Market Monday: The Week Ahead….

Thursday 10/14/21. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 228/397 or 57.4% of the time.

     The prediction of the index closing lower has been right 59/124 or 47.6% 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.

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

The composite formed a small triple bottom at 1, 2, 3. The pattern confirmed when the composite closed above red line A. That was a buy signal, but it hasn’t amounted
to much…so far anyway.

If you take the height of the chart pattern (from A to 3, the tallest part of the pattern) and add it to A, you can get a target. In stocks, price will reach the target 74% of the time
according to my book,
Encyclopedia of Chart Patterns, 3rd edition.

If I had to guess, I’d say the composite will move higher and that assessment agrees with the above prediction, too.

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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:
AXDX, AMD, AES, APD, ALK, AA, AMWD, AMN, ANIK, AAPL, AMAT, ARCB, ACGL, ADM, BIG, BMRN, BRKS, BG, CBT, CNC, CHD, CLNE, CLF, CSOD, CCK, DDS, D, DUK, BOOM, EMR, WIRE, EZPW, FLS, FCX, HSII, ITW, INFN, NSP, TILE, IPI, JAZZ, KMT, LAWS, RAMP, MCHX, MRTN, MTRX, NXGN, OLN, PKG, PRFT, PFE, KWR, QCOM, RL, RJF, RNG, SCHW, SAIC, SMG, SWN, SUM, TDOC, TFX, TPX, TEVA, TREX, VFC, VRSN, VMC, WRB, WMT, WLK, XEL, XLNX, IYM, FXL, EWO, ECH, EWH, EIS, EWM, EWS, EWY, PXJ, XLP, GLD, UNG, SMH. 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.

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The following table shows where Fibonacci retrace values of the day’s high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

— Thomas Bulkowski

Wednesday 10/13/21. A Look At Indicators: Stealth Bullish

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 bearish signal, shown by the vertical red line on the right of the chart, is still in place. However, look at the CPI line, the thin blue line near chart bottom.

It has been climbing even as the S & P index has been dropping. That’s bullish divergence. It suggests a return of the bulls, which will push the index upward.

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 show improvement from a week ago. This is another indication of the market firming up, that it will begin to recover from the weakness which took it lower starting
in September.

The two charts suggest the retrace is coming to an end. But with bullish divergence like we see here, it could last months before we see a recovery.

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Here’s a symbol list of 108 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AXDX, AJRD, AES, ATSG, AKAM, ALK, AA, ALL, ANIK, ANTM, APOG, AAPL, ARCB, ARW, ADP, BMI, BIG, BKNG, BMY, CACI, CPB, CLS, CX, CNP, CINF, CTXS, CMCO, CAG, COTY, CR, CCK, CTS, CMI, DDS, BOOM, EMN, EMR, EFX, FFIV, FB, FIS, FMC, FTNT, FCX, HL, ITW, ILMN, IPG, JAZZ, KELYA, KLAC, LRCX, MHO, MCHX, MRTN, MTRN, MTRX, MSFT, NEU, NXGN, OMCL, PKG, PRFT, PFE, PINC, PFG, PGR, RL, RNG, SAIC, SWN, SR, TDOC, TFX, TEVA, TG, TREX, WLK, WMB, IYK, IHE, IAT, IYF, EWZ, ECH, EEM, EWH, EIS, EWJ, EWM, EWY, EWP, EWT, THD, DBA, PJP, XLF, UNG. 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 10/12/21. Slider Trading Quiz!

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 229/412 or 55.6% of the time.

     The prediction of the index closing lower has been right 42/89 or 47.2% of the time.

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I show another slider trading quiz featuring Continental Air: CAL 2

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Here’s a symbol list of 148 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ADBE, APD, ALRM, AYX, AMZN, AXP, ANTM, AAPL, ARCB, ACGL, AWI, ADSK, ADP, BLL, BSET, BIG, BIO, BKNG, CDNS, CALM, CAL, CPB, CLS, CENX, CF, CRL, CHKP, CINF, CNA, CMCO, CAG, CSOD, COTY, CRH, CCRN, CCK, CTS, CMI, DFS, DOV, BOOM, EXP, EMN, EMR, EPAM, EFX, EQT, RE, EVH, EZPW, FDS, FICO, FDX, FIS, FISV, FLS, FORM, FCX, FRD, GPN, GL, GS, HSC, HE, HTLD, HSII, HSY, HNI, HOLX, HON, DHI, HURC, IDXX, ILMN, IPI, KALU, KELYA, KFRC, RAMP, L, LOW, M, MRTN, MCO, MS, MOS, MLI, ^IXIC, NCR, OGE, OUT, PKG, PANW, PINC, PFG, DGX, RMBS, RGA, RES, SLB, SEIC, SIGI, SKX, SNPS, TECH, TFX, TPX, TEVA, VMC, WU, WMB, IAI, IHI, FTEC, FDN, QTEC, FXL, BOTZ, IAT, IYZ, IGV, IYF, EWZ, EEM, EWQ, EWM, EWT, TUR, QLD, PEJ, QQQ, PHO, IXN, SSO, XLF, XHB, SPY, XLK, UNG, USO, 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.

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The following table shows where Fibonacci retrace values of the day’s high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

— Thomas Bulkowski

Monday 10/11/21. Market Monday: The Week Ahead

My Prediction

I show the Dow utilities on the daily scale.

At AB is a chart pattern familiar to many of you, I’m sure. It’s called a Eve & Eve double top. I consider it an Eve top at A because the number of days
between spike A and the one to the left is less than 5. Peak B is wide enough by itself to be an Eve top, too.

The patterns turn from squiggles on the chart to a valid double top when the average closes below line C.

The utilities made a strong push lower, bottoming just before October started. It bounced and is now heading lower again. The reason for this, I think, is that the markets
believe interest rates are going to rise and that’s bad for utility companies. Their borrowing costs will climb.

I expect the utilities to continue lower, as I show with line D.

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.

Thursday: Up 428.48 points.

Friday: Down 8.69 points.

Saturday: Holiday or other weird event!

Saturday: Holiday or other weird event!

Saturday: Holiday or other weird event!

For the Week…

The Dow industrials were up 419.79 points or 1.2%.

The Nasdaq composite was up 13.14 points or 0.1%.

The S&P 500 index was up 34.3 points or 0.8%.

Year to Date…

Dow Industrials

     2.5% down from the high of 35,631.19 on 08/16/2021.

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

Nasdaq

     5.3% down from the high of 15,403.44 on 09/07/2021.

     17.6% up from the low of 12,397.05 on 03/05/2021.

S&P 500

     3.4% down from the high of 4,545.85 on 09/02/2021.

     19.9% up from the low of 3,662.71 on 01/04/2021.

Options Expiration

Many options expire this week, so traders will be looking to close out their positions, and that suggests increased volatility (large daily price swings).

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 will be starting in about 5 days.

Here’s a symbol list of 151 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ACIW, ADBE, ALRM, AYX, AMZN, APA, AAPL, ARCB, ADM, AWI, ADSK, ADP, AVY, BLL, BZH, BIO, BRC, CDNS, CALM, CAL, CLS, CRL, CVX, CAG, COP, CLR, CSOD, CCRN, CCK, EPAM, EFX, EQT, XOM, FICO, FISV, GPS, GPN, GES, HLIT, HSC, HE, HTLD, HOLX, HON, DHI, IDA, IDXX, INFN, ITGR, KALU, KELYA, KMT, LDOS, LNC, L, LXU, MHO, MRO, MGEE, MU, MCO, MYGN, ^IXIC, NOV, NCR, NWL, NUS, OXY, OGE, OMI, OXM, PKG, PRFT, PNW, PRU, DGX, RL, RMBS, SCHW, SIGI, SMTC, NOW, SLGN, SKX, SRDX, SNPS, TECH, TFX, TPX, TDC, TSCO, RIG, UPS, VMC, WSO, WU, WMB, WOLF, IYE, IHI, IEO, IEZ, FTEC, FDN, QTEC, FXL, BOTZ, ICF, IAT, IYZ, IGV, IGE, EWC, EWQ, EIS, EWI, EWM, EWW, EWP, TUR, EWU, QLD, DBA, PBE, PEJ, PXJ, QQQ, PHO, IXC, IXN, SSO, XLE, XHB, XLB, SPY, XLK, USO, VAW, 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

Monday to Friday 10/4/21 to 10/8/2021. Quiz Week

Take one of these quizzes each day. All of them are based on actual trades I’ve made, some of them recently.

The following is a brief review of how the markets performed over time, ending Friday 10/1/2021. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Up 71.37 points.

Tuesday: Down 569.38 points.

Wednesday: Up 90.73 points.

Thursday: Down 546.8 points.

Friday: Up 482.54 points.

For the Week Ending 10/1…

The Dow industrials were down 471.54 points or 1.4%.

The Nasdaq composite was down 481 points or 3.2%.

The S&P 500 index was down 98.44 points or 2.2%.

Year to Date, Ending 10/1…

Dow Industrials

     3.7% down from the high of 35,631.19 on 08/16/2021.

     15.0% up from the low of 29,856.30 on 01/29/2021.

Nasdaq

     5.4% down from the high of 15,403.44 on 09/07/2021.

     17.5% up from the low of 12,397.05 on 03/05/2021.

S&P 500

     4.2% down from the high of 4,545.85 on 09/02/2021.

     19.0% up from the low of 3,662.71 on 01/04/2021.

Here’s a symbol list of 105 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, ACN, AJRD, ALK, AFG, ABC, APH, AWI, BLL, BRC, CPB, CNP, CHD, CTSH, CREE, DECK, DRQ, DUK, EBAY, EQT, FOE, FTNT, GILD, HQY, HSII, HURC, ILMN, INOV, INTC, IPAR, TILE, NVTA, JCOM, K, KMB, LH, LAWS, LXU, MHO, MRO, MRTN, MTRX, MDT, MRK, MUR, NOV, NCR, NEU, PKG, PANW, PDCO, PFE, PINC, PG, PGR, RJF, SLB, SMG, SLGN, STMP, SSYS, TXN, TOL, TRV, TZOO, SLCA, VRTX, WSM, IYK, IYE, IHI, IEZ, QTEC, FXL, BOTZ, EWO, EWZ, EWQ, EIS, EWL, EWT, QLD, IBB, DBA, PEJ, PXJ, IEV, XLE, XLV, 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 below industries were the best (rank 1) or worst performing of those I follow.

— Thomas Bulkowski

Friday 10/1/21. 2021 Forecast Update

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

Based on sector performance from Fidelity, the best performing sectors for one-year performance as of 30 September 2021 were…
(The numbering is how they ranked a month ago.)

4. Energy (+71%)

1. Financials (+59%)

2. Communication services (+38%)

7. Information technology (+29%)

6. Real estate (+29%)

5. Industrials (+28%)

3. Materials (+26%)

8. Health care (+24%)

9. Consumer discretionary (+20%)

11. Consumer staples (+11%)

10. Utilities (+9%)

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

1. Information technology (IT)

2. Health care

3. Consumer discretionary

5. Communication services

4. Financials

6. Industrials

7. Consumer staples

11. Energy

8. Real estate

9. Materials

10. Utilities

Here’s how they rank the industries, but only the top 10 appear. One-year change, as of 9/29. The numbering is how they ranked a month ago but that was based on year-to-date performance.
This list is for one year performance.

1. Real estate management and development (108%)

2. Consumer finance (+98%)

3. Construction and engineering (+90%)

New. Energy equipment and services (+79%)

5. Banks (+78%)

New. Oil, gas and consumable fuels (+71%)

New. Automobiles (+60%)

10. Capital markets (55%)

8. Auto components (+53%)

7. Electronic equipment instruments and components (47%)

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Here’s a symbol list of 227 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, MMM, ABT, ACIW, AYI, AJRD, ATSG, AKAM, ALK, ALKS, ALL, AEO, AFG, AMWD, ABC, APH, ANTM, AON, APA, AAPL, ATR, ADM, ARW, AIZ, AVY, AVNT, BMI, BLL, BSET, BAX, BECN, BBBY, BRC, BLDR, CBT, CPB, CE, CNP, CVX, CINF, CSCO, CNA, CTSH, CL, COST, CR, CRH, CCRN, CMI, DHR, DECK, DDS, ^DJI, D, DRQ, EBAY, EQT, XOM, EZPW, FIS, FISV, FLS, IT, GD, GE, GILD, GL, EVRG, GFF, GES, HBI, HIG, HE, HQY, HELE, HP, HNI, HD, DHI, HOV, HUBG, HURC, IDA, IEX, INOV, IBP, IPAR, TILE, NVTA, JKHY, JBLU, JNJ, K, KELYA, KBAL, KMB, KSS, LH, LANC, LAWS, LEG, LDOS, LEN, LMT, MHO, M, MRTN, MLM, MA, MTRX, MDT, MGEE, MU, MCO, MS, MLI, MUR, NOV, NCR, NTGR, NJR, NEU, JWN, OGE, OMCL, OXM, PATK, PDCO, PRFT, PFE, POR, PPG, PPL, PINC, PG, PHM, DGX, RL, RMBS, RJF, RGA, REV, RLI, ROK, RCKY, SLB, SAIC, SMG, SEIC, SIGI, SMTC, SLGN, SO, SCCO, LUV, SXI, SCS, SUM, SRDX, TPR, TGT, TXT, TKR, TOL, TRV, TZOO, VEEV, VRTX, WMT, WMB, ITA, IYK, IHI, IEZ, IHE, FTEC, FXL, FXI, BOTZ, ICF, IYH, IHF, IAT, IYZ, SLV, ECH, EEM, EWQ, EWJ, EWY, EWD, THD, QLD, PXJ, PJP, PHO, ROBO, XLP, GLD, XLV, XHB, 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.