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     26,800 or 25,400 by 07/01/2019   10,700 or 9,900 by 07/01/2019   830 or 780 by 07/01/2019   8,150 or 7,575 by 07/01/2019   3,000 or 2,875 by 07/01/2019
Chart pattern indicator: on 6/24/19

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     26,800 or 25,400 by 07/01/2019   10,700 or 9,900 by 07/01/2019   830 or 780 by 07/01/2019   8,150 or 7,575 by 07/01/2019   3,000 or 2,875 by 07/01/2019
Chart pattern indicator: on 6/24/19

Wednesday 6/26/19. Indicators Turn Bearish

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.

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).

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.

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I updated the performance stats of inverted roof.

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-- Thomas Bulkowski

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

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

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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

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

• My Prediction
• A Brief Look Back
• Options Expiration
• Swing and Position Traders: Chart Pattern Indicator
• Swing Traders: Pivot Points
• Consecutive Price Trends
• Earnings, Chart Patterns & Industries

My Prediction

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.

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 and Position Traders: Chart Pattern Indicator

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

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.

• 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:

Consecutive Price Trends

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.

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.

-- Thomas Bulkowski

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