Bulkowski's Blog: ThePatternSite.com
As of 08/16/2019
  Indus: 25,886 +306.62 +1.2%  
  Trans: 9,967 +202.83 +2.1%  
  Utils: 831 +2.56 +0.3%  
  Nasdaq: 7,896 +129.37 +1.7%  
  S&P 500: 2,889 +41.08 +1.4%  
YTD
 +11.0%  
 +8.7%  
 +16.6%  
 +19.0%  
 +15.2%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019
As of 08/16/2019
  Indus: 25,886 +306.62 +1.2%  
  Trans: 9,967 +202.83 +2.1%  
  Utils: 831 +2.56 +0.3%  
  Nasdaq: 7,896 +129.37 +1.7%  
  S&P 500: 2,889 +41.08 +1.4%  
YTD
 +11.0%  
 +8.7%  
 +16.6%  
 +19.0%  
 +15.2%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019

 

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Monday 8/19/19. The Week Ahead: Bullish Recovery

My Prediction

Picture of the S and P on the daily scale.

I show the S&P 500 index on the daily scale.

If this were on the weekly scale, I'd call bottom A a horn bottom. It has the twin downward spikes separated by a price bar. Price confirms the pattern when it rises and closes above the top of the pattern. I'm working on horn bottoms for the next quiz, incidentally.

The AB turn looks to me like a double bottom, Adam & Adam, to be exact.

I'm thinking that this gives us a hint of what the indices will do in the next few weeks: Move up.

I show that by the red line. Whether it will happen as I show is anyone's guess. The index may move higher than the prior peak in a nice push upward (which I suspect it might do) or fall short in a 2B pattern.

We will, of course, have to wait and see.

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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 389.73 points.
Tuesday: Up 382.2 points.
Wednesday: Down 800.49 points.
Thursday: Up 99.97 points.
Friday: Up 306.62 points.

For the Week...

The Dow industrials were down 401.43 points or 1.5%.
The Nasdaq composite was down 63.15 points or 0.8%.
The S&P 500 index was down 29.97 points or 1.0%.

Year to Date...

Dow Industrials
     5.5% down from the high of 27,398.68 on 07/16/2019.
     14.3% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     5.3% down from the high of 8,339.64 on 07/26/2019.
     22.3% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     4.6% down from the high of 3,027.98 on 07/26/2019.
     18.2% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

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  25,580  25,733  25,831  25,984  26,083 
Weekly  24,797  25,341  25,884  26,429  26,972 
Monthly  24,149  25,018  26,208  27,077  28,267 
S&P500 (^GSPC): Daily  2,853  2,871  2,882  2,900  2,911 
Weekly  2,768  2,828  2,886  2,946  3,004 
Monthly  2,707  2,798  2,913  3,004  3,119 
Nasdaq (^IXIC): Daily  7,798  7,847  7,877  7,926  7,956 
Weekly  7,544  7,720  7,893  8,069  8,241 
Monthly  7,289  7,593  7,966  8,269  8,643 

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 8.6%   Expect a reversal soon. 
 1 month down 21.4%   Expect a reversal soon. 
 S & P 500 (^GSPC) 3 weeks down 6.1%   Expect a reversal soon. 
 1 month down 22.1%   Expect a reversal soon. 
 Nasdaq composite (^IXIC) 3 weeks down 8.5%   Expect a reversal soon. 
 1 month down 26.6%   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 either underway or should be starting soon. The sessions could be more volatile.

 Found Chart Pattern Name
16Triangle, symmetrical
15Pipe top
14Head-and-shoulders top
13Double Top, Adam and Adam
12Dead-cat bounce
10Triple top
8Double Top, Eve and Eve
6Triangle, ascending
5Broadening top
5Double Top, Eve and Adam

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. Cement and Aggregates1. Cement and Aggregates
2. Financial Services2. Financial Services
3. IT Services3. IT Services
4. Insurance (Prop/Casualty)4. Information Services
5. Information Services5. None

-- Thomas Bulkowski

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Friday 8/16/19. 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 10 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 588 stocks searched, or 1.7%. 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 5 bullish chart patterns this week and 2 bearish ones with any remaining (4) 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
APDBroadening top, right-angled and descending      07/03/201908/13/2019Chemical (Diversified)
BZHDiamond top      07/30/201908/13/2019Homebuilding
BIOTriangle, symmetrical      08/01/201908/15/2019Medical Supplies
EIXDouble Top, Eve and Adam      07/31/201908/09/2019Electric Utility (West)
FICODouble Top, Adam and Eve      08/01/201908/09/2019IT Services
FLEXBump-and-run reversal, top      06/25/201908/13/2019Electronics
INCYTriangle, symmetrical      06/11/201908/15/2019Drug
MYGNDead-cat bounce      08/14/201908/14/2019Biotechnology
TPRDead-cat bounce      08/15/201908/15/2019Apparel
TGPipe bottom      07/29/201908/05/2019Chemical (Specialty)
XELRectangle top      06/14/201908/15/2019Electric Utility (West)

 

Weekly screen for chart patterns ending between 08/08/2019 and 08/15/2019. 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.
 
Air Products and Chemicals, Inc. (APD)
Industry: Chemical (Diversified)
Industry RS rank: 32 out of 58
Stock RS rank: 20 out of 583
8/15/19 close: $226.34
1 Month avg volatility: $4.36. Volatility stop (for upward breakout): $213.96 or 5.5% below the close.
Change YTD: 41.42%
Volume: 1,132,200 shares. 3 month avg: 1,051,743 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, right-angled and descending continuation pattern from 07/03/2019 to 08/13/2019
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price hits measure rule target 63% of the time.

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Beazer Homes USA, Inc (BZH)
Industry: Homebuilding
Industry RS rank: 17 out of 58
Stock RS rank: 408 out of 583
8/15/19 close: $11.31
1 Month avg volatility: $0.46. Volatility stop (for downward breakout): $12.52 or 10.7% above the close.
Change YTD: 19.30%
Volume: 239,000 shares. 3 month avg: 503,903 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 top reversal pattern from 07/30/2019 to 08/13/2019
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price hits measure rule target 76% of the time.

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Bio-Rad Laboratories (BIO)
Industry: Medical Supplies
Industry RS rank: 20 out of 58
Stock RS rank: 61 out of 583
8/15/19 close: $319.13
1 Month avg volatility: $7.45. Volatility stop (for upward breakout): $301.71 or 5.5% below the close.
Change YTD: 37.43%
Volume: 347,100 shares. 3 month avg: 180,103 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: Triangle, symmetrical continuation pattern from 08/01/2019 to 08/15/2019
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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Edison International (EIX)
Industry: Electric Utility (West)
Industry RS rank: 6 out of 58
Stock RS rank: 76 out of 583
8/15/19 close: $72.07
1 Month avg volatility: $1.64. Volatility stop (for downward breakout): $75.98 or 5.4% above the close.
Change YTD: 26.95%
Volume: 2,419,000 shares. 3 month avg: 2,498,883 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: Double Top, Eve and Adam reversal pattern from 07/31/2019 to 08/09/2019
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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Fair Isaac Corp (FICO)
Industry: IT Services
Industry RS rank: 4 out of 58
Stock RS rank: 6 out of 583
8/15/19 close: $340.98
1 Month avg volatility: $9.85. Volatility stop (for downward breakout): $362.24 or 6.2% above the close.
Change YTD: 82.34%
Volume: 248,200 shares. 3 month avg: 162,437 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: Double Top, Adam and Eve reversal pattern from 08/01/2019 to 08/09/2019
Breakout is downward 100% of the time.
Average decline: 18%.
Break-even failure rate: 14%.
Pullbacks occur 59% of the time.
Price hits measure rule target 69% of the time.

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Flextronics International Ltd (FLEX)
Industry: Electronics
Industry RS rank: 50 out of 58
Stock RS rank: 327 out of 583
8/15/19 close: $9.68
1 Month avg volatility: $0.37. Volatility stop (for downward breakout): $10.72 or 10.8% above the close.
Change YTD: 27.20%
Volume: 3,467,500 shares. 3 month avg: 3,241,565 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: Bump-and-run reversal, top reversal pattern from 06/25/2019 to 08/13/2019
Breakout is downward 100% of the time.
Average decline: 19%.
Break-even failure rate: 5%.
Pullbacks occur 62% of the time.
Price hits measure rule target 78% of the time.

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Incyte Corp. (INCY)
Industry: Drug
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 37 out of 58
Stock RS rank: 266 out of 583
8/15/19 close: $80.61
1 Month avg volatility: $2.58. Volatility stop (for upward breakout): $74.43 or 7.7% below the close.
Change YTD: 26.77%
Volume: 1,181,700 shares. 3 month avg: 1,771,434 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: Triangle, symmetrical continuation pattern from 06/11/2019 to 08/15/2019
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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Myriad Genetics Inc (MYGN)
Industry: Biotechnology
Industry RS rank: 46 out of 58
Stock RS rank: 488 out of 583
8/15/19 close: $23.20
1 Month avg volatility: $2.64. Volatility stop (for downward breakout): $31.25 or 34.7% above the close.
Change YTD: -20.19%
Volume: 3,569,700 shares. 3 month avg: 906,888 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: Dead-cat bounce continuation pattern from 08/14/2019 to 08/14/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Tapestry Inc (TPR)
Industry: Apparel
Industry RS rank: 56 out of 58
Stock RS rank: 566 out of 583
8/15/19 close: $19.45
1 Month avg volatility: $1.07. Volatility stop (for downward breakout): $24.41 or 25.5% above the close.
Change YTD: -42.37%
Volume: 26,315,600 shares. 3 month avg: 3,145,718 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: Dead-cat bounce continuation pattern from 08/15/2019 to 08/15/2019
Breakout is downward 67% of the time.
Average decline: 18%.

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Tredegar Corp (TG)
Industry: Chemical (Specialty)
Industry RS rank: 42 out of 58
Stock RS rank: 210 out of 583
8/15/19 close: $17.48
1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $16.29 or 6.8% below the close.
Change YTD: 10.21%
Volume: 69,700 shares. 3 month avg: 64,734 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 Tuesday.
 
Chart pattern: Pipe bottom reversal pattern from 07/29/2019 to 08/05/2019
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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Xcel Energy, Inc (XEL)
Industry: Electric Utility (West)
Industry RS rank: 6 out of 58
Stock RS rank: 95 out of 583
8/15/19 close: $61.53
1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $58.21 or 5.4% below the close.
Change YTD: 24.88%
Volume: 3,659,100 shares. 3 month avg: 3,202,808 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: Rectangle top continuation pattern from 06/14/2019 to 08/15/2019
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price hits measure rule target 80% of the time.

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Thursday 8/15/19. Intraday Market Direction: Nasdaq

The index dropped by -3.0% or -242.42 points. Since 02/05/1971 the index made 32 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 2.8% on 15 occasions.
     Average loss was -1.1% on 17 occasions.
Expect the index to close lower 53.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 169/307 or 55.0% of the time.
     The prediction of the index closing lower has been right 52/104 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, but only the last 2 days.

I wanted to zoom into today's (Wednesday's) trading action, hence the chart.

The market opened sharply lower (A), drifted down, and formed a symmetrical triangle (B). A zoom of this chart pattern appears at C. Rather, it's a zoom of the last few price bars.

Notice that it has closed near the bottom of the triangle (green dot). I was going to buy the dip, and I may do that but not at the open.

That is a 4-star doji, a sign of indecision. That doji appears when all four prices are the same. Often you see it in lightly traded shares and it's bogus. So bogus that I decided it wasn't worth studying.

A check of the candle pics shows that this could be bullish harami cross (which is really bearish) or a morning doji star, which is bullish. Go figure.

I think I'll watch the market and buy if it drops again. I've a number of stocks I want to add to. So that's how I think about the bond market's yield inversion and a threat to the bull market.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  7,248.75    
 Weekly S2  7,447.77  199.01   
 Monthly S1  7,511.35  63.58   
 Weekly S1  7,610.85  99.51   
 Daily S2  7,674.95  64.10   
 Daily S1  7,724.45  49.49   
 Low  7,762.87  38.42   
 Close  7,773.94  11.07   Yes! The Close is close to the Low.
 Daily Pivot  7,812.36  38.42   
 61.8% Down from Intraday High  7,815.36  3.00   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot  7,825.99  10.63   Yes! The Weekly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High  7,831.58  5.59   Yes! The 50% Down from Intraday High is close to the Weekly Pivot.
 38.2% Down from Intraday High  7,847.79  16.21   
 Daily R1  7,861.86  14.07   
 Open  7,877.33  15.47   
 High  7,900.28  22.95   
 Monthly Pivot  7,925.49  25.21   
 Daily R2  7,949.77  24.28   
 Weekly R1  7,989.07  39.30   
 Monthly R1  8,188.09  199.01   
 Weekly R2  8,204.21  16.12   
 Monthly R2  8,602.23  398.03   

 

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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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