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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 09/23/2016
18,261 -131.01 -0.7%
7,937 -26.13 -0.3%
694 -2.05 -0.3%
5,306 -33.77 -0.6%
2,165 -12.49 -0.6%
YTD
4.8%
5.7%
20.1%
6.0%
5.9%
Tom's Targets    Overview: 09/15/2016
17,800 or 18,600 by 10/01/2016
8,275 or 7,500 by 10/01/2016
710 or 650 by 10/01/2016
5,400 or 5,100 by 10/01/2016
2,080 or 2,225 by 10/01/2016

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Monday 9/26/16. 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.

I drew two horizontal red lines outlining support and resistance areas on the chart. I chose to connect the peaks for overhead resistance and the valleys for underlying support.

Those areas are where the index turned.

Notice at A that the index didn't quite make it down to the bottom line. That could be a bullish indication.

The dip is a chart pattern I've studied called a partial decline, in this case, in a rectangle top.

It suggests, but does not guarantee, that price will break out upward on the move from A to the top line. But as you can see, it appears the index is turning back down.

And that could mean a trip to the bottom trendline.

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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 3.63 points.
Tuesday: Up 9.79 points.
Wednesday: Up 163.74 points.
Thursday: Up 98.76 points.
Friday: Down 131.01 points.

For the Week...

The Dow industrials were up 137.65 points or 0.8%.
The Nasdaq composite was up 61.18 points or 1.2%.
The S&P 500 index was up 25.53 points or 1.2%.

Year to Date...

Dow Industrials
     2.2% down from the high of 18,668.44 on 08/15/2016.
     18.2% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     0.7% down from the high of 5,342.88 on 09/22/2016.
     26.0% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     1.3% down from the high of 2,193.81 on 08/15/2016.
     19.6% up from the low of 1,810.10 on 02/11/2016.

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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
New home sales10:00 MC+Shows sales of single-family homes.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Durable goods orders8:30 WBMeasures orders, shipments of goods with lifespans >3 years.
Crude inventories10:30 W?My guess: Measures oil inventory.
Gross domestic product8:30 ThBMeasures economic activity; GDP deflator measures inflation.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
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 sentiment10:00 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 09/23/2016, the CPI had:

9 bearish patterns,
13 bullish patterns,
400 patterns waiting for breakout.
The CPI signal is 59.1%, which is neutral (between 35% and 65%).

The chart pattern indicator is bullish 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  18,171  18,216  18,300  18,345  18,429 
Weekly  17,911  18,086  18,268  18,443  18,625 
Monthly  17,656  17,959  18,295  18,598  18,934 
S&P500 (^GSPC): Daily  2,158  2,161  2,167  2,171  2,177 
Weekly  2,116  2,140  2,160  2,184  2,204 
Monthly  2,085  2,125  2,159  2,199  2,233 
Nasdaq (^IXIC): Daily  5,284  5,295  5,312  5,323  5,340 
Weekly  5,171  5,238  5,291  5,358  5,410 
Monthly  5,004  5,155  5,249  5,400  5,494 
  • 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) 2 weeks up 29.6%   The trend may continue. 
 2 months down 10.0%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks up 30.0%   The trend may continue. 
 2 months down 10.7%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks up 32.9%   The trend may continue. 
 3 months up 30.1%   The trend may continue. 

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.

 Found Chart Pattern Name
24Triangle, symmetrical
16Pipe bottom
8Triangle, ascending
7Triangle, descending
7Broadening top
6Head-and-shoulders top
6Dead-cat bounce
5Rectangle top
5Triple bottom
4Double Top, Adam and Adam

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. Semiconductor1. Semiconductor
2. Natural Gas (Diversified)2. E-Commerce
3. E-Commerce3. Natural Gas (Diversified)
4. Medical Supplies4. Medical Services
5. Semiconductor Cap Equip.5. Biotechnology
50. Oilfield Svcs/Equipment50. Trucking/Transp. Leasing
51. Air Transport51. Air Transport
52. Retail (Special Lines)52. Retail (Special Lines)
53. Shoe53. Retail Store
54. Retail Store54. Shoe
55. Trucking/Transp. Leasing55. Oilfield Svcs/Equipment
56. Apparel56. Apparel
57. Short ETFs57. Short ETFs

-- Thomas Bulkowski

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Friday 9/23/16. 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 11 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 630 stocks searched, or 1.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 13 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 13 bullish chart patterns this week and 5 bearish ones with any remaining (1) 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

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ABAXPipe bottom      09/06/201609/12/2016Medical Supplies
AMATPipe bottom      09/06/201609/12/2016Semiconductor Cap Equip.
ARRSBroadening top      08/16/201609/19/2016Telecom. Equipment
ASNADead-cat bounce      09/20/201609/20/2016Apparel
BMRNTriangle, symmetrical      08/04/201609/22/2016Biotechnology
CGNXPipe bottom      09/06/201609/12/2016Precision Instrument
FLEXPipe bottom      09/06/201609/12/2016Electronics
FMCPipe bottom      09/06/201609/12/2016Chemical (Basic)
GNWTriangle, symmetrical      08/31/201609/22/2016Insurance (Life)
HHSTriangle, descending      07/21/201609/22/2016Advertising
HNIDead-cat bounce      09/20/201609/20/2016Furn/Home Furnishings
TILEHead-and-shoulders top      08/08/201609/19/2016Furn/Home Furnishings
KLACTriangle, symmetrical      09/13/201609/22/2016Semiconductor Cap Equip.
LAWSPipe bottom      09/06/201609/12/2016Metal Fabricating
NVDAPipe bottom      09/06/201609/12/2016Semiconductor
QCOMPipe bottom      09/06/201609/12/2016Telecom. Equipment
SRBroadening wedge, descending      08/23/201609/22/2016Natural Gas (Distributor)
TMOPipe bottom      09/06/201609/12/2016Precision Instrument
UNMDiamond top      09/02/201609/20/2016Insurance (Diversified)
SOXXPipe bottom      09/06/201609/12/2016Semiconductor
SMHPipe bottom      09/06/201609/12/2016Semiconductor
EPPBroadening top, right-angled and descending      08/10/201609/22/2016Investment Co. (Foreign)
THDPipe bottom      09/06/201609/12/2016Investment Co. (Foreign)
QLDPipe bottom      09/06/201609/12/2016Long ETFs

 

Weekly screen for chart patterns ending between 09/15/2016 and 09/22/2016. 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: 5 out of 56
Stock RS rank: 83 out of 622
9/22/16 close: $52.84
1 Month avg volatility: $1.03. Volatility stop (for upward breakout): $49.71 or 5.9% below the close.
Change YTD: -5.10%
Volume: 128,500 shares. 3 month avg: 152,492 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: Pipe bottom reversal pattern from 09/06/2016 to 09/12/2016
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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Applied Materials (AMAT)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 7 out of 56
Stock RS rank: 31 out of 622
9/22/16 close: $30.29
1 Month avg volatility: $0.59. Volatility stop (for upward breakout): $29.00 or 4.3% below the close.
Change YTD: 62.24%
Volume: 15,650,900 shares. 3 month avg: 12,995,748 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 09/06/2016 to 09/12/2016
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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Arris Group Inc. (ARRS)
Industry: Telecom. Equipment
Industry RS rank: 23 out of 56
Stock RS rank: 81 out of 622
9/22/16 close: $29.32
1 Month avg volatility: $0.67. Volatility stop (for downward breakout): $30.87 or 5.3% above the close.
Change YTD: -4.09%
Volume: 2,273,300 shares. 3 month avg: 2,008,798 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 08/16/2016 to 09/19/2016
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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Ascena Retail Group (ASNA)
Industry: Apparel
Industry RS rank: 55 out of 56
Stock RS rank: 617 out of 622
9/22/16 close: $5.91
1 Month avg volatility: $0.36. Volatility stop (for downward breakout): $6.65 or 12.5% above the close.
Change YTD: -40.00%
Volume: 5,624,800 shares. 3 month avg: 2,997,229 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 09/20/2016 to 09/20/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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BioMarin Pharmaceutical Inc (BMRN)
Industry: Biotechnology
Industry RS rank: 11 out of 56
Stock RS rank: 121 out of 622
9/22/16 close: $97.45
1 Month avg volatility: $3.28. Volatility stop (for upward breakout): $89.13 or 8.5% below the close.
Change YTD: -6.98%
Volume: 1,053,700 shares. 3 month avg: 1,853,849 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, symmetrical continuation pattern from 08/04/2016 to 09/22/2016
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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Cognex (CGNX)
Industry: Precision Instrument
Industry RS rank: 40 out of 56
Stock RS rank: 64 out of 622
9/22/16 close: $51.79
1 Month avg volatility: $0.95. Volatility stop (for upward breakout): $49.61 or 4.2% below the close.
Change YTD: 53.36%
Volume: 463,600 shares. 3 month avg: 372,506 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 09/06/2016 to 09/12/2016
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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Flextronics International Ltd (FLEX)
Industry: Electronics
Industry RS rank: 36 out of 56
Stock RS rank: 202 out of 622
9/22/16 close: $13.62
1 Month avg volatility: $0.21. Volatility stop (for upward breakout): $13.08 or 4.0% below the close.
Change YTD: 21.50%
Volume: 9,047,100 shares. 3 month avg: 4,754,912 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 09/06/2016 to 09/12/2016
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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FMC Corp. (FMC)
Industry: Chemical (Basic)
Industry RS rank: 44 out of 56
Stock RS rank: 139 out of 622
9/22/16 close: $48.90
1 Month avg volatility: $1.07. Volatility stop (for upward breakout): $46.62 or 4.7% below the close.
Change YTD: 24.97%
Volume: 542,500 shares. 3 month avg: 1,133,531 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 09/06/2016 to 09/12/2016
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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Genworth Financial Inc (GNW)
Industry: Insurance (Life)
Industry RS rank: 17 out of 56
Stock RS rank: 9 out of 622
9/22/16 close: $4.95
1 Month avg volatility: $0.24. Volatility stop (for upward breakout): $4.45 or 10.1% below the close.
Change YTD: 32.71%
Volume: 6,067,200 shares. 3 month avg: 8,772,140 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 08/31/2016 to 09/22/2016
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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Harte-Hanks Inc (HHS)
Industry: Advertising
Industry RS rank: 38 out of 56
Stock RS rank: 613 out of 622
9/22/16 close: $1.57
1 Month avg volatility: $0.09. Volatility stop (for downward breakout): $1.78 or 13.3% above the close.
Change YTD: -51.54%
Volume: 106,400 shares. 3 month avg: 346,962 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: Triangle, descending reversal pattern from 07/21/2016 to 09/22/2016
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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HNI (HON Industries) (HNI)
Industry: Furn/Home Furnishings
Industry RS rank: 16 out of 56
Stock RS rank: 265 out of 622
9/22/16 close: $41.59
1 Month avg volatility: $1.51. Volatility stop (for downward breakout): $44.96 or 8.1% above the close.
Change YTD: 15.34%
Volume: 529,000 shares. 3 month avg: 230,998 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: Dead-cat bounce continuation pattern from 09/20/2016 to 09/20/2016
Breakout is downward 67% of the time.
Average decline: 18%.

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Interface, Inc. (TILE)
Industry: Furn/Home Furnishings
Industry RS rank: 16 out of 56
Stock RS rank: 521 out of 622
9/22/16 close: $16.36
1 Month avg volatility: $0.40. Volatility stop (for downward breakout): $17.21 or 5.2% above the close.
Change YTD: -14.52%
Volume: 754,100 shares. 3 month avg: 591,375 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: Head-and-shoulders top reversal pattern from 08/08/2016 to 09/19/2016
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.

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KLA-Tencor Corporation (KLAC)
Industry: Semiconductor Cap Equip.
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 7 out of 56
Stock RS rank: 473 out of 622
9/22/16 close: $69.51
1 Month avg volatility: $1.29. Volatility stop (for upward breakout): $66.73 or 4.0% below the close.
Change YTD: 0.23%
Volume: 1,565,800 shares. 3 month avg: 1,394,648 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 09/13/2016 to 09/22/2016
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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Lawson Products (LAWS)
Industry: Metal Fabricating
Industry RS rank: 13 out of 56
Stock RS rank: 564 out of 622
9/22/16 close: $17.38
1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $16.19 or 6.9% below the close.
Change YTD: -25.57%
Volume: 11,800 shares. 3 month avg: 14,708 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: Pipe bottom reversal pattern from 09/06/2016 to 09/12/2016
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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NVidia Corp (NVDA)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 1 out of 56
Stock RS rank: 7 out of 622
9/22/16 close: $65.02
1 Month avg volatility: $1.51. Volatility stop (for upward breakout): $61.64 or 5.2% below the close.
Change YTD: 97.27%
Volume: 7,715,100 shares. 3 month avg: 10,185,628 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 09/06/2016 to 09/12/2016
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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Qualcomm Inc. (QCOM)
Industry: Telecom. Equipment
Industry RS rank: 23 out of 56
Stock RS rank: 93 out of 622
9/22/16 close: $63.52
1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $61.54 or 3.1% below the close.
Change YTD: 27.08%
Volume: 7,895,700 shares. 3 month avg: 8,631,460 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 09/06/2016 to 09/12/2016
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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Spire (SR)
Industry: Natural Gas (Distributor)
Industry RS rank: 15 out of 56
Stock RS rank: 456 out of 622
9/22/16 close: $65.76
1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $62.63 or 4.8% below the close.
Change YTD: 10.69%
Volume: 293,800 shares. 3 month avg: 229,017 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: Broadening wedge, descending reversal pattern from 08/23/2016 to 09/22/2016
Breakout is upward 79% of the time.
Average rise: 33%.
Break-even failure rate: 6%.
Throwbacks occur 53% of the time.
Price hits measure rule target 79% of the time.

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Thermo Electron Corp (TMO)
Industry: Precision Instrument
Industry RS rank: 40 out of 56
Stock RS rank: 215 out of 622
9/22/16 close: $157.66
1 Month avg volatility: $2.22. Volatility stop (for upward breakout): $151.23 or 4.1% below the close.
Change YTD: 11.15%
Volume: 1,599,000 shares. 3 month avg: 1,449,652 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 09/06/2016 to 09/12/2016
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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Unum Group (UNM)
Industry: Insurance (Diversified)
Industry RS rank: 14 out of 56
Stock RS rank: 235 out of 622
9/22/16 close: $35.51
1 Month avg volatility: $0.63. Volatility stop (for downward breakout): $37.05 or 4.3% above the close.
Change YTD: 6.67%
Volume: 1,420,600 shares. 3 month avg: 1,774,011 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: Diamond top reversal pattern from 09/02/2016 to 09/20/2016
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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iShares PHLX SOX Semiconductor Sector (SOXX)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 1 out of 56
Stock RS rank: 107 out of 622
9/22/16 close: $110.46
1 Month avg volatility: $1.55. Volatility stop (for upward breakout): $107.04 or 3.1% below the close.
Change YTD: 22.95%
Volume: 352,200 shares. 3 month avg: 560,865 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 09/06/2016 to 09/12/2016
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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Market Vectors Semiconductor (SMH)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 1 out of 56
Stock RS rank: 91 out of 622
9/22/16 close: $67.78
1 Month avg volatility: $0.94. Volatility stop (for upward breakout): $65.68 or 3.1% below the close.
Change YTD: 27.21%
Volume: 3,121,600 shares. 3 month avg: 2,746,080 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 09/06/2016 to 09/12/2016
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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MSCI Pacific ex-Japan Index fund (EPP)
Industry: Investment Co. (Foreign)
Industry RS rank: 29 out of 56
Stock RS rank: 314 out of 622
9/22/16 close: $41.96
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $41.10 or 2.1% below the close.
Change YTD: 9.30%
Volume: 454,700 shares. 3 month avg: 717,666 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 descending continuation pattern from 08/10/2016 to 09/22/2016
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

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MSCI Thailand Invest Mkt Index (THD)
Industry: Investment Co. (Foreign)
Industry RS rank: 29 out of 56
Stock RS rank: 252 out of 622
9/22/16 close: $74.75
1 Month avg volatility: $0.81. Volatility stop (for upward breakout): $72.80 or 2.6% below the close.
Change YTD: 27.47%
Volume: 217,800 shares. 3 month avg: 264,112 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 09/06/2016 to 09/12/2016
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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Nasdaq 100 long 2x Ultra QQQ ProShares (QLD)
Industry: Long ETFs
Industry RS rank: 28 out of 56
Stock RS rank: 105 out of 622
9/22/16 close: $87.21
1 Month avg volatility: $1.55. Volatility stop (for upward breakout): $83.58 or 4.2% below the close.
Change YTD: 11.29%
Volume: 900,200 shares. 3 month avg: 1,058,606 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: Pipe bottom reversal pattern from 09/06/2016 to 09/12/2016
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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Thursday 9/22/16. Intraday Market Direction: Nasdaq

The index climbed by 1.0% or 53.83 points. Since 02/05/1971 the index made 213 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 142 occasions.
     Average loss was -1.0% on 71 occasions.
Expect the index to close higher 66.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 115/195 or 59.0% of the time.
     The prediction of the index closing lower has been right 38/76 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.

I suppose you can call the combination of red and green lines an ascending triangle. It's not really, though...

The red line highlights support along the bottoms over the last several days. Notice that it trends upward.

I drew the green line near the tops of price, just to highlight that the index pushed through overhead resistance.

We could see the index drop a bit to touch the green line on Thursday (a throwback) before it resumes its upward move.

Today's rally was a surprise for me, a pleasant one. How do you spell green? M-O-N-E-Y.

$ $ $

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  5,037.05    
 Weekly S2  5,058.94  21.89   
 Monthly S1  5,166.12  107.18   
 Weekly S1  5,177.06  10.94   
 Daily S2  5,210.71  33.65   
 Weekly Pivot  5,215.92  5.21   Yes! The Weekly Pivot is close to the Daily S2.
 Monthly Pivot  5,226.86  10.94   
 Low  5,233.94  7.08   
 Daily S1  5,252.95  19.01   
 61.8% Down from Intraday High  5,258.95  6.00   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Open  5,263.65  4.70   Yes! The Open is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  5,266.67  3.02   Yes! The 50% Down from Intraday High is close to the Open.
 38.2% Down from Intraday High  5,274.39  7.72   
 Daily Pivot  5,276.17  1.78   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  5,295.18  19.01   
 High  5,299.40  4.22   Yes! The High is close to the Close.
 Daily R1  5,318.41  19.01   
 Weekly R1  5,334.04  15.63   
 Daily R2  5,341.63  7.59   
 Monthly R1  5,355.93  14.29   
 Weekly R2  5,372.90  16.97   
 Monthly R2  5,416.67  43.77   

Wednesday 9/21/16. A Look At Indicators

Picture of the chart pattern indicator

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

As the chart shows, the red vertical bar on the far right has been in place long enough to signal weakness.

Look at the indicator line, the blue one. It's still trending down from the July peak.

That trend is a concern for people still bullish.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...
On Monday, 29% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 27%.
The fewest was 25% on 09/07/2016.
And the most was 70% on 02/11/2016.
Shown as a blue line on the above chart...
The 527 stocks in my database are down an average of 16% from their yearly high.
A week ago, the average was 15%.
The peak was 14% on 08/23/2016.
And the bottom was 32% on 02/11/2016.

Both lines on this chart have suffered over the past week.

I think the prognosis is that we're about to see the indices drop, perhaps substantially. One instigating factor is Wednesday's FED meeting result. If they raise rates, the markets will likely drop. I guess we'll have to wait and see what they decide and the re-evaluate.

-- Thomas Bulkowski

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