As of 10/07/2024
  Indus: 41,954 -398.51 -0.9%  
  Trans: 15,783 -31.37 -0.2%  
  Utils: 1,027 -24.05 -2.3%  
  Nasdaq: 17,924 -213.95 -1.2%  
  S&P 500: 5,696 -55.13 -1.0%  
YTD
 +11.3%  
-0.7%  
 +16.5%  
 +19.4%  
 +19.4%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024
As of 10/07/2024
  Indus: 41,954 -398.51 -0.9%  
  Trans: 15,783 -31.37 -0.2%  
  Utils: 1,027 -24.05 -2.3%  
  Nasdaq: 17,924 -213.95 -1.2%  
  S&P 500: 5,696 -55.13 -1.0%  
YTD
 +11.3%  
-0.7%  
 +16.5%  
 +19.4%  
 +19.4%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024

Bulkowski on Pattern Failures by Month

This article looks at the failures of chart patterns, sorted by the month in which the breakout occurred. First posted August 2015.

Pattern Failures: Summary

I sorted chart patterns that failed to see price rise more than 10% after the breakout by their breakout date.

The average failure rate for all qualifying chart patterns in the study was 8%.

The fall/winter months (February and October through December) had fewer failures and the spring/summer months (March, April, June and July) had more failures.

Pattern Failures: Background

I received an email that asked if August showed more chart pattern failures than other months. Since it was an easy question to answer, I started the research and found the result a day later.

The results are discussed in this article.

Pattern Failures: Methodology

I looked at the breakouts from the following chart patterns.

I used 1,263 stocks and found 23,487 chart patterns from 1988 to 2015. Not all stocks covered the entire range.

I sorted the breakout date according to the month in which it occurred.

For this test, I defined a chart pattern failure as one in which price failed to rise more than 10% after an upward breakout (to keep the sample counts high). The results are for bull markets only and for chart patterns that appear on the daily charts.

Top of page

Pattern Failures: Results

Table 1: Chart Pattern Failures Sorted by Month
Month Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  Dec 
Failure Rate8%7%10%10%8%11%11%8%8%6%6%7%
More/Less  Less  More  More   More  More    Less  Less  Less 

Table 1 shows the results, sorted by month. For example, in January 8% of the chart patterns failed to rise more that 10% after an upward breakout in a bull market (at the time of the breakout). The 8% value is the average failure rate for all qualifying chart patterns that I measured.

February showed fewer than average failures, as the "less" box in the "More/less" row signifies.

Based on the results, we can say that February, and October through December showed fewer failures and March, April, June and July showed more failures. Generally, the fall/winter months had fewer failures and the spring/summer months had more failures.

-- Thomas Bulkowski. Donate now to keep this website free.

Top of page

See Also

 

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.
Legal notice for paid links: "As an Amazon Associate I earn from qualifying purchases."

My Stock Market Books
My Novels

Copyright © 2005-2024 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.
Home Advertise Contact Privacy/Disclaimer

Monday is an awful way to spend one-seventh of your lifeSmiley