Market Monday: The Week Ahead….

Industry: Insurance (Prop/Casualty)

Industry RS rank: 52 out of 58

Stock RS rank: 369 out of 600

9/27/18 close: $62.55

1 Month avg volatility: $1.09. Volatility stop (for downward breakout): $65.49 or 4.7% above the close.

Change YTD: 6.56%

Volume: 179,500 shares.
3 month avg: 158,554 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 reversal pattern from 08/22/2018 to 09/25/2018

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.

Industry: Diversified Co.

Industry RS rank: 38 out of 58

Stock RS rank: 279 out of 600

9/27/18 close: $104.30

1 Month avg volatility: $2.52. Volatility stop (for downward breakout): $110.29 or 5.7% above the close.

Change YTD: 2.41%

Volume: 69,500 shares.
3 month avg: 37,109 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 Friday.

 

Chart pattern: Double Top, Eve and Adam reversal pattern from 09/10/2018 to 09/21/2018

Breakout is downward 100% of the time.

Average decline: 15%.

Break-even failure rate: 13%.

Pullbacks occur 64% of the time.

Price hits measure rule target 72% of the time.

Industry: Trucking/Transp. Leasing

Industry RS rank: 26 out of 58

Stock RS rank: 431 out of 600

9/27/18 close: $35.40

1 Month avg volatility: $1.23. Volatility stop (for downward breakout): $38.47 or 8.7% above the close.

Change YTD: -8.41%

Volume: 750,100 shares.
3 month avg: 887,242 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 top reversal pattern from 09/10/2018 to 09/17/2018

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.

Thursday 9/27/18. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 152/275 or 55.3% of the time.

     The prediction of the index closing lower has been right 47/93 or 50.5% 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.

The index made good progress moving higher, as the two parallel lines show.

The index even peaked above the channel at A. If you believe the measure rule for trendlines, the height of this peak above the top trendline should equal
the drop below it.

The rule didn’t account for the Federal Reserve raising interest rates. You can see how the index reacted to the announcement (B).

The good news, if there is any, is that the above probabilities suggest a slight edge to the market closing higher on Thursday.

$ $ $

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 9/26/18. 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.

That red vertical bar on the far right of the chart is a bearish signal. But it might be fake news.

Why?

Because the signal can disappear or appear for up to a week, but is usually solid after 3 days. So if the index makes a big move upward, that red bar could disappear or turn green.
However, it’s still a bearish development.

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).

The red line dropped this week compare to last week. The blue line held steady, suggesting the red line’s drop wasn’t all that severe.

However, the twin peaks of the last few days could be what’s called a failure swing. It’s not an ideal example because the right peak is only slightly
below (or it looks to be only slightly below) the left peak.

But it’s bearish. Based on these charts, it suggests more bearish behavior ahead.

— Thomas Bulkowski

Tuesday 9/25/18. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 172/286 or 60.1% of the time.

     The prediction of the index closing lower has been right 34/68 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.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

The index showed a descending scallop chart pattern today.

There’s not much of an upward hook on the end of the pattern, and I thought that suggested further deterioration in the index (re: it’s going down). Now, I’m not so sure.

Plus, I’ve been wrong a lot recently, or think I have about my direction calls. So maybe the index will rise instead.

$ $ $

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 9/24/18. Market Monday: The Week Ahead

My Prediction

This is a picture of the Dow industrials on the daily scale.

There’s not much to see this week. The index has broken above the red trendline, which I arbitrarily drew along recent peaks.

The bottoms appear to be trending higher at a faster rate than the tops, at least for the majority of the time. I show that with the curved trendline.

Taken together, this looks like a rising wedge type behavior, even though the bottom of this example is curved instead of straight.

It suggests momentum is increasing. This upward trend can continue but it does favor a slowing of that momentum, meaning price will either move sideways or drop.

Unfortunately, I have no idea when that might happen. But it will happen.

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: Down 92.55 points.

Tuesday: Up 184.84 points.

Wednesday: Up 158.8 points.

Thursday: Up 251.22 points.

Friday: Up 86.52 points.

For the Week…

The Dow industrials were up 588.83 points or 2.3%.

The Nasdaq composite was down 23.08 points or 0.3%.

The S&P 500 index was up 24.69 points or 0.8%.

Year to Date…

Dow Industrials

     0.1% down from the high of 26,769.16 on 09/21/2018.

     14.6% up from the low of 23,344.52 on 04/02/2018.

Nasdaq

     1.8% down from the high of 8,133.30 on 08/30/2018.

     20.5% up from the low of 6,630.67 on 02/09/2018.

S&P 500

     0.4% down from the high of 2,940.91 on 09/21/2018.

     15.7% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 09/21/2018, the CPI had:

15 bearish patterns,

29 bullish patterns,

267 patterns waiting for breakout.

The CPI signal is 65.9%, 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.

• 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

Consecutive Price Trends

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 over.

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.

— Thomas Bulkowski

Friday 9/21/18. 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.

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 607 stocks searched, or 3.0%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 10 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 8 bearish ones with any remaining (3) 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.

More…

— Thomas Bulkowski

Definitions

’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.

Industry: Natural Gas (Diversified)

Industry RS rank: 13 out of 58

Stock RS rank: 462 out of 600

9/20/18 close: $22.90

1 Month avg volatility: $0.48. Volatility stop (for upward breakout): $21.38 or 6.7% below the close.

Change YTD: -19.93%

Volume: 7,179,500 shares.
3 month avg: 5,196,143 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, Adam and Adam reversal pattern from 09/07/2018 to 09/17/2018

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.

Industry: Cement and Aggregates

Industry RS rank: 55 out of 58

Stock RS rank: 311 out of 600

9/20/18 close: $7.16

1 Month avg volatility: $0.19. Volatility stop (for upward breakout): $6.74 or 5.9% below the close.

Change YTD: -4.91%

Volume: 4,307,800 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: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Electric Utility (Central)

Industry RS rank: 17 out of 58

Stock RS rank: 335 out of 600

9/20/18 close: $28.00

1 Month avg volatility: $0.37. Volatility stop (for downward breakout): $28.79 or 2.8% above the close.

Change YTD: -1.27%

Volume: 2,195,500 shares.
3 month avg: 2,845,400 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: Double Top, Adam and Adam reversal pattern from 09/06/2018 to 09/14/2018

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 8%.

Pullbacks occur 61% of the time.

Price hits measure rule target 72% of the time.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 33 out of 58

Stock RS rank: 192 out of 600

9/20/18 close: $18.41

1 Month avg volatility: $0.52. Volatility stop (for upward breakout): $17.15 or 6.9% below the close.

Change YTD: -0.97%

Volume: 1,124,500 shares.
3 month avg: 2,441,012 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: None

Industry RS rank is unavailable.

9/20/18 close: $724.76

1 Month avg volatility: $7.87. Volatility stop (for upward breakout): $699.70 or 3.5% below the close.

Change YTD: 0.19%

Volume: 56,381,800 shares.
3 month avg: 50,790,135 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 08/01/2018 to 09/14/2018

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.

Industry: Electric Utility (East)

Industry RS rank: 34 out of 58

Stock RS rank: 339 out of 600

9/20/18 close: $70.32

1 Month avg volatility: $0.91. Volatility stop (for upward breakout): $67.42 or 4.1% below the close.

Change YTD: -13.25%

Volume: 5,143,700 shares.
3 month avg: 2,249,422 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: Triangle, ascending reversal pattern from 08/03/2018 to 09/18/2018

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.

Industry: Electric Utility (East)

Industry RS rank: 34 out of 58

Stock RS rank: 317 out of 600

9/20/18 close: $80.62

1 Month avg volatility: $1.10. Volatility stop (for downward breakout): $82.95 or 2.9% above the close.

Change YTD: -4.15%

Volume: 3,918,200 shares.
3 month avg: 2,571,354 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: Head-and-shoulders top reversal pattern from 08/17/2018 to 09/18/2018

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.

Industry: Natural Gas (Diversified)

Industry RS rank: 13 out of 58

Stock RS rank: 49 out of 600

9/20/18 close: $80.62

1 Month avg volatility: $1.98. Volatility stop (for upward breakout): $76.53 or 5.1% below the close.

Change YTD: 40.04%

Volume: 1,162,000 shares.
3 month avg: 929,683 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 bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 33 out of 58

Stock RS rank: 15 out of 600

9/20/18 close: $7.70

1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $7.09 or 7.9% below the close.

Change YTD: 30.51%

Volume: 11,120,300 shares.
3 month avg: 16,303,415 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Natural Gas (Diversified)

Industry RS rank: 13 out of 58

Stock RS rank: 413 out of 600

9/20/18 close: $48.49

1 Month avg volatility: $1.15. Volatility stop (for upward breakout): $45.38 or 6.4% below the close.

Change YTD: -14.81%

Volume: 1,982,700 shares.
3 month avg: 3,960,946 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, Adam and Adam reversal pattern from 09/11/2018 to 09/18/2018

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.

Industry: Chemical (Basic)

Industry RS rank: 26 out of 58

Stock RS rank: 221 out of 600

9/20/18 close: $89.55

1 Month avg volatility: $1.59. Volatility stop (for upward breakout): $85.09 or 5.0% below the close.

Change YTD: -5.40%

Volume: 1,545,900 shares.
3 month avg: 1,151,138 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 09/04/2018 to 09/10/2018

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.

Industry: Metals and Mining (Div.)

Industry RS rank: 54 out of 58

Stock RS rank: 575 out of 600

9/20/18 close: $14.39

1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $13.40 or 6.9% below the close.

Change YTD: -24.10%

Volume: 21,787,600 shares.
3 month avg: 16,878,592 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Food Processing

Industry RS rank: 19 out of 58

Stock RS rank: 422 out of 600

9/20/18 close: $44.37

1 Month avg volatility: $0.91. Volatility stop (for downward breakout): $46.40 or 4.6% above the close.

Change YTD: -25.16%

Volume: 6,018,800 shares.
3 month avg: 4,139,065 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: Triple top reversal pattern from 08/03/2018 to 09/17/2018

Breakout is downward 100% of the time.

Average decline: 19%.

Break-even failure rate: 10%.

Pullbacks occur 61% of the time.

Price hits measure rule target 40% of the time.

Industry: Advertising

Industry RS rank: 42 out of 58

Stock RS rank: 399 out of 600

9/20/18 close: $22.67

1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $21.80 or 3.8% below the close.

Change YTD: 12.45%

Volume: 2,784,600 shares.
3 month avg: 6,516,800 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: Triangle, symmetrical continuation pattern from 06/29/2018 to 09/20/2018

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.

Industry: Chemical (Diversified)

Industry RS rank: 36 out of 58

Stock RS rank: 446 out of 600

9/20/18 close: $3.62

1 Month avg volatility: $0.11. Volatility stop (for upward breakout): $3.30 or 8.8% below the close.

Change YTD: -23.95%

Volume: 794,300 shares.
3 month avg: 1,190,495 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: Triple bottom reversal pattern from 08/23/2018 to 09/14/2018

WARNING: A dead-cat bounce occurred on 08/02/2018. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 11/01/2018 and a 38% chance by 01/31/2019.

Breakout is upward 100% of the time.

Average rise: 37%.

Break-even failure rate: 4%.

Throwbacks occur 64% of the time.

Price hits measure rule target 64% of the time.

Industry: Homebuilding

Industry RS rank: 57 out of 58

Stock RS rank: 539 out of 600

9/20/18 close: $50.72

1 Month avg volatility: $1.10. Volatility stop (for upward breakout): $48.15 or 5.1% below the close.

Change YTD: -19.80%

Volume: 4,529,800 shares.
3 month avg: 3,465,638 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: Triangle, symmetrical continuation pattern from 08/09/2018 to 09/20/2018

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.

Industry: Retail Store

Industry RS rank: 10 out of 58

Stock RS rank: 120 out of 600

9/20/18 close: $35.18

1 Month avg volatility: $0.99. Volatility stop (for downward breakout): $37.61 or 6.9% above the close.

Change YTD: 39.66%

Volume: 6,660,800 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 Friday.

 

Chart pattern: Triangle, descending reversal pattern from 08/16/2018 to 09/19/2018

Breakout is downward 64% of the time.

Average decline: 16%.

Break-even failure rate: 16%.

Pullbacks occur 54% of the time.

Price hits measure rule target 54% of the time.

Industry: Building Materials

Industry RS rank: 38 out of 58

Stock RS rank: 471 out of 600

9/20/18 close: $38.61

1 Month avg volatility: $0.61. Volatility stop (for downward breakout): $40.37 or 4.6% above the close.

Change YTD: -12.13%

Volume: 1,913,400 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: Triangle, descending reversal pattern from 07/25/2018 to 09/20/2018

Breakout is downward 64% of the time.

Average decline: 16%.

Break-even failure rate: 16%.

Pullbacks occur 54% of the time.

Price hits measure rule target 54% of the time.

Industry: Petroleum (Integrated)

Industry RS rank: 6 out of 58

Stock RS rank: 101 out of 600

9/20/18 close: $31.79

1 Month avg volatility: $0.71. Volatility stop (for upward breakout): $30.28 or 4.8% below the close.

Change YTD: 0.03%

Volume: 697,400 shares.
3 month avg: 2,218,335 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 09/04/2018 to 09/10/2018

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 33 out of 58

Stock RS rank: 16 out of 600

9/20/18 close: $6.51

1 Month avg volatility: $0.23. Volatility stop (for upward breakout): $5.88 or 9.8% below the close.

Change YTD: 46.29%

Volume: 6,964,100 shares.
3 month avg: 7,535,162 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 bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Retail Building Supply

Industry RS rank: 27 out of 58

Stock RS rank: 428 out of 600

9/20/18 close: $64.00

1 Month avg volatility: $1.87. Volatility stop (for downward breakout): $68.09 or 6.4% above the close.

Change YTD: -7.85%

Volume: 272,200 shares.
3 month avg: 94,083 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 Thursday.

 

Chart pattern: Broadening top reversal pattern from 08/27/2018 to 09/20/2018

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.

Industry: Diversified Co.

Industry RS rank: 37 out of 58

Stock RS rank: 240 out of 600

9/20/18 close: $12.40

1 Month avg volatility: $0.25. Volatility stop (for upward breakout): $11.73 or 5.4% below the close.

Change YTD: -3.13%

Volume: 61,600 shares.
3 month avg: 140,617 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: Triangle, ascending reversal pattern from 08/09/2018 to 09/20/2018

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.

Industry: Apparel

Industry RS rank: 23 out of 58

Stock RS rank: 106 out of 600

9/20/18 close: $136.12

1 Month avg volatility: $2.82. Volatility stop (for upward breakout): $129.52 or 4.9% below the close.

Change YTD: 31.28%

Volume: 767,900 shares.
3 month avg: 1,365,482 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: Triangle, symmetrical continuation pattern from 07/31/2018 to 09/19/2018

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.

Industry: Insurance (Prop/Casualty)

Industry RS rank: 49 out of 58

Stock RS rank: 329 out of 600

9/20/18 close: $64.30

1 Month avg volatility: $0.97. Volatility stop (for downward breakout): $66.29 or 3.1% above the close.

Change YTD: 9.54%

Volume: 129,100 shares.
3 month avg: 158,554 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 reversal pattern from 08/22/2018 to 09/14/2018

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.

Industry: Computer Software and Svcs

Industry RS rank: 14 out of 58

Stock RS rank: 180 out of 600

9/20/18 close: $99.78

1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $102.74 or 3.0% above the close.

Change YTD: 17.06%

Volume: 1,237,000 shares.
3 month avg: 998,728 shares.

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

 

Chart pattern: Double Top, Eve and Eve reversal pattern from 08/27/2018 to 09/14/2018

Breakout is downward 100% of the time.

Average decline: 18%.

Break-even failure rate: 11%.

Pullbacks occur 59% of the time.

Price hits measure rule target 73% of the time.

Industry: Drug

Industry RS rank: 22 out of 58

Stock RS rank: 45 out of 600

9/20/18 close: $24.83

1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $22.98 or 7.4% below the close.

Change YTD: 30.82%

Volume: 9,168,500 shares.
3 month avg: 26,334,894 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 33 out of 58

Stock RS rank: 78 out of 600

9/20/18 close: $12.63

1 Month avg volatility: $0.37. Volatility stop (for upward breakout): $11.85 or 6.2% below the close.

Change YTD: 17.49%

Volume: 20,765,600 shares.
3 month avg: 13,612,100 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 bottom reversal pattern from 09/04/2018 to 09/10/2018

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.

Industry: Petroleum (Integrated)

Industry RS rank: 6 out of 58

Stock RS rank: 175 out of 600

9/20/18 close: $110.48

1 Month avg volatility: $2.46. Volatility stop (for downward breakout): $116.55 or 5.5% above the close.

Change YTD: 20.20%

Volume: 3,110,000 shares.
3 month avg: 3,584,486 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 top reversal pattern from 07/31/2018 to 09/14/2018

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.

Thursday 9/20/18. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 151/274 or 55.1% of the time.

     The prediction of the index closing lower has been right 47/93 or 50.5% 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.

After looking at the Dow’s 159 point gain, I thought we’d had a good day. But then I ran my relative strength form and saw almost no industries closing higher. So today’s (Wednesday’s) move
was confined to the Dow stocks.

If you look at the chart of the Nasdaq, the blue trendline shows two things. First, how the index dropped today. Second, it’s a place of overhead resistance. So that suggests the
index could struggle moving higher on Thursday.

AB shows a double bottom chart pattern. It’s unconfirmed so far. What does that mean? The index has to close above the price of the peak between the two bottoms.
I show that peak with the horizontal red line. The index has stopped at day’s end just below that line.

$ $ $

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 9/19/18. 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 chart remains bullish, despite the recent ups and downs. Today’s 184 point Dow move pulled the indicator 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).

The red line shows substantial improvement over a week ago, but you’ll notice that from the start of September, it’s been mostly down.

The blue line, by contrast, has been flat, but also suffering at month’s start.

I don’t see anything on these two charts to indicate a problem coming. Maybe that should be a warning to change the batteries in my crystal ball.

— Thomas Bulkowski

Tuesday 9/18/18. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 171/285 or 60.0% of the time.

     The prediction of the index closing lower has been right 34/68 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.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

A complex head-and-shoulders top appears on the chart. I’ve conveniently marked the left shoulder (LS), head, and right shoulder (RS) for your viewing pleasure.

The head is a dual head, which is what makes the pattern a complex one. Simple head-and-shoulders have two shoulders and one head, resembling a person’s torso. The complex variety have
more shoulders or heads or both.

I eyeballed the height of the pattern and projected how far the index would have to drop to hit the measure rule target. I show the target with a blue line.
I wouldn’t be surprised if the index dropped to the line, probably taking two days to make the voyage, though.

$ $ $

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 9/17/18. Market Monday: The Week Ahead

My Prediction

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

There’s not much happening on this chart, however, it does indicate caution.

Why?

I drew two trendlines, shown here in red, following the peaks and valleys, respectively.

Notice how the index has risen to the top trendline, or nearly so. Now look at how far the index has to go to drop back to the bottom trendline.

That’s a big decline.

Right now, that move looks too far to be possible, but I might have said that back in June, right before the index plummeted.

This chart makes me cautious going into year end.

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: Down 59.47 points.

Tuesday: Up 113.99 points.

Wednesday: Up 27.86 points.

Thursday: Up 147.07 points.

Friday: Up 8.68 points.

For the Week…

The Dow industrials were up 238.13 points or 0.9%.

The Nasdaq composite was up 107.5 points or 1.4%.

The S&P 500 index was up 33.3 points or 1.2%.

Year to Date…

Dow Industrials

     1.7% down from the high of 26,616.71 on 01/26/2018.

     12.0% up from the low of 23,344.52 on 04/02/2018.

Nasdaq

     1.5% down from the high of 8,133.30 on 08/30/2018.

     20.8% up from the low of 6,630.67 on 02/09/2018.

S&P 500

     0.4% down from the high of 2,916.50 on 08/29/2018.

     14.7% up from the low of 2,532.69 on 02/09/2018.

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 and Position Traders: Chart Pattern Indicator

As of 09/14/2018, the CPI had:

6 bearish patterns,

42 bullish patterns,

294 patterns waiting for breakout.

The CPI signal is 87.5%, 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.

• 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

Consecutive Price Trends

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 over.

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.

— Thomas Bulkowski

Friday 9/14/18. 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.

There were 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 607 stocks searched, or 2.6%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 3 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 7 bullish chart patterns this week and 8 bearish ones with any remaining (4) 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

Definitions

’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.

Industry: Air Transport

Industry RS rank: 36 out of 58

Stock RS rank: 318 out of 600

9/13/18 close: $68.42

1 Month avg volatility: $1.37. Volatility stop (for downward breakout): $71.46 or 4.5% above the close.

Change YTD: -6.92%

Volume: 857,600 shares.
3 month avg: 1,966,126 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: Rising wedge reversal pattern from 07/26/2018 to 09/13/2018

Breakout is downward 69% of the time.

Average decline: 14%.

Break-even failure rate: 24%.

Pullbacks occur 63% of the time.

Price hits measure rule target 46% of the time.

Industry: Electric Utility (Central)

Industry RS rank: 10 out of 58

Stock RS rank: 245 out of 600

9/13/18 close: $72.97

1 Month avg volatility: $0.82. Volatility stop (for downward breakout): $74.63 or 2.3% above the close.

Change YTD: -0.82%

Volume: 2,193,900 shares.
3 month avg: 2,150,485 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: Rising wedge reversal pattern from 07/06/2018 to 09/13/2018

Breakout is downward 69% of the time.

Average decline: 14%.

Break-even failure rate: 24%.

Pullbacks occur 63% of the time.

Price hits measure rule target 46% of the time.

Industry: Petroleum (Producing)

Industry RS rank: 20 out of 58

Stock RS rank: 103 out of 600

9/13/18 close: $44.54

1 Month avg volatility: $0.99. Volatility stop (for upward breakout): $41.64 or 6.5% below the close.

Change YTD: 5.50%

Volume: 2,474,700 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: Double Bottom, Eve and Adam reversal pattern from 08/20/2018 to 09/07/2018

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.

Industry: Chemical (Basic)

Industry RS rank: 34 out of 58

Stock RS rank: 146 out of 600

9/13/18 close: $84.60

1 Month avg volatility: $0.94. Volatility stop (for downward breakout): $86.61 or 2.4% above the close.

Change YTD: 18.82%

Volume: 351,400 shares.
3 month avg: 610,854 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: Triangle, descending reversal pattern from 08/09/2018 to 09/11/2018

Breakout is downward 64% of the time.

Average decline: 16%.

Break-even failure rate: 16%.

Pullbacks occur 54% of the time.

Price hits measure rule target 54% of the time.

Industry: Aerospace/Defense

Industry RS rank: 43 out of 58

Stock RS rank: 264 out of 600

9/13/18 close: $355.46

1 Month avg volatility: $5.98. Volatility stop (for upward breakout): $342.33 or 3.7% below the close.

Change YTD: 20.53%

Volume: 3,157,100 shares.
3 month avg: 3,332,308 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: Double Bottom, Adam and Adam reversal pattern from 09/04/2018 to 09/11/2018

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.

Industry: Insurance (Prop/Casualty)

Industry RS rank: 50 out of 58

Stock RS rank: 518 out of 600

9/13/18 close: $45.28

1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $43.90 or 3.1% below the close.

Change YTD: -14.65%

Volume: 153,300 shares.
3 month avg: 204,923 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 08/23/2018 to 09/13/2018

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.

Industry: Electric Utility (East)

Industry RS rank: 25 out of 58

Stock RS rank: 386 out of 600

9/13/18 close: $72.18

1 Month avg volatility: $0.83. Volatility stop (for upward breakout): $69.69 or 3.4% below the close.

Change YTD: -10.95%

Volume: 2,684,100 shares.
3 month avg: 2,249,422 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: Triangle, ascending reversal pattern from 08/03/2018 to 09/13/2018

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.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 31 out of 58

Stock RS rank: 31 out of 600

9/13/18 close: $7.32

1 Month avg volatility: $0.27. Volatility stop (for upward breakout): $6.53 or 10.8% below the close.

Change YTD: 24.07%

Volume: 10,456,300 shares.
3 month avg: 16,303,415 shares.

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

 

Chart pattern: Double Bottom, Adam and Adam reversal pattern from 08/15/2018 to 09/07/2018

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.

Industry: Semiconductor

Industry RS rank: 49 out of 58

Stock RS rank: 514 out of 600

9/13/18 close: $13.15

1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $14.37 or 9.3% above the close.

Change YTD: -15.97%

Volume: 244,900 shares.
3 month avg: 748,688 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 08/27/2018 to 09/04/2018

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.

Industry: Retail (Special Lines)

Industry RS rank: 13 out of 58

Stock RS rank: 232 out of 600

9/13/18 close: $17.04

1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $15.03 or 11.8% below the close.

Change YTD: -5.07%

Volume: 3,689,500 shares.
3 month avg: 3,063,175 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: Pipe bottom reversal pattern from 08/27/2018 to 09/04/2018

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.

Industry: Medical Supplies

Industry RS rank: 7 out of 58

Stock RS rank: 120 out of 600

9/13/18 close: $83.18

1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $79.66 or 4.2% below the close.

Change YTD: 19.03%

Volume: 876,100 shares.
3 month avg: 2,211,905 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: Pipe bottom reversal pattern from 08/27/2018 to 09/04/2018

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.

Industry: Drug

Industry RS rank: 26 out of 58

Stock RS rank: 572 out of 600

9/13/18 close: $67.48

1 Month avg volatility: $1.86. Volatility stop (for downward breakout): $71.39 or 5.8% above the close.

Change YTD: -28.75%

Volume: 1,202,100 shares.
3 month avg: 1,771,434 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: Pipe top reversal pattern from 08/27/2018 to 09/04/2018

WARNING: A dead-cat bounce occurred on 04/06/2018. There is a 38% chance that a 15% or higher decline will occur (or has occurred since then) by 10/05/2018.

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.

Industry: Apparel

Industry RS rank: 23 out of 58

Stock RS rank: 587 out of 600

9/13/18 close: $27.44

1 Month avg volatility: $0.89. Volatility stop (for upward breakout): $25.57 or 6.8% below the close.

Change YTD: -54.43%

Volume: 5,888,400 shares.
3 month avg: 4,494,122 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: Pipe bottom reversal pattern from 08/27/2018 to 09/04/2018

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.

Industry: Human Resources

Industry RS rank: 27 out of 58

Stock RS rank: 576 out of 600

9/13/18 close: $87.63

1 Month avg volatility: $1.66. Volatility stop (for downward breakout): $92.14 or 5.2% above the close.

Change YTD: -30.51%

Volume: 472,400 shares.
3 month avg: 461,820 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 top reversal pattern from 08/27/2018 to 09/04/2018

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.

Industry: Building Materials

Industry RS rank: 38 out of 58

Stock RS rank: 458 out of 600

9/13/18 close: $38.23

1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $40.00 or 4.6% above the close.

Change YTD: -12.99%

Volume: 2,050,100 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: Triangle, descending reversal pattern from 07/25/2018 to 09/13/2018

Breakout is downward 64% of the time.

Average decline: 16%.

Break-even failure rate: 16%.

Pullbacks occur 54% of the time.

Price hits measure rule target 54% of the time.

Industry: Securities Brokerage

Industry RS rank: 57 out of 58

Stock RS rank: 534 out of 600

9/13/18 close: $47.72

1 Month avg volatility: $0.69. Volatility stop (for upward breakout): $46.13 or 3.3% below the close.

Change YTD: -9.05%

Volume: 8,380,100 shares.
3 month avg: 7,779,832 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: Triangle, symmetrical continuation pattern from 06/07/2018 to 09/10/2018

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.

Industry: Chemical (Diversified)

Industry RS rank: 48 out of 58

Stock RS rank: 198 out of 600

9/13/18 close: $30.68

1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $29.28 or 4.6% below the close.

Change YTD: 19.56%

Volume: 1,923,800 shares.
3 month avg: 4,715,435 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: Triangle, symmetrical continuation pattern from 08/07/2018 to 09/13/2018

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.

Industry: Building Materials

Industry RS rank: 38 out of 58

Stock RS rank: 467 out of 600

9/13/18 close: $16.35

1 Month avg volatility: $0.56. Volatility stop (for upward breakout): $15.14 or 7.4% below the close.

Change YTD: -15.28%

Volume: 251,100 shares.
3 month avg: 632,900 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: Flag continuation pattern from 08/31/2018 to 09/12/2018

Breakout is upward 54% of the time.

Average rise: 23%.

Break-even failure rate: 4%.

Throwbacks occur 43% of the time.

Price hits measure rule target 64% of the time.

Industry: Aerospace/Defense

Industry RS rank: 43 out of 58

Stock RS rank: 404 out of 600

9/13/18 close: $200.83

1 Month avg volatility: $2.30. Volatility stop (for downward breakout): $205.79 or 2.5% above the close.

Change YTD: 6.91%

Volume: 921,000 shares.
3 month avg: 1,302,565 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 08/20/2018 to 09/07/2018

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.

Thursday 9/13/18. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 150/273 or 54.9% of the time.

     The prediction of the index closing lower has been right 47/93 or 50.5% 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.

The chart looks busy, and it is, but it shouldn’t look intimidating.

Let’s start from the left and work to the hard right edge.

The first pattern is SHS and it’s a head-and-shoulders top. It confirms as a valid one when the index closes below the green line. You’ll have to hold onto the
index for a few days, but it does make a strong move down, just as the pattern predicted.

The next pattern is DD and it’s a double top. This also confirms (close below the blue line) and the index makes a strong move lower.

Finally, we have the red pattern. That’s a broadening formation, right-angled and ascending. This one needs no confirmation, but we won’t know the breakout
direction until it closes outside one of the red lines.

$ $ $

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 9/12/18. 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.

I highlight the disturbing trend of the indicator versus the index.

The CPI line (thin blue line near bottom of chart) has been trending lower for months now even as the index has been climbing.

Of course, this bearish divergence can go on for longer until it resolves itself.

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).

The more sensitive line, the red one, took the largest drop this week compared to last, larger than anything that I can remember.

Of course, my memory could be shot.

But both lines show profound weakness. Combined with the prior chart’s bearish divergence, could this be a warning of a market stumble?

Clearly, September is the weakest month of the year with October not exactly a strong performer, either. So maybe that’s what these charts are saying. Batten down the hatches, boys! Story weather is coming.

— Thomas Bulkowski

Tuesday 9/11/18. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 170/284 or 59.9% of the time.

     The prediction of the index closing lower has been right 34/68 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.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

What caught my attention is the ABCD pattern, which you may recognize as one I mention frequently.

The pattern is not complete because D hasn’t extended far enough. But I call the pattern a measured move down.

AB is the first leg, BC is called the corrective phase, and CD is the second leg. The thinking with measured moves is the second leg is supposed to equal the length of the first leg.
Unfortunately, that rarely happens. But if it does in this case, look for tomorrow to see the market drop more.

$ $ $

I updated the performance statistics of the inverted cup with handle chart pattern. You can see how well it’s done compared to other patterns here.

$ $ $

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 9/10/18. Market Monday: The Week Ahead

My Prediction

I show a chart of the Dow utilities on the daily scale.

First, I drew in the ABC pattern then I found DEF. So let’s talk about them.

AB is a potential double top. I write potential because it hasn’t confirmed as a valid chart pattern. That would only happen if the index closes below
the green line at C.

And that hasn’t happened yet.

Pattern DEF is the same except flipped upside down. DE is a double bottom only this one confirms as valid when the index closes above blue line F.

Notice the bumpy ride it took higher. Hmm. Could that be waiting for us next week (a bumpy ride lower)?

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: Down 12.34 points.

Wednesday: Up 22.51 points.

Thursday: Up 20.88 points.

Friday: Down 79.33 points.

Saturday: Holiday or other weird event!

For the Week…

The Dow industrials were down 48.28 points or 0.2%.

The Nasdaq composite was down 207 points or 2.6%.

The S&P 500 index was down 29.84 points or 1.0%.

Year to Date…

Dow Industrials

     2.6% down from the high of 26,616.71 on 01/26/2018.

     11.0% up from the low of 23,344.52 on 04/02/2018.

Nasdaq

     2.8% down from the high of 8,133.30 on 08/30/2018.

     19.2% up from the low of 6,630.67 on 02/09/2018.

S&P 500

     1.5% down from the high of 2,916.50 on 08/29/2018.

     13.4% up from the low of 2,532.69 on 02/09/2018.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 09/07/2018, the CPI had:

15 bearish patterns,

6 bullish patterns,

136 patterns waiting for breakout.

The CPI signal is 28.6%, which is
bearish (<= 35%).

The chart pattern indicator is bearish
with 1 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.

• 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

Consecutive Price Trends

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 over.

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.

— Thomas Bulkowski

Friday 9/7/18. 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.

There were 15 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 608 stocks searched, or 2.5%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 6 bearish ones with any remaining (4) 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

Definitions

’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.

Industry: Furn/Home Furnishings

Industry RS rank: 47 out of 58

Stock RS rank: 337 out of 601

9/6/18 close: $150.46

1 Month avg volatility: $2.90. Volatility stop (for upward breakout): $144.21 or 4.2% below the close.

Change YTD: -14.51%

Volume: 313,200 shares.
3 month avg: 670,414 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: Flag continuation pattern from 08/27/2018 to 09/06/2018

Breakout is upward 54% of the time.

Average rise: 23%.

Break-even failure rate: 4%.

Throwbacks occur 43% of the time.

Price hits measure rule target 64% of the time.

Industry: Semiconductor

Industry RS rank: 39 out of 58

Stock RS rank: 6 out of 601

9/6/18 close: $27.84

1 Month avg volatility: $1.18. Volatility stop (for upward breakout): $24.84 or 10.8% below the close.

Change YTD: 170.82%

Volume: 143,508,800 shares.
3 month avg: 56,512,782 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 07/05/2018 to 09/05/2018

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.

Industry: Insurance (Diversified)

Industry RS rank: 41 out of 58

Stock RS rank: 298 out of 601

9/6/18 close: $46.89

1 Month avg volatility: $0.43. Volatility stop (for downward breakout): $48.01 or 2.4% above the close.

Change YTD: 6.84%

Volume: 2,346,800 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 reversal pattern from 08/03/2018 to 09/04/2018

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.

Industry: Air Transport

Industry RS rank: 31 out of 58

Stock RS rank: 308 out of 601

9/6/18 close: $67.04

1 Month avg volatility: $1.29. Volatility stop (for downward breakout): $71.14 or 6.1% above the close.

Change YTD: -8.80%

Volume: 1,019,200 shares.
3 month avg: 1,966,126 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: Rising wedge reversal pattern from 07/26/2018 to 09/06/2018

Breakout is downward 69% of the time.

Average decline: 14%.

Break-even failure rate: 24%.

Pullbacks occur 63% of the time.

Price hits measure rule target 46% of the time.

Industry: Financial Services

Industry RS rank: 19 out of 58

Stock RS rank: 354 out of 601

9/6/18 close: $77.73

1 Month avg volatility: $0.97. Volatility stop (for upward breakout): $75.76 or 2.5% below the close.

Change YTD: 1.05%

Volume: 1,651,500 shares.
3 month avg: 2,443,809 shares.

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

 

Chart pattern: Flag continuation pattern from 08/21/2018 to 09/06/2018

Breakout is upward 54% of the time.

Average rise: 23%.

Break-even failure rate: 4%.

Throwbacks occur 43% of the time.

Price hits measure rule target 64% of the time.

Industry: Aerospace/Defense

Industry RS rank: 51 out of 58

Stock RS rank: 519 out of 601

9/6/18 close: $195.24

1 Month avg volatility: $2.26. Volatility stop (for upward breakout): $189.68 or 2.9% below the close.

Change YTD: -4.04%

Volume: 736,200 shares.
3 month avg: 1,076,035 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 08/03/2018 to 09/06/2018

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.

Industry: Building Materials

Industry RS rank: 38 out of 58

Stock RS rank: 533 out of 601

9/6/18 close: $36.59

1 Month avg volatility: $1.19. Volatility stop (for downward breakout): $39.67 or 8.4% above the close.

Change YTD: 14.17%

Volume: 63,100 shares.
3 month avg: 80,035 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 Friday.

 

Chart pattern: Head-and-shoulders top reversal pattern from 07/10/2018 to 08/31/2018

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.

Industry: Semiconductor Cap Equip.

Industry RS rank: 57 out of 58

Stock RS rank: 477 out of 601

9/6/18 close: $107.28

1 Month avg volatility: $2.78. Volatility stop (for downward breakout): $124.00 or 15.6% above the close.

Change YTD: 2.10%

Volume: 3,692,600 shares.
3 month avg: 1,563,420 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: Double Top, Eve and Eve reversal pattern from 07/31/2018 to 09/05/2018

Breakout is downward 100% of the time.

Average decline: 18%.

Break-even failure rate: 11%.

Pullbacks occur 59% of the time.

Price hits measure rule target 73% of the time.