Bulkowski's Blog: ThePatternSite.com
As of 06/25/2019
  Industrials: 26,548 -179.32 -0.7%  
  Transports: 10,110 -87.48 -0.9%  
  Utilities: 821 -5.99 -0.7%  
  Nasdaq: 7,885 -120.98 -1.5%  
  S&P 500: 2,917 -27.97 -0.9%  
YTD
 +13.8%  
 +10.2%  
 +15.2%  
 +18.8%  
 +16.4%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019
As of 06/25/2019
  Industrials: 26,548 -179.32 -0.7%  
  Transports: 10,110 -87.48 -0.9%  
  Utilities: 821 -5.99 -0.7%  
  Nasdaq: 7,885 -120.98 -1.5%  
  S&P 500: 2,917 -27.97 -0.9%  
YTD
 +13.8%  
 +10.2%  
 +15.2%  
 +18.8%  
 +16.4%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019

 

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Wednesday 6/26/19. Indicators Turn Bearish

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.

A week ago, I wrote, "the thin blue indicator line has hit its peak (100) and bounce[d] downward. That's the first sign of weakness, but not indicative of a major decline coming."

This week, the red bar on the far right of the chart has signaled a bearish turn in the markets. However, remember that the signal can change for up to a week.

That means the red bar can be replaced by a green bar (really, the red bar just disappears, leaving the prior green signal intact). That can happen if the market were to rise several hundred points.

Still, seeing a red bar is not a good sign. I feel pleased that I sold a security at yesterday's open, bypassing two sessions of bad news.

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, 41% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).
A week ago, it was 39%.
The fewest was 21% on 07/09/2018.
And the most was 81% on 12/24/2018.
Shown as a blue line on the above chart...
The 491 stocks in my database are down an average of 20% from their yearly high.
A week ago, the average was 20%.
The peak was 12% on 08/29/2018.
And the bottom was 34% on 12/24/2018.

The more sensitive of the two lines is the red one and it's more bearish this week than the snapshot taken a week ago.

But we know from following these charts that these two indicators mirror what is happening in the price chart. If the index rises, so will the indicators. If the index tumbles, so too will the red and blue lines. In other words, they don't add much value.

$ $ $

I updated the performance stats of inverted roof.

$ $ $

-- Thomas Bulkowski

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Tuesday 6/25/19. Slider Quiz! Falling Wedges

The index climbed by 0.0% or 8.41 points. Since 10/01/1928 the index made 1302 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 692 occasions.
     Average loss was -0.6% on 610 occasions.
Expect the index to close higher 53.1% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 189/312 or 60.6% of the time.
     The prediction of the index closing lower has been right 38/74 or 51.4% of the time.

$ $ $

I show a another slider quiz featuring the falling wedge chart pattern.

$ $ $

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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© 2019 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  23,878.36    
 Monthly S1  25,302.95  1,424.59   
 Weekly S2  25,744.00  441.05   
 Monthly Pivot  26,105.16  361.16   
 Weekly S1  26,235.77  130.61   
 Weekly Pivot  26,571.57  335.80   
 Daily S2  26,669.33  97.76   
 Daily S1  26,698.43  29.11   
 Low  26,723.37  24.94   
 Close  26,727.54  4.17   Yes! The Close is close to the Low.
 Open  26,727.61  0.07   Yes! The Open is close to the Close.
 Daily Pivot  26,752.48  24.87   
 61.8% Down from Intraday High  26,755.13  2.66   Yes! The 61.8% Down from Intraday High is close to the Daily Pivot.
 50% Down from Intraday High  26,764.95  9.81   
 38.2% Down from Intraday High  26,774.76  9.81   
 Daily R1  26,781.58  6.83   Yes! The Daily R1 is close to the 38.2% Down from Intraday High.
 High  26,806.52  24.94   
 Daily R2  26,835.63  29.11   
 Weekly R1  27,063.34  227.71   
 Weekly R2  27,399.14  335.80   
 Monthly R1  27,529.75  130.61   
 Monthly R2  28,331.96  802.21   

Monday 6/24/19. Market Monday: Trouble Ahead

My Prediction

Picture of the Dow industrials on the daily scale.

I show a picture of the Dow industrials. Usually I rotate among five indices but I skipped the transports because the industrials look more appealing.

Here's what I see happening.

Notice the strong move up from the June low (A to B). It reaches the green circle and hesitates for a few days. Then it completes its journey to peak at the top of the chart (C).

That rise-pause-rise (ABC) is a pattern called a measured move up.

The circled green area (B) is called the corrective phase. And what happens after a measured move up finishes?

Price returns to the green circle. And that's what I see happening during the coming week, maybe two (D).

This view is supported by today's chart pattern indicator (scroll down to the third chart). It's still bullish, but the indicator line has dropped down and looks weak. That could change, of course, but it's bearish looking as I write this.

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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 22.92 points.
Tuesday: Up 353.01 points.
Wednesday: Up 38.46 points.
Thursday: Up 249.17 points.
Friday: Down 34.04 points.

For the Week...

The Dow industrials were up 629.52 points or 2.4%.
The Nasdaq composite was up 235.05 points or 3.0%.
The S&P 500 index was up 63.48 points or 2.2%.

Year to Date...

Dow Industrials
     0.7% down from the high of 26,907.37 on 06/21/2019.
     18.0% up from the low of 22,638.41 on 01/03/2019.
Nasdaq
     1.8% down from the high of 8,176.08 on 04/29/2019.
     24.4% up from the low of 6,457.13 on 01/03/2019.
S&P 500
     0.5% down from the high of 2,964.15 on 06/21/2019.
     20.7% 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

As of 06/21/2019, the CPI had:

12 bearish patterns,
22 bullish patterns,
192 patterns waiting for breakout.
The CPI signal is 64.7%, which is neutral (between 35% and 65%).

The chart pattern indicator is bullish 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  26,576  26,648  26,777  26,849  26,979 
Weekly  25,741  26,230  26,569  27,058  27,396 
Monthly  23,876  25,297  26,102  27,524  28,329 
S&P500 (^GSPC): Daily  2,937  2,944  2,954  2,961  2,971 
Weekly  2,857  2,904  2,934  2,981  3,011 
Monthly  2,646  2,798  2,881  3,033  3,116 
Nasdaq (^IXIC): Daily  7,977  8,004  8,039  8,066  8,100 
Weekly  7,701  7,867  7,978  8,143  8,254 
Monthly  7,008  7,520  7,804  8,316  8,601 

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 up 26.7%   The trend may continue. 
 1 month up 54.6%   Expect a random direction. 
 S & P 500 (^GSPC) 3 weeks up 26.9%   The trend may continue. 
 1 month up 55.9%   Expect a random direction. 
 Nasdaq composite (^IXIC) 3 weeks up 30.5%   The trend may continue. 
 1 month up 47.4%   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 over.

 Found Chart Pattern Name
57Pipe bottom
21Double Bottom, Adam and Adam
13Triangle, symmetrical
8Double Bottom, Eve and Eve
8Triple bottom
6Triangle, ascending
5Head-and-shoulders bottom
4Dead-cat bounce
4Falling wedge
4Diamond bottom

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. Cement and Aggregates
2. Cement and Aggregates2. IT Services
3. Financial Services3. Financial Services
4. IT Services4. Healthcare Information
5. Semiconductor Cap Equip.5. Insurance (Prop/Casualty)

-- Thomas Bulkowski

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Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.
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 Bumper's Story Head's Law
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