Bulkowski's Blog: ThePatternSite.com
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  
  Up arrow35,500 or 33,000 by 06/01/2021
  Up arrow17,000 or 15,000 by 06/15/2021
  Up arrow950 or 875 by 06/01/2021
  Up arrow14,600 or 12,950 by 06/01/2021
  Up arrow4,400 or 4,000 by 06/01/2021
CPI (updated daily): Arrows 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  
  Up arrow35,500 or 33,000 by 06/01/2021
  Up arrow17,000 or 15,000 by 06/15/2021
  Up arrow950 or 875 by 06/01/2021
  Up arrow14,600 or 12,950 by 06/01/2021
  Up arrow4,400 or 4,000 by 06/01/2021
CPI (updated daily): Arrows on 5/13/21

 

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

My Prediction

Picture of the Dow utilities on the daily scale.

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.


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A Brief Look Back

Picture of a flower from my garden.

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

Monday: Down 34.94 points.
Tuesday: Down 473.66 points.
Wednesday: Down 681.5 points.
Thursday: Up 433.79 points.
Friday: Up 360.68 points.

For the Week...

The Dow industrials were down 395.63 points or 1.1%.
The Nasdaq composite was down 352.26 points or 2.6%.
The S&P 500 index was down 58.75 points or 1.4%.

Year to Date...

Dow Industrials
     2.0% down from the high of 35,091.56 on 05/10/2021.
     15.2% up from the low of 29,856.30 on 01/29/2021.
Nasdaq
     5.5% down from the high of 14,211.57 on 04/29/2021.
     8.3% up from the low of 12,397.05 on 03/05/2021.
S&P 500
     1.5% down from the high of 4,238.04 on 05/07/2021.
     14.0% up from the low of 3,662.71 on 01/04/2021.

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).

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Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  33,892  34,137  34,296  34,541  34,699 
Weekly  32,807  33,594  34,343  35,131  35,879 
Monthly  32,794  33,588  34,340  35,134  35,886 
S&P500 (^GSPC): Daily  4,109  4,141  4,162  4,195  4,216 
Weekly  3,976  4,075  4,156  4,255  4,335 
Monthly  3,975  4,074  4,156  4,256  4,337 
Nasdaq (^IXIC): Daily  13,160  13,295  13,378  13,513  13,596 
Weekly  12,688  13,059  13,373  13,744  14,059 
Monthly  12,339  12,884  13,548  14,094  14,757 

Here are the formulas:

Pivot point: P = (H + L + C)/3
First resistance level: R1 = (2 * P) - L
First support level: S1 = (2 * P) - H)
Second resistance level: R2 = P + (R1 - S1)
Second support level: S2 = P - (R1 - S1)
H = high price , L=low price, C=closing price

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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.

This WeekLast Week
1. Oilfield Svcs/Equipment1. Oilfield Svcs/Equipment
2. Petroleum (Producing)2. Petroleum (Producing)
3. Apparel3. Apparel
4. Retail (Special Lines)4. Petroleum (Integrated)
5. Petroleum (Integrated)5. Retail (Special Lines)
6. Securities Brokerage6. Securities Brokerage
7. Furn/Home Furnishings7. Furn/Home Furnishings
8. Homebuilding8. Advertising
9. Cement and Aggregates9. Homebuilding
10. Trucking/Transp. Leasing10. Trucking/Transp. Leasing
Best Performing AboveWorst Performing Below
50. Medical Supplies50. Electric Utility (West)
51. Precision Instrument51. Chemical (Specialty)
52. Electric Utility (West)52. Precision Instrument
53. Chemical (Specialty)53. Computer Software and Svcs
54. Electric Utility (Central)54. Electric Utility (Central)
55. E-Commerce55. Electric Utility (East)
56. Electric Utility (East)56. Healthcare Information
57. Healthcare Information57. Household Products
58. Household Products58. E-Commerce
59. Short ETFs59. Short ETFs

-- Thomas Bulkowski

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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

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 Symbol  Chart Pattern  Bullish 
 Bearish 
Start End Industry
AEODouble Top, Adam and Adam      04/23/202105/10/2021Apparel
AGOPipe top      04/26/202105/03/2021Insurance (Life)
ATOTriple top      04/21/202105/10/2021Natural Gas (Diversified)
BAXDouble Top, Eve and Eve      04/22/202105/07/2021Medical Supplies
CVXCup with handle      03/12/202105/13/2021Petroleum (Integrated)
CINFScallop, ascending      03/15/202105/10/2021Insurance (Prop/Casualty)
CAGTriangle, symmetrical      03/30/202105/13/2021Food Processing
DECKRectangle top      02/02/202105/13/2021Shoe
^DJUDouble Top, Adam and Adam      05/03/202105/10/2021None
EVHPipe top      04/26/202105/03/2021Healthcare Information
XOMCup with handle      03/11/202105/13/2021Petroleum (Integrated)
FIVNPipe top      04/26/202105/03/2021Computer Software and Svcs
GPSDouble Top, Adam and Adam      05/03/202105/10/2021Apparel
GSScallop, ascending      03/18/202105/10/2021Securities Brokerage
GESBroadening top      04/22/202105/12/2021Apparel
HONDouble Top, Eve and Adam      04/16/202105/10/2021Aerospace/Defense
JBLUTriangle, symmetrical      03/25/202105/10/2021Air Transport
KSSTriangle, symmetrical      03/15/202105/10/2021Retail Store
MTRNCup with handle      03/10/202105/12/2021Metals and Mining (Div.)
MDCBroadening top      04/05/202105/12/2021Homebuilding
MSCup with handle      03/18/202105/13/2021Securities Brokerage
NXGNRectangle bottom      03/25/202105/10/2021Healthcare Information
OTEXHead-and-shoulders top      03/22/202105/10/2021E-Commerce
SIGIHead-and-shoulders top      04/15/202105/10/2021Insurance (Prop/Casualty)
VCDouble Top, Adam and Eve      04/29/202105/07/2021Electronics
VMCDiamond top      05/05/202105/13/2021Cement and Aggregates
WRBDouble Top, Eve and Adam      04/26/202105/10/2021Insurance (Prop/Casualty)

 

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Thursday 5/13/21. Intraday Market Direction: Nasdaq

The index dropped by -2.7% or -357.75 points. Since 02/05/1971 the index made 25 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.9% on 14 occasions.
     Average loss was -1.5% on 11 occasions.
Expect the index to close higher 56.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 215/378 or 56.9% of the time.
     The prediction of the index closing lower has been right 58/122 or 47.5% of the time.

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

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

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

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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© 2021 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  12,788.70    
 Daily S2  12,821.54  32.84   
 Weekly S2  12,901.67  80.13   
 Monthly S1  12,910.19  8.52   Yes! The Monthly S1 is close to the Weekly S2.
 Daily S1  12,926.61  16.42   Yes! The Daily S1 is close to the Monthly S1.
 Weekly S1  12,966.67  40.06   
 Low  13,002.54  35.87   
 Close  13,031.68  29.14   
 Daily Pivot  13,107.61  75.93   
 61.8% Down from Intraday High  13,111.82  4.21   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  13,145.58  33.76   
 38.2% Down from Intraday High  13,179.33  33.76   
 Daily R1  13,212.68  33.35   
 Open  13,215.49  2.81   Yes! The Open is close to the Daily R1.
 High  13,288.61  73.12   
 Daily R2  13,393.68  105.07   
 Weekly Pivot  13,504.40  110.72   
 Monthly Pivot  13,560.88  56.48   
 Weekly R1  13,569.40  8.52   Yes! The Weekly R1 is close to the Monthly Pivot.
 Monthly R1  13,682.37  112.97   
 Weekly R2  14,107.13  424.76   
 Monthly R2  14,333.06  225.93   

 

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My novels:  Bumper's Story Head's Law

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

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