Bulkowski's Blog: ThePatternSite.com
As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20
As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20

 

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Monday 12/7/20. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I had in mind to show you the Nasdaq composite but pulled up this chart instead. I haven't lost my mind. I know exactly where I left it.

Let's go through the chart, starting from the left. Smiley

The twin bottom at E is a double bottom. It has two valleys which bottom near the same price. It confirms as a valid double bottom when the index closes above the highest peak between the two bottoms.

Peaks DC are a double top. The twin peaks top out near the same price and it is supposed to confirm as a valid chart pattern when the index closes below valley A. I drew a horizontal brown line but it's hard to tell if price closed below the line or not.

AB is another double bottom. The two bottoms are not at the same price, so that's a flaw. It confirms as a valid pattern when price closes above the blue line.

More recently are the two up-sloping red lines highlighting a rising wedge. Rising wedges breakout downward 60% of the time. That's not much above random.

This wedge has price touching the trendlines plenty of times, but it also looks loose, not tight. That means there's not a lot of overlap between the price bars. I did a study of overlap and showed that flags (I think) with lots of overlap outperformed.

This one looks like it might breakout upward.

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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 271.73 points.
Tuesday: Up 185.28 points.
Wednesday: Up 59.87 points.
Thursday: Up 85.73 points.
Friday: Up 248.74 points.

For the Week...

The Dow industrials were up 307.89 points or 1.0%.
The Nasdaq composite was up 258.38 points or 2.1%.
The S&P 500 index was up 60.77 points or 1.7%.

Year to Date...

Dow Industrials
     0.0% down from the high of 30,218.26 on 12/04/2020.
     65.9% up from the low of 18,213.65 on 03/23/2020.
Nasdaq
     0.0% down from the high of 12,464.23 on 12/04/2020.
     88.0% up from the low of 6,631.42 on 03/23/2020.
S&P 500
     0.0% down from the high of 3,699.20 on 12/04/2020.
     68.8% up from the low of 2,191.86 on 03/23/2020.

Options Expiration

No options expire this week.

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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  29,913  30,066  30,142  30,294  30,371 
Weekly  29,212  29,715  29,967  30,470  30,721 
Monthly  24,786  27,502  28,860  31,576  32,935 
S&P500 (^GSPC): Daily  3,661  3,680  3,690  3,709  3,718 
Weekly  3,559  3,629  3,664  3,734  3,769 
Monthly  3,079  3,389  3,544  3,854  4,009 
Nasdaq (^IXIC): Daily  12,347  12,406  12,435  12,493  12,523 
Weekly  11,881  12,173  12,319  12,610  12,756 
Monthly  10,275  11,370  11,917  13,011  13,559 

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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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).

Here's a symbol list of 134 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: AES, AMN, APH, ANTM, APA, ATR, ACGL, ARW, ASH, ATO, AXS, BIG, BKH, BRC, CBT, COG, CENX, CRL, CIEN, CLNE, ED, CONN, CLR, GLW, COST, CRH, CTS, DVN, DOV, EOG, EL, RE, EXC, XOM, FDS, FCX, THG, HLIT, HQY, HP, HSIC, HNI, INFN, IBP, IIIN, IPG, IPI, KALU, KMT, LANC, LNC, L, LXU, MRO, MAS, MRK, MUR, NBR, CNR, NCR, NTGR, NEU, NEE, OXY, ORI, PATK, PDCO, PTEN, PFE, PICO, PLXS, POL, PFG, RJF, RGS, RGA, RHI, SAIA, CRM, SLB, SEIC, SO, SCCO, SRDX, TECH, TFX, TKR, TG, SLCA, UPS, UNM, V, WAT, WWW, WDAY, ZBRA, IYK, IYE, IEO, IEZ, FTEC, BOTZ, IYZ, IGE, IYF, EWO, EEM, EWH, EWI, EWS, EWY, EWP, EWT, EWU, PXJ, IEV, IXC, XLE, XLF, XLU. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

The below industries were the best (rank 1) or worst performing of those I follow.

This WeekLast Week
1. Air Transport1. Air Transport
2. Semiconductor Cap Equip.2. Semiconductor Cap Equip.
3. Semiconductor3. Apparel
4. Shoe4. Semiconductor
5. Apparel5. Shoe
6. Telecom. Equipment6. Retail (Special Lines)
7. Computers and Peripherals7. Furn/Home Furnishings
8. Retail (Special Lines)8. Homebuilding
9. Human Resources9. Metal Fabricating
10. Trucking/Transp. Leasing10. Computers and Peripherals
Best Performing AboveWorst Performing Below
50. Aerospace/Defense50. Aerospace/Defense
51. Chemical (Specialty)51. Electric Utility (Central)
52. Electric Utility (Central)52. Electric Utility (East)
53. Electric Utility (East)53. Chemical (Specialty)
54. Biotechnology54. Electric Utility (West)
55. Electric Utility (West)55. Natural Gas (Diversified)
56. Natural Gas (Distributor)56. Natural Gas (Distributor)
57. Natural Gas (Diversified)57. Biotechnology
58. Petroleum (Integrated)58. Petroleum (Integrated)
59. Short ETFs59. Short ETFs

-- Thomas Bulkowski

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Friday 12/4/20. Pattern Trading Setups for the Weekend.

$ $ $

Here's a symbol list of 141 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: ADBE, ADTN, AMD, AES, ALRM, ALK, ALB, ALKS, ADS, DOX, AEO, APH, AMAT, AIZ, BBBY, BIIB, BKH, BA, BRC, BBW, BLDR, CBT, CPB, CE, CENX, CRL, CIEN, CTSH, CMCO, CONN, COTY, CMI, DECK, DVN, D, DOV, EXP, RE, EVH, FDS, FOE, FIS, FEYE, FCX, FDP, FRD, GNW, GES, HBI, THG, HLIT, HE, HQY, HTLD, HL, HD, INTU, IVC, JKHY, LH, LAWS, LEN, LLY, LXU, MHO, MCHX, MTRN, MTRX, MDCA, MU, MCO, MUR, NTGR, NWPX, PKG, PKE, PATK, PRFT, PETS, PFE, PCG, PICO, PNW, PFG, PG, RL, RGA, REV, SAIA, SLGN, SKX, LUV, SXI, TPR, TEVA, TOL, UGI, UPS, VFC, VRSN, VMC, WRB, WAT, WERN, WLK, WWW, XLNX, FXL, EWA, EWO, EWK, EWZ, EWC, EEM, EWM, EWW, EPP, EWS, EWY, EWT, THD, TUR, EWU, ILF, XLF, XRT, UNG, USO. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

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

The following patterns were found manually, not using Patternz. Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 27 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 579 stocks searched, or 4.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 1 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 16 bullish chart patterns this week and 6 bearish ones with any remaining (6) 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.

For details about the chart patterns, click here.

-- Thomas Bulkowski

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 Symbol  Chart Pattern  Bullish 
 Bearish 
Start End Industry
ADBETriangle, symmetrical      10/13/202012/02/2020Computer Software and Svcs
AESRectangle top      11/10/202012/03/2020Electric Utility (East)
ADSFlag, high and tight      10/28/202012/03/2020Information Services
ALLFlag      11/25/202012/03/2020Insurance (Prop/Casualty)
ADMTriangle, symmetrical      10/23/202012/02/2020Food Processing
BKNGTriangle, ascending      11/09/202012/03/2020Internet
CENXRounding bottom      09/14/202011/30/2020Metals and Mining (Div.)
CMCOTriangle, ascending      11/09/202012/02/2020Machinery
DTEHead-and-shoulders top      11/10/202011/27/2020Electric Utility (Central)
FBTriangle, symmetrical      08/26/202012/03/2020E-Commerce
FRDRounding bottom      09/02/202012/02/2020Building Materials
GDTriangle, ascending      11/12/202012/03/2020Aerospace/Defense
HTLDTriangle, descending      09/22/202012/03/2020Trucking/Transp. Leasing
HONTriangle, ascending      11/09/202012/03/2020Aerospace/Defense
ITGRRising wedge      11/10/202012/01/2020Electronics
KSSFlag, high and tight      10/01/202012/03/2020Retail Store
LHTriangle, descending      11/11/202012/03/2020Medical Services
LXUFlag, high and tight      10/06/202012/03/2020Building Materials
MTSIScallop, ascending      11/09/202012/03/2020Semiconductor
MCHXCup with handle      10/09/202012/02/2020Advertising
MRTNPipe top      11/16/202011/23/2020Trucking/Transp. Leasing
PKGTriangle, symmetrical      11/17/202012/03/2020Packaging and Container
PFEPipe bottom      11/16/202011/23/2020Drug
PCGPennant      11/23/202012/03/2020Electric Utility (West)
PINCHorn top      11/23/202011/30/2020Healthcare Information
RGSFlag, high and tight      11/02/202012/03/2020Toiletries/Cosmetics
REVFlag, high and tight      11/02/202012/03/2020Toiletries/Cosmetics
TEVAHead-and-shoulders complex bottom      08/25/202012/02/2020Drug

 

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Thursday 12/3/20. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -5.74 points. Since 02/05/1971 the index made 678 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 384 occasions.
     Average loss was -0.9% on 294 occasions.
Expect the index to close higher 56.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 202/360 or 56.1% of the time.
     The prediction of the index closing lower has been right 57/117 or 48.7% 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.

I drew three trendlines, shown here in red, A, B, and C. Notice that they are getting steeper and shorter.

They remind me of fan lines. I looked into them once but they didn't make a lot of sense to me, so I didn't pursue them. (Fan lines are not covered on my website... I checked). You might say I'm not a fan of fan lines. Smiley To me, fan lines make as much sense as taking the width, not the height, of a rectangle and projecting it upward from the top of the pattern and claiming that's the price target. Anyway, I digress.

The blue line forms a small ascending triangle, with a flat top and up-sloping bottom. Ascending triangles breakout upward 63% of the time. That's almost 2 of every 3 trades.

Of course, that statistics comes from patterns on the daily charts. With intraday data like you see here, the opening bell can throw the index around a lot, so there's no telling what will happen.

Today was a weak day which saw the CPI (Chart Pattern Indicator) drop. The entire market looked weak to me, so I'd be cautious about expecting that upward breakout.

$ $ $

Here's a symbol list of 104 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: DDD, ACIW, AFL, DOX, AXP, AIG, ANTM, ARW, BCPC, BSET, BKH, BA, BOOT, BRC, CBT, CPB, CLS, CNP, CENX, CRL, CVX, CHS, ED, CSOD, GLW, CTS, DDS, ^DJT, EXP, RE, EXC, XOM, FAST, FIS, FE, FRD, GE, GL, HE, HTLD, HP, HON, HUBG, INCY, JKHY, LH, RAMP, LOW, LXU, MHO, MCO, NOV, NTAP, NVDA, OGE, ORI, PATK, PDCO, PFE, PICO, POR, PG, PRU, RJF, RGS, RGA, REV, ROK, CRM, SLB, SCHW, SLGN, LUV, SSYS, TECH, TEVA, TG, SLCA, VLO, VRTX, WAT, WERN, WLK, WWW, ITA, IYE, FXI, IHF, IGV, IGE, IYF, EWC, EWY, EWP, EWT, PPA, IXC, XLE, XLF, XLU. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

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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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  10,389.06    
 Monthly S1  11,369.22  980.15   
 Weekly S2  11,687.68  318.46   
 Monthly Pivot  11,802.72  115.05   
 Weekly S1  12,018.52  215.80   
 Weekly Pivot  12,127.38  108.85   
 Daily S2  12,166.22  38.84   
 Low  12,217.35  51.13   
 Daily S1  12,257.79  40.44   
 61.8% Down from Intraday High  12,271.87  14.07   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Open  12,285.75  13.88   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  12,288.71  2.96   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  12,305.54  16.84   
 Daily Pivot  12,308.93  3.38   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  12,349.37  40.44   
 High  12,360.06  10.69   Yes! The High is close to the Close.
 Daily R1  12,400.50  40.44   
 Daily R2  12,451.64  51.13   
 Weekly R1  12,458.22  6.59   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  12,567.08  108.85   
 Monthly R1  12,782.88  215.80   
 Monthly R2  13,216.38  433.51   

 

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Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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