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Pattern Trading Setups for the Weekend!…

Blog: October 2020

Bulkowski's Blog: ThePatternSite.com

As of 10/06/2020

  Indus: 27,773 -375.88 -1.3%  

  Trans: 11,399 -82.95 -0.7%  

  Utils: 851 +6.32 +0.7%  

  Nasdaq: 11,155 -167.89 -1.5%  

  S&P 500: 3,361 -47.68 -1.4%  

YTD

-2.7%  

 +4.6%  

-3.2%  

 +24.3%  

 +4.0%  

  Up arrow28,650 or 26,000 by 10/15/2020
  Up arrow11,750 or 10,600 by 10/15/2020
  Up arrow870 or 760 by 10/15/2020
  Up arrow11,800 or 10,400 by 10/15/2020
  Up arrow3,500 or 3,150 by 10/15/2020

As of 10/06/2020

  Indus: 27,773 -375.88 -1.3%  

  Trans: 11,399 -82.95 -0.7%  

  Utils: 851 +6.32 +0.7%  

  Nasdaq: 11,155 -167.89 -1.5%  

  S&P 500: 3,361 -47.68 -1.4%  

YTD

-2.7%  

 +4.6%  

-3.2%  

 +24.3%  

 +4.0%  

  Up arrow28,650 or 26,000 by 10/15/2020
  Up arrow11,750 or 10,600 by 10/15/2020
  Up arrow870 or 760 by 10/15/2020
  Up arrow11,800 or 10,400 by 10/15/2020
  Up arrow3,500 or 3,150 by 10/15/2020

 


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

The index climbed by 1.7% or 465.83 points. Since 10/01/1928 the index made 146 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.7% on 80 occasions.

     Average loss was -1.1% on 66 occasions.

Expect the index to close higher 54.8% of the time.

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.

$ $ $

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

$ $ $

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.

$ $ $

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   25,299.33      
 Monthly S1   26,723.98   1,424.66   
 Weekly S2   27,139.36   415.38   
 Weekly S1   27,644.00   504.64   
 Daily S2   27,708.35   64.35   
 Low   27,825.42   117.07   
 Open   27,825.42   0.00   Yes! The Open is close to the Low.
 Weekly Pivot   27,842.73   17.31   Yes! The Weekly Pivot is close to the Open.
 Daily S1   27,928.49   85.76   
 61.8% Down from Intraday High   27,954.24   25.74   Yes! The 61.8% Down from Intraday High is close to the Daily S1.
 Monthly Pivot   27,961.67   7.43   Yes! The Monthly Pivot is close to the 61.8% Down from Intraday High.
 50% Down from Intraday High   27,994.03   32.36   Yes! The 50% Down from Intraday High is close to the Monthly Pivot.
 38.2% Down from Intraday High   28,033.82   39.79   
 Daily Pivot   28,045.57   11.74   Yes! The Daily Pivot is close to the 38.2% Down from Intraday High.
 Close   28,148.64   103.07   
 High   28,162.64   14.00   Yes! The High is close to the Close.
 Daily R1   28,265.71   103.07   
 Weekly R1   28,347.37   81.66   
 Daily R2   28,382.79   35.42   
 Weekly R2   28,546.10   163.31   
 Monthly R1   29,386.32   840.22   
 Monthly R2   30,624.01   1,237.68   


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

My Prediction

Picture of the Dow transports on the daily scale.

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.

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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: 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.

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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   27,164   27,423   27,642   27,902   28,121 
Weekly   26,984   27,333   27,687   28,037   28,391 
Monthly   25,144   26,413   27,806   29,076   30,469 
S&P500 (^GSPC): Daily   3,302   3,325   3,347   3,370   3,392 
Weekly   3,283   3,316   3,356   3,389   3,430 
Monthly   3,003   3,176   3,382   3,555   3,761 
Nasdaq (^IXIC): Daily   10,907   10,991   11,118   11,202   11,329 
Weekly   10,821   10,948   11,146   11,273   11,471 
Monthly   9,668   10,372   11,223   11,926   12,777 
  • 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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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.

This Week Last Week
1. Homebuilding 1. Homebuilding
2. Retail (Special Lines) 2. Retail Building Supply
3. Shoe 3. Air Transport
4. Retail Building Supply 4. Shoe
5. Air Transport 5. Retail (Special Lines)
6. Furn/Home Furnishings 6. Semiconductor
7. Semiconductor 7. Chemical (Basic)
8. Apparel 8. E-Commerce
9. Chemical (Basic) 9. Healthcare Information
10. Chemical (Diversified) 10. Chemical (Diversified)
Best Performing Above Worst Performing Below
50. Aerospace/Defense 50. Electric Utility (Central)
51. Insurance (Prop/Casualty) 51. Aerospace/Defense
52. Natural Gas (Diversified) 52. Chemical (Specialty)
53. Chemical (Specialty) 53. Insurance (Prop/Casualty)
54. Electric Utility (West) 54. Petroleum (Integrated)
55. Oilfield Svcs/Equipment 55. Oilfield Svcs/Equipment
56. Petroleum (Integrated) 56. Electric Utility (West)
57. Natural Gas (Distributor) 57. Natural Gas (Distributor)
58. Petroleum (Producing) 58. Petroleum (Producing)
59. Short ETFs 59. Short ETFs

— Thomas Bulkowski

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

$ $ $

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.

$ $ $

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

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Thursday 10/1/20. 2020 Market Forecast October Update

The index climbed by 0.7% or 82.26 points. Since 02/05/1971 the index made 432 similar moves on a percentage basis. After those moves, the next day’s…

     Average gain was 0.7% on 264 occasions.

     Average loss was -0.8% on 168 occasions.

Expect the index to close higher 61.1% of the time.

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.

$ $ $

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%),

$ $ $

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.

$ $ $

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   9,699.12      
 Weekly S2   10,428.72   729.61   
 Monthly S1   10,433.31   4.59   Yes! The Monthly S1 is close to the Weekly S2.
 Weekly S1   10,798.12   364.80   
 Weekly Pivot   10,888.88   90.77   
 Daily S2   10,994.40   105.51   
 Daily S1   11,080.95   86.56   
 Open   11,092.90   11.95   Yes! The Open is close to the Daily S1.
 Low   11,092.90   0.00   Yes! The Low is close to the Open.
 61.8% Down from Intraday High   11,163.59   70.69   
 Close   11,167.51   3.92   Yes! The Close is close to the 61.8% Down from Intraday High.
 Daily Pivot   11,179.46   11.95   Yes! The Daily Pivot is close to the Close.
 50% Down from Intraday High   11,185.43   5.97   Yes! The 50% Down from Intraday High is close to the Daily Pivot.
 38.2% Down from Intraday High   11,207.27   21.84   
 Monthly Pivot   11,253.69   46.42   
 Weekly R1   11,258.28   4.59   Yes! The Weekly R1 is close to the Monthly Pivot.
 Daily R1   11,266.01   7.74   Yes! The Daily R1 is close to the Weekly R1.
 High   11,277.96   11.95   Yes! The High is close to the Daily R1.
 Weekly R2   11,349.04   71.08   
 Daily R2   11,364.52   15.47   Yes! The Daily R2 is close to the Weekly R2.
 Monthly R1   11,987.88   623.37   
 Monthly R2   12,808.26   820.37   

— Thomas Bulkowski

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Forecast Update…

Blog: June 2020 As of 06/04/2020   Indus: 26,282 +11.93 +0.0%     Trans: 9,575 +134.48 +1.4%     Utils: 814 -17.21 -2.1%   ...

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