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

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Bulkowski's Blog: ThePatternSite.com
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Busted
Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 10/24/2014
16,805 127.51 0.8%
8,569 82.62 1.0%
584 6.67 1.2%
4,484 30.93 0.7%
1,965 13.76 0.7%
YTD
1.4%
15.8%
19.0%
7.4%
6.3%
Tom's Targets    Overview: 10/10/2014
17,100 or 16,350 by 11/15/2014
8,700 or 8,000 by 11/01/2014
600 or 560 by 11/15/2014
4,600 or 4,200 by 11/15/2014
2,000 or 1,900 by 11/15/2014

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

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Monday 10/27/14. Market Monday: The Week Ahead

My Prediction

Picture of the S and P 500 index on the daily scale.

I show the S&P 500 index on the daily scale.

Although I have enjoyed participating in the meteoric rise of the indices over the past week or so, I'm worried.

Why?

Because such strong runs come to an end. When the run ends, what then?

The index could just drop. A string of bad earnings would cause this as would a surprising world event. Since earnings have been strong so far, I think a quick reversal is unlikely.

The index could resume its rise. That would probably occur after earnings season ends and there would need some good news to power it higher. I don't see that happening. Thus, I expect the index to drop. That's what I show on the chart. Once this upward run ends, I think the indices will move horizontally for a time (but they could coast up or down slightly) and then ease over and head down, retracing some of the gains. Once they bottom, that would be another buying opportunity going into the year end window dressing by mutual funds.

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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: Up 19.26 points.
Tuesday: Up 215.14 points.
Wednesday: Down 153.49 points.
Thursday: Up 216.58 points.
Friday: Up 127.51 points.

For the Week...

The Dow industrials were up 425 points or 2.6%.
The Nasdaq composite was up 225.28 points or 5.3%.
The S&P 500 index was up 77.82 points or 4.1%.

Year to Date...

Dow Industrials
     3.1% down from the high of 17,350.64 on 09/19/2014.
     9.5% up from the low of 15,340.69 on 02/05/2014.
Nasdaq
     2.8% down from the high of 4,610.57 on 09/19/2014.
     13.6% up from the low of 3,946.03 on 04/15/2014.
S&P 500
     2.7% down from the high of 2,019.26 on 09/19/2014.
     13.0% up from the low of 1,737.92 on 02/05/2014.

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Economic Reports

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

ReportTimeA-F
Rating
Description
Durable goods orders8:30 TBMeasures orders, shipments of goods with lifespans >3 years.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Crude inventories10:30 W?My guess: Measures oil inventory.
FOMC Rate decision2:00 W?The Federal Reserves reports on interest rate changes.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Gross domestic product8:30 ThBMeasures economic activity; GDP deflator measures inflation.
Personal income & consumption8:30 FC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 FC+Covers durables, non-durables, and services.
Chicago purchasing managers index9:45 FBMonitors regional manufacturing activity.
Michigan sentiment9:55 FB-Consumer sentiment: Measures strength of consumer spending.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 10/24/2014, the CPI had:

8 bearish patterns,
102 bullish patterns,
467 patterns waiting for breakout.
The CPI signal is 92.7%, which is bullish (>= 65%).

The chart pattern indicator is bullish with 1 of 3 full triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  16,594  16,700  16,756  16,862  16,918 
Weekly  16,075  16,440  16,626  16,991  17,177 
Monthly  15,223  16,014  16,646  17,437  18,069 
S&P500 (^GSPC): Daily  1,940  1,952  1,959  1,971  1,978 
Weekly  1,854  1,909  1,937  1,992  2,020 
Monthly  1,743  1,854  1,931  2,042  2,120 
Nasdaq (^IXIC): Daily  4,432  4,458  4,472  4,498  4,512 
Weekly  4,168  4,326  4,406  4,564  4,644 
Monthly  3,937  4,211  4,390  4,663  4,842 
  • 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 up 43.2%   Expect a random direction. 
 2 months down 11.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 42.5%   Expect a random direction. 
 2 months down 11.3%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 43.7%   Expect a random direction. 
 2 months down 15.8%   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: bullish.
Nasdaq Composite: bullish.
S&P 500 Index: bullish.
Dow Transports: bullish.
Dow Utilities: bullish.

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Earnings, Chart Patterns & Industries

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

 Found Chart Pattern Name
21Pipe bottom
12Head-and-shoulders top
5Rectangle top
5Triangle, symmetrical
5Broadening bottom
5Double Top, Eve and Eve
4Triangle, descending
4Broadening top
3Channel
3Head-and-shoulders bottom

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. Biotechnology1. Biotechnology
2. E-Commerce2. Shoe
3. Air Transport3. E-Commerce
4. Shoe4. Air Transport
5. Long ETFs5. Retail Store
50. Short ETFs50. Retail Building Supply
51. Natural Gas (Diversified)51. Toiletries/Cosmetics
52. Petroleum (Producing)52. Natural Gas (Diversified)
53. Toiletries/Cosmetics53. Petroleum (Producing)
54. Oilfield Svcs/Equipment54. Oilfield Svcs/Equipment

-- Thomas Bulkowski

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Friday 10/24/14. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 14 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 603 stocks searched, or 2.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 20 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 29 bullish chart patterns this week and 0 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

The following tips may help.

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

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AABroadening bottom      09/30/201410/22/2014Metals and Mining (Div.)
AELPipe bottom      10/06/201410/13/2014Insurance (Life)
AIZBroadening wedge, descending      09/02/201410/23/2014Insurance (Diversified)
BCPCPipe bottom      09/29/201410/13/2014Chemical (Specialty)
BECNPipe bottom      10/06/201410/13/2014Retail Building Supply
BIGHorn bottom      09/29/201410/13/2014Retail Store
BWSBroadening wedge, descending      09/11/201410/22/2014Shoe
BBWPipe bottom      10/06/201410/13/2014Retail (Special Lines)
CEPipe bottom      10/06/201410/13/2014Chemical (Basic)
CVGRounding bottom      09/15/201410/23/2014Computer Software and Svcs
CCRNTriangle, symmetrical      09/30/201410/23/2014Human Resources
FBPipe bottom      10/06/201410/13/2014E-Commerce
FMCPipe bottom      10/06/201410/13/2014Chemical (Basic)
FWRDBroadening top      07/16/201410/23/2014Trucking/Transp. Leasing
FRDV bottoms      09/22/201410/23/2014Building Materials
GGGPipe bottom      10/06/201410/13/2014Machinery
HTLDPipe bottom      10/06/201410/13/2014Trucking/Transp. Leasing
HGGHead-and-shoulders bottom      09/25/201410/17/2014Retail (Special Lines)
HDBroadening top      08/29/201410/23/2014Retail Building Supply
IPARPipe bottom      10/06/201410/13/2014Toiletries/Cosmetics
IBKRPipe bottom      10/06/201410/13/2014Securities Brokerage
IPGPipe bottom      10/06/201410/13/2014Advertising
IVCHead-and-shoulders bottom      09/16/201410/20/2014Medical Supplies
MHOPipe bottom      10/06/201410/13/2014Homebuilding
MDCPipe bottom      10/06/201410/13/2014Homebuilding
MONPipe bottom      10/06/201410/13/2014Chemical (Diversified)
POLPipe bottom      10/06/201410/13/2014Chemical (Specialty)
PHMPipe bottom      10/06/201410/13/2014Homebuilding
ROSTScallop, ascending      09/04/201410/23/2014Retail (Special Lines)
SXIPipe bottom      10/06/201410/13/2014Diversified Co.
VMCPipe bottom      10/06/201410/13/2014Cement and Aggregates
WERNPipe bottom      10/06/201410/13/2014Trucking/Transp. Leasing
EWZPipe top      10/06/201410/13/2014Investment Co. (Foreign)
ILFPipe top      10/06/201410/13/2014Investment Co. (Foreign)

 

Weekly screen for chart patterns ending between 10/16/2014 and 10/23/2014. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Alcoa (AA)
Industry: Metals and Mining (Div.)
Industry RS rank: 41 out of 53
Stock RS rank: 58 out of 595
Close as of 10/23/2014: $16.24
1 Month average volatility: $0.57. Volatility based stop (assuming upward breakout): $14.98 or 7.8% below the close.
Change YTD: 52.78%
Volume: 17,226,500 shares
3 month avg volume: 19,310,862 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening bottom reversal pattern from 09/30/2014 to 10/22/2014
Performance rank: 17 out of 23.
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price meets the measure rule target 59% of the time.

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American Equity Investment Life Holding (AEL)
Industry: Insurance (Life)
Industry RS rank: 14 out of 53
Stock RS rank: 233 out of 595
Close as of 10/23/2014: $24.24
1 Month average volatility: $0.50. Volatility based stop (assuming upward breakout): $22.88 or 5.6% below the close.
Change YTD: -8.11%
Volume: 534,900 shares
3 month avg volume: 500,800 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Assurant Inc (AIZ)
Industry: Insurance (Diversified)
Industry RS rank: 33 out of 53
Stock RS rank: 347 out of 595
Close as of 10/23/2014: $64.54
1 Month average volatility: $1.10. Volatility based stop (assuming upward breakout): $62.21 or 3.6% below the close.
Change YTD: -2.76%
Volume: 382,400 shares
3 month avg volume: 476,065 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Broadening wedge, descending reversal pattern from 09/02/2014 to 10/23/2014
Performance rank: 12 out of 23.
Breakout is upward 79% of the time.
Average rise: 33%.
Break-even failure rate: 6%.
Throwbacks occur 53% of the time.
Price meets the measure rule target 79% of the time.

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Balchem Corp (BCPC)
Industry: Chemical (Specialty)
Industry RS rank: 43 out of 53
Stock RS rank: 342 out of 595
Close as of 10/23/2014: $60.48
1 Month average volatility: $1.78. Volatility based stop (assuming upward breakout): $56.15 or 7.2% below the close.
Change YTD: 3.03%
Volume: 135,200 shares
3 month avg volume: 145,809 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 09/29/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Beacon Roofing Supply Inc. (BECN)
Industry: Retail Building Supply
Industry RS rank: 46 out of 53
Stock RS rank: 566 out of 595
Close as of 10/23/2014: $26.56
1 Month average volatility: $0.73. Volatility based stop (assuming upward breakout): $24.77 or 6.7% below the close.
Change YTD: -34.06%
Volume: 465,800 shares
3 month avg volume: 469,174 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Big Lots Inc. (BIG)
Industry: Retail Store
Industry RS rank: 5 out of 53
Stock RS rank: 76 out of 595
Close as of 10/23/2014: $45.80
1 Month average volatility: $1.11. Volatility based stop (assuming upward breakout): $43.35 or 5.4% below the close.
Change YTD: 41.84%
Volume: 912,600 shares
3 month avg volume: 933,045 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Horn bottom reversal pattern from 09/29/2014 to 10/13/2014
Performance rank: 14 out of 23.
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 9%.
Throwbacks occur 29% of the time.
Price meets the measure rule target 76% of the time.

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Brown Shoe Co Inc (BWS)
Industry: Shoe
Industry RS rank: 2 out of 53
Stock RS rank: 97 out of 595
Close as of 10/23/2014: $27.71
1 Month average volatility: $0.87. Volatility based stop (assuming upward breakout): $25.69 or 7.3% below the close.
Change YTD: -1.53%
Volume: 200,800 shares
3 month avg volume: 277,302 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening wedge, descending reversal pattern from 09/11/2014 to 10/22/2014
Performance rank: 12 out of 23.
Breakout is upward 79% of the time.
Average rise: 33%.
Break-even failure rate: 6%.
Throwbacks occur 53% of the time.
Price meets the measure rule target 79% of the time.

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Build-A-Bear Workshop Inc (BBW)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 21 out of 53
Stock RS rank: 37 out of 595
Close as of 10/23/2014: $15.00
1 Month average volatility: $0.60. Volatility based stop (assuming upward breakout): $13.44 or 10.4% below the close.
Change YTD: 98.68%
Volume: 871,500 shares
3 month avg volume: 149,651 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Celanese Corp (CE)
Industry: Chemical (Basic)
Industry RS rank: 20 out of 53
Stock RS rank: 339 out of 595
Close as of 10/23/2014: $57.85
1 Month average volatility: $1.63. Volatility based stop (assuming upward breakout): $54.22 or 6.3% below the close.
Change YTD: 4.59%
Volume: 1,162,400 shares
3 month avg volume: 1,009,815 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Convergys Corporation (CVG)
Industry: Computer Software and Svcs
Industry RS rank: 26 out of 53
Stock RS rank: 485 out of 595
Close as of 10/23/2014: $18.96
1 Month average volatility: $0.35. Volatility based stop (assuming upward breakout): $18.02 or 5.0% below the close.
Change YTD: -9.93%
Volume: 489,100 shares
3 month avg volume: 598,846 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Rounding bottom continuation pattern from 09/15/2014 to 10/23/2014
Performance rank: 5 out of 23.
Breakout is upward 100% of the time.
Average rise: 43%.
Break-even failure rate: 5%.
Throwbacks occur 40% of the time.
Price meets the measure rule target 57% of the time.

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Cross Country Healthcare Inc (CCRN)
Industry: Human Resources
Industry RS rank: 47 out of 53
Stock RS rank: 30 out of 595
Close as of 10/23/2014: $9.21
1 Month average volatility: $0.48. Volatility based stop (assuming upward breakout): $8.15 or 11.5% below the close.
Change YTD: -7.72%
Volume: 121,700 shares
3 month avg volume: 171,928 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 09/30/2014 to 10/23/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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Facebook (FB)
Industry: E-Commerce
Industry RS rank: 3 out of 53
Stock RS rank: 26 out of 595
Close as of 10/23/2014: $80.04
1 Month average volatility: $1.96. Volatility based stop (assuming upward breakout): $75.10 or 6.2% below the close.
Change YTD: 46.46%
Volume: 34,957,100 shares
3 month avg volume: 37,397,315 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 20 out of 53
Stock RS rank: 556 out of 595
Close as of 10/23/2014: $58.18
1 Month average volatility: $1.32. Volatility based stop (assuming upward breakout): $55.37 or 4.8% below the close.
Change YTD: -22.90%
Volume: 1,650,800 shares
3 month avg volume: 1,497,432 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Forward Air Corp (FWRD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 24 out of 53
Stock RS rank: 150 out of 595
Close as of 10/23/2014: $48.35
1 Month average volatility: $1.06. Volatility based stop (assuming downward breakout): $50.99 or 5.5% above the close.
Change YTD: 10.11%
Volume: 159,200 shares
3 month avg volume: 130,226 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Monday.
 
Chart pattern: Broadening top reversal pattern from 07/16/2014 to 10/23/2014
Performance rank: 18 out of 21.
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price meets the measure rule target 37% of the time.

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Friedman Industries Inc (FRD)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 36 out of 53
Stock RS rank: 448 out of 595
Close as of 10/23/2014: $7.66
1 Month average volatility: $0.14. Volatility based stop (assuming upward breakout): $7.20 or 6.0% below the close.
Change YTD: -9.88%
Volume: 25,000 shares
3 month avg volume: 12,372 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: V bottoms from 09/22/2014 to 10/23/2014

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Graco Incorporated (GGG)
Industry: Machinery
Industry RS rank: 42 out of 53
Stock RS rank: 230 out of 595
Close as of 10/23/2014: $76.27
1 Month average volatility: $1.60. Volatility based stop (assuming upward breakout): $70.80 or 7.2% below the close.
Change YTD: -2.37%
Volume: 349,500 shares
3 month avg volume: 262,975 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Heartland Express, Inc (HTLD)
Industry: Trucking/Transp. Leasing
Industry RS rank: 24 out of 53
Stock RS rank: 105 out of 595
Close as of 10/23/2014: $25.32
1 Month average volatility: $0.63. Volatility based stop (assuming upward breakout): $23.97 or 5.3% below the close.
Change YTD: 29.05%
Volume: 227,900 shares
3 month avg volume: 386,580 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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hhgregg, Inc (HGG)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 21 out of 53
Stock RS rank: 571 out of 595
Close as of 10/23/2014: $6.39
1 Month average volatility: $0.30. Volatility based stop (assuming upward breakout): $5.60 or 12.3% below the close.
Change YTD: -54.26%
Volume: 210,000 shares
3 month avg volume: 197,738 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 09/25/2014 to 10/17/2014
Performance rank: 7 out of 23.
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price meets the measure rule target 74% of the time.

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Home Depot, Inc (HD)
Industry: Retail Building Supply
Industry RS rank: 46 out of 53
Stock RS rank: 48 out of 595
Close as of 10/23/2014: $94.80
1 Month average volatility: $1.76. Volatility based stop (assuming downward breakout): $99.05 or 4.5% above the close.
Change YTD: 15.13%
Volume: 5,830,500 shares
3 month avg volume: 6,919,791 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Broadening top reversal pattern from 08/29/2014 to 10/23/2014
Performance rank: 18 out of 21.
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price meets the measure rule target 37% of the time.

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Inter Parfums Inc. (IPAR)
Industry: Toiletries/Cosmetics
Industry RS rank: 51 out of 53
Stock RS rank: 539 out of 595
Close as of 10/23/2014: $27.37
1 Month average volatility: $0.84. Volatility based stop (assuming upward breakout): $25.63 or 6.4% below the close.
Change YTD: -23.57%
Volume: 132,000 shares
3 month avg volume: 110,075 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Interactive Brokers Group Inc (IBKR)
Industry: Securities Brokerage
Industry RS rank: 8 out of 53
Stock RS rank: 169 out of 595
Close as of 10/23/2014: $25.75
1 Month average volatility: $0.54. Volatility based stop (assuming upward breakout): $24.59 or 4.5% below the close.
Change YTD: 5.79%
Volume: 863,400 shares
3 month avg volume: 425,295 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Interpublic Group of Companies (IPG)
Industry: Advertising
Industry RS rank: 25 out of 53
Stock RS rank: 159 out of 595
Close as of 10/23/2014: $18.62
1 Month average volatility: $0.45. Volatility based stop (assuming upward breakout): $17.46 or 6.2% below the close.
Change YTD: 5.20%
Volume: 3,932,200 shares
3 month avg volume: 5,520,954 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Invacare Corp. (IVC)
Industry: Medical Supplies
Industry RS rank: 7 out of 53
Stock RS rank: 561 out of 595
Close as of 10/23/2014: $13.14
1 Month average volatility: $0.53. Volatility based stop (assuming upward breakout): $11.15 or 15.2% below the close.
Change YTD: -43.39%
Volume: 302,300 shares
3 month avg volume: 188,588 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Head-and-shoulders bottom reversal pattern from 09/16/2014 to 10/20/2014
Performance rank: 7 out of 23.
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price meets the measure rule target 74% of the time.

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M/I Homes, Inc. (MHO)
Industry: Homebuilding
Industry RS rank: 27 out of 53
Stock RS rank: 261 out of 595
Close as of 10/23/2014: $21.92
1 Month average volatility: $0.67. Volatility based stop (assuming upward breakout): $20.00 or 8.8% below the close.
Change YTD: -13.87%
Volume: 414,300 shares
3 month avg volume: 242,757 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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MDC Holdings Inc. (MDC)
Industry: Homebuilding
Industry RS rank: 27 out of 53
Stock RS rank: 365 out of 595
Close as of 10/23/2014: $26.36
1 Month average volatility: $0.68. Volatility based stop (assuming upward breakout): $24.66 or 6.5% below the close.
Change YTD: -18.24%
Volume: 1,018,700 shares
3 month avg volume: 843,975 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Monsanto Co (MON)
Industry: Chemical (Diversified)
Industry RS rank: 30 out of 53
Stock RS rank: 270 out of 595
Close as of 10/23/2014: $112.81
1 Month average volatility: $1.96. Volatility based stop (assuming upward breakout): $108.64 or 3.7% below the close.
Change YTD: -3.21%
Volume: 5,187,400 shares
3 month avg volume: 4,312,206 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Thursday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Polyone Corp (POL)
Industry: Chemical (Specialty)
Industry RS rank: 43 out of 53
Stock RS rank: 323 out of 595
Close as of 10/23/2014: $36.61
1 Month average volatility: $0.94. Volatility based stop (assuming upward breakout): $34.22 or 6.5% below the close.
Change YTD: 3.56%
Volume: 879,600 shares
3 month avg volume: 827,422 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Pulte Homes Inc. (PHM)
Industry: Homebuilding
Industry RS rank: 27 out of 53
Stock RS rank: 181 out of 595
Close as of 10/23/2014: $19.51
1 Month average volatility: $0.54. Volatility based stop (assuming upward breakout): $17.62 or 9.7% below the close.
Change YTD: -4.22%
Volume: 13,924,300 shares
3 month avg volume: 5,953,269 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Ross Stores (ROST)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 21 out of 53
Stock RS rank: 69 out of 595
Close as of 10/23/2014: $80.08
1 Month average volatility: $1.52. Volatility based stop (assuming upward breakout): $76.37 or 4.6% below the close.
Change YTD: 6.87%
Volume: 1,659,600 shares
3 month avg volume: 1,690,580 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Scallop, ascending continuation pattern from 09/04/2014 to 10/23/2014
Performance rank: 16 out of 23.
Breakout is upward 80% of the time.
Average rise: 31%.
Break-even failure rate: 10%.
Throwbacks occur 58% of the time.
Price meets the measure rule target 58% of the time.

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Standex International Corp (SXI)
Industry: Diversified Co.
Industry RS rank: 38 out of 53
Stock RS rank: 21 out of 595
Close as of 10/23/2014: $78.16
1 Month average volatility: $1.70. Volatility based stop (assuming upward breakout): $74.23 or 5.0% below the close.
Change YTD: 24.30%
Volume: 26,300 shares
3 month avg volume: 51,280 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Vulcan Materials (VMC)
Industry: Cement and Aggregates
Industry RS rank: 40 out of 53
Stock RS rank: 403 out of 595
Close as of 10/23/2014: $60.24
1 Month average volatility: $1.60. Volatility based stop (assuming upward breakout): $56.14 or 6.8% below the close.
Change YTD: 1.38%
Volume: 1,195,300 shares
3 month avg volume: 1,024,097 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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Werner Enterprises, Inc (WERN)
Industry: Trucking/Transp. Leasing
Industry RS rank: 24 out of 53
Stock RS rank: 262 out of 595
Close as of 10/23/2014: $25.90
1 Month average volatility: $0.53. Volatility based stop (assuming upward breakout): $24.75 or 4.4% below the close.
Change YTD: 4.73%
Volume: 661,000 shares
3 month avg volume: 495,851 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Pipe bottom reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 2 out of 23.
Breakout is upward 100% of the time.
Average rise: 45%.
Break-even failure rate: 5%.
Throwbacks occur 44% of the time.
Price meets the measure rule target 83% of the time.

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MSCI Brazil Index fund (EWZ)
Industry: Investment Co. (Foreign)
Industry RS rank: 44 out of 53
Stock RS rank: 507 out of 595
Close as of 10/23/2014: $39.84
1 Month average volatility: $1.33. Volatility based stop (assuming downward breakout): $43.46 or 9.1% above the close.
Change YTD: -10.83%
Volume: 56,174,000 shares
3 month avg volume: 27,807,618 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe top reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 4 out of 21.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price meets the measure rule target 70% of the time.

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S and P Latin America 40 Index fund (ILF)
Industry: Investment Co. (Foreign)
Industry RS rank: 44 out of 53
Stock RS rank: 434 out of 595
Close as of 10/23/2014: $34.56
1 Month average volatility: $0.83. Volatility based stop (assuming downward breakout): $36.80 or 6.5% above the close.
Change YTD: -6.70%
Volume: 614,900 shares
3 month avg volume: 795,802 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Pipe top reversal pattern from 10/06/2014 to 10/13/2014
Performance rank: 4 out of 21.
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price meets the measure rule target 70% of the time.

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Thursday 10/23/14. Intraday Market Direction: Nasdaq

The index dropped by -0.8% or -36.63 points. Since 02/05/1971 the index made 230 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 113 occasions.
     Average loss was -1.4% on 117 occasions.
Expect the index to close lower 50.9% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 70/123 or 56.9% of the time.
     The prediction of the index closing lower has been right 26/52 or 50.0% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

There's not much to say about this figure. The index made a V-shaped drop as the red lines show.

The index slides through the right red line at A. That could mean the market is turning bearish for a spell. Think Elliott wave's simple ABC correction. Price moves down in a series of down-up-down steps. After it completes, a 5-wave move up returns.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  3,876.04    
 Weekly S2  4,080.54  204.50   
 Monthly S1  4,129.44  48.91   
 Weekly S1  4,231.69  102.25   
 Weekly Pivot  4,267.76  36.06   
 Daily S2  4,345.42  77.66   
 Daily S1  4,364.13  18.72   
 Monthly Pivot  4,370.01  5.87   
 Low  4,381.28  11.27   
 Close  4,382.85  1.57   Yes! The Close is close to the Low.
 Daily Pivot  4,400.00  17.15   
 61.8% Down from Intraday High  4,402.13  2.13   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  4,408.57  6.44   
 38.2% Down from Intraday High  4,415.01  6.44   
 Daily R1  4,418.71  3.70   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Weekly R1  4,418.91  0.20   Yes! The Weekly R1 is close to the Daily R1.
 Open  4,429.16  10.25   
 High  4,435.86  6.70   
 Daily R2  4,454.58  18.72   
 Weekly R2  4,454.98  0.40   Yes! The Weekly R2 is close to the Daily R2.
 Monthly R1  4,623.41  168.44   
 Monthly R2  4,863.98  240.56   

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