Bulkowski's Blog: ThePatternSite.com
As of 10/15/2020
  Indus: 28,494 -19.80 -0.1%  
  Trans: 11,989 +101.34 +0.9%  
  Utils: 875 +0.03 +0.0%  
  Nasdaq: 11,714 -54.86 -0.5%  
  S&P 500: 3,483 -5.33 -0.2%  
YTD
-0.2%  
 +10.0%  
-0.4%  
 +30.6%  
 +7.8%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 9/25/20
As of 10/15/2020
  Indus: 28,494 -19.80 -0.1%  
  Trans: 11,989 +101.34 +0.9%  
  Utils: 875 +0.03 +0.0%  
  Nasdaq: 11,714 -54.86 -0.5%  
  S&P 500: 3,483 -5.33 -0.2%  
YTD
-0.2%  
 +10.0%  
-0.4%  
 +30.6%  
 +7.8%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 9/25/20

 

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Monday 10/19/20. Market Monday: Nasdaq Cup w/Handle?

My Prediction

Picture of the Nasdaq composite on the daily scale.

This is a picture of the Nasdaq composite on the daily scale.

I'm not a big fan of patterns with rounded turns. They are hard to recognize using automated means and often don't work well anyway.

The cup with handle pattern is an exception on the performance front. A recent review of chart patterns shows its performance in bull markets ranks third out of 39 patterns, where a rank of 1 is best.

So it's at the top of the list.

Could this chart be a picture of one?

It has the ingredients of a cup. Price rises into the cup (the blue channel). A concave rounded turn follows (red line). A handle on the right follows the cup.

So far, the handle hasn't dropped far, which is a good thing. Short handles are good, too.

The cup isn't a smooth as I like to see, but few patterns are perfect.

The pattern will confirm if or when price closes above the right rim. If the handle drops below midway down the cup, then that's bad news. If the handle lasts more than 22 days, that's also bad news. We'll have to see how this pattern continues to unfold in the coming days.

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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 250.62 points.
Tuesday: Down 157.71 points.
Wednesday: Down 165.81 points.
Thursday: Down 19.8 points.
Friday: Up 112.11 points.

For the Week...

The Dow industrials were up 19.41 points or 0.1%.
The Nasdaq composite was up 91.62 points or 0.8%.
The S&P 500 index was up 6.68 points or 0.2%.

Year to Date...

Dow Industrials
     3.3% down from the high of 29,568.57 on 02/12/2020.
     57.1% up from the low of 18,213.65 on 03/23/2020.
Nasdaq
     3.3% down from the high of 12,074.06 on 09/02/2020.
     76.0% up from the low of 6,631.42 on 03/23/2020.
S&P 500
     2.9% down from the high of 3,588.11 on 09/02/2020.
     58.9% up from the low of 2,191.86 on 03/23/2020.

Options Expiration

No options expire this week.

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Swing Traders: Pivot Points

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

IndexS2S1PivotR1R2
Dow Industrials (^DJI): Daily  28,401  28,504  28,673  28,776  28,945 
Weekly  27,805  28,206  28,582  28,983  29,360 
Monthly  25,612  27,109  28,034  29,531  30,456 
S&P500 (^GSPC): Daily  3,458  3,471  3,493  3,506  3,529 
Weekly  3,383  3,433  3,492  3,542  3,600 
Monthly  3,074  3,279  3,414  3,619  3,755 
Nasdaq (^IXIC): Daily  11,537  11,604  11,716  11,783  11,895 
Weekly  11,326  11,499  11,732  11,905  12,139 
Monthly  9,939  10,806  11,386  12,252  12,832 

Here are the formulas:

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

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Earnings, Chart Patterns & Industries

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

Here's a symbol list of 108 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: AYI, AES, ALKS, ADS, AMZN, AEL, AMWD, AMGN, APH, AVY, AXS, BMI, BLL, BSET, BKNG, BRC, BRKS, BBW, BG, CBT, COG, CAL, CPB, CE, CX, CF, CRL, CHD, CLNE, CNO, CMCO, CONN, CLR, COST, COTY, CCK, CTS, DHR, DDS, EMR, EQT, EXPD, FISV, FLEX, FCX, GE, GL, GES, IEX, ITW, INCY, INTU, ISRG, KELYA, KBAL, KLAC, LH, LRCX, LEG, LLY, LOW, MCHX, MDCA, MLHR, NWL, JWN, NUS, OMCL, PKG, PTEN, PRFT, PFE, DGX, ROG, SKX, STMP, TMO, TJX, TOL, TG, TREX, SLCA, VLO, WAT, WLK, WWW, ZBRA, ITA, IYM, IHI, IEO, IAT, IGV, EWH, PPA, PHO, ILF, XLI, XLB, XAR, SMH. Clink this link for details (pattern type, start and end dates).

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

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

This WeekLast Week
1. Homebuilding1. Homebuilding
2. Air Transport2. Air Transport
3. Shoe3. Retail Building Supply
4. Retail Building Supply4. Retail (Special Lines)
5. Retail (Special Lines)5. Shoe
6. Furn/Home Furnishings6. Semiconductor
7. Semiconductor7. E-Commerce
8. Chemical (Diversified)8. Computer Software and Svcs
9. Human Resources9. Internet
10. Chemical (Basic)10. Healthcare Information
Best Performing AboveWorst Performing Below
50. Electric Utility (Central)50. Chemical (Specialty)
51. Insurance (Prop/Casualty)51. Electric Utility (Central)
52. Aerospace/Defense52. Insurance (Prop/Casualty)
53. Oilfield Svcs/Equipment53. Natural Gas (Diversified)
54. Petroleum (Integrated)54. Oilfield Svcs/Equipment
55. Natural Gas (Diversified)55. Petroleum (Integrated)
56. Electric Utility (West)56. Electric Utility (West)
57. Petroleum (Producing)57. Natural Gas (Distributor)
58. Natural Gas (Distributor)58. Petroleum (Producing)
59. Short ETFs59. Short ETFs

-- Thomas Bulkowski

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Friday 10/16/20. Pattern Trading Setups for the Weekend.

$ $ $

Here's a symbol list of 174 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: DDD, ANF, AXDX, AYI, ADBE, AEIS, AMD, AKAM, ALKS, DOX, AMED, AEP, AIG, AMGN, AMN, APH, AON, APOG, ARCB, ARW, ADSK, AVY, BCPC, BLL, BAX, BERY, BBY, BIG, BMRN, BKH, BKNG, EPAY, COG, CALM, CLS, CX, CNC, CNP, CVX, CNA, CLR, GLW, COST, CRH, CROX, CCRN, CCK, CMI, DFS, EIX, EIGI, EQT, EXC, FDS, FOE, FTNT, FCX, FDP, FRD, GME, IT, GE, GIS, GPRO, GFF, THG, HSC, IDXX, ITW, ILMN, INCY, NSP, IBP, IIIN, IPAR, IBKR, TILE, IPG, IVC, KBH, KBAL, LZB, LRCX, LEG, LLY, LNC, L, LOW, MTSI, MANH, MRO, MAS, MA, MDCA, MRK, MSFT, MS, MLI, MUR, MYL, NTAP, OXY, OMCL, ASGN, OUT, PKG, PATK, PTEN, PLXS, POR, PPL, PRU, PHM, DGX, RMBS, RGS, REV, RHI, ROK, RCKY, ROG, CRM, SEE, SRE, NOW, SLGN, SWN, SCS, TKR, TOL, TZOO, TREX, SLCA, VEEV, VRTX, WERN, WWW, ZBRA, IAI, ITB, FDN, FXI, BOTZ, IYH, IHF, IGV, IYF, EWK, EWC, EWH, EPP, EWY, EWL, EWT, THD, EWU, IBB, PHO, XLV, XHB, XRT, VHT. Clink this link for details (pattern type, start and end dates).

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

$ $ $

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

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

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 578 stocks searched, or 2.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

I found 1 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 7 bullish chart patterns this week and 2 bearish ones with any remaining (5) 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.

For details about the chart patterns, click here.

-- Thomas Bulkowski

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 Symbol  Chart Pattern  Bullish 
 Bearish 
Start End Industry
DDDFlag      10/09/202010/15/2020Electronics
ANIKBroadening top      07/15/202010/12/2020Biotechnology
ARWPennant      10/08/202010/14/2020Electronics
CBTFlag      10/09/202010/15/2020Chemical (Diversified)
COGPipe bottom      09/28/202010/05/2020Natural Gas (Diversified)
CTSPennant      10/08/202010/15/2020Electronics
DRQTriangle, symmetrical      09/30/202010/09/2020Oilfield Svcs/Equipment
GPROFlag, high and tight      09/11/202010/15/2020Electronics
LLYBroadening bottom      08/21/202010/09/2020Drug
MTRXTriangle, symmetrical      08/31/202010/15/2020Oilfield Svcs/Equipment
OMCLHorn bottom      09/21/202010/05/2020Healthcare Information
OTEXDouble Top, Eve and Adam      10/01/202010/12/2020E-Commerce
SHWTriangle, symmetrical      09/04/202010/14/2020Chemical (Basic)
VRTXDead-cat bounce      10/15/202010/15/2020Biotechnology

 

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Thursday 10/15/20. Intraday Market Direction: Nasdaq

The index dropped by -0.8% or -95.17 points. Since 02/05/1971 the index made 258 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 129 occasions.
     Average loss was -1.1% on 129 occasions.
Expect the index to close higher 50.0% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 198/354 or 55.9% of the time.
     The prediction of the index closing lower has been right 57/116 or 49.1% 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 triple top appears on the chart as the three peaks 1-2-3. It confirms as a valid chart pattern when the index closes below the blue line. I use a close instead of the low price to avoid premature breakouts. In this example, the index broke out downward at A.

Following that, a flag appeared. I show that at B. The flagpole (the drop from C to the start of B) isn't really long enough to support the pattern. In other words, it doesn't look proportional. The flag is too long for the flagpole.

If you look from point 3 to the start of B, there's a measured move down chart pattern where the flag has returned to the corrective phase of the MMD. That's how MMDs often behave.

After that, the security usually resumes its downward trend, so that's what I'm looking for on Thursday.

$ $ $

Here's a symbol list of 105 chart and candlestick patterns (13 "investment grade" candle patterns) found in today's securities using my version of Patternz: ADBE, AMD, AKAM, ALRM, ALKS, DOX, AMED, AMGN, ASH, AXS, BBBY, BMRN, COG, CAL, CLS, CVX, CNO, CMTL, CAG, CONN, GLW, COST, CRH, DDS, EIGI, EQT, XOM, FAST, FISV, IT, GES, HLIT, HSIC, HOV, ILMN, NSP, IBP, IPAR, IBKR, IVC, JNJ, LZB, LLY, RAMP, LXU, MTSI, MANH, MRO, MCHX, MLM, MSFT, MLHR, NBR, NFG, NWL, NEU, NXGN, NKE, NWPX, OGE, OLN, OMCL, OTEX, OUT, PTEN, PRFT, PLXS, QCOM, REV, CRM, SMG, SEIC, SHW, SXI, TGT, TKR, TREX, SLCA, VMI, V, WMT, WLK, ZBRA, IYC, IHE, FDN, BOTZ, IGV, SOXX, EWK, EWW, EWP, EWL, TUR, EWU, IBB, XLY, XHB, VHT. Clink this link for details (pattern type, start and end dates).

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

$ $ $

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

-- Thomas Bulkowski

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© 2020 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  10,228.08    
 Monthly S1  10,998.40  770.33   
 Weekly S2  11,034.69  36.29   
 Monthly Pivot  11,289.82  255.13   
 Weekly S1  11,401.71  111.89   
 Weekly Pivot  11,491.47  89.76   
 Daily S2  11,582.10  90.63   
 Daily S1  11,675.41  93.32   
 Low  11,714.35  38.94   
 Close  11,768.73  54.38   
 61.8% Down from Intraday High  11,800.52  31.79   
 Daily Pivot  11,807.67  7.15   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  11,827.13  19.47   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High  11,853.75  26.62   
 Weekly R1  11,858.49  4.74   Yes! The Weekly R1 is close to the 38.2% Down from Intraday High.
 Open  11,889.07  30.58   
 Daily R1  11,900.98  11.91   Yes! The Daily R1 is close to the Open.
 High  11,939.92  38.94   
 Weekly R2  11,948.25  8.33   Yes! The Weekly R2 is close to the High.
 Daily R2  12,033.24  84.99   
 Monthly R1  12,060.14  26.91   
 Monthly R2  12,351.56  291.41   

 

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

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