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Written and copyright © 2010 by Thomas N. Bulkowski. All rights reserved.
Thursday 2/4/10. Blog Suspended For Several Days! Film at 11:00!

I am working on a project that requires my full attention for several days, so I am suspending blog posts and emails until it's finished. While waiting, have a look at the following links.
Site Map: Lists almost every page on the website.
Quiz: Take one of 158 quizzes, perhaps one based on an actual trade. Comes as a compressed file that contains a Word document.
My trades: These pages take you through some of my trades. These are different than the quizzes.
Research studies: 45 studies on how the markets behave, or misbehave.
Tutorials: 40 tutorials are just waiting to teach you what you need to know to make money in these markets
Trading class: This is a wimpy attempt at a trading class by cobbling together various web pages that novice traders need to know.
Trading setups: Perhaps there is a setup that you can use.
Event patterns: Learn about a dozen event patterns before one takes your stock for a ride.
-- Thomas Bulkowski
Wednesday 2/3/10. What’s Hot Wednesday
Largest winners and losers over the past week, from the close on 01/26/2010 to 02/02/2010 and year to date.
Below are the top 10 stocks with the best performance during the past week out of 574 stocks.
Stocks from this list may suggest what stocks or industries will do well in the future.
Week Change | Last Close | YTD | Stock | Industry | Most Recent Chart Pattern |
| 27.94% | $15.75 | 15.47% | Ann Taylor (ANN) | Retail (Special Lines) | Target price from 11/19/2009 to 11/19/2009 |
| 20.84% | $12.06 | 16.07% | M/I Homes, Inc. (MHO) | Homebuilding | Flag, high and tight from 07/10/2009 to 08/28/2009 |
| 17.01% | $13.21 | 21.53% | Horton, D.R. Inc. (DHI) | Homebuilding | Pipe bottom from 09/28/2009 to 10/05/2009 |
| 16.21% | $12.69 | 42.42% | Talbots Inc. (TLB) | Apparel | Flag, high and tight from 07/10/2009 to 09/08/2009 |
| 14.94% | $15.00 | 32.16% | Genworth Financial Inc (GNW) | Insurance (Life) | Target price from 11/19/2009 to 11/19/2009 |
| 14.64% | $23.96 | 21.62% | Ryland Group, Inc (RYL) | Homebuilding | Triple bottom from 11/02/2009 to 12/11/2009 |
| 14.29% | $9.12 | -0.76% | Newport Corporation (NEWP) | Precision Instrument | Double Bottom, Eve and Eve from 11/02/2009 to 11/30/2009 |
| 13.67% | $16.55 | 29.60% | Lennar Corp. Cl A (LEN) | Homebuilding | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 13.21% | $3.17 | 7.82% | AC Moore Arts and Crafts (ACMR) | Retail (Special Lines) | Pipe bottom from 12/07/2009 to 12/14/2009 |
| 12.33% | $4.19 | 12.03% | Standard Pacific (SPF) | Homebuilding | Triangle, symmetrical from 10/14/2009 to 12/10/2009 |
Below are the 10 worst performing stocks during the past week out of 574 stocks.
Stocks from this list suggest companies or industries that may be having difficulty and might be future short sale candidates.
Week Change | Last Close | YTD | Stock | Industry | Most Recent Chart Pattern |
| -21.25% | $88.29 | -23.07% | NewMarket Corp. (NEU) | Chemical (Specialty) | Head-and-shoulders top from 12/28/2009 to 01/21/2010 |
| -18.68% | $1.48 | -34.22% | Molecular Insight Pharmaceuticals (MIPI) | Biotechnology | Horn bottom from 08/17/2009 to 08/31/2009 |
| -16.27% | $39.26 | -15.13% | Qualcomm Inc. (QCOM) | Telecom. Equipment | Broadening top, right-angled and descending from 11/19/2009 to 12/23/2009 |
| -14.28% | $21.49 | -3.42% | Arch Coal Inc. (ACI) | Coal | Pipe bottom from 11/30/2009 to 12/07/2009 |
| -13.96% | $22.50 | -23.55% | Arkansas Best (ABFS) | Trucking/Transp. Leasing | Head-and-shoulders top from 12/09/2009 to 01/14/2010 |
| -13.64% | $3.99 | -16.53% | Hercules Offshore, Inc. (HERO) | Petroleum (Producing) | Target price from 11/19/2009 to 11/19/2009 |
| -12.61% | $33.54 | -8.08% | Avery Dennison Corp (AVY) | Packaging and Container | Pipe bottom from 10/26/2009 to 11/02/2009 |
| -11.09% | $9.54 | -19.29% | Cemex SA de CV (CX) | Cement and Aggregates | Broadening wedge, descending from 11/12/2009 to 12/17/2009 |
| -10.80% | $5.12 | -14.81% | LSI Logic (LSI) | Semiconductor | Triangle, symmetrical from 10/14/2009 to 12/18/2009 |
| -10.54% | $50.92 | -4.73% | IDEXX Laboratories, Inc (IDXX) | Drug | Pipe top from 10/19/2009 to 10/26/2009 |
Below are the top 10 stocks with the best performance year to date out of 574 stocks.
Knowing which securities are trending higher makes selecting stocks for momentum trades much easier, especially if some share the same industry.
YTD Change | Last Close | Stock | Industry | Most Recent Chart Pattern |
| 112.96% | $2.30 | Somaxon Pharmaceuticals (SOMX) | Biotechnology | Target price from 01/21/2010 to 01/22/2010 |
| 81.40% | $4.68 | Tuesday Morning Corp (TUES) | Retail Store | Flag, high and tight from 12/01/2009 to 01/12/2010 |
| 48.16% | $18.12 | Bare Escentuals, Inc (BARE) | Toiletries/Cosmetics | Pipe bottom from 12/07/2009 to 12/14/2009 |
| 42.42% | $12.69 | Talbots Inc. (TLB) | Apparel | Flag, high and tight from 07/10/2009 to 09/08/2009 |
| 32.16% | $15.00 | Genworth Financial Inc (GNW) | Insurance (Life) | Target price from 11/19/2009 to 11/19/2009 |
| 30.61% | $7.51 | CROCS Inc (CROX) | Shoe | Pipe bottom from 11/23/2009 to 11/30/2009 |
| 30.60% | $12.89 | Brown Shoe Co Inc (BWS) | Shoe | Pipe bottom from 11/23/2009 to 11/30/2009 |
| 29.60% | $16.55 | Lennar Corp. Cl A (LEN) | Homebuilding | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 27.89% | $22.15 | Zep Inc. (ZEP) | Chemical (Specialty) | Falling wedge from 11/19/2009 to 12/10/2009 |
| 26.92% | $18.01 | Amylin Pharmaceuticals (AMLN) | Biotechnology | Pipe bottom from 10/26/2009 to 11/02/2009 |
Below are the 10 worst performing stocks year to date out of 574 stocks.
These stocks might represent a good momentum trade from the short side. If some stocks also share the same industry, then the industry may be weak, so concentrate your search there.
YTD Change | Last Close | Stock | Industry | Most Recent Chart Pattern |
| -34.22% | $1.48 | Molecular Insight Pharmaceuticals (MIPI) | Biotechnology | Horn bottom from 08/17/2009 to 08/31/2009 |
| -33.91% | $4.19 | Ener1 Inc. (HEV) | Alternate Energy | Double Top, Adam and Eve from 08/05/2009 to 09/23/2009 |
| -27.51% | $15.78 | FormFactor Inc. (FORM) | Semiconductor | Pipe bottom from 08/10/2009 to 08/17/2009 |
| -25.85% | $9.64 | Insteel Industries Inc (IIIN) | Building Materials | Triangle, symmetrical from 10/21/2009 to 12/10/2009 |
| -23.55% | $22.50 | Arkansas Best (ABFS) | Trucking/Transp. Leasing | Head-and-shoulders top from 12/09/2009 to 01/14/2010 |
| -23.07% | $88.29 | NewMarket Corp. (NEU) | Chemical (Specialty) | Head-and-shoulders top from 12/28/2009 to 01/21/2010 |
| -22.42% | $8.27 | Stein Mart Inc. (SMRT) | Apparel | Rectangle top from 11/27/2009 to 01/12/2010 |
| -21.88% | $12.65 | Century Aluminum Co. (CENX) | Metals and Mining (Div.) | Target price from 01/04/2010 to 01/04/2010 |
| -21.01% | $2.97 | FuelCell Energy Inc. (FCEL) | Alternate Energy | Triangle, descending from 09/16/2009 to 10/22/2009 |
| -20.51% | $12.52 | Cbeyond, Inc. (CBEY) | Telecom. Equipment | Double Top, Eve and Eve from 09/22/2009 to 10/20/2009 |
Below are the top 10 exchange traded funds (ETF) with the best performance this past week out of 94 ETFs.
A hot ETF may suggest an industry or commodity that is doing well, so look there for individual stock picks or just trade the ETF for a momentum play.
Week Change | Last Close | YTD | Fund | Most Recent Chart Pattern |
| 6.80% | $13.03 | 8.49% | DJ US Home construction index fund (ITB) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 4.66% | $24.05 | 2.34% | MSCI Sweden Index (EWD) | Head-and-shoulders bottom from 12/09/2009 to 12/31/2009 |
| 4.33% | $25.26 | 12.67% | UltraShort 2x Technology ProShares (REW) | Rectangle bottom from 07/23/2009 to 08/13/2009 |
| 3.91% | $14.56 | 1.10% | SPDR Financial Select Sector (XLF) | Target price from 01/05/2010 to 01/05/2010 |
| 3.61% | $55.33 | -1.14% | MSCI South Africa Index (EZA) | Broadening top from 11/09/2009 to 01/26/2010 |
| 3.55% | $17.48 | 4.98% | PowerShares Dynamic Biotech and Genome (PBE) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 3.35% | $39.84 | -5.73% | FTSE/Xinhua China 25 index fund (FXI) | Pipe top from 01/04/2010 to 01/11/2010 |
| 3.30% | $85.49 | 4.47% | Nasdaq Biotechnology Index (IBB) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 2.91% | $58.08 | 7.76% | MSCI Turkey Index (TUR) | Pipe bottom from 08/31/2009 to 09/08/2009 |
| 2.88% | $20.69 | 8.67% | Nasdaq 100 short 2x ProShares (QID) | Broadening bottom from 12/31/2009 to 01/21/2010 |
Below are the 10 worst performing ETFs over the past week out of 94 ETFs.
These funds may represent companies or industries that are suffering. Avoid going long in those stocks or buying any stocks from those industries.
Week Change | Last Close | YTD | Fund | Most Recent Chart Pattern |
| -6.21% | $23.58 | -2.68% | UltraShort 2x Financials ProShares (SKF) | Rectangle bottom from 01/07/2010 to 01/20/2010 |
| -5.74% | $7.72 | 2.93% | UltraShort 2x Real Estate ProShares (SRS) | Head-and-shoulders bottom from 05/08/2009 to 07/01/2009 |
| -4.02% | $41.08 | -2.77% | UltraShort 2x Consumer Goods ProShares (SZK) | Head-and-shoulders bottom from 11/23/2009 to 12/16/2009 |
| -3.34% | $53.79 | -9.57% | Nasdaq 100 long 2x Ultra QQQ ProShares (QLD) | Triangle, ascending from 11/16/2009 to 12/18/2009 |
| -3.24% | $17.32 | 1.24% | Direxion Large Cap Short 3x Russell 1000 (BGZ) | Pipe bottom from 08/03/2009 to 08/10/2009 |
| -3.15% | $12.60 | -1.10% | UltraShort 2x Oil and Gas ProShares (DUG) | Triangle, symmetrical from 10/21/2009 to 12/02/2009 |
| -2.49% | $37.61 | -0.13% | UltraShort 2x Consumer Svcs ProShares (SCC) | Rectangle bottom from 12/23/2009 to 01/21/2010 |
| -2.40% | $11.80 | -9.02% | MSCI Taiwan Index (EWT) | Double Top, Adam and Eve from 11/16/2009 to 01/06/2010 |
| -2.18% | $35.48 | 1.23% | S and P short 2x ProShares (SDS) | Pipe bottom from 08/03/2009 to 08/10/2009 |
| -2.12% | $29.95 | 1.63% | DJIA short 2x ProShares (DXD) | Pipe bottom from 08/03/2009 to 08/10/2009 |
Below are the top 10 exchange traded funds (ETF) with the best performance year to date out of 94 ETFs.
Concentrate your individual stock picks from industries that are doing well, or trade the ETF for a momentum play.
YTD Change | Last Close | Fund | Most Recent Chart Pattern |
| 12.81% | $20.52 | UltraShort 2x Semiconductor ProShares (SSG) | Head-and-shoulders bottom from 09/23/2009 to 11/17/2009 |
| 12.67% | $25.26 | UltraShort 2x Technology ProShares (REW) | Rectangle bottom from 07/23/2009 to 08/13/2009 |
| 9.08% | $22.71 | iShares DJ US Regional Banks (IAT) | Target price from 01/05/2010 to 01/05/2010 |
| 8.67% | $20.69 | Nasdaq 100 short 2x ProShares (QID) | Broadening bottom from 12/31/2009 to 01/21/2010 |
| 8.49% | $13.03 | DJ US Home construction index fund (ITB) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 7.76% | $58.08 | MSCI Turkey Index (TUR) | Pipe bottom from 08/31/2009 to 09/08/2009 |
| 6.58% | $21.85 | UltraShort 2x Utilities ProShares (SDP) | Head-and-shoulders bottom from 09/30/2009 to 11/11/2009 |
| 5.30% | $8.94 | UltraShort 2x Basic Materials ProShares (SMN) | Broadening bottom from 11/16/2009 to 12/10/2009 |
| 4.98% | $17.48 | PowerShares Dynamic Biotech and Genome (PBE) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 4.47% | $85.49 | Nasdaq Biotechnology Index (IBB) | Pipe bottom from 10/26/2009 to 11/02/2009 |
Below are the 10 worst performing ETFs year to date out of 94 ETFs. These represent the stocks or industries you will want to avoid buying or want to concentrate selling short.
YTD Change | Last Close | Fund | Most Recent Chart Pattern |
| -9.57% | $53.79 | Nasdaq 100 long 2x Ultra QQQ ProShares (QLD) | Triangle, ascending from 11/16/2009 to 12/18/2009 |
| -9.02% | $11.80 | MSCI Taiwan Index (EWT) | Double Top, Adam and Eve from 11/16/2009 to 01/06/2010 |
| -8.80% | $44.90 | Goldman Sachs Semiconductor (IGW) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| -7.91% | $68.71 | MSCI Brazil Index fund (EWZ) | Head-and-shoulders top from 11/18/2009 to 12/14/2009 |
| -6.85% | $44.75 | MSCI Spain Index (EWP) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| -6.63% | $21.41 | SPDR Technology Select Sector (XLK) | Rising wedge from 11/17/2009 to 12/16/2009 |
| -6.49% | $44.69 | S and P Latin America 40 Index fund (ILF) | Double Top, Eve and Eve from 12/04/2009 to 01/11/2010 |
| -6.42% | $21.00 | MSCI Germany Index (EWG) | Triangle, ascending from 10/21/2009 to 01/14/2010 |
| -5.73% | $39.84 | FTSE/Xinhua China 25 index fund (FXI) | Pipe top from 01/04/2010 to 01/11/2010 |
| -5.09% | $59.05 | SandP Global Materials Sector Index fund (MXI) | Pipe bottom from 10/26/2009 to 11/02/2009 |
Below is a list of market index performance over the past week.
Week Change | Last Close | YTD | Index | Most Recent Chart Pattern |
| 1.02% | 1,103.32 | -1.06% | S and P 500 (^GSPC) | Rectangle top from 11/10/2009 to 12/21/2009 |
| 1.01% | 10,296.85 | -1.26% | DJ 30 Industrials (^DJI) | Rectangle top from 11/16/2009 to 12/23/2009 |
| -0.53% | 3,993.12 | -2.60% | DJ 20 Transportation (^DJT) | Rectangle top from 12/14/2009 to 01/07/2010 |
| -0.62% | 2,190.06 | -3.49% | Nasdaq Composite (^IXIC) | Rising wedge from 11/17/2009 to 12/17/2009 |
| -0.86% | 384.27 | -3.45% | DJ 15 Utilities (^DJU) | Triangle, symmetrical from 12/11/2009 to 12/30/2009 |
Below are the top 10 country exchange traded funds with the best performance this past week out of 23 ETFs. These may highlight emerging markets that are ready to soar.
Week Change | Last Close | YTD | Fund | Most Recent Chart Pattern |
| 4.66% | $24.05 | 2.34% | MSCI Sweden Index (EWD) | Head-and-shoulders bottom from 12/09/2009 to 12/31/2009 |
| 3.61% | $55.33 | -1.14% | MSCI South Africa Index (EZA) | Broadening top from 11/09/2009 to 01/26/2010 |
| 2.91% | $58.08 | 7.76% | MSCI Turkey Index (TUR) | Pipe bottom from 08/31/2009 to 09/08/2009 |
| 2.81% | $68.71 | -7.91% | MSCI Brazil Index fund (EWZ) | Head-and-shoulders top from 11/18/2009 to 12/14/2009 |
| 2.60% | $13.00 | 1.88% | MSCI Belgium Investable Mkt Idx (EWK) | Broadening top from 11/16/2009 to 12/03/2009 |
| 1.95% | $15.19 | -3.00% | MSCI Hong Kong Index fund (EWH) | Triple top from 10/21/2009 to 01/11/2010 |
| 1.43% | $39.63 | -4.51% | MSCI Emerging Markets Index fund (EEM) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| 0.63% | $47.62 | -2.56% | MSCI Mexico Investable Mkt idx (EWW) | Triangle, symmetrical from 12/04/2009 to 12/30/2009 |
| 0.52% | $25.20 | -4.29% | MSCI Canada Index (EWC) | Broadening top from 11/11/2009 to 12/02/2009 |
| 0.28% | $10.92 | -4.96% | MSCI Singapore Index (EWS) | Rectangle top from 12/01/2009 to 12/17/2009 |
Below are the top 10 country exchange traded funds with the best performance year to date out of 23 ETFs.
Finding several countries from a similar region that is performing well helps identify which international mutual fund or ETF may continue to do well in the future.
YTD Change | Last Close | Fund | Most Recent Chart Pattern |
| 7.76% | $58.08 | MSCI Turkey Index (TUR) | Pipe bottom from 08/31/2009 to 09/08/2009 |
| 4.00% | $10.13 | MSCI Japan Index fund (EWJ) | Triangle, descending from 10/05/2009 to 11/17/2009 |
| 4.00% | $56.98 | MSCI Chile Investable Mkt Idx (ECH) | Pipe bottom from 03/02/2009 to 03/09/2009 |
| 2.34% | $24.05 | MSCI Sweden Index (EWD) | Head-and-shoulders bottom from 12/09/2009 to 12/31/2009 |
| 1.88% | $13.00 | MSCI Belgium Investable Mkt Idx (EWK) | Broadening top from 11/16/2009 to 12/03/2009 |
| 0.09% | $10.63 | MSCI Malaysia Index (EWM) | Rectangle top from 10/20/2009 to 01/07/2010 |
| -1.14% | $55.33 | MSCI South Africa Index (EZA) | Broadening top from 11/09/2009 to 01/26/2010 |
| -1.62% | $21.90 | MSCI Switzerland Index (EWL) | Rectangle top from 11/05/2009 to 01/07/2010 |
| -1.67% | $15.93 | MSCI United Kingdom Index (EWU) | Pipe bottom from 10/26/2009 to 11/02/2009 |
| -1.99% | $46.69 | MSCI South Korea Index (EWY) | Pipe bottom from 11/23/2009 to 11/30/2009 |
-- Thomas Bulkowski
Tuesday, 2/2/2009. Tutorial Tuesday: How Far Will Market Move?

An email from Tanxia posed this question and it makes for a good review: How do I estimate how far price will go?
Trendlines offer clues as to how far price is going to rise (down sloping trendlines) or tumble (up-sloping ones).
Let’s take the case of an up-sloping trendline to gauge how far price is likely to drop.
The figure to the right shows an up-sloping trendline with price breaking out downward at point B.
From the breakout, find the prior minor low trendline touch. I show it as point A. Measure the widest distance between those two points (re, A and B),
measured vertically. In this case, that’s the distance from C to D. Multiply that distance by 63% because that’s how often this
method works when a full height is used, and project the result downward from the breakout price (B) – the point where price pierces the trendline.
For example, if the high at C is 10 and directly below that at point D, the trendline is at 8, the difference is 2. Multiply this by 63% to get 1.26.
Suppose the breakout at point B is at 9. That would give a price target of 7.74 (9 – 1.26). If the projected decline is less than 0, ignore the result.

For down-sloping trendlines, use the measure rule to predict how far price will rise after an upward breakout (a price pierce) from the trendline. The figure to the left shows a down-sloping
trendline with price breaking out upward at point B. From the breakout, find the prior minor high trendline touch. I show
it as point A. Measure the widest distance between those two points, measured vertically. In this case, that’s the distance
from C to D. Multiply that distance by 80% because that’s how often this method works when a full height is used, and
project the result upward from the breakout price – the point where price pierces the trendline.
For example, if the low at C is 10 and directly above that at point D, the trendline is at 12, the difference is 2. Multiply this by 80% to get 1.60.
Suppose the breakout at point B is at 11. That would give a price target of 12.60 (11 + 1.60).
If you use the full height of the CD move in either case, the success rate is 63% and 80%, respectively. Multiplying the CD height by 63% or 80% boosts the success rate into
the 90% or above region. The above links provide more information on trendlines. My
Trading Classic Chart Patterns
book, pictured on the right, takes an in depth look at trendlines. The analysis proves what others don't, that long trendline work better than short ones, the more touches a trendline
has is important, and so on.
Do I use the trendline measure rule or other measure rules for chart patterns and candlesticks? No. Why not? Because it's too complicated and every situation is different.
I prefer to use underlying support or overhead resistance. I can do that just by looking at the chart without need for a calculator. For candlesticks, I have my program setup to not only
identify each candlestick, but to project price targets based on the measure rule for them. I use that sometimes to help estimate how far price is going to move in the very short term.
The measure rule is discussed in each chapter of my two encyclopedia books for the associated chart patterns and candlesticks.
-- Thomas Bulkowski
Monday 02/01/2010. Market Monday: The Week Ahead
In an email today (Sunday), Gary wanted me to pass along this tip for traders facing hesitation when buying. "At first, buy and then get out quickly (either at the very first profit or,
as always, at a stop loss). The point here is to at least do the real trade beyond paper and to gain confidence with low risk repetitions."
# # #
A Brief Look Back
The following are economic reports that moved the markets last week. The numbers refer to the close-to-close move in the Dow industrials.
Monday: Up 23.88 points. Existing home sales were lower than expected.
Tuesday: Down 2.57 points. Consumer confidence was higher then expected.
Wednesday: Up 41.87 points. New home sales were down and crude inventory dropped.
Thursday: Down 115.7 points. Initial and continuing jobless claims climbed, but durable good orders rose.
Friday: Down 53.13 points. GDP was unexpectedly good.
For the week...
The Dow industrials were down 105.65 points or 1.0%.
The Nasdaq composite was down 57.94 points or 2.6%.
The S&P 500 index was down 17.89 points or 1.6%.
Economic Reports
The following information is derived from yahoo!finance and times are local to the east coast. The "Dow Moved" column is the close-to-close price change of the Dow industrials on the
release day from the prior trading day, the last time the report came out.
| Report | Time | A-F Rating | Dow Moved | Description |
| Personal income & consumption | 8:30 M | C+ | +1 | Measures sources of income to predict future demand. |
| Construction spending | 10:00 M | D | +156 | Covers residential/non-residential/public spending on new construction. |
| Auto & truck sales | 2:00 T | C- | -12 | Monthly sales of domestically produced vehicles. |
| Crude inventories | 10:30 W | ? | +42 | My guess: Measures oil inventory. |
| Initial jobless claims | 8:30 Th | C+ | -116 | Counts people filing for state unemployment benefits. |
| Productivity & costs | 8:30 Th | D+ | ? | Cost of producing a unit of output. |
| Factory orders | 10:00 Th | D+ | -12 | Durable/non-durable goods orders w/factory inventories. |
| 4 Employment reports | 8:30 F | A | +11 | Nonfarm payrolls, unemployment rate, avg workweek, hourly earnings. |
| Consumer credit | 3:00 F | D- | +11 | Measures auto, credit card and other debt. |
Options Expiration
No options expire this week.
CPI: Chart Pattern Indicator
As of 01/29/2010, the CPI had:
51 bearish patterns,
3 bullish patterns,
172 patterns waiting for breakout.
The CPI signal is 5.6%, which is
bearish (<= 35%).
The chart pattern indicator is bearish
with 2 of 3 full triangles showing ( ). Additional triangles are a measure
of strength with solid triangles meaning a more reliable signal than half triangles.
Other
Earnings season is underway. The sessions could be more volatile.
I found 1 pipe bottoms last week, which is neutral. Large numbers of pipe bottoms often signal the
start of a short to intermediate-term move up before price curls back down, forming an unconfirmed double bottom. I think of it as the signal for the first bottom of a potential double bottom.
The following industries, of 52 that I follow, were the best (1) and worst (52) performing.
| This Week | Last Week |
| 1. Toiletries/Cosmetics | 1. Coal |
| 2. Coal | 2. Toiletries/Cosmetics |
| 3. Shoe | 3. Chemical (Specialty) |
| 4. Internet | 4. Internet |
| 5. Diversified Co. | 5. Air Transport |
| |
| 48. Securities Brokerage | 48. Securities Brokerage |
| 49. Trucking/Transp. Leasing | 49. Electric Utility (East) |
| 50. Cement and Aggregates | 50. Cement and Aggregates |
| 51. Short ETFs | 51. Alternate Energy |
| 52. Alternate Energy | 52. Short ETFs |
My Prediction

Pictured to the right is the Dow utilities on a daily scale. A busted broadening top appears and I say busted because price broke out downward from the pattern
and then reversed. When that happens, it usually (but not always) suggests a strong move in the new direction.
The congestion area circled at A I see as lending support to the utilities. Thus, I don't expect much of a drop, but the index could continue lower
for a few days. I expect it to rebound as the five red lines indicate.
The reason I expect a sharp reversal and not a rounded one is from the shape of valleys B, C, and
D.
In research on the shape of tops, I found that sharp peaks often follow sharp peaks and rounded turns follow rounded ones. I'm assuming that analysis
applies to bottoms, too.
-- Thomas Bulkowski

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