As of 05/14/2021   Indus: 34,382 +360.68 +1.1%     Trans: 15,917 +215.47 +1.4%     Utils: 908 +2.62 +0.3%     Nasdaq: 13,430 +304.99 +2.3%     S&P 500: 4,174 +61.35 +1.5%	YTD  +12.3%    +27.3%    +5.0%    +4.2%    +11.1%	Targets    Overview: 05/14/2021     35,500 or 33,000 by 06/01/2021   17,000 or 15,000 by 06/15/2021   950 or 875 by 06/01/2021   14,600 or 12,950 by 06/01/2021   4,400 or 4,000 by 06/01/2021
CPI (updated daily): on 5/13/21

As of 05/14/2021   Indus: 34,382 +360.68 +1.1%     Trans: 15,917 +215.47 +1.4%     Utils: 908 +2.62 +0.3%     Nasdaq: 13,430 +304.99 +2.3%     S&P 500: 4,174 +61.35 +1.5%	YTD  +12.3%    +27.3%    +5.0%    +4.2%    +11.1%
Targets    Overview: 05/14/2021     35,500 or 33,000 by 06/01/2021   17,000 or 15,000 by 06/15/2021   950 or 875 by 06/01/2021   14,600 or 12,950 by 06/01/2021   4,400 or 4,000 by 06/01/2021
CPI (updated daily): on 5/13/21

Monday 5/17/21. Market Monday: The Week Ahead

• My Prediction
• A Brief Look Back
• Options Expiration
• Swing Traders: Pivot Points
• Earnings, Chart Patterns & Industries

My Prediction

I show the Dow utilities on the daily scale.

The pattern in blue is a common one. Do you know its name? It's a descending scallop. Those breakout downward 78% of the time, according to near research from my book, Encyclopedia of Chart Patterns, 3rd edition.

That's what happened here when the pattern closed below the bottom of it in late February.

Shown highlighted in red is a flag. It's large but compared to the move up from A to B, the slide to C looks proportional. Even though flags are often short patterns, hanging on a flagpole, this one is probably fine. Flags in a bull market breakout upward 60% of the time (the statistics was taken from the same book).

There's no guarantee that this one will breakout upward, too, but that's the way to bet. I'd look to the left (off this chart) to see what the prior price action shows to determine support/resistance levels. That's important when trying to gauge how far price might move and to determine the breakout direction. I didn't do that in this case, so I'm using only the 60% breakout number to go on.

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 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:

Earnings, Chart Patterns & Industries

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

Here's a symbol list of 113 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: DDD, ADTN, APD, AKAM, ALRM, ALK, AA, AEL, AMGN, APA, ACGL, AWI, AGO, AXS, BERY, BOOT, CNC, CNP, CVX, CHS, CINF, CLX, CNA, CNO, CGNX, CL, CSGS, CW, DDS, ^DJI, RE, EVH, EXC, XOM, FB, FIVN, FLS, FCX, IT, GILD, GL, THG, HSC, HE, HQY, HTLD, HL, HSIC, HNI, HUBG, INCY, IVC, NVTA, JNJ, LB, LHX, LANC, LAWS, LLY, LNC, L, M, MRO, MRTN, MRK, MS, MUR, NOV, JWN, NOC, NVDA, OXY, OGE, ORI, OXM, PANW, PKE, PLXS, PRU, DGX, ^GSPC, SEIC, SIGI, SKX, SXI, SRDX, TDC, TRV, TG, WMB, IYM, IAI, IYE, IEO, FXI, EWO, EWK, EWC, ECH, EWG, EWP, EWU, DBA, PJP, IXC, XLP, XLE, XLB. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

The below industries were the best (rank 1) or worst performing of those I follow.

-- Thomas Bulkowski

Friday 5/14/21. Pattern Trading Setups for the Weekend.

$ $ $

Here's a symbol list of 129 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: ACIW, AJRD, APD, ALKS, ALL, DOX, AMED, AEO, AFG, ABC, AMGN, AMAT, ADM, AWI, ARW, AIZ, AGO, AXS, BMI, BAX, BZH, BKH, BA, BOOT, BAH, EPAY, BRC, BRKS, CACI, CNC, CNP, CHD, CNA, CAG, CSGS, DDS, ^DJT, D, DOV, BOOM, EIX, EPAM, RE, EVH, EXC, FB, FISV, FIVN, FLEX, GME, GIS, GL, THG, HLIT, HSC, HTLD, HSY, HNI, IDA, ILMN, NSP, IBP, IIIN, ITGR, INTC, IBKR, IPG, JBLU, K, KSS, LZB, LRCX, LAWS, MTRN, MRK, MGEE, MS, MOS, MUR, NOV, CNR, NTAP, NEU, NI, OXM, PATK, PLXS, PPL, PGR, PEG, RJF, RGS, SAIA, SLGN, LUV, SWX, SXI, TXN, TOL, TSCO, UGI, VEEV, IAI, IYE, IEO, IHE, FTEC, FXI, IYZ, SOXX, IYF, EWA, EWO, EWJ, EWM, EZA, EWL, PHO, IXC, XLE, XHB, SMH. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

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

The following patterns were found manually, not using Patternz. Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 27 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 577 stocks searched, or 4.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 9 bearish ones with any remaining (13) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) 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.

For details about the chart patterns, click here.

-- Thomas Bulkowski

Thursday 5/13/21. 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.

Notice how the slope of trendline B is steeper than trendline A. That means momentum is increasing as price drops. Of course, those with a copy of my book, Encyclopedia of Chart Patterns, 3rd edition, will see in the text that the speed of downward moves is often at least twice as fast as upward moves. So the big, fast drops are no surprise.

The good news is that I believe this drop will end soon. People (traders) will settle down and realize the world isn't ending as we know it. Inflation will calm down and the pandemic will fade, perhaps turning into a chronic condition, requiring a booster shot annually.

Having said that, the bottom may be in September. Look at screen 2 through 4 here.

$ $ $

Here's a symbol list of 215 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: ABT, ACN, ADS, DOX, AEE, AEO, AEL, AXP, AFG, AMWD, AMGN, APH, ASH, AGO, AVY, AVNT, AXS, BLL, BAX, BZH, BBBY, BERY, BIG, BKH, BA, BAH, BRC, BLDR, CALM, CNC, CNP, CIEN, CINF, CSCO, CLX, CNA, CNO, CTSH, CL, CAG, CLR, GLW, COST, CR, CW, DFS, ^DJT, ^DJI, D, DOV, DTE, BOOM, EIX, EQT, EL, RE, EVH, EXC, XOM, FB, FE, FISV, FIVN, FLS, FWRD, GPS, IT, GD, GE, GIS, GNW, GL, GGG, EVRG, GFF, HBI, HLIT, HSC, HIG, HTLD, HELE, HNI, HD, IDA, IEX, ITW, NSP, IIIN, INTC, IBKR, TILE, JNJ, KBH, K, KELYA, KBAL, KMB, KSS, LB, LHX, LH, LAMR, LEG, LEN, LLY, LXU, MHO, MLM, MAS, MDC, MDT, MRK, MGEE, MCO, MS, MLI, MUR, NOV, CNR, NTAP, NJR, NI, JWN, NWPX, ORI, ASGN, OTEX, OUT, OMI, PKG, PATK, PAYX, PCG, PPL, PINC, PFG, PGR, PEG, RL, RLI, ROK, ROST, SCHW, SAIC, SMG, SHW, SKX, LUV, SWX, SWN, TGT, TPX, TXT, TKR, TJX, TOL, TSCO, RIG, TRV, TREX, VFC, VMC, WMT, WMB, WWW, IAI, IYE, ITB, IHI, IEO, IDU, DDM, ICF, IHF, IAT, IGE, IYF, EIS, EWJ, EWM, EWY, EWT, THD, IXC, XLP, XLE, XLF, XLV, XHB, XLI, XLU, USO. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

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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