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Market Monday: The Week Ahead….

Blog: January 2020

Bulkowski's Blog: ThePatternSite.com

As of 01/09/2020

  Indus: 28,957 +211.81 +0.7%  

  Trans: 11,026 +42.18 +0.4%  

  Utils: 873 +3.74 +0.4%  

  Nasdaq: 9,203 +74.19 +0.8%  

  S&P 500: 3,275 +21.65 +0.7%  

YTD

 +1.5%  

 +1.1%  

-0.7%  

 +2.6%  

 +1.4%  

  Up arrow29,000 or 27,900 by 01/15/2020
  Up arrow11,300 or 10,500 by 01/15/2020
  Up arrow900 or 850 by 01/15/2020
  Up arrow9,250 or 8,700 by 01/15/2020
  Up arrow3,345 or 3,150 by 01/15/2020

As of 01/09/2020

  Indus: 28,957 +211.81 +0.7%  

  Trans: 11,026 +42.18 +0.4%  

  Utils: 873 +3.74 +0.4%  

  Nasdaq: 9,203 +74.19 +0.8%  

  S&P 500: 3,275 +21.65 +0.7%  

YTD

 +1.5%  

 +1.1%  

-0.7%  

 +2.6%  

 +1.4%  

  Up arrow29,000 or 27,900 by 01/15/2020
  Up arrow11,300 or 10,500 by 01/15/2020
  Up arrow900 or 850 by 01/15/2020
  Up arrow9,250 or 8,700 by 01/15/2020
  Up arrow3,345 or 3,150 by 01/15/2020

 


Friday 1/10/20. Pattern Trading Setups for the Weekend.

Go to Table.

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

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 597 stocks searched, or 3.4%. Based on the percentage, the stock market is
trending
since few consolidation patterns appear.

Excluding ETFs, there were 10 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 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

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
AIG Triangle, symmetrical        11/25/2019 01/07/2020 Insurance (Prop/Casualty)
ARCB Triangle, descending        11/26/2019 01/08/2020 Trucking/Transp. Leasing
ACGL Rising wedge        11/27/2019 01/09/2020 Insurance (Prop/Casualty)
BBBY Dead-cat bounce        01/09/2020 01/09/2020 Retail (Special Lines)
CENX Double Top, Adam and Adam        12/13/2019 01/07/2020 Metals and Mining (Div.)
CIEN Triangle, symmetrical        12/13/2019 01/09/2020 Telecom. Equipment
CNA Triangle, symmetrical        12/03/2019 01/09/2020 Insurance (Prop/Casualty)
WIRE Triangle, symmetrical        11/11/2019 01/09/2020 Metals and Mining (Div.)
ERA Double Top, Adam and Adam        12/18/2019 01/06/2020 Air Transport
GIS Triangle, symmetrical        10/10/2019 01/09/2020 Food Processing
JKHY Triple bottom        12/11/2019 01/06/2020 IT Services
LH Double Bottom, Adam and Adam        12/10/2019 01/03/2020 Medical Services
MSFT Diamond top        12/24/2019 01/07/2020 Computer Software and Svcs
MS Broadening top        12/16/2019 01/06/2020 Securities Brokerage
ORI Triangle, symmetrical        12/05/2019 01/06/2020 Insurance (Prop/Casualty)
OXM Double Top, Eve and Eve        12/12/2019 01/08/2020 Apparel
PETS Head-and-shoulders complex bottom        11/05/2019 01/03/2020 Medical Services
RL Broadening top        12/18/2019 01/09/2020 Apparel
ROK Rectangle top        12/16/2019 01/07/2020 Diversified Co.
TZOO Triangle, symmetrical        12/18/2019 01/09/2020 Internet

 

Weekly screen for chart patterns ending between 01/02/2020 and 01/09/2020. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions

RS is relative strength (where 1 is best). For other definitions, see the glossary.

’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.

All numbers assume a bull market and are based on the breakout direction that occurs most often.

 

American International Group (AIG)

Industry: Insurance (Prop/Casualty)

Industry RS rank: 50 out of 58

1/9/20 close: $52.28

1 Month avg volatility: $0.71. Volatility stop (for upward breakout): $50.23 or 3.9% below the close.

Change YTD: 1.85%

Volume: 3,219,800 shares.
3 month avg: 5,185,998 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 11/25/2019 to 01/07/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

ArcBest Corp (ARCB)

Industry: Trucking/Transp. Leasing

Industry RS rank: 2 out of 58

Stock RS rank: 252 out of 400

1/9/20 close: $27.52

1 Month avg volatility: $0.67. Volatility stop (for downward breakout): $29.30 or 6.5% above the close.

Change YTD: -0.29%

Volume: 118,800 shares.
3 month avg: 234,063 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 11/26/2019 to 01/08/2020

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.

Top

Arch Capital Group Ltd (ACGL)

Industry: Insurance (Prop/Casualty)

Industry RS rank: 50 out of 58

Stock RS rank: 179 out of 400

1/9/20 close: $43.60

1 Month avg volatility: $0.51. Volatility stop (for downward breakout): $44.66 or 2.4% above the close.

Change YTD: 1.66%

Volume: 1,326,300 shares.
3 month avg: 517,168 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: Rising wedge reversal pattern from 11/27/2019 to 01/09/2020

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.

Top

Bed Bath and Beyond (BBBY)

Industry: Retail (Special Lines)

Industry RS rank: 11 out of 58

Stock RS rank: 139 out of 400

1/9/20 close: $13.45

1 Month avg volatility: $0.76. Volatility stop (for downward breakout): $16.43 or 22.1% above the close.

Change YTD: -22.25%

Volume: 40,302,100 shares.
3 month avg: 4,821,077 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: Dead-cat bounce continuation pattern from 01/09/2020 to 01/09/2020

Breakout is downward 67% of the time.

Average decline: 18%.

Top

Century Aluminum Co. (CENX)

Industry: Metals and Mining (Div.)

Industry RS rank: 37 out of 58

Stock RS rank: 362 out of 400

1/9/20 close: $7.06

1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $8.11 or 14.8% above the close.

Change YTD: -6.05%

Volume: 3,009,700 shares.
3 month avg: 2,285,742 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 Top, Adam and Adam reversal pattern from 12/13/2019 to 01/07/2020

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.

Top

Ciena Corp (CIEN)

Industry: Telecom. Equipment

Industry RS rank: 26 out of 58

1/9/20 close: $42.10

1 Month avg volatility: $1.03. Volatility stop (for upward breakout): $39.87 or 5.3% below the close.

Change YTD: -1.38%

Volume: 1,905,300 shares.
3 month avg: 3,226,991 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: Triangle, symmetrical continuation pattern from 12/13/2019 to 01/09/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

CNA Financial Corp (CNA)

Industry: Insurance (Prop/Casualty)

Industry RS rank: 50 out of 58

1/9/20 close: $45.14

1 Month avg volatility: $0.57. Volatility stop (for upward breakout): $43.54 or 3.6% below the close.

Change YTD: 0.74%

Volume: 142,200 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 Thursday.

 

Chart pattern: Triangle, symmetrical continuation pattern from 12/03/2019 to 01/09/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Encore Wire Corp (WIRE)

Industry: Metals and Mining (Div.)

Industry RS rank: 37 out of 58

Stock RS rank: 363 out of 400

1/9/20 close: $56.83

1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $54.33 or 4.4% below the close.

Change YTD: -0.99%

Volume: 152,800 shares.
3 month avg: 88,880 shares.

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

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 11/11/2019 to 01/09/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Era Group Inc (ERA)

Industry: Air Transport

Industry RS rank: 38 out of 58

Stock RS rank: 180 out of 400

1/9/20 close: $9.71

1 Month avg volatility: $0.35. Volatility stop (for downward breakout): $10.73 or 10.5% above the close.

Change YTD: -4.52%

Volume: 67,600 shares.
3 month avg: 78,248 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 Wednesday.

 

Chart pattern: Double Top, Adam and Adam reversal pattern from 12/18/2019 to 01/06/2020

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.

Top

General Mills Inc (GIS)

Industry: Food Processing

Industry RS rank: 30 out of 58

1/9/20 close: $52.38

1 Month avg volatility: $0.85. Volatility stop (for upward breakout): $50.27 or 4.0% below the close.

Change YTD: -2.20%

Volume: 3,842,000 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 Thursday.

 

Chart pattern: Triangle, symmetrical continuation pattern from 10/10/2019 to 01/09/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Jack Henry and Associates (JKHY)

Industry: IT Services

Industry RS rank: 17 out of 58

Stock RS rank: 257 out of 400

1/9/20 close: $148.62

1 Month avg volatility: $1.65. Volatility stop (for upward breakout): $144.14 or 3.0% below the close.

Change YTD: 2.03%

Volume: 301,700 shares.
3 month avg: 329,005 shares.

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

 

Chart pattern: Triple bottom reversal pattern from 12/11/2019 to 01/06/2020

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.

Top

Labratory Corp of America (LH)

Industry: Medical Services

Industry RS rank: 19 out of 58

Stock RS rank: 391 out of 400

1/9/20 close: $174.91

1 Month avg volatility: $2.53. Volatility stop (for upward breakout): $169.08 or 3.3% below the close.

Change YTD: 3.39%

Volume: 827,600 shares.
3 month avg: 674,168 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 Bottom, Adam and Adam reversal pattern from 12/10/2019 to 01/03/2020

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 5%.

Throwbacks occur 64% of the time.

Price hits measure rule target 66% of the time.

Top

Microsoft Corp (MSFT)

Industry: Computer Software and Svcs

Industry RS rank: 23 out of 58

Stock RS rank: 128 out of 400

1/9/20 close: $162.09

1 Month avg volatility: $1.69. Volatility stop (for downward breakout): $165.60 or 2.2% above the close.

Change YTD: 2.78%

Volume: 20,485,800 shares.
3 month avg: 21,460,729 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: Diamond top reversal pattern from 12/24/2019 to 01/07/2020

Breakout is downward 69% of the time.

Average decline: 21%.

Break-even failure rate: 6%.

Pullbacks occur 57% of the time.

Price hits measure rule target 76% of the time.

Top

Morgan Stanley (MS)

Industry: Securities Brokerage

Industry RS rank: 18 out of 58

Stock RS rank: 103 out of 400

1/9/20 close: $52.06

1 Month avg volatility: $0.59. Volatility stop (for downward breakout): $53.42 or 2.6% above the close.

Change YTD: 1.84%

Volume: 7,308,000 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: Broadening top reversal pattern from 12/16/2019 to 01/06/2020

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.

Top

Old Republic International Corp (ORI)

Industry: Insurance (Prop/Casualty)

Industry RS rank: 50 out of 58

1/9/20 close: $22.41

1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $21.51 or 4.0% below the close.

Change YTD: 0.18%

Volume: 1,334,600 shares.
3 month avg: 1,253,378 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: Triangle, symmetrical continuation pattern from 12/05/2019 to 01/06/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top

Oxford Industries (OXM)

Industry: Apparel

Industry RS rank: 44 out of 58

Stock RS rank: 339 out of 400

1/9/20 close: $72.42

1 Month avg volatility: $1.82. Volatility stop (for downward breakout): $79.44 or 9.7% above the close.

Change YTD: -3.98%

Volume: 194,300 shares.
3 month avg: 144,562 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 Eve reversal pattern from 12/12/2019 to 01/08/2020

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.

Top

PetMed Express Inc. (PETS)

Industry: Medical Services

Industry RS rank: 19 out of 58

Stock RS rank: 18 out of 400

1/9/20 close: $23.69

1 Month avg volatility: $0.65. Volatility stop (for upward breakout): $21.97 or 7.2% below the close.

Change YTD: 0.72%

Volume: 520,000 shares.
3 month avg: 739,945 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: Head-and-shoulders complex bottom reversal pattern from 11/05/2019 to 01/03/2020

Breakout is upward 100% of the time.

Average rise: 39%.

Break-even failure rate: 4%.

Throwbacks occur 63% of the time.

Price hits measure rule target 74% of the time.

Top

Ralph Lauren Corp. (RL)

Industry: Apparel

Industry RS rank: 44 out of 58

Stock RS rank: 268 out of 400

1/9/20 close: $117.93

1 Month avg volatility: $2.30. Volatility stop (for downward breakout): $124.69 or 5.7% above the close.

Change YTD: 0.61%

Volume: 877,000 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 Monday.

 

Chart pattern: Broadening top reversal pattern from 12/18/2019 to 01/09/2020

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.

Top

Rockwell Automation Inc (ROK)

Industry: Diversified Co.

Industry RS rank: 12 out of 58

Stock RS rank: 40 out of 400

1/9/20 close: $207.17

1 Month avg volatility: $3.02. Volatility stop (for upward breakout): $198.93 or 4.0% below the close.

Change YTD: 2.22%

Volume: 676,100 shares.
3 month avg: 805,498 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 12/16/2019 to 01/07/2020

Breakout is upward 68% of the time.

Average rise: 39%.

Break-even failure rate: 9%.

Throwbacks occur 64% of the time.

Price hits measure rule target 80% of the time.

Top

Travelzoo Inc. (TZOO)

Industry: Internet

Industry RS rank: 36 out of 58

1/9/20 close: $10.80

1 Month avg volatility: $0.42. Volatility stop (for upward breakout): $9.86 or 8.7% below the close.

Change YTD: 0.93%

Volume: 50,100 shares.
3 month avg: 22,411 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 Tuesday.

 

Chart pattern: Triangle, symmetrical continuation pattern from 12/18/2019 to 01/09/2020

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Top


Thursday 1/9/20. Intraday Market Direction: Nasdaq

The index climbed by 0.7% or 60.66 points. Since 02/05/1971 the index made 425 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.6% on 261 occasions.

     Average loss was -0.7% on 164 occasions.

Expect the index to close higher 61.4% of the time.

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 181/323 or 56.0% of the time.

     The prediction of the index closing lower has been right 54/106 or 50.9% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale, but only for the last 5 days.

Why? Because I wanted to highlight the strong drop near the end of the session. I show that in the chart as the drop from B to A. Notice how it mirrors the rise from C to D.

I drew a red trendline along the bottoms. What does it show?

It suggests there’s more space for the index to drop. That is, the space between the trendline at A and price above it.

The above probabilities suggest a higher close. Maybe we’ll have both. A drip followed by a rise to close the day higher. The chart pattern indicator is still bearish, though, so I expect weakness.

$ $ $

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

— Thomas Bulkowski

Top

© 2020 ThePatternSite.com    Metric   Value   Diff   Close (within 10% of the high-low range for the day)? 
 Monthly S2   8,227.99      
 Monthly S1   8,678.62   450.62   
 Weekly S2   8,859.71   181.10   
 Monthly Pivot   8,886.02   26.31   
 Weekly S1   8,994.48   108.45   
 Daily S2   9,009.66   15.18   
 Weekly Pivot   9,043.95   34.29   
 Low   9,059.38   15.43   
 Open   9,068.03   8.65   Yes! The Open is close to the Low.
 Daily S1   9,069.45   1.42   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High   9,101.21   31.76   
 50% Down from Intraday High   9,114.13   12.92   
 Daily Pivot   9,119.17   5.04   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 38.2% Down from Intraday High   9,127.06   7.89   Yes! The 38.2% Down from Intraday High is close to the Daily Pivot.
 Close   9,129.24   2.18   Yes! The Close is close to the 38.2% Down from Intraday High.
 High   9,168.89   39.65   
 Weekly R1   9,178.72   9.83   Yes! The Weekly R1 is close to the High.
 Daily R1   9,178.96   0.24   Yes! The Daily R1 is close to the Weekly R1.
 Weekly R2   9,228.19   49.23   
 Daily R2   9,228.68   0.49   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1   9,336.65   107.97   
 Monthly R2   9,544.05   207.41   


Wednesday 1/8/20. A Look At Indicators

Picture of the chart pattern indicator

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The indicator has turned bearish, as denoted by the vertical red line on the right of the chart.

Of higher interest is the indicator line near the bottom of the chart. It’s taken a dive toward 0, and it started falling well before the red bar appeared.

To me, that’s not a good omen. When combined with slide 4 on the yearly forecast, maybe this is the start of the downturn.

Please note that the signal can change for up to a week, meaning it could disappear but it usually stable after 3 trading days.

Picture of the percent down indicators

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart…

On Tuesday, 23% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 23%.

The fewest was 22% on 01/02/2020.

And the most was 61% on 01/08/2019.

Shown as a blue line on the above chart…

The 491 stocks in my database are down an average of 13% from their yearly high.

A week ago, the average was 13%.

The peak was 13% on 12/26/2019.

And the bottom was 26% on 01/08/2019.

The two lines remain unchanged from a week ago. I don’t know if that’s really true because the indicator wasn’t run the last two times due to the holidays.

The red line is the more sensitive of the two and it peaked a week ago. That means things are getting worse…

— Thomas Bulkowski

Top


Tuesday 1/7/20. Slider Quiz!

The index climbed by 0.2% or 68.5 points. Since 10/01/1928 the index made 1323 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.5% on 718 occasions.

     Average loss was -0.5% on 605 occasions.

Expect the index to close higher 54.3% of the time.

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 198/337 or 58.8% of the time.

     The prediction of the index closing lower has been right 39/77 or 50.6% of the time.

$ $ $

I show a another slider quiz featuring the triple bottom chart pattern.

$ $ $

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

Top

© 2020 ThePatternSite.com    Metric   Value   Diff   Close (within 10% of the high-low range for the day)? 
 Monthly S2   26,752.77      
 Monthly S1   27,728.07   975.31   
 Weekly S2   28,154.58   426.51   
 Monthly Pivot   28,300.44   145.86   
 Daily S2   28,320.62   20.18   Yes! The Daily S2 is close to the Monthly Pivot.
 Low   28,418.63   98.01   
 Weekly S1   28,428.98   10.35   Yes! The Weekly S1 is close to the Low.
 Open   28,465.50   36.52   
 Daily S1   28,512.00   46.50   
 61.8% Down from Intraday High   28,529.18   17.18   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 50% Down from Intraday High   28,563.32   34.15   
 38.2% Down from Intraday High   28,597.47   34.15   
 Daily Pivot   28,610.01   12.54   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Weekly Pivot   28,650.89   40.88   
 Close   28,703.38   52.49   
 High   28,708.02   4.64   Yes! The High is close to the Close.
 Daily R1   28,801.39   93.37   
 Daily R2   28,899.40   98.01   
 Weekly R1   28,925.29   25.89   Yes! The Weekly R1 is close to the Daily R2.
 Weekly R2   29,147.20   221.91   
 Monthly R1   29,275.74   128.54   
 Monthly R2   29,848.11   572.36   


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

My Prediction

Picture of the Dow industrials on the daily scale.

I show the Dow industrials on the daily scale.

The index seems to be climbing upward following a narrow channel. I highlight that channel by the two nearly-parallel red lines on the chart.

The up-sloping channel shows the index nearing the top of it and backing away. The theory about channels is that price will bounce from one trendline to the other…until it pierces the
channel wall.

As you can see, the index continues to bounce between the lines.

There are events which can push the index out of the channel. A war with Iran is one of them. Solution of the China trade war is another.

We’ll have to wait and see if the breakout will be upward or down, but you can rest assured that it will happen. When it’ll happen is an unanswered question.

 

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A Brief Look Back

Picture of a flower from my garden.

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 183.12 points.

Tuesday: Up 76.3 points.

Thursday: Up 330.36 points.

Friday: Down 233.92 points.

Saturday: Holiday or other weird event!

For the Week…

The Dow industrials were down 10.38 points or 0.0%.

The Nasdaq composite was up 14.15 points or 0.2%.

The S&P 500 index was down 5.17 points or 0.2%.

Year to Date…

Dow Industrials

     0.8% down from the high of 28,872.80 on 01/02/2020.

     0.5% up from the low of 28,500.36 on 01/03/2020.

Nasdaq

     0.8% down from the high of 9,093.43 on 01/02/2020.

     0.5% up from the low of 8,976.43 on 01/03/2020.

S&P 500

     0.7% down from the high of 3,258.14 on 01/02/2020.

     0.4% up from the low of 3,222.34 on 01/03/2020.

Options Expiration

No options expire this week.

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Swing and Position Traders: Chart Pattern Indicator

The chart pattern indicator is bearish
with 2 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.

Index S2 S1 Pivot R1 R2
Dow Industrials (^DJI): Daily   28,401   28,518   28,617   28,734   28,833 
Weekly   28,132   28,383   28,628   28,880   29,124 
Monthly   26,730   27,682   28,278   29,230   29,825 
S&P500 (^GSPC): Daily   3,211   3,223   3,234   3,247   3,258 
Weekly   3,189   3,212   3,235   3,258   3,281 
Monthly   3,000   3,117   3,188   3,305   3,376 
Nasdaq (^IXIC): Daily   8,932   8,976   9,021   9,066   9,110 
Weekly   8,824   8,922   9,008   9,106   9,192 
Monthly   8,192   8,606   8,850   9,264   9,508 
  • Seekinger doesn’t look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
  • S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
  • If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
  • In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
  • A move outside of daily R1 or S1 usually does not mean a breakout.
  • The odds suggest that the entire week’s price action will remain between weekly R2 and S2.
  • Avoid going long when the market moves above weekly R2 (it’s overbought) and avoid going short when price moves below weekly S2 (oversold).
  • Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
  • Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) – L

First support level: S1 = (2 * P) – H)

Second resistance level: R2 = P + (R1 – S1)

Second support level: S2 = P – (R1 – S1)

H = high price , L=low price, C=closing price

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Consecutive Price Trends

Index  Consecutive
Closes So Far 
%  Comments 
 Dow industrials (^DJI)  1 week down  27.0%   The trend may continue. 
  5 months up  17.9%   Expect a reversal soon. 
 S & P 500 (^GSPC)  1 week down  25.3%   The trend may continue. 
  5 months up  21.3%   Expect a reversal soon. 
 Nasdaq composite (^IXIC)  4 weeks up  23.2%   Expect a reversal soon. 
  5 months up  14.3%   Expect a reversal soon. 

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 will be starting in about 10 days.

 Found  Chart Pattern Name
24 Triangle, symmetrical
9 Rectangle top
8 Triangle, descending
8 Diamond top
7 Double Bottom, Adam and Adam
6 Pipe bottom
5 Pennant
5 Island bottom
5 Broadening top
5 Triangle, ascending

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

The industries I follow were the best (rank 1) and worst performing.

This Week Last Week
1. Semiconductor Cap Equip. 1. Semiconductor Cap Equip.
2. Semiconductor 2. Semiconductor
3. Trucking/Transp. Leasing 3. Trucking/Transp. Leasing
4. Homebuilding 4. Homebuilding
5. Computers and Peripherals 5. Computers and Peripherals

— Thomas Bulkowski

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Friday 1/3/20. Year-end Review and Forecast to 2024

Here’s the 2019 market performance review and forecast of the years 2020 to 2024, presented in a slider format.

— Thomas Bulkowski


Wednesday-Thursday 1/1/20. Site Support

Happy new year everyone.

If you wish to support the website, then try one of these options.

  1. Perhaps the best way is come to this site and click on an image of one of my books. You’ll find the images either along the left side or at the bottom of the page. The click will take
    you to
    Amazon.com.
    The link passes a code to them and I receive a small referral fee but only if you buy something while there. You do NOT need to buy the book. It’s just a vehicle to get you to Amazon with the referral
    code.

    So each time you want to use Amazon.com to buy something, come to this site first. The referral is free, it’s easy, and it supports this site.

    Unfortunately, I think this approach only works for those in the United States.

  2. You can click on an ad. Please don’t click on them just to run up the score. Google frowns on that. If you see something of interest, then click the ad and visit their site.
    Ad sales are where most of the financial support for the site comes from. Some of you may have to turn off your ad blocker to see the ads.
  3. Finally, you can donate to the site directly. The home page (and some other pages as well) has a Donate link at the bottom of it.

— Thomas Bulkowski

 

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