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Chart Pattern Indicator: What's It Say?…

Blog: February 2020

Bulkowski's Blog: ThePatternSite.com

As of 02/07/2020

  Indus: 29,103 -277.26 -0.9%  

  Trans: 10,858 -16.67 -0.2%  

  Utils: 932 -3.33 -0.4%  

  Nasdaq: 9,521 -51.64 -0.5%  

  S&P 500: 3,328 -18.07 -0.5%  

YTD

 +2.0%  

-0.4%  

 +6.0%  

 +6.1%  

 +3.0%  

  Up arrow29,650 or 28,450 by 02/15/2020
  Up arrow11,200 or 10,200 by 02/15/2020
  Up arrow1,025 or 910 by 02/15/2020
  Up arrow9,700 or 9,150 by 02/15/2020
  Up arrow3,350 or 3,150 by 02/15/2020

As of 02/07/2020

  Indus: 29,103 -277.26 -0.9%  

  Trans: 10,858 -16.67 -0.2%  

  Utils: 932 -3.33 -0.4%  

  Nasdaq: 9,521 -51.64 -0.5%  

  S&P 500: 3,328 -18.07 -0.5%  

YTD

 +2.0%  

-0.4%  

 +6.0%  

 +6.1%  

 +3.0%  

  Up arrow29,650 or 28,450 by 02/15/2020
  Up arrow11,200 or 10,200 by 02/15/2020
  Up arrow1,025 or 910 by 02/15/2020
  Up arrow9,700 or 9,150 by 02/15/2020
  Up arrow3,350 or 3,150 by 02/15/2020

 


Monday 2/10/20. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

This is a chart of the Dow utilities on the daily scale.

I like how the index has climbed in a nice straight-line run from the resistance line at B to peak at C.

The question I ask now, is what comes next?

That question is harder to answer.

First, I drew a resistance line, B, connecting recent peaks. That line will become a support line should the index drop back to that level.

Then I looked at the move up to B, that is, the move from A to B. That corresponds to the move from B to C.

That rise-retrace-rise pattern is what’s called a measured move up (MMU) chart pattern. One of the key features of the MMU is how price behaves after it’s done.
Price returns to the corrective phase (that’s B in this picture) 57% of the time. The other 43% see price drop some but not decline far enough to reach B before soaring.

So that’s the template I’m following, a retrace down to the corrective phase.

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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 143.78 points.

Tuesday: Up 407.82 points.

Wednesday: Up 483.22 points.

Thursday: Up 88.92 points.

Friday: Down 277.26 points.

For the Week…

The Dow industrials were up 846.48 points or 3.0%.

The Nasdaq composite was up 369.57 points or 4.0%.

The S&P 500 index was up 102.19 points or 3.2%.

Year to Date…

Dow Industrials

     1.0% down from the high of 29,408.05 on 02/06/2020.

     3.3% up from the low of 28,169.56 on 01/31/2020.

Nasdaq

     0.6% down from the high of 9,575.66 on 02/06/2020.

     6.5% up from the low of 8,943.50 on 01/06/2020.

S&P 500

     0.6% down from the high of 3,347.96 on 02/06/2020.

     3.5% up from the low of 3,214.64 on 01/06/2020.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

The chart pattern indicator is bearish
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.

Index S2 S1 Pivot R1 R2
Dow Industrials (^DJI): Daily   28,919   29,011   29,149   29,241   29,379 
Weekly   27,855   28,479   28,943   29,567   30,032 
Monthly   27,655   28,379   28,893   29,617   30,132 
S&P500 (^GSPC): Daily   3,311   3,319   3,330   3,339   3,350 
Weekly   3,191   3,260   3,304   3,372   3,416 
Monthly   3,163   3,246   3,297   3,379   3,430 
Nasdaq (^IXIC): Daily   9,455   9,488   9,529   9,562   9,603 
Weekly   9,041   9,281   9,428   9,668   9,815 
Monthly   8,714   9,117   9,347   9,750   9,979 
  • 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:

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)  1 week up  47.1%   Expect a random direction. 
  1 month up  55.3%   Expect a random direction. 
 S & P 500 (^GSPC)  1 week up  48.0%   Expect a random direction. 
  1 month up  56.6%   Expect a random direction. 
 Nasdaq composite (^IXIC)  1 week up  49.3%   Expect a random direction. 
  6 months up  14.2%   Expect a reversal soon. 

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
14 Pipe top
12 Triangle, symmetrical
10 Head-and-shoulders top
9 Broadening top
9 Triple top
8 Scallop, ascending
7 Double Bottom, Adam and Adam
5 Dead-cat bounce
4 Triangle, descending
4 Double Bottom, Adam and Eve

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 Week Last Week
1. Homebuilding 1. Homebuilding
2. Computers and Peripherals 2. Computers and Peripherals
3. Semiconductor 3. Semiconductor
4. Semiconductor Cap Equip. 4. Shoe
5. Shoe 5. Semiconductor Cap Equip.


— Thomas Bulkowski

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Friday 2/7/20. 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.

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 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 595 stocks searched, or 3.4%. Based on the percentage, the stock market is
trending
since few consolidation patterns appear.

I found 2 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 6 bullish chart patterns this week and 9 bearish ones with any remaining (7) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) 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
AFL Broadening top, right-angled and descending        12/27/2019 02/06/2020 Insurance (Diversified)
AEO Broadening bottom        01/21/2020 02/06/2020 Apparel
AMAT Broadening top        12/19/2019 02/06/2020 Semiconductor Cap Equip.
ATR Broadening wedge, ascending        11/22/2019 02/06/2020 Packaging and Container
CX Diamond top        01/21/2020 02/06/2020 Cement and Aggregates
CF Double Bottom, Adam and Adam        01/28/2020 02/03/2020 Chemical (Basic)
CTSH Broadening top        01/17/2020 02/03/2020 IT Services
CMCO Broadening wedge, descending        01/02/2020 02/06/2020 Machinery
RE Broadening top        12/30/2019 02/06/2020 Insurance (Prop/Casualty)
EZPW Dead-cat bounce        02/04/2020 02/04/2020 Financial Services
GPS Double Bottom, Adam and Adam        01/27/2020 01/31/2020 Apparel
HOV Pipe top        01/21/2020 01/27/2020 Homebuilding
KALU Double Bottom, Eve and Adam        01/23/2020 01/31/2020 Metals and Mining (Div.)
K Head-and-shoulders top        01/07/2020 02/04/2020 Food Processing
MHO Pipe top        01/21/2020 01/27/2020 Homebuilding
MRTN Pipe bottom        01/21/2020 01/27/2020 Trucking/Transp. Leasing
MAS Double Bottom, Adam and Eve        01/27/2020 01/31/2020 Building Materials
MTRX Dead-cat bounce        02/06/2020 02/06/2020 Oilfield Svcs/Equipment
PCG Flag, high and tight        12/03/2019 02/05/2020 Electric Utility (West)
SCCO Double Bottom, Adam and Adam        01/28/2020 01/31/2020 Metals and Mining (Div.)
SLCA Double Bottom, Adam and Adam        01/27/2020 02/04/2020 Metals and Mining (Div.)
VAL Pipe bottom        01/21/2020 01/27/2020 Oilfield Svcs/Equipment

 

Weekly screen for chart patterns ending between 01/30/2020 and 02/06/2020. 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.

 

AFLAC Inc (AFL)

Industry: Insurance (Diversified)

Industry RS rank: 21 out of 58

Stock RS rank: 439 out of 590

2/6/20 close: $52.74

1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $51.12 or 3.1% below the close.

Change YTD: -0.30%

Volume: 3,480,500 shares.
3 month avg: 1,541,537 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: Broadening top, right-angled and descending continuation pattern from 12/27/2019 to 02/06/2020

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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American Eagle Outfitters Inc. (AEO)

Industry: Apparel

Industry RS rank: 38 out of 58

Stock RS rank: 534 out of 590

2/6/20 close: $14.68

1 Month avg volatility: $0.45. Volatility stop (for upward breakout): $13.67 or 6.9% below the close.

Change YTD: -0.14%

Volume: 2,184,600 shares.
3 month avg: 4,309,748 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: Broadening bottom reversal pattern from 01/21/2020 to 02/06/2020

Breakout is upward 53% of the time.

Average rise: 27%.

Break-even failure rate: 10%.

Throwbacks occur 41% of the time.

Price hits measure rule target 59% of the time.

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Applied Materials (AMAT)

Industry: Semiconductor Cap Equip.

Industry RS rank: 4 out of 58

Stock RS rank: 47 out of 590

2/6/20 close: $63.19

1 Month avg volatility: $1.53. Volatility stop (for downward breakout): $67.23 or 6.4% above the close.

Change YTD: 3.52%

Volume: 4,862,000 shares.
3 month avg: 11,583,771 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: Broadening top reversal pattern from 12/19/2019 to 02/06/2020

Breakout is downward 50% of the time.

Average decline: 15%.

Break-even failure rate: 18%.

Pullbacks occur 48% of the time.

Price hits measure rule target 37% of the time.

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AptarGroup Inc (ATR)

Industry: Packaging and Container

Industry RS rank: 45 out of 58

Stock RS rank: 481 out of 590

2/6/20 close: $117.53

1 Month avg volatility: $1.64. Volatility stop (for downward breakout): $122.23 or 4.0% above the close.

Change YTD: 1.65%

Volume: 247,800 shares.
3 month avg: 241,254 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Friday.

 

Chart pattern: Broadening wedge, ascending reversal pattern from 11/22/2019 to 02/06/2020

Breakout is downward 73% of the time.

Average decline: 17%.

Break-even failure rate: 11%.

Pullbacks occur 57% of the time.

Price hits measure rule target 58% of the time.

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Cemex SA de CV (CX)

Industry: Cement and Aggregates

Industry RS rank: 35 out of 58

Stock RS rank: 53 out of 590

2/6/20 close: $4.19

1 Month avg volatility: $0.14. Volatility stop (for downward breakout): $4.52 or 7.8% above the close.

Change YTD: 10.85%

Volume: 3,276,800 shares.
3 month avg: 9,928,860 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 01/21/2020 to 02/06/2020

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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CF Industries Holdings, Inc. (CF)

Industry: Chemical (Basic)

Industry RS rank: 37 out of 58

Stock RS rank: 556 out of 590

2/6/20 close: $42.25

1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $40.00 or 5.3% below the close.

Change YTD: -11.50%

Volume: 2,801,100 shares.
3 month avg: 3,754,700 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: Double Bottom, Adam and Adam reversal pattern from 01/28/2020 to 02/03/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

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Cognizant Technology Solutions Corp (CTSH)

Industry: IT Services

Industry RS rank: 7 out of 58

Stock RS rank: 228 out of 590

2/6/20 close: $71.42

1 Month avg volatility: $1.10. Volatility stop (for downward breakout): $73.69 or 3.2% above the close.

Change YTD: 15.16%

Volume: 7,781,400 shares.
3 month avg: 3,250,685 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: Broadening top reversal pattern from 01/17/2020 to 02/03/2020

Breakout is downward 50% of the time.

Average decline: 15%.

Break-even failure rate: 18%.

Pullbacks occur 48% of the time.

Price hits measure rule target 37% of the time.

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Columbus McKinnon (CMCO)

Industry: Machinery

Industry RS rank: 23 out of 58

Stock RS rank: 341 out of 590

2/6/20 close: $37.77

1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $34.92 or 7.5% below the close.

Change YTD: -5.65%

Volume: 90,500 shares.
3 month avg: 120,960 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: Broadening wedge, descending reversal pattern from 01/02/2020 to 02/06/2020

Breakout is upward 79% of the time.

Average rise: 33%.

Break-even failure rate: 6%.

Throwbacks occur 53% of the time.

Price hits measure rule target 79% of the time.

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Everest Re Group Ltd (RE)

Industry: Insurance (Prop/Casualty)

Industry RS rank: 48 out of 58

Stock RS rank: 258 out of 590

2/6/20 close: $280.45

1 Month avg volatility: $3.52. Volatility stop (for downward breakout): $291.31 or 3.9% above the close.

Change YTD: 1.30%

Volume: 374,300 shares.
3 month avg: 566,686 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Friday, and best sell day (most up closes) is Wednesday.

 

Chart pattern: Broadening top reversal pattern from 12/30/2019 to 02/06/2020

Breakout is downward 50% of the time.

Average decline: 15%.

Break-even failure rate: 18%.

Pullbacks occur 48% of the time.

Price hits measure rule target 37% of the time.

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EZCorp Inc (EZPW)

Industry: Financial Services

Industry RS rank: 26 out of 58

Stock RS rank: 586 out of 590

2/6/20 close: $5.03

1 Month avg volatility: $0.24. Volatility stop (for downward breakout): $5.63 or 11.9% above the close.

Change YTD: -26.25%

Volume: 748,500 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: Dead-cat bounce continuation pattern from 02/04/2020 to 02/04/2020

Breakout is downward 67% of the time.

Average decline: 18%.

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Gap Inc. (GPS)

Industry: Apparel

Industry RS rank: 38 out of 58

Stock RS rank: 409 out of 590

2/6/20 close: $18.49

1 Month avg volatility: $0.55. Volatility stop (for upward breakout): $17.38 or 6.0% below the close.

Change YTD: 4.58%

Volume: 3,829,700 shares.
3 month avg: 5,662,882 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Tuesday, and best sell day (most up closes) is Thursday.

 

Chart pattern: Double Bottom, Adam and Adam reversal pattern from 01/27/2020 to 01/31/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

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Hovnanian Enterprises Inc (HOV)

Industry: Homebuilding

Industry RS rank: 3 out of 58

Stock RS rank: 1 out of 590

2/6/20 close: $24.51

1 Month avg volatility: $1.94. Volatility stop (for downward breakout): $29.59 or 20.7% above the close.

Change YTD: 17.44%

Volume: 184,900 shares.
3 month avg: 1,539,280 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: Pipe top reversal pattern from 01/21/2020 to 01/27/2020

Breakout is downward 100% of the time.

Average decline: 20%.

Break-even failure rate: 11%.

Pullbacks occur 41% of the time.

Price hits measure rule target 70% of the time.

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Kaiser Aluminum Corp (KALU)

Industry: Metals and Mining (Div.)

Industry RS rank: 47 out of 58

Stock RS rank: 200 out of 590

2/6/20 close: $107.31

1 Month avg volatility: $2.31. Volatility stop (for upward breakout): $100.39 or 6.4% below the close.

Change YTD: -3.23%

Volume: 138,300 shares.
3 month avg: 141,669 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Double Bottom, Eve and Adam reversal pattern from 01/23/2020 to 01/31/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 4%.

Throwbacks occur 57% of the time.

Price hits measure rule target 66% of the time.

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Kellogg Co (K)

Industry: Food Processing

Industry RS rank: 50 out of 58

Stock RS rank: 413 out of 590

2/6/20 close: $63.46

1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $68.25 or 7.6% above the close.

Change YTD: -8.24%

Volume: 7,660,400 shares.
3 month avg: 3,593,774 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: Head-and-shoulders top reversal pattern from 01/07/2020 to 02/04/2020

Breakout is downward 100% of the time.

Average decline: 22%.

Break-even failure rate: 4%.

Pullbacks occur 50% of the time.

Price hits measure rule target 55% of the time.

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M/I Homes, Inc. (MHO)

Industry: Homebuilding

Industry RS rank: 3 out of 58

Stock RS rank: 146 out of 590

2/6/20 close: $43.24

1 Month avg volatility: $1.48. Volatility stop (for downward breakout): $47.22 or 9.2% above the close.

Change YTD: 9.89%

Volume: 515,300 shares.
3 month avg: 256,088 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: Pipe top reversal pattern from 01/21/2020 to 01/27/2020

Breakout is downward 100% of the time.

Average decline: 20%.

Break-even failure rate: 11%.

Pullbacks occur 41% of the time.

Price hits measure rule target 70% of the time.

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Marten Transport Ltd (MRTN)

Industry: Trucking/Transp. Leasing

Industry RS rank: 10 out of 58

Stock RS rank: 205 out of 590

2/6/20 close: $22.00

1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $20.89 or 5.0% below the close.

Change YTD: 2.37%

Volume: 157,300 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: Pipe bottom reversal pattern from 01/21/2020 to 01/27/2020

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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Masco Corp. (MAS)

Industry: Building Materials

Industry RS rank: 11 out of 58

Stock RS rank: 110 out of 590

2/6/20 close: $49.53

1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $47.91 or 3.3% below the close.

Change YTD: 3.21%

Volume: 2,092,700 shares.
3 month avg: 2,351,771 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 Bottom, Adam and Eve reversal pattern from 01/27/2020 to 01/31/2020

Breakout is upward 100% of the time.

Average rise: 37%.

Break-even failure rate: 5%.

Throwbacks occur 59% of the time.

Price hits measure rule target 66% of the time.

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Matrix Service Co. (MTRX)

Industry: Oilfield Svcs/Equipment

Industry RS rank: 57 out of 58

Stock RS rank: 577 out of 590

2/6/20 close: $12.85

1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $15.65 or 21.8% above the close.

Change YTD: -43.84%

Volume: 1,018,400 shares.
3 month avg: 303,508 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: Dead-cat bounce continuation pattern from 02/06/2020 to 02/06/2020

Breakout is downward 67% of the time.

Average decline: 18%.

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PG and E (PCG)

Industry: Electric Utility (West)

Industry RS rank: 41 out of 58

Stock RS rank: 506 out of 590

2/6/20 close: $16.84

1 Month avg volatility: $0.78. Volatility stop (for upward breakout): $15.17 or 9.9% below the close.

Change YTD: 54.92%

Volume: 6,913,800 shares.
3 month avg: 5,870,049 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: Flag, high and tight continuation pattern from 12/03/2019 to 02/05/2020

WARNING: A dead-cat bounce occurred on 10/25/2019. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/24/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

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Southern Copper (SCCO)

Industry: Metals and Mining (Div.)

Industry RS rank: 47 out of 58

Stock RS rank: 141 out of 590

2/6/20 close: $39.59

1 Month avg volatility: $0.94. Volatility stop (for upward breakout): $37.52 or 5.2% below the close.

Change YTD: -6.80%

Volume: 570,500 shares.
3 month avg: 1,021,280 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: Double Bottom, Adam and Adam reversal pattern from 01/28/2020 to 01/31/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

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U.S Silica Holdings Inc (SLCA)

Industry: Metals and Mining (Div.)

Industry RS rank: 47 out of 58

Stock RS rank: 588 out of 590

2/6/20 close: $5.92

1 Month avg volatility: $0.36. Volatility stop (for upward breakout): $4.86 or 17.9% below the close.

Change YTD: -3.74%

Volume: 2,847,000 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: Double Bottom, Adam and Adam reversal pattern from 01/27/2020 to 02/04/2020

WARNING: A dead-cat bounce occurred on 10/29/2019. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 04/28/2020.

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

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Valaris Plc (VAL)

Industry: Oilfield Svcs/Equipment

Industry RS rank: 57 out of 58

Stock RS rank: 248 out of 590

2/6/20 close: $5.32

1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $4.49 or 15.6% below the close.

Change YTD: -18.90%

Volume: 2,978,300 shares.
3 month avg: 16,303,415 shares.

Since 2009 bear market, the best buy day (fewest up closes) is Wednesday, and best sell day (most up closes) is Tuesday.

 

Chart pattern: Pipe bottom reversal pattern from 01/21/2020 to 01/27/2020

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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Thursday 2/6/20. Intraday Nasdaq: Bearish Signs

The index climbed by 0.4% or 40.71 points. Since 02/05/1971 the index made 606 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.7% on 383 occasions.

     Average loss was -0.8% on 223 occasions.

Expect the index to close higher 63.2% of the time.

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 185/327 or 56.6% of the time.

     The prediction of the index closing lower has been right 54/106 or 50.9% 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.

I drew two red parallel lines bordering price action today.

Two things: First, the channel slopes upward. That’s bullish. It’s clearly better than having a channel slope downward.

Second, the index is at the bottom of the channel. That’s bearish. Why? Because it’s closer to breaking out of the channel downward. However, the index could bounce off the bottom
of the channel and zip higher. That’s why some traders put their faith and their money into channels.

My feeling is that intraday price movement contains a lot of noise and the index often gaps at the open. So there really isn’t a meaningful transition from day to day on this scale, meaning
the implications of what you see one day could be moot from the opening bell.

$ $ $

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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© 2020 ThePatternSite.com    Metric   Value   Diff   Close (within 10% of the high-low range for the day)? 
 Monthly S2   8,747.53      
 Weekly S2   9,067.54   320.01   
 Monthly S1   9,128.10   60.56   
 Weekly S1   9,288.11   160.01   
 Monthly Pivot   9,289.77   1.66   Yes! The Monthly Pivot is close to the Weekly S1.
 Weekly Pivot   9,308.61   18.84   
 Daily S2   9,392.84   84.23   
 Daily S1   9,450.76   57.92   
 Low   9,454.93   4.17   Yes! The Low is close to the Daily S1.
 61.8% Down from Intraday High   9,500.77   45.84   
 Close   9,508.68   7.91   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot   9,512.85   4.17   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High   9,514.93   2.08   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High   9,529.10   14.16   
 Weekly R1   9,529.18   0.08   Yes! The Weekly R1 is close to the 38.2% Down from Intraday High.
 Weekly R2   9,549.68   20.50   
 Daily R1   9,570.77   21.09   
 Open   9,574.10   3.33   Yes! The Open is close to the Daily R1.
 High   9,574.94   0.84   Yes! The High is close to the Open.
 Daily R2   9,632.86   57.92   
 Monthly R1   9,670.34   37.48   
 Monthly R2   9,832.01   161.66   


Wednesday 2/5/20. Indicators Bullish!

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.

The vertical green bar on the right of the chart is a welcome sign. It’s bullish.

On a day where the Dow surged 400 points, it comes as no surprise that the CPI would flip from bearish to bullish. The next question is, can the indicator hold its bullish stance?

That’s harder to answer. Clearly the thin blue line at the bottom of the chart shows promise, with it spiking upward. As I’ve mentioned before, the signal can change for up to 7 days but after
3 days, it’s usually a solid and believable signal.

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, 27% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 26%.

The fewest was 21% on 01/16/2020.

And the most was 49% on 05/31/2019.

Shown as a blue line on the above chart…

The 489 stocks in my database are down an average of 15% from their yearly high.

A week ago, the average was 14%.

The peak was 11% on 01/16/2020.

And the bottom was 24% on 08/23/2019.

Both lines were headed lower until today’s move in the markets. That pulled upward the lines. The big surprise is that the two lines had tumbled low enough that even today’s rally has kept
them below what they were a week ago.

I would have expected a more robust response from the lines, but their weakness tells me the general market has been suffering
during the week.

Both charts have bullish elements to them. This chart shows underlying weakness. Overall, I favor the bulls, though. I think fears of the virus are overblown and that the markets will simmer down
and come to expect the implications on China woes as understandable.

— Thomas Bulkowski

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Tuesday 2/4/20. Slider Quiz!

The index climbed by 0.5% or 143.78 points. Since 10/01/1928 the index made 933 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.6% on 507 occasions.

     Average loss was -0.6% on 426 occasions.

Expect the index to close higher 54.3% of the time.

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 199/339 or 58.7% of the time.

     The prediction of the index closing lower has been right 39/78 or 50.0% of the time.

$ $ $

I show a another slider quiz featuring the three rising valleys 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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© 2020 ThePatternSite.com    Metric   Value   Diff   Close (within 10% of the high-low range for the day)? 
 Monthly S2   27,443.60      
 Weekly S2   27,729.86   286.25   
 Monthly S1   27,921.71   191.85   
 Weekly S1   28,064.83   143.13   
 Daily S2   28,139.21   74.38   
 Daily S1   28,269.51   130.30   
 Open   28,319.65   50.14   
 Low   28,319.65   0.00   Yes! The Low is close to the Open.
 Close   28,399.81   80.16   
 61.8% Down from Intraday High   28,438.35   38.54   
 Daily Pivot   28,449.95   11.60   Yes! The Daily Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High   28,475.02   25.07   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 Weekly Pivot   28,504.54   29.52   Yes! The Weekly Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High   28,511.69   7.15   Yes! The 38.2% Down from Intraday High is close to the Weekly Pivot.
 Daily R1   28,580.25   68.56   
 High   28,630.39   50.14   
 Monthly Pivot   28,647.66   17.27   Yes! The Monthly Pivot is close to the High.
 Daily R2   28,760.69   113.03   
 Weekly R1   28,839.51   78.82   
 Monthly R1   29,125.77   286.25   
 Weekly R2   29,279.22   153.45   
 Monthly R2   29,851.72   572.51   


Monday 2/3/20. 2020 Market Forecast Update!

Here’s the updated 2020 forecast for January. I’m impressed with how accurate it has been…so far.

— Thomas Bulkowski

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