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Encyclopedia of Chart Patterns 2nd Edition book.
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Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
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As of 09/13/2019
  Indus: 27,220 +37.07 +0.1%  
  Trans: 10,814 +100.11 +0.9%  
  Utils: 847 -6.12 -0.7%  
  Nasdaq: 8,177 -17.76 -0.2%  
  S&P 500: 3,007 -2.18 -0.1%  
YTD
 +16.7%  
 +17.9%  
 +18.8%  
 +23.2%  
 +20.0%  
  Targets    Overview: 09/12/2019  
  Down arrow26,400 or 27,600 by 10/01/2019
  Down arrow10,200 or 11,100 by 10/01/2019
  Up arrow875 or 830 by 10/01/2019
  Down arrow8,000 or 8,750 by 10/01/2019
  Down arrow2,925 or 3,050 by 10/01/2019
As of 09/13/2019
  Indus: 27,220 +37.07 +0.1%  
  Trans: 10,814 +100.11 +0.9%  
  Utils: 847 -6.12 -0.7%  
  Nasdaq: 8,177 -17.76 -0.2%  
  S&P 500: 3,007 -2.18 -0.1%  
YTD
 +16.7%  
 +17.9%  
 +18.8%  
 +23.2%  
 +20.0%  
  Targets    Overview: 09/12/2019  
  Down arrow26,400 or 27,600 by 10/01/2019
  Down arrow10,200 or 11,100 by 10/01/2019
  Up arrow875 or 830 by 10/01/2019
  Down arrow8,000 or 8,750 by 10/01/2019
  Down arrow2,925 or 3,050 by 10/01/2019

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

December 2018 Headlines


Archives


Monday 12/31/18. 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 index has retraced a portion of the drop from the high at A. But will it retrace more?

I think it will.

My target is the red line mostly because it's a round number, 740, but it's also in the midst of a congestion region (that is, resistance).

In the way are three common Fibonacci retrace values: 38%, 50%, and 62%. I show the 62% in cyan (about 731.70). At least I think it's cyan. That's why I labeled it C.

C is the 62% retrace of the AB drop.

Right now, the index is just below the 50% retrace (722.05) and comfortably above the 38% retrace (712.41).

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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 653.17 points.
Wednesday: Up 1086.25 points.
Thursday: Up 260.37 points.
Friday: Down 76.42 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 617.03 points or 2.7%.
The Nasdaq composite was up 251.53 points or 4.0%.
The S&P 500 index was up 69.12 points or 2.9%.

Year to Date...

Dow Industrials
     14.4% down from the high of 26,951.81 on 10/03/2018.
     6.2% up from the low of 21,712.53 on 12/26/2018.
Nasdaq
     19.0% down from the high of 8,133.30 on 08/30/2018.
     6.4% up from the low of 6,190.17 on 12/24/2018.
S&P 500
     15.5% down from the high of 2,940.91 on 09/21/2018.
     5.9% up from the low of 2,346.58 on 12/26/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 12/28/2018, the CPI had:

0 bearish patterns,
0 bullish patterns,
370 patterns waiting for breakout.
The CPI signal is 0.0%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  22,741  22,902  23,142  23,302  23,542 
Weekly  21,050  22,056  22,719  23,725  24,388 
Monthly  19,317  21,190  23,585  25,458  27,853 
S&P500 (^GSPC): Daily  2,446  2,466  2,493  2,513  2,540 
Weekly  2,277  2,381  2,451  2,555  2,625 
Monthly  2,091  2,288  2,544  2,742  2,998 
Nasdaq (^IXIC): Daily  6,444  6,514  6,599  6,669  6,754 
Weekly  5,992  6,288  6,486  6,782  6,980 
Monthly  5,457  6,021  6,754  7,317  8,050 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 44.6%   Expect a random direction. 
 1 month down 21.2%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week up 45.1%   Expect a random direction. 
 1 month down 21.8%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week up 46.2%   Expect a random direction. 
 1 month down 26.3%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
31Pipe top
31Double Top, Adam and Adam
27Long Island
18Head-and-shoulders top
16Triple top
12Double Top, Eve and Adam
11Double Top, Adam and Eve
9Double Top, Eve and Eve
8Island top
7Broadening top

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Short ETFs
2. Precision Instrument2. Electric Utility (Central)
3. Household Products3. Household Products
4. Electric Utility (Central)4. Electric Utility (East)
5. Toiletries/Cosmetics5. Precision Instrument

-- Thomas Bulkowski

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Friday 12/28/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 7 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 598 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 2 bearish ones with any remaining (2) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

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

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
CXTriangle, symmetrical      11/23/201812/27/2018Cement and Aggregates
CNPPipe top      12/10/201812/17/2018Electric Utility (Central)
HIGDouble Bottom, Eve and Adam      12/10/201812/26/2018Insurance (Prop/Casualty)
LANCBroadening top      11/26/201812/24/2018Food Processing
LLYDouble Bottom, Adam and Adam      12/18/201812/26/2018Drug
MSFTBroadening bottom      10/17/201812/21/2018Computer Software and Svcs
PETSBroadening bottom      12/07/201812/27/2018Medical Services

 

Weekly screen for chart patterns ending between 12/20/2018 and 12/27/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Cemex SA de CV (CX)
Industry: Cement and Aggregates
Industry RS rank: 56 out of 58
Stock RS rank: 463 out of 592
12/27/18 close: $4.79
1 Month avg volatility: $0.21. Volatility stop (for upward breakout): $4.25 or 11.4% below the close.
Change YTD: -36.39%
Volume: 9,040,500 shares. 3 month avg: 9,928,860 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/23/2018 to 12/27/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Centerpoint Energy (CNP)
Industry: Electric Utility (Central)
Industry RS rank: 4 out of 58
Stock RS rank: 113 out of 592
12/27/18 close: $28.09
1 Month avg volatility: $0.62. Volatility stop (for downward breakout): $29.36 or 4.5% above the close.
Change YTD: -0.95%
Volume: 5,378,900 shares. 3 month avg: 2,845,400 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: Pipe top reversal pattern from 12/10/2018 to 12/17/2018
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.

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Hartford Financial Services Group Inc (HIG)
Industry: Insurance (Prop/Casualty)
Industry RS rank: 14 out of 58
Stock RS rank: 321 out of 592
12/27/18 close: $43.87
1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $39.33 or 10.3% below the close.
Change YTD: -22.05%
Volume: 3,330,800 shares. 3 month avg: 2,032,532 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 Bottom, Eve and Adam reversal pattern from 12/10/2018 to 12/26/2018
Breakout is upward 100% of the time.
Average rise: 35%.
Break-even failure rate: 4%.
Throwbacks occur 57% of the time.
Price hits measure rule target 66% of the time.

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Lancaster Colony Corp (LANC)
Industry: Food Processing
Industry RS rank: 17 out of 58
Stock RS rank: 16 out of 592
12/27/18 close: $175.25
1 Month avg volatility: $6.25. Volatility stop (for downward breakout): $188.08 or 7.3% above the close.
Change YTD: 35.63%
Volume: 145,700 shares. 3 month avg: 112,417 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: Broadening top reversal pattern from 11/26/2018 to 12/24/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

Top

Lilly, Eli and Co. (LLY)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 58
Stock RS rank: 9 out of 592
12/27/18 close: $112.89
1 Month avg volatility: $2.85. Volatility stop (for upward breakout): $103.03 or 8.7% below the close.
Change YTD: 33.66%
Volume: 3,893,800 shares. 3 month avg: 3,358,597 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: Double Bottom, Adam and Adam reversal pattern from 12/18/2018 to 12/26/2018
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.

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Microsoft Corp (MSFT)
Industry: Computer Software and Svcs
Industry RS rank: 7 out of 58
Stock RS rank: 94 out of 592
12/27/18 close: $101.18
1 Month avg volatility: $3.71. Volatility stop (for upward breakout): $88.97 or 12.1% below the close.
Change YTD: 18.28%
Volume: 49,161,100 shares. 3 month avg: 21,460,729 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: Broadening bottom reversal pattern from 10/17/2018 to 12/21/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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PetMed Express Inc. (PETS)
Industry: Medical Services
Industry RS rank: 26 out of 58
Stock RS rank: 566 out of 592
12/27/18 close: $23.93
1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $20.91 or 12.6% below the close.
Change YTD: -47.41%
Volume: 562,100 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: Broadening bottom reversal pattern from 12/07/2018 to 12/27/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Thursday 12/27/18. Intraday Market Direction: Nasdaq

The index climbed by 5.8% or 361.44 points. Since 02/05/1971 the index made 2 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 2 occasions.
Expect the index to close higher 100.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/282 or 54.6% of the time.
     The prediction of the index closing lower has been right 49/98 or 50.0% 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.

Today was a wild ride. The index formed a triple bottom, which I show as 1, 2, 3. By drawing a down-sloping line (red), we can signal a breakout at A, where the index crosses the red line.

You might also call the dual red-line pattern a descending triangle. Both chart patterns are bullish when they breakout upward.

Overhead is resistance setup by the cyan line. I drew that line from today's high price onward to the left, just to see where it matches up.

The above probabilities say we have a 100% chance of closing higher tomorrow (Thursday). Does that mean we'll actually close higher? No. It means this might be the first time the index drops.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  5,599.95    
 Weekly S2  5,969.75  369.80   
 Monthly S1  6,077.16  107.40   
 Daily S2  6,100.22  23.06   Yes! The Daily S2 is close to the Monthly S1.
 Low  6,214.34  114.12   
 Open  6,257.86  43.52   
 Weekly S1  6,262.06  4.20   Yes! The Weekly S1 is close to the Open.
 Daily S1  6,327.29  65.23   
 61.8% Down from Intraday High  6,344.67  17.38   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High  6,384.94  40.26   
 38.2% Down from Intraday High  6,425.20  40.26   
 Daily Pivot  6,441.41  16.21   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close  6,554.36  112.95   
 High  6,555.53  1.17   Yes! The High is close to the Close.
 Weekly Pivot  6,596.93  41.40   
 Daily R1  6,668.48  71.55   
 Monthly Pivot  6,781.83  113.35   
 Daily R2  6,782.60  0.77   Yes! The Daily R2 is close to the Monthly Pivot.
 Weekly R1  6,889.24  106.64   
 Weekly R2  7,224.11  334.88   
 Monthly R1  7,259.04  34.92   
 Monthly R2  7,963.71  704.68   

Wednesday 12/26/18. A Look At Indicators

Picture of the chart pattern indicator

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.

I don't offer any analysis this week. Why? Because it's Christmas eve and I'm in no mood to think about the markets.

For those users of Patternz, the CPI (Indicator form) has at least 1 bug in it. I'm working on a fix and will release a new version when it's solved.

Have a happy holiday...

Picture of the percent down indicators

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).

Shown as a red line on the above chart...
On Monday, 80% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 66%.
The fewest was 15% on 01/26/2018.
And the most was 80% on 12/24/2018.
Shown as a blue line on the above chart...
The 496 stocks in my database are down an average of 33% from their yearly high.
A week ago, the average was 28%.
The peak was 9% on 01/22/2018.
And the bottom was 33% on 12/24/2018.

-- Thomas Bulkowski

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Monday 12/24/18. Market Monday: The Week Ahead

My Prediction

Picture of the S and P on the weekly scale.

I've been trying to figure out where the bottom is ever since this downtrend began and I haven't figure it out yet.

I show the index on the weekly scale.

I chose this scale to highlight support levels, or what I think/hope are support areas.

The red line I drew from today's (Friday's) low to the left. Notice how it finds support with the peak in Feb 2017 and valleys in June through August.

I'm thinking that Monday will be an up day, or half day really, setting the stage for a good week to finish off the year.

Historically the day before Christmas shows a slight tendency to close higher. After Christmas, the close is random.

Below the red line is a green one marking the bottom of support. So maybe we'll see the indices turn here.

$ $ $

I released a new study about buying before confirmation of a chart pattern. You can improve results if you know when to buy.

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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 507.53 points.
Tuesday: Up 82.66 points.
Wednesday: Down 351.98 points.
Thursday: Down 464.06 points.
Friday: Down 414.23 points.

For the Week...

The Dow industrials were down 1655.14 points or 6.9%.
The Nasdaq composite was down 577.67 points or 8.4%.
The S&P 500 index was down 183.33 points or 7.1%.

Year to Date...

Dow Industrials
     16.7% down from the high of 26,951.81 on 10/03/2018.
     0.2% up from the low of 22,396.34 on 12/21/2018.
Nasdaq
     22.1% down from the high of 8,133.30 on 08/30/2018.
     0.4% up from the low of 6,304.63 on 12/21/2018.
S&P 500
     17.8% down from the high of 2,940.91 on 09/21/2018.
     0.3% up from the low of 2,408.55 on 12/21/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 12/21/2018, the CPI had:

38 bearish patterns,
1 bullish patterns,
58 patterns waiting for breakout.
The CPI signal is 2.6%, which is bearish (<= 35%).

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.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  21,841  22,143  22,699  23,001  23,557 
Weekly  21,285  21,865  22,977  23,557  24,668 
Monthly  20,023  21,234  23,607  24,818  27,191 
S&P500 (^GSPC): Daily  2,347  2,382  2,443  2,478  2,539 
Weekly  2,283  2,350  2,475  2,542  2,668 
Monthly  2,150  2,283  2,542  2,675  2,933 
Nasdaq (^IXIC): Daily  6,126  6,230  6,408  6,512  6,690 
Weekly  5,896  6,114  6,523  6,742  7,150 
Monthly  5,526  5,930  6,708  7,111  7,890 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 3 weeks down 10.1%   Expect a reversal soon. 
 1 month down 21.2%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 6.3%   Expect a reversal soon. 
 1 month down 21.8%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.6%   Expect a reversal soon. 
 1 month down 26.3%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
33Long Island
30Double Top, Adam and Adam
22Pipe top
16Head-and-shoulders top
11Double Top, Eve and Eve
11Triple top
10Double Top, Eve and Adam
8Triangle, symmetrical
8Island top
7Broadening top

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

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

 

 

 

 

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

This WeekLast Week
1. Short ETFs1. Electric Utility (Central)
2. Electric Utility (Central)2. Electric Utility (East)
3. Household Products3. Household Products
4. Electric Utility (East)4. Short ETFs
5. Precision Instrument5. Precision Instrument

-- Thomas Bulkowski

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Friday 12/21/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 4 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 599 stocks searched, or 0.7%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 2 bullish chart patterns this week and 2 bearish ones with any remaining (0) 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.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ESRXHead-and-shoulders top      11/07/201812/14/2018Medical Services
GESBroadening bottom      10/09/201812/20/2018Apparel
IPARTriangle, ascending      10/23/201812/20/2018Toiletries/Cosmetics
OMCBroadening top      11/12/201812/18/2018Advertising

 

Weekly screen for chart patterns ending between 12/13/2018 and 12/20/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Express Scripts (ESRX)
Industry: Medical Services
Industry RS rank: 21 out of 58
Stock RS rank: 38 out of 593
12/20/18 close: $92.33
1 Month avg volatility: $2.28. Volatility stop (for downward breakout): $100.42 or 8.8% above the close.
Change YTD: 23.70%
Volume: 29,300,300 shares. 3 month avg: 4,217,495 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: Head-and-shoulders top reversal pattern from 11/07/2018 to 12/14/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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Guess Inc. (GES)
Industry: Apparel
Industry RS rank: 52 out of 58
Stock RS rank: 294 out of 593
12/20/18 close: $19.46
1 Month avg volatility: $0.99. Volatility stop (for upward breakout): $17.17 or 11.8% below the close.
Change YTD: 15.28%
Volume: 823,300 shares. 3 month avg: 1,269,442 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 bottom reversal pattern from 10/09/2018 to 12/20/2018
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price hits measure rule target 59% of the time.

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Inter Parfums Inc. (IPAR)
Industry: Toiletries/Cosmetics
Industry RS rank: 8 out of 58
Stock RS rank: 33 out of 593
12/20/18 close: $62.82
1 Month avg volatility: $1.96. Volatility stop (for upward breakout): $56.52 or 10.0% below the close.
Change YTD: 44.58%
Volume: 154,900 shares. 3 month avg: 72,294 shares.
This security may be thinly traded (less than 100k shares)!
Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Triangle, ascending reversal pattern from 10/23/2018 to 12/20/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Omnicom Group (OMC)
Industry: Advertising
Industry RS rank: 22 out of 58
Stock RS rank: 142 out of 593
12/20/18 close: $72.25
1 Month avg volatility: $1.47. Volatility stop (for downward breakout): $76.27 or 5.6% above the close.
Change YTD: -0.80%
Volume: 2,101,400 shares. 3 month avg: 2,548,395 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: Broadening top reversal pattern from 11/12/2018 to 12/18/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Thursday 12/20/18. Intraday Market Direction: Nasdaq

The index dropped by -2.2% or -147.08 points. Since 02/05/1971 the index made 46 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 19 occasions.
     Average loss was -1.7% on 27 occasions.
Expect the index to close lower 58.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/282 or 54.6% of the time.
     The prediction of the index closing lower has been right 48/97 or 49.5% 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.

I guess this was predictable. The FED raised interest rates and down the Nasdaq tumbled.

The announcement happened around A. Before that time, the index was moving horizontally, forming a triple top. That's the three peaks to the left of A.

The pattern confirmed as a valid one when the index dropped after A. Had you shorted the pattern, it would have made for a nice day trade.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,328.95    
 Daily S2  6,415.04  86.09   
 Monthly S1  6,482.89  67.85   
 Daily S1  6,525.93  43.04   
 Weekly S2  6,586.07  60.14   
 Low  6,586.50  0.43   Yes! The Low is close to the Weekly S2.
 Weekly S1  6,611.45  24.95   Yes! The Weekly S1 is close to the Low.
 Close  6,636.83  25.38   Yes! The Close is close to the Weekly S1.
 61.8% Down from Intraday High  6,694.36  57.53   
 Daily Pivot  6,697.40  3.04   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  6,727.68  30.28   
 38.2% Down from Intraday High  6,761.00  33.32   
 Open  6,777.59  16.59   Yes! The Open is close to the 38.2% Down from Intraday High.
 Daily R1  6,808.29  30.70   
 High  6,868.86  60.57   
 Weekly Pivot  6,904.37  35.51   
 Weekly R1  6,929.75  25.38   Yes! The Weekly R1 is close to the Weekly Pivot.
 Daily R2  6,979.76  50.01   
 Monthly Pivot  6,984.70  4.94   Yes! The Monthly Pivot is close to the Daily R2.
 Monthly R1  7,138.64  153.94   
 Weekly R2  7,222.67  84.03   
 Monthly R2  7,640.45  417.78   

Wednesday 12/19/18. A Look At Indicators

Picture of the chart pattern indicator

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 on the indicator chart. It's still hovering near zero.

However, the index has punched through to a new low. As I wrote last week, with the indicator near zero, the only place it can go is up. It you look back at the chart, the thin blue line at the bottom of the chart doesn't hover around zero for long. So I'm expecting a recovery soon. Wishful thinking?

Picture of the percent down indicators

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).

Shown as a red line on the above chart...
On Tuesday, 65% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 60%.
The fewest was 15% on 01/26/2018.
And the most was 66% on 12/17/2018.
Shown as a blue line on the above chart...
The 497 stocks in my database are down an average of 28% from their yearly high.
A week ago, the average was 25%.
The peak was 9% on 01/22/2018.
And the bottom was 28% on 12/17/2018.

Both lines continue to suffer compared to a week ago. Not only are the lines heading lower, but they are doing so quickly.

I compared the index where it peaked, which I highlight with the purple line on the right. To the left of that is where the red line peaks, shown with a parallel purple line.

The red line correctly predicts a drop in the index well before it happened. As far back as July, the red line was diverging, signaling weakness.

$ $ $

I updated the performance stats on long islands.

$ $ $

-- Thomas Bulkowski

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Tuesday 12/18/18. Intraday Market Direction: Dow

The index dropped by -2.1% or -507.53 points. Since 10/01/1928 the index made 67 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.0% on 38 occasions.
     Average loss was -1.0% on 29 occasions.
Expect the index to close higher 56.7% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 176/295 or 59.7% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% 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 Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

I drew three trendlines along the peaks, shown here in red.

Notice how the slope of those lines increases from A to B to C. That means downward momentum is increasing. And that's not good news for bullish people like me.

I'm hoping that the index will rebound on Tuesday, but with increasing downward momentum, it could continue lower. Maybe it'll do both. Drop in the morning and stage a strong recovery.

I'm still looking for an upward turn in the indices because they are resting on support. However, Elliott wavers are saying the bottom is going to fall out. Guess we'll find out.

$ $ $

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

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  22,386.01    
 Monthly S1  22,989.50  603.48   
 Daily S2  23,081.45  91.95   
 Weekly S2  23,153.96  72.51   
 Daily S1  23,337.21  183.25   
 Weekly S1  23,373.47  36.26   Yes! The Weekly S1 is close to the Daily S1.
 Low  23,456.88  83.41   
 Close  23,592.98  136.10   
 61.8% Down from Intraday High  23,698.00  105.02   
 Daily Pivot  23,712.65  14.65   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  23,772.48  59.83   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  23,846.96  74.48   
 Daily R1  23,968.41  121.45   
 Open  23,986.83  18.42   Yes! The Open is close to the Daily R1.
 High  24,088.08  101.25   
 Weekly Pivot  24,100.88  12.80   Yes! The Weekly Pivot is close to the High.
 Weekly R1  24,320.39  219.51   
 Daily R2  24,343.85  23.46   Yes! The Daily R2 is close to the Weekly R1.
 Monthly Pivot  24,484.85  141.01   
 Weekly R2  25,047.80  562.95   
 Monthly R1  25,088.34  40.54   Yes! The Monthly R1 is close to the Weekly R2.
 Monthly R2  26,583.69  1,495.36   

Monday 12/17/18. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq on the daily scale.

I show the Nasdaq composite on the weekly scale, again this week. I usually rotate through the five indices I follow but messed up this week.

I'm hoping that the next two weeks are ones of inflection, where the indices change direction. That's what I show in the chart by the blue line.

My guess is that the Nasdaq will drop to the lower support area, which is the lower red line, and turn there.

It could turn sooner, of course, or later. But the key word is turn.

 

 

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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: Up 34.31 points.
Tuesday: Down 53.02 points.
Wednesday: Up 157.03 points.
Thursday: Up 70.11 points.
Friday: Down 496.87 points.

For the Week...

The Dow industrials were down 288.44 points or 1.2%.
The Nasdaq composite was down 58.59 points or 0.8%.
The S&P 500 index was down 33.13 points or 1.3%.

Year to Date...

Dow Industrials
     10.6% down from the high of 26,951.81 on 10/03/2018.
     3.2% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     15.0% down from the high of 8,133.30 on 08/30/2018.
     4.2% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     11.6% down from the high of 2,940.91 on 09/21/2018.
     2.7% up from the low of 2,532.69 on 02/09/2018.

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 and Position Traders: Chart Pattern Indicator

As of 12/14/2018, the CPI had:

104 bearish patterns,
1 bullish patterns,
420 patterns waiting for breakout.
The CPI signal is 1.0%, which is bearish (<= 35%).

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.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  23,791  23,946  24,188  24,343  24,586 
Weekly  23,323  23,712  24,270  24,659  25,217 
Monthly  22,555  23,328  24,654  25,427  26,753 
S&P500 (^GSPC): Daily  2,568  2,584  2,610  2,625  2,651 
Weekly  2,521  2,560  2,623  2,663  2,725 
Monthly  2,444  2,522  2,661  2,739  2,878 
Nasdaq (^IXIC): Daily  6,817  6,864  6,946  6,992  7,074 
Weekly  6,677  6,794  6,996  7,112  7,314 
Monthly  6,420  6,665  7,076  7,321  7,732 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 2 weeks down 15.4%   Expect a reversal soon. 
 1 month down 21.2%   Expect a reversal soon. 
 S & P 500 (^GSPC) 2 weeks down 13.6%   Expect a reversal soon. 
 1 month down 21.8%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 2 weeks down 15.9%   Expect a reversal soon. 
 1 month down 26.3%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
20Double Top, Adam and Adam
12Triangle, symmetrical
11Pipe bottom
11Island top
9Double Bottom, Adam and Adam
9Double Top, Eve and Adam
7Broadening top
6Dead-cat bounce
6Double Top, Eve and Eve
6Head-and-shoulders top

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

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

 

 

 

 

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

This WeekLast Week
1. Electric Utility (Central)1. Electric Utility (Central)
2. Electric Utility (East)2. Electric Utility (East)
3. Household Products3. Household Products
4. Short ETFs4. Short ETFs
5. Precision Instrument5. Electric Utility (West)

-- Thomas Bulkowski

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Friday 12/14/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 599 stocks searched, or 2.2%. 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 7 bearish ones with any remaining (3) 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.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ALKPipe top      11/26/201812/03/2018Air Transport
APCDiamond bottom      11/23/201812/13/2018Petroleum (Producing)
BECNFlag      12/04/201812/13/2018Retail Building Supply
BIGDead-cat bounce      12/07/201812/07/2018Retail Store
CTSBroadening wedge, ascending      10/29/201812/13/2018Electronics
HPTriangle, symmetrical      11/19/201812/13/2018Petroleum (Producing)
INTCBroadening top      10/31/201812/10/2018Semiconductor
JBLUPipe top      11/26/201812/03/2018Air Transport
OUTTriple top      11/07/201812/07/2018Advertising
PICOHead-and-shoulders bottom      11/16/201812/10/2018Diversified Co.
SNPSDiamond bottom      10/11/201812/13/2018Computer Software and Svcs
TLRDDead-cat bounce      12/13/201812/13/2018Retail (Special Lines)
TDCTriangle, ascending      11/07/201812/13/2018Computer Software and Svcs

 

Weekly screen for chart patterns ending between 12/06/2018 and 12/13/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Alaska Air Group, Inc (ALK)
Industry: Air Transport
Industry RS rank: 47 out of 58
Stock RS rank: 170 out of 593
12/13/18 close: $61.34
1 Month avg volatility: $2.08. Volatility stop (for downward breakout): $66.67 or 8.7% above the close.
Change YTD: -16.56%
Volume: 3,656,700 shares. 3 month avg: 1,966,126 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: Pipe top reversal pattern from 11/26/2018 to 12/03/2018
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.

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Anadarko Petroleum Corp. (APC)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 58
Stock RS rank: 490 out of 593
12/13/18 close: $52.49
1 Month avg volatility: $1.78. Volatility stop (for upward breakout): $48.40 or 7.8% below the close.
Change YTD: -2.14%
Volume: 6,736,300 shares. 3 month avg: 5,746,292 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 bottom reversal pattern from 11/23/2018 to 12/13/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Beacon Roofing Supply Inc. (BECN)
Industry: Retail Building Supply
Industry RS rank: 45 out of 58
Stock RS rank: 491 out of 593
12/13/18 close: $31.82
1 Month avg volatility: $1.60. Volatility stop (for upward breakout): $28.58 or 10.2% below the close.
Change YTD: -50.09%
Volume: 1,323,700 shares. 3 month avg: 811,195 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: Flag continuation pattern from 12/04/2018 to 12/13/2018
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price hits measure rule target 64% of the time.

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Big Lots Inc. (BIG)
Industry: Retail Store
Industry RS rank: 27 out of 58
Stock RS rank: 512 out of 593
12/13/18 close: $29.70
1 Month avg volatility: $1.57. Volatility stop (for downward breakout): $33.14 or 11.6% above the close.
Change YTD: -47.11%
Volume: 1,720,100 shares. 3 month avg: 984,457 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: Dead-cat bounce continuation pattern from 12/07/2018 to 12/07/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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CTS Corp (CTS)
Industry: Electronics
Industry RS rank: 44 out of 58
Stock RS rank: 393 out of 593
12/13/18 close: $27.37
1 Month avg volatility: $0.88. Volatility stop (for downward breakout): $29.81 or 8.9% above the close.
Change YTD: 6.29%
Volume: 135,100 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: Broadening wedge, ascending reversal pattern from 10/29/2018 to 12/13/2018
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.

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Helmerich and Payne Inc. (HP)
Industry: Petroleum (Producing)
Industry RS rank: 52 out of 58
Stock RS rank: 251 out of 593
12/13/18 close: $60.80
1 Month avg volatility: $2.22. Volatility stop (for upward breakout): $55.78 or 8.3% below the close.
Change YTD: -5.94%
Volume: 1,470,700 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: Triangle, symmetrical continuation pattern from 11/19/2018 to 12/13/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Intel Corporation (INTC)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 53 out of 58
Stock RS rank: 320 out of 593
12/13/18 close: $48.29
1 Month avg volatility: $1.27. Volatility stop (for downward breakout): $51.12 or 5.9% above the close.
Change YTD: 4.61%
Volume: 19,302,600 shares. 3 month avg: 27,019,903 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: Broadening top reversal pattern from 10/31/2018 to 12/10/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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JetBlue Airways Corporation (JBLU)
Industry: Air Transport
Industry RS rank: 47 out of 58
Stock RS rank: 273 out of 593
12/13/18 close: $17.27
1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $18.86 or 9.2% above the close.
Change YTD: -22.69%
Volume: 11,018,800 shares. 3 month avg: 6,141,268 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: Pipe top reversal pattern from 11/26/2018 to 12/03/2018
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.

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Outfont Media (OUT)
Industry: Advertising
Industry RS rank: 21 out of 58
Stock RS rank: 172 out of 593
12/13/18 close: $19.62
1 Month avg volatility: $0.56. Volatility stop (for downward breakout): $21.04 or 7.2% above the close.
Change YTD: -14.95%
Volume: 1,061,900 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: Triple top reversal pattern from 11/07/2018 to 12/07/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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PICO Holdings (PICO)
Industry: Diversified Co.
Industry RS rank: 32 out of 58
Stock RS rank: 256 out of 593
12/13/18 close: $10.12
1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $9.27 or 8.4% below the close.
Change YTD: -20.94%
Volume: 58,500 shares. 3 month avg: 140,617 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 bottom reversal pattern from 11/16/2018 to 12/10/2018
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.

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Synopsys Inc (SNPS)
Industry: Computer Software and Svcs
Industry RS rank: 16 out of 58
Stock RS rank: 178 out of 593
12/13/18 close: $89.29
1 Month avg volatility: $2.78. Volatility stop (for upward breakout): $83.01 or 7.0% below the close.
Change YTD: 4.75%
Volume: 1,319,700 shares. 3 month avg: 998,728 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: Diamond bottom reversal pattern from 10/11/2018 to 12/13/2018
Breakout is upward 69% of the time.
Average rise: 36%.
Break-even failure rate: 4%.
Throwbacks occur 53% of the time.
Price hits measure rule target 81% of the time.

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Tailored Brands Inc (TLRD)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 54 out of 58
Stock RS rank: 584 out of 593
12/13/18 close: $14.13
1 Month avg volatility: $1.11. Volatility stop (for downward breakout): $17.41 or 23.3% above the close.
Change YTD: -35.74%
Volume: 17,396,100 shares. 3 month avg: 1,195,355 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Wednesday.
 
Chart pattern: Dead-cat bounce continuation pattern from 12/13/2018 to 12/13/2018
Breakout is downward 67% of the time.
Average decline: 18%.

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Teradata Corp (TDC)
Industry: Computer Software and Svcs
Industry RS rank: 16 out of 58
Stock RS rank: 301 out of 593
12/13/18 close: $37.49
1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $35.02 or 6.6% below the close.
Change YTD: -3.10%
Volume: 1,718,300 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: Triangle, ascending reversal pattern from 11/07/2018 to 12/13/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Thursday 12/13/18. Intraday Market Direction: Nasdaq

The index climbed by 0.9% or 66.48 points. Since 02/05/1971 the index made 291 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.7% on 191 occasions.
     Average loss was -0.8% on 100 occasions.
Expect the index to close higher 65.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/281 or 54.8% of the time.
     The prediction of the index closing lower has been right 48/97 or 49.5% 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.

A head-and-shoulders bottom chart pattern appears on the chart as LS (left shoulder), head, and RS (right shoulder).

It confirms as a valid chart pattern when the index closes above the red line. That happens at A.

At B, the index throws back to the breakout price. Usually, but not guaranteed, is that the index will rise after a throwback completes. There might be a bit of a downward move before the throwback bottoms, but then a recovery should ensue.

$ $ $

I updated the performance statistics of island bottoms.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,425.16    
 Weekly S2  6,635.46  210.29   
 Monthly S1  6,761.74  126.28   
 Weekly S1  6,866.88  105.15   
 Daily S2  7,029.99  163.11   
 Daily S1  7,064.15  34.16   
 Low  7,096.56  32.41   
 Close  7,098.31  1.75   Yes! The Close is close to the Low.
 Open  7,127.00  28.69   
 Daily Pivot  7,130.72  3.72   Yes! The Daily Pivot is close to the Open.
 61.8% Down from Intraday High  7,135.04  4.32   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  7,146.92  11.89   
 38.2% Down from Intraday High  7,158.81  11.89   
 Daily R1  7,164.88  6.07   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 Monthly Pivot  7,167.33  2.45   Yes! The Monthly Pivot is close to the Daily R1.
 Weekly Pivot  7,176.70  9.36   Yes! The Weekly Pivot is close to the Monthly Pivot.
 High  7,197.29  20.59   
 Daily R2  7,231.45  34.16   
 Weekly R1  7,408.12  176.67   
 Monthly R1  7,503.91  95.78   
 Weekly R2  7,717.94  214.03   
 Monthly R2  7,909.50  191.57   

Wednesday 12/12/18. A Look At Indicators

Picture of the chart pattern indicator

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 CPI signaled a bearish turn about a week ago, and down the index went.

It's still bearish. You can see that by the thin blue line near the bottom of the chart.

The good news is that the line has nowhere to go but up.

Picture of the percent down indicators

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).

Shown as a red line on the above chart...
On Tuesday, 60% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 47%.
The fewest was 15% on 01/26/2018.
And the most was 60% on 12/11/2018.
Shown as a blue line on the above chart...
The 497 stocks in my database are down an average of 25% from their yearly high.
A week ago, the average was 20%.
The peak was 9% on 01/22/2018.
And the bottom was 25% on 12/11/2018.

The above numbers show a huge downturn in both lines. Usually you'll see a 1-percentage point difference, but maybe 2 points in a bad week.

This week, for the red line, it's off 13 percentage points. Wow. What a reversal.

Stocks in the general market are suffering. That's what the numbers say.

I've never seen it this bad. Looking at the S&P, the index appears to be resting on support, so I expect an upward turn. But who knows. Clearly the market won't like interest rates rising.

-- Thomas Bulkowski

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Tuesday 12/11/18. Intraday Market Direction: Dow

The index climbed by 0.1% or 34.31 points. Since 10/01/1928 the index made 1336 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.5% on 690 occasions.
     Average loss was -0.6% on 646 occasions.
Expect the index to close higher 51.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 176/294 or 59.9% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% 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 Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

This is a chart of the future, but you might not recognize it as such. So let's dream a bit.

At point A, the index hit bottom and bounced. Notice that the index has pierced the down-sloping trendline, but not by much. Also notice how the rise from A is curving to the right, as if upward momentum is slowing.

Now look at what happened in the past. At B, the index hit a low and bounced. It climbed, hit the trendline and dropped to C. (To be fair, the trendline wouldn't have been drawn there, but a bit lower, with a steeper slope, making it also pierce a down-sloping trendline). The index kept on going down to A.

As we look to the future, I expect the index to round over and form a second bottom, near where A is now. Whether it bounces upward or continues lower, I'll leave to market sentiment.

$ $ $

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

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  22,945.50    
 Weekly S2  23,143.91  198.41   
 Daily S2  23,649.04  505.13   
 Monthly S1  23,684.38  35.34   Yes! The Monthly S1 is close to the Daily S2.
 Weekly S1  23,783.58  99.20   
 Low  23,881.37  97.79   
 Daily S1  24,036.15  154.78   
 61.8% Down from Intraday High  24,118.00  81.85   
 50% Down from Intraday High  24,191.09  73.09   
 38.2% Down from Intraday High  24,264.18  73.09   
 Daily Pivot  24,268.48  4.30   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Open  24,360.95  92.47   
 Close  24,423.26  62.31   
 High  24,500.81  77.55   
 Daily R1  24,655.59  154.78   
 Weekly Pivot  24,881.90  226.31   
 Daily R2  24,887.92  6.02   Yes! The Daily R2 is close to the Weekly Pivot.
 Monthly Pivot  24,981.10  93.18   
 Weekly R1  25,521.57  540.47   
 Monthly R1  25,719.98  198.41   
 Weekly R2  26,619.89  899.91   
 Monthly R2  27,016.70  396.81   

Monday 12/10/18. Market Monday: The Week Ahead

My Prediction

Picture of the Nasdaq composite on the weekly scale.

I show the Nasdaq composite on the weekly scale, so I could capture the longer view.

...Not sure it's helped, but you decide.

I drew a horizontal red line where support is. However, I'm not sure the index will actually find support there.

Then I mirrored the horizontal move earlier in the year, flipped it horizontally and pasted it to the right of the blue line.

These price mirrors can help predict what will happen in the future by looking at the past.

So we see the index rebounding in the coming weeks only to sink again and eventually move horizontally. The entire picture looks like a complex head-and-shoulders top.

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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: Up 287.97 points.
Tuesday: Down 799.36 points.
Thursday: Down 79.4 points.
Friday: Down 558.72 points.
Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were down 1149.51 points or 4.5%.
The Nasdaq composite was down 361.29 points or 4.9%.
The S&P 500 index was down 127.09 points or 4.6%.

Year to Date...

Dow Industrials
     9.5% down from the high of 26,951.81 on 10/03/2018.
     4.5% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     14.3% down from the high of 8,133.30 on 08/30/2018.
     5.1% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     10.5% down from the high of 2,940.91 on 09/21/2018.
     4.0% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 12/07/2018, the CPI had:

22 bearish patterns,
0 bullish patterns,
87 patterns waiting for breakout.
The CPI signal is 0.0%, which is bearish (<= 35%).

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

Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  23,779  24,084  24,590  24,895  25,401 
Weekly  23,132  23,761  24,870  25,499  26,608 
Monthly  22,934  23,662  24,970  25,697  27,005 
S&P500 (^GSPC): Daily  2,570  2,601  2,655  2,687  2,740 
Weekly  2,506  2,570  2,685  2,748  2,864 
Monthly  2,496  2,565  2,690  2,758  2,884 
Nasdaq (^IXIC): Daily  6,780  6,875  7,040  7,135  7,300 
Weekly  6,592  6,781  7,134  7,322  7,675 
Monthly  6,382  6,676  7,124  7,418  7,866 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week down 28.7%   The trend may continue. 
 1 month down 21.2%   Expect a reversal soon. 
 S & P 500 (^GSPC) 1 week down 27.0%   The trend may continue. 
 1 month down 21.8%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 1 week down 28.5%   The trend may continue. 
 1 month down 26.3%   The trend may continue. 

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is over.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

 Found Chart Pattern Name
13Double Top, Adam and Adam
11Pipe bottom
11Triangle, symmetrical
7Double Bottom, Adam and Adam
6Dead-cat bounce
6Double Top, Eve and Adam
6Broadening top
6Head-and-shoulders top
4Double Bottom, Eve and Adam
4Triple top

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

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

 

 

 

 

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

This WeekLast Week
1. Electric Utility (Central)1. Healthcare Information
2. Electric Utility (East)2. Household Products
3. Household Products3. Precision Instrument
4. Short ETFs4. Food Processing
5. Electric Utility (West)5. Electric Utility (Central)

-- Thomas Bulkowski

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Friday 12/7/18. Pattern Trading Setups for the Weekend.

Go to Table.

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

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

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

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 600 stocks searched, or 3.3%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 2 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 8 bearish ones with any remaining (9) 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.

More...

-- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AYIDouble Top, Adam and Adam      11/07/201812/03/2018Furn/Home Furnishings
CEBroadening top      11/12/201812/03/2018Chemical (Basic)
CELGPipe bottom      11/19/201811/26/2018Biotechnology
CENXTriangle, symmetrical      10/09/201812/04/2018Metals and Mining (Div.)
CGNXTriangle, ascending      10/16/201812/06/2018Precision Instrument
CYRising wedge      10/24/201812/04/2018Semiconductor
DOVHead-and-shoulders top      11/08/201812/03/2018Machinery
ETFCDouble Top, Adam and Adam      11/08/201812/03/2018Securities Brokerage
EMRDouble Top, Adam and Adam      11/16/201812/03/2018Computers and Peripherals
EVHDouble Top, Adam and Adam      11/08/201811/30/2018Healthcare Information
FFGDouble Top, Eve and Adam      11/14/201812/04/2018Insurance (Life)
FOEDouble Top, Eve and Adam      11/14/201812/03/2018Chemical (Specialty)
MAPipe bottom      11/19/201811/26/2018Financial Services
NETriangle, symmetrical      11/19/201812/04/2018Oilfield Svcs/Equipment
NUSDouble Top, Adam and Adam      11/16/201812/04/2018Toiletries/Cosmetics
POLDouble Top, Adam and Adam      11/07/201812/03/2018Chemical (Specialty)
RGADouble Top, Eve and Eve      11/14/201812/03/2018Insurance (Life)
SHWBroadening top      11/14/201812/06/2018Chemical (Basic)
AMTDBroadening top      10/31/201812/06/2018Securities Brokerage
TXTTriple top      11/08/201812/03/2018Diversified Co.
VMIDouble Top, Adam and Adam      11/08/201812/03/2018Metal Fabricating
WATBroadening top      11/08/201812/06/2018Precision Instrument

 

Weekly screen for chart patterns ending between 11/29/2018 and 12/06/2018. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Acuity Brands, Inc (AYI)
Industry: Furn/Home Furnishings
Industry RS rank: 30 out of 58
Stock RS rank: 203 out of 593
12/6/18 close: $120.44
1 Month avg volatility: $4.39. Volatility stop (for downward breakout): $129.45 or 7.5% above the close.
Change YTD: -31.57%
Volume: 888,400 shares. 3 month avg: 670,414 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 11/07/2018 to 12/03/2018
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.

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Celanese Corp (CE)
Industry: Chemical (Basic)
Industry RS rank: 40 out of 58
Stock RS rank: 460 out of 593
12/6/18 close: $94.66
1 Month avg volatility: $2.71. Volatility stop (for downward breakout): $100.23 or 5.9% above the close.
Change YTD: -11.60%
Volume: 1,384,400 shares. 3 month avg: 691,697 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 reversal pattern from 11/12/2018 to 12/03/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Celgene Corp (CELG)
Industry: Biotechnology
Industry RS rank: 12 out of 58
Stock RS rank: 289 out of 593
12/6/18 close: $72.80
1 Month avg volatility: $1.89. Volatility stop (for upward breakout): $67.24 or 7.6% below the close.
Change YTD: -30.24%
Volume: 6,694,100 shares. 3 month avg: 7,439,311 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: Pipe bottom reversal pattern from 11/19/2018 to 11/26/2018
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.

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Century Aluminum Co. (CENX)
Industry: Metals and Mining (Div.)
Industry RS rank: 53 out of 58
Stock RS rank: 584 out of 593
12/6/18 close: $8.65
1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $7.36 or 14.9% below the close.
Change YTD: -55.96%
Volume: 1,697,500 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: Triangle, symmetrical continuation pattern from 10/09/2018 to 12/04/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Cognex (CGNX)
Industry: Precision Instrument
Industry RS rank: 4 out of 58
Stock RS rank: 272 out of 593
12/6/18 close: $43.92
1 Month avg volatility: $1.67. Volatility stop (for upward breakout): $39.06 or 11.1% below the close.
Change YTD: -28.19%
Volume: 1,752,200 shares. 3 month avg: 1,157,365 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: Triangle, ascending reversal pattern from 10/16/2018 to 12/06/2018
Breakout is upward 70% of the time.
Average rise: 35%.
Break-even failure rate: 13%.
Throwbacks occur 57% of the time.
Price hits measure rule target 75% of the time.

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Cypress Semiconductor (CY)
Industry: Semiconductor
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 56 out of 58
Stock RS rank: 479 out of 593
12/6/18 close: $13.37
1 Month avg volatility: $0.42. Volatility stop (for downward breakout): $14.33 or 7.2% above the close.
Change YTD: -12.27%
Volume: 7,035,800 shares. 3 month avg: 5,847,760 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: Rising wedge reversal pattern from 10/24/2018 to 12/04/2018
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price hits measure rule target 46% of the time.

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Dover Corp (DOV)
Industry: Machinery
Industry RS rank: 32 out of 58
Stock RS rank: 149 out of 593
12/6/18 close: $81.84
1 Month avg volatility: $1.66. Volatility stop (for downward breakout): $85.82 or 4.9% above the close.
Change YTD: -18.96%
Volume: 2,574,700 shares. 3 month avg: 1,038,811 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: Head-and-shoulders top reversal pattern from 11/08/2018 to 12/03/2018
Breakout is downward 100% of the time.
Average decline: 22%.
Break-even failure rate: 4%.
Pullbacks occur 50% of the time.
Price hits measure rule target 55% of the time.

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E-Trade Financial Corp (ETFC)
Industry: Securities Brokerage
Industry RS rank: 55 out of 58
Stock RS rank: 522 out of 593
12/6/18 close: $47.40
1 Month avg volatility: $1.48. Volatility stop (for downward breakout): $50.51 or 6.6% above the close.
Change YTD: -4.38%
Volume: 6,738,100 shares. 3 month avg: 2,308,982 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 11/08/2018 to 12/03/2018
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.

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Emerson Electric (EMR)
Industry: Computers and Peripherals
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 26 out of 58
Stock RS rank: 366 out of 593
12/6/18 close: $63.79
1 Month avg volatility: $1.84. Volatility stop (for downward breakout): $68.02 or 6.6% above the close.
Change YTD: -8.47%
Volume: 7,599,700 shares. 3 month avg: 3,509,922 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: Double Top, Adam and Adam reversal pattern from 11/16/2018 to 12/03/2018
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.

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Evolent Health, Inc (EVH)
Industry: Healthcare Information
Industry RS rank: 8 out of 58
Stock RS rank: 244 out of 593
12/6/18 close: $20.80
1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $24.58 or 18.2% above the close.
Change YTD: 61.87%
Volume: 1,635,700 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: Double Top, Adam and Adam reversal pattern from 11/08/2018 to 11/30/2018
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.

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FBL Financial Group (FFG)
Industry: Insurance (Life)
Industry RS rank: 38 out of 58
Stock RS rank: 428 out of 593
12/6/18 close: $67.65
1 Month avg volatility: $1.39. Volatility stop (for downward breakout): $71.98 or 6.4% above the close.
Change YTD: -2.87%
Volume: 28,100 shares. 3 month avg: 18,072 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 Thursday.
 
Chart pattern: Double Top, Eve and Adam reversal pattern from 11/14/2018 to 12/04/2018
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 17 out of 58
Stock RS rank: 396 out of 593
12/6/18 close: $17.87
1 Month avg volatility: $0.79. Volatility stop (for downward breakout): $19.58 or 9.5% above the close.
Change YTD: -24.25%
Volume: 512,600 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, Eve and Adam reversal pattern from 11/14/2018 to 12/03/2018
Breakout is downward 100% of the time.
Average decline: 15%.
Break-even failure rate: 13%.
Pullbacks occur 64% of the time.
Price hits measure rule target 72% of the time.

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Mastercard Inc (MA)
Industry: Financial Services
Industry RS rank: 18 out of 58
Stock RS rank: 195 out of 593
12/6/18 close: $202.99
1 Month avg volatility: $6.19. Volatility stop (for upward breakout): $181.84 or 10.4% below the close.
Change YTD: 34.11%
Volume: 6,459,000 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: Pipe bottom reversal pattern from 11/19/2018 to 11/26/2018
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.

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Noble Corporation (NE)
Industry: Oilfield Svcs/Equipment
Industry RS rank: 58 out of 58
Stock RS rank: 547 out of 593
12/6/18 close: $3.86
1 Month avg volatility: $0.26. Volatility stop (for upward breakout): $3.22 or 16.6% below the close.
Change YTD: -13.26%
Volume: 8,716,300 shares. 3 month avg: 7,535,162 shares.
Since 2009 bear market, the best buy day (fewest up closes) is Monday, and best sell day (most up closes) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 11/19/2018 to 12/04/2018
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price hits measure rule target 66% of the time.

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Nu Skin Enterprises, Inc (NUS)
Industry: Toiletries/Cosmetics
Industry RS rank: 7 out of 58
Stock RS rank: 495 out of 593
12/6/18 close: $63.79
1 Month avg volatility: $2.32. Volatility stop (for downward breakout): $68.77 or 7.8% above the close.
Change YTD: -6.51%
Volume: 356,900 shares. 3 month avg: 417,486 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: Double Top, Adam and Adam reversal pattern from 11/16/2018 to 12/04/2018
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.

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Polyone Corp (POL)
Industry: Chemical (Specialty)
Industry RS rank: 17 out of 58
Stock RS rank: 523 out of 593
12/6/18 close: $31.69
1 Month avg volatility: $0.98. Volatility stop (for downward breakout): $33.73 or 6.4% above the close.
Change YTD: -27.15%
Volume: 392,500 shares. 3 month avg: 446,563 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 11/07/2018 to 12/03/2018
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.

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Reinsurance Group of America (RGA)
Industry: Insurance (Life)
Industry RS rank: 38 out of 58
Stock RS rank: 258 out of 593
12/6/18 close: $143.72
1 Month avg volatility: $3.41. Volatility stop (for downward breakout): $150.70 or 4.9% above the close.
Change YTD: -7.83%
Volume: 669,000 shares. 3 month avg: 326,800 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, Eve and Eve reversal pattern from 11/14/2018 to 12/03/2018
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 11%.
Pullbacks occur 59% of the time.
Price hits measure rule target 73% of the time.

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Sherwin-Williams Co (SHW)
Industry: Chemical (Basic)
Industry RS rank: 40 out of 58
Stock RS rank: 178 out of 593
12/6/18 close: $401.03
1 Month avg volatility: $10.79. Volatility stop (for downward breakout): $426.54 or 6.4% above the close.
Change YTD: -2.20%
Volume: 1,288,200 shares. 3 month avg: 564,294 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: Broadening top reversal pattern from 11/14/2018 to 12/06/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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TD AmeriTrade Holding A (AMTD)
Industry: Securities Brokerage
Industry RS rank: 55 out of 58
Stock RS rank: 435 out of 593
12/6/18 close: $51.35
1 Month avg volatility: $1.33. Volatility stop (for downward breakout): $54.16 or 5.5% above the close.
Change YTD: 0.43%
Volume: 3,486,600 shares. 3 month avg: 2,043,012 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 reversal pattern from 10/31/2018 to 12/06/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Textron Inc (TXT)
Industry: Diversified Co.
Industry RS rank: 29 out of 58
Stock RS rank: 498 out of 593
12/6/18 close: $53.01
1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $56.14 or 5.9% above the close.
Change YTD: -6.33%
Volume: 2,920,100 shares. 3 month avg: 1,461,508 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: Triple top reversal pattern from 11/08/2018 to 12/03/2018
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 10%.
Pullbacks occur 61% of the time.
Price hits measure rule target 40% of the time.

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Valmont Industries Inc. (VMI)
Industry: Metal Fabricating
Industry RS rank: 45 out of 58
Stock RS rank: 461 out of 593
12/6/18 close: $120.87
1 Month avg volatility: $3.81. Volatility stop (for downward breakout): $130.48 or 8.0% above the close.
Change YTD: -27.12%
Volume: 202,000 shares. 3 month avg: 117,540 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: Double Top, Adam and Adam reversal pattern from 11/08/2018 to 12/03/2018
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.

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Waters Corp (WAT)
Industry: Precision Instrument
Industry RS rank: 4 out of 58
Stock RS rank: 242 out of 593
12/6/18 close: $193.88
1 Month avg volatility: $3.74. Volatility stop (for downward breakout): $202.40 or 4.4% above the close.
Change YTD: 0.36%
Volume: 794,600 shares. 3 month avg: 474,158 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: Broadening top reversal pattern from 11/08/2018 to 12/06/2018
Breakout is downward 50% of the time.
Average decline: 15%.
Break-even failure rate: 18%.
Pullbacks occur 48% of the time.
Price hits measure rule target 37% of the time.

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Thursday 12/6/18. Intraday Market Direction: Nasdaq

The index dropped by -3.8% or -283.08 points. Since 02/05/1971 the index made 8 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 1.9% on 2 occasions.
     Average loss was -0.9% on 6 occasions.
Expect the index to close lower 75.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 154/281 or 54.8% of the time.
     The prediction of the index closing lower has been right 48/96 or 50.0% 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 from Tuesday's trading.

From the opening bell, the index dropped, eventually bouncing when it reached the horizontal blue line.

I would not have thought the index would find support there.

The index bounced and then made a lower low to end the session at the red line.

The line appears to rest on thin air on the left side. So that leads me to believe the index will open down tomorrow (Thursday).

Of course, support isn't a point or a line. Rather, it's an area. The red line hovers just above Wednesday's peak, so maybe it'll find enough support there to prevent a further drop.

$ $ $

I updated the performance statistics for pipe tops.

$ $ $

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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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  6,445.20    
 Monthly S1  6,801.82  356.61   
 Weekly S2  6,835.11  33.29   
 Daily S2  6,972.22  137.11   
 Weekly S1  6,996.77  24.55   Yes! The Weekly S1 is close to the Daily S2.
 Daily S1  7,065.32  68.55   
 Low  7,150.11  84.79   
 Close  7,158.43  8.32   Yes! The Close is close to the Low.
 Weekly Pivot  7,164.78  6.35   Yes! The Weekly Pivot is close to the Close.
 Monthly Pivot  7,187.37  22.59   Yes! The Monthly Pivot is close to the Weekly Pivot.
 Daily Pivot  7,243.22  55.84   
 61.8% Down from Intraday High  7,253.63  10.42   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  7,285.61  31.98   
 38.2% Down from Intraday High  7,317.59  31.98   
 Weekly R1  7,326.44  8.85   Yes! The Weekly R1 is close to the 38.2% Down from Intraday High.
 Daily R1  7,336.32  9.88   Yes! The Daily R1 is close to the Weekly R1.
 Open  7,407.95  71.63   
 High  7,421.11  13.16   Yes! The High is close to the Open.
 Weekly R2  7,494.45  73.34   
 Daily R2  7,514.22  19.77   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1  7,543.99  29.77   
 Monthly R2  7,929.54  385.56   

Tuesday 12/4/18. Intraday Market Direction: Dow

The index climbed by 1.1% or 287.97 points. Since 10/01/1928 the index made 361 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 208 occasions.
     Average loss was -0.8% on 153 occasions.
Expect the index to close higher 57.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 176/293 or 60.1% of the time.
     The prediction of the index closing lower has been right 36/71 or 50.7% 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 Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

On Friday (when I wrote Monday's blog post), I predicted that the Dow would rise 800 points if news came out of an agreement with China, settling the trade war.

At A, the index climbed only 500 points. Why? Because nothing has really changed. Trump says they'll work out their differences over the next 90 days while the Chinese says there is no such time limit.

No wonder the index retraced back down to B.

Still, a gain is a gain, so I'll take it and my portfolio balance thanks, you, too. Just get it done and settle the dispute.

$ $ $

I updated the performance statistics for pipe bottoms.

$ $ $

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

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© 2018 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,253.24    
 Weekly S2  23,933.99  680.75   
 Monthly S1  24,539.83  605.84   
 Weekly S1  24,880.21  340.38   
 Weekly Pivot  25,214.96  334.75   
 Monthly Pivot  25,408.83  193.87   
 Daily S2  25,516.02  107.19   
 Low  25,670.51  154.49   
 Daily S1  25,671.22  0.71   Yes! The Daily S1 is close to the Low.
 Open  25,779.57  108.35   
 61.8% Down from Intraday High  25,788.81  9.24   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High  25,825.36  36.54   
 Daily Pivot  25,825.72  0.36   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  25,826.43  0.71   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  25,861.90  35.47   
 High  25,980.21  118.31   
 Daily R1  25,980.92  0.71   Yes! The Daily R1 is close to the High.
 Daily R2  26,135.42  154.49   
 Weekly R1  26,161.18  25.76   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2  26,495.93  334.75   
 Monthly R1  26,695.42  199.49   
 Monthly R2  27,564.42  868.99   

Monday 12/3/18. Market Monday: The Week Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily chart.

I believe the Dow will take one of two paths this week. The first, the optimistic one, will happen when the US (meaning Trump) comes to some sort of resolution to the trade war with China at the G20 meeting.

I show that move with a red, upward arrow. This move will be several hundred points, but 800 comes to mind (for no specific reason. It's just a number I pulled out of thin air. I didn't look for any overhead resistance).

If a deal falls through, the market will take a hit, following the blue line lower. That move will erase the gains and take it back down to 24300, but probably much lower. Maybe 800 down.

Again, I didn't look back for support, but know or believe that the climb up from 24,300 will be erased. But that's just a 250 point drop, so the damage will be far worse than that.

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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: Up 354.29 points.
Tuesday: Up 108.49 points.
Wednesday: Up 617.7 points.
Thursday: Down 27.59 points.
Friday: Up 199.62 points.

For the Week...

The Dow industrials were up 1252.51 points or 5.2%.
The Nasdaq composite was up 391.56 points or 5.6%.
The S&P 500 index was up 127.61 points or 4.8%.

Year to Date...

Dow Industrials
     5.2% down from the high of 26,951.81 on 10/03/2018.
     9.4% up from the low of 23,344.52 on 04/02/2018.
Nasdaq
     9.9% down from the high of 8,133.30 on 08/30/2018.
     10.6% up from the low of 6,630.67 on 02/09/2018.
S&P 500
     6.1% down from the high of 2,940.91 on 09/21/2018.
     9.0% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 11/30/2018, the CPI had:

14 bearish patterns,
44 bullish patterns,
388 patterns waiting for breakout.
The CPI signal is 75.9%, which is bullish (>= 65%).

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.

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  25,148  25,343  25,446  25,642  25,745 
Weekly  23,838  24,688  25,119  25,969  26,400 
Monthly  23,157  24,348  25,313  26,503  27,468 
S&P500 (^GSPC): Daily  2,723  2,742  2,751  2,770  2,779 
Weekly  2,613  2,686  2,724  2,797  2,835 
Monthly  2,515  2,637  2,726  2,849  2,938 
Nasdaq (^IXIC): Daily  7,229  7,280  7,306  7,357  7,383 
Weekly  6,892  7,112  7,222  7,441  7,552 
Monthly  6,503  6,917  7,245  7,659  7,987 
  • Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week's price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it's overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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Consecutive Price Trends

Index Consecutive
Closes So Far 
% Comments 
 Dow industrials (^DJI) 1 week up 44.9%   Expect a random direction. 
 1 month up 55.0%   Expect a random direction. 
 S & P 500 (^GSPC) 1 week up 45.4%   Expect a random direction. 
 1 month up 55.6%   Expect a random direction. 
 Nasdaq composite (^IXIC) 1 week up 46.5%   Expect a random direction. 
 1 month up 47.9%   Expect a random direction. 

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.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

I found 57 pipe bottoms last week, which is very bullish! Large numbers of pipe bottoms often signal the start of a short to intermediate-term move up before price drops back down, forming an unconfirmed double bottom.

 Found Chart Pattern Name
13Dead-cat bounce
9Triangle, symmetrical
8Double Bottom, Adam and Adam
6Double Bottom, Eve and Adam
6Pipe top
5Double Top, Adam and Adam
5Head-and-shoulders bottom
4Double Bottom, Eve and Eve
4Triple bottom
3Triple top

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

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

 

 

 

 

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

This WeekLast Week
1. Healthcare Information1. Household Products
2. Household Products2. Food Processing
3. Precision Instrument3. Electric Utility (Central)
4. Food Processing4. Healthcare Information
5. Electric Utility (Central)5. Medical Services

-- Thomas Bulkowski

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Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.