Market Monday: The Week Ahead….

Monday 1/31/22. Market Monday: The Week Ahead

My Prediction

I show the Nasdaq composite on the daily scale.

At AB, there’s a small double bottom which confirms as a valid pattern when the index closes above the top of the pattern. I show that as line C.

In this case, the upward move faltered and the index tumbled. The double bottom failed.

More recently, the index has found a bottom — I think. My expectation and hope is that the index will recover by following the blue line. It won’t be as steep as the line suggests, but
maybe I’ve gotten the direction right (upward).

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I finished converting my website to a secure site: https versus http. If you have links to the website with only http:, change it to https: and you’ll get in faster (but I doubt you’ll notice
the difference).

If you find any broken links or pages which don’t load properly, please let me know. Email me at

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 99.13 points.

Tuesday: Down 66.77 points.

Wednesday: Down 129.64 points.

Thursday: Down 7.31 points.

Friday: Up 564.69 points.

For the Week…

The Dow industrials were up 460.1 points or 1.3%.

The Nasdaq composite was up 1.65 points or 0.0%.

The S&P 500 index was up 33.91 points or 0.8%.

Year to Date…

Dow Industrials

     6.0% down from the high of 36,952.65 on 01/05/2022.

     4.8% up from the low of 33,150.33 on 01/24/2022.

Nasdaq

     13.1% down from the high of 15,852.14 on 01/04/2022.

     5.2% up from the low of 13,094.65 on 01/24/2022.

S&P 500

     8.0% down from the high of 4,818.62 on 01/04/2022.

     5.0% up from the low of 4,222.62 on 01/24/2022.

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 94 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ACIW, AEL, AXP, AMN, APOG, AAPL, ATR, ARW, AVNT, AVA, BECN, BBBY, BERY, BIO, BOOT, BAH, EPAY, BLDR, BG, CX, CNP, CENX, CTXS, COTY, CCRN, CSGS, DECK, D, DOV, FICO, FAST, FE, FLS, FORM, FCX, GNW, THG, HE, HL, NSP, IVC, KALU, KBH, KSS, LEG, MAN, MRK, MS, MOS, MYGN, NI, OGE, OMI, OXM, PCG, PICO, PNW, RL, SCHW, SRE, NOW, SKX, SCCO, TJX, SLCA, VRSN, VRTX, V, WLK, WEX, XEL, IAI, IHE, FXI, SOXX, SLV, EWK, EWH, EWM, EPP, TUR, DBA, XLP, XLV, XLK, XLU, 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.

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

— Thomas Bulkowski

Friday 1/28/22. Pattern Trading Setups for the Weekend.

Here’s a symbol list of 71 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ADTN, AEL, ABC, ADM, AIZ, ADP, BAX, BECN, BIG, CACI, CAL, CLS, CONN, COST, CTS, DHR, EIX, EZPW, FAST, FORM, FCX, GME, GNW, GILD, HBI, HQY, HTLD, HL, HSII, HSIC, HNI, INCY, NSP, INTC, IPG, IVC, JBLU, KALU, KBH, KSS, LH, LAWS, LDOS, M, MOS, NFLX, OMC, PRFT, PCG, PEG, PHM, RCKY, SLB, SCHW, SAIC, NOW, SCCO, SR, TPX, TER, SLCA, WLK, WSM, WWW, FXI, EWJ, EPP, EWY, GLD, 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.

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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.

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 1/27/22. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 234/409 or 57.2% of the time.

     The prediction of the index closing lower has been right 60/127 or 47.2% 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.

I like trendlines because they describe how price has moved and give hints of what will happen.

This chart is an example of that idea. The blue line shows the longer-term trend (although on this scale, it’s very short term). The index tried to pierce it at point A, but failed to do so.

The red line shows a recovery. Everything was fine until the FED made their announcement. My view is that the market would shrug off their words and climb. Instead, the index dropped.
I still believe their worry is overblown, so I’m still thinking that this is a buying opportunity (I bought 2 securities and may buy another tomorrow). I expect a recovery.
The above probabilities (57% close higher) support that belief.

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Here’s a symbol list of 160 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
MMM, ABT, ACN, ACIW, AYI, APD, DOX, AEE, AEL, AFG, APOG, AWI, ARW, ASH, ADP, AVNT, BZH, BERY, BIG, BIO, BIIB, BMRN, BA, CBT, CAL, CPB, CNC, CENX, CHS, CSCO, CLF, CTSH, CL, CMCO, CONN, GLW, CSGS, DECK, ^DJU, ^DJI, BOOM, EZPW, FFIV, FAST, FIS, FCX, GE, GPRO, GES, HBI, HE, HTLD, HL, HSII, HNI, HD, HON, DHI, NSP, ITGR, IPAR, TILE, IVC, JNJ, KALU, KBH, KBAL, KSS, LHX, LZB, LAMR, LEG, MHO, M, MAN, MCHX, MAS, FB, MGEE, MOS, NTAP, NEU, NKE, OMC, OUT, OXM, PAYX, PRFT, PFE, PCG, PNW, POR, PPL, PHM, KWR, RL, RCKY, ROST, SMG, SCCO, SCS, SRDX, TPR, TDOC, TPX, TKR, TOL, SLCA, UPS, VLO, WLK, WMB, WSM, WWW, ITA, IYM, FXI, BOTZ, ICF, IYH, IYZ, ECH, EEM, EWJ, EPP, EWS, EZA, EWY, EWT, THD, TUR, PPA, PBE, XLY, XLP, XLI, XLB, XRT, XAR, UNG, USO, VHT, VIS, VAW. 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