As of 03/22/2019   Industrials: 25,502 -460.19 -1.8%     Transports: 10,052 -233.37 -2.3%     Utilities: 784 +4.91 +0.6%     Nasdaq: 7,643 -196.29 -2.5%     S&P 500: 2,801 -54.17 -1.9%	YTD  +9.3%    +9.6%    +10.0%    +15.2%    +11.7%	Tom's Targets    Overview: 03/14/2019     26,900 or 25,200 by 04/01/2019   10,700 or 9,900 by 04/01/2019   800 or 750 by 04/15/2019   7,900 or 7,300 by 04/01/2019   2,875 or 2,700 by 04/01/2019
Chart pattern indicator: on 3/22/19

As of 03/22/2019   Industrials: 25,502 -460.19 -1.8%     Transports: 10,052 -233.37 -2.3%     Utilities: 784 +4.91 +0.6%     Nasdaq: 7,643 -196.29 -2.5%     S&P 500: 2,801 -54.17 -1.9%	YTD  +9.3%    +9.6%    +10.0%    +15.2%    +11.7%
Tom's Targets    Overview: 03/14/2019     26,900 or 25,200 by 04/01/2019   10,700 or 9,900 by 04/01/2019   800 or 750 by 04/15/2019   7,900 or 7,300 by 04/01/2019   2,875 or 2,700 by 04/01/2019
Chart pattern indicator: on 3/22/19

Monday 3/25/19. Market Monday: Utilities Soar. Why?

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

My Prediction

This is a chart of the Dow utilities on the daily scale.

Notice on Friday the index reached a new high even as the Dow plummeted 460 points. What's the deal?

The Federal Reserve announced that they would hold interest rates steady this year. That's good news for utilities which are hungry to borrow money and to do so cheaply.

The Dow industrials considered that bad news. But they also barked about a slowing economy not only in the US but worldwide.

So we have the Dow dropping and the utilities rising.

Does that mean you should buy utility stocks? They are a safe-haven in turbulent times mostly because they pay dividends. I buy them when they are priced low, with dividend rates yielding about 4.5% to 5% and hold them, sometimes selling when they are high.

Mostly, I use them to diversify my portfolio. Even as the market tanks, the yield helps cushion the blow. And in prior years, the utilities have soared above all others. That happened in 2015 when I was loaded with utility stocks. So there's upside potential in capital gains.

The chart shows a broadening top pattern (red lines) with an upward breakout followed by a throwback to the breakout price.

After the throwback completed, the index continued its upward move. That's how it should behave, so I look for more of an upward push.

A Brief Look Back

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

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

Swing Traders: Pivot Points

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

• Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
• S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
• If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
• In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
• A move outside of daily R1 or S1 usually does not mean a breakout.
• The odds suggest that the entire week's price action will remain between weekly R2 and S2.
• Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
• Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
• Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Consecutive Price Trends

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is over.

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example). However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

The industries I follow were the best (rank 1) and worst performing.

-- Thomas Bulkowski

Friday 3/22/19. Pattern Trading Setups for the Weekend.

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

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

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

There were 11 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 595 stocks searched, or 1.8%. 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 6 bullish chart patterns this week and 5 bearish ones with any remaining (4) 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

Weekly screen for chart patterns ending between 03/14/2019 and 03/21/2019. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Semiconductor

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

Industry RS rank: 34 out of 58

Stock RS rank: 395 out of 589

3/21/19 close: $27.89

1 Month avg volatility: $0.96. Volatility stop (for upward breakout): $23.79 or 14.7% below the close.

Change YTD: 51.08%

Volume: 127,889,800 shares. 3 month avg: 56,512,782 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: Pipe bottom reversal pattern from 03/04/2019 to 03/11/2019

WARNING: A dead-cat bounce occurred on 10/25/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/25/2019.

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Electric Utility (East)

Industry RS rank: 3 out of 58

Stock RS rank: 8 out of 589

3/21/19 close: $18.28

1 Month avg volatility: $0.33. Volatility stop (for downward breakout): $18.98 or 3.8% above the close.

Change YTD: 26.42%

Volume: 4,984,600 shares. 3 month avg: 5,494,342 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: Rising wedge reversal pattern from 12/12/2018 to 03/21/2019

Breakout is downward 69% of the time.

Average decline: 14%.

Break-even failure rate: 24%.

Pullbacks occur 63% of the time.

Price hits measure rule target 46% of the time.

Industry: Human Resources

Industry RS rank: 21 out of 58

Stock RS rank: 265 out of 589

3/21/19 close: $49.24

1 Month avg volatility: $1.29. Volatility stop (for upward breakout): $45.37 or 7.9% below the close.

Change YTD: -13.10%

Volume: 444,900 shares. 3 month avg: 549,046 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: Double Bottom, Adam and Adam reversal pattern from 03/11/2019 to 03/19/2019

WARNING: A dead-cat bounce occurred on 02/15/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 05/17/2019 and a 38% chance by 08/16/2019.

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.

Industry: Apparel

Industry RS rank: 50 out of 58

Stock RS rank: 589 out of 589

3/21/19 close: $1.05

1 Month avg volatility: $0.16. Volatility stop (for downward breakout): $1.53 or 45.9% above the close.

Change YTD: -58.17%

Volume: 5,612,300 shares. 3 month avg: 2,861,685 shares.

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

 

Chart pattern: Dead-cat bounce continuation pattern from 03/14/2019 to 03/15/2019

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Biotechnology

Industry RS rank: 47 out of 58

Stock RS rank: 556 out of 589

3/21/19 close: $226.88

1 Month avg volatility: $6.34. Volatility stop (for downward breakout): $248.45 or 9.5% above the close.

Change YTD: -24.60%

Volume: 21,571,600 shares. 3 month avg: 1,244,726 shares.

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

 

Chart pattern: Dead-cat bounce continuation pattern from 03/20/2019 to 03/21/2019

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Natural Gas (Distributor)

Industry RS rank: 20 out of 58

Stock RS rank: 12 out of 589

3/21/19 close: $3.31

1 Month avg volatility: $0.17. Volatility stop (for upward breakout): $2.67 or 19.3% below the close.

Change YTD: 92.44%

Volume: 2,424,600 shares. 3 month avg: 1,021,160 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: Flag, high and tight continuation pattern from 02/08/2019 to 03/21/2019

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.

Industry: Cement and Aggregates

Industry RS rank: 27 out of 58

Stock RS rank: 279 out of 589

3/21/19 close: $31.38

1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $32.17 or 2.5% above the close.

Change YTD: 19.09%

Volume: 522,400 shares. 3 month avg: 546,094 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: Diamond top reversal pattern from 02/21/2019 to 03/20/2019

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.

Industry: Natural Gas (Diversified)

Industry RS rank: 37 out of 58

Stock RS rank: 502 out of 589

3/21/19 close: $31.65

1 Month avg volatility: $0.94. Volatility stop (for upward breakout): $29.11 or 8.0% below the close.

Change YTD: 40.42%

Volume: 6,863,900 shares. 3 month avg: 4,704,349 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 03/04/2019 to 03/11/2019

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Healthcare Information

Industry RS rank: 14 out of 58

Stock RS rank: 578 out of 589

3/21/19 close: $14.00

1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $11.46 or 18.1% below the close.

Change YTD: -29.82%

Volume: 2,899,700 shares.

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

 

Chart pattern: Double Bottom, Adam and Adam reversal pattern from 03/07/2019 to 03/19/2019

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.

Industry: Diversified Co.

Industry RS rank: 39 out of 58

Stock RS rank: 520 out of 589

3/21/19 close: $21.97

1 Month avg volatility: $0.78. Volatility stop (for downward breakout): $23.87 or 8.7% above the close.

Change YTD: 10.62%

Volume: 328,700 shares. 3 month avg: 523,465 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, descending reversal pattern from 02/27/2019 to 03/21/2019

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.

Industry: Metal Fabricating

Industry RS rank: 18 out of 58

Stock RS rank: 217 out of 589

3/21/19 close: $31.92

1 Month avg volatility: $1.14. Volatility stop (for downward breakout): $34.47 or 8.0% above the close.

Change YTD: 1.01%

Volume: 25,300 shares. 3 month avg: 11,408 shares.

This security may be thinly traded (less than 100k 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: Rectangle bottom continuation pattern from 11/06/2018 to 03/21/2019

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.

Industry: Advertising

Industry RS rank: 10 out of 58

Stock RS rank: 106 out of 589

3/21/19 close: $75.02

1 Month avg volatility: $1.16. Volatility stop (for downward breakout): $77.55 or 3.4% above the close.

Change YTD: 2.43%

Volume: 1,469,900 shares. 3 month avg: 2,548,395 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: Diamond top reversal pattern from 01/11/2019 to 03/20/2019

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 58 out of 58

Stock RS rank: 558 out of 589

3/21/19 close: $2.14

1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $1.74 or 18.9% below the close.

Change YTD: 73.98%

Volume: 352,100 shares. 3 month avg: 605,192 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: Pipe bottom reversal pattern from 03/11/2019 to 03/11/2019

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Metals and Mining (Div.)

Industry RS rank: 23 out of 58

Stock RS rank: 463 out of 589

3/21/19 close: $16.98

1 Month avg volatility: $0.70. Volatility stop (for upward breakout): $14.84 or 12.6% below the close.

Change YTD: 66.80%

Volume: 1,361,100 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: Pipe bottom reversal pattern from 03/04/2019 to 03/11/2019

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Insurance (Diversified)

Industry RS rank: 28 out of 58

Stock RS rank: 405 out of 589

3/21/19 close: $34.62

1 Month avg volatility: $0.70. Volatility stop (for downward breakout): $36.18 or 4.5% above the close.

Change YTD: 17.84%

Volume: 1,867,800 shares. 3 month avg: 1,168,134 shares.

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

 

Chart pattern: Head-and-shoulders top reversal pattern from 02/06/2019 to 03/19/2019

Breakout is downward 100% of the time.

Average decline: 22%.

Break-even failure rate: 4%.

Pullbacks occur 50% of the time.

Price hits measure rule target 55% of the time.

Thursday 3/21/19. Intraday Market Direction: Nasdaq

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

$ $ $

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

At A, an ascending and inverted scallop appears in red. It's not clear that the pattern has completed. To finish, the index needs to close above the top of the pattern. Price could go down instead, of course.

The index also made a pattern at B. This is a broadening pattern, specifically, a right-angled and ascending broadening formation. Whew! That's a mouthful.

Notice how the index at A is below the cyan line (hard to see, but it is). That suggests weakness, that we'll open lower tomorrow. Or close lower. Or maybe both.

The probabilities suggest a higher close, though.

$ $ $

I updated the performance statistics in ascending and inverted scallops.

$ $ $

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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