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

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Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 02/05/2016
16,205 -211.61 -1.3%
6,943 -108.43 -1.5%
625 2.55 0.4%
4,363 -146.42 -3.2%
1,880 -35.40 -1.8%
YTD
-7.0%
-7.5%
8.1%
-12.9%
-8.0%
Tom's Targets    Overview: 01/29/2016
16,700 or 15,000 by 02/15/2016
7,300 or 6,300 by 02/15/2016
640 or 570 by 02/15/2016
4,850 or 4,300 by 02/15/2016
2,000 or 1,800 by 02/15/2016
Mutt Losers: None YTD
Mutt Winners: None YTD

  Written by and copyright © 2005-2016 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Donate now to keep this website free. Thanks -- Tom

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Monday 2/8/16. Market Monday: The Week Ahead

My Prediction

Picture of the Dow transports on the daily scale.

I show the Dow transports on the daily scale.

The index has made a flag. I show that between the two red lines.

Most times, flags in a downtrend breakout downward. Whether that will happen is anyone's guess.

$ $ $

I was asked by R. Scott Braley to comment about what is happening in the markets.

My personal view is that we hit bottom in mid January and the markets are now recovering. It is possible that the indices will turn back down to form a double bottom. No one knows the direction the market will take, including me, so everyone is guessing.

The day to day move in the indices is volatile based on how the market think about these subjects.

  • The US economy (it has weakened recently)
  • The Chinese economy (it is not growing as fast as it used to, some would say by design as they shift to a more internal consumer driven economy)
  • Earnings (it's earnings season)
  • Oil (the market hates a falling price of oil. Consumers love it).
  • The US dollar (it's been strong against other currencies, making our exports more expensive)
  • World events (the markets will react to events accordingly).
  • Other (like US economic reports and other domestic events)

I am 35% in cash and own several utility companies, so my portfolio is holding up well. I have a shopping list of stocks that once they report earnings and the market reacts to them, I may (or may not) buy them.

Many stocks are down 50% or more from their yearly highs, so they are bargains. Whether they will recover anytime soon is the challenge we all face.

Unfortunately, the main drivers today are the price of oil, weakening Chinese economy, and a strong US dollar. Those problems won't go away anytime soon. That means continue volatility and a market unable to trend. Even swing trading will be difficult in this environment. I thought we might see a V-bottom, but it looks more like an extended V-bottom.

Trade carefully.

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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 17.12 points.
Tuesday: Down 295.64 points.
Wednesday: Up 183.12 points.
Thursday: Up 79.92 points.
Friday: Down 211.61 points.

For the Week...

The Dow industrials were down 261.33 points or 1.6%.
The Nasdaq composite was down 250.81 points or 5.4%.
The S&P 500 index was down 60.19 points or 3.1%.

Year to Date...

Dow Industrials
     6.9% down from the high of 17,405.48 on 01/04/2016.
     4.9% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     11.4% down from the high of 4,926.73 on 01/05/2016.
     1.2% up from the low of 4,313.39 on 01/20/2016.
S&P 500
     7.8% down from the high of 2,038.20 on 01/04/2016.
     3.7% up from the low of 1,812.29 on 01/20/2016.

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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
Wholesale inventories10:00 TD-Wholesale sales and inventory statistics.
Crude inventories10:30 W?My guess: Measures oil inventory.
Treasury budget2:00 WDTracks budget deficit. Important in April (tax filing).
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
International trade8:30 FC+Import/export prices, trade balance. US economy vs others.
Retail sales8:30 FA-Reports total retail sales (not services). Are people spending?
Business inventories10:00 FC-Reports manufacturing, wholesale, retail inventories.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  15,959  16,082  16,253  16,376  16,547 
Weekly  15,635  15,920  16,215  16,500  16,796 
Monthly  14,399  15,302  16,354  17,257  18,309 
S&P500 (^GSPC): Daily  1,848  1,864  1,889  1,905  1,929 
Weekly  1,825  1,852  1,900  1,927  1,975 
Monthly  1,684  1,782  1,910  2,008  2,136 
Nasdaq (^IXIC): Daily  4,259  4,311  4,402  4,454  4,545 
Weekly  4,164  4,263  4,450  4,550  4,737 
Monthly  3,921  4,142  4,534  4,755  5,148 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.3%   The trend may continue. 
 3 months down 7.3%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.1%   The trend may continue. 
 3 months down 6.0%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.7%   The trend may continue. 
 3 months down 8.9%   Expect a reversal soon. 

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: bearish.
Nasdaq Composite: bearish.
S&P 500 Index: bearish.
Dow Transports: bearish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
52Pipe bottom
17Dead-cat bounce
8Broadening top
8Double Bottom, Adam and Adam
5Triangle, symmetrical
5Broadening bottom
4Diamond bottom
3Rectangle bottom
3Triangle, descending
3Flag, high and tight

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. Short ETFs1. Short ETFs
2. Electric Utility (Central)2. Electric Utility (West)
3. Electric Utility (West)3. Electric Utility (Central)
4. Electric Utility (East)4. Semiconductor Cap Equip.
5. Semiconductor Cap Equip.5. Electric Utility (East)
50. Computers and Peripherals50. Computers and Peripherals
51. Homebuilding51. Securities Brokerage
52. Securities Brokerage52. Biotechnology
53. Biotechnology53. Petroleum (Producing)
54. Petroleum (Producing)54. Trucking/Transp. Leasing
55. Electronics55. Electronics
56. Shoe56. Shoe
57. Retail (Special Lines)57. Retail (Special Lines)

-- Thomas Bulkowski. Donate now to keep this website free.

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Friday 2/5/16. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 647 stocks searched, or 2.8%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 4 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 10 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.

More...

-- Thomas Bulkowski. Donate now to keep this website free.

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ABAXDead-cat bounce      01/29/201601/29/2016Medical Supplies
BCPCPipe bottom      01/19/201601/25/2016Chemical (Specialty)
CENXFlag, high and tight      01/14/201602/04/2016Metals and Mining (Div.)
CCKDouble Bottom, Adam and Adam      01/20/201602/04/2016Packaging and Container
^DJTBroadening top, right-angled and ascending      01/25/201602/04/2016None
DOWDouble Bottom, Adam and Adam      01/20/201601/29/2016Chemical (Basic)
DDDouble Bottom, Adam and Adam      01/20/201601/29/2016Chemical (Basic)
GPNDiamond bottom      01/14/201602/04/2016Computer Software and Svcs
HOLXDiamond bottom      01/15/201602/04/2016Medical Supplies
DHITriangle, symmetrical      01/13/201602/01/2016Homebuilding
IDXXPipe bottom      01/19/201601/25/2016Drug
IDTIDead-cat bounce      02/02/201602/02/2016Semiconductor
MANHBroadening bottom      01/12/201602/03/2016IT Services
MLMTriangle, ascending      01/19/201602/04/2016Cement and Aggregates
MTRXDead-cat bounce      02/04/201602/04/2016Oilfield Svcs/Equipment
MRKChannel      12/03/201502/04/2016Drug
MONTriangle, descending      01/20/201602/03/2016Chemical (Diversified)
RLDead-cat bounce      02/04/201602/04/2016Apparel
SEEPipe bottom      01/19/201601/25/2016Packaging and Container
SWCPipe bottom      01/19/201601/25/2016Metals and Mining (Div.)
VVUSRectangle bottom      12/07/201502/04/2016Biotechnology
WRBTriple bottom      01/20/201602/03/2016Insurance (Prop/Casualty)

 

Weekly screen for chart patterns ending between 01/28/2016 and 02/04/2016. 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.
 
Abaxis Inc (ABAX)
Industry: Medical Supplies
Industry RS rank: 10 out of 56
Stock RS rank: 381 out of 639
2/4/16 close: $41.28
1 Month avg volatility: $2.24. Volatility stop (for downward breakout): $46.46 or 12.6% above the close.
Change YTD: -25.87%
Volume: 223,000 shares. 3 month avg: 185,798 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: Dead-cat bounce continuation pattern from 01/29/2016 to 01/29/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Balchem Corp (BCPC)
Industry: Chemical (Specialty)
Industry RS rank: 19 out of 56
Stock RS rank: 103 out of 639
2/4/16 close: $63.49
1 Month avg volatility: $2.84. Volatility stop (for upward breakout): $57.59 or 9.3% below the close.
Change YTD: 4.42%
Volume: 53,000 shares. 3 month avg: 132,448 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 01/19/2016 to 01/25/2016
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Century Aluminum Co. (CENX)
Industry: Metals and Mining (Div.)
Industry RS rank: 11 out of 56
Stock RS rank: 584 out of 639
2/4/16 close: $4.97
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $3.54 or 28.7% below the close.
Change YTD: 12.44%
Volume: 4,537,300 shares. 3 month avg: 2,928,682 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Flag, high and tight continuation pattern from 01/14/2016 to 02/04/2016
WARNING: A dead-cat bounce occurred on 08/07/2015. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 02/05/2016.
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Crown Holdings Inc (CCK)
Industry: Packaging and Container
Industry RS rank: 12 out of 56
Stock RS rank: 227 out of 639
2/4/16 close: $47.93
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $40.28 or 16.0% below the close.
Change YTD: -5.46%
Volume: 2,236,300 shares. 3 month avg: 796,320 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 Bottom, Adam and Adam reversal pattern from 01/20/2016 to 02/04/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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DJ 20 Transportation (^DJT)
Industry: None
Industry RS rank is unavailable.
2/4/16 close: $7,051.25
1 Month avg volatility: $185.93. Volatility stop (for downward breakout): $7,430.50 or 5.4% above the close.
Change YTD: -6.09%
Volume: 22,183,500 shares. 3 month avg: 19,608,149 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, right-angled and ascending reversal pattern from 01/25/2016 to 02/04/2016
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Dow Chemical (DOW)
Industry: Chemical (Basic)
Industry RS rank: 29 out of 56
Stock RS rank: 137 out of 639
2/4/16 close: $47.39
1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $43.76 or 7.7% below the close.
Change YTD: -7.94%
Volume: 13,177,300 shares. 3 month avg: 11,811,280 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/20/2016 to 01/29/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Dupont (DD)
Industry: Chemical (Basic)
Industry RS rank: 29 out of 56
Stock RS rank: 64 out of 639
2/4/16 close: $59.10
1 Month avg volatility: $2.02. Volatility stop (for upward breakout): $54.42 or 7.9% below the close.
Change YTD: -11.26%
Volume: 5,948,000 shares. 3 month avg: 6,304,072 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/20/2016 to 01/29/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 5%.
Throwbacks occur 64% of the time.
Price hits measure rule target 66% of the time.

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Global Payments Inc (GPN)
Industry: Computer Software and Svcs
Industry RS rank: 40 out of 56
Stock RS rank: 116 out of 639
2/4/16 close: $57.69
1 Month avg volatility: $2.07. Volatility stop (for upward breakout): $52.72 or 8.6% below the close.
Change YTD: -10.57%
Volume: 1,055,700 shares. 3 month avg: 2,073,503 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: Diamond bottom reversal pattern from 01/14/2016 to 02/04/2016
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Hologic Inc (HOLX)
Industry: Medical Supplies
Industry RS rank: 10 out of 56
Stock RS rank: 376 out of 639
2/4/16 close: $35.17
1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $32.40 or 7.9% below the close.
Change YTD: -9.10%
Volume: 1,296,200 shares. 3 month avg: 2,519,000 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Diamond bottom reversal pattern from 01/15/2016 to 02/04/2016
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Horton, D.R. Inc. (DHI)
Industry: Homebuilding
Industry RS rank: 50 out of 56
Stock RS rank: 285 out of 639
2/4/16 close: $25.67
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $23.19 or 9.7% below the close.
Change YTD: -19.86%
Volume: 5,848,500 shares. 3 month avg: 5,748,315 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 01/13/2016 to 02/01/2016
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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IDEXX Laboratories, Inc (IDXX)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 45 out of 56
Stock RS rank: 197 out of 639
2/4/16 close: $71.78
1 Month avg volatility: $1.94. Volatility stop (for upward breakout): $67.30 or 6.2% below the close.
Change YTD: -1.56%
Volume: 279,000 shares. 3 month avg: 667,328 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 01/19/2016 to 01/25/2016
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Integrated Device Technology (IDTI)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 14 out of 56
Stock RS rank: 235 out of 639
2/4/16 close: $18.69
1 Month avg volatility: $0.96. Volatility stop (for downward breakout): $21.11 or 12.9% above the close.
Change YTD: -29.07%
Volume: 4,327,000 shares. 3 month avg: 3,333,432 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: Dead-cat bounce continuation pattern from 02/02/2016 to 02/02/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Manhattan Associates (MANH)
Industry: IT Services
Industry RS rank: 9 out of 56
Stock RS rank: 403 out of 639
2/4/16 close: $53.72
1 Month avg volatility: $2.46. Volatility stop (for upward breakout): $48.35 or 10.0% below the close.
Change YTD: -18.82%
Volume: 501,000 shares. 3 month avg: 612,377 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Broadening bottom reversal pattern from 01/12/2016 to 02/03/2016
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Martin Marietta Materials, Inc (MLM)
Industry: Cement and Aggregates
Industry RS rank: 49 out of 56
Stock RS rank: 495 out of 639
2/4/16 close: $124.41
1 Month avg volatility: $5.13. Volatility stop (for upward breakout): $111.79 or 10.2% below the close.
Change YTD: -8.91%
Volume: 1,428,600 shares. 3 month avg: 953,883 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, ascending reversal pattern from 01/19/2016 to 02/04/2016
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Matrix Service Co. (MTRX)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 42 out of 56
Stock RS rank: 298 out of 639
2/4/16 close: $17.06
1 Month avg volatility: $1.26. Volatility stop (for downward breakout): $20.45 or 19.9% above the close.
Change YTD: -16.94%
Volume: 542,200 shares. 3 month avg: 216,577 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: Dead-cat bounce continuation pattern from 02/04/2016 to 02/04/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Merck and Co., Inc. (MRK)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 45 out of 56
Stock RS rank: 394 out of 639
2/4/16 close: $48.59
1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $45.67 or 6.0% below the close.
Change YTD: -8.01%
Volume: 20,609,200 shares. 3 month avg: 11,296,482 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: Channel from 12/03/2015 to 02/04/2016

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Monsanto Co (MON)
Industry: Chemical (Diversified)
Industry RS rank: 26 out of 56
Stock RS rank: 238 out of 639
2/4/16 close: $95.32
1 Month avg volatility: $2.34. Volatility stop (for downward breakout): $100.07 or 5.0% above the close.
Change YTD: -3.25%
Volume: 9,526,500 shares. 3 month avg: 3,835,855 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, descending reversal pattern from 01/20/2016 to 02/03/2016
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price hits measure rule target 54% of the time.

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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 32 out of 56
Stock RS rank: 483 out of 639
2/4/16 close: $89.95
1 Month avg volatility: $4.76. Volatility stop (for downward breakout): $113.02 or 25.7% above the close.
Change YTD: -19.31%
Volume: 10,823,200 shares. 3 month avg: 1,405,652 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: Dead-cat bounce continuation pattern from 02/04/2016 to 02/04/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Sealed Air Corp (SEE)
Industry: Packaging and Container
Industry RS rank: 12 out of 56
Stock RS rank: 471 out of 639
2/4/16 close: $41.64
1 Month avg volatility: $1.39. Volatility stop (for upward breakout): $38.16 or 8.4% below the close.
Change YTD: -6.64%
Volume: 3,343,900 shares. 3 month avg: 1,936,975 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 01/19/2016 to 01/25/2016
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Stillwater Mining Co. (SWC)
Industry: Metals and Mining (Div.)
Industry RS rank: 11 out of 56
Stock RS rank: 450 out of 639
2/4/16 close: $6.72
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $5.68 or 15.5% below the close.
Change YTD: -21.59%
Volume: 3,257,400 shares. 3 month avg: 1,600,152 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 01/19/2016 to 01/25/2016
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price hits measure rule target 83% of the time.

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Vivus Inc (VVUS)
Industry: Biotechnology
Industry RS rank: 53 out of 56
Stock RS rank: 418 out of 639
2/4/16 close: $1.04
1 Month avg volatility: $0.07. Volatility stop (for downward breakout): $1.17 or 12.7% above the close.
Change YTD: 1.96%
Volume: 576,900 shares. 3 month avg: 1,390,915 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: Rectangle bottom continuation pattern from 12/07/2015 to 02/04/2016
Breakout is downward 55% of the time.
Average decline: 14%.
Break-even failure rate: 16%.
Pullbacks occur 69% of the time.
Price hits measure rule target 50% of the time.

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W. R. Berkley Corp (WRB)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 8 out of 56
Stock RS rank: 275 out of 639
2/4/16 close: $50.52
1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $47.81 or 5.4% below the close.
Change YTD: -7.73%
Volume: 644,200 shares. 3 month avg: 563,089 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triple bottom reversal pattern from 01/20/2016 to 02/03/2016
Breakout is upward 100% of the time.
Average rise: 37%.
Break-even failure rate: 4%.
Throwbacks occur 64% of the time.
Price hits measure rule target 64% of the time.

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Thursday 2/4/16. Intraday Market Direction: Nasdaq

The index dropped by -0.3% or -12.71 points. Since 02/05/1971 the index made 476 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 251 occasions.
     Average loss was -0.9% on 225 occasions.
Expect the index to close higher 52.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 98/168 or 58.3% of the time.
     The prediction of the index closing lower has been right 34/72 or 47.2% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

The index made a terrific looking double bottom at AB. This confirmed at C (red line) when the index closed above the red line.

A throwback appears at D, which also completed. The index now appears to be moving up. Thus, I expect a higher close tomorrow (Thursday).

$ $ $

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. Donate now to keep this website free.

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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  3,841.27    
 Monthly S1  4,172.76  331.48   
 Weekly S2  4,355.45  182.69   
 Daily S2  4,369.16  13.71   
 Low  4,424.47  55.31   
 Weekly S1  4,429.84  5.37   Yes! The Weekly S1 is close to the Low.
 Daily S1  4,436.70  6.86   Yes! The Daily S1 is close to the Weekly S1.
 61.8% Down from Intraday High  4,471.40  34.70   
 50% Down from Intraday High  4,485.90  14.50   
 Daily Pivot  4,492.01  6.11   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,500.39  8.38   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,504.24  3.85   Yes! The Close is close to the 38.2% Down from Intraday High.
 Weekly Pivot  4,521.90  17.66   
 Open  4,543.82  21.92   
 High  4,547.32  3.50   Yes! The High is close to the Open.
 Daily R1  4,559.55  12.23   Yes! The Daily R1 is close to the High.
 Weekly R1  4,596.29  36.74   
 Daily R2  4,614.86  18.57   
 Monthly Pivot  4,644.87  30.01   
 Weekly R2  4,688.35  43.47   
 Monthly R1  4,976.36  288.01   
 Monthly R2  5,448.47  472.12   

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