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     29,300 or 27,400 by 11/01/2020   12,000 or 11,000 by 11/01/2020   915 or 840 by 11/01/2020   12,800 or 11,300 by 11/01/2020   3,700 or 3,400 by 11/01/2020
CPI (updated daily): 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     29,300 or 27,400 by 11/01/2020   12,000 or 11,000 by 11/01/2020   915 or 840 by 11/01/2020   12,800 or 11,300 by 11/01/2020   3,700 or 3,400 by 11/01/2020
CPI (updated daily): on 9/25/20

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

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

My Prediction

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.

A Brief Look Back

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

For the Week...

Year to Date...

Options Expiration

No options expire this week.

Swing Traders: Pivot Points

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

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

Here are the formulas:

Earnings, Chart Patterns & Industries

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

Here's a symbol list of 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.

-- Thomas Bulkowski

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

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

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

$ $ $

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

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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