Chart Pattern Indicator: What's It Say?…

Monday 6/7/21. Market Monday: The Week Ahead

My Prediction

This is a pic of the Dow industrials on the daily chart. What can we see?

All of the colored lines are variations of scallops. The red, blue, and orange lines are ascending and inverted scallops. The ends of those patterns
are above the start and they have a nice arc between the two points. Usually I look for that arc on the tops of the patterns. In this case, I show it on the bottom.

The green pattern is an ascending scallop where the end is above the start, with a nice rounded turn in between. In this case, I drew the green line along
price highs when I usually look for the curve along the lows.

The orange and green lines begin to frame a diamond top chart pattern, but it looked odd enough that I didn’t have the courage to publicly call it a diamond.

So there you have it. None of the patterns tell what’s going to happen. Sometimes with scallops (of any type), a series of them appearing in the same uptrend like you see here with the
red, blue, and orange patterns, you see them getting either narrower/shorter or wider/taller as price climbs the trend. When that happens, look for a trend change especially if the last
scallop in the series has nearly equally priced ends.

With these three, they have inconsistent sizes, so I don’t attach any significance to their appearance.

I guess what I’m saying is look for the uptrend to continue.

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.

Tuesday: Up 45.86 points.

Wednesday: Up 25.07 points.

Thursday: Down 23.34 points.

Friday: Up 179.35 points.

Saturday: Holiday or other weird event!

For the Week…

The Dow industrials were up 226.94 points or 0.7%.

The Nasdaq composite was up 65.75 points or 0.5%.

The S&P 500 index was up 25.78 points or 0.6%.

Year to Date…

Dow Industrials

     1.0% down from the high of 35,091.56 on 05/10/2021.

     16.4% up from the low of 29,856.30 on 01/29/2021.

Nasdaq

     2.8% down from the high of 14,211.57 on 04/29/2021.

     11.4% up from the low of 12,397.05 on 03/05/2021.

S&P 500

     0.2% down from the high of 4,238.04 on 05/07/2021.

     15.5% up from the low of 3,662.71 on 01/04/2021.

Options Expiration

No options expire this week.

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:

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

Earnings, Chart Patterns & Industries

Earnings season is over.

Here’s a symbol list of 129 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AKAM, ALK, AA, DOX, AMED, AEO, AEL, ABC, APH, ANTM, AON, ADM, AXS, CALM, CPB, CLS, CNC, CNP, CHS, CLF, CLX, CSOD, GLW, CREE, DECK, ^DJT, BOOM, FDX, FIVN, FLEX, FLS, FORM, FTNT, FWRD, GPS, GE, GNW, GOOGL, HBI, HE, HP, HUBG, HURC, IEX, INFN, INOV, ITGR, INTU, JBLU, KALU, KELYA, KLAC, LHX, LH, LAWS, LMT, LOW, MRO, MLM, MTRN, MU, MS, MUR, NOV, NJR, NWPX, NUS, OXY, OMCL, OUT, OXM, PKE, PATK, PNW, PINC, DGX, RGS, SLB, SMG, SEE, SRE, SCCO, LUV, SR, TEVA, TXN, UGI, UPS, VMC, WERN, ZBRA, IAI, IDU, QTEC, FXL, FXI, BOTZ, IYH, IAT, IGV, IGE, EWK, EWZ, ECH, EWJ, EZA, PXJ, PJP, ILF, XLP, XLV, XAR, XLK, XLU. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

The below industries were the best (rank 1) or worst performing of those I follow.

— Thomas Bulkowski

Friday 6/4/21. Pattern Trading Setups for the Weekend.

$ $ $

Here’s a symbol list of 103 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ACN, AA, ALKS, DOX, AMED, AEL, ADM, AIZ, AVY, AXS, BMI, BLL, BAX, BBBY, BMY, CLS, CX, CNP, CRL, CIEN, CLNE, CLF, CLX, CONN, CLGX, GLW, DFS, ^DJT, DOV, BOOM, EFX, EXPD, FIVN, FLEX, GPS, GOOGL, GGG, HBI, HON, HUBG, IIIN, IBKR, JCOM, KALU, KFRC, LZB, LAWS, MANH, MAN, MRO, MAS, MDT, MRK, MGEE, MS, MLI, NWPX, OXY, OUT, PKE, PATK, PETS, PNW, RCKY, SLB, SMG, SRE, SMTC, NOW, SLGN, SRDX, TPR, TXT, TKR, RIG, VC, WERN, WDAY, XEL, IYM, IAI, IDU, IHF, ECH, EWH, EWP, TUR, PXJ, PJP, XLP, XLF, XLV, XLB, MGK. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

You can find setups based on a Fibonacci retrace by clicking on the link.

The following patterns were found manually, not 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 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 575 stocks searched, or 3.0%. 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 12 bullish chart patterns this week and 4 bearish ones with any remaining (2) 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.

For details about the chart patterns, click here.

— Thomas Bulkowski

Thursday 6/3/21. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 217/381 or 57.0% of the time.

     The prediction of the index closing lower has been right 58/122 or 47.5% 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.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

I drew the bottom red line first because I noticed multiple points (valleys) resting on it. The line shows support. Along the top, I noticed that there was another trend, this one upward
but shorter than the bottom one.

The two lines form a mouthful: broadening formation, right-angled and ascending chart pattern. A partial rise at point A suggests a downward breakout.

The index should have closed below the bottom red line at B but it didn’t. Tests show a partial rise correct predicts a downward breakout 74% of the time from this type of
broadening pattern.

Now, it looks as if the index is rising which also agrees with the above probabilities.

$ $ $

Here’s a symbol list of 166 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, AYI, AES, AFL, ATSG, AA, DOX, AEO, AEL, AIG, APOG, AMAT, ARCB, AWI, AGO, ADP, AVY, AVNT, BCPC, BSET, BECN, BBBY, BERY, BMRN, BKNG, BMY, CBT, CE, CX, CNP, CRL, CHKP, CHS, CLF, CMCO, CCK, CMI, CW, DHR, DECK, DDS, ^DJT, BOOM, EXP, EL, EXPD, FLEX, FLS, FMC, FDP, GME, GPN, GOOGL, GGG, GFF, HBI, HAYN, HELE, HP, HSIC, HON, HUBG, HURC, IDXX, ILMN, INOV, IBP, ITGR, IPAR, INTU, ISRG, JAZZ, KALU, KBH, KMT, KFRC, LAMR, LAWS, LEG, LEN, MTSI, MANH, MRO, MAS, MA, MDT, MLI, NBR, CNR, NTGR, NEU, NKE, NWPX, NVDA, OLN, ASGN, OUT, OXM, PKE, PATK, PTEN, PAYX, PETS, PICO, POR, QCOM, REV, RCKY, RES, SAIA, NOW, SLGN, SCCO, SCS, SRDX, TGT, TECH, TXT, TKR, TJX, SLCA, UPS, VEEV, WRB, WMT, WERN, WSM, IYM, IYE, ITB, IHI, BOTZ, ICF, IYZ, EWA, EWK, ECH, EWH, EWJ, PEJ, PJP, ILF, XLE, XLV, XLB, XAR, VHT. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

$ $ $

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

Wednesday 6/2/21. A Look At Indicators

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 bullish signal, shown as the vertical green bar, is intact. It can change for up to a week, but it’s usually stable after 3 days. The signal looks 4 trading days old, or probably
like 6 calendar days old. So it’s probably reliable.

The market has moved higher, but slowly, as if it’s searching for a path. Coupled with overhead resistance from the recent high, I still don’t trust it. I think the market is going lower.

That’s just a feeling, so I could be wrong. But it seems that the market is struggling to move up.

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).

Both the red and blue lines showed improvement compared to a week ago. So that’s bullish.

The prior chart and this one are bullish. The red line on this chart is the more sensitive of the two, and it’s rising. That’s a bullish sign. So I don’t understand my concern about the market
falling. Maybe that’s how a market rises…on worry that it’ll drop.

$ $ $

Have you removed the dust from your refrigerator cooling coils recently? I did that this weekend. I unplugged the fridge from the wall, removed the back panel and used my vacuum cleaner
to suck up as much dust as possible. I also used a brush that was thin but long, about half inch wide and six inches long. The brush fit perfectly between several folds in the coils.
Another tour with the vacuum cleaner and I was ready for the power tools. I went to the garage and grabbed my leaf blower. I blasted the until with 200 mph winds. The dust bunnies ran
cover and a cloud of dust rose in my kitchen. But the coils were clean.

$ $ $

Went on a group bicycle ride with the mayor et al from the neighboring town. Near the end of the ride, I noticed that my rear tire was thump-thump-thumping. When we stopped, I looked at the tire and
it was ready to burst. I couldn’t believe it. I only put on 4,000 miles in 2 years (changed last in Feb 2019). The original set lasted thousands more miles and 8 years.

$ $ $

Here’s a symbol list of 194 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, AYI, ATSG, ALB, AA, ADS, AYX, DOX, AMED, AXP, AIG, AMWD, AMGN, APA, ATR, ARCB, ADM, AGO, AVY, BBBY, BA, BKNG, BRC, BMY, BG, CBT, CAL, CE, CNC, CNP, CENX, CRL, CHS, CHD, CTXS, CLF, CTSH, CMTL, ED, CLR, CRH, CMI, XRAY, DVN, DFS, D, DOV, DRQ, EIX, EMR, EL, EXPD, FFIV, FDS, FISV, FLS, FTNT, FCX, GME, GPS, GILD, GS, GGG, EVRG, GFF, HSC, HAYN, HTLD, HL, IDA, IEX, IDXX, INCY, NSP, IPI, ISRG, NVTA, JAZZ, LHX, LH, LAWS, LDOS, LLY, LNC, L, MTSI, MRO, MAS, MRK, MLHR, MCO, MS, MOS, MUR, MYGN, NBR, NOV, NTGR, NEE, NKE, OXY, OGE, PKE, PFE, PCG, POR, PFG, PG, PRU, QCOM, RGA, ROK, SMG, SEE, SWN, SUM, TECH, TER, RIG, UPS, UNM, VLO, WRB, WMT, WMB, ITA, IYM, IAI, IYK, IYE, IEO, IEZ, IHE, IDU, QTEC, FXI, BOTZ, IYH, IHF, SLV, IYF, EWO, EWZ, EWC, ECH, EEM, EWQ, EWG, EIS, EWI, EWW, EWS, EZA, EWY, EWD, EWL, EWT, THD, EWU, IBB, PPA, DBA, PBE, PXJ, PJP, IEV, IXC, ILF, MXI, XLY, XLP, XLE, XLF, XLV, XLB, UNG, USO, VHT. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

— Thomas Bulkowski

Tuesday 6/1/21. 2021 Market Forecast Update

Forecast Update

Here’s the updated 2021 forecast for June, presented in slider format.

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 28 May 2021 were…
(The numbering is how they ranked a month ago.)

1. Energy (+36.1%)

2. Financials (+28.4%)

6. Materials (+20.3%)

5. Industrials (+18.4%)

4. Real estate (+17.7%)

3. Communication services (+16.3%)

9. Health care (+8.2%)

7. Consumer discretionary (+6.2%)

8. Information technology (+5.6%)

11. Consumer staples (+4.2%)

10. Utilities (+2.8%)

The folks at two firms polled by Fidelity weigh the sectors in this order.

1. Information technology

2. Health care

3. Consumer discretionary

4. Financials

5. Communication services

6. Industrials

7. Consumer staples

8. Energy

9. Materials

10. Utilities

11. Real estate

Here’s how they rank the industries, but only the top 10 appear. Year to date returns, as of 5/27. The numbering is how they ranked a month ago.

8. Metals and mining (+48.1%)

3. Consumer finance (+40.8%)

1. Real estate management and development (39.7%)

2. Oil, Gas and Consumable fuels (+36.8%)

6. Banks (+35.3%)

9. Airlines (+31.9.%)

4. Household durables (+31.0%)

5. Interactive media and services (29.9%)

(new). Energy equipment and services (+29.5%)

(mew). Distributors (+28.3%)

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.

Monday: Up 186.14 points.

Tuesday: Down 81.52 points.

Wednesday: Up 10.59 points.

Thursday: Up 141.59 points.

Friday: Up 64.81 points.

For the Week…

The Dow industrials were up 321.61 points or 0.9%.

The Nasdaq composite was up 277.75 points or 2.1%.

The S&P 500 index was up 48.25 points or 1.2%.

Year to Date…

Dow Industrials

     1.6% down from the high of 35,091.56 on 05/10/2021.

     15.7% up from the low of 29,856.30 on 01/29/2021.

Nasdaq

     3.3% down from the high of 14,211.57 on 04/29/2021.

     10.9% up from the low of 12,397.05 on 03/05/2021.

S&P 500

     0.8% down from the high of 4,238.04 on 05/07/2021.

     14.8% up from the low of 3,662.71 on 01/04/2021.

Options Expiration

No options expire this week.

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:

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

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Here’s a symbol list of 159 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, ACN, AMD, AFL, ALKS, AMED, AMWD, APOG, AMAT, ARCB, ADM, AWI, BSET, BKNG, EPAY, BRKS, CDNS, CNC, CVX, CHD, CGNX, CMCO, CONN, GLW, CREE, CMI, DHR, DECK, XRAY, DVN, DFS, DUK, BOOM, FFIV, FB, FAST, FIS, FISV, FDP, GME, GOOGL, GPRO, HLIT, HSC, HAYN, HQY, HSII, HNI, HD, HON, HOV, IDA, NSP, INTC, IPAR, NVTA, JKHY, KBAL, KLAC, LZB, LH, LRCX, LAWS, LEG, LXU, MTSI, M, MAS, MDC, MRK, MU, MYGN, NBR, NOV, NTGR, NVDA, OGE, OMCL, OMC, ASGN, OXM, PKE, PTEN, PYPL, PPG, QCOM, RL, RMBS, RGS, REV, RES, CRM, SMTC, NOW, SLGN, SO, SWN, SCS, SSYS, TECH, TDOC, TDC, TER, SLCA, VEEV, WU, WEX, WDAY, XEL, XLNX, IYE, IHI, IEZ, IHE, IDU, QTEC, BOTZ, IGV, SOXX, EIS, EWJ, EWS, EZA, EWY, EWP, EWT, EWU, QQQ, PHO, ROBO, ILF, SSO, XLY, XLE, XRT, XLU, SMH, MGK. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

The below industries were the best (rank 1) or worst performing of those I follow.

— Thomas Bulkowski