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Forecast Update…

Blog: June 2020

Bulkowski's Blog: ThePatternSite.com

As of 06/04/2020

  Indus: 26,282 +11.93 +0.0%  

  Trans: 9,575 +134.48 +1.4%  

  Utils: 814 -17.21 -2.1%  

  Nasdaq: 9,616 -67.10 -0.7%  

  S&P 500: 3,112 -10.52 -0.3%  

YTD

-7.9%  

-12.2%  

-7.4%  

 +7.2%  

-3.7%  

  Up arrow27,000 or 24,000 by 06/15/2020
  Up arrow9,800 or 8,200 by 06/15/2020
  Up arrow850 or 750 by 06/15/2020
  Up arrow9,800 or 9,000 by 06/15/2020
  Up arrow3,200 or 2,850 by 06/15/2020

As of 06/04/2020

  Indus: 26,282 +11.93 +0.0%  

  Trans: 9,575 +134.48 +1.4%  

  Utils: 814 -17.21 -2.1%  

  Nasdaq: 9,616 -67.10 -0.7%  

  S&P 500: 3,112 -10.52 -0.3%  

YTD

-7.9%  

-12.2%  

-7.4%  

 +7.2%  

-3.7%  

  Up arrow27,000 or 24,000 by 06/15/2020
  Up arrow9,800 or 8,200 by 06/15/2020
  Up arrow850 or 750 by 06/15/2020
  Up arrow9,800 or 9,000 by 06/15/2020
  Up arrow3,200 or 2,850 by 06/15/2020

 


Friday 6/5/20. 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 587 stocks searched, or 3.4%. 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 17 bullish chart patterns this week and 2 bearish ones with any remaining (2) being undecided.
The ratio of bullish to bearish patterns suggests the market is bullish.

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
AXDX Triangle, symmetrical        05/22/2020 06/04/2020 Medical Services
ALRM Pipe bottom        05/18/2020 05/26/2020 Computer Software and Svcs
AA Flag, high and tight        04/03/2020 06/04/2020 Aerospace/Defense
ALKS Diamond top        05/20/2020 06/01/2020 Drug
APA Head-and-shoulders bottom        05/04/2020 06/01/2020 Petroleum (Producing)
BBW Head-and-shoulders bottom        05/04/2020 06/02/2020 Retail (Special Lines)
CAL Flag, high and tight        04/03/2020 06/04/2020 Shoe
CLR Double Bottom, Adam and Adam        05/14/2020 06/01/2020 Petroleum (Producing)
DHR Broadening top, right-angled and descending        05/06/2020 06/02/2020 Precision Instrument
EVH Dead-cat bounce        06/01/2020 06/01/2020 Healthcare Information
HHS Flag, high and tight        04/03/2020 06/04/2020 Advertising
NVTA Triangle, symmetrical        04/27/2020 06/04/2020 Medical Services
M Flag, high and tight        04/02/2020 06/04/2020 Retail Store
MDT Triangle, symmetrical        05/08/2020 06/03/2020 Medical Supplies
MYGN Rectangle top        04/07/2020 06/04/2020 Biotechnology
OMI Triangle, ascending        04/28/2020 06/04/2020 Medical Supplies
RES Flag, high and tight        04/03/2020 06/04/2020 Oilfield Svcs/Equipment
SLGN Triangle, symmetrical        05/08/2020 06/03/2020 Packaging and Container
TPR Head-and-shoulders bottom        04/21/2020 05/29/2020 Apparel
TREX Pipe top        05/18/2020 05/26/2020 Building Materials
WWW Flag, high and tight        04/03/2020 06/04/2020 Shoe

 

Weekly screen for chart patterns ending between 05/28/2020 and 06/04/2020. 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.

 

Accelerate Diagnostics Inc (AXDX)

Industry: Medical Services

Industry RS rank: 16 out of 58

Stock RS rank: 546 out of 582

6/4/20 close: $8.53

1 Month avg volatility: $0.63. Volatility stop (for upward breakout): $6.96 or 18.4% below the close.

Change YTD: -49.53%

Volume: 279,100 shares.
3 month avg: 533,922 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: Triangle, symmetrical continuation pattern from 05/22/2020 to 06/04/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Alarm.com Holdings inc (ALRM)

Industry: Computer Software and Svcs

Industry RS rank: 2 out of 58

Stock RS rank: 28 out of 582

6/4/20 close: $55.91

1 Month avg volatility: $2.50. Volatility stop (for upward breakout): $49.91 or 10.7% below the close.

Change YTD: 30.11%

Volume: 952,900 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 bottom reversal pattern from 05/18/2020 to 05/26/2020

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.

Top

Alcoa (AA)

Industry: Aerospace/Defense

Industry RS rank: 46 out of 58

Stock RS rank: 544 out of 582

6/4/20 close: $11.64

1 Month avg volatility: $0.58. Volatility stop (for upward breakout): $9.41 or 19.2% below the close.

Change YTD: -45.89%

Volume: 11,422,100 shares.
3 month avg: 8,355,648 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

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.

Top

Alkermes (ALKS)

Industry: Drug

Industry RS rank: 7 out of 58

Stock RS rank: 432 out of 582

6/4/20 close: $16.83

1 Month avg volatility: $0.68. Volatility stop (for downward breakout): $18.35 or 9.0% above the close.

Change YTD: -17.50%

Volume: 1,017,300 shares.
3 month avg: 949,792 shares.

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

 

Chart pattern: Diamond top reversal pattern from 05/20/2020 to 06/01/2020

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.

Top

Apache Corp. (APA)

Industry: Petroleum (Producing)

Industry RS rank: 57 out of 58

Stock RS rank: 506 out of 582

6/4/20 close: $13.00

1 Month avg volatility: $0.84. Volatility stop (for upward breakout): $10.57 or 18.7% below the close.

Change YTD: -49.20%

Volume: 16,013,200 shares.
3 month avg: 3,367,409 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: Head-and-shoulders bottom reversal pattern from 05/04/2020 to 06/01/2020

WARNING: A dead-cat bounce occurred on 03/11/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/10/2020 and a 38% chance by 09/09/2020.

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Top

Build-A-Bear Workshop Inc (BBW)

Industry: Retail (Special Lines)

Industry RS rank: 37 out of 58

Stock RS rank: 392 out of 582

6/4/20 close: $2.55

1 Month avg volatility: $0.19. Volatility stop (for upward breakout): $1.98 or 22.4% below the close.

Change YTD: -21.30%

Volume: 358,800 shares.
3 month avg: 99,982 shares.

This security may be thinly traded (less than 100k 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 bottom reversal pattern from 05/04/2020 to 06/02/2020

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Top

Caleres (CAL)

Industry: Shoe

Industry RS rank: 20 out of 58

Stock RS rank: 571 out of 582

6/4/20 close: $9.49

1 Month avg volatility: $0.75. Volatility stop (for upward breakout): $7.01 or 26.2% below the close.

Change YTD: -60.04%

Volume: 1,708,400 shares.
3 month avg: 329,342 shares.

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

 

Chart pattern: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 02/14/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/14/2020.

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.

Top

Continental Resources Inc. (CLR)

Industry: Petroleum (Producing)

Industry RS rank: 57 out of 58

Stock RS rank: 569 out of 582

6/4/20 close: $15.37

1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $12.20 or 20.6% below the close.

Change YTD: -55.19%

Volume: 3,225,900 shares.
3 month avg: 2,362,946 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: Double Bottom, Adam and Adam reversal pattern from 05/14/2020 to 06/01/2020

WARNING: A dead-cat bounce occurred on 02/27/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/27/2020.

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.

Top

Danaher Corp (DHR)

Industry: Precision Instrument

Industry RS rank: 13 out of 58

Stock RS rank: 79 out of 582

6/4/20 close: $168.79

1 Month avg volatility: $3.84. Volatility stop (for upward breakout): $160.35 or 5.0% below the close.

Change YTD: 9.98%

Volume: 2,599,700 shares.
3 month avg: 2,378,355 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: Broadening top, right-angled and descending continuation pattern from 05/06/2020 to 06/02/2020

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.

Top

Evolent Health, Inc (EVH)

Industry: Healthcare Information

Industry RS rank: 3 out of 58

Stock RS rank: 267 out of 582

6/4/20 close: $6.30

1 Month avg volatility: $0.64. Volatility stop (for downward breakout): $7.65 or 21.4% above the close.

Change YTD: -30.39%

Volume: 2,289,700 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: Dead-cat bounce continuation pattern from 06/01/2020 to 06/01/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Top

Harte-Hanks Inc (HHS)

Industry: Advertising

Industry RS rank: 52 out of 58

Stock RS rank: 161 out of 582

6/4/20 close: $3.12

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $2.25 or 27.8% below the close.

Change YTD: -12.85%

Volume: 53,600 shares.
3 month avg: 98,162 shares.

This security may be thinly traded (less than 100k shares)!

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

 

Chart pattern: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/08/2020 and a 38% chance by 09/07/2020.

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.

Top

Invitae Corp (NVTA)

Industry: Medical Services

Industry RS rank: 16 out of 58

Stock RS rank: 269 out of 582

6/4/20 close: $16.67

1 Month avg volatility: $1.22. Volatility stop (for upward breakout): $14.11 or 15.4% below the close.

Change YTD: 3.35%

Volume: 1,861,600 shares.
3 month avg: 321,822 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: Triangle, symmetrical continuation pattern from 04/27/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Macys, Inc (M)

Industry: Retail Store

Industry RS rank: 34 out of 58

Stock RS rank: 554 out of 582

6/4/20 close: $8.21

1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $6.41 or 21.9% below the close.

Change YTD: -51.71%

Volume: 77,912,000 shares.
3 month avg: 14,056,392 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: Flag, high and tight continuation pattern from 04/02/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/12/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/11/2020 and a 38% chance by 09/10/2020.

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.

Top

Medtronic Inc (MDT)

Industry: Medical Supplies

Industry RS rank: 17 out of 58

Stock RS rank: 361 out of 582

6/4/20 close: $96.99

1 Month avg volatility: $2.56. Volatility stop (for upward breakout): $91.30 or 5.9% below the close.

Change YTD: -14.51%

Volume: 8,784,700 shares.
3 month avg: 5,761,640 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: Triangle, symmetrical continuation pattern from 05/08/2020 to 06/03/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Myriad Genetics Inc (MYGN)

Industry: Biotechnology

Industry RS rank: 8 out of 58

Stock RS rank: 535 out of 582

6/4/20 close: $15.92

1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $13.41 or 15.8% below the close.

Change YTD: -41.54%

Volume: 1,889,900 shares.
3 month avg: 906,888 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: Rectangle top continuation pattern from 04/07/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 02/07/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 08/07/2020.

Breakout is upward 68% of the time.

Average rise: 39%.

Break-even failure rate: 9%.

Throwbacks occur 64% of the time.

Price hits measure rule target 80% of the time.

Top

Owens and Minor Inc (OMI)

Industry: Medical Supplies

Industry RS rank: 17 out of 58

Stock RS rank: 99 out of 582

6/4/20 close: $7.80

1 Month avg volatility: $0.54. Volatility stop (for upward breakout): $6.42 or 17.7% below the close.

Change YTD: 50.87%

Volume: 1,106,100 shares.
3 month avg: 1,318,423 shares.

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

 

Chart pattern: Triangle, ascending reversal pattern from 04/28/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/05/2020. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 09/03/2020.

Breakout is upward 70% of the time.

Average rise: 35%.

Break-even failure rate: 13%.

Throwbacks occur 57% of the time.

Price hits measure rule target 75% of the time.

Top

RPC Inc (RES)

Industry: Oilfield Svcs/Equipment

Industry RS rank: 58 out of 58

Stock RS rank: 270 out of 582

6/4/20 close: $3.66

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $2.84 or 22.3% below the close.

Change YTD: -30.15%

Volume: 2,227,300 shares.
3 month avg: 1,275,503 shares.

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

 

Chart pattern: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

WARNING: A dead-cat bounce occurred on 03/09/2020. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 06/08/2020 and a 38% chance by 09/07/2020.

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.

Top

Silgan Holdings Inc (SLGN)

Industry: Packaging and Container

Industry RS rank: 26 out of 58

Stock RS rank: 101 out of 582

6/4/20 close: $33.85

1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $31.24 or 7.7% below the close.

Change YTD: 8.91%

Volume: 1,107,300 shares.
3 month avg: 499,285 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 05/08/2020 to 06/03/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Tapestry Inc (TPR)

Industry: Apparel

Industry RS rank: 54 out of 58

Stock RS rank: 524 out of 582

6/4/20 close: $16.44

1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $13.41 or 18.4% below the close.

Change YTD: -39.04%

Volume: 6,863,900 shares.
3 month avg: 3,145,718 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: Head-and-shoulders bottom reversal pattern from 04/21/2020 to 05/29/2020

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Top

Trex Company (TREX)

Industry: Building Materials

Industry RS rank: 42 out of 58

Stock RS rank: 24 out of 582

6/4/20 close: $114.35

1 Month avg volatility: $5.13. Volatility stop (for downward breakout): $127.84 or 11.8% above the close.

Change YTD: 27.23%

Volume: 1,256,900 shares.
3 month avg: 245,355 shares.

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

 

Chart pattern: Pipe top reversal pattern from 05/18/2020 to 05/26/2020

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.

Top

Wolverine World Wide (WWW)

Industry: Shoe

Industry RS rank: 20 out of 58

Stock RS rank: 453 out of 582

6/4/20 close: $24.94

1 Month avg volatility: $1.17. Volatility stop (for upward breakout): $21.33 or 14.5% below the close.

Change YTD: -26.08%

Volume: 1,618,500 shares.
3 month avg: 772,149 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: Flag, high and tight continuation pattern from 04/03/2020 to 06/04/2020

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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Thursday 6/4/20. Intraday Market Direction: Nasdaq

The index climbed by 0.8% or 74.54 points. Since 02/05/1971 the index made 400 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.8% on 264 occasions.

     Average loss was -0.8% on 136 occasions.

Expect the index to close higher 66.0% of the time.

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 189/338 or 55.9% of the time.

     The prediction of the index closing lower has been right 56/112 or 50.0% 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.

Let’s start from the left with a double top. That’s DD on the chart. It confirms as a valid chart pattern when the index closes below the horizontal blue line.
Judging by its height, it didn’t appear to meet the measure rule target (the pattern’s height subtracted from the blue line). But it was close

The LHHR pattern is a complex head-and-shoulders bottom. L is the left shoulder, H is a head, and R is the right shoulder. This one met the measure rule target (height
added to the top of the pattern) easily enough, within a day or two.

Now we come to the green lines. That’s a channel. Price rises bouncing between the two green lines. The index has touched the bottom line. So either it’s
going to bounce upward off the line or plunge through it. Which way will it be? The above probabilities says there’s a 66% chance it’ll be upward, so that sounds good to me.

$ $ $

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

Top

© 2020 ThePatternSite.com    Metric   Value   Diff   Close (within 10% of the high-low range for the day)? 
 Monthly S2   8,262.32      
 Monthly S1   8,972.61   710.30   
 Weekly S2   9,070.92   98.30   
 Monthly Pivot   9,248.13   177.21   
 Weekly S1   9,376.91   128.79   
 Weekly Pivot   9,450.28   73.36   
 Daily S2   9,592.02   141.75   
 Low   9,627.18   35.16   
 Daily S1   9,637.47   10.29   
 Open   9,651.86   14.39   
 61.8% Down from Intraday High   9,657.97   6.11   Yes! The 61.8% Down from Intraday High is close to the Open.
 50% Down from Intraday High   9,667.48   9.51   
 Daily Pivot   9,672.62   5.14   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High   9,676.99   4.37   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close   9,682.91   5.92   Yes! The Close is close to the 38.2% Down from Intraday High.
 High   9,707.78   24.87   
 Daily R1   9,718.07   10.29   
 Daily R2   9,753.22   35.16   
 Weekly R1   9,756.27   3.05   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2   9,829.64   73.36   
 Monthly R1   9,958.42   128.79   
 Monthly R2   10,233.94   275.51   


Wednesday 6/3/20. A Look At Indicators

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.

Not much has changed in the CPI pic since yesterday’s post. The CPI is pegged at the top of the scale, 100, pinned there by a move up in the index.

In my study of trendlines, those which rise up at 45 degrees or less tend to last the longest. And this is going up at that rate (but it changes with the aspect ratio of your screen
versus mine).

Since the green bar on the far right of the chart, the trend has been steady and the slope is good, too.

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, 55% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 62%.

The fewest was 20% on 01/16/2020.

And the most was 96% on 03/23/2020.

Shown as a blue line on the above chart…

The 481 stocks in my database are down an average of 26% from their yearly high.

A week ago, the average was 28%.

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

And the bottom was 47% on 03/23/2020.

Both lines have made progress over the last week.

I don’t see anything on this chart or the last which would derail upward progress.

Of course, I’m still expecting covid-19 to surge. We’re still seeing that in 15 states. With protests and little social distancing, it’ll be a surprise if we didn’t see more waves of covid.
But I don’t know if that’ll stop the upward rise in the indices. They may choose to ignore it and continue looking 6 months forward.

— Thomas Bulkowski

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Tuesday 6/2/20. 2020 Market Forecast June Update

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 29 May 2020 were…

1. Information technology (+6.68%),

2. Consumer discretionary (+2.55%),

3. Communication services (+0.39%),

4. Health care (-0.18%),

5. Consumer staples (-5.79%),

6. Utilities (-7.03%),

7. Real estate (-8.96%),

8. Materials (-9.22%),

9. Industrials (-16.92%),

10. Financials (-23.34%),

11. and dead last is energy (-35.04%).

Here’s how they rank the industries, but only those in the plus column appear. Year to date returns.

1. Internet & direct marketing retail (+27.48%),

2. Software (+15.63%),

3. Biotechnology (+9.37%),

4. Interactive media & Services (+7.77%),

5. Technology hardware, storage & Peripherals (+6.45%),

6. Metals & mining (+5.99%),

7. Life sciences tools & Services (+4.98%),

8. Semiconductors & semiconductor equipment (+2.99%),

9. Specialty retail (+2.73%),

10. IT Services (+1.60%),

11. Entertainment (+1.08%).

Here’s the updated 2020 forecast for June, presented in slider format.

— Thomas Bulkowski

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Monday 6/1/20. Market Monday: The Week Ahead

My Prediction

Picture of the Dow utilities on the daily scale.

I show the Dow utilities on the daily scale and marked it up quite a bit. Let’s go through it.

The red labels, L, H, R are the markings for the left shoulder, head, and right shoulder of what could be a head-and-shoulders bottom.

Just one problem: the head is too long (it’s too far away from the shoulders). So I don’t consider it a valid head-and-shoulders.

The red labels, 1, 2, 3 are the peaks of a three falling peaks chart pattern and it’s a nice one, too. It’s tight, the peaks look similar, and it confirms as valid
when the index closes below the low between the three peaks, which I show as a horizontal line at A.

Pattern LHR in blue is a valid head-and-shoulders bottom. This is much nicer looking than the one in red, isn’t it? The neck is closer to the shoulders and it confirms as valid, too.

Finally, I drew the orange trendline down from the three falling peaks to today’s price, just to see where we are. In the past, I’ve skipped trades because of overhead trendline resistance
(and have been glad I did).
Notice how price has pierced the trendline, but not by much. We could still see a reversal next week before the index rises much higher.

Until then, all systems are go for liftoff.

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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.

Tuesday: Up 529.95 points.

Wednesday: Up 553.16 points.

Thursday: Down 147.63 points.

Friday: Down 17.53 points.

Saturday: Holiday or other weird event!

For the Week…

The Dow industrials were up 917.95 points or 3.8%.

The Nasdaq composite was up 165.28 points or 1.8%.

The S&P 500 index was up 88.86 points or 3.0%.

Year to Date…

Dow Industrials

     14.2% down from the high of 29,568.57 on 02/12/2020.

     39.4% up from the low of 18,213.65 on 03/23/2020.

Nasdaq

     3.5% down from the high of 9,838.37 on 02/19/2020.

     43.1% up from the low of 6,631.42 on 03/23/2020.

S&P 500

     10.3% down from the high of 3,393.52 on 02/19/2020.

     38.9% up from the low of 2,191.86 on 03/23/2020.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

As of 05/29/2020, the CPI had:

1 bearish patterns,

14 bullish patterns,

136 patterns waiting for breakout.

The CPI signal is 93.3%, which is
bullish (>= 65%).

The chart pattern indicator is bullish
with 2 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.

Index S2 S1 Pivot R1 R2
Dow Industrials (^DJI): Daily   24,848   25,116   25,299   25,567   25,750 
Weekly   24,331   24,857   25,308   25,834   26,285 
Monthly   21,675   23,529   24,644   26,498   27,613 
S&P500 (^GSPC): Daily   2,980   3,012   3,031   3,063   3,081 
Weekly   2,929   2,986   3,028   3,085   3,126 
Monthly   2,658   2,851   2,960   3,153   3,262 
Nasdaq (^IXIC): Daily   9,259   9,375   9,440   9,555   9,621 
Weekly   9,007   9,248   9,386   9,628   9,765 
Monthly   8,198   8,844   9,184   9,830   10,170 
  • 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)  2 weeks up  33.9%   The trend may continue. 
  2 months up  43.6%   Expect a random direction. 
 S & P 500 (^GSPC)  2 weeks up  35.9%   The trend may continue. 
  2 months up  47.5%   Expect a random direction. 
 Nasdaq composite (^IXIC)  2 weeks up  36.1%   The trend may continue. 
  2 months up  40.7%   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 either underway or should be starting soon. The sessions could be more volatile.

 Found  Chart Pattern Name
60 Flag, high and tight
23 Pipe bottom
18 Double Top, Adam and Adam
16 Head-and-shoulders top
11 Pipe top
10 Triangle, symmetrical
9 Double Bottom, Adam and Adam
7 Head-and-shoulders bottom
7 Diamond top
6 Broadening top

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. Healthcare Information 1. Healthcare Information
2. Semiconductor 2. Computer Software and Svcs
3. Computer Software and Svcs 3. Biotechnology
4. Internet 4. Semiconductor
5. Drug 5. Drug

— Thomas Bulkowski

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Intraday Market Direction Thursday: Nasdaq Higher…

Blog: July 2020 As of 07/07/2020   Indus: 25,890 -396.85 -1.5%     Trans: 9,279 -108.33 -1.2%     Utils: 776 -3.44 -0.4%   ...

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