out of 600
9/20/18 close: $3.62
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $3.30 or 8.8% below the close.
Change YTD: -23.95%
Volume: 794,300 shares. 3 month avg: 1,190,495 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triple bottom reversal pattern from 08/23/2018 to 09/14/2018
WARNING: A dead-cat bounce occurred on 08/02/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 11/01/2018 and a 38% chance by 01/31/2019.
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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Lennar Corp. Cl A (LEN)
Industry: Homebuilding
Industry RS rank: 57 out of 58
Stock RS rank: 539 out of 600
9/20/18 close: $50.72
1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $48.15 or 5.1% below the close.
Change YTD: -19.80%
Volume: 4,529,800 shares. 3 month avg: 3,465,638 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 08/09/2018 to 09/20/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Macys, Inc (M)
Industry: Retail Store
Industry RS rank: 10 out of 58
Stock RS rank: 120 out of 600
9/20/18 close: $35.18
1 Month avg volatility: $0.99. Volatility stop (for downward breakout): $37.61 or 6.9% above the close.
Change YTD: 39.66%
Volume: 6,660,800 shares. 3 month avg: 14,056,392 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, descending reversal pattern from 08/16/2018 to 09/19/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Masco Corp. (MAS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 471 out of 600
9/20/18 close: $38.61
1 Month avg volatility: $0.61. Volatility stop (for downward breakout): $40.37 or 4.6% above the close.
Change YTD: -12.13%
Volume: 1,913,400 shares. 3 month avg: 2,351,771 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, descending reversal pattern from 07/25/2018 to 09/20/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Murphy Oil Corporation (MUR)
Industry: Petroleum (Integrated)
Industry RS rank: 6 out of 58
Stock RS rank: 101 out of 600
9/20/18 close: $31.79
1 Month avg volatility: $0.71. Volatility stop (for upward breakout): $30.28 or 4.8% below the close.
Change YTD: 0.03%
Volume: 697,400 shares. 3 month avg: 2,218,335 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018
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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Noble Corporation (NE)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 33 out of 58
Stock RS rank: 16 out of 600
9/20/18 close: $6.51
1 Month avg volatility: $0.23. Volatility stop (for upward breakout): $5.88 or 9.8% below the close.
Change YTD: 46.29%
Volume: 6,964,100 shares. 3 month avg: 7,535,162 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 09/04/2018 to 09/10/2018
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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Patrick Industries Inc (PATK)
Industry: Retail Building Supply
Industry RS rank: 27 out of 58
Stock RS rank: 428 out of 600
9/20/18 close: $64.00
1 Month avg volatility: $1.87. Volatility stop (for downward breakout): $68.09 or 6.4% above the close.
Change YTD: -7.85%
Volume: 272,200 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 Thursday.
 
Chart pattern: Broadening top reversal pattern from 08/27/2018 to 09/20/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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PICO Holdings (PICO)
Industry: Diversified Co.
Industry RS rank: 37 out of 58
Stock RS rank: 240 out of 600
9/20/18 close: $12.40
1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $11.73 or 5.4% below the close.
Change YTD: -3.13%
Volume: 61,600 shares. 3 month avg: 140,617 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, ascending reversal pattern from 08/09/2018 to 09/20/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 23 out of 58
Stock RS rank: 106 out of 600
9/20/18 close: $136.12
1 Month avg volatility: $2.82. Volatility stop (for upward breakout): $129.52 or 4.9% below the close.
Change YTD: 31.28%
Volume: 767,900 shares. 3 month avg: 1,365,482 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/31/2018 to 09/19/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Selective Insurance Group Inc (SIGI)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 49 out of 58
Stock RS rank: 329 out of 600
9/20/18 close: $64.30
1 Month avg volatility: $0.97. Volatility stop (for downward breakout): $66.29 or 3.1% above the close.
Change YTD: 9.54%
Volume: 129,100 shares. 3 month avg: 158,554 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 08/22/2018 to 09/14/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Synopsys Inc (SNPS)
Industry: Computer Software and Svcs
Industry RS rank: 14 out of 58
Stock RS rank: 180 out of 600
9/20/18 close: $99.78
1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $102.74 or 3.0% above the close.
Change YTD: 17.06%
Volume: 1,237,000 shares. 3 month avg: 998,728 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Double Top, Eve and Eve reversal pattern from 08/27/2018 to 09/14/2018
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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Teva Pharmaceutical Industries (TEVA)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 22 out of 58
Stock RS rank: 45 out of 600
9/20/18 close: $24.83
1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $22.98 or 7.4% below the close.
Change YTD: 30.82%
Volume: 9,168,500 shares. 3 month avg: 26,334,894 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: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018
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: 33 out of 58
Stock RS rank: 78 out of 600
9/20/18 close: $12.63
1 Month avg volatility: $0.37. Volatility stop (for upward breakout): $11.85 or 6.2% below the close.
Change YTD: 17.49%
Volume: 20,765,600 shares. 3 month avg: 13,612,100 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 09/04/2018 to 09/10/2018
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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Valero Energy (VLO)
Industry: Petroleum (Integrated)
Industry RS rank: 6 out of 58
Stock RS rank: 175 out of 600
9/20/18 close: $110.48
1 Month avg volatility: $2.46. Volatility stop (for downward breakout): $116.55 or 5.5% above the close.
Change YTD: 20.20%
Volume: 3,110,000 shares. 3 month avg: 3,584,486 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/31/2018 to 09/14/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Thursday 9/20/18. Intraday Market Direction: Nasdaq

The index dropped by -0.1% or -6.07 points. Since 02/05/1971 the index made 584 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 323 occasions.
     Average loss was -0.7% on 261 occasions.
Expect the index to close higher 55.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 151/274 or 55.1% of the time.
     The prediction of the index closing lower has been right 47/93 or 50.5% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

After looking at the Dow's 159 point gain, I thought we'd had a good day. But then I ran my relative strength form and saw almost no industries closing higher. So today's (Wednesday's) move was confined to the Dow stocks.

If you look at the chart of the Nasdaq, the blue trendline shows two things. First, how the index dropped today. Second, it's a place of overhead resistance. So that suggests the index could struggle moving higher on Thursday.

AB shows a double bottom chart pattern. It's unconfirmed so far. What does that mean? The index has to close above the price of the peak between the two bottoms. I show that peak with the horizontal red line. The index has stopped at day's end just below that line.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,538.07    
 Monthly S1  7,744.05  205.99   
 Weekly S2  7,797.35  53.30   
 Weekly S1  7,873.70  76.34   
 Daily S2  7,889.57  15.88   
 Low  7,917.73  28.16   
 Daily S1  7,919.81  2.08   Yes! The Daily S1 is close to the Low.
 Monthly Pivot  7,938.68  18.87   
 61.8% Down from Intraday High  7,940.04  1.36   Yes! The 61.8% Down from Intraday High is close to the Monthly Pivot.
 50% Down from Intraday High  7,946.92  6.89   
 Daily Pivot  7,947.96  1.04   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  7,950.04  2.08   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  7,953.81  3.77   Yes! The 38.2% Down from Intraday High is close to the Close.
 Weekly Pivot  7,957.26  3.45   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Open  7,962.55  5.29   Yes! The Open is close to the Weekly Pivot.
 High  7,976.12  13.57   
 Daily R1  7,978.20  2.08   Yes! The Daily R1 is close to the High.
 Daily R2  8,006.35  28.16   
 Weekly R1  8,033.61  27.25   
 Weekly R2  8,117.17  83.57   
 Monthly R1  8,144.66  27.49   
 Monthly R2  8,339.29  194.62   

Wednesday 9/19/18. A Look At Indicators

Picture of the chart pattern indicator

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

The chart remains bullish, despite the recent ups and downs. Today's 184 point Dow move pulled the indicator upward.

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, 25% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 27%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 504 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 14%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

The red line shows substantial improvement over a week ago, but you'll notice that from the start of September, it's been mostly down.

The blue line, by contrast, has been flat, but also suffering at month's start.

I don't see anything on these two charts to indicate a problem coming. Maybe that should be a warning to change the batteries in my crystal ball.

-- Thomas Bulkowski

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

The index dropped by -0.4% or -92.55 points. Since 10/01/1928 the index made 894 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 454 occasions.
     Average loss was -0.6% on 440 occasions.
Expect the index to close higher 50.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 171/285 or 60.0% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

A complex head-and-shoulders top appears on the chart. I've conveniently marked the left shoulder (LS), head, and right shoulder (RS) for your viewing pleasure.

The head is a dual head, which is what makes the pattern a complex one. Simple head-and-shoulders have two shoulders and one head, resembling a person's torso. The complex variety have more shoulders or heads or both.

I eyeballed the height of the pattern and projected how far the index would have to drop to hit the measure rule target. I show the target with a blue line. I wouldn't be surprised if the index dropped to the line, probably taking two days to make the voyage, though.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,500.99    
 Monthly S1  25,281.56  780.56   
 Weekly S2  25,552.39  270.84   
 Monthly Pivot  25,746.33  193.94   
 Weekly S1  25,807.26  60.92   
 Daily S2  25,938.19  130.94   
 Daily S1  26,000.16  61.96   
 Weekly Pivot  26,009.18  9.03   Yes! The Weekly Pivot is close to the Daily S1.
 Low  26,030.35  21.17   
 Close  26,062.12  31.77   
 61.8% Down from Intraday High  26,089.22  27.11   
 Daily Pivot  26,092.31  3.09   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  26,107.41  15.10   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  26,125.60  18.19   
 Open  26,151.66  26.06   
 Daily R1  26,154.28  2.62   Yes! The Daily R1 is close to the Open.
 High  26,184.47  30.19   
 Daily R2  26,246.43  61.96   
 Weekly R1  26,264.05  17.61   
 Weekly R2  26,465.97  201.93   
 Monthly R1  26,526.90  60.92   
 Monthly R2  26,991.67  464.78   

Monday 9/17/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

This is a chart of the Dow transports on the daily scale.

There's not much happening on this chart, however, it does indicate caution.

Why?

I drew two trendlines, shown here in red, following the peaks and valleys, respectively.

Notice how the index has risen to the top trendline, or nearly so. Now look at how far the index has to go to drop back to the bottom trendline.

That's a big decline.

Right now, that move looks too far to be possible, but I might have said that back in June, right before the index plummeted.

This chart makes me cautious going into year end.

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A Brief Look Back

Picture of a moth 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 59.47 points.
Tuesday: Up 113.99 points.
Wednesday: Up 27.86 points.
Thursday: Up 147.07 points.
Friday: Up 8.68 points.

For the Week...

The Dow industrials were up 238.13 points or 0.9%.
The Nasdaq composite was up 107.5 points or 1.4%.
The S&P 500 index was up 33.3 points or 1.2%.

Year to Date...

Dow Industrials
     1.7% down from the high of 26,616.71 on 01/26/2018.
     12.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     1.5% down from the high of 8,133.30 on 08/30/2018.
     20.8% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     0.4% down from the high of 2,916.50 on 08/29/2018.
     14.7% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

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

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Swing and Position Traders: Chart Pattern Indicator

As of 09/14/2018, the CPI had:

6 bearish patterns,
42 bullish patterns,
294 patterns waiting for breakout.
The CPI signal is 87.5%, which is bullish (>= 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  26,002  26,078  26,145  26,221  26,288 
Weekly  25,583  25,869  26,040  26,326  26,497 
Monthly  24,532  25,343  25,777  26,589  27,023 
S&P500 (^GSPC): Daily  2,890  2,898  2,903  2,910  2,916 
Weekly  2,852  2,878  2,893  2,920  2,935 
Monthly  2,761  2,833  2,875  2,947  2,989 
Nasdaq (^IXIC): Daily  7,949  7,980  8,010  8,041  8,071 
Weekly  7,817  7,914  7,977  8,074  8,137 
Monthly  7,558  7,784  7,959  8,185  8,359 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 45.1%   Expect a random direction. 
 3 months up 33.7%   The trend may continue. 
 S & P 500 (^GSPC) 1 week up 45.6%   Expect a random direction. 
 6 months up 15.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 47.0%   Expect a random direction. 
 1 month down 25.9%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
16Triangle, symmetrical
12Pipe bottom
11Head-and-shoulders top
9Pipe top
8Head-and-shoulders bottom
7Rising wedge
6Double Top, Adam and Adam
6Broadening top
6Flag
5Triple 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. Healthcare Information1. Healthcare Information
2. Short ETFs2. Short ETFs
3. Petroleum (Integrated)3. Shoe
4. Computers and Peripherals4. Computers and Peripherals
5. Shoe5. Petroleum (Integrated)

-- Thomas Bulkowski

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Friday 9/14/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 607 stocks searched, or 2.6%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 3 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 7 bullish chart patterns this week and 8 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALKRising wedge      07/26/201809/13/2018Air Transport
AEPRising wedge      07/06/201809/13/2018Electric Utility (Central)
APADouble Bottom, Eve and Adam      08/20/201809/07/2018Petroleum (Producing)
ASHTriangle, descending      08/09/201809/11/2018Chemical (Basic)
BADouble Bottom, Adam and Adam      09/04/201809/11/2018Aerospace/Defense
CNATriangle, symmetrical      08/23/201809/13/2018Insurance (Prop/Casualty)
DTriangle, ascending      08/03/201809/13/2018Electric Utility (East)
ESVDouble Bottom, Adam and Adam      08/15/201809/07/2018Oilfield Svcs/Equipment
FORMPipe top      08/27/201809/04/2018Semiconductor
GMEPipe bottom      08/27/201809/04/2018Retail (Special Lines)
HSICPipe bottom      08/27/201809/04/2018Medical Supplies
INCYPipe top      08/27/201809/04/2018Drug
LBPipe bottom      08/27/201809/04/2018Apparel
MANPipe top      08/27/201809/04/2018Human Resources
MASTriangle, descending      07/25/201809/13/2018Building Materials
MSTriangle, symmetrical      06/07/201809/10/2018Securities Brokerage
MOSTriangle, symmetrical      08/07/201809/13/2018Chemical (Diversified)
NCSFlag      08/31/201809/12/2018Building Materials
RTNBroadening top      08/20/201809/07/2018Aerospace/Defense

 

Weekly screen for chart patterns ending between 09/06/2018 and 09/13/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 36 out of 58
Stock RS rank: 318 out of 600
9/13/18 close: $68.42
1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $71.46 or 4.5% above the close.
Change YTD: -6.92%
Volume: 857,600 shares. 3 month avg: 1,966,126 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: Rising wedge reversal pattern from 07/26/2018 to 09/13/2018
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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American Electric Power AEP (AEP)
Industry: Electric Utility (Central)
Industry RS rank: 10 out of 58
Stock RS rank: 245 out of 600
9/13/18 close: $72.97
1 Month avg volatility: $0.82. Volatility stop (for downward breakout): $74.63 or 2.3% above the close.
Change YTD: -0.82%
Volume: 2,193,900 shares. 3 month avg: 2,150,485 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: Rising wedge reversal pattern from 07/06/2018 to 09/13/2018
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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Apache Corp. (APA)
Industry: Petroleum (Producing)
Industry RS rank: 20 out of 58
Stock RS rank: 103 out of 600
9/13/18 close: $44.54
1 Month avg volatility: $0.99. Volatility stop (for upward breakout): $41.64 or 6.5% below the close.
Change YTD: 5.50%
Volume: 2,474,700 shares. 3 month avg: 3,367,409 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Eve and Adam reversal pattern from 08/20/2018 to 09/07/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 4%.
Throwbacks occur 57% of the time.
Price hits measure rule target 66% of the time.

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Ashland Inc. (ASH)
Industry: Chemical (Basic)
Industry RS rank: 34 out of 58
Stock RS rank: 146 out of 600
9/13/18 close: $84.60
1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $86.61 or 2.4% above the close.
Change YTD: 18.82%
Volume: 351,400 shares. 3 month avg: 610,854 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, descending reversal pattern from 08/09/2018 to 09/11/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Boeing Company, The (BA)
Industry: Aerospace/Defense
Industry RS rank: 43 out of 58
Stock RS rank: 264 out of 600
9/13/18 close: $355.46
1 Month avg volatility: $5.98. Volatility stop (for upward breakout): $342.33 or 3.7% below the close.
Change YTD: 20.53%
Volume: 3,157,100 shares. 3 month avg: 3,332,308 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 Bottom, Adam and Adam reversal pattern from 09/04/2018 to 09/11/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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CNA Financial Corp (CNA)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 50 out of 58
Stock RS rank: 518 out of 600
9/13/18 close: $45.28
1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $43.90 or 3.1% below the close.
Change YTD: -14.65%
Volume: 153,300 shares. 3 month avg: 204,923 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: Triangle, symmetrical continuation pattern from 08/23/2018 to 09/13/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Dominion Resources Inc. (D)
Industry: Electric Utility (East)
Industry RS rank: 25 out of 58
Stock RS rank: 386 out of 600
9/13/18 close: $72.18
1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $69.69 or 3.4% below the close.
Change YTD: -10.95%
Volume: 2,684,100 shares. 3 month avg: 2,249,422 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 08/03/2018 to 09/13/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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ENSCO International (ESV)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 31 out of 58
Stock RS rank: 31 out of 600
9/13/18 close: $7.32
1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $6.53 or 10.8% below the close.
Change YTD: 24.07%
Volume: 10,456,300 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: Double Bottom, Adam and Adam reversal pattern from 08/15/2018 to 09/07/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 49 out of 58
Stock RS rank: 514 out of 600
9/13/18 close: $13.15
1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $14.37 or 9.3% above the close.
Change YTD: -15.97%
Volume: 244,900 shares. 3 month avg: 748,688 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 top reversal pattern from 08/27/2018 to 09/04/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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GameStop Corp (GME)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 13 out of 58
Stock RS rank: 232 out of 600
9/13/18 close: $17.04
1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $15.03 or 11.8% below the close.
Change YTD: -5.07%
Volume: 3,689,500 shares. 3 month avg: 3,063,175 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 08/27/2018 to 09/04/2018
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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Henry Schein Inc. (HSIC)
Industry: Medical Supplies
Industry RS rank: 7 out of 58
Stock RS rank: 120 out of 600
9/13/18 close: $83.18
1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $79.66 or 4.2% below the close.
Change YTD: 19.03%
Volume: 876,100 shares. 3 month avg: 2,211,905 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Pipe bottom reversal pattern from 08/27/2018 to 09/04/2018
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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Incyte Corp. (INCY)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 58
Stock RS rank: 572 out of 600
9/13/18 close: $67.48
1 Month avg volatility: $1.86. Volatility stop (for downward breakout): $71.39 or 5.8% above the close.
Change YTD: -28.75%
Volume: 1,202,100 shares. 3 month avg: 1,771,434 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 08/27/2018 to 09/04/2018
WARNING: A dead-cat bounce occurred on 04/06/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 10/05/2018.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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L Brands, Inc. (LB)
Industry: Apparel
Industry RS rank: 23 out of 58
Stock RS rank: 587 out of 600
9/13/18 close: $27.44
1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $25.57 or 6.8% below the close.
Change YTD: -54.43%
Volume: 5,888,400 shares. 3 month avg: 4,494,122 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 08/27/2018 to 09/04/2018
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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Manpower Inc. (MAN)
Industry: Human Resources
Industry RS rank: 27 out of 58
Stock RS rank: 576 out of 600
9/13/18 close: $87.63
1 Month avg volatility: $1.66. Volatility stop (for downward breakout): $92.14 or 5.2% above the close.
Change YTD: -30.51%
Volume: 472,400 shares. 3 month avg: 461,820 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 top reversal pattern from 08/27/2018 to 09/04/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Masco Corp. (MAS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 458 out of 600
9/13/18 close: $38.23
1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $40.00 or 4.6% above the close.
Change YTD: -12.99%
Volume: 2,050,100 shares. 3 month avg: 2,351,771 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, descending reversal pattern from 07/25/2018 to 09/13/2018
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Morgan Stanley (MS)
Industry: Securities Brokerage
Industry RS rank: 57 out of 58
Stock RS rank: 534 out of 600
9/13/18 close: $47.72
1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $46.13 or 3.3% below the close.
Change YTD: -9.05%
Volume: 8,380,100 shares. 3 month avg: 7,779,832 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 06/07/2018 to 09/10/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 48 out of 58
Stock RS rank: 198 out of 600
9/13/18 close: $30.68
1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $29.28 or 4.6% below the close.
Change YTD: 19.56%
Volume: 1,923,800 shares. 3 month avg: 4,715,435 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/07/2018 to 09/13/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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NCI Building Systems Inc. (NCS)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 467 out of 600
9/13/18 close: $16.35
1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $15.14 or 7.4% below the close.
Change YTD: -15.28%
Volume: 251,100 shares. 3 month avg: 632,900 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 continuation pattern from 08/31/2018 to 09/12/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Raytheon Co. (RTN)
Industry: Aerospace/Defense
Industry RS rank: 43 out of 58
Stock RS rank: 404 out of 600
9/13/18 close: $200.83
1 Month avg volatility: $2.30. Volatility stop (for downward breakout): $205.79 or 2.5% above the close.
Change YTD: 6.91%
Volume: 921,000 shares. 3 month avg: 1,302,565 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Broadening top reversal pattern from 08/20/2018 to 09/07/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Thursday 9/13/18. Intraday Market Direction: Nasdaq

The index dropped by -0.2% or -18.24 points. Since 02/05/1971 the index made 501 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 261 occasions.
     Average loss was -0.8% on 240 occasions.
Expect the index to close higher 52.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 150/273 or 54.9% of the time.
     The prediction of the index closing lower has been right 47/93 or 50.5% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The chart looks busy, and it is, but it shouldn't look intimidating.

Let's start from the left and work to the hard right edge.

The first pattern is SHS and it's a head-and-shoulders top. It confirms as a valid one when the index closes below the green line. You'll have to hold onto the index for a few days, but it does make a strong move down, just as the pattern predicted.

The next pattern is DD and it's a double top. This also confirms (close below the blue line) and the index makes a strong move lower.

Finally, we have the red pattern. That's a broadening formation, right-angled and ascending. This one needs no confirmation, but we won't know the breakout direction until it closes outside one of the red lines.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,539.46    
 Monthly S1  7,746.85  207.38   
 Weekly S2  7,747.27  0.42   Yes! The Weekly S2 is close to the Monthly S1.
 Weekly S1  7,850.75  103.48   
 Daily S2  7,853.22  2.47   Yes! The Daily S2 is close to the Weekly S1.
 Low  7,884.05  30.83   
 Daily S1  7,903.72  19.67   
 61.8% Down from Intraday High  7,915.12  11.40   
 50% Down from Intraday High  7,924.72  9.60   
 38.2% Down from Intraday High  7,934.32  9.60   
 Daily Pivot  7,934.56  0.24   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Monthly Pivot  7,940.07  5.52   Yes! The Monthly Pivot is close to the Daily Pivot.
 Close  7,954.23  14.16   
 Open  7,958.87  4.64   Yes! The Open is close to the Close.
 High  7,965.39  6.52   Yes! The High is close to the Open.
 Weekly Pivot  7,977.41  12.02   
 Daily R1  7,985.06  7.65   Yes! The Daily R1 is close to the Weekly Pivot.
 Daily R2  8,015.90  30.83   
 Weekly R1  8,080.89  64.99   
 Monthly R1  8,147.46  66.57   
 Weekly R2  8,207.55  60.09   
 Monthly R2  8,340.68  133.13   

Wednesday 9/12/18. A Look At Indicators

Picture of the chart pattern indicator

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

I highlight the disturbing trend of the indicator versus the index.

The CPI line (thin blue line near bottom of chart) has been trending lower for months now even as the index has been climbing.

Of course, this bearish divergence can go on for longer until it resolves itself.

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, 27% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 24%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 505 stocks in my database are down an average of 14% from their yearly high.
A week ago, the average was 13%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

The more sensitive line, the red one, took the largest drop this week compared to last, larger than anything that I can remember.

Of course, my memory could be shot.

But both lines show profound weakness. Combined with the prior chart's bearish divergence, could this be a warning of a market stumble?

Clearly, September is the weakest month of the year with October not exactly a strong performer, either. So maybe that's what these charts are saying. Batten down the hatches, boys! Story weather is coming.

-- Thomas Bulkowski

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Tuesday 9/11/18. Intraday Market Direction: Dow

The index dropped by -0.2% or -59.47 points. Since 10/01/1928 the index made 1196 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 601 occasions.
     Average loss was -0.6% on 595 occasions.
Expect the index to close higher 50.3% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 170/284 or 59.9% of the time.
     The prediction of the index closing lower has been right 34/68 or 50.0% of the time.

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

Picture of the Dow industrials on the 5 minute scale.

$ $ $

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

What caught my attention is the ABCD pattern, which you may recognize as one I mention frequently.

The pattern is not complete because D hasn't extended far enough. But I call the pattern a measured move down.

AB is the first leg, BC is called the corrective phase, and CD is the second leg. The thinking with measured moves is the second leg is supposed to equal the length of the first leg. Unfortunately, that rarely happens. But if it does in this case, look for tomorrow to see the market drop more.

$ $ $

I updated the performance statistics of the inverted cup with handle chart pattern. You can see how well it's done compared to other patterns here.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  24,461.42    
 Monthly S1  25,159.25  697.82   
 Weekly S2  25,644.50  485.26   
 Monthly Pivot  25,663.59  19.09   
 Daily S2  25,731.22  67.63   
 Weekly S1  25,750.79  19.56   
 Daily S1  25,794.15  43.36   
 Low  25,854.13  59.98   
 Close  25,857.07  2.94   Yes! The Close is close to the Low.
 Weekly Pivot  25,912.23  55.16   
 Daily Pivot  25,917.05  4.82   Yes! The Daily Pivot is close to the Weekly Pivot.
 61.8% Down from Intraday High  25,925.12  8.06   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  25,947.04  21.93   
 38.2% Down from Intraday High  25,968.97  21.93   
 Daily R1  25,979.98  11.00   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Open  25,991.91  11.93   Yes! The Open is close to the Daily R1.
 Weekly R1  26,018.52  26.61   
 High  26,039.96  21.45   
 Daily R2  26,102.88  62.92   
 Weekly R2  26,179.96  77.08   
 Monthly R1  26,361.42  181.45   
 Monthly R2  26,865.76  504.35   

Monday 9/10/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utlities on the daily scale.

I show a chart of the Dow utilities on the daily scale.

First, I drew in the ABC pattern then I found DEF. So let's talk about them.

AB is a potential double top. I write potential because it hasn't confirmed as a valid chart pattern. That would only happen if the index closes below the green line at C.

And that hasn't happened yet.

Pattern DEF is the same except flipped upside down. DE is a double bottom only this one confirms as valid when the index closes above blue line F.

Notice the bumpy ride it took higher. Hmm. Could that be waiting for us next week (a bumpy ride lower)?

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A Brief Look Back

Picture of a lizard 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.

Tuesday: Down 12.34 points.
Wednesday: Up 22.51 points.
Thursday: Up 20.88 points.
Friday: Down 79.33 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 48.28 points or 0.2%.
The Nasdaq composite was down 207 points or 2.6%.
The S&P 500 index was down 29.84 points or 1.0%.

Year to Date...

Dow Industrials
     2.6% down from the high of 26,616.71 on 01/26/2018.
     11.0% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     2.8% down from the high of 8,133.30 on 08/30/2018.
     19.2% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     1.5% down from the high of 2,916.50 on 08/29/2018.
     13.4% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 09/07/2018, the CPI had:

15 bearish patterns,
6 bullish patterns,
136 patterns waiting for breakout.
The CPI signal is 28.6%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,728  25,822  25,913  26,007  26,097 
Weekly  25,664  25,790  25,932  26,058  26,200 
Monthly  24,481  25,199  25,683  26,401  26,886 
S&P500 (^GSPC): Daily  2,854  2,863  2,873  2,882  2,893 
Weekly  2,843  2,857  2,879  2,893  2,915 
Monthly  2,750  2,811  2,864  2,925  2,978 
Nasdaq (^IXIC): Daily  7,824  7,863  7,913  7,952  8,002 
Weekly  7,730  7,816  7,960  8,046  8,190 
Monthly  7,522  7,712  7,923  8,113  8,323 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.5%   The trend may continue. 
 1 month down 21.4%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 26.7%   The trend may continue. 
 1 month down 22.0%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.1%   The trend may continue. 
 1 month down 25.9%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
12Triangle, symmetrical
10Pipe bottom
7Head-and-shoulders bottom
6Rising wedge
6Flag
5Double Top, Adam and Adam
5Diamond bottom
5Broadening top
4Triple top
4Pipe 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. Healthcare Information1. Healthcare Information
2. Short ETFs2. Shoe
3. Shoe3. Computers and Peripherals
4. Computers and Peripherals4. Short ETFs
5. Petroleum (Integrated)5. Petroleum (Integrated)

-- Thomas Bulkowski

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Friday 9/7/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 15 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 608 stocks searched, or 2.5%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 6 bearish ones with any remaining (4) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AYIFlag      08/27/201809/06/2018Furn/Home Furnishings
AMDFlag, high and tight      07/05/201809/05/2018Semiconductor
AFLBroadening top      08/03/201809/04/2018Insurance (Diversified)
ALKRising wedge      07/26/201809/06/2018Air Transport
DFSFlag      08/21/201809/06/2018Financial Services
GDRectangle top      08/03/201809/06/2018Aerospace/Defense
HAYNHead-and-shoulders top      07/10/201808/31/2018Building Materials
KLACDouble Top, Eve and Eve      07/31/201809/05/2018Semiconductor Cap Equip.
MDCADiamond bottom      06/07/201809/06/2018Advertising
MLIPipe top      08/20/201808/27/2018Metal Fabricating
RJFTriangle, symmetrical      05/03/201809/06/2018Securities Brokerage
TXNRectangle top      05/11/201809/06/2018Semiconductor
TJXFlag      08/21/201808/31/2018Retail Store
TRVRising wedge      08/07/201809/06/2018Insurance (Prop/Casualty)
UTXTriangle, symmetrical      07/24/201809/06/2018Diversified Co.

 

Weekly screen for chart patterns ending between 08/30/2018 and 09/06/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Acuity Brands, Inc (AYI)
Industry: Furn/Home Furnishings
Industry RS rank: 47 out of 58
Stock RS rank: 337 out of 601
9/6/18 close: $150.46
1 Month avg volatility: $2.90. Volatility stop (for upward breakout): $144.21 or 4.2% below the close.
Change YTD: -14.51%
Volume: 313,200 shares. 3 month avg: 670,414 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 continuation pattern from 08/27/2018 to 09/06/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Advanced Micro Devices, Inc (AMD)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 39 out of 58
Stock RS rank: 6 out of 601
9/6/18 close: $27.84
1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $24.84 or 10.8% below the close.
Change YTD: 170.82%
Volume: 143,508,800 shares. 3 month avg: 56,512,782 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: Flag, high and tight continuation pattern from 07/05/2018 to 09/05/2018
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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AFLAC Inc (AFL)
Industry: Insurance (Diversified)
Industry RS rank: 41 out of 58
Stock RS rank: 298 out of 601
9/6/18 close: $46.89
1 Month avg volatility: $0.43. Volatility stop (for downward breakout): $48.01 or 2.4% above the close.
Change YTD: 6.84%
Volume: 2,346,800 shares. 3 month avg: 1,541,537 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Broadening top reversal pattern from 08/03/2018 to 09/04/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 31 out of 58
Stock RS rank: 308 out of 601
9/6/18 close: $67.04
1 Month avg volatility: $1.29. Volatility stop (for downward breakout): $71.14 or 6.1% above the close.
Change YTD: -8.80%
Volume: 1,019,200 shares. 3 month avg: 1,966,126 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: Rising wedge reversal pattern from 07/26/2018 to 09/06/2018
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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Discover Financial Services (DFS)
Industry: Financial Services
Industry RS rank: 19 out of 58
Stock RS rank: 354 out of 601
9/6/18 close: $77.73
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $75.76 or 2.5% below the close.
Change YTD: 1.05%
Volume: 1,651,500 shares. 3 month avg: 2,443,809 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: Flag continuation pattern from 08/21/2018 to 09/06/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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General Dynamics Corp (GD)
Industry: Aerospace/Defense
Industry RS rank: 51 out of 58
Stock RS rank: 519 out of 601
9/6/18 close: $195.24
1 Month avg volatility: $2.26. Volatility stop (for upward breakout): $189.68 or 2.9% below the close.
Change YTD: -4.04%
Volume: 736,200 shares. 3 month avg: 1,076,035 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: Rectangle top continuation pattern from 08/03/2018 to 09/06/2018
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Haynes International Inc. (HAYN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 38 out of 58
Stock RS rank: 533 out of 601
9/6/18 close: $36.59
1 Month avg volatility: $1.19. Volatility stop (for downward breakout): $39.67 or 8.4% above the close.
Change YTD: 14.17%
Volume: 63,100 shares. 3 month avg: 80,035 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Head-and-shoulders top reversal pattern from 07/10/2018 to 08/31/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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KLA-Tencor Corporation (KLAC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 57 out of 58
Stock RS rank: 477 out of 601
9/6/18 close: $107.28
1 Month avg volatility: $2.78. Volatility stop (for downward breakout): $124.00 or 15.6% above the close.
Change YTD: 2.10%
Volume: 3,692,600 shares. 3 month avg: 1,563,420 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, Eve and Eve reversal pattern from 07/31/2018 to 09/05/2018
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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MDC Pateners Inc (MDCA)
Industry: Advertising
Industry RS rank: 42 out of 58
Stock RS rank: 594 out of 601
9/6/18 close: $4.55
1 Month avg volatility: $0.22. Volatility stop (for upward breakout): $4.11 or 9.7% below the close.
Change YTD: -53.33%
Volume: 81,000 shares.
This security may be thinly traded (less than 100k 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: Diamond bottom reversal pattern from 06/07/2018 to 09/06/2018
WARNING: A dead-cat bounce occurred on 05/10/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 11/08/2018.
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Mueller Industries Inc. (MLI)
Industry: Metal Fabricating
Industry RS rank: 46 out of 58
Stock RS rank: 196 out of 601
9/6/18 close: $30.65
1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $32.37 or 5.6% above the close.
Change YTD: -13.49%
Volume: 117,400 shares. 3 month avg: 161,678 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe top reversal pattern from 08/20/2018 to 08/27/2018
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Raymond James Financial, Inc. (RJF)
Industry: Securities Brokerage
Industry RS rank: 58 out of 58
Stock RS rank: 420 out of 601
9/6/18 close: $91.82
1 Month avg volatility: $1.28. Volatility stop (for upward breakout): $88.55 or 3.6% below the close.
Change YTD: 2.82%
Volume: 401,500 shares. 3 month avg: 692,654 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/03/2018 to 09/06/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Texas Instruments Inc. (TXN)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 39 out of 58
Stock RS rank: 341 out of 601
9/6/18 close: $110.89
1 Month avg volatility: $1.89. Volatility stop (for upward breakout): $106.55 or 3.9% below the close.
Change YTD: 6.18%
Volume: 4,813,100 shares. 3 month avg: 4,332,837 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: Rectangle top continuation pattern from 05/11/2018 to 09/06/2018
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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TJX Companies Inc (TJX)
Industry: Retail Store
Industry RS rank: 13 out of 58
Stock RS rank: 63 out of 601
9/6/18 close: $110.60
1 Month avg volatility: $1.75. Volatility stop (for upward breakout): $106.96 or 3.3% below the close.
Change YTD: 44.65%
Volume: 3,784,700 shares. 3 month avg: 4,406,445 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Flag continuation pattern from 08/21/2018 to 08/31/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Travelers Companies Inc, The (TRV)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 44 out of 58
Stock RS rank: 423 out of 601
9/6/18 close: $132.57
1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $136.10 or 2.7% above the close.
Change YTD: -2.26%
Volume: 1,274,200 shares. 3 month avg: 1,525,757 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: Rising wedge reversal pattern from 08/07/2018 to 09/06/2018
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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United Technologies Corp (UTX)
Industry: Diversified Co.
Industry RS rank: 45 out of 58
Stock RS rank: 345 out of 601
9/6/18 close: $133.52
1 Month avg volatility: $1.52. Volatility stop (for upward breakout): $129.73 or 2.8% below the close.
Change YTD: 4.66%
Volume: 3,605,000 shares. 3 month avg: 3,146,206 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 07/24/2018 to 09/06/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Thursday 9/6/18. Intraday Market Direction: Nasdaq

The index dropped by -1.2% or -96.08 points. Since 02/05/1971 the index made 114 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 48 occasions.
     Average loss was -1.4% on 66 occasions.
Expect the index to close lower 57.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 150/273 or 54.9% of the time.
     The prediction of the index closing lower has been right 46/92 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

Look first at the blue circle. See how the index moved horizontally? I'm thinking that area will act as support should the index move as I expect.

Now look at the ABC pattern. This reminds me of a dead-cat bounce. Price makes a large and swift decline (A), hits bottom at B and then bounces (C).

The kicker with dead-cat bounces is price often drops, touching down 18% below B, on average. But that's for individual stocks.

Still, if price drops, maybe it'll find support at the price of the blue circle, which isn't too far below B.

$ $ $

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

-- Thomas Bulkowski

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,381.84    
 Monthly S1  7,688.51  306.66   
 Weekly S2  7,878.32  189.82   
 Daily S2  7,896.30  17.97   
 Monthly Pivot  7,910.90  14.61   
 Weekly S1  7,936.75  25.84   
 Daily S1  7,945.73  8.99   Yes! The Daily S1 is close to the Weekly S1.
 Low  7,962.35  16.62   
 Close  7,995.17  32.82   
 61.8% Down from Intraday High  8,006.47  11.30   Yes! The 61.8% Down from Intraday High is close to the Close.
 Daily Pivot  8,011.79  5.32   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  8,020.10  8.31   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  8,033.72  13.63   
 Weekly Pivot  8,035.02  1.30   Yes! The Weekly Pivot is close to the 38.2% Down from Intraday High.
 Daily R1  8,061.22  26.20   
 Open  8,073.53  12.31   
 High  8,077.84  4.31   Yes! The High is close to the Open.
 Weekly R1  8,093.45  15.61   
 Daily R2  8,127.28  33.83   
 Weekly R2  8,191.72  64.45   
 Monthly R1  8,217.57  25.84   
 Monthly R2  8,439.96  222.40   

Wednesday 9/5/18. A Look At Indicators

Picture of the chart pattern indicator

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

As the thin blue line near the bottom of the chart reveals, the indicator has dropped and it's approaching a sell signal.

The index has rounded over, too, suggesting weakness.

However, a large move up can change all of this.

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, 24% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 23%.
The fewest was 15% on 01/26/2018.
And the most was 33% on 04/02/2018.
Shown as a blue line on the above chart...
The 505 stocks in my database are down an average of 13% from their yearly high.
A week ago, the average was 12%.
The peak was 9% on 01/22/2018.
And the bottom was 19% on 02/08/2018.

The two lines turned more bearish this week over last. That's most clear by the red line which has turned lower. The blue line looks flat, but it's actually down from a week ago.

My feeling is that the markets will enter a weak stretch over the next two weeks.

-- Thomas Bulkowski

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Monday/Tuesday 9/3-4/18. Market Holiday

Picture of my dog.

Market holiday, but I released a new version of Patternz which includes a Seasonality form and eight new chart patterns.

Patternz is a FREE desktop software application that finds chart patterns and candlesticks in your stocks automatically and displays them on a chart or lists them in a table. It does not contain any spyware or adware and there is no registration process to use it. It works with Windows 7 (and more recent) versions of the operating system.

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