Pattern Trading Setups for the Weekend!…

Tuesday 10/6/20. Slider Trading Quiz! Expeditor International

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 215/371 or 58.0% of the time.

     The prediction of the index closing lower has been right 40/80 or 50.0% of the time.

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I show another slider trading quiz featuring Expeditor International (EXPD) (actual trade) stock. (An actual trade).

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Here’s a symbol list of 167 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ANF, ACIW, AYI, AES, AFL, ALRM, ALK, AA, AMZN, AFG, AMWD, APA, AAPL, ARCB, ADM, ARW, AGO, ATO, AVY, AXS, BLL, BIO, BG, CALM, CAL, CE, CX, CIEN, CLF, CNA, CTSH, CMTL, ED, CONN, CLR, CLGX, COTY, CREE, CRH, CROX, CCK, CTS, DECK, XRAY, DFS, DOV, EXP, EMN, EBAY, EIX, EIGI, RE, EVH, FAST, FE, FLEX, FCX, GPS, GD, GE, GILD, EVRG, HIG, HELE, HNI, HOLX, DHI, HOV, HUBG, JBHT, HURC, IDXX, IPG, IPI, INTU, IVC, KMT, KFRC, KLIC, LAMR, LEG, LNC, MHO, MAN, MRO, MLM, MTRX, MLI, CNR, NTGR, NEU, JWN, ORI, OLN, OMC, PATK, PYPL, PDLI, PICO, PLXS, PPG, PFG, PGR, PEG, PHM, RJF, RGA, RHI, ROK, RCKY, SLB, SCHW, SCCO, SWN, SXI, SUM, AMTD, TPX, TKR, TJX, TRV, UNM, VMC, WWW, ZBRA, IYK, IYC, DDM, ICF, IHF, EWG, EWH, EIS, EWW, EWS, EWY, EWD, EWL, TUR, EWU, QLD, PPA, PXJ, PJP, PHO, IEV, SSO, MXI, XLY, XLF, XRT. Clink this link for details (pattern type, start and end dates).

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

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

— Thomas Bulkowski

Monday 10/5/20. Market Monday: The Week Ahead

My Prediction

This is the Dow transports on the daily scale. I show a few chart patterns on the figure. Let’s go through them, starting from the left.

In April, the index shows a head-and-shoulders top. That appears on the chart as L-H-R for left shoulder, head, and right shoulder. It confirmed as a valid chart
pattern when the index closed below the blue neckline. Unfortunately, the index didn’t drop far enough to meet the measure rule target.

The measure rule for most chart patterns measures the height of the pattern and in the case of a top, subtracts that height from the bottom of the pattern (the neckline directly below
the head’s peak, for this pattern). The result is a target which we can use to measure how often price reaches it.

To the right of the pattern is a double bottom, cleverly labeled DB. It confirmed and led to a big gain. Confirmation in this example is when price closes above the peak between
the two valleys. Here the measure rule is the height of the pattern added to the confirmation price.

Next comes a pennant. Those patterns can be handy when they appear in the middle of the run. However, they tend to appear most often beyond the middle, as in this case.

Under LS is a diamond top. This is a small one, but it’s handsome.

Finally, mostly recently, is another head-and-shoulders top. In this case, though, it has not been confirmed yet, so it’s just squiggles on the price chart.

Based on what I see with the chart pattern indicator, it looks like the head-and-shoulders top will be a dud and we see the index rise to a new high. That could change with world and U.S. events,
of course. It’s election season. Imagine if Biden gets Covid-19 and both Trump and Biden die. Hmm. That would make for an interesting election. Likely both man’s names would appear on
the ballot anyway.

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 410.1 points.

Tuesday: Down 131.4 points.

Wednesday: Up 329.04 points.

Thursday: Up 35.2 points.

Friday: Down 134.09 points.

For the Week…

The Dow industrials were up 508.85 points or 1.9%.

The Nasdaq composite was up 161.46 points or 1.5%.

The S&P 500 index was up 49.98 points or 1.5%.

Year to Date…

Dow Industrials

     6.4% down from the high of 29,568.57 on 02/12/2020.

     52.0% up from the low of 18,213.65 on 03/23/2020.

Nasdaq

     8.3% down from the high of 12,074.06 on 09/02/2020.

     67.0% up from the low of 6,631.42 on 03/23/2020.

S&P 500

     6.7% down from the high of 3,588.11 on 09/02/2020.

     52.8% up from the low of 2,191.86 on 03/23/2020.

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 will be starting in about 11 days.

Here’s a symbol list of 165 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ANF, ACN, AYI, ADTN, ALRM, ALKS, AMZN, AEO, AAPL, ARW, AGO, ATO, AVY, BSET, BMY, CBT, CLS, CNP, CENX, CF, CHD, CINF, CLX, CNA, CL, CMTL, CONN, GLW, COTY, CW, DVN, ^DJT, D, EXP, EBAY, EIX, EIGI, EXC, FFG, FDP, GPS, GE, GNW, GES, HBI, HLIT, HIG, HOV, HUBG, IDXX, INFN, ITGR, TILE, IPG, INTU, JNJ, KMT, KFRC, KLIC, L, MHO, MAN, MLM, MDCA, MRK, MOS, MLI, MYL, NBR, NFG, CNR, NTGR, NWL, NI, NBL, NUS, OUT, OMI, PDCO, PYPL, PETS, PICO, POL, PPG, PINC, PFG, PEG, PHM, KWR, RJF, RLI, RHI, ROK, RES, SAIA, SRE, SLGN, LUV, SWX, SR, SXI, SCS, SRDX, TPR, TPX, TDC, TXT, TKR, RIG, UGI, VMI, VMC, WRB, WLK, WWW, ITA, IYM, IAI, IHF, IAT, IGE, EWK, EWG, EWI, EPP, EWS, EWP, EWL, EWU, QLD, IEV, MXI, XLF, XLI, UNG, USO. Clink this link for details (pattern type, start and end dates).

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

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

— Thomas Bulkowski

Friday 10/2/20. Pattern Trading Setups for the Weekend.

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Here’s a symbol list of 135 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ANF, ACN, AES, AKAM, ALRM, ALB, ALKS, ALL, AMZN, AEO, AEL, ABC, AMN, AAPL, ARCB, ARW, AGO, ADP, AVY, BLL, BSET, BZH, BBBY, BOOT, BRC, BMY, BBW, BLDR, CX, CENX, CHD, CL, CONN, CLR, CROX, CCK, DECK, DVN, EXP, EBAY, EIGI, EXPD, XOM, FDS, FLEX, FLIR, FLS, FMC, FDP, GS, HIG, HSII, HSIC, HURC, IEX, IDXX, IIIN, ITGR, INTU, JNJ, KFRC, LAMR, LLY, MAN, MLM, MDC, MRK, MGEE, MS, MOS, MYGN, NOV, NTGR, NTAP, NEU, NBL, OMI, OXM, PYPL, PETS, PICO, PGR, PHM, DGX, REV, RHI, SAIA, SMG, SKX, SCCO, LUV, SCS, SRDX, TJX, RIG, UGI, VLO, VMI, VEEV, VMC, WLK, WMB, ZBRA, IYM, IYE, IEO, IEZ, IDU, FXI, SLV, EWS, EWD, EWT, QLD, PXJ, PJP, MXI, XLE, XHB, XLB, XLU, USO, SMH. Clink this link for details (pattern type, start and end dates).

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

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

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

There were 16 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 581 stocks searched, or 2.8%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 4 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 16 bullish chart patterns this week and 3 bearish ones with any remaining (1) being undecided.
The ratio of bullish to bearish patterns suggests the market is bullish.

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 10/1/20. 2020 Market Forecast October Update

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 196/352 or 55.7% of the time.

     The prediction of the index closing lower has been right 57/116 or 49.1% of the time.

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Here’s the updated 2020 forecast for October, presented in slider format.

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 29 September 2020 were…
(The numbering is how they ranked a month ago.)

1. Information technology (+26.4%),

2. Consumer discretionary (+21.6%),

3. Communication services (+7.5%),

6. Materials (+2.7%),

4. Health care (+1.9%),

5. Consumer staples (+.7%),

7. Industrials (-5.1%),

9. Utilities (-8.9%),

8. Real estate (-9.4%),

10. Financials (-22.7%),

11. and dead last is energy (-50.0%).

Here’s how they rank the industries, but only the top 10 appear. Year to date returns. The numbering is how they ranked a month ago.

1. Internet & direct marketing retail (+59.7%),

2. Technology hardware, storage & Peripherals (+49.0%),

4. Air freight and logistics (46.8%)

3. Software (+34.1%),

7. Semiconductors & semiconductor equipment (+23.1%),

6. Metals & mining (+21.8%),

9. Life sciences tools & Services (+17.6%),

5. Interactive media & Services (+17.0%),

11. Specialty retail (+14.0%),

8. Entertainment (+12.9%),

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Here’s a symbol list of 99 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ADBE, AKAM, ALRM, AMZN, AMED, AAPL, ARCB, ARW, AGO, BBBY, BIG, EPAY, CDNS, CRL, CONN, CR, CCRN, CSGS, CTS, CW, DVN, DUK, EXP, EBAY, EIGI, EXPD, FFIV, FICO, FAST, FIS, FEYE, FISV, FIVN, FLEX, FTNT, FWRD, GFF, HQY, HSII, HELE, HNI, IDXX, INTU, IVC, LHX, LAWS, LXU, MHO, MLM, MLHR, MS, MOS, MYGN, NFG, NOV, NTGR, NEU, OMCL, ASGN, PATK, PTEN, PYPL, PDLI, PICO, RL, RJF, RHI, SHW, SKX, SCS, SRDX, SNPS, TEVA, TXN, TXT, TZOO, VMI, VMC, ITA, FTEC, IGE, EIS, EWY, EWT, THD, QLD, DBA, PHO, ROBO, IXC, XHB, XLK. Clink this link for details (pattern type, start and end dates).

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

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

— Thomas Bulkowski

— Thomas Bulkowski