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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 08/26/2016
18,395 -53.01 -0.3%
7,825 -43.49 -0.6%
667 -14.42 -2.1%
5,219 6.72 0.1%
2,169 -3.43 -0.2%
YTD
5.6%
4.2%
15.4%
4.2%
6.1%
Tom's Targets    Overview: 08/12/2016
19,000 or 18,000 by 09/01/2016
8,275 or 7,500 by 09/01/2016
710 or 680 by 09/01/2016
5,300 or 5,000 by 09/01/2016
2,225 or 2,125 by 09/01/2016

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Monday 8/29/16. Market Monday: The Week Ahead

My Prediction

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

I shows a picture of the S&P 500 index on the daily scale.

The chart shows another broadening top. It's the same as I have shown in the last two Monday postings in other indices.

I extended the top line knowing that September -- which is the worst performing month of the year -- is coming.

I expect the indices to show weakness and maybe it'll drop far enough to touch the trendline and rebound.

Perhaps we'll see it happen this week.

 

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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 23.15 points.
Tuesday: Up 17.88 points.
Wednesday: Down 65.82 points.
Thursday: Down 33.07 points.
Friday: Down 53.01 points.

For the Week...

The Dow industrials were down 157.17 points or 0.8%.
The Nasdaq composite was down 19.46 points or 0.4%.
The S&P 500 index was down 14.83 points or 0.7%.

Year to Date...

Dow Industrials
     1.5% down from the high of 18,668.44 on 08/15/2016.
     19.1% up from the low of 15,450.56 on 01/20/2016.
Nasdaq
     1.1% down from the high of 5,275.74 on 08/23/2016.
     24.0% up from the low of 4,209.76 on 02/11/2016.
S&P 500
     1.1% down from the high of 2,193.81 on 08/15/2016.
     19.8% 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
Personal income & consumption8:30 MC+Measures sources of income to predict future demand.
Personal consumption expenditures8:30 MC+Covers durables, non-durables, and services.
Consumer confidence10:00 TB-Surveys 5,000 households for trends.
Chicago purchasing managers index9:45 WBMonitors regional manufacturing activity.
Crude inventories10:30 W?My guess: Measures oil inventory.
Initial jobless claims8:30 ThC+Counts people filing for state unemployment benefits.
Productivity & costs8:30 ThD+Cost of producing a unit of output.
Construction spending10:00 ThDCovers residential/non-residential/public spending on new construction.
Auto & truck sales2:00 ThC-Monthly sales of domestically produced vehicles.
4 Employment reports8:30 FANonfarm payrolls, unemployment rate, avg workweek, hourly earnings.
Trade balance8:30 FC+Signals balance of exports & imports.
Factory orders10:00 FD+Durable/non-durable goods orders w/factory inventories.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

The chart pattern indicator is bearish with 2 of 3 half triangles showing (). Additional triangles are a measure of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  18,198  18,296  18,434  18,533  18,671 
Weekly  18,158  18,277  18,454  18,573  18,750 
Monthly  18,017  18,206  18,437  18,627  18,858 
S&P500 (^GSPC): Daily  2,145  2,157  2,172  2,185  2,200 
Weekly  2,141  2,155  2,174  2,188  2,207 
Monthly  2,124  2,146  2,170  2,193  2,216 
Nasdaq (^IXIC): Daily  5,160  5,189  5,221  5,251  5,283 
Weekly  5,145  5,182  5,229  5,266  5,313 
Monthly  4,975  5,097  5,186  5,308  5,398 
  • 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 down 16.0%   Expect a reversal soon. 
 1 month down 19.8%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 15.3%   Expect a reversal soon. 
 1 month down 20.5%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.6%   The trend may continue. 
 2 months up 38.0%   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 either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
27Triangle, symmetrical
11Pipe bottom
9Triangle, descending
8Broadening top
7Triangle, ascending
7Head-and-shoulders top
7Dead-cat bounce
5Rising wedge
5Flag
4Double Top, Eve 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. Natural Gas (Diversified)1. Natural Gas (Diversified)
2. Petroleum (Producing)2. Semiconductor
3. Semiconductor3. Petroleum (Producing)
4. Furn/Home Furnishings4. Cement and Aggregates
5. Cement and Aggregates5. Furn/Home Furnishings
50. Electric Utility (Central)50. Shoe
51. Trucking/Transp. Leasing51. Household Products
52. Electric Utility (East)52. Insurance (Prop/Casualty)
53. Shoe53. Electric Utility (East)
54. Retail Store54. Trucking/Transp. Leasing
55. Retail (Special Lines)55. Apparel
56. Apparel56. Retail (Special Lines)
57. Short ETFs57. Short ETFs

-- Thomas Bulkowski

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Friday 8/26/16. 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 30 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 633 stocks searched, or 4.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 19 bullish chart patterns this week and 6 bearish ones with any remaining (2) 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
AONTriangle, symmetrical      07/14/201608/25/2016Insurance (Diversified)
AGOTriangle, symmetrical      08/09/201608/25/2016Insurance (Life)
CDIDiamond top      08/16/201608/24/2016Human Resources
CSCOBroadening top      07/26/201608/25/2016Computers and Peripherals
CMTLTriangle, descending      07/22/201608/25/2016Telecom. Equipment
FBTriangle, symmetrical      08/02/201608/25/2016E-Commerce
FISTriangle, symmetrical      07/27/201608/25/2016Computer Software and Svcs
FORMTriangle, symmetrical      08/03/201608/19/2016Semiconductor
GISTriangle, symmetrical      07/19/201608/24/2016Food Processing
GNWFlag, high and tight      07/06/201608/25/2016Insurance (Life)
GFFTriangle, symmetrical      08/03/201608/22/2016Building Materials
HAYNTriangle, symmetrical      08/12/201608/25/2016Building Materials
HLPipe top      08/08/201608/15/2016Metals and Mining (Div.)
DHIBroadening bottom      08/05/201608/23/2016Homebuilding
LNCTriangle, ascending      08/09/201608/24/2016Insurance (Life)
MCHXTriangle, descending      08/11/201608/25/2016Advertising
MRKTriangle, symmetrical      08/05/201608/22/2016Drug
MOSTriangle, symmetrical      07/27/201608/22/2016Chemical (Diversified)
MLIHead-and-shoulders bottom      07/20/201608/22/2016Metal Fabricating
NWYFlag, high and tight      06/27/201608/19/2016Apparel
PCGBroadening top, right-angled and descending      07/06/201608/22/2016Electric Utility (West)
RTNChannel      04/05/201608/25/2016Aerospace/Defense
SETriangle, symmetrical      08/04/201608/23/2016Oilfield Svcs/Equipment
RIGTriangle, descending      08/02/201608/25/2016Oilfield Svcs/Equipment
USGBroadening bottom      08/01/201608/23/2016Building Materials
PAYTriangle, ascending      06/22/201608/25/2016Telecom. Equipment
WMTBroadening top      07/28/201608/24/2016Retail Store
RTHBroadening top, right-angled and ascending      07/12/201608/25/2016Retail Store
IBBDouble Top, Eve and Adam      08/04/201608/24/2016Biotechnology
XLBTriangle, ascending      07/27/201608/22/2016Building Materials

 

Weekly screen for chart patterns ending between 08/18/2016 and 08/25/2016. 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.
 
Aon Corp (AON)
Industry: Insurance (Diversified)
Industry RS rank: 16 out of 56
Stock RS rank: 289 out of 625
8/25/16 close: $110.11
1 Month avg volatility: $1.00. Volatility stop (for upward breakout): $107.41 or 2.5% below the close.
Change YTD: 19.41%
Volume: 606,100 shares. 3 month avg: 1,080,678 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, symmetrical continuation pattern from 07/14/2016 to 08/25/2016
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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Assured Guaranty Ltd. (AGO)
Industry: Insurance (Life)
Industry RS rank: 20 out of 56
Stock RS rank: 363 out of 625
8/25/16 close: $27.33
1 Month avg volatility: $0.35. Volatility stop (for upward breakout): $26.42 or 3.4% below the close.
Change YTD: 3.41%
Volume: 431,400 shares. 3 month avg: 910,222 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 08/09/2016 to 08/25/2016
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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CDI Corp (CDI)
Industry: Human Resources
Industry RS rank: 42 out of 56
Stock RS rank: 251 out of 625
8/25/16 close: $5.63
1 Month avg volatility: $0.23. Volatility stop (for downward breakout): $6.11 or 8.5% above the close.
Change YTD: -16.72%
Volume: 51,500 shares. 3 month avg: 101,226 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: Diamond top reversal pattern from 08/16/2016 to 08/24/2016
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Cisco Systems, Inc. (CSCO)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 56
Stock RS rank: 253 out of 625
8/25/16 close: $31.29
1 Month avg volatility: $0.34. Volatility stop (for downward breakout): $32.08 or 2.5% above the close.
Change YTD: 15.23%
Volume: 22,917,100 shares. 3 month avg: 23,432,752 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 07/26/2016 to 08/25/2016
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Comtech Telecommunications Corp (CMTL)
Industry: Telecom. Equipment
Industry RS rank: 40 out of 56
Stock RS rank: 617 out of 625
8/25/16 close: $12.78
1 Month avg volatility: $0.37. Volatility stop (for downward breakout): $13.83 or 8.2% above the close.
Change YTD: -36.39%
Volume: 237,200 shares. 3 month avg: 475,623 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 07/22/2016 to 08/25/2016
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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Facebook (FB)
Industry: E-Commerce
Industry RS rank: 7 out of 56
Stock RS rank: 291 out of 625
8/25/16 close: $123.89
1 Month avg volatility: $1.62. Volatility stop (for upward breakout): $119.87 or 3.3% below the close.
Change YTD: 18.37%
Volume: 10,723,200 shares. 3 month avg: 20,216,028 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Thursday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/02/2016 to 08/25/2016
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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Fidelity National Information Svcs (FIS)
Industry: Computer Software and Svcs
Industry RS rank: 11 out of 56
Stock RS rank: 100 out of 625
8/25/16 close: $79.61
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $77.75 or 2.3% below the close.
Change YTD: 31.37%
Volume: 1,031,800 shares. 3 month avg: 1,924,194 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 07/27/2016 to 08/25/2016
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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FormFactor Inc. (FORM)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 3 out of 56
Stock RS rank: 67 out of 625
8/25/16 close: $10.42
1 Month avg volatility: $0.37. Volatility stop (for upward breakout): $9.55 or 8.3% below the close.
Change YTD: 15.78%
Volume: 311,000 shares. 3 month avg: 481,460 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 08/03/2016 to 08/19/2016
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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General Mills Inc (GIS)
Industry: Food Processing
Industry RS rank: 15 out of 56
Stock RS rank: 218 out of 625
8/25/16 close: $71.39
1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $69.25 or 3.0% below the close.
Change YTD: 23.81%
Volume: 3,197,300 shares. 3 month avg: 3,275,778 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/19/2016 to 08/24/2016
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Genworth Financial Inc (GNW)
Industry: Insurance (Life)
Industry RS rank: 20 out of 56
Stock RS rank: 9 out of 625
8/25/16 close: $4.40
1 Month avg volatility: $0.16. Volatility stop (for upward breakout): $3.92 or 11.0% below the close.
Change YTD: 17.96%
Volume: 8,981,200 shares. 3 month avg: 7,649,578 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Flag, high and tight continuation pattern from 07/06/2016 to 08/25/2016
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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Griffon Corp (GFF)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 258 out of 625
8/25/16 close: $17.19
1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $16.32 or 5.1% below the close.
Change YTD: -3.43%
Volume: 109,200 shares. 3 month avg: 157,578 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/03/2016 to 08/22/2016
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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Haynes International Inc. (HAYN)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 122 out of 625
8/25/16 close: $39.41
1 Month avg volatility: $1.61. Volatility stop (for upward breakout): $35.41 or 10.2% below the close.
Change YTD: 7.41%
Volume: 55,600 shares. 3 month avg: 87,443 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 Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/12/2016 to 08/25/2016
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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Hecla Mining Co. (HL)
Industry: Metals and Mining (Div.)
Industry RS rank: 31 out of 56
Stock RS rank: 6 out of 625
8/25/16 close: $5.76
1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $6.46 or 12.2% above the close.
Change YTD: 204.76%
Volume: 16,003,600 shares. 3 month avg: 10,128,583 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 top reversal pattern from 08/08/2016 to 08/15/2016
Breakout is downward 100% of the time.
Average decline: 20%.
Break-even failure rate: 11%.
Pullbacks occur 41% of the time.
Price hits measure rule target 70% of the time.

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Horton, D.R. Inc. (DHI)
Industry: Homebuilding
Industry RS rank: 9 out of 56
Stock RS rank: 190 out of 625
8/25/16 close: $32.63
1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $31.37 or 3.9% below the close.
Change YTD: 1.87%
Volume: 1,851,400 shares. 3 month avg: 3,592,565 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: Broadening bottom reversal pattern from 08/05/2016 to 08/23/2016
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 20 out of 56
Stock RS rank: 119 out of 625
8/25/16 close: $46.43
1 Month avg volatility: $0.90. Volatility stop (for upward breakout): $43.98 or 5.3% below the close.
Change YTD: -7.62%
Volume: 1,384,100 shares. 3 month avg: 2,365,785 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, ascending reversal pattern from 08/09/2016 to 08/24/2016
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Marchex, Inc (MCHX)
Industry: Advertising
Industry RS rank: 44 out of 56
Stock RS rank: 616 out of 625
8/25/16 close: $2.81
1 Month avg volatility: $0.13. Volatility stop (for downward breakout): $3.12 or 10.9% above the close.
Change YTD: -27.76%
Volume: 33,300 shares. 3 month avg: 189,746 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 08/11/2016 to 08/25/2016
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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Merck and Co., Inc. (MRK)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 43 out of 56
Stock RS rank: 188 out of 625
8/25/16 close: $62.32
1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $60.56 or 2.8% below the close.
Change YTD: 17.99%
Volume: 7,947,700 shares. 3 month avg: 9,958,548 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 08/05/2016 to 08/22/2016
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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Mosaic Co (MOS)
Industry: Chemical (Diversified)
Industry RS rank: 17 out of 56
Stock RS rank: 326 out of 625
8/25/16 close: $28.50
1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $26.51 or 7.0% below the close.
Change YTD: 3.30%
Volume: 2,979,000 shares. 3 month avg: 5,534,089 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 07/27/2016 to 08/22/2016
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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Mueller Industries Inc. (MLI)
Industry: Metal Fabricating
Industry RS rank: 8 out of 56
Stock RS rank: 107 out of 625
8/25/16 close: $34.82
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $33.00 or 5.2% below the close.
Change YTD: 28.49%
Volume: 167,500 shares. 3 month avg: 151,531 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: Head-and-shoulders bottom reversal pattern from 07/20/2016 to 08/22/2016
Breakout is upward 100% of the time.
Average rise: 38%.
Break-even failure rate: 3%.
Throwbacks occur 45% of the time.
Price hits measure rule target 74% of the time.

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New York and Company Inc (NWY)
Industry: Apparel
Industry RS rank: 54 out of 56
Stock RS rank: 543 out of 625
8/25/16 close: $2.07
1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $1.80 or 13.1% below the close.
Change YTD: -9.61%
Volume: 92,900 shares. 3 month avg: 200,389 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: Flag, high and tight continuation pattern from 06/27/2016 to 08/19/2016
WARNING: A dead-cat bounce occurred on 05/20/2016. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 11/18/2016.
Breakout is upward 100% of the time.
Average rise: 69%.
Throwbacks occur 54% of the time.
Price hits measure rule target 90% of the time.

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PG and E (PCG)
Industry: Electric Utility (West)
Industry RS rank: 48 out of 56
Stock RS rank: 386 out of 625
8/25/16 close: $63.44
1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $61.69 or 2.8% below the close.
Change YTD: 19.27%
Volume: 1,841,400 shares. 3 month avg: 2,817,102 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: Broadening top, right-angled and descending continuation pattern from 07/06/2016 to 08/22/2016
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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Raytheon Co. (RTN)
Industry: Aerospace/Defense
Industry RS rank: 38 out of 56
Stock RS rank: 317 out of 625
8/25/16 close: $141.78
1 Month avg volatility: $1.56. Volatility stop (for upward breakout): $137.02 or 3.4% below the close.
Change YTD: 13.85%
Volume: 1,096,200 shares. 3 month avg: 1,819,822 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Channel from 04/05/2016 to 08/25/2016

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Spectra Energy Corp (SE)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 27 out of 56
Stock RS rank: 175 out of 625
8/25/16 close: $35.69
1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $34.61 or 3.0% below the close.
Change YTD: 49.08%
Volume: 3,079,300 shares. 3 month avg: 4,131,452 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Friday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/04/2016 to 08/23/2016
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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Transocean Inc. (RIG)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 27 out of 56
Stock RS rank: 197 out of 625
8/25/16 close: $10.07
1 Month avg volatility: $0.49. Volatility stop (for downward breakout): $11.39 or 13.2% above the close.
Change YTD: -18.66%
Volume: 10,436,800 shares. 3 month avg: 15,364,363 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, descending reversal pattern from 08/02/2016 to 08/25/2016
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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USG Corp (USG)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 75 out of 625
8/25/16 close: $28.11
1 Month avg volatility: $0.61. Volatility stop (for upward breakout): $26.73 or 4.9% below the close.
Change YTD: 15.73%
Volume: 697,100 shares. 3 month avg: 1,425,711 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 bottom reversal pattern from 08/01/2016 to 08/23/2016
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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VeriFone Systems, Inc (PAY)
Industry: Telecom. Equipment
Industry RS rank: 40 out of 56
Stock RS rank: 600 out of 625
8/25/16 close: $19.26
1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $18.35 or 4.7% below the close.
Change YTD: -31.26%
Volume: 1,196,800 shares. 3 month avg: 3,180,138 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, ascending reversal pattern from 06/22/2016 to 08/25/2016
WARNING: A dead-cat bounce occurred on 06/08/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 09/07/2016 and a 38% chance by 12/07/2016.
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Wal-Mart Stores Inc. (WMT)
Industry: Retail Store
Industry RS rank: 53 out of 56
Stock RS rank: 463 out of 625
8/25/16 close: $71.22
1 Month avg volatility: $0.98. Volatility stop (for downward breakout): $74.54 or 4.7% above the close.
Change YTD: 16.18%
Volume: 10,513,900 shares. 3 month avg: 8,382,542 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: Broadening top reversal pattern from 07/28/2016 to 08/24/2016
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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Market Vectors Retail (RTH)
Industry: Retail Store
Industry RS rank: 53 out of 56
Stock RS rank: 419 out of 625
8/25/16 close: $79.53
1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $81.25 or 2.2% above the close.
Change YTD: 2.33%
Volume: 14,600 shares. 3 month avg: 26,257 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 Thursday.
 
Chart pattern: Broadening top, right-angled and ascending reversal pattern from 07/12/2016 to 08/25/2016
Breakout is downward 66% of the time.
Average decline: 15%.
Break-even failure rate: 20%.
Pullbacks occur 65% of the time.
Price hits measure rule target 32% of the time.

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Nasdaq Biotechnology Index (IBB)
Industry: Biotechnology
Industry RS rank: 36 out of 56
Stock RS rank: 409 out of 625
8/25/16 close: $282.87
1 Month avg volatility: $5.39. Volatility stop (for downward breakout): $299.87 or 6.0% above the close.
Change YTD: -16.39%
Volume: 3,078,900 shares. 3 month avg: 1,624,038 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: Double Top, Eve and Adam reversal pattern from 08/04/2016 to 08/24/2016
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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SPDR Materials Select Sector (XLB)
Industry: Building Materials
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 6 out of 56
Stock RS rank: 240 out of 625
8/25/16 close: $49.01
1 Month avg volatility: $0.45. Volatility stop (for upward breakout): $47.82 or 2.4% below the close.
Change YTD: 12.87%
Volume: 3,388,200 shares. 3 month avg: 4,689,358 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, ascending reversal pattern from 07/27/2016 to 08/22/2016
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Thursday 8/25/16. Intraday Market Direction: Nasdaq

The index dropped by -0.8% or -42.39 points. Since 02/05/1971 the index made 241 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.9% on 118 occasions.
     Average loss was -1.3% on 123 occasions.
Expect the index to close lower 51.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 113/192 or 58.9% of the time.
     The prediction of the index closing lower has been right 37/75 or 49.3% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

As I looked at this picture, I drew a red trendline following the bottom of price movement over the last week. It follows a straight trend.

The measure rule for trendlines tells that the drop is over.

The vertical distance from B to A should approximately equal the drop from C to D.

The downward move nearly made it to the target at D. So I would expect a rebound tomorrow (Thursday). You already see part of that rebound in the last ten minutes or so.

I can see the index climbing to 5,230 before running into trouble and perhaps retracing to close lower and fulfill the prediction at the top of this page for a lower close.

$ $ $

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

-- Thomas Bulkowski

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© 2016 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,916.35    
 Monthly S1  5,067.02  150.67   
 Weekly S2  5,154.63  87.61   
 Monthly Pivot  5,169.19  14.56   
 Daily S2  5,171.42  2.23   Yes! The Daily S2 is close to the Monthly Pivot.
 Weekly S1  5,186.16  14.74   
 Daily S1  5,194.56  8.40   
 Low  5,205.64  11.08   
 Close  5,217.69  12.05   
 61.8% Down from Intraday High  5,227.55  9.86   
 Weekly Pivot  5,228.76  1.21   Yes! The Weekly Pivot is close to the 61.8% Down from Intraday High.
 Daily Pivot  5,228.77  0.01   Yes! The Daily Pivot is close to the Weekly Pivot.
 50% Down from Intraday High  5,234.31  5.54   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  5,241.08  6.77   
 Daily R1  5,251.91  10.82   
 Open  5,254.42  2.51   Yes! The Open is close to the Daily R1.
 Weekly R1  5,260.29  5.87   
 High  5,262.99  2.70   Yes! The High is close to the Weekly R1.
 Daily R2  5,286.12  23.13   
 Weekly R2  5,302.89  16.77   
 Monthly R1  5,319.86  16.97   
 Monthly R2  5,422.03  102.17   

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