Pattern Trading Setups for the Weekend!…

Tuesday 11/16/16. Picking Mutual Funds for Performance

Back in early October, I sold about half my IRA holdings (mutual funds) and went into cash. I was able to sidestep the decline that began just days later. On Monday, I moved one under performing fund
to another more promising one. I’m waiting for this recent market spike to retrace, following a buy the dip scenario. I have my mutual funds already picked out, and I’ll buy after weakness sets in.

How do I measure performance of funds? Look at the figure.

Price at A has failed to exceed peak C. It shows weakness. Now look at B versus peak D. B is above D, so the fund is outperforming the other scenario.

I just looked for mutual funds with the BD setup and avoided the AC one.

Then I charted both funds on the same scale, starting from the same price. This is a version of relative strength and some charting services will do this for you (I got bigcharts.com to
do it, but now I struggle getting it to work. Go figure). The index or fund on top is the stronger of the two. It’s best if the fund has remained on top for a long time.

What you’re looking for is a fund that’s been strong over time and is beating the index.

A fund that is vastly under performing the indices can also be a worthwhile holding. Think “dogs of the Dow.” The under performing fund will turn upward and outperform the others. Eventually.

Unfortunately, an under performing fund can stay that way for a long long time. And its climb to the top of the food chain can be slow, too. Finally, the performance of these dogs is
slightly worse than the other type of momentum play (strong funds tend to remain strong).

That’s what I learned from my “mutt winners” and “mutt losers” test portfolios (see page top, right).

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I went for a bicycle ride today, the first time since I spit up a mouthful of blood three weeks ago. I didn’t push it, because I didn’t want to aggravate my lungs, but still averaged
over 17 mph on the ride. That’s not bad for a guy approaching 60 but well off last year’s pace when I was bumping up against 19 mph over a 14.5 mile course.

— Thomas Bulkowski

Tuesday 11/15/16. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 125/211 or 59.2% of the time.

     The prediction of the index closing lower has been right 32/63 or 50.8% 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.

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I show a picture of the Dow industrials on the 5-minute scale.

Notice that the Dow has made a good move higher, following channel A.

Following that, channel B also has an upward slope but at a much slower pace. This does not surprise me. After a short and steep run-up, like that shown by many stocks, the stock
or index will tend to go flat for a proportionate amount of time. That’s what I think we’re seeing now.

If strength remains in the index, then we’ll see an upward breakout and a resumption of the upward channel (A) following its slope, or nearly so.

If the index weakens, then look for a downward breakout from the channel.

The index could just slide sideways but sooner or later, it will break out.

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Visited my dentist. No cavities. No problems. Yippee.

This past weekend, I used my shredder to eat some papers. The instructions warned that it only shreds paper, not staples or anything else. I didn’t notice that my vet taped my dog’s rabies tag to a paper I was shredding. Oops.

It entered the machine and jammed it. Took a pair of pliers and about five minutes to free it from the machine. Then I used it for another form or two. Then I piled into it about a dozen sheets
(max 7) and the machine ground to a halt and made a funny noise. I unplugged it and cleared the paper from the two shredder rollers but that didn’t help. So I dismantled it to find what I
expected: a missing tooth on a nylon gear.

In other words, I toasted my shredder. I bought a new one from Walmart that was cheaper ($55) and this one can chew staples, small paper clips and even credit cards.

The good news is that I figured out how to destroy old DVDs, too. I tried bending them until they broke but that takes a lot of strength and the shards are dangerous when the disk shatters.

Instead, I use tin snips to slice through the disk. Be sure to wear eye protection but you’ll find it won’t be needed. The disks don’t shatter when cut with the snips (at least mine didn’t
and I cut hundreds).

For my floppy disks, I put a ice pick through the disk’s film.

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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 11/14/16. Market Monday: The Week Ahead

My Prediction

I show a chart of the Nasdaq composite on the daily scale.

I looked at this chart and looked and looked and didn’t really see anything interesting.

The Dow is making new highs, but not this index. Why?

Look at the progress of the index since August. I show that with the red line. It tilts upward, sure, but not by much.

It’s possible that the index has been stuck in place by the under performance of a few stocks. I’ve heard that’s a problem with the weighting of stocks in the index.

Whatever the reason, I am thankful for the stocks I own. They are doing spectacular, so spectacular that I fear a collapse of their upward move. That means giving back profit.

Of course, if you sell then the stocks will continue their upward ascent. Hold and they will reverse.

When they do reverse, you exit quickly but then the reverse turns into a pause before a resumption of the upward move.

One of my favorite techniques in such a situation is to put a trailing stop a penny or two below the prior day’s low. Move it up each day as price rises. When the stock reverses,
it’ll take you out immediately. A no sweat exit. They key to this is to make sure you have a strong trend.

You do that by making sure that the stock has posted at least three higher lows, preferably also making higher highs.

That technique works well for swing trades, when you want to exit at the first sign of a slowdown.

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 371.32 points.

Tuesday: Up 73.14 points.

Wednesday: Up 256.95 points.

Thursday: Up 218.19 points.

Friday: Up 39.78 points.

For the Week…

The Dow industrials were up 959.38 points or 5.4%.

The Nasdaq composite was up 190.74 points or 3.8%.

The S&P 500 index was up 79.2701 points or 3.8%.

Year to Date…

Dow Industrials

     0.1% down from the high of 18,873.66 on 11/10/2016.

     22.0% up from the low of 15,450.56 on 01/20/2016.

Nasdaq

     2.0% down from the high of 5,342.88 on 09/22/2016.

     24.4% up from the low of 4,209.76 on 02/11/2016.

S&P 500

     1.3% down from the high of 2,193.81 on 08/15/2016.

     19.6% up from the low of 1,810.10 on 02/11/2016.

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

Options Expiration

The following is courtesy of the Options Industry Council.

Many options expire this week, so traders will be looking to close out their positions ahead of that, and that suggests increased volatility (large daily price swings).

Swing and Position Traders: Chart Pattern Indicator

As of 11/11/2016, the CPI had:

2 bearish patterns,

11 bullish patterns,

112 patterns waiting for breakout.

The CPI signal is 84.6%, which is
bullish (>= 65%).

The chart pattern indicator is bullish
with 1 of 3 full 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.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

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 list is old (unchanged) due to a technical issue.

— Thomas Bulkowski

Friday 11/11/16. 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.

There were 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 625 stocks searched, or 3.4%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 6 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 15 bullish chart patterns this week and 4 bearish ones with any remaining (5) 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

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: Air Transport

Industry RS rank: 14 out of 56

Stock RS rank: 115 out of 619

11/10/16 close: $15.91

1 Month avg volatility: $0.51. Volatility stop (for upward breakout): $14.25 or 10.5% below the close.

Change YTD: 57.84%

Volume: 573,500 shares.
3 month avg: 244,143 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: Pipe bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Packaging and Container

Industry RS rank: 41 out of 56

Stock RS rank: 145 out of 619

11/10/16 close: $44.35

1 Month avg volatility: $0.93. Volatility stop (for upward breakout): $42.40 or 4.4% below the close.

Change YTD: 22.58%

Volume: 1,645,100 shares.
3 month avg: 1,593,337 shares.

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

 

Chart pattern: Rectangle top continuation pattern from 08/22/2016 to 11/10/2016

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.

Industry: Biotechnology

Industry RS rank: 26 out of 56

Stock RS rank: 174 out of 619

11/10/16 close: $93.54

1 Month avg volatility: $3.28. Volatility stop (for upward breakout): $84.91 or 9.2% below the close.

Change YTD: -10.71%

Volume: 2,166,200 shares.
3 month avg: 1,435,834 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 bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Medical Services

Industry RS rank: 46 out of 56

Stock RS rank: 449 out of 619

11/10/16 close: $55.43

1 Month avg volatility: $2.04. Volatility stop (for downward breakout): $60.53 or 9.2% above the close.

Change YTD: -15.77%

Volume: 5,104,600 shares.
3 month avg: 1,499,549 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: Dead-cat bounce continuation pattern from 11/08/2016 to 11/09/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Metals and Mining (Div.)

Industry RS rank: 30 out of 56

Stock RS rank: 56 out of 619

11/10/16 close: $9.22

1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $7.58 or 17.8% below the close.

Change YTD: 108.60%

Volume: 4,219,600 shares.
3 month avg: 1,917,674 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: Pipe bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Information Services

Industry RS rank: 45 out of 56

Stock RS rank: 293 out of 619

11/10/16 close: $39.53

1 Month avg volatility: $0.77. Volatility stop (for downward breakout): $43.15 or 9.2% above the close.

Change YTD: 16.75%

Volume: 1,112,300 shares.
3 month avg: 476,900 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: Double Top, Adam and Adam reversal pattern from 11/01/2016 to 11/08/2016

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: E-Commerce

Industry RS rank: 20 out of 56

Stock RS rank: 534 out of 619

11/10/16 close: $33.82

1 Month avg volatility: $1.35. Volatility stop (for downward breakout): $38.20 or 13.0% above the close.

Change YTD: -2.06%

Volume: 1,019,600 shares.
3 month avg: 609,278 shares.

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

 

Chart pattern: Dead-cat bounce continuation pattern from 11/03/2016 to 11/04/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Diversified Co.

Industry RS rank: 22 out of 56

Stock RS rank: 59 out of 619

11/10/16 close: $72.70

1 Month avg volatility: $1.40. Volatility stop (for upward breakout): $68.20 or 6.2% below the close.

Change YTD: 51.96%

Volume: 418,200 shares.
3 month avg: 250,642 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: Measured move up from 10/21/2016 to 11/10/2016

Industry: Computer Software and Svcs

Industry RS rank: 12 out of 56

Stock RS rank: 268 out of 619

11/10/16 close: $14.19

1 Month avg volatility: $0.53. Volatility stop (for upward breakout): $12.70 or 10.5% below the close.

Change YTD: -31.58%

Volume: 8,625,200 shares.
3 month avg: 4,886,325 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Electronics

Industry RS rank: 21 out of 56

Stock RS rank: 156 out of 619

11/10/16 close: $13.89

1 Month avg volatility: $0.38. Volatility stop (for downward breakout): $15.85 or 14.1% above the close.

Change YTD: 23.91%

Volume: 4,343,700 shares.
3 month avg: 3,978,537 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, right-angled and ascending reversal pattern from 09/22/2016 to 11/10/2016

Breakout is downward 66% of the time.

Average decline: 15%.

Break-even failure rate: 20%.

Pullbacks occur 65% of the time.

Price hits measure rule target 32% of the time.

Industry: Toiletries/Cosmetics

Industry RS rank: 55 out of 56

Stock RS rank: 573 out of 619

11/10/16 close: $82.20

1 Month avg volatility: $2.05. Volatility stop (for upward breakout): $77.94 or 5.2% below the close.

Change YTD: -12.79%

Volume: 256,300 shares.
3 month avg: 227,200 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: Head-and-shoulders bottom reversal pattern from 10/12/2016 to 11/09/2016

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Industry: Retail Building Supply

Industry RS rank: 49 out of 56

Stock RS rank: 100 out of 619

11/10/16 close: $37.20

1 Month avg volatility: $1.06. Volatility stop (for upward breakout): $34.12 or 8.3% below the close.

Change YTD: 49.82%

Volume: 172,600 shares.
3 month avg: 218,960 shares.

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

 

Chart pattern: Pipe bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Retail Building Supply

Industry RS rank: 49 out of 56

Stock RS rank: 516 out of 619

11/10/16 close: $69.46

1 Month avg volatility: $1.21. Volatility stop (for upward breakout): $65.83 or 5.2% below the close.

Change YTD: -8.65%

Volume: 9,759,600 shares.
3 month avg: 5,862,666 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: Double Bottom, Adam and Adam reversal pattern from 11/01/2016 to 11/09/2016

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.

Industry: Building Materials

Industry RS rank: 11 out of 56

Stock RS rank: 410 out of 619

11/10/16 close: $31.45

1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $29.42 or 6.4% below the close.

Change YTD: 11.13%

Volume: 5,005,300 shares.
3 month avg: 3,925,802 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: Head-and-shoulders bottom reversal pattern from 10/25/2016 to 11/09/2016

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Industry: Furn/Home Furnishings

Industry RS rank: 47 out of 56

Stock RS rank: 399 out of 619

11/10/16 close: $30.45

1 Month avg volatility: $0.79. Volatility stop (for upward breakout): $28.72 or 5.7% below the close.

Change YTD: 6.10%

Volume: 416,100 shares.
3 month avg: 453,565 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: Double Bottom, Adam and Eve reversal pattern from 10/14/2016 to 11/09/2016

Breakout is upward 100% of the time.

Average rise: 37%.

Break-even failure rate: 5%.

Throwbacks occur 59% of the time.

Price hits measure rule target 66% of the time.

Industry: Electric Utility (East)

Industry RS rank: 53 out of 56

Stock RS rank: 462 out of 619

11/10/16 close: $115.06

1 Month avg volatility: $1.95. Volatility stop (for downward breakout): $120.83 or 5.0% above the close.

Change YTD: 10.75%

Volume: 7,464,000 shares.
3 month avg: 2,181,288 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: Head-and-shoulders top reversal pattern from 10/20/2016 to 11/08/2016

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: Natural Gas (Distributor)

Industry RS rank: 36 out of 56

Stock RS rank: 408 out of 619

11/10/16 close: $24.50

1 Month avg volatility: $0.78. Volatility stop (for upward breakout): $21.99 or 10.3% below the close.

Change YTD: 15.84%

Volume: 38,400 shares.
3 month avg: 59,429 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 Thursday.

 

Chart pattern: Rectangle top continuation pattern from 04/21/2016 to 11/10/2016

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.

Industry: Chemical (Diversified)

Industry RS rank: 34 out of 56

Stock RS rank: 533 out of 619

11/10/16 close: $96.87

1 Month avg volatility: $1.70. Volatility stop (for upward breakout): $92.38 or 4.6% below the close.

Change YTD: -1.97%

Volume: 2,826,800 shares.
3 month avg: 1,769,774 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 bottom reversal pattern from 10/13/2016 to 11/09/2016

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Industry: Natural Gas (Distributor)

Industry RS rank: 36 out of 56

Stock RS rank: 482 out of 619

11/10/16 close: $61.35

1 Month avg volatility: $1.05. Volatility stop (for upward breakout): $57.61 or 6.1% below the close.

Change YTD: 3.27%

Volume: 298,700 shares.
3 month avg: 254,055 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: Broadening bottom reversal pattern from 10/21/2016 to 11/10/2016

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: Natural Gas (Distributor)

Industry RS rank: 36 out of 56

Stock RS rank: 391 out of 619

11/10/16 close: $42.07

1 Month avg volatility: $0.93. Volatility stop (for downward breakout): $46.28 or 10.0% above the close.

Change YTD: 24.61%

Volume: 1,353,100 shares.
3 month avg: 700,366 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 11/01/2016 to 11/08/2016

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: Metal Fabricating

Industry RS rank: 9 out of 56

Stock RS rank: 373 out of 619

11/10/16 close: $137.75

1 Month avg volatility: $3.36. Volatility stop (for upward breakout): $127.13 or 7.7% below the close.

Change YTD: 29.93%

Volume: 175,400 shares.
3 month avg: 124,503 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: Horn bottom reversal pattern from 10/17/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 9%.

Throwbacks occur 29% of the time.

Price hits measure rule target 76% of the time.

Industry: Telecom. Equipment

Industry RS rank: 15 out of 56

Stock RS rank: 615 out of 619

11/10/16 close: $16.20

1 Month avg volatility: $0.37. Volatility stop (for upward breakout): $15.21 or 6.1% below the close.

Change YTD: -42.18%

Volume: 2,586,100 shares.
3 month avg: 2,870,662 shares.

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

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 09/20/2016 to 11/09/2016

WARNING: A dead-cat bounce occurred on 09/02/2016. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 12/02/2016 and a 38% chance by 03/03/2017.

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price hits measure rule target 74% of the time.

Industry: Biotechnology

Industry RS rank: 26 out of 56

Stock RS rank: 170 out of 619

11/10/16 close: $95.36

1 Month avg volatility: $3.28. Volatility stop (for upward breakout): $87.50 or 8.2% below the close.

Change YTD: -24.22%

Volume: 4,130,900 shares.
3 month avg: 1,677,995 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: Pipe bottom reversal pattern from 10/24/2016 to 11/01/2016

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price hits measure rule target 83% of the time.

Industry: Electronics

Industry RS rank: 21 out of 56

Stock RS rank: 506 out of 619

11/10/16 close: $69.19

1 Month avg volatility: $1.65. Volatility stop (for upward breakout): $64.20 or 7.2% below the close.

Change YTD: -39.57%

Volume: 392,700 shares.
3 month avg: 333,809 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 10/10/2016 to 11/08/2016

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: 25 out of 56

Stock RS rank: 386 out of 619

11/10/16 close: $145.97

1 Month avg volatility: $1.39. Volatility stop (for upward breakout): $142.59 or 2.3% below the close.

Change YTD: 0.91%

Volume: 40,800 shares.
3 month avg: 31,255 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 Thursday.

 

Chart pattern: Broadening top, right-angled and descending continuation pattern from 10/04/2016 to 11/10/2016

Breakout is upward 51% of the time.

Average rise: 28%.

Break-even failure rate: 19%.

Throwbacks occur 52% of the time.

Price hits measure rule target 63% of the time.

Industry: Investment Co. (Foreign)

Industry RS rank: 7 out of 56

Stock RS rank: 263 out of 619

11/10/16 close: $27.96

1 Month avg volatility: $0.60. Volatility stop (for downward breakout): $30.44 or 8.9% above the close.

Change YTD: 31.95%

Volume: 13,135,600 shares.
3 month avg: 2,080,049 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 Top, Eve and Adam reversal pattern from 10/24/2016 to 11/08/2016

Breakout is downward 100% of the time.

Average decline: 15%.

Break-even failure rate: 13%.

Pullbacks occur 64% of the time.

Price hits measure rule target 72% of the time.

Industry: Investment Co. (Foreign)

Industry RS rank: 7 out of 56

Stock RS rank: 193 out of 619

11/10/16 close: $55.17

1 Month avg volatility: $0.43. Volatility stop (for upward breakout): $54.11 or 1.9% below the close.

Change YTD: 22.57%

Volume: 16,600 shares.
3 month avg: 40,543 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: Triangle, symmetrical continuation pattern from 09/07/2016 to 11/04/2016

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.

Thursday 11/10/16. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 116/200 or 58.0% of the time.

     The prediction of the index closing lower has been right 40/78 or 51.3% 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.

The two channels I show here in red. One tilts downward and the other recovers the loss.

A v-bottom is also the name of a chart pattern that resembles the two channels. I just drew the channel lines willy-nilly, so don’t be concerned that
price crosses the bottom trendline.

What one can say about channels is that the index will stay between the two lines…until it doesn’t.

The most likely breakout direction is downward because an upward breakout would take a big push upward. That could happen. We’ve already seen a huge rally over the last several days.

And that means a downward retrace is overdue.

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I stayed up an extra three hours last night to watch the election returns. I made a party out of it. A pizza (DiGiorno: pepperoni, supposed to be the best of the frozen variety according to
America’s Test Kitchen, but it was just OK), salad, and a glass of wine completed the scene. Lots of fun watching the
lead of each state change from person to person. You guys might like the super bowl or world series. I’ll take a close election to curl my toes.

During the event, the news media said that the Dow futures were off 800 (over 900 as reported by a friend). I rubbed my hands with glee because I knew that buying at the open would likely
lead to a tasty rebound. But when I checked the futures before the market open, the Dow was off just 300. Yawn. I didn’t bother researching this any further.

Of course, I didn’t expect the Dow to rise as much as it did. At least I had good instincts.

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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

Tuesday 11/8/16. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 124/210 or 59.0% of the time.

     The prediction of the index closing lower has been right 32/63 or 50.8% 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.

$ $ $

Both yahoo and google quote systems seemed to have died after the close on Monday. Yahoo isn’t reporting at all. Google has so much dirt (0 numbers) in their quotes as to be unusable.
I waited late into the evening for correct data before giving up. This morning (Tuesday), there’s no change with the services.

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I show a picture of the Dow industrials non the 5-minute scale but on the daily chart.

A symmetrical triangle (A) appears on the chart, shown here in red. I show this scale because I want you to be aware of what I see happening on a longer scale.

Price has pulled back to the apex of the triangle (B). In these cases, there is an increased chance that the index will head back down. It might not happen
today (Tuesday), but it’s something to watch for.

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If I were elected president, I’d make the hard choices, starting with petitioning congress to get rid of daylight savings time. How about this: We adjust our clocks by one-half hour and
not touch them again.

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I won’t be posting tonight. I want to watch the election and not worry about how to get today’s quotes.

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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 11/7/16. Market Monday: The Week Ahead

My Prediction

I show a picture of the Dow industrials on the daily scale.

I first noticed the descending triangle. I show that here, outlined in red. Price points its way downward toward a narrowing apex of price movement.

Another bearish pattern appears: a head-and-shoulders top. I have that marked on the chart with the left shoulder (LS), head, and right shoulder (RS) identified

It confirms as a valid chart pattern only when the index closes below the up-sloping neckline (A). I show that neckline in green.

If the neckline were to slope downward, then I’d use a close below the right armpit as a validating signal. The right armpit is the valley to the north west of A.

Both patterns are bearish because they both broke out downward. So I’m looking for more weakness to come.

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 18.77 points.

Tuesday: Down 105.32 points.

Wednesday: Down 77.46 points.

Thursday: Down 28.97 points.

Friday: Down 42.39 points.

For the Week…

The Dow industrials were down 272.91 points or 1.5%.

The Nasdaq composite was down 143.73 points or 2.8%.

The S&P 500 index was down 41.23 points or 1.9%.

Year to Date…

Dow Industrials

     4.2% down from the high of 18,668.44 on 08/15/2016.

     15.8% up from the low of 15,450.56 on 01/20/2016.

Nasdaq

     5.5% down from the high of 5,342.88 on 09/22/2016.

     19.9% up from the low of 4,209.76 on 02/11/2016.

S&P 500

     5.0% down from the high of 2,193.81 on 08/15/2016.

     15.2% up from the low of 1,810.10 on 02/11/2016.

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 11/04/2016, the CPI had:

20 bearish patterns,

3 bullish patterns,

225 patterns waiting for breakout.

The CPI signal is 13.0%, which is
bearish (<= 35%).

The chart pattern indicator is bearish
with 2 of 3 full 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.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

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

Friday 11/4/16. CT Scan Results

I received a report about my CT scan results. As you may know, I spit up a mouthful of blood back in June (3x) and a week ago.

The CT scan revealed scarring from prior lung infections and inflammation related to a current infection.

The doc prescribed an antibiotic. The first line of the information sheet that came with the drug said, “WARNING: This drug may cause very bad side effects.”

That’s exactly what I wanted to read. I’m not a fan of horror stories…

The good news is that the drug was free. Wow. Never had that happen before. I once had the doc prescribe Advair. Cost? $120 (after insurance, too). I declined to take it and
called the doc for a cheaper option. He gave me a free sample.

Infection cause? Could be aggressive bicycle riding, which I do, accompanied by foul air from the diesels that pass by along with the polluted air from living in a city.

I was asked to see a pulmonologist, too. I don’t even know why, probably to help him keep up payments on his fleet of yachts.

Thanks to all of you that emailed me expressing your concern. It was most appreciated.

— Thomas Bulkowski

Friday 11/4/16. Pattern Trading Setups for the Weekend.

I’ve released a new version of patternz, 5.10, which corrects a few bugs with the chart pattern indicator and update. I could not test the installation
like I normally do because my security software kept deleting the setup file. It considered it a virus. The virus co. is looking into the problem.

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I had my CT scan done this afternoon. Way cool. The machine whirled around me while I held my breath for just 23 seconds. Then they injected contrast, which in rare
cases can be fatale, and did another pass. It’ll be a few days before I get the results mostly because they want to inform the requesting doc before they let me have the data.

They said that depending on the size of the lung, each pass could be worth 300 x-ray pictures. Wow.

Cost? $325 down from $375 because of insurance (big deal since I’m spending $9,200 per year for my bronze health plan and down from $475 from the facility the doc wanted me to use.

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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 12 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 627 stocks searched, or 1.9%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 6 bullish chart patterns this week and 2 bearish ones with any remaining (3) 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

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: Electronics

Industry RS rank: 31 out of 56

Stock RS rank: 117 out of 619

11/3/16 close: $13.76

1 Month avg volatility: $0.31. Volatility stop (for downward breakout): $14.61 or 6.1% above the close.

Change YTD: 22.75%

Volume: 2,545,800 shares.
3 month avg: 3,920,412 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, right-angled and ascending reversal pattern from 09/22/2016 to 10/28/2016

Breakout is downward 66% of the time.

Average decline: 15%.

Break-even failure rate: 20%.

Pullbacks occur 65% of the time.

Price hits measure rule target 32% of the time.

Industry: Chemical (Basic)

Industry RS rank: 41 out of 56

Stock RS rank: 178 out of 619

11/3/16 close: $50.93

1 Month avg volatility: $0.95. Volatility stop (for upward breakout): $46.47 or 8.8% below the close.

Change YTD: 30.16%

Volume: 2,500,600 shares.
3 month avg: 923,932 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: Double Bottom, Adam and Adam reversal pattern from 10/13/2016 to 11/02/2016

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.

Industry: Building Materials

Industry RS rank: 43 out of 56

Stock RS rank: 216 out of 619

11/3/16 close: $16.75

1 Month avg volatility: $0.34. Volatility stop (for upward breakout): $15.87 or 5.2% below the close.

Change YTD: -5.90%

Volume: 127,400 shares.
3 month avg: 133,675 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: Triangle, symmetrical continuation pattern from 08/31/2016 to 11/03/2016

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: Building Materials

Industry RS rank: 43 out of 56

Stock RS rank: 480 out of 619

11/3/16 close: $16.67

1 Month avg volatility: $0.44. Volatility stop (for upward breakout): $15.72 or 5.7% below the close.

Change YTD: -1.19%

Volume: 870,600 shares.
3 month avg: 624,868 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: Broadening bottom reversal pattern from 09/23/2016 to 11/01/2016

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: Retail Store

Industry RS rank: 48 out of 56

Stock RS rank: 409 out of 619

11/3/16 close: $36.89

1 Month avg volatility: $0.80. Volatility stop (for upward breakout): $35.21 or 4.6% below the close.

Change YTD: 5.46%

Volume: 5,951,800 shares.
3 month avg: 6,994,263 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, symmetrical continuation pattern from 08/16/2016 to 11/03/2016

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: Natural Gas (Distributor)

Industry RS rank: 20 out of 56

Stock RS rank: 505 out of 619

11/3/16 close: $23.15

1 Month avg volatility: $0.76. Volatility stop (for upward breakout): $21.28 or 8.1% below the close.

Change YTD: 9.46%

Volume: 65,300 shares.
3 month avg: 63,958 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 Thursday.

 

Chart pattern: Rectangle top continuation pattern from 04/21/2016 to 11/03/2016

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.

Industry: Electric Utility (Central)

Industry RS rank: 33 out of 56

Stock RS rank: 321 out of 619

11/3/16 close: $29.86

1 Month avg volatility: $0.54. Volatility stop (for downward breakout): $31.23 or 4.6% above the close.

Change YTD: 13.58%

Volume: 652,500 shares.
3 month avg: 910,865 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, Adam and Adam reversal pattern from 10/20/2016 to 10/28/2016

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: Metals and Mining (Div.)

Industry RS rank: 46 out of 56

Stock RS rank: 48 out of 619

11/3/16 close: $13.34

1 Month avg volatility: $0.47. Volatility stop (for upward breakout): $12.16 or 8.9% below the close.

Change YTD: 55.66%

Volume: 1,203,900 shares.
3 month avg: 1,813,023 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: Broadening bottom reversal pattern from 08/26/2016 to 11/02/2016

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: Information Services

Industry RS rank: 24 out of 56

Stock RS rank: 80 out of 619

11/3/16 close: $36.00

1 Month avg volatility: $1.55. Volatility stop (for downward breakout): $39.91 or 10.9% above the close.

Change YTD: -27.43%

Volume: 356,000 shares.
3 month avg: 240,548 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: Dead-cat bounce continuation pattern from 11/01/2016 to 11/01/2016

Breakout is downward 67% of the time.

Average decline: 18%.

Industry: Oilfield Svcs/Equipment

Industry RS rank: 44 out of 56

Stock RS rank: 365 out of 619

11/3/16 close: $9.87

1 Month avg volatility: $0.39. Volatility stop (for upward breakout): $8.78 or 11.0% below the close.

Change YTD: -20.27%

Volume: 27,363,900 shares.
3 month avg: 14,942,842 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 09/29/2016 to 10/28/2016

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: Natural Gas (Distributor)

Industry RS rank: 20 out of 56

Stock RS rank: 537 out of 619

11/3/16 close: $60.18

1 Month avg volatility: $1.17. Volatility stop (for downward breakout): $62.75 or 4.3% above the close.

Change YTD: -4.46%

Volume: 158,700 shares.
3 month avg: 221,263 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: Double Top, Adam and Adam reversal pattern from 10/24/2016 to 11/01/2016

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: Investment Co. (Foreign)

Industry RS rank: 13 out of 56

Stock RS rank: 342 out of 619

11/3/16 close: $25.37

1 Month avg volatility: $0.19. Volatility stop (for downward breakout): $25.87 or 2.0% above the close.

Change YTD: -3.13%

Volume: 2,876,500 shares.
3 month avg: 3,215,442 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, descending reversal pattern from 09/16/2016 to 11/02/2016

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.

Thursday 11/3/16. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 116/200 or 58.0% of the time.

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

The downward trend of the Nasdaq is both alarming and pronounced. The sucker is just falling.

I show the downward trend as a channel, highlighted in red.

Notice how the index follows the bottom of the channel. From my day trading days, that suggests a downward breakout or at least a continued move lower. If the index were to hover along
the top of the channel, the you’d expect an upward move or breakout.

Combine the down-sloping channel with a lower channel hug, add in the probabilities of the index closing lower tomorrow, and you’d want to avoid the long side.

Just remember that we’re overdue for an upward move. So, maybe tomorrow will be it.

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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

Wednesday 11/2/16. 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 has been bearish for a while now with no up turn indicated. That’s why, in part, I remain bearish for the next two weeks (see Tom’s Targets in the grid at page top).

Be aware that the blue line at the bottom of the page tends to bounce off the bottom of the scale instead of ride along it, so there is hope of a bullish move soon. If that were to happen,
I would expect it to be short lived, though.

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 lines ticked down over the past week, adding to the bearish sentiment.

The blue line was flat for quite some time, but even it has thrown in the towel and started to drop.

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I took at look at the ObamaCare website. They want about $620 for the cheapest medical plan to $1,230 for the top plan. Get this: None of them cover the two doctors I use (an optometrist
and family doc). I haven’t looked to see what type of hospitals are covered, either. If it’s like last year, only about three of 20 hospitals will be covered and those three will be rated the
most costly and worst providers. I’m not kidding.

Years ago, I went to one of them as an ER visit after I fell off my bike and broke some bones. Got a call the next day from the doc.
“We missed your collapsed lung,” he said and apologized. Fine. Then he asked me to come in so they could x-ray it AGAIN. The ER visit, at his request, his fees, the radiologist, and the x-rays were all
added to my bill. Only the doc waived a portion of his fee when I complained that I returned because he asked me to. HIS mistake cost me almost a grand. Neither my insurance agent no me could change
that.

What’s the moral of the story? Don’t fall off your bicycle.

— Thomas Bulkowski

Tuesday 11/1/16. Intraday Market Direction: Dow

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 124/209 or 59.3% of the time.

     The prediction of the index closing lower has been right 32/63 or 50.8% 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.

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I show a picture of the Dow industrials on the 5-minute scale.

The chart shows the index moving horizontally, roughly cycling up and down along the red line.

It also appears to be squeezed between the two green lines, forming a type of symmetrical triangle.

Which way will it break out? If you look at a chart of the chart pattern indicator (not shown), then the breakout will be downward. The indicator is heading toward zero today but that signal can change
for up to a week. Stay tuned.

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This weekend, I spent most of the day on Saturday installing 25 feet of gutter along my garage and another two hours or so on Sunday to finish the job.

That seems like an unusually long time. Most of Saturday was spent preparing the installation: removing rotten fascia wood (that took a long time because I don’t have a reciprocating saw
to slice off six inches of wood buried beneath the drip edge), drilling holes in the gutters, matching the two ends to existing gutters, adding bracing, and so on. I also counted wrong and
needed two additional brackets, meaning another walk to the nearby Home Depot to pick up some.

On Sunday, all I had to do was screw the gutters onto the house, a ten foot section at a time. By myself. I had to devise a way to hold up each ten foot section of metal (put up a bar-clamp and
let the gutter rest on top of it). Unfortunately, I had only two of those clamps.

Coupling the sections together is easy in theory, but with the top end of the joint hidden (it’s an upside down J fold that the new gutter slips into) under the drip edge, you can’t
see if it’s installed right or not. And the far end of the new gutter slips down from under the drip edge, making it difficult to work with alone.

They suggest hanging the gutters first and installing the J brackets to join each section together later, but that’s for installations without a drip edge already installed. You install the bracket by wrapping it around
the gutter and bending over the tab at the top to make the inverted J. It’s easy unless you have a drip edge installed. Then you have to bend the tabs before hanging the gutter.

But it was a fun project.

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Went shopping this morning for a CT scan place. My doc recommended one facility that was two miles from me, in town. I found one about ten miles away that’s 27% cheaper. Wow.
Cheaper isn’t necessarily better but in this case, it is, in my view.

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For those fans of Patternz, I found errors in the chart pattern indicator portion of the program. I found one bug and am still searching why the XP version of patternz gives slightly
different results than the new version. The old version has a bug in it too, that of including the index file in the scan. I’ll update both versions when I fix any remaining problems.

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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

Written by and copyright © 2005-2016 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
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