Pattern Trading Setups for the Weekend!…

Wednesday 2/7/24. 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 CPI turned bearish three trading days ago, suggesting but not guaranteeing that the indicator won’t change. It can change for up to a week but is usually stable after 3 days. That happens if the market were to make a big move (up in this case).

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

Both the red and blue lines are more bearish today than they were a week ago. Both lines looked like they peaked in December and have been sliding lower since.

Both charts are hinting or outright yelling that this upward trend is losing steam. Does that mean a reversal is imminent? No.

This is the first time I’ve noticed that the above chart shows a meaningful result (usually the two lines follow the market index). It shows divergence between price action and the indicators. Translation: I’d be careful going forward. The markets might drop. It could shoot upward, but there’s underlying weakness building.

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Here’s a symbol list of 140 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
MMM, AXDX, ACIW, APD, ATSG, ALRM, AME, ANIK, AON, AAPL, BAX, BBY, BIO, BAH, BCO, BMY, BBW, CBT, CDNS, CNC, CENX, CNX, CTSH, CCRN, CCK, CTS, DDS, EG, FFIV, FE, FLS, FMC, FORM, FWRD, FRD, GNW, GS, HLIT, HIG, HE, HELE, DHI, HUN, IPAR, TILE, INTU, JBLU, KALU, KELYA, KFRC, KLAC, KSS, LRCX, RAMP, LXU, MHO, MGY, MCHX, MA, MTRX, MGEE, NBR, NJR, NWL, JWN, NUS, NVDA, OLN, ORCL, OR, OMI, PKG, PANW, PKE, PATK, PDCO, PTEN, PEN, PPG, PINC, PFG, RMBS, RNG, ROK, ROST, SLB, SAIC, SMG, NOW, STR, SCCO, SUM, SNPS, TECH, TEVA, TOL, RIG, TG, UIS, UPS, VFC, MDRX, IYC, IEZ, IHE, FXI, IYZ, IGV, SOXX, EWK, EEM, EWG, EIS, EWP, EWT, THD, TUR, PBE, PEJ, PXJ, PJP, XLY, XLF, XRT, UNG, USO, SMH, VAW. Click this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

— Thomas Bulkowski

Tuesday 2/6/24. Slider Trading Quiz!

Weekly, since inception on 6/14/2011:

     The prediction of the Dow closing higher has been right 282/510 or 55.3% of the time.

     The prediction of the Dow closing lower has been right 53/111 or 47.7% of the time.

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I show another slider trading quiz featuring Diamond bottom.

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Here’s a symbol list of 120 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, MMM, APD, ATSG, ALK, AA, AMN, ANIK, AON, BMI, BAX, BKH, BAH, BMY, BBW, CBT, CALM, CLS, CHKP, CONN, COTY, CCRN, CCK, CSGS, XRAY, DVN, DFS, EL, FNV, FCX, GNW, GFS, GOOGL, GPRO, HBI, HAYN, HL, HNI, HON, HOV, HURC, IDXX, IIIN, IPAR, NVTA, JNJ, KELYA, LLY, LMT, LPLA, MCHX, MTDR, MTRX, MGEE, MU, NWL, NEE, NWPX, NVDA, OXY, OLN, OTEX, ORCL, OUT, PDCO, PTEN, PINC, RTX, REGN, RNG, RLI, RCKY, RGLD, RES, SAND, SMG, SCCO, SCS, TG, SLCA, UNM, VLO, WEX, WOLF, WWD, IYM, IEZ, IHE, ICF, IYZ, IGV, EWO, EWG, EPP, EWS, EZA, EWU, PXJ, PJP, GLD, XAR, VAW. Click this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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

— Thomas Bulkowski

Monday 2/5/24. Market Monday: The Week Ahead

My Prediction

I show the Dow utilities on the daily scale.

There’s not much to say about the chart.

One could argue that there’s a measured move down chart pattern forming at ABCD.

The thinking with this pattern is that the CD leg will equal the length and duration of leg AB. What I like about this pattern is that when it completes, the index often returns to the corrective phase, BC.

So you can expect a retrace and trade accordingly. Just remember that the ABCD pattern has to complete first.

A Brief Look Back

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

Monday: Up 224.02 points.

Tuesday: Up 133.86 points.

Wednesday: Down 317.01 points.

Thursday: Up 369.54 points.

Friday: Up 134.58 points.

For the Week…

The Dow industrials were up 544.99 points or 1.4%.

The Nasdaq composite was up 173.59 points or 1.1%.

The S&P 500 index was up 67.64 points or 1.4%.

Year to Date…

Dow Industrials

     0.3% down from the high of 38,783.62 on 02/02/2024.

     4.1% up from the low of 37,122.95 on 01/18/2024.

Nasdaq

     0.2% down from the high of 15,664.21 on 02/02/2024.

     8.0% up from the low of 14,477.57 on 01/05/2024.

S&P 500

     0.3% down from the high of 4,975.29 on 02/02/2024.

     5.9% up from the low of 4,682.11 on 01/05/2024.

Options Expiration

No options expire this week.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, “Take a
two-dimensional approach.” He offers these tips.

• Seekinger doesn’t look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
• S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
• If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
• In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
• A move outside of daily R1 or S1 usually does not mean a breakout.
• The odds suggest that the entire week’s price action will remain between weekly R2 and S2.
• Avoid going long when the market moves above weekly R2 (it’s overbought) and avoid going short when price moves below weekly S2 (oversold).
• Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
• Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

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

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

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

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

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

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

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Here’s a symbol list of 102 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, ACIW, AFL, AA, ALL, AMZN, AON, ACGL, ANET, AGO, ADSK, BAX, BZH, BOOT, BSX, BMY, CBT, CVX, CI, CINF, CLNE, CLX, CONN, COP, CCK, CSGS, DECK, XRAY, DFS, EL, FDS, FCX, FRD, GILD, GL, GS, GGG, HBI, HIG, HAYN, HOV, IIIN, IPAR, IBKR, INTU, JKHY, JBLU, JNJ, LZB, MGY, MCHX, MKTX, MDC, META, MS, NVDA, OXY, OTEX, ORCL, OUT, PGR, REGN, RLI, ^GSPC, SMG, SEIC, SHOP, SSYS, TDOC, RIG, TZOO, TREX, VMC, WOLF, WWW, WWD, IYC, IHE, FDN, FXI, ICF, IAT, EWO, ECH, EWH, EWS, EZA, EWY, EWU, PBE, PJP, SSO, XHB, SPY, USO, MGK, VONG. Click this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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

— Thomas Bulkowski

Friday 2/2/24. Pattern Trading Setups for the Weekend.

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Here’s a symbol list of 156 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, ADTN, AFL, ALK, AA, DOX, AEP, AXP, AFG, AON, APA, ANET, ARW, ADP, AVA, BAX, BERY, BIG, BIIB, BKH, BMY, BR, BG, CBT, CPB, CX, CNP, CINF, CSCO, CLX, CNA, CNO, CL, ED, CAG, CONN, COP, GLW, COST, CCRN, CCK, CSGS, CTS, DVN, DFS, D, DTE, ELV, EOG, EL, EVRG, EZPW, FDS, FICO, FE, FLEX, FORM, FCX, FDP, GNW, GL, GOOGL, GPRO, HBI, HLIT, HE, HSY, HNI, HOV, HUBG, HUN, IDA, IDXX, ITW, IIIN, IPI, IRM, JNJ, K, KLIC, L, MGY, MTRX, MCO, NBR, ^IXIC, NTGR, NEU, NEE, OGE, ORCL, OR, OUT, PLXS, POR, PPL, PFG, PG, PRU, PEG, QCOM, RNG, RLI, ROL, SAIA, SBH, SEIC, SHOP, SMAR, SO, SR, SSYS, SRDX, TGT, TER, TEVA, TTD, TREX, TWLO, UGI, WOLF, XEL, IDU, FDN, FXL, BOTZ, ICF, IHF, IAT, IGV, IXN, ILF, EWI, EWJ, EWS, EZA, EWY, EWD, EWT, THD, TUR, PJP, GLD, XRT, XAR, XLU, MGK. Click this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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

The following patterns were found manually, not using Patternz. Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

For details about the chart patterns, click here.

— Thomas Bulkowski

Thursday 2/1/24. Market Forecast Update

Weekly, since inception on 6/14/2011:

     The prediction of the Nasdaq closing higher has been right 269/479 or 56.2% of the time.

     The prediction of the Nasdaq closing lower has been right 75/159 or 47.2% of the time.

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

Here’s the updated 2024 market forecast, presented in slider format.

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Here’s a symbol list of 238 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABM, AFL, A, ALB, AA, ALL, AMED, AEE, AFG, AMWD, AME, AON, APA, APOG, AAPL, ATR, ARCB, ARW, ASH, AIZ, AGO, BCPC, BAX, BECN, BERY, BIO, BAH, BSX, BRC, BR, CBT, CE, CNC, CENX, CF, CRL, CHKP, CVX, CHD, CINF, CNA, CNO, CTSH, CMCO, CAG, CONN, COP, GLW, CCK, CSGS, DHR, DVN, FANG, DFS, DSGR, ^DJU, EMN, ECL, EMR, EOG, EQT, EL, EG, EXC, EXPD, FDS, FIS, FE, FISV, FLS, FMC, FORM, FTV, FCX, FDP, GME, GD, GNW, GL, GMS, GFF, HBI, HE, HAYN, HQY, HNI, HOLX, HD, HOV, HUBG, JBHT, IDXX, ITW, ILMN, IIIN, ITGR, TILE, IPI, IRM, JKHY, K, KMT, KMB, KLIC, LHX, LH, LEG, LDOS, LLY, LMT, L, MGY, MANH, MKTX, MRTN, MA, MTDR, MTRN, MTRX, MRK, MSFT, NBR, NFG, NOV, NEU, NI, NWPX, OR, POR, PPG, PINC, KWR, RL, REGN, RGA, RLI, RHI, ROK, ROL, R, SBH, SLB, SMG, SEE, SIGI, SCCO, SWX, SPSC, SXI, SSYS, TRGP, TER, TXT, TJX, TSCO, TRV, TZOO, TG, UHAL, SLCA, UPS, UNM, WMT, WAT, WERN, WU, WLK, WEX, WMB, WWD, ZBRA, IYM, IEZ, IHE, IDU, DDM, ICF, IYH, IEV, IXC, MXI, IXN, IGE, IHI, EWA, EWO, EWK, EWC, EWQ, EWI, EPP, EZA, EWD, EWU, PPA, PJP, PHO, GLD, XLV, XLB, XLU, VAW. Click this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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

— Thomas Bulkowski