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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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Bulkowski's Blog: ThePatternSite.com
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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 09/12/2014
16,988 -61.49 -0.4%
8,552 -3.33 0.0%
550 -10.26 -1.8%
4,568 -24.21 -0.5%
1,986 -11.91 -0.6%
YTD
2.5%
15.6%
12.0%
9.4%
7.4%
Tom's Targets    Overview: 09/12/2014
17,100 or 16,800 by 10/01/2014
8,700 or 8,000 by 10/01/2014
530 or 570 by 10/01/2014
4,450 or 4,800 by 10/01/2014
1,960 or 2,050 by 10/01/2014

Written and copyright © 2014 by Thomas N. Bulkowski. All rights reserved.

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Monday 9/15/14. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the monthly scale.

This is a picture of the Dow industrials on the monthly scale. I wanted to show the recovery since the bear market ended.

The bear market started at A, in 2007 and ended when the index hit a low in 2009. That was a drop from almost 14,000 to 6500. Nice if you were short the market and a devastating blow for those on the long side.

Now look at the recovery since B. The market is at 17,000. That's almost a triple from the low at B.

My research says that Fibonacci extensions work no better than a random pick but who's counting? I show the 1.618 extension applied to the AB move. The dashed line at C is where we're supposed to end up.

How far up is that? I'm interpolating, but it appears to be around 19,000. If the prediction is correct, then we have more upside to go.

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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 25.94 points.
Tuesday: Down 97.55 points.
Wednesday: Up 54.84 points.
Thursday: Down 19.71 points.
Friday: Down 61.49 points.

For the Week...

The Dow industrials were down 149.85 points or 0.9%.
The Nasdaq composite was down 15.3 points or 0.3%.
The S&P 500 index was down 22.17 points or 1.1%.

Year to Date...

Dow Industrials
     1.0% down from the high of 17,161.55 on 09/04/2014.
     10.7% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     0.9% down from the high of 4,610.14 on 09/03/2014.
     15.8% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     1.3% down from the high of 2,011.17 on 09/04/2014.
     14.2% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Industrial production9:15 MB-Production of utilities, mines, and manufacturers.
Capacity utilization9:15 MB-Gauges economic activity, hints of inflation.
Producer price index8:30 TB-Measures wholesale goods cost. An indication of future inflation.
Consumer price index8:30 WB+Inflation report. Measures cost of goods and services.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Rate decision2:00 W?The Federal Reserves reports on interest rate changes.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Housing starts8:30 ThB-Number of homes beginning construction.
Building permits8:30 ThB-Measures building permits for new construction.
Leading indicators10:00 FD-Summary of already known reports.

Options Expiration

The following is courtesy of the Options Industry Council.

OptionDate
VIX expiresWednesday
A.M. settled index options cease trading.Thursday
Expiring equity and P.M. settled index options cease trading. Expiring cash-settled currency options cease trading at 12:00 P.M. EST.Friday
Equity, index, and cash-settled currency options expireSaturday

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

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Swing and Position Traders: Chart Pattern Indicator

As of 09/12/2014, the CPI had:

54 bearish patterns,
5 bullish patterns,
237 patterns waiting for breakout.
The CPI signal is 8.5%, 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  16,883  16,935  16,990  17,042  17,096 
Weekly  16,821  16,904  17,021  17,104  17,221 
Monthly  16,040  16,514  16,838  17,311  17,635 
S&P500 (^GSPC): Daily  1,971  1,978  1,988  1,995  2,004 
Weekly  1,964  1,975  1,991  2,002  2,018 
Monthly  1,866  1,926  1,969  2,028  2,071 
Nasdaq (^IXIC): Daily  4,537  4,552  4,571  4,587  4,606 
Weekly  4,515  4,541  4,571  4,597  4,627 
Monthly  4,220  4,394  4,502  4,676  4,784 
  • 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 29.7%   The trend may continue. 
 1 month down 19.4%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.5%   The trend may continue. 
 1 month down 20.4%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 30.2%   The trend may continue. 
 1 month down 25.6%   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.

Buy-and-Hold: 12-Month SMA

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

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Earnings, Chart Patterns & Industries

Earnings season is over.

 Found Chart Pattern Name
12Triangle, symmetrical
11Scallop, ascending and inverted
7Rectangle top
5Broadening bottom
5Rising wedge
4Triangle, descending
3Diamond top
3Falling wedge
3Double Bottom, Adam and Adam
3Head-and-shoulders top

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

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

 

 

 

 

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

This WeekLast Week
1. Shoe1. Shoe
2. Semiconductor Cap Equip.2. Natural Gas (Distributor)
3. Natural Gas (Distributor)3. Petroleum (Producing)
4. Long ETFs4. Semiconductor Cap Equip.
5. Computers and Peripherals5. Retail Store
50. Homebuilding50. Metal Fabricating
51. Internet51. Internet
52. Toiletries/Cosmetics52. Homebuilding
53. Retail Building Supply53. Retail Building Supply
54. Short ETFs54. Short ETFs

-- Thomas Bulkowski

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Friday 9/12/14. 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 26 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 603 stocks searched, or 4.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 16 bullish chart patterns this week and 5 bearish ones with any remaining (1) 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.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
APCRectangle top      06/12/201409/11/2014Petroleum (Producing)
ANIKChannel      08/07/201409/11/2014Biotechnology
ASNAScallop, ascending and inverted      08/15/201409/09/2014Apparel
ADPScallop, ascending and inverted      08/07/201409/11/2014Computer Software and Svcs
CSCOHead-and-shoulders complex bottom      08/01/201409/09/2014Computers and Peripherals
CLRPipe top      08/25/201409/02/2014Petroleum (Producing)
DRIVRising wedge      07/14/201409/11/2014E-Commerce
EIXScallop, ascending and inverted      08/06/201409/11/2014Electric Utility (West)
EFIIRectangle bottom      08/01/201409/11/2014Computers and Peripherals
FOERectangle top      04/11/201409/11/2014Chemical (Specialty)
JNJRising wedge      07/23/201409/11/2014Medical Supplies
NBRPipe top      08/25/201409/02/2014Oilfield Svcs/Equipment
NFXPipe top      08/25/201409/02/2014Natural Gas (Diversified)
NEEScallop, ascending and inverted      08/06/201409/11/2014Electric Utility (East)
PORScallop, ascending and inverted      08/06/201409/10/2014Electric Utility (West)
PFGScallop, ascending and inverted      08/06/201409/11/2014Insurance (Diversified)
COLRectangle top      08/21/201409/11/2014Aerospace/Defense
SEEBroadening top      05/13/201409/08/2014Packaging and Container
TRVScallop, ascending and inverted      08/06/201409/11/2014Insurance (Prop/Casualty)
UNTDRectangle top      08/14/201409/11/2014Internet
WMBScallop, ascending and inverted      08/07/201409/11/2014Natural Gas (Distributor)
XLScallop, ascending and inverted      08/08/201409/11/2014Insurance (Diversified)
PHOScallop, ascending and inverted      08/04/201409/10/2014Investment Co. (Domestic)
XLYScallop, ascending and inverted      08/07/201409/10/2014Investment Co. (Domestic)
XLIRectangle top      08/21/201409/11/2014Investment Co. (Domestic)
XLKBroadening top, right-angled and ascending      08/25/201409/10/2014Investment Co. (Domestic)

 

Weekly screen for chart patterns ending between 09/04/2014 and 09/11/2014. 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.
 
Anadarko Petroleum Corp. (APC)
Industry: Petroleum (Producing)
Industry RS rank: 36 out of 53
Stock RS rank: 26 out of 595
Close as of 09/11/2014: $107.39
1 Month average volatility: $2.02. Volatility based stop (assuming upward breakout): $101.13 or 5.8% below the close.
Change YTD: 35.39%
Volume: 2,297,400 shares
3 month avg volume: 3,889,432 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Rectangle top continuation pattern from 06/12/2014 to 09/11/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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Anika Therapeutics Inc (ANIK)
Industry: Biotechnology
Industry RS rank: 10 out of 53
Stock RS rank: 365 out of 595
Close as of 09/11/2014: $42.11
1 Month average volatility: $0.95. Volatility based stop (assuming upward breakout): $39.53 or 6.1% below the close.
Change YTD: 10.35%
Volume: 182,600 shares
3 month avg volume: 309,222 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Channel from 08/07/2014 to 09/11/2014

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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 33 out of 53
Stock RS rank: 458 out of 595
Close as of 09/11/2014: $17.14
1 Month average volatility: $0.31. Volatility based stop (assuming upward breakout): $16.23 or 5.3% below the close.
Change YTD: -19.00%
Volume: 837,100 shares
3 month avg volume: 914,009 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/15/2014 to 09/09/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Automatic Data Processing Inc (ADP)
Industry: Computer Software and Svcs
Industry RS rank: 41 out of 53
Stock RS rank: 207 out of 595
Close as of 09/11/2014: $83.20
1 Month average volatility: $0.84. Volatility based stop (assuming upward breakout): $81.00 or 2.6% below the close.
Change YTD: 2.97%
Volume: 1,346,800 shares
3 month avg volume: 1,247,578 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/07/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Cisco Systems, Inc. (CSCO)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 88 out of 595
Close as of 09/11/2014: $25.18
1 Month average volatility: $0.27. Volatility based stop (assuming upward breakout): $24.32 or 3.4% below the close.
Change YTD: 12.26%
Volume: 22,104,700 shares
3 month avg volume: 25,519,237 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Head-and-shoulders complex bottom reversal pattern from 08/01/2014 to 09/09/2014
Performance rank: 9 out of 23.
Breakout is upward 100% of the time.
Average rise: 39%.
Break-even failure rate: 4%.
Throwbacks occur 63% of the time.
Price meets the measure rule target 74% of the time.

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Continental Resources Inc. (CLR)
Industry: Petroleum (Producing)
Industry RS rank: 36 out of 53
Stock RS rank: 586 out of 595
Close as of 09/11/2014: $75.79
1 Month average volatility: $1.95. Volatility based stop (assuming downward breakout): $79.82 or 5.3% above the close.
Change YTD: 34.71%
Volume: 2,471,000 shares
3 month avg volume: 871,697 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 08/25/2014 to 09/02/2014
Performance rank: 4 out of 21.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price meets the measure rule target 70% of the time.

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Digital River Inc (DRIV)
Industry: E-Commerce
Industry RS rank: 43 out of 53
Stock RS rank: 493 out of 595
Close as of 09/11/2014: $15.93
1 Month average volatility: $0.34. Volatility based stop (assuming downward breakout): $16.64 or 4.5% above the close.
Change YTD: -13.75%
Volume: 171,900 shares
3 month avg volume: 217,075 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rising wedge reversal pattern from 07/14/2014 to 09/11/2014
Performance rank: 20 out of 21.
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price meets the measure rule target 46% of the time.

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Edison International (EIX)
Industry: Electric Utility (West)
Industry RS rank: 14 out of 53
Stock RS rank: 116 out of 595
Close as of 09/11/2014: $58.00
1 Month average volatility: $0.77. Volatility based stop (assuming upward breakout): $55.74 or 3.9% below the close.
Change YTD: 25.27%
Volume: 1,628,100 shares
3 month avg volume: 1,894,394 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/06/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Electronics For Imaging, Inc. (EFII)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 4 out of 53
Stock RS rank: 300 out of 595
Close as of 09/11/2014: $44.33
1 Month average volatility: $0.93. Volatility based stop (assuming downward breakout): $46.27 or 4.4% above the close.
Change YTD: 14.46%
Volume: 309,700 shares
3 month avg volume: 347,332 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rectangle bottom continuation pattern from 08/01/2014 to 09/11/2014
Performance rank: 12 out of 21.
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price meets the measure rule target 50% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 34 out of 53
Stock RS rank: 372 out of 595
Close as of 09/11/2014: $13.69
1 Month average volatility: $0.33. Volatility based stop (assuming upward breakout): $12.78 or 6.6% below the close.
Change YTD: 6.70%
Volume: 938,600 shares
3 month avg volume: 662,349 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 04/11/2014 to 09/11/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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Johnson and Johnson (JNJ)
Industry: Medical Supplies
Industry RS rank: 30 out of 53
Stock RS rank: 120 out of 595
Close as of 09/11/2014: $104.55
1 Month average volatility: $0.83. Volatility based stop (assuming downward breakout): $106.55 or 1.9% above the close.
Change YTD: 14.15%
Volume: 4,834,000 shares
3 month avg volume: 6,241,888 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Rising wedge reversal pattern from 07/23/2014 to 09/11/2014
Performance rank: 20 out of 21.
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price meets the measure rule target 46% of the time.

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Nabors Industries, Ltd. (NBR)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 37 out of 53
Stock RS rank: 123 out of 595
Close as of 09/11/2014: $24.85
1 Month average volatility: $0.74. Volatility based stop (assuming downward breakout): $26.69 or 7.4% above the close.
Change YTD: 46.26%
Volume: 34,301,700 shares
3 month avg volume: 4,189,626 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe top reversal pattern from 08/25/2014 to 09/02/2014
Performance rank: 4 out of 21.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price meets the measure rule target 70% of the time.

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Newfield Exploration Company (NFX)
Industry: Natural Gas (Diversified)
Industry RS rank: 24 out of 53
Stock RS rank: 14 out of 595
Close as of 09/11/2014: $39.33
1 Month average volatility: $1.15. Volatility based stop (assuming downward breakout): $41.78 or 6.2% above the close.
Change YTD: 59.68%
Volume: 2,373,700 shares
3 month avg volume: 2,486,877 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe top reversal pattern from 08/25/2014 to 09/02/2014
Performance rank: 4 out of 21.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price meets the measure rule target 70% of the time.

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NextEra Energy Inc (NEE)
Industry: Electric Utility (East)
Industry RS rank: 18 out of 53
Stock RS rank: 286 out of 595
Close as of 09/11/2014: $96.15
1 Month average volatility: $1.12. Volatility based stop (assuming upward breakout): $92.70 or 3.6% below the close.
Change YTD: 12.30%
Volume: 1,681,000 shares
3 month avg volume: 1,951,765 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/06/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Portland General Electric Co. (POR)
Industry: Electric Utility (West)
Industry RS rank: 14 out of 53
Stock RS rank: 197 out of 595
Close as of 09/11/2014: $34.00
1 Month average volatility: $0.37. Volatility based stop (assuming upward breakout): $32.79 or 3.6% below the close.
Change YTD: 12.58%
Volume: 441,300 shares
3 month avg volume: 495,166 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/06/2014 to 09/10/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Principal Financial Group Inc (PFG)
Industry: Insurance (Diversified)
Industry RS rank: 38 out of 53
Stock RS rank: 79 out of 595
Close as of 09/11/2014: $53.96
1 Month average volatility: $0.69. Volatility based stop (assuming upward breakout): $51.99 or 3.7% below the close.
Change YTD: 9.43%
Volume: 676,100 shares
3 month avg volume: 1,052,931 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/06/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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Rockwell Collins (COL)
Industry: Aerospace/Defense
Industry RS rank: 28 out of 53
Stock RS rank: 441 out of 595
Close as of 09/11/2014: $76.94
1 Month average volatility: $0.75. Volatility based stop (assuming upward breakout): $74.95 or 2.6% below the close.
Change YTD: 4.09%
Volume: 574,500 shares
3 month avg volume: 647,380 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Rectangle top continuation pattern from 08/21/2014 to 09/11/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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Sealed Air Corp (SEE)
Industry: Packaging and Container
Industry RS rank: 21 out of 53
Stock RS rank: 113 out of 595
Close as of 09/11/2014: $36.82
1 Month average volatility: $0.55. Volatility based stop (assuming downward breakout): $38.10 or 3.5% above the close.
Change YTD: 8.14%
Volume: 1,028,900 shares
3 month avg volume: 1,700,520 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening top reversal pattern from 05/13/2014 to 09/08/2014
Performance rank: 18 out of 21.
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price meets the measure rule target 37% of the time.

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Travelers Companies Inc, The (TRV)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 15 out of 53
Stock RS rank: 124 out of 595
Close as of 09/11/2014: $92.92
1 Month average volatility: $0.80. Volatility based stop (assuming upward breakout): $90.96 or 2.1% below the close.
Change YTD: 2.63%
Volume: 1,349,700 shares
3 month avg volume: 1,838,431 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Tuesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/06/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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United Online (UNTD)
Industry: Internet
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 51 out of 53
Stock RS rank: 52 out of 595
Close as of 09/11/2014: $12.82
1 Month average volatility: $0.58. Volatility based stop (assuming upward breakout): $11.15 or 13.0% below the close.
Change YTD: -6.83%
Volume: 90,400 shares
3 month avg volume: 304,395 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rectangle top continuation pattern from 08/14/2014 to 09/11/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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Williams Companies Inc. (WMB)
Industry: Natural Gas (Distributor)
Industry RS rank: 5 out of 53
Stock RS rank: 15 out of 595
Close as of 09/11/2014: $57.44
1 Month average volatility: $0.83. Volatility based stop (assuming upward breakout): $54.61 or 4.9% below the close.
Change YTD: 48.92%
Volume: 4,956,200 shares
3 month avg volume: 6,193,846 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/07/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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XL Group (XL)
Industry: Insurance (Diversified)
Industry RS rank: 38 out of 53
Stock RS rank: 129 out of 595
Close as of 09/11/2014: $33.70
1 Month average volatility: $0.33. Volatility based stop (assuming upward breakout): $32.79 or 2.7% below the close.
Change YTD: 5.84%
Volume: 917,400 shares
3 month avg volume: 1,680,266 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/08/2014 to 09/11/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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PowerShares Water Resources (PHO)
Industry: Investment Co. (Domestic)
Industry RS rank: 31 out of 53
Stock RS rank: 419 out of 595
Close as of 09/11/2014: $25.86
1 Month average volatility: $0.21. Volatility based stop (assuming upward breakout): $25.19 or 2.6% below the close.
Change YTD: -1.37%
Volume: 37,300 shares
3 month avg volume: 92,754 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/04/2014 to 09/10/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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SPDR Consumer Discretionary (XLY)
Industry: Investment Co. (Domestic)
Industry RS rank: 31 out of 53
Stock RS rank: 319 out of 595
Close as of 09/11/2014: $68.55
1 Month average volatility: $0.46. Volatility based stop (assuming upward breakout): $67.30 or 1.8% below the close.
Change YTD: 2.57%
Volume: 2,438,600 shares
3 month avg volume: 5,315,112 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Scallop, ascending and inverted continuation pattern from 08/07/2014 to 09/10/2014
Performance rank: 3 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 4%.
Throwbacks occur 61% of the time.
Price meets the measure rule target 61% of the time.

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SPDR Industrial Select Sector (XLI)
Industry: Investment Co. (Domestic)
Industry RS rank: 31 out of 53
Stock RS rank: 302 out of 595
Close as of 09/11/2014: $54.17
1 Month average volatility: $0.37. Volatility based stop (assuming upward breakout): $53.17 or 1.9% below the close.
Change YTD: 3.65%
Volume: 5,783,900 shares
3 month avg volume: 9,103,623 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rectangle top continuation pattern from 08/21/2014 to 09/11/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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SPDR Technology Select Sector (XLK)
Industry: Investment Co. (Domestic)
Industry RS rank: 31 out of 53
Stock RS rank: 130 out of 595
Close as of 09/11/2014: $40.39
1 Month average volatility: $0.27. Volatility based stop (assuming downward breakout): $40.96 or 1.4% above the close.
Change YTD: 13.01%
Volume: 10,322,200 shares
3 month avg volume: 6,823,532 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Monday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 08/25/2014 to 09/10/2014
Performance rank: 19 out of 21.
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price meets the measure rule target 32% of the time.

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Thursday 9/11/14. Intraday Market Direction: Nasdaq

The index climbed by 0.8% or 34.23 points. Since 02/05/1971 the index made 362 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 242 occasions.
     Average loss was -0.9% on 120 occasions.
Expect the index to close higher 66.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 67/118 or 56.8% of the time.
     The prediction of the index closing lower has been right 26/51 or 51.0% 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.

This picture highlights two chart patterns. The first, in blue, is a head-and-shoulders top chart pattern. This one breaks out downward and the index drops, but not by much, about 20 points.

The chart pattern in red is a descending triangle. It also breaks out downward before spiking upward and then plunging again. It's as if the index can't make up its mind about a direction.

You can also view this as a double top (AB), confirmed as a valid chart pattern when the index closes below C. A pullback carries price higher (D).

What does all of this say about tomorrow's movement or close?

If the index can close above 4600, then I would expect a strong move higher. That's because the descending triangle will have busted. Busted patterns frequently lead to strong moves.

$ $ $

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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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,217.93    
 Monthly S1  4,402.23  184.29   
 Monthly Pivot  4,506.18  103.96   
 Weekly S2  4,512.40  6.22   
 Daily S2  4,530.56  18.16   
 Low  4,544.84  14.28   
 Weekly S1  4,549.46  4.62   
 Open  4,554.15  4.69   
 Daily S1  4,558.54  4.39   
 61.8% Down from Intraday High  4,560.98  2.44   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  4,565.97  4.99   
 38.2% Down from Intraday High  4,570.96  4.99   
 Daily Pivot  4,572.82  1.86   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot  4,579.80  6.98   
 Close  4,586.52  6.72   
 High  4,587.10  0.58   Yes! The High is close to the Close.
 Daily R1  4,600.80  13.70   
 Daily R2  4,615.08  14.28   
 Weekly R1  4,616.86  1.78   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  4,647.20  30.34   
 Monthly R1  4,690.48  43.28   
 Monthly R2  4,794.43  103.96   

Written and copyright © 2014 by Thomas N. Bulkowski. All rights reserved.