Pattern Trading Setups for the Weekend!…

Wednesday 2/7/18. 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 behavior of the chart pattern indicator this time, is exemplary. It correctly signaled a market turn a few days before the Dow started tumbling.

That’s the good news. The bad news is that these bear stripes (the vertical red line on the far right of the chart) happen frequently. Probably too often to trust.

Notice that the chart is still bearish. I know my portfolio only regained about one-quarter of what it lost the prior day.

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).

This chart is the worst I’ve seen. Ever.

The number of bearish stocks in my database climbed from 17% a week ago to 26% now. Wow. That’s the red line, the more sensitive of the two lines.

The blue line wasn’t immune to the market’s tumble. The average stock is now off 17% from it’s yearly high, well up from 10% a week ago. That’s no surprise since the markets tumbled
8% in like three days and only retraced a portion of that drop.

One thing we can expect is continued volatility.

I won’t tell you what to do, but I will tell you that I bought as the markets tumbled. I think it’s a good time to buy the dip, but that’s me.

— Thomas Bulkowski

Tuesday 2/6/18. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 154/260 or 59.2% of the time.

     The prediction of the index closing lower has been right 33/66 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 1-minute scale, today’s (Monday’s) price action only.

This is a different chart than the usual 10-day, 5 minute one.

Despite my expecting the Dow to close 200 points higher, the index opened lower, right from the start.

At A, the index was off more than 1,500 points. But notice how long the decline lasted, just 1 or 2 minutes below 24k before traders bought and pushed it back up. Fast.

I think the 24,000 level is a support area, so I’m looking for the index to move lower tomorrow, but, hopefully, not make a lower low.

If you compare today’s action with what happened in 1987, you’ll see the drop started on Friday, made a big drop on Monday 10/19/1987, followed by a lower low the next day. It closed
higher on Tuesday. Maybe that’s the blueprint to follow this time around.

You can think of this as a buying opportunity. It’s like using a coupon for 8% off the purchase price of your favorite stock, providing you hold long enough.

In 1987, after the 31% drop over 3 days, the index moved horizontally.

This time, unseasoned traders will be shell shocked and too afraid to buy. Seasoned traders will be selective, but nibbling, and wondering how this is going to shake out.

My hope is that this is a buying opportunity.

Look back at the 2018 prediction. I guess the swift January drop was a month late, but it’s here now. See how the Dow recovers? Perhaps I’m tempting fate, so don’t be surprised if the Dow
drops another 1,000 on Tuesday.

$ $ $

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 2/5/18. Market Monday: The Week Ahead

My Prediction

With such a large drop in the indices, I thought it would be good to see where we could be going in the future.

This chart uses the belief that the Dow industrials have a 10-year cycle (please note: the 2007-2009 bear market is not included in the prediction). All you have to do to create the chart, is to average daily price data for years ending in 8 (1938, 1948 and so on).

As you can see, it’s rarely accurate, but it does provide a roadmap.

Notice that point A is the lowest on the chart (red line). It suggested, based on historical trends, the index would bottom in the first few weeks of January. Clearly, as the bar chart shows,
that drop didn’t happen.

Maybe it’s happening now.

Or today’s drop could mirror the drop at B.

I drew vertical blue (they look black) lines at the turning points of A and the peak so far in 2018.

I wanted to see how often price continued lower after such a decline, but it’s Friday night. So forget that idea.

I think it’s a bit early to buy the dip, I think, but I’ll know more when I look at my portfolio on Saturday.

Saturday addendum: I added a Saturday post where I predict Monday’s move. Page down to the next post.

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 177.23 points.

Tuesday: Down 362.59 points.

Wednesday: Up 72.5 points.

Thursday: Up 37.32 points.

Friday: Down 665.75 points.

For the Week…

The Dow industrials were down 1095.75 points or 4.1%.

The Nasdaq composite was down 264.82 points or 3.5%.

The S&P 500 index was down 110.74 points or 3.9%.

Year to Date…

Dow Industrials

     4.1% down from the high of 26,616.71 on 01/26/2018.

     3.1% up from the low of 24,741.70 on 01/02/2018.

Nasdaq

     3.5% down from the high of 7,505.77 on 01/26/2018.

     4.6% up from the low of 6,924.08 on 01/02/2018.

S&P 500

     3.9% down from the high of 2,872.87 on 01/26/2018.

     3.0% up from the low of 2,682.36 on 01/02/2018.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 02/02/2018, the CPI had:

80 bearish patterns,

3 bullish patterns,

107 patterns waiting for breakout.

The CPI signal is 3.6%, which is
bearish (<= 35%).

The chart pattern indicator is bearish
with 3 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 either underway or should be starting soon. The sessions could be more volatile.

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

Saturday Supplement 2/3/18. What Will Happen Monday?

On Monday’s post, I mention that I didn’t have time or inclination to do the analysis for Monday’s opening move. I discuss those results below.

I created a spreadsheet of Dow movements since October 1928 and found 39 cases where the Dow dropped by 2.6% (the drop on Friday).

• Of those 39 cases, 23 of them saw the Dow close higher and 16 were lower.
• For those 23 closing higher, the median rise was 1.11% with an average of 1.15%.
• For those 16 closing lower, the median drop was 1%, the average was 1.72%
• 14 of the drops happened on Friday. Seven of them saw Monday close higher and 7 closed lower.
• For the 7 that closed higher on Monday, the median gain was 0.79% and the average was 0.78%.
• For the 7 that closed lower on Monday, the median loss was 2.26% and the average was 2.19%. That’s a huge move!
• However, if we look at the move since 1990, we find that 3 Monday’s closed higher and 2 lower.
• The median gain was 0.79% and the average was 0.77%.
• The median and average loss was 0.4%.

Based on this analysis, the Dow will likely close higher by, oh, 202 points (median rise since 1990). If it closes lower, it’ll drop 102 points (median/avg drop since 1990).

Want to check my work? Load the spreadsheet (1.7mb).

— Thomas Bulkowski

Friday 2/2/18. Pattern Trading Setups for the Weekend.

For those of you with diabetes, pre-diabetic, or just concerned about their blood glucose like me, try taking berberine. I started that on 12/20/17 and it finally started kicking in
this week. After eating breakfast, my blood sugar level actually dropped from the same meal a month ago. And for high carb meals, the rise is significantly suppressed (50% rise before is now down to 15%).

I take one pill of 500mg each morning and another 500mg pill before a high carb meal. As I said, it’ll take weeks (6 for me) before it begins to work. AND you don’t want to mix this with metformin
or other diabetic medication. In fact, I consider it a replacement for metformin (which I’ve never taken). They act similar.

I’ve also tried vinegar (supposedly 1 tbls in water works, but didn’t for me) and gymnema sylvester didn’t work either.

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 20 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 619 stocks searched, or 3.2%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 8 bullish chart patterns this week and 9 bearish ones with any remaining (3) 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: IT Services

Industry RS rank: 17 out of 58

Stock RS rank: 449 out of 611

2/1/18 close: $68.15

1 Month avg volatility: $0.93. Volatility stop (for downward breakout): $70.21 or 3.0% above the close.

Change YTD: 4.08%

Volume: 746,800 shares.
3 month avg: 895,243 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 01/24/2018 to 01/31/2018

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: Chemical (Specialty)

Industry RS rank: 53 out of 58

Stock RS rank: 442 out of 611

2/1/18 close: $78.71

1 Month avg volatility: $1.82. Volatility stop (for upward breakout): $74.28 or 5.6% below the close.

Change YTD: -2.34%

Volume: 145,200 shares.
3 month avg: 82,003 shares.

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

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 12/21/2017 to 01/29/2018

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 (Special Lines)

Industry RS rank: 14 out of 58

Stock RS rank: 171 out of 611

2/1/18 close: $73.10

1 Month avg volatility: $1.75. Volatility stop (for downward breakout): $77.86 or 6.5% above the close.

Change YTD: 6.76%

Volume: 3,190,000 shares.
3 month avg: 4,325,955 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: Double Top, Adam and Adam reversal pattern from 01/23/2018 to 01/26/2018

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: Chemical (Diversified)

Industry RS rank: 38 out of 58

Stock RS rank: 241 out of 611

2/1/18 close: $38.55

1 Month avg volatility: $0.64. Volatility stop (for upward breakout): $36.47 or 5.4% below the close.

Change YTD: 1.72%

Volume: 122,900 shares.
3 month avg: 204,463 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 11/16/2017 to 01/29/2018

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: Metals and Mining (Div.)

Industry RS rank: 26 out of 58

Stock RS rank: 72 out of 611

2/1/18 close: $22.83

1 Month avg volatility: $1.08. Volatility stop (for upward breakout): $19.64 or 14.0% below the close.

Change YTD: 16.24%

Volume: 1,187,700 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: Flag, high and tight continuation pattern from 11/29/2017 to 02/01/2018

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: Cement and Aggregates

Industry RS rank: 42 out of 58

Stock RS rank: 201 out of 611

2/1/18 close: $112.82

1 Month avg volatility: $2.63. Volatility stop (for downward breakout): $119.62 or 6.0% above the close.

Change YTD: -0.42%

Volume: 936,000 shares.
3 month avg: 553,088 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: Head-and-shoulders top reversal pattern from 01/08/2018 to 01/26/2018

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: Electric Utility (East)

Industry RS rank: 51 out of 58

Stock RS rank: 470 out of 611

2/1/18 close: $37.84

1 Month avg volatility: $0.67. Volatility stop (for upward breakout): $36.42 or 3.8% below the close.

Change YTD: -3.98%

Volume: 4,895,100 shares.
3 month avg: 5,244,875 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 01/03/2018 to 01/31/2018

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 (Specialty)

Industry RS rank: 53 out of 58

Stock RS rank: 229 out of 611

2/1/18 close: $23.36

1 Month avg volatility: $0.52. Volatility stop (for downward breakout): $24.66 or 5.6% above the close.

Change YTD: -0.97%

Volume: 307,200 shares.
3 month avg: 594,032 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 11/30/2017 to 02/01/2018

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: Biotechnology

Industry RS rank: 39 out of 58

Stock RS rank: 263 out of 611

2/1/18 close: $230.29

1 Month avg volatility: $5.40. Volatility stop (for downward breakout): $244.37 or 6.1% above the close.

Change YTD: 5.40%

Volume: 939,200 shares.
3 month avg: 759,071 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: Triple top reversal pattern from 01/16/2018 to 01/31/2018

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: 46 out of 58

Stock RS rank: 460 out of 611

2/1/18 close: $21.77

1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $20.67 or 5.1% below the close.

Change YTD: 7.99%

Volume: 3,093,600 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, ascending reversal pattern from 01/16/2018 to 02/01/2018

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: Drug

Industry RS rank: 45 out of 58

Stock RS rank: 456 out of 611

2/1/18 close: $82.41

1 Month avg volatility: $1.48. Volatility stop (for upward breakout): $78.32 or 5.0% below the close.

Change YTD: -2.43%

Volume: 7,474,300 shares.
3 month avg: 3,358,597 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: Broadening bottom reversal pattern from 01/02/2018 to 01/31/2018

Breakout is upward 53% of the time.

Average rise: 27%.

Break-even failure rate: 10%.

Throwbacks occur 41% of the time.

Price hits measure rule target 59% of the time.

Industry: Medical Supplies

Industry RS rank: 34 out of 58

Stock RS rank: 445 out of 611

2/1/18 close: $84.98

1 Month avg volatility: $1.23. Volatility stop (for downward breakout): $88.13 or 3.7% above the close.

Change YTD: 5.24%

Volume: 4,139,600 shares.
3 month avg: 5,761,640 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 01/09/2018 to 01/29/2018

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: Medical Supplies

Industry RS rank: 34 out of 58

Stock RS rank: 606 out of 611

2/1/18 close: $17.78

1 Month avg volatility: $0.88. Volatility stop (for downward breakout): $21.05 or 18.4% above the close.

Change YTD: -5.83%

Volume: 5,660,500 shares.
3 month avg: 1,318,423 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 Top, Adam and Adam reversal pattern from 01/22/2018 to 01/29/2018

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: Medical Supplies

Industry RS rank: 34 out of 58

Stock RS rank: 545 out of 611

2/1/18 close: $35.66

1 Month avg volatility: $0.78. Volatility stop (for downward breakout): $37.34 or 4.7% above the close.

Change YTD: -1.30%

Volume: 1,193,000 shares.
3 month avg: 1,885,975 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: Head-and-shoulders top reversal pattern from 01/08/2018 to 01/29/2018

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: Toiletries/Cosmetics

Industry RS rank: 35 out of 58

Stock RS rank: 267 out of 611

2/1/18 close: $21.10

1 Month avg volatility: $0.89. Volatility stop (for downward breakout): $23.08 or 9.4% above the close.

Change YTD: -3.21%

Volume: 54,800 shares.
3 month avg: 238,602 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: Horn top reversal pattern from 01/08/2018 to 01/22/2018

Breakout is downward 100% of the time.

Average decline: 21%.

Break-even failure rate: 7%.

Pullbacks occur 33% of the time.

Price hits measure rule target 70% of the time.

Industry: Electronics

Industry RS rank: 29 out of 58

Stock RS rank: 54 out of 611

2/1/18 close: $164.30

1 Month avg volatility: $5.89. Volatility stop (for downward breakout): $176.49 or 7.4% above the close.

Change YTD: 1.47%

Volume: 223,300 shares.
3 month avg: 155,332 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 01/16/2018 to 01/22/2018

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: Insurance (Diversified)

Industry RS rank: 48 out of 58

Stock RS rank: 277 out of 611

2/1/18 close: $90.74

1 Month avg volatility: $1.00. Volatility stop (for downward breakout): $93.41 or 2.9% above the close.

Change YTD: 0.03%

Volume: 995,600 shares.
3 month avg: 431,386 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: Double Top, Eve and Eve reversal pattern from 01/11/2018 to 01/29/2018

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: Retail Building Supply

Industry RS rank: 5 out of 58

Stock RS rank: 119 out of 611

2/1/18 close: $71.44

1 Month avg volatility: $1.61. Volatility stop (for downward breakout): $75.52 or 5.7% above the close.

Change YTD: -4.43%

Volume: 7,947,400 shares.
3 month avg: 2,128,008 shares.

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

 

Chart pattern: Pipe top reversal pattern from 01/16/2018 to 01/22/2018

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: 12 out of 58

Stock RS rank: 31 out of 611

2/1/18 close: $111.98

1 Month avg volatility: $3.79. Volatility stop (for upward breakout): $102.83 or 8.2% below the close.

Change YTD: 3.31%

Volume: 198,900 shares.
3 month avg: 245,355 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 12/26/2017 to 02/01/2018

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: 21 out of 58

Stock RS rank: 11 out of 611

2/1/18 close: $3.05

1 Month avg volatility: $0.20. Volatility stop (for upward breakout): $2.40 or 21.2% below the close.

Change YTD: 10.91%

Volume: 824,900 shares.
3 month avg: 391,566 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: Rectangle top continuation pattern from 09/28/2017 to 02/01/2018

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.

Thursday 2/1/18. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 142/252 or 56.3% of the time.

     The prediction of the index closing lower has been right 44/86 or 51.2% 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.

$ $ $

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

A symmetrical triangle appears outlined in the chart in blue (A). It broke out upward, threw back to the top trendline and a bit below before gapping
up higher today (Wednesday).

What followed was promise chasing disappointment as the composite dropped. The red line shows this day-long downward trend. It makes me wonder what will happen on Thursday.

Even though I think the indices will move to new highs, this intraday trend gives me pause. Perhaps the upward push I expect in the coming days won’t be as robust as I hope.

$ $ $

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

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