As of 11/22/2024   Indus: 44,297 +426.16 +1.0%     Trans: 17,367 +194.86 +1.1%     Utils: 1,067 -8.74 -0.8%     Nasdaq: 19,004 +31.23 +0.2%     S&P 500: 5,969 +20.63 +0.3%	YTD  +17.5%    +9.2%    +21.0%    +26.6%    +25.1%	Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,200 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/20/24

As of 11/22/2024   Indus: 44,297 +426.16 +1.0%     Trans: 17,367 +194.86 +1.1%     Utils: 1,067 -8.74 -0.8%     Nasdaq: 19,004 +31.23 +0.2%     S&P 500: 5,969 +20.63 +0.3%	YTD  +17.5%    +9.2%    +21.0%    +26.6%    +25.1%
Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,200 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/20/24

Tuesday 6/30/20. Slider Trading Quiz! Alpharma

$ $ $

I show a another slider trading quiz featuring an actual trade in Alpharma chart pattern.

$ $ $

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

-- Thomas Bulkowski

Monday 6/29/20. Market Monday: The Week Ahead

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

My Prediction

I ride a bicycle for exercise several times a week. My bike needed a tune up, so I rode it down to the bike shop and walked in the door (first time I entered a store other than a grocery store since the pandemic started). "Wait a minute," I said as the owner approached. I put on my mask. Did he have one on? No (and he chuckled as if a mask was unnecessary). Did his two employees have theirs on? One did, the other did not.

While he worked on my bike, I looked at the bicycles in the shop. The owner said he's sold out of every new bike. The 50 or so lining the walls were bikes waiting for repairs. He said that in the month of May, he sold 500% more bikes than a year ago. He said in 6 months, he's done more business than he did in all of last year.

A woman can in with her bike. She had a flat and needed it fixed. Did she wear a mask? Nope. Did you two young children wear a mask? Nope. Did they try to keep their distance from me? Nope. And yet the owner and the woman agreed that it was dumb to open bars in the midst of a pandemic. And yet they weren't social distancing nor wearing masks.

People are still not taking this pandemic seriously (or more likely is they got tired of doing so).

If the experts are correct, this is a continuation of the first wave as it spreads across the country. Some expect the second wave will be worse, perhaps hitting in the fall. I can see that happening first in New York City as they begin to reopen now.

People have become complacent. The youth feel invincible. And now we're seeing them getting sick. Hope they have good health insurance because a few weeks in the ICU at a hospital will make school loans seem like pocket change.

I live in one of the states where covid is spiking now. And based on what I saw, this is going to continue to get worse. A lot worse. And that tells me the market is going down.

So I'm going to hold off before employing my cash for a while longer. In a few weeks, we'll get earnings coming in and my guess is it'll be another bad surprise.

This is a chart of the S&P 500 index on the daily scale.

There's not much to show on the chart.

I drew the red trendline connecting two minor lows. It might support the index as it falls.

I drew another line (green) connecting two minor highs. It might also support price.

If we split the difference, I see the index dropping to 2,850, probably within the next 2 weeks. But it could be in week 3 or more as covid ramps up before the markets get really shook up.

I case I'm wrong about all of this, I'd like to mention the upside, but I just don't see any...

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 06/26/2020, the CPI had:

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

Swing Traders: Pivot Points

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

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

Here are the formulas:

Consecutive Price Trends

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

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

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

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

-- Thomas Bulkowski

Friday 6/26/20. Pattern Trading Setups for the Weekend.

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

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

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

There were 8 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 585 stocks searched, or 1.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 3 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 5 bullish chart patterns this week and 3 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

Weekly screen for chart patterns ending between 06/18/2020 and 06/25/2020. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Drug

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

Industry RS rank: 6 out of 58

Stock RS rank: 204 out of 580

6/25/20 close: $19.27

1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $17.14 or 11.0% below the close.

Change YTD: -5.54%

Volume: 1,948,500 shares. 3 month avg: 949,792 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 06/08/2020 to 06/15/2020

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Apparel

Industry RS rank: 57 out of 58

Stock RS rank: 580 out of 580

6/25/20 close: $1.52

1 Month avg volatility: $0.45. Volatility stop (for downward breakout): $2.53 or 66.6% above the close.

Change YTD: -80.17%

Volume: 747,800 shares. 3 month avg: 2,861,685 shares.

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

 

Chart pattern: Head-and-shoulders top reversal pattern from 05/27/2020 to 06/22/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/10/2020.

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.

Industry: Drug

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

Industry RS rank: 6 out of 58

Stock RS rank: 225 out of 580

6/25/20 close: $58.18

1 Month avg volatility: $1.49. Volatility stop (for upward breakout): $54.71 or 6.0% below the close.

Change YTD: -9.36%

Volume: 15,266,500 shares. 3 month avg: 5,378,746 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: Double Bottom, Adam and Adam reversal pattern from 06/15/2020 to 06/19/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

Industry: Food Processing

Industry RS rank: 23 out of 58

Stock RS rank: 123 out of 580

6/25/20 close: $43.71

1 Month avg volatility: $1.42. Volatility stop (for upward breakout): $38.71 or 11.4% below the close.

Change YTD: 2.25%

Volume: 594,700 shares. 3 month avg: 322,132 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: Double Bottom, Adam and Adam reversal pattern from 06/15/2020 to 06/22/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

Industry: Information Services

Industry RS rank: 12 out of 58

Stock RS rank: 40 out of 580

6/25/20 close: $52.93

1 Month avg volatility: $1.55. Volatility stop (for upward breakout): $48.69 or 8.0% below the close.

Change YTD: 21.09%

Volume: 1,321,000 shares. 3 month avg: 487,489 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 06/08/2020 to 06/15/2020

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Telecom. Equipment

Industry RS rank: 21 out of 58

Stock RS rank: 244 out of 580

6/25/20 close: $25.81

1 Month avg volatility: $0.84. Volatility stop (for downward breakout): $27.57 or 6.8% above the close.

Change YTD: -11.34%

Volume: 6,431,600 shares. 3 month avg: 5,449,098 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: Head-and-shoulders top reversal pattern from 06/10/2020 to 06/19/2020

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.

Industry: Computer Software and Svcs

Industry RS rank: 2 out of 58

Stock RS rank: 166 out of 580

6/25/20 close: $133.28

1 Month avg volatility: $3.75. Volatility stop (for downward breakout): $141.49 or 6.2% above the close.

Change YTD: -4.18%

Volume: 3,267,800 shares. 3 month avg: 1,473,917 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: Triple top reversal pattern from 06/08/2020 to 06/19/2020

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.

Industry: Advertising

Industry RS rank: 52 out of 58

Stock RS rank: 208 out of 580

6/25/20 close: $3.20

1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $2.60 or 18.7% below the close.

Change YTD: -10.61%

Volume: 19,300 shares. 3 month avg: 98,162 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: Triangle, symmetrical continuation pattern from 06/05/2020 to 06/25/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/07/2020.

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.

Industry: Medical Services

Industry RS rank: 14 out of 58

Stock RS rank: 4 out of 580

6/25/20 close: $27.98

1 Month avg volatility: $1.67. Volatility stop (for upward breakout): $23.12 or 17.4% below the close.

Change YTD: 73.47%

Volume: 5,148,100 shares. 3 month avg: 321,822 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: Flag, high and tight continuation pattern from 05/04/2020 to 06/25/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/10/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Medical Services

Industry RS rank: 14 out of 58

Stock RS rank: 9 out of 580

6/25/20 close: $36.59

1 Month avg volatility: $2.09. Volatility stop (for downward breakout): $41.33 or 13.0% above the close.

Change YTD: 55.57%

Volume: 544,900 shares. 3 month avg: 739,945 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: Roof, inverted reversal pattern from 05/26/2020 to 06/25/2020

Breakout is downward 50% of the time.

Average decline: 17%.

Break-even failure rate: 10%.

Pullbacks occur 56% of the time.

Price hits measure rule target 73% of the time.

Industry: Retail Building Supply

Industry RS rank: 5 out of 58

Stock RS rank: 16 out of 580

6/25/20 close: $130.82

1 Month avg volatility: $3.64. Volatility stop (for upward breakout): $121.33 or 7.3% below the close.

Change YTD: 40.00%

Volume: 829,800 shares. 3 month avg: 2,128,008 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 06/08/2020 to 06/15/2020

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.

Thursday 6/25/20. Intraday Market Direction: Nasdaq

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

$ $ $

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

This is a study in support.

I drew the red line first because I am fascinated how the index dropped to that line and held there. Price at A has moved horizontally, riding the (green) line.

Without knowing what was to happen today except knowing the index was going down a lot, I would guess the index would find support at the thin green line, B.

In my mind, that seemed to line up better than the red one. But the red line is near the very bottom of the support zone. The green line is more in the middle of it. (Support and resistance comes in areas, levels, or zones, not distinct points).

Along the top is a blue line connecting the peaks. The red and blue lines outline a pattern called a broadening formation, right-angled and ascending. They breakout upward 54% of the time, which is about random. An upward breakout would mean price has to climb to the top of the pattern and close above it. I don't see that happening.

I can see the index punching through the red line to see another down day. That's based partly on the above probabilities and partly from the scary news about covid.

Traders/people are going to be nervous/scared. Of course, if you look back at last Thursday, the index went horizontal and on Friday it jumped up at the open. That could happen here.

I'm voting for a continued decline, though.

$ $ $

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

Wednesday 6/24/20. A Look At Indicators: Bearish

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.

The chart pattern indicator turned bearish about 2 weeks ago and the signal remains intact. For a few days, there was a bullish signal, but it disappeared. Signals can change for up to a week.

Looking at the thin blue line near the bottom of the chart, we see the CPI dropping. That's bearish. Even as the indices today closed higher, it wasn't enough to pull many stocks upward.

Indeed, they seemed to open higher and fade. With covid racing across the country, the pandemic is growing worse. And that's going to take a toll on the indices, I think. However, what the impact will be is unknown.

We may have our answer when quarterly earnings come out in a few weeks.

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).

Both lines show a deterioration from a week ago.

The uptrend, which is clearer on the blue line, seems intact. The index continues to rise steadily, but wobbles during weakness. The weakness we see in the blue and red lines might be a reflection not of a trend change but of momentary weakness.

Regardless both charts are bearish. The prior chart shows the indicator recovering from the June low but struggling now. The above chart shows an uptrend with larger swings. I am reminded that periods of high volatility follow periods of low volatility. Maybe a trend will resume shortly and it might be down.

-- Thomas Bulkowski

Tuesday 6/23/20. Slider Quiz! Ameritrade

$ $ $

I show a another slider trading quiz featuring Ameritrade stock. This is based on an actual trade.

$ $ $

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

-- Thomas Bulkowski

Monday 6/22/20. Market Monday: The Week Ahead

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

My Prediction

As I write this, we've a storm approaching, just north of me, with winds that are shaking the house.

I show a picture of the Nasdaq.

The index has poked its head above the previous high and is now struggling to work it was higher/lower. You pick.

If it's lower then the pattern is a 2B.

Victor Sperandeo in his book, Trader Vic--Methods of a Wall Street Master describes the 2B pattern this way.

In an uptrend, if a higher high is made but fails to carry through, and then prices drop below the previous high, then the trend is apt to reverse. The converse is true for down trends. This observation applies in any of the three trends; short-term, intermediate-term, or long-term.

A 2B on a minor high or low will usually occur within one day or less of the time the high or low is made. For 2B's on intermediate highs or lows preceding a correction, the new high or low point will usually break within three to five days. At major market turning points, long-term 2B's, the new high or low will usually break within seven to ten days. In the stock market, after the new high is made, the failure to carry forward usually occurs on low to normal volume, and the confirmation of a reversal occurs on higher volume.

So there you have it.

Pray for rain. We could use it. It's been 22 days without...

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 06/19/2020, the CPI had:

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

Swing Traders: Pivot Points

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

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

Here are the formulas:

Consecutive Price Trends

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

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

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

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

-- Thomas Bulkowski

Friday 6/19/20. Pattern Trading Setups for the Weekend.

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

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

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

There were 7 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 586 stocks searched, or 1.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 3 bullish chart patterns this week and 1 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

Weekly screen for chart patterns ending between 06/11/2020 and 06/18/2020. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: E-Commerce

Industry RS rank: 7 out of 58

Stock RS rank: 52 out of 581

6/18/20 close: $100.69

1 Month avg volatility: $2.93. Volatility stop (for upward breakout): $93.70 or 6.9% below the close.

Change YTD: 16.57%

Volume: 1,355,500 shares. 3 month avg: 2,185,974 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 05/27/2020 to 06/18/2020

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.

Industry: Insurance (Life)

Industry RS rank: 57 out of 58

Stock RS rank: 547 out of 581

6/18/20 close: $25.58

1 Month avg volatility: $1.30. Volatility stop (for downward breakout): $29.19 or 14.1% above the close.

Change YTD: -47.82%

Volume: 1,170,400 shares. 3 month avg: 1,068,715 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 top reversal pattern from 05/27/2020 to 06/16/2020

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.

Industry: Financial Services

Industry RS rank: 18 out of 58

Stock RS rank: 262 out of 581

6/18/20 close: $6.18

1 Month avg volatility: $0.31. Volatility stop (for upward breakout): $5.41 or 12.4% below the close.

Change YTD: -9.38%

Volume: 378,900 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: Pennant continuation pattern from 06/05/2020 to 06/18/2020

WARNING: A dead-cat bounce occurred on 02/04/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/04/2020.

Breakout is upward 61% of the time.

Average rise: 25%.

Break-even failure rate: 2%.

Throwbacks occur 47% of the time.

Price hits measure rule target 60% of the time.

Industry: Petroleum (Producing)

Industry RS rank: 55 out of 58

Stock RS rank: 552 out of 581

6/18/20 close: $21.62

1 Month avg volatility: $1.57. Volatility stop (for downward breakout): $25.39 or 17.4% above the close.

Change YTD: -52.41%

Volume: 1,603,500 shares. 3 month avg: 1,539,165 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: Bump-and-run reversal, top reversal pattern from 05/06/2020 to 06/18/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/07/2020.

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 5%.

Pullbacks occur 62% of the time.

Price hits measure rule target 78% of the time.

Industry: Medical Supplies

Industry RS rank: 13 out of 58

Stock RS rank: 141 out of 581

6/18/20 close: $53.07

1 Month avg volatility: $1.64. Volatility stop (for upward breakout): $48.77 or 8.1% below the close.

Change YTD: 1.65%

Volume: 2,515,400 shares. 3 month avg: 3,130,522 shares.

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

 

Chart pattern: Rectangle top continuation pattern from 04/30/2020 to 06/18/2020

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.

Industry: Drug

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

Industry RS rank: 10 out of 58

Stock RS rank: 108 out of 581

6/18/20 close: $97.36

1 Month avg volatility: $3.31. Volatility stop (for upward breakout): $89.24 or 8.4% below the close.

Change YTD: 11.50%

Volume: 983,300 shares. 3 month avg: 1,771,434 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: Double Bottom, Adam and Adam reversal pattern from 06/05/2020 to 06/12/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

Industry: Electric Utility (Central)

Industry RS rank: 39 out of 58

Stock RS rank: 307 out of 581

6/18/20 close: $23.73

1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $22.01 or 7.3% below the close.

Change YTD: -14.76%

Volume: 1,997,300 shares. 3 month avg: 2,389,146 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 03/05/2020 to 06/18/2020

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.

Thursday 6/18/20. Intraday Market Direction: Nasdaq

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

$ $ $

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

The chart shows a few chart patterns, so let's talk about them.

The first is at AB. It's a double bottom. The two spikes bottom near the same price. The pattern confirms as valid when the index closed above the line at C.

That line touches the top of the pattern, the highest high between the two bottoms.

The measure rule, which uses the height of the pattern added to the top of it, gives a target. Price easily met the target and blew through it.

At D we have a double top. That pattern confirms in a similar way, when price closes below the low between the two valleys. That happened.

This double top isn't tall, so the index has already met the measure rule target as it dropped today (Wednesday).

The peak at D is close to the one last Wednesday, suggesting overhead resistance. Yesterday, the index formed what looks like a loose support zone at 9900, right where the index stopped trading today.

Even though the index dropped today, the chart pattern indicator climbed. And that has me mystified. It suggests there's underlying strength. That assessment agrees with the above probabilities, too. So maybe we'll see a higher close on Thursday.

$ $ $

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

Wednesday 6/17/20. A Look At Indicators

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.

In the past week, the indicator turned bearish as the red vertical line on the far right of the chart shows. It claims to have appeared the day after price peaked, but it actually appeared a few days later.

Today, though, the indicator has turned bullish, as noted by the green vertical line on the far right of the chart. That signal appeared today, not yesterday despite what the chart shows.

I know. It's all confusing. Let me just say that signals can appear or disappear for up to a week.

At any rate, the indicator is signaling a bullish turn. The thin blue line at the bottom of the chart also appears to have climbed to the top of its scale (or nearly so).

If the market were to make a substantial downturn tomorrow (Wednesday), then the signal would disappear, too, just as quickly as it appeared.

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).

Both lines, compared to a week ago, are below what they were then. That's no surprise given that the market tumbled from a week ago. Today's rise helped but not enough.

What does all of this mean? The CPI chart is bullish. This chart is also bullish. So am I bullish? Yes, but am still waiting for the markets to accept that covid is going to hit us with a second wave. We're seeing that in China. Several states (it varies from day to day) are showing higher rates of hospitalization. "That's because of increased testing," some claim.

The infection rate, sure, but not the hospitalization rate. And it's getting worse.

I've decided that I'll come out of my cave when they have a vaccine ready. If we're lucky, that'll be sometime next year.

-- Thomas Bulkowski

Tuesday 6/16/20. Slider Quiz! Alaska Air

$ $ $

Ever since the pandemic started, I've wondered about the cost of hospitalization. I have my answer. One man got Covid and was placed in the hospital's ICU for 2 months. He got the bill: 180 pages long. Cost? $1.1 million.

If that's not a reason for obeying social distancing and covering your face with a mask, then I don't know what is. Imagine what these types of costs are going to do to your health insurance premium in the coming years...

$ $ $

I show a another slider trading quiz featuring Alaska Air.

$ $ $

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

-- Thomas Bulkowski

Monday 6/15/20. Market Monday: Dow Finding Support

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

My Prediction

This is a picture of the Dow industrials on the weekly scale, which is different from my usual (daily scale). Yes, it's Friday night and I'm feeling ornery.

Anyway, I thought I'd look at what I could see.

I drew two green lines surrounding the current week. The top line, C, is overhead resistance. The bottom line, B, is support.

I can see the top green line hitting resistance setup by the two peaks near the left start of the top green line.

B looks to be in the middle of a horizontal move dating back to the far left of the chart.

Because I expect the index to continue lower, I want to know, how much lower?

I circled area A, in red.

In the middle of the circle, I drew a horizontal red line to see where it lined up with that horizontal move. You can see it's near the bottom of the range, especially on the far left.

I'm thinking that 23,300 on the Dow might be where the index will stop, if it does continue lower (and there's no guarantee of that).

If the index were to climb, it would hit C again and perhaps coast a bit higher, to the January valley, maybe 28,000.

All of this will take place in the coming weeks, but both the timing and move are unknown. But my guess is covid is going to get worse and the market's not going to like it.

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

Many options expire this week, so traders will be looking to close out their positions, and that suggests increased volatility (large daily price swings).

Swing and Position Traders: Chart Pattern Indicator

As of 06/12/2020, the CPI had:

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

Swing Traders: Pivot Points

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

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

Here are the formulas:

Consecutive Price Trends

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

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

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

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

-- Thomas Bulkowski

Friday 6/12/20. Pattern Trading Setups for the Weekend.

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

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

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

There were 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 587 stocks searched, or 2.9%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 1 bullish chart patterns this week and 6 bearish ones with any remaining (10) being undecided. The ratio of bullish to bearish patterns suggests the market is bearish.

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

More...

-- Thomas Bulkowski

Weekly screen for chart patterns ending between 06/04/2020 and 06/11/2020. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Medical Services

Industry RS rank: 14 out of 58

Stock RS rank: 200 out of 582

6/11/20 close: $264.54

1 Month avg volatility: $9.31. Volatility stop (for downward breakout): $302.79 or 14.5% above the close.

Change YTD: -12.41%

Volume: 2,126,600 shares. 3 month avg: 1,801,302 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: Diamond top reversal pattern from 05/28/2020 to 06/10/2020

Breakout is downward 69% of the time.

Average decline: 21%.

Break-even failure rate: 6%.

Pullbacks occur 57% of the time.

Price hits measure rule target 76% of the time.

Industry: Chemical (Specialty)

Industry RS rank: 37 out of 58

Stock RS rank: 255 out of 582

6/11/20 close: $90.22

1 Month avg volatility: $3.19. Volatility stop (for downward breakout): $102.43 or 13.5% above the close.

Change YTD: -11.23%

Volume: 285,800 shares. 3 month avg: 82,003 shares.

This security may be thinly traded (less than 100k shares)!

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

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/05/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Chemical (Diversified)

Industry RS rank: 27 out of 58

Stock RS rank: 311 out of 582

6/11/20 close: $47.84

1 Month avg volatility: $1.68. Volatility stop (for downward breakout): $53.55 or 11.9% above the close.

Change YTD: -16.45%

Volume: 176,800 shares. 3 month avg: 204,463 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/05/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Drug

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

Industry RS rank: 10 out of 58

Stock RS rank: 234 out of 582

6/11/20 close: $56.71

1 Month avg volatility: $1.55. Volatility stop (for downward breakout): $63.39 or 11.8% above the close.

Change YTD: -11.65%

Volume: 17,367,200 shares. 3 month avg: 5,378,746 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: Head-and-shoulders top reversal pattern from 04/28/2020 to 06/09/2020

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.

Industry: Food Processing

Industry RS rank: 23 out of 58

Stock RS rank: 174 out of 582

6/11/20 close: $41.96

1 Month avg volatility: $1.50. Volatility stop (for downward breakout): $45.56 or 8.6% above the close.

Change YTD: -1.85%

Volume: 345,500 shares. 3 month avg: 322,132 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/09/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Metals and Mining (Div.)

Industry RS rank: 31 out of 58

Stock RS rank: 334 out of 582

6/11/20 close: $6.12

1 Month avg volatility: $0.40. Volatility stop (for downward breakout): $8.15 or 33.2% above the close.

Change YTD: -18.56%

Volume: 1,481,100 shares. 3 month avg: 2,285,742 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 06/11/2020 to 06/11/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Electronics

Industry RS rank: 32 out of 58

Stock RS rank: 426 out of 582

6/11/20 close: $20.40

1 Month avg volatility: $0.87. Volatility stop (for downward breakout): $22.40 or 9.8% above the close.

Change YTD: -32.02%

Volume: 224,300 shares. 3 month avg: 73,662 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 Wednesday.

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/05/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Chemical (Specialty)

Industry RS rank: 37 out of 58

Stock RS rank: 356 out of 582

6/11/20 close: $11.49

1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $13.29 or 15.7% above the close.

Change YTD: -22.52%

Volume: 535,800 shares. 3 month avg: 594,032 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/08/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Metals and Mining (Div.)

Industry RS rank: 31 out of 58

Stock RS rank: 87 out of 582

6/11/20 close: $3.06

1 Month avg volatility: $0.23. Volatility stop (for downward breakout): $3.90 or 27.3% above the close.

Change YTD: -9.73%

Volume: 11,945,700 shares. 3 month avg: 4,539,271 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 05/22/2020 to 06/10/2020

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.

Industry: Homebuilding

Industry RS rank: 41 out of 58

Stock RS rank: 460 out of 582

6/11/20 close: $19.56

1 Month avg volatility: $2.13. Volatility stop (for downward breakout): $29.50 or 50.8% above the close.

Change YTD: -6.28%

Volume: 415,000 shares. 3 month avg: 1,539,280 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 06/11/2020 to 06/11/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Homebuilding

Industry RS rank: 41 out of 58

Stock RS rank: 186 out of 582

6/11/20 close: $57.22

1 Month avg volatility: $3.19. Volatility stop (for downward breakout): $67.38 or 17.8% above the close.

Change YTD: 2.56%

Volume: 4,539,900 shares. 3 month avg: 3,465,638 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/08/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Homebuilding

Industry RS rank: 41 out of 58

Stock RS rank: 373 out of 582

6/11/20 close: $31.75

1 Month avg volatility: $1.76. Volatility stop (for downward breakout): $37.63 or 18.5% above the close.

Change YTD: -16.80%

Volume: 520,200 shares. 3 month avg: 498,709 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/08/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/10/2020.

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Aerospace/Defense

Industry RS rank: 44 out of 58

Stock RS rank: 224 out of 582

6/11/20 close: $320.99

1 Month avg volatility: $9.36. Volatility stop (for downward breakout): $355.45 or 10.7% above the close.

Change YTD: -6.68%

Volume: 965,100 shares. 3 month avg: 756,831 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/08/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Computer Software and Svcs

Industry RS rank: 1 out of 58

Stock RS rank: 7 out of 582

6/11/20 close: $257.17

1 Month avg volatility: $14.17. Volatility stop (for upward breakout): $228.25 or 11.2% below the close.

Change YTD: 52.47%

Volume: 947,500 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 05/04/2020 to 06/11/2020

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.

Industry: Semiconductor Cap Equip.

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

Industry RS rank: 12 out of 58

Stock RS rank: 101 out of 582

6/11/20 close: $49.65

1 Month avg volatility: $2.24. Volatility stop (for downward breakout): $57.04 or 14.9% above the close.

Change YTD: -6.14%

Volume: 571,100 shares. 3 month avg: 510,991 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: Double Top, Adam and Adam reversal pattern from 05/28/2020 to 06/05/2020

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Computer Software and Svcs

Industry RS rank: 1 out of 58

Stock RS rank: 307 out of 582

6/11/20 close: $21.26

1 Month avg volatility: $0.92. Volatility stop (for downward breakout): $24.72 or 16.3% above the close.

Change YTD: -20.58%

Volume: 3,124,200 shares. 3 month avg: 1,378,918 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 wedge, ascending reversal pattern from 05/14/2020 to 06/11/2020

Breakout is downward 73% of the time.

Average decline: 17%.

Break-even failure rate: 11%.

Pullbacks occur 57% of the time.

Price hits measure rule target 58% of the time.

Industry: Metals and Mining (Div.)

Industry RS rank: 31 out of 58

Stock RS rank: 522 out of 582

6/11/20 close: $3.29

1 Month avg volatility: $0.34. Volatility stop (for downward breakout): $4.38 or 33.0% above the close.

Change YTD: -46.50%

Volume: 2,751,700 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: Dead-cat bounce continuation pattern from 06/11/2020 to 06/11/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Thursday 6/11/20. Intraday Nasdaq: Double Top?

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

$ $ $

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

In the lower corner, at the start of the red trendline is a letter C. It's where a complex head-and-shoulders bottom chart pattern appears. Notice how the index made a nice run higher. Yum!

On the other end of the chart, at the top, is a potential double top at AB. I write 'potential' because it hasn't confirmed yet. And that means price hasn't closed below the valley between the two peaks.

I drew two trendlines, one in blue and one in red. The red one is shorter and maybe less reliable and yet the index touches it more often. Will it act as support again?

The blue line connects the low on the chart, upward, so that price doesn't pass through the line. It should also act as support. I'm thinking that if price pierces the red line then perhaps the blue line will stop the fall.

$ $ $

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

Wednesday 6/10/20. A Look At Indicators

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.

The indicator has been pegged against the ceiling (or nearly so) for weeks now and yet with today's drop in the indices (except the Nasdaq), the indicator slumped.

It's still in bull market territory, not the neutral zone, but if the downtrend continues, especially if we see a strong move lower, the signal could flip from bullish to bearish.

I'm not predicting that will happen but I'm wondering what's taking the market so long to fear another 2nd wave of covid. It's happening now and I expect it'll get worse. But I could be wrong, of course.

Recently, though, the market has been ignoring such bad omens. It'll stumble for a day or two and then continue to rise as if nothing had happened.

I'm thinking that September or October will be especially bad this year, but I've been wrong so far with my predictions and beliefs.

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).

Both the red and blue lines show marked improvement over the week-ago reading. Today's (Tuesday's) down move in the market pulled the lines lower, but not too much.

They are still heading upward at a clip that seems unsustainable, so I view that as a warning.

Taken together, the charts are still bullish. The CPI chart hints at coming weakness, but until it makes a signal, the uptrend is still intact.

-- Thomas Bulkowski

Tuesday 6/9/20. Trading Quiz! Albermarle

$ $ $

I show a another slider trading quiz featuring an actual trade in Albermarle.

$ $ $

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

-- Thomas Bulkowski

Monday 6/8/20. Market Monday: The Week Ahead

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

My Prediction

I show the Dow transports on the daily scale.

A head-and-shoulders top chart pattern appears as LS (left shoulder), head, and RS (right shoulder). It confirms as valid when the index closes below the red neckline.

Price drops to A, doesn't move down far, before closing above the top of the pattern (blue line). When it does that, it busts the downward breakout.

You can see the move which results. A nice strong push upward. That can happen with busted patterns, as if it tries to hurt those traders who shorted on the downward break.

Overhead resistance appears at C, denoted by two horizontal red lines. I expect the index to struggle there.

Notice how price gapped higher on Friday (last price bar on the chart). It could be a continuation gap, suggesting more of an up move coming. We'll find out on Monday. If price continues higher, a higher high and little to no overlap with Friday's move, then yes, it's probably a continuation gap.

However, the height of the gap suggests it could be an exhaustion gap. If it is, it'll mean the index will reverse and cover the gap, perhaps make a strong downward push for a week or so. On Monday, if price backtracks or fails to make a strong push upward (that is, if price moves sideways to down), then it's more likely the gap is an exhaustion gap and a strong reversal might happen.

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 06/05/2020, the CPI had:

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

Swing Traders: Pivot Points

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

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

Here are the formulas:

Consecutive Price Trends

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

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

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

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

-- Thomas Bulkowski

Friday 6/5/20. Pattern Trading Setups for the Weekend.

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

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

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

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 587 stocks searched, or 3.4%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 1 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 17 bullish chart patterns this week and 2 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is bullish.

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

More...

-- Thomas Bulkowski

Weekly screen for chart patterns ending between 05/28/2020 and 06/04/2020. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Industry: Medical Services

Industry RS rank: 16 out of 58

Stock RS rank: 546 out of 582

6/4/20 close: $8.53

1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $6.96 or 18.4% below the close.

Change YTD: -49.53%

Volume: 279,100 shares. 3 month avg: 533,922 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 05/22/2020 to 06/04/2020

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.

Industry: Computer Software and Svcs

Industry RS rank: 2 out of 58

Stock RS rank: 28 out of 582

6/4/20 close: $55.91

1 Month avg volatility: $2.50. Volatility stop (for upward breakout): $49.91 or 10.7% below the close.

Change YTD: 30.11%

Volume: 952,900 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 05/18/2020 to 05/26/2020

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Aerospace/Defense

Industry RS rank: 46 out of 58

Stock RS rank: 544 out of 582

6/4/20 close: $11.64

1 Month avg volatility: $0.58. Volatility stop (for upward breakout): $9.41 or 19.2% below the close.

Change YTD: -45.89%

Volume: 11,422,100 shares. 3 month avg: 8,355,648 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Drug

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

Industry RS rank: 7 out of 58

Stock RS rank: 432 out of 582

6/4/20 close: $16.83

1 Month avg volatility: $0.68. Volatility stop (for downward breakout): $18.35 or 9.0% above the close.

Change YTD: -17.50%

Volume: 1,017,300 shares. 3 month avg: 949,792 shares.

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

 

Chart pattern: Diamond top reversal pattern from 05/20/2020 to 06/01/2020

Breakout is downward 69% of the time.

Average decline: 21%.

Break-even failure rate: 6%.

Pullbacks occur 57% of the time.

Price hits measure rule target 76% of the time.

Industry: Petroleum (Producing)

Industry RS rank: 57 out of 58

Stock RS rank: 506 out of 582

6/4/20 close: $13.00

1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $10.57 or 18.7% below the close.

Change YTD: -49.20%

Volume: 16,013,200 shares. 3 month avg: 3,367,409 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: Head-and-shoulders bottom reversal pattern from 05/04/2020 to 06/01/2020

WARNING: A dead-cat bounce occurred on 03/11/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/10/2020 and a 38% chance by 09/09/2020.

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.

Industry: Retail (Special Lines)

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

Industry RS rank: 37 out of 58

Stock RS rank: 392 out of 582

6/4/20 close: $2.55

1 Month avg volatility: $0.19. Volatility stop (for upward breakout): $1.98 or 22.4% below the close.

Change YTD: -21.30%

Volume: 358,800 shares. 3 month avg: 99,982 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: Head-and-shoulders bottom reversal pattern from 05/04/2020 to 06/02/2020

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.

Industry: Shoe

Industry RS rank: 20 out of 58

Stock RS rank: 571 out of 582

6/4/20 close: $9.49

1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $7.01 or 26.2% below the close.

Change YTD: -60.04%

Volume: 1,708,400 shares. 3 month avg: 329,342 shares.

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

 

Chart pattern: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 02/14/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/14/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Petroleum (Producing)

Industry RS rank: 57 out of 58

Stock RS rank: 569 out of 582

6/4/20 close: $15.37

1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $12.20 or 20.6% below the close.

Change YTD: -55.19%

Volume: 3,225,900 shares. 3 month avg: 2,362,946 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: Double Bottom, Adam and Adam reversal pattern from 05/14/2020 to 06/01/2020

WARNING: A dead-cat bounce occurred on 02/27/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/27/2020.

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

Industry: Precision Instrument

Industry RS rank: 13 out of 58

Stock RS rank: 79 out of 582

6/4/20 close: $168.79

1 Month avg volatility: $3.84. Volatility stop (for upward breakout): $160.35 or 5.0% below the close.

Change YTD: 9.98%

Volume: 2,599,700 shares. 3 month avg: 2,378,355 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 05/06/2020 to 06/02/2020

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.

Industry: Healthcare Information

Industry RS rank: 3 out of 58

Stock RS rank: 267 out of 582

6/4/20 close: $6.30

1 Month avg volatility: $0.64. Volatility stop (for downward breakout): $7.65 or 21.4% above the close.

Change YTD: -30.39%

Volume: 2,289,700 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: Dead-cat bounce continuation pattern from 06/01/2020 to 06/01/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Advertising

Industry RS rank: 52 out of 58

Stock RS rank: 161 out of 582

6/4/20 close: $3.12

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $2.25 or 27.8% below the close.

Change YTD: -12.85%

Volume: 53,600 shares. 3 month avg: 98,162 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/08/2020 and a 38% chance by 09/07/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Medical Services

Industry RS rank: 16 out of 58

Stock RS rank: 269 out of 582

6/4/20 close: $16.67

1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $14.11 or 15.4% below the close.

Change YTD: 3.35%

Volume: 1,861,600 shares. 3 month avg: 321,822 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 04/27/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

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.

Industry: Retail Store

Industry RS rank: 34 out of 58

Stock RS rank: 554 out of 582

6/4/20 close: $8.21

1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $6.41 or 21.9% below the close.

Change YTD: -51.71%

Volume: 77,912,000 shares. 3 month avg: 14,056,392 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: Flag, high and tight continuation pattern from 04/02/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Medical Supplies

Industry RS rank: 17 out of 58

Stock RS rank: 361 out of 582

6/4/20 close: $96.99

1 Month avg volatility: $2.56. Volatility stop (for upward breakout): $91.30 or 5.9% below the close.

Change YTD: -14.51%

Volume: 8,784,700 shares. 3 month avg: 5,761,640 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 05/08/2020 to 06/03/2020

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.

Industry: Biotechnology

Industry RS rank: 8 out of 58

Stock RS rank: 535 out of 582

6/4/20 close: $15.92

1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $13.41 or 15.8% below the close.

Change YTD: -41.54%

Volume: 1,889,900 shares. 3 month avg: 906,888 shares.

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

 

Chart pattern: Rectangle top continuation pattern from 04/07/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 02/07/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/07/2020.

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.

Industry: Medical Supplies

Industry RS rank: 17 out of 58

Stock RS rank: 99 out of 582

6/4/20 close: $7.80

1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $6.42 or 17.7% below the close.

Change YTD: 50.87%

Volume: 1,106,100 shares. 3 month avg: 1,318,423 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: Triangle, ascending reversal pattern from 04/28/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/05/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/03/2020.

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 58 out of 58

Stock RS rank: 270 out of 582

6/4/20 close: $3.66

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $2.84 or 22.3% below the close.

Change YTD: -30.15%

Volume: 2,227,300 shares. 3 month avg: 1,275,503 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/08/2020 and a 38% chance by 09/07/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Packaging and Container

Industry RS rank: 26 out of 58

Stock RS rank: 101 out of 582

6/4/20 close: $33.85

1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $31.24 or 7.7% below the close.

Change YTD: 8.91%

Volume: 1,107,300 shares. 3 month avg: 499,285 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 05/08/2020 to 06/03/2020

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.

Industry: Apparel

Industry RS rank: 54 out of 58

Stock RS rank: 524 out of 582

6/4/20 close: $16.44

1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $13.41 or 18.4% below the close.

Change YTD: -39.04%

Volume: 6,863,900 shares. 3 month avg: 3,145,718 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 bottom reversal pattern from 04/21/2020 to 05/29/2020

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.

Industry: Building Materials

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

Industry RS rank: 42 out of 58

Stock RS rank: 24 out of 582

6/4/20 close: $114.35

1 Month avg volatility: $5.13. Volatility stop (for downward breakout): $127.84 or 11.8% above the close.

Change YTD: 27.23%

Volume: 1,256,900 shares. 3 month avg: 245,355 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: Pipe top reversal pattern from 05/18/2020 to 05/26/2020

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.

Industry: Shoe

Industry RS rank: 20 out of 58

Stock RS rank: 453 out of 582

6/4/20 close: $24.94

1 Month avg volatility: $1.17. Volatility stop (for upward breakout): $21.33 or 14.5% below the close.

Change YTD: -26.08%

Volume: 1,618,500 shares. 3 month avg: 772,149 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

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.

Thursday 6/4/20. Intraday Market Direction: Nasdaq

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

$ $ $

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

Let's start from the left with a double top. That's DD on the chart. It confirms as a valid chart pattern when the index closes below the horizontal blue line. Judging by its height, it didn't appear to meet the measure rule target (the pattern's height subtracted from the blue line). But it was close

The LHHR pattern is a complex head-and-shoulders bottom. L is the left shoulder, H is a head, and R is the right shoulder. This one met the measure rule target (height added to the top of the pattern) easily enough, within a day or two.

Now we come to the green lines. That's a channel. Price rises bouncing between the two green lines. The index has touched the bottom line. So either it's going to bounce upward off the line or plunge through it. Which way will it be? The above probabilities says there's a 66% chance it'll be upward, so that sounds good to me.

$ $ $

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

Wednesday 6/3/20. A Look At Indicators

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.

Not much has changed in the CPI pic since yesterday's post. The CPI is pegged at the top of the scale, 100, pinned there by a move up in the index.

In my study of trendlines, those which rise up at 45 degrees or less tend to last the longest. And this is going up at that rate (but it changes with the aspect ratio of your screen versus mine).

Since the green bar on the far right of the chart, the trend has been steady and the slope is good, too.

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).

Both lines have made progress over the last week.

I don't see anything on this chart or the last which would derail upward progress.

Of course, I'm still expecting covid-19 to surge. We're still seeing that in 15 states. With protests and little social distancing, it'll be a surprise if we didn't see more waves of covid. But I don't know if that'll stop the upward rise in the indices. They may choose to ignore it and continue looking 6 months forward.

-- Thomas Bulkowski

Tuesday 6/2/20. 2020 Market Forecast June Update

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 29 May 2020 were...

Here's how they rank the industries, but only those in the plus column appear. Year to date returns.

Here's the updated 2020 forecast for June, presented in slider format.

-- Thomas Bulkowski

Monday 6/1/20. Market Monday: The Week Ahead

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

My Prediction

I show the Dow utilities on the daily scale and marked it up quite a bit. Let's go through it.

The red labels, L, H, R are the markings for the left shoulder, head, and right shoulder of what could be a head-and-shoulders bottom.

Just one problem: the head is too long (it's too far away from the shoulders). So I don't consider it a valid head-and-shoulders.

The red labels, 1, 2, 3 are the peaks of a three falling peaks chart pattern and it's a nice one, too. It's tight, the peaks look similar, and it confirms as valid when the index closes below the low between the three peaks, which I show as a horizontal line at A.

Pattern LHR in blue is a valid head-and-shoulders bottom. This is much nicer looking than the one in red, isn't it? The neck is closer to the shoulders and it confirms as valid, too.

Finally, I drew the orange trendline down from the three falling peaks to today's price, just to see where we are. In the past, I've skipped trades because of overhead trendline resistance (and have been glad I did). Notice how price has pierced the trendline, but not by much. We could still see a reversal next week before the index rises much higher.

Until then, all systems are go for liftoff.

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 05/29/2020, the CPI had:

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

Swing Traders: Pivot Points

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

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

Here are the formulas:

Consecutive Price Trends

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

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

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

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

-- Thomas Bulkowski