As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019
As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019

Bulkowski's Failures by Month

 

This article looks at the failures of chart patterns, sorted by the month in which the breakout occurred. First posted August 2015.

 

Summary

I sorted chart patterns that failed to see price rise more than 10% after the breakout by their breakout date.

The average failure rate for all qualifying chart patterns in the study was 8%.

The fall/winter months (February and October through December) had fewer failures and the spring/summer months (March, April, June and July) had more failures.

Background

I received an email that asked if August showed more chart pattern failures than other months. Since it was an easy question to answer, I started the research and found the result a day later.

The results are discussed in this article.

Methodology

I looked at the breakouts from the following chart patterns.

I used 1,263 stocks and found 23,487 chart patterns from 1988 to 2015. Not all stocks covered the entire range.

I sorted the breakout date according to the month in which it occurred.

For this test, I defined a chart pattern failure as one in which price failed to rise more than 10% after an upward breakout (to keep the sample counts high). The results are for bull markets only and for chart patterns that appear on the daily charts.

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Results

Table 1: Chart Pattern Failures Sorted by Month
Month Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  Dec 
Failure Rate8%7%10%10%8%11%11%8%8%6%6%7%
More/Less  Less  More  More   More  More    Less  Less  Less 

Table 1 shows the results, sorted by month. For example, in January 8% of the chart patterns failed to rise more that 10% after an upward breakout in a bull market (at the time of the breakout). The 8% value is the average failure rate for all qualifying chart patterns that I measured.

February showed fewer than average failures, as the "less" box in the "More/less" row signifies.

Based on the results, we can say that February, and October through December showed fewer failures and March, April, June and July showed more failures. Generally, the fall/winter months had fewer failures and the spring/summer months had more failures.

-- Thomas Bulkowski. Donate now to keep this website free.

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See Also

 

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My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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