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.

Tuesday 12/11/18. Intraday Market Direction: Dow

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

$ $ $

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

This is a chart of the future, but you might not recognize it as such. So let's dream a bit.

At point A, the index hit bottom and bounced. Notice that the index has pierced the down-sloping trendline, but not by much. Also notice how the rise from A is curving to the right, as if upward momentum is slowing.

Now look at what happened in the past. At B, the index hit a low and bounced. It climbed, hit the trendline and dropped to C. (To be fair, the trendline wouldn't have been drawn there, but a bit lower, with a steeper slope, making it also pierce a down-sloping trendline). The index kept on going down to A.

As we look to the future, I expect the index to round over and form a second bottom, near where A is now. Whether it bounces upward or continues lower, I'll leave to market sentiment.

$ $ $

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

Monday 12/10/18. Market Monday: The Week Ahead

• My Prediction
• A Brief Look Back
• Options Expiration
• Swing and Position Traders: Chart Pattern Indicator
• Swing Traders: Pivot Points
• Consecutive Price Trends
• Earnings, Chart Patterns & Industries

My Prediction

I show the Nasdaq composite on the weekly scale, so I could capture the longer view.

...Not sure it's helped, but you decide.

I drew a horizontal red line where support is. However, I'm not sure the index will actually find support there.

Then I mirrored the horizontal move earlier in the year, flipped it horizontally and pasted it to the right of the blue line.

These price mirrors can help predict what will happen in the future by looking at the past.

So we see the index rebounding in the coming weeks only to sink again and eventually move horizontally. The entire picture looks like a complex head-and-shoulders top.

A Brief Look Back

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.

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 12/07/2018, the CPI had:

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

Swing Traders: Pivot Points

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

• 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:

Consecutive Price Trends

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.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

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.

-- Thomas Bulkowski

Friday 12/7/18. Pattern Trading Setups for the Weekend.

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 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 600 stocks searched, or 3.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 2 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 5 bullish chart patterns this week and 8 bearish ones with any remaining (9) 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

Weekly screen for chart patterns ending between 11/29/2018 and 12/06/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Furn/Home Furnishings

Industry RS rank: 30 out of 58

Stock RS rank: 203 out of 593

12/6/18 close: $120.44

1 Month avg volatility: $4.39. Volatility stop (for downward breakout): $129.45 or 7.5% above the close.

Change YTD: -31.57%

Volume: 888,400 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: Double Top, Adam and Adam reversal pattern from 11/07/2018 to 12/03/2018

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.

Industry: Chemical (Basic)

Industry RS rank: 40 out of 58

Stock RS rank: 460 out of 593

12/6/18 close: $94.66

1 Month avg volatility: $2.71. Volatility stop (for downward breakout): $100.23 or 5.9% above the close.

Change YTD: -11.60%

Volume: 1,384,400 shares. 3 month avg: 691,697 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 11/12/2018 to 12/03/2018

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.

Industry: Biotechnology

Industry RS rank: 12 out of 58

Stock RS rank: 289 out of 593

12/6/18 close: $72.80

1 Month avg volatility: $1.89. Volatility stop (for upward breakout): $67.24 or 7.6% below the close.

Change YTD: -30.24%

Volume: 6,694,100 shares. 3 month avg: 7,439,311 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 11/19/2018 to 11/26/2018

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.

Industry: Metals and Mining (Div.)

Industry RS rank: 53 out of 58

Stock RS rank: 584 out of 593

12/6/18 close: $8.65

1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $7.36 or 14.9% below the close.

Change YTD: -55.96%

Volume: 1,697,500 shares. 3 month avg: 2,285,742 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: Triangle, symmetrical continuation pattern from 10/09/2018 to 12/04/2018

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.

Industry: Precision Instrument

Industry RS rank: 4 out of 58

Stock RS rank: 272 out of 593

12/6/18 close: $43.92

1 Month avg volatility: $1.67. Volatility stop (for upward breakout): $39.06 or 11.1% below the close.

Change YTD: -28.19%

Volume: 1,752,200 shares. 3 month avg: 1,157,365 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, ascending reversal pattern from 10/16/2018 to 12/06/2018

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.

Industry: Semiconductor

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 56 out of 58

Stock RS rank: 479 out of 593

12/6/18 close: $13.37

1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $14.33 or 7.2% above the close.

Change YTD: -12.27%

Volume: 7,035,800 shares. 3 month avg: 5,847,760 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: Rising wedge reversal pattern from 10/24/2018 to 12/04/2018

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.

Industry: Machinery

Industry RS rank: 32 out of 58

Stock RS rank: 149 out of 593

12/6/18 close: $81.84

1 Month avg volatility: $1.66. Volatility stop (for downward breakout): $85.82 or 4.9% above the close.

Change YTD: -18.96%

Volume: 2,574,700 shares. 3 month avg: 1,038,811 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Head-and-shoulders top reversal pattern from 11/08/2018 to 12/03/2018

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.

Industry: Securities Brokerage

Industry RS rank: 55 out of 58

Stock RS rank: 522 out of 593

12/6/18 close: $47.40

1 Month avg volatility: $1.48. Volatility stop (for downward breakout): $50.51 or 6.6% above the close.

Change YTD: -4.38%

Volume: 6,738,100 shares. 3 month avg: 2,308,982 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: Double Top, Adam and Adam reversal pattern from 11/08/2018 to 12/03/2018

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.

Industry: Computers and Peripherals

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 26 out of 58

Stock RS rank: 366 out of 593

12/6/18 close: $63.79

1 Month avg volatility: $1.84. Volatility stop (for downward breakout): $68.02 or 6.6% above the close.

Change YTD: -8.47%

Volume: 7,599,700 shares. 3 month avg: 3,509,922 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 11/16/2018 to 12/03/2018

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.

Industry: Healthcare Information

Industry RS rank: 8 out of 58

Stock RS rank: 244 out of 593

12/6/18 close: $20.80

1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $24.58 or 18.2% above the close.

Change YTD: 61.87%

Volume: 1,635,700 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: Double Top, Adam and Adam reversal pattern from 11/08/2018 to 11/30/2018

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.

Industry: Insurance (Life)

Industry RS rank: 38 out of 58

Stock RS rank: 428 out of 593

12/6/18 close: $67.65

1 Month avg volatility: $1.39. Volatility stop (for downward breakout): $71.98 or 6.4% above the close.

Change YTD: -2.87%

Volume: 28,100 shares. 3 month avg: 18,072 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 Thursday.

 

Chart pattern: Double Top, Eve and Adam reversal pattern from 11/14/2018 to 12/04/2018

Breakout is downward 100% of the time.

Average decline: 15%.

Break-even failure rate: 13%.

Pullbacks occur 64% of the time.

Price hits measure rule target 72% of the time.

Industry: Chemical (Specialty)

Industry RS rank: 17 out of 58

Stock RS rank: 396 out of 593

12/6/18 close: $17.87

1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $19.58 or 9.5% above the close.

Change YTD: -24.25%

Volume: 512,600 shares. 3 month avg: 594,032 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 Adam reversal pattern from 11/14/2018 to 12/03/2018

Breakout is downward 100% of the time.

Average decline: 15%.

Break-even failure rate: 13%.

Pullbacks occur 64% of the time.

Price hits measure rule target 72% of the time.

Industry: Financial Services

Industry RS rank: 18 out of 58

Stock RS rank: 195 out of 593

12/6/18 close: $202.99

1 Month avg volatility: $6.19. Volatility stop (for upward breakout): $181.84 or 10.4% below the close.

Change YTD: 34.11%

Volume: 6,459,000 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 11/19/2018 to 11/26/2018

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 58 out of 58

Stock RS rank: 547 out of 593

12/6/18 close: $3.86

1 Month avg volatility: $0.26. Volatility stop (for upward breakout): $3.22 or 16.6% below the close.

Change YTD: -13.26%

Volume: 8,716,300 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: Triangle, symmetrical continuation pattern from 11/19/2018 to 12/04/2018

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.

Industry: Toiletries/Cosmetics

Industry RS rank: 7 out of 58

Stock RS rank: 495 out of 593

12/6/18 close: $63.79

1 Month avg volatility: $2.32. Volatility stop (for downward breakout): $68.77 or 7.8% above the close.

Change YTD: -6.51%

Volume: 356,900 shares. 3 month avg: 417,486 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 Top, Adam and Adam reversal pattern from 11/16/2018 to 12/04/2018

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.

Industry: Chemical (Specialty)

Industry RS rank: 17 out of 58

Stock RS rank: 523 out of 593

12/6/18 close: $31.69

1 Month avg volatility: $0.98. Volatility stop (for downward breakout): $33.73 or 6.4% above the close.

Change YTD: -27.15%

Volume: 392,500 shares. 3 month avg: 446,563 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 11/07/2018 to 12/03/2018

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.

Industry: Insurance (Life)

Industry RS rank: 38 out of 58

Stock RS rank: 258 out of 593

12/6/18 close: $143.72

1 Month avg volatility: $3.41. Volatility stop (for downward breakout): $150.70 or 4.9% above the close.

Change YTD: -7.83%

Volume: 669,000 shares. 3 month avg: 326,800 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: Double Top, Eve and Eve reversal pattern from 11/14/2018 to 12/03/2018

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.

Industry: Chemical (Basic)

Industry RS rank: 40 out of 58

Stock RS rank: 178 out of 593

12/6/18 close: $401.03

1 Month avg volatility: $10.79. Volatility stop (for downward breakout): $426.54 or 6.4% above the close.

Change YTD: -2.20%

Volume: 1,288,200 shares. 3 month avg: 564,294 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 11/14/2018 to 12/06/2018

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.

Industry: Securities Brokerage

Industry RS rank: 55 out of 58

Stock RS rank: 435 out of 593

12/6/18 close: $51.35

1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $54.16 or 5.5% above the close.

Change YTD: 0.43%

Volume: 3,486,600 shares. 3 month avg: 2,043,012 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 10/31/2018 to 12/06/2018

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.

Industry: Diversified Co.

Industry RS rank: 29 out of 58

Stock RS rank: 498 out of 593

12/6/18 close: $53.01

1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $56.14 or 5.9% above the close.

Change YTD: -6.33%

Volume: 2,920,100 shares. 3 month avg: 1,461,508 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.

 

Chart pattern: Triple top reversal pattern from 11/08/2018 to 12/03/2018

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.

Industry: Metal Fabricating

Industry RS rank: 45 out of 58

Stock RS rank: 461 out of 593

12/6/18 close: $120.87

1 Month avg volatility: $3.81. Volatility stop (for downward breakout): $130.48 or 8.0% above the close.

Change YTD: -27.12%

Volume: 202,000 shares. 3 month avg: 117,540 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 11/08/2018 to 12/03/2018

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.

Industry: Precision Instrument

Industry RS rank: 4 out of 58

Stock RS rank: 242 out of 593

12/6/18 close: $193.88

1 Month avg volatility: $3.74. Volatility stop (for downward breakout): $202.40 or 4.4% above the close.

Change YTD: 0.36%

Volume: 794,600 shares. 3 month avg: 474,158 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Broadening top reversal pattern from 11/08/2018 to 12/06/2018

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.

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.