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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
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Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 01/20/2017
19,827 94.85 0.5%
9,225 60.61 0.7%
658 0.48 0.1%
5,555 15.25 0.3%
2,271 7.62 0.3%
YTD
0.3%
2.0%
-0.2%
3.2%
1.5%
Tom's Targets    Overview: 01/18/2017
19,250 or 20,250 by 02/01/2017
8,800 or 9,500 by 02/01/2017
685 or 630 by 02/01/2017
5,700 or 5,400 by 02/01/2017
2,200 or 2,350 by 02/01/2017
Indus strength: None YTD
Mutt Losers: None YTD
Mutt Winners: None YTD

  Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

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Monday 1/23/17. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the monthly scale.

I show the Dow utility index not on the daily scale, but on the monthly. Yes, it's true.

However, on the daily chart, the index has been dropping since July. Despite that drop, the index posted the second best performance in 2016 (behind the transports) of the indices I follow.

As I get older and preservation of capital becomes more important, I have found that utility stocks can be a safe haven, especially when money market funds pay almost nothing.

Anyway, to the monthly chart.

Notice that the index has been moving upward in a nicely defined channel from the low in 2009. I show that channel, bounded by two red trendlines.

You can see how the index peaked at A (July) and has since dropped back to B, just as I described above.

If it stays inside the channel, then the index will soon bottom and turn up. That means a buying opportunity is coming. You can buy a utility stock with a high yield and reasonable payout ratio (below 90%) and ride it upward.

Just keep in mind that the indices (Dow) will peak in mid February and drop until early April, if the forecast is correct.

Maybe April will be the time to go shopping.

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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.

Tuesday: Down 58.96 points.
Wednesday: Down 22.05 points.
Thursday: Down 72.32 points.
Friday: Up 94.85 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 58.48 points or 0.3%.
The Nasdaq composite was down 18.79 points or 0.3%.
The S&P 500 index was down 3.3298 points or 0.1%.

Year to Date...

Dow Industrials
     0.9% down from the high of 19,999.63 on 01/06/2017.
     0.8% up from the low of 19,677.94 on 01/19/2017.
Nasdaq
     0.5% down from the high of 5,584.26 on 01/13/2017.
     2.9% up from the low of 5,397.99 on 01/03/2017.
S&P 500
     0.5% down from the high of 2,282.10 on 01/06/2017.
     1.2% up from the low of 2,245.13 on 01/03/2017.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 01/20/2017, the CPI had:

8 bearish patterns,
12 bullish patterns,
397 patterns waiting for breakout.
The CPI signal is 60.0%, which is neutral (between 35% and 65%).

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.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  19,725  19,776  19,810  19,861  19,895 
Weekly  19,591  19,709  19,796  19,914  20,001 
Monthly  19,513  19,670  19,835  19,992  20,157 
S&P500 (^GSPC): Daily  2,259  2,265  2,271  2,277  2,283 
Weekly  2,250  2,261  2,269  2,279  2,287 
Monthly  2,214  2,243  2,262  2,291  2,311 
Nasdaq (^IXIC): Daily  5,525  5,540  5,557  5,572  5,589 
Weekly  5,505  5,530  5,552  5,577  5,599 
Monthly  5,291  5,423  5,504  5,636  5,716 
  • 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 17.0%   Expect a reversal soon. 
 3 months up 29.9%   The trend may continue. 
 S & P 500 (^GSPC) 2 weeks down 15.6%   Expect a reversal soon. 
 3 months up 36.9%   The trend may continue. 
 Nasdaq composite (^IXIC) 1 week down 28.4%   The trend may continue. 
 3 months up 28.2%   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
33Triangle, symmetrical
10Rectangle top
9Triangle, ascending
9Channel
8Head-and-shoulders top
6Pipe bottom
4Triangle, descending
4Rising wedge
3Dead-cat bounce
3Falling wedge

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. Securities Brokerage1. Securities Brokerage
2. Insurance (Life)2. Insurance (Life)
3. Semiconductor3. Semiconductor
4. Trucking/Transp. Leasing4. Semiconductor Cap Equip.
5. Semiconductor Cap Equip.5. Trucking/Transp. Leasing
50. Electric Utility (West)50. Shoe
51. Biotechnology51. Electric Utility (West)
52. Toiletries/Cosmetics52. Furn/Home Furnishings
53. Household Products53. Toiletries/Cosmetics
54. Furn/Home Furnishings54. Household Products
55. Short ETFs55. Short ETFs
56. Apparel56. Apparel
57. Electric Utility (East)57. Electric Utility (East)

-- Thomas Bulkowski

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Friday 1/20/17. Pattern Trading Setups for the Weekend.

Addendum: I released a new version, 5.17, which I hope fixes the below bug. Again.

I released a new version of Patternz, 5.16. This fixes a bug, hopefully, that prevented the program from working correctly outside the U.S.

My email this morning says that two people have already broken it. Sigh. Back to the drawing board.

$ $ $

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 24 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 3.9%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 8 bullish chart patterns this week and 7 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AEISChannel      04/29/201601/19/2017Semiconductor
APATriangle, descending      01/03/201701/19/2017Petroleum (Producing)
BATriangle, ascending      12/13/201601/19/2017Aerospace/Defense
CBKDead-cat bounce      01/17/201701/17/2017Retail (Special Lines)
CWChannel      12/14/201601/19/2017Machinery
CYHead-and-shoulders top      12/08/201601/13/2017Semiconductor
HIGRectangle top      12/05/201601/17/2017Insurance (Prop/Casualty)
HONTriangle, ascending      12/14/201601/19/2017Aerospace/Defense
NSPChannel      11/10/201601/19/2017Human Resources
IDTITriangle, symmetrical      11/25/201601/17/2017Semiconductor
LNCRectangle top      12/12/201601/19/2017Insurance (Life)
MDCTriangle, symmetrical      12/02/201601/19/2017Homebuilding
NEERising wedge      12/14/201601/19/2017Electric Utility (East)
PETSTriple top      12/21/201601/17/2017Medical Services
PMCHead-and-shoulders top      12/29/201601/17/2017Medical Services
PRUTriangle, descending      12/14/201601/19/2017Insurance (Life)
XLTriangle, symmetrical      11/14/201601/19/2017Insurance (Diversified)
YUMERectangle top      12/09/201601/19/2017Advertising
ITBTriangle, symmetrical      01/03/201701/19/2017Homebuilding
DOGRectangle bottom      12/13/201601/18/2017Short ETFs
DXDRectangle bottom      12/13/201601/18/2017Short ETFs
IXCChannel      12/15/201601/19/2017Investment Co. (Foreign)
XLUTriangle, ascending      11/01/201601/19/2017Electric Utility (Central)
SKFBroadening bottom      12/08/201601/19/2017Short ETFs

 

Weekly screen for chart patterns ending between 01/12/2017 and 01/19/2017. 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.
 
Advanced Energy (AEIS)
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: 34 out of 613
1/19/17 close: $56.84
1 Month avg volatility: $1.35. Volatility stop (for upward breakout): $53.80 or 5.3% below the close.
Change YTD: 3.82%
Volume: 297,100 shares. 3 month avg: 336,725 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: Channel from 04/29/2016 to 01/19/2017

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Apache Corp. (APA)
Industry: Petroleum (Producing)
Industry RS rank: 14 out of 56
Stock RS rank: 164 out of 613
1/19/17 close: $62.22
1 Month avg volatility: $1.25. Volatility stop (for downward breakout): $65.49 or 5.3% above the close.
Change YTD: -1.97%
Volume: 2,212,300 shares. 3 month avg: 3,285,915 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 01/03/2017 to 01/19/2017
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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Boeing Company, The (BA)
Industry: Aerospace/Defense
Industry RS rank: 23 out of 56
Stock RS rank: 129 out of 613
1/19/17 close: $159.00
1 Month avg volatility: $1.85. Volatility stop (for upward breakout): $154.22 or 3.0% below the close.
Change YTD: 2.13%
Volume: 3,132,900 shares. 3 month avg: 3,381,174 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, ascending reversal pattern from 12/13/2016 to 01/19/2017
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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Christopher and Banks Corp (CBK)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 32 out of 56
Stock RS rank: 598 out of 613
1/19/17 close: $1.36
1 Month avg volatility: $0.11. Volatility stop (for downward breakout): $1.71 or 25.9% above the close.
Change YTD: -41.88%
Volume: 859,200 shares. 3 month avg: 368,711 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: Dead-cat bounce continuation pattern from 01/17/2017 to 01/17/2017
Breakout is downward 67% of the time.
Average decline: 18%.

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Curtiss-Wright (CW)
Industry: Machinery
Industry RS rank: 12 out of 56
Stock RS rank: 198 out of 613
1/19/17 close: $95.80
1 Month avg volatility: $1.66. Volatility stop (for upward breakout): $90.85 or 5.2% below the close.
Change YTD: -2.60%
Volume: 430,300 shares. 3 month avg: 281,475 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: Channel from 12/14/2016 to 01/19/2017

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Cypress Semiconductor (CY)
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: 422 out of 613
1/19/17 close: $11.18
1 Month avg volatility: $0.26. Volatility stop (for downward breakout): $11.99 or 7.2% above the close.
Change YTD: -2.27%
Volume: 3,884,600 shares. 3 month avg: 5,086,703 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: Head-and-shoulders top reversal pattern from 12/08/2016 to 01/13/2017
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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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 15 out of 56
Stock RS rank: 212 out of 613
1/19/17 close: $48.24
1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $46.63 or 3.4% below the close.
Change YTD: 1.24%
Volume: 3,465,200 shares. 3 month avg: 2,481,234 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: Rectangle top continuation pattern from 12/05/2016 to 01/17/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Honeywell International Inc (HON)
Industry: Aerospace/Defense
Industry RS rank: 23 out of 56
Stock RS rank: 398 out of 613
1/19/17 close: $117.91
1 Month avg volatility: $1.24. Volatility stop (for upward breakout): $114.82 or 2.6% below the close.
Change YTD: 1.78%
Volume: 2,413,200 shares. 3 month avg: 3,451,811 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, ascending reversal pattern from 12/14/2016 to 01/19/2017
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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Insperity (NSP)
Industry: Human Resources
Industry RS rank: 24 out of 56
Stock RS rank: 536 out of 613
1/19/17 close: $69.45
1 Month avg volatility: $1.68. Volatility stop (for upward breakout): $65.85 or 5.2% below the close.
Change YTD: -2.11%
Volume: 163,100 shares. 3 month avg: 153,674 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: Channel from 11/10/2016 to 01/19/2017

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Integrated Device Technology (IDTI)
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: 197 out of 613
1/19/17 close: $24.25
1 Month avg volatility: $0.66. Volatility stop (for upward breakout): $22.87 or 5.7% below the close.
Change YTD: 2.93%
Volume: 1,136,200 shares. 3 month avg: 1,924,018 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 11/25/2016 to 01/17/2017
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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Lincoln National Corp (LNC)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 20 out of 613
1/19/17 close: $66.69
1 Month avg volatility: $1.38. Volatility stop (for upward breakout): $63.32 or 5.1% below the close.
Change YTD: 0.63%
Volume: 1,699,300 shares. 3 month avg: 1,708,803 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: Rectangle top continuation pattern from 12/12/2016 to 01/19/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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MDC Holdings Inc. (MDC)
Industry: Homebuilding
Industry RS rank: 42 out of 56
Stock RS rank: 408 out of 613
1/19/17 close: $26.00
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $24.87 or 4.4% below the close.
Change YTD: 1.33%
Volume: 172,900 shares. 3 month avg: 381,774 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 12/02/2016 to 01/19/2017
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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NextEra Energy Inc (NEE)
Industry: Electric Utility (East)
Industry RS rank: 56 out of 56
Stock RS rank: 613 out of 613
1/19/17 close: $119.28
1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $122.94 or 3.1% above the close.
Change YTD: -0.15%
Volume: 1,175,500 shares. 3 month avg: 2,364,605 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: Rising wedge reversal pattern from 12/14/2016 to 01/19/2017
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.

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PetMed Express Inc. (PETS)
Industry: Medical Services
Industry RS rank: 36 out of 56
Stock RS rank: 183 out of 613
1/19/17 close: $22.23
1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $23.87 or 7.4% above the close.
Change YTD: -3.64%
Volume: 267,100 shares. 3 month avg: 183,343 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: Triple top reversal pattern from 12/21/2016 to 01/17/2017
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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PharMerica Corp (PMC)
Industry: Medical Services
Industry RS rank: 36 out of 56
Stock RS rank: 452 out of 613
1/19/17 close: $25.05
1 Month avg volatility: $0.70. Volatility stop (for downward breakout): $27.00 or 7.8% above the close.
Change YTD: -0.40%
Volume: 112,700 shares. 3 month avg: 268,812 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: Head-and-shoulders top reversal pattern from 12/29/2016 to 01/17/2017
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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Prudential Financial Inc (PRU)
Industry: Insurance (Life)
Industry RS rank: 2 out of 56
Stock RS rank: 41 out of 613
1/19/17 close: $104.76
1 Month avg volatility: $1.76. Volatility stop (for downward breakout): $109.55 or 4.6% above the close.
Change YTD: 0.67%
Volume: 2,078,300 shares. 3 month avg: 2,571,855 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, descending reversal pattern from 12/14/2016 to 01/19/2017
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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XL Group (XL)
Industry: Insurance (Diversified)
Industry RS rank: 16 out of 56
Stock RS rank: 165 out of 613
1/19/17 close: $37.33
1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $36.22 or 3.0% below the close.
Change YTD: 0.19%
Volume: 1,161,100 shares. 3 month avg: 1,994,068 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 11/14/2016 to 01/19/2017
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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YuMe Inc (YUME)
Industry: Advertising
Industry RS rank: 37 out of 56
Stock RS rank: 344 out of 613
1/19/17 close: $3.54
1 Month avg volatility: $0.13. Volatility stop (for upward breakout): $3.20 or 9.6% below the close.
Change YTD: -1.12%
Volume: 21,200 shares. 3 month avg: 62,671 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 12/09/2016 to 01/19/2017
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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DJ US Home construction index fund (ITB)
Industry: Homebuilding
Industry RS rank: 42 out of 56
Stock RS rank: 464 out of 613
1/19/17 close: $27.63
1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $26.84 or 2.8% below the close.
Change YTD: 0.55%
Volume: 2,224,200 shares. 3 month avg: 2,834,668 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 01/03/2017 to 01/19/2017
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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DJIA short 1x ProShares (DOG)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 485 out of 613
1/19/17 close: $19.05
1 Month avg volatility: $0.10. Volatility stop (for downward breakout): $19.30 or 1.3% above the close.
Change YTD: 0.05%
Volume: 564,900 shares. 3 month avg: 876,509 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/18/2017
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.

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DJIA short 2x ProShares (DXD)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 554 out of 613
1/19/17 close: $14.22
1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $14.60 or 2.7% above the close.
Change YTD: 0.28%
Volume: 1,265,300 shares. 3 month avg: 1,272,514 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: Rectangle bottom continuation pattern from 12/13/2016 to 01/18/2017
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.

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S and P Global Energy Sector Index fund (IXC)
Industry: Investment Co. (Foreign)
Industry RS rank: 34 out of 56
Stock RS rank: 279 out of 613
1/19/17 close: $34.46
1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $33.78 or 2.0% below the close.
Change YTD: -0.98%
Volume: 71,400 shares. 3 month avg: 282,509 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: Channel from 12/15/2016 to 01/19/2017

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SPDR Utilities Select Sector (XLU)
Industry: Electric Utility (Central)
Industry RS rank: 44 out of 56
Stock RS rank: 465 out of 613
1/19/17 close: $48.55
1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $47.41 or 2.3% below the close.
Change YTD: -0.04%
Volume: 13,742,500 shares. 3 month avg: 16,642,032 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, ascending reversal pattern from 11/01/2016 to 01/19/2017
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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UltraShort 2x Financials ProShares (SKF)
Industry: Short ETFs
Industry RS rank: 54 out of 56
Stock RS rank: 592 out of 613
1/19/17 close: $30.85
1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $29.26 or 5.2% below the close.
Change YTD: 0.82%
Volume: 59,600 shares. 3 month avg: 58,858 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Monday.
 
Chart pattern: Broadening bottom reversal pattern from 12/08/2016 to 01/19/2017
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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Thursday 1/19/17. Intraday Market Direction: Nasdaq

The index climbed by 0.3% or 16.92 points. Since 02/05/1971 the index made 611 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 335 occasions.
     Average loss was -0.7% on 276 occasions.
Expect the index to close higher 54.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 120/208 or 57.7% of the time.
     The prediction of the index closing lower has been right 41/80 or 51.2% 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.

The chart shows a head-and-shoulders bottom chart pattern with the left shoulder (LS), head, and right shoulder (RS) marked.

It's difficult on this chart to see if the pattern has confirmed as valid yet. By that, I mean the index has to close above the red neckline (at A) which connects the two armpits.

If it hasn't confirmed, then you're not looking at a head-and-shoulders bottom.

If it does confirm, then look for the index to rise. However, because confirmation is at the close, the opening could throw price anywhere.

$ $ $

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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© 2017 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,291.56    
 Monthly S1  5,423.61  132.04   
 Weekly S2  5,458.14  34.53   
 Monthly Pivot  5,503.93  45.80   
 Weekly S1  5,506.89  2.96   
 Daily S2  5,527.59  20.70   
 Low  5,534.77  7.18   
 Daily S1  5,541.62  6.85   
 61.8% Down from Intraday High  5,542.87  1.25   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  5,545.38  2.50   
 Weekly Pivot  5,545.58  0.20   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 Open  5,546.94  1.36   Yes! The Open is close to the Weekly Pivot.
 38.2% Down from Intraday High  5,547.88  0.94   Yes! The 38.2% Down from Intraday High is close to the Open.
 Daily Pivot  5,548.80  0.92   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  5,555.65  6.85   
 High  5,555.98  0.33   Yes! The High is close to the Close.
 Daily R1  5,562.83  6.85   
 Daily R2  5,570.01  7.18   
 Weekly R1  5,594.33  24.32   
 Weekly R2  5,633.02  38.68   
 Monthly R1  5,635.98  2.96   
 Monthly R2  5,716.30  80.33   

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