Trading Tuesday…

Friday 11/6/20. Pattern Trading Setups for the Weekend.

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Here’s a symbol list of 184 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, ACN, AYI, ADTN, AEIS, APD, AKAM, ALB, ALL, AMZN, AMED, AMWD, APH, AON, AAPL, AMAT, ATR, AXS, BSET, BAX, BECN, BBY, BOOT, BRKS, BG, CDNS, CAL, CLNE, CL, CAG, CSOD, COTY, CCRN, DHR, DECK, D, EBAY, EMR, EPAM, FB, GGG, HBI, HLIT, HL, HOV, NSP, TILE, INTU, ISRG, IVC, NVTA, JKHY, KLAC, LZB, LRCX, LNC, LMT, LXU, MTSI, M, MRO, MA, MTRX, MDT, MU, MSFT, MLI, MYGN, ^IXIC, NEE, NKE, NOC, NUS, NVDA, OLN, ASGN, PANW, PTEN, PCG, PNW, PINC, PGR, QCOM, RMBS, RGS, ROG, CRM, SEIC, SMTC, NOW, SNPS, TECH, TPX, TER, TEVA, TXN, RIG, TZOO, TREX, SLCA, VEEV, VRSN, V, WAT, ZBRA, IYM, IAI, IYC, IHE, FTEC, FDN, QTEC, FXI, BOTZ, IYH, IYZ, IGV, SOXX, SLV, EWA, EWO, EWK, EWZ, EWC, EEM, EWQ, EWG, EWH, EIS, EWI, EWJ, EWM, EWW, EPP, EWS, EZA, EWY, EWP, EWD, EWL, THD, EWU, QLD, DBA, PBE, PEJ, PJP, QQQ, ROBO, IEV, IXN, ILF, SSO, MXI, XLY, GLD, XHB, XLB, XRT, SPY, XLK, UNG, SMH, VHT, MGK. 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 4 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 578 stocks searched, or 0.7%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 1 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 2 bullish chart patterns this week and 2 bearish ones with any remaining (1) 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.

For details about the chart patterns, click here.

— Thomas Bulkowski

Thursday 11/5/20. Intraday Nasdaq: Caution!

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 200/357 or 56.0% of the time.

     The prediction of the index closing lower has been right 57/116 or 49.1% 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 Nasdaq composite on the 5-minute scale.

At EA, the index formed an Eve & Adam double bottom. It confirmed as a valid chart pattern (when price closed above the peak between the two bottoms)
and that led to a large gain.

More recent than that pattern, an ascending and inverted scallop appears at B and C. Do you notice anything peculiar about these two patterns?

Answer: Yes. C is larger than B. I’ve noticed this both ways: in a series of scallops in an uptrend, most get narrower the higher up the price trend they appear. In a few instances,
they get larger (taller, wider). And this is an example. If we see a third inverted and ascending scallop that is wider than or taller than C, then it probably marks the end of the uptrend.
No guarantees, of course.

Even the appearance of a third scallop, regardless of the size, sings a note of caution. That’s especially true if the start and end of the pattern appear near the same price (so it doesn’t
really look like a scallop).

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Here’s a symbol list of 138 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, ADTN, ATSG, AKAM, ALRM, ALB, AMWD, AMGN, AMN, ANTM, ACGL, AGO, AVY, AXS, BERY, BBY, BIO, BIIB, BMY, BBW, BG, CBT, COG, CDNS, CPB, CX, CRL, CHS, ED, CSOD, COTY, DHR, EBAY, EQT, FICO, FDX, FISV, FIVN, FLIR, FTNT, FDP, IT, GPN, GOOGL, GGG, HLIT, HOLX, DHI, HOV, IEX, IDXX, IPI, INTU, IVC, JKHY, JAZZ, JBLU, KBH, LHX, LDOS, LEN, LLY, LMT, LXU, MHO, MTSI, MRO, MA, MDC, MRK, MSFT, MOS, MYGN, NXGN, JWN, NOC, OMC, OMI, PKG, PDLI, PFE, PNW, PINC, PGR, PHM, DGX, REV, RHI, ROG, ^GSPC, CRM, SLB, SAIC, TPX, TKR, TOL, RIG, TZOO, SLCA, VFC, VEEV, VRSN, V, WERN, WEX, IYC, ITB, IHI, IHE, QTEC, FXI, IYH, IHF, SOXX, EWK, EEM, EWH, EIS, EWS, EWL, EWT, PPA, PJP, IXN, SSO, XLV, SPY, XLK, SMH, VHT. 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

Wednesday 11/4/20. 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.

With today’s (Tuesday’s) gain, the indicator flipped from bearish to bullish. Although the signal appears to have flipped on Monday, it really changed on Tuesday and backdated,
if you will, to Monday.

In other words, the signal can change for up to a week. We see that it’s bullish now and the index is rising.

Let’s check what the next chart says.

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).

The more sensitive red line shows no change from a week ago, which is puzzling. The blue line, however, shows a minor move higher. That’s a plus.

Taken together, the two charts are turning bullish. The prior chart shows the thin blue indicator line spiking higher, which changed Monday’s view from bearish to bullish. This chart
is bullish too, but very mildly.

My view is that the upswing will continue.

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Here’s a symbol list of 178 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
MMM, ADTN, AES, ATSG, AYX, DOX, AEL, AXP, ABC, AMN, APH, AMAT, ATR, ARCB, ASH, AGO, ATO, ADP, AVY, AXS, BAX, BECN, BBY, BAH, BMY, BBW, BG, CBT, CACI, CX, CNC, CHS, CLX, CNA, COP, CLGX, CR, CRH, CTS, CMI, DECK, DDS, DFS, DOV, EQT, RE, XOM, FAST, FOE, FLIR, FLS, FCX, FRD, IT, GNW, GL, GPRO, GFF, HLIT, HE, HQY, HL, HSIC, HOV, ITW, INFN, TILE, IPG, IVC, JCOM, JBLU, KELYA, KMT, KFRC, LH, LANC, LNC, M, MAN, MTRX, MGEE, MS, MOS, MLI, MUR, MYGN, NFG, NJR, NXGN, OGE, OMC, ASGN, OTEX, OMI, PKG, PDCO, PDLI, PNW, PPL, PINC, PFG, PGR, PRU, KWR, RMBS, RJF, REV, RLI, ROK, SAIA, SAIC, SO, SWX, SWN, SXI, SCS, TECH, TXT, RIG, TRV, TZOO, TG, TREX, SLCA, UNM, VMI, VRSN, IYM, IAI, DDM, IYH, IHF, IAT, IYZ, IGV, IYF, EWO, EWQ, EWH, EWI, EWJ, EZA, EWY, EWP, EWD, EWL, EWT, THD, EWU, IBB, PPA, PXJ, PHO, IEV, MXI, XLP, XLF, GLD, XLV, XHB, XLI, XLB, XAR, 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.

— Thomas Bulkowski

Tuesday 11/3/20. Recent Research

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 215/374 or 57.5% of the time.

     The prediction of the index closing lower has been right 40/81 or 49.4% of the time.

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I’ve been doing research on new patterns and testing old ones. Here’s a link to testing old patterns. These are short patterns, two to four days long.
I wanted to know how they worked as reversal patterns. It you’re interested in short term bearish patterns, take a look.

I completed my analysis of the bearish Carl V chart pattern (I mentioned the bullish version on 10/13/20).
It’s a new chart pattern, founded by Carl Vanhaesendonck. I include his trading rules and tested how well the pattern worked, using those rules.

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Here’s a symbol list of 114 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AMD, AEL, AIG, ABC, AAPL, ADM, BMI, BECN, BIG, BMRN, BKH, BKNG, BRKS, BBW, BLDR, BG, CACI, CX, CF, CNA, CMCO, CONN, CLR, CLGX, COST, CRH, CMI, DFS, DOV, EMR, EIGI, FIS, FRD, GME, GFF, HSC, HE, HL, HELE, HSIC, HNI, HD, HON, HUBG, INFN, NSP, IIIN, INTC, TILE, IPI, ISRG, KELYA, KLIC, LZB, LAWS, LDOS, LLY, L, MANH, MDCA, MU, MOS, NEE, NKE, PFE, PPG, PFG, PGR, PRU, RGA, RHI, SAIC, SMG, SEE, SMTC, LUV, SRDX, SNPS, TXT, TKR, TREX, SLCA, VFC, VEEV, VRSN, VMC, WLK, WMB, WSM, ZBRA, IYK, ITB, IGE, EWK, EWH, EIS, EWS, EWY, EWT, PBE, IXC, GLD, 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 11/2/20. 2020 Market Forecast October Update

My Prediction

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

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 30 October 2020 were…
(The numbering is how they ranked a month ago.)

1. Information technology (+35.5%),

2. Consumer discretionary (+26.6%),

3. Communication services (+15.0%),

5. Health care (+10.1%),

4. Materials (+8.5%),

6. Consumer staples (+2.6%),

8. Utilities (-0.4%),

7. Industrials (-3.4%),

9. Real estate (-11.8%),

10. Financials (-17.4%),

11. and dead last is energy (-50.4%).

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.

2. Technology hardware, storage & Peripherals (+75.7%),

1. Internet & direct marketing retail (+67.2%),

4. Software (+43.9%),

3. Air freight and logistics (41.7%)

6. Metals & mining (+41.4%),

7. Life sciences tools & Services (+36.0%),

5. Semiconductors & semiconductor equipment (+32.9%),

8. Interactive media & Services (+32.0%),

10. Entertainment (+24.4%),

(New). Trading companies, distributors (17.5%)

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 650.19 points.

Tuesday: Down 222.19 points.

Wednesday: Down 943.24 points.

Thursday: Up 139.16 points.

Friday: Down 157.51 points.

For the Week…

The Dow industrials were down 1833.97 points or 6.5%.

The Nasdaq composite was down 636.69 points or 5.5%.

The S&P 500 index was down 195.43 points or 5.6%.

Year to Date…

Dow Industrials

     10.4% down from the high of 29,568.57 on 02/12/2020.

     45.5% up from the low of 18,213.65 on 03/23/2020.

Nasdaq

     9.6% down from the high of 12,074.06 on 09/02/2020.

     64.5% up from the low of 6,631.42 on 03/23/2020.

S&P 500

     8.9% down from the high of 3,588.11 on 09/02/2020.

     49.2% 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 is either underway or should be starting soon. The sessions could be more volatile.

Here’s a symbol list of 131 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, ANF, ALK, AA, DOX, AEO, AEP, AEL, AIG, ANIK, APA, AAPL, AXS, BMI, BSET, BBBY, BIG, BOOT, BRC, BBW, CBT, COG, CAL, CPB, CX, CNC, CNP, CVX, CIEN, CNO, CTSH, CMTL, CLR, CCRN, DVN, DFS, EBAY, EOG, EZPW, FLIR, FMC, FDP, FRD, GME, HSC, HNI, HON, ILMN, INOV, TILE, ISRG, IVC, JBLU, LAMR, LEG, LNC, MANH, MDCA, ^IXIC, NWL, NXGN, NKE, NWPX, NUS, PTEN, PICO, PLXS, PFG, PRU, RGA, RHI, ROG, ROST, SEE, SWX, SXI, SCS, SUM, SRDX, TEVA, TKR, RIG, SLCA, VLO, VEEV, WLK, WMB, WSM, IYE, IEZ, FTEC, IGE, EEM, EWH, EIS, EWJ, EPP, EWS, EWY, EWT, THD, TUR, PBE, PEJ, PXJ, IXC, IXN, XLE, XLF, XLK, UNG, MGK. 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