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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
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Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 05/27/2016
17,873 44.93 0.3%
7,772 49.59 0.6%
656 0.99 0.2%
4,934 31.73 0.6%
2,099 8.96 0.4%
YTD
2.6%
3.5%
13.6%
-1.5%
2.7%
Tom's Targets    Overview: 05/12/2016
18,400 or 17,300 by 06/01/2016
7,300 or 8,100 by 06/01/2016
625 or 665 by 06/01/2016
5,050 or 4,750 by 06/15/2016
2,120 or 2,020 by 06/01/2016

  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.

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Tuesday 5/31/16. A 328% Gain

Picture of the CNO.

I took partial profit on a stock I've owned for years and want to discuss it with you.

Back on February 3, 2010, I bought shares in CNO, filled at 4.96. I show that point at A (monthly scale).

Unfortunately, I didn't log anything regarding the purchase.

As the chart shows, the stock moved up and down in waves before starting a nice upward trend in late 2011, but I wasn't in any hurry to sell.

Starting in 2012, the company began paying dividends, which added to the gain.

I sold 20% of my position today (Friday, 5/27) at 20.29 for three reasons. A cloud bank chart pattern said that the upside would be a slow move higher. It can take as long to push through the cloud as it took to make the climb to the bottom of the cloud.

I show that cloud bank as a thick blue line. The actual cloud is off the chart to the left.

Notice how the stock hit the bottom of the cloud at 18 (thin green line) from 2014 onward and move horizontally.

Another sell reason was diversification. At $5 a share, the cost of the stock didn't amount to much but now that it's above 20, it is one of my larger holdings.

Notice how the stock has moved horizontally since 2014. I haven't made much on the stock during that time, so there might be new positions that would see their values increase faster than CNO going forward. And yet, I feel that the stock still has lots of upside potential, as if it's about to jump off a flat base.

I still have 80% of the position left in my portfolio, so I can participate in more gains.

On the portion that I held over 6 years, I made 328%, including dividends, or over 50% a year.

If you are losing money in your trading or just want to kick back and relax instead of being stressed by your trading with meager gains, consider diversifying your portfolio with different trading styles (day trading, swing, position, buy and hold).

By that, I mean add some positions that you'll hold for a longer-than normal-time. In my case, I don't mind holding onto a stock for years, even though I also trade more frequently.

-- Thomas Bulkowski


Friday 5/27/16. 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 14 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 638 stocks searched, or 2.2%. 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 11 bullish chart patterns this week and 1 bearish ones with any remaining (1) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACGLTriangle, symmetrical      05/12/201605/26/2016Insurance (Prop/Casualty)
DOTriangle, symmetrical      05/02/201605/24/2016Oilfield Svcs/Equipment
EXPHorn bottom      05/02/201605/16/2016Cement and Aggregates
FOEDiamond top      05/13/201605/24/2016Chemical (Specialty)
ILMNTriangle, symmetrical      05/11/201605/20/2016Biotechnology
IPGTriangle, symmetrical      04/22/201605/26/2016Advertising
KELYATriangle, symmetrical      04/20/201605/26/2016Human Resources
MLHRTriangle, ascending      03/21/201605/26/2016Furn/Home Furnishings
MOSTriangle, symmetrical      05/12/201605/20/2016Chemical (Diversified)
NWYDead-cat bounce      05/20/201605/20/2016Apparel
PESFlag, high and tight      04/05/201605/26/2016Oilfield Svcs/Equipment
RLPipe bottom      05/09/201605/16/2016Apparel
SWNTriangle, symmetrical      05/06/201605/24/2016Natural Gas (Diversified)
IHITriangle, ascending      04/28/201605/26/2016Medical Supplies
EWUBroadening top      04/18/201605/25/2016Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 05/19/2016 and 05/26/2016. 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.
 
Arch Capital Group Ltd (ACGL)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 25 out of 56
Stock RS rank: 335 out of 630
5/26/16 close: $71.87
1 Month avg volatility: $1.25. Volatility stop (for upward breakout): $68.50 or 4.7% below the close.
Change YTD: 3.04%
Volume: 402,100 shares. 3 month avg: 335,606 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Monday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/12/2016 to 05/26/2016
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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Diamond Offshore (DO)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 149 out of 630
5/26/16 close: $25.30
1 Month avg volatility: $1.13. Volatility stop (for upward breakout): $23.02 or 9.0% below the close.
Change YTD: 19.91%
Volume: 2,187,300 shares. 3 month avg: 2,559,132 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 05/02/2016 to 05/24/2016
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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Eagle Materials Inc. (EXP)
Industry: Cement and Aggregates
Industry RS rank: 2 out of 56
Stock RS rank: 92 out of 630
5/26/16 close: $79.95
1 Month avg volatility: $1.85. Volatility stop (for upward breakout): $74.56 or 6.8% below the close.
Change YTD: 32.30%
Volume: 1,175,800 shares. 3 month avg: 658,648 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: Horn bottom reversal pattern from 05/02/2016 to 05/16/2016
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price hits measure rule target 76% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 36 out of 56
Stock RS rank: 86 out of 630
5/26/16 close: $13.90
1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $15.37 or 10.5% above the close.
Change YTD: 25.00%
Volume: 697,500 shares. 3 month avg: 730,405 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: Diamond top reversal pattern from 05/13/2016 to 05/24/2016
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Illumina Inc (ILMN)
Industry: Biotechnology
Industry RS rank: 47 out of 56
Stock RS rank: 550 out of 630
5/26/16 close: $143.12
1 Month avg volatility: $4.02. Volatility stop (for upward breakout): $134.00 or 6.4% below the close.
Change YTD: -25.44%
Volume: 563,600 shares. 3 month avg: 1,457,075 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: Triangle, symmetrical continuation pattern from 05/11/2016 to 05/20/2016
WARNING: A dead-cat bounce occurred on 04/19/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 07/19/2016 and a 38% chance by 10/18/2016.
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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Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 18 out of 56
Stock RS rank: 280 out of 630
5/26/16 close: $23.49
1 Month avg volatility: $0.31. Volatility stop (for upward breakout): $22.85 or 2.7% below the close.
Change YTD: 0.90%
Volume: 2,756,100 shares. 3 month avg: 4,329,180 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: Triangle, symmetrical continuation pattern from 04/22/2016 to 05/26/2016
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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Kelly Services A (KELYA)
Industry: Human Resources
Industry RS rank: 28 out of 56
Stock RS rank: 85 out of 630
5/26/16 close: $19.32
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $16.97 or 12.1% below the close.
Change YTD: 19.63%
Volume: 71,200 shares. 3 month avg: 143,648 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 04/20/2016 to 05/26/2016
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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Miller, Herman (MLHR)
Industry: Furn/Home Furnishings
Industry RS rank: 32 out of 56
Stock RS rank: 344 out of 630
5/26/16 close: $31.22
1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $29.70 or 4.9% below the close.
Change YTD: 8.78%
Volume: 162,200 shares. 3 month avg: 338,346 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, ascending reversal pattern from 03/21/2016 to 05/26/2016
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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Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 524 out of 630
5/26/16 close: $26.13
1 Month avg volatility: $1.04. Volatility stop (for upward breakout): $23.93 or 8.4% below the close.
Change YTD: -5.29%
Volume: 5,229,100 shares. 3 month avg: 5,713,040 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: Triangle, symmetrical continuation pattern from 05/12/2016 to 05/20/2016
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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New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 551 out of 630
5/26/16 close: $1.71
1 Month avg volatility: $0.16. Volatility stop (for downward breakout): $2.04 or 19.2% above the close.
Change YTD: -25.33%
Volume: 230,300 shares. 3 month avg: 231,595 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: Dead-cat bounce continuation pattern from 05/20/2016 to 05/20/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Pioneer Energy Services (PES)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 45 out of 56
Stock RS rank: 8 out of 630
5/26/16 close: $4.03
1 Month avg volatility: $0.24. Volatility stop (for upward breakout): $3.16 or 21.7% below the close.
Change YTD: 85.71%
Volume: 2,273,100 shares. 3 month avg: 776,251 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: Flag, high and tight continuation pattern from 04/05/2016 to 05/26/2016
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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Ralph Lauren Corp. (RL)
Industry: Apparel
Industry RS rank: 56 out of 56
Stock RS rank: 571 out of 630
5/26/16 close: $93.85
1 Month avg volatility: $2.54. Volatility stop (for upward breakout): $88.62 or 5.6% below the close.
Change YTD: -15.81%
Volume: 887,200 shares. 3 month avg: 1,197,922 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 05/09/2016 to 05/16/2016
WARNING: A dead-cat bounce occurred on 02/04/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/04/2016.
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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Southwestern Energy Company (SWN)
Industry: Natural Gas (Diversified)
Industry RS rank: 8 out of 56
Stock RS rank: 14 out of 630
5/26/16 close: $13.13
1 Month avg volatility: $0.86. Volatility stop (for upward breakout): $11.22 or 14.5% below the close.
Change YTD: 84.67%
Volume: 14,778,900 shares. 3 month avg: 19,751,817 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: Triangle, symmetrical continuation pattern from 05/06/2016 to 05/24/2016
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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DJ US Medical devices index fund (IHI)
Industry: Medical Supplies
Industry RS rank: 5 out of 56
Stock RS rank: 184 out of 630
5/26/16 close: $130.75
1 Month avg volatility: $1.30. Volatility stop (for upward breakout): $127.99 or 2.1% below the close.
Change YTD: 6.75%
Volume: 56,700 shares. 3 month avg: 117,405 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: Triangle, ascending reversal pattern from 04/28/2016 to 05/26/2016
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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MSCI United Kingdom Index (EWU)
Industry: Investment Co. (Foreign)
Industry RS rank: 37 out of 56
Stock RS rank: 380 out of 630
5/26/16 close: $16.47
1 Month avg volatility: $0.15. Volatility stop (for downward breakout): $16.85 or 2.3% above the close.
Change YTD: 2.04%
Volume: 7,598,800 shares. 3 month avg: 3,542,322 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 04/18/2016 to 05/25/2016
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.

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Thursday 5/26/16. Intraday Market Direction: Nasdaq

The index climbed by 0.7% or 33.83 points. Since 02/05/1971 the index made 387 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 242 occasions.
     Average loss was -0.8% on 145 occasions.
Expect the index to close higher 62.5% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 104/181 or 57.5% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% 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 looked at this chart and wondered where will price go tomorrow (Thursday).

Look at the ABC pattern. Price makes a strong move up from A to B, followed by a sideways move from B to C. That makes sense because price often needs a rest (BC) after a strong move up (AB).

Compare the ABC move with C-B1-C1. The big push occurs from C to B1, just as it did from A to B. Price continued higher on upward momentum and eased over to C1.

Could this move mean another strong push higher (like AB and C-B1) will happen tomorrow?

My gut says no, because trading the markets is not that easy.

Look at the trend going back to the left side of the chart. The index has moved sideways during most of that period. Thus, it appears that the index has stored enough energy to power another push upward.

Looking at the daily chart, we see that the index is reaching overhead resistance, attached with an exhaustion gap. It's not clear that this is an exhaustion gap (it could be a continuation), but combined with overhead resistance, it looks like the index could coast a bit higher on Thursday and then drop.

$ $ $

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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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,556.59    
 Weekly S2  4,675.30  118.71   
 Monthly S1  4,725.74  50.44   
 Weekly S1  4,785.10  59.36   
 Weekly Pivot  4,788.17  3.08   Yes! The Weekly Pivot is close to the Weekly S1.
 Monthly Pivot  4,847.53  59.36   
 Daily S2  4,857.89  10.36   
 Low  4,872.42  14.53   
 Daily S1  4,876.39  3.97   
 Open  4,877.18  0.79   Yes! The Open is close to the Daily S1.
 61.8% Down from Intraday High  4,885.04  7.86   
 50% Down from Intraday High  4,888.94  3.90   
 Daily Pivot  4,890.92  1.98   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High  4,892.83  1.91   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close  4,894.89  2.06   Yes! The Close is close to the 38.2% Down from Intraday High.
 Weekly R1  4,897.97  3.08   Yes! The Weekly R1 is close to the Close.
 Weekly R2  4,901.04  3.08   Yes! The Weekly R2 is close to the Weekly R1.
 High  4,905.45  4.41   
 Daily R1  4,909.42  3.97   
 Daily R2  4,923.95  14.53   
 Monthly R1  5,016.68  92.73   
 Monthly R2  5,138.47  121.79   

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.