Chart Pattern Indicator: What's It Say?…

Monday 12/9/19. Market Monday: The Week Ahead

My Prediction

I show the Nasdaq composite on the daily scale.

Bottoms 1, 2, and 3 form a triple bottom.

That’s three bottoms near the same price. The pattern confirms as a valid triple bottom when price closes above the top of the pattern. That happens when price gaps up in September.

In this example, a throwback takes price back down in October to the level of the three bottoms.

More recently is the diamond shape in the upper right of the chart. Can you name this chart pattern?

That was easy, wasn’t it? It’s a diamond top, but not one I’m proud of.

The right side of the index isn’t well formed, so we really should wait to see if the diamond blossoms with sparkle or not. As it looks now, I’m not sure it’s a diamond.

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 268.37 points.

Tuesday: Down 280.23 points.

Wednesday: Up 146.97 points.

Thursday: Up 28.01 points.

Friday: Up 337.27 points.

For the Week…

The Dow industrials were down 36.35 points or 0.1%.

The Nasdaq composite was down 8.64 points or 0.1%.

The S&P 500 index was up 4.93 points or 0.2%.

Year to Date…

Dow Industrials

     0.6% down from the high of 28,174.97 on 11/27/2019.

     23.8% up from the low of 22,638.41 on 01/03/2019.

Nasdaq

     0.6% down from the high of 8,705.91 on 11/27/2019.

     34.1% up from the low of 6,457.13 on 01/03/2019.

S&P 500

     0.3% down from the high of 3,154.26 on 11/27/2019.

     28.7% up from the low of 2,443.96 on 01/03/2019.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 12/06/2019, the CPI had:

4 bearish patterns,

46 bullish patterns,

297 patterns waiting for breakout.

The CPI signal is 92.0%, which is
bullish (>= 65%).

The chart pattern indicator is bullish
with 2 of 3 half triangles showing (). Additional triangles are a measure
of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, “Take a
two-dimensional approach.” He offers these tips.

• Seekinger doesn’t look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
• S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
• If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
• In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
• A move outside of daily R1 or S1 usually does not mean a breakout.
• The odds suggest that the entire week’s price action will remain between weekly R2 and S2.
• Avoid going long when the market moves above weekly R2 (it’s overbought) and avoid going short when price moves below weekly S2 (oversold).
• Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
• Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) – L

First support level: S1 = (2 * P) – H)

Second resistance level: R2 = P + (R1 – S1)

Second support level: S2 = P – (R1 – S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is over.

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 12/6/19. 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.

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 28 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 584 stocks searched, or 4.8%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 22 bullish chart patterns this week and 2 bearish ones with any remaining (4) 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.

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: Telecom. Equipment

Industry RS rank: 41 out of 58

Stock RS rank: 572 out of 579

12/5/19 close: $8.91

1 Month avg volatility: $0.29. Volatility stop (for upward breakout): $8.23 or 7.6% below the close.

Change YTD: -17.04%

Volume: 229,600 shares.
3 month avg: 348,746 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: Triangle, symmetrical continuation pattern from 10/10/2019 to 12/05/2019

WARNING: A dead-cat bounce occurred on 10/10/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/09/2020 and a 38% chance by 04/09/2020.

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: Human Resources

Industry RS rank: 52 out of 58

Stock RS rank: 126 out of 579

12/5/19 close: $60.46

1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $57.55 or 4.8% below the close.

Change YTD: 6.71%

Volume: 240,400 shares.
3 month avg: 549,046 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 11/08/2019 to 12/05/2019

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: Electronics

Industry RS rank: 10 out of 58

Stock RS rank: 16 out of 579

12/5/19 close: $88.80

1 Month avg volatility: $1.19. Volatility stop (for downward breakout): $91.65 or 3.2% above the close.

Change YTD: 63.51%

Volume: 2,311,900 shares.
3 month avg: 173,640 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: Broadening top reversal pattern from 11/15/2019 to 12/03/2019

Breakout is downward 50% of the time.

Average decline: 15%.

Break-even failure rate: 18%.

Pullbacks occur 48% of the time.

Price hits measure rule target 37% of the time.

Industry: Electronics

Industry RS rank: 10 out of 58

Stock RS rank: 84 out of 579

12/5/19 close: $81.16

1 Month avg volatility: $1.14. Volatility stop (for upward breakout): $78.61 or 3.1% below the close.

Change YTD: 17.71%

Volume: 358,300 shares.
3 month avg: 447,163 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, Eve and Adam reversal pattern from 11/20/2019 to 12/03/2019

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 4%.

Throwbacks occur 57% of the time.

Price hits measure rule target 66% of the time.

Industry: Chemical (Basic)

Industry RS rank: 7 out of 58

Stock RS rank: 458 out of 579

12/5/19 close: $73.20

1 Month avg volatility: $1.23. Volatility stop (for upward breakout): $70.31 or 4.0% below the close.

Change YTD: 3.16%

Volume: 608,900 shares.
3 month avg: 610,854 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: Flag continuation pattern from 11/21/2019 to 12/02/2019

Breakout is upward 54% of the time.

Average rise: 23%.

Break-even failure rate: 4%.

Throwbacks occur 43% of the time.

Price hits measure rule target 64% of the time.

Industry: Packaging and Container

Industry RS rank: 28 out of 58

Stock RS rank: 355 out of 579

12/5/19 close: $66.14

1 Month avg volatility: $1.41. Volatility stop (for upward breakout): $62.52 or 5.5% below the close.

Change YTD: 43.85%

Volume: 1,487,100 shares.
3 month avg: 2,433,769 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 11/12/2019 to 12/05/2019

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: Telecom. Equipment

Industry RS rank: 41 out of 58

Stock RS rank: 382 out of 579

12/5/19 close: $36.29

1 Month avg volatility: $0.72. Volatility stop (for downward breakout): $38.17 or 5.2% above the close.

Change YTD: 7.02%

Volume: 4,964,600 shares.
3 month avg: 3,226,991 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 Top, Eve and Adam reversal pattern from 11/13/2019 to 11/29/2019

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: IT Services

Industry RS rank: 19 out of 58

Stock RS rank: 401 out of 579

12/5/19 close: $62.21

1 Month avg volatility: $0.68. Volatility stop (for downward breakout): $63.95 or 2.8% above the close.

Change YTD: -2.00%

Volume: 2,882,600 shares.
3 month avg: 3,250,685 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: Broadening top, right-angled and ascending reversal pattern from 11/07/2019 to 12/05/2019

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: Petroleum (Producing)

Industry RS rank: 58 out of 58

Stock RS rank: 540 out of 579

12/5/19 close: $31.11

1 Month avg volatility: $1.12. Volatility stop (for upward breakout): $28.51 or 8.4% below the close.

Change YTD: -22.59%

Volume: 2,371,400 shares.
3 month avg: 2,362,946 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: Triangle, symmetrical continuation pattern from 11/07/2019 to 12/05/2019

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: Electric Utility (Central)

Industry RS rank: 47 out of 58

Stock RS rank: 440 out of 579

12/5/19 close: $125.36

1 Month avg volatility: $1.43. Volatility stop (for upward breakout): $121.85 or 2.8% below the close.

Change YTD: 13.65%

Volume: 901,500 shares.
3 month avg: 979,609 shares.

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

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 10/29/2019 to 12/03/2019

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: Electric Utility (East)

Industry RS rank: 38 out of 58

Stock RS rank: 362 out of 579

12/5/19 close: $89.29

1 Month avg volatility: $1.16. Volatility stop (for upward breakout): $86.28 or 3.4% below the close.

Change YTD: 3.46%

Volume: 3,055,400 shares.
3 month avg: 2,571,354 shares.

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

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 11/12/2019 to 12/03/2019

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: Petroleum (Producing)

Industry RS rank: 58 out of 58

Stock RS rank: 551 out of 579

12/5/19 close: $38.64

1 Month avg volatility: $1.39. Volatility stop (for upward breakout): $35.74 or 7.5% below the close.

Change YTD: -19.40%

Volume: 1,236,700 shares.
3 month avg: 1,539,165 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: Triangle, symmetrical continuation pattern from 10/31/2019 to 12/05/2019

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: Food Processing

Industry RS rank: 26 out of 58

Stock RS rank: 282 out of 579

12/5/19 close: $157.97

1 Month avg volatility: $2.82. Volatility stop (for upward breakout): $151.85 or 3.9% below the close.

Change YTD: -10.68%

Volume: 64,600 shares.
3 month avg: 112,417 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 11/05/2019 to 12/05/2019

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Industry: Metals and Mining (Div.)

Industry RS rank: 34 out of 58

Stock RS rank: 483 out of 579

12/5/19 close: $58.13

1 Month avg volatility: $1.31. Volatility stop (for upward breakout): $55.31 or 4.9% below the close.

Change YTD: 29.21%

Volume: 121,300 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 10/24/2019 to 12/05/2019

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: Human Resources

Industry RS rank: 52 out of 58

Stock RS rank: 96 out of 579

12/5/19 close: $66.92

1 Month avg volatility: $1.09. Volatility stop (for upward breakout): $64.28 or 3.9% below the close.

Change YTD: 22.79%

Volume: 150,500 shares.
3 month avg: 295,840 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 11/11/2019 to 12/05/2019

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: Advertising

Industry RS rank: 44 out of 58

Stock RS rank: 398 out of 579

12/5/19 close: $25.01

1 Month avg volatility: $0.48. Volatility stop (for downward breakout): $26.08 or 4.3% above the close.

Change YTD: 38.02%

Volume: 888,300 shares.

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

 

Chart pattern: Rectangle bottom continuation pattern from 11/06/2019 to 12/05/2019

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price hits measure rule target 50% of the time.

Industry: Electric Utility (West)

Industry RS rank: 49 out of 58

Stock RS rank: 578 out of 579

12/5/19 close: $9.78

1 Month avg volatility: $0.73. Volatility stop (for upward breakout): $7.49 or 23.4% below the close.

Change YTD: -58.82%

Volume: 21,666,000 shares.
3 month avg: 5,870,049 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: Flag, high and tight continuation pattern from 10/28/2019 to 12/05/2019

WARNING: A dead-cat bounce occurred on 10/25/2019. There is a 26% chance that a 15% or higher decline will occur (or has occurred since then) by 01/24/2020 and a 38% chance by 04/24/2020.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price hits measure rule target 90% of the time.

Industry: Insurance (Prop/Casualty)

Industry RS rank: 48 out of 58

Stock RS rank: 513 out of 579

12/5/19 close: $72.44

1 Month avg volatility: $1.29. Volatility stop (for upward breakout): $69.16 or 4.5% below the close.

Change YTD: 20.07%

Volume: 3,500,600 shares.
3 month avg: 3,017,600 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 10/11/2019 to 12/05/2019

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price hits measure rule target 66% of the time.

Industry: Chemical (Specialty)

Industry RS rank: 29 out of 58

Stock RS rank: 539 out of 579

12/5/19 close: $151.99

1 Month avg volatility: $4.28. Volatility stop (for upward breakout): $142.01 or 6.6% below the close.

Change YTD: -14.47%

Volume: 135,100 shares.
3 month avg: 69,343 shares.

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

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

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 10/21/2019 to 12/03/2019

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: Apparel

Industry RS rank: 53 out of 58

Stock RS rank: 385 out of 579

12/5/19 close: $112.06

1 Month avg volatility: $3.03. Volatility stop (for upward breakout): $102.87 or 8.2% below the close.

Change YTD: 8.31%

Volume: 1,296,100 shares.
3 month avg: 1,365,482 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: Double Bottom, Adam and Adam reversal pattern from 11/21/2019 to 12/03/2019

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: Human Resources

Industry RS rank: 52 out of 58

Stock RS rank: 304 out of 579

12/5/19 close: $58.39

1 Month avg volatility: $0.77. Volatility stop (for upward breakout): $56.49 or 3.3% below the close.

Change YTD: 2.08%

Volume: 1,207,900 shares.
3 month avg: 1,012,069 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: Rectangle top continuation pattern from 10/30/2019 to 12/05/2019

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: E-Commerce

Industry RS rank: 31 out of 58

Stock RS rank: 403 out of 579

12/5/19 close: $158.22

1 Month avg volatility: $3.00. Volatility stop (for upward breakout): $149.24 or 5.7% below the close.

Change YTD: 15.51%

Volume: 7,126,600 shares.
3 month avg: 4,417,257 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: Scallop, ascending and inverted continuation pattern from 10/23/2019 to 12/04/2019

Breakout is upward 100% of the time.

Average rise: 43%.

Break-even failure rate: 4%.

Throwbacks occur 61% of the time.

Price hits measure rule target 61% of the time.

Industry: Electric Utility (East)

Industry RS rank: 38 out of 58

Stock RS rank: 169 out of 579

12/5/19 close: $62.76

1 Month avg volatility: $0.72. Volatility stop (for upward breakout): $60.93 or 2.9% below the close.

Change YTD: 42.90%

Volume: 3,216,500 shares.
3 month avg: 4,514,520 shares.

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

 

Chart pattern: Triangle, ascending reversal pattern from 11/01/2019 to 12/05/2019

Breakout is upward 70% of the time.

Average rise: 35%.

Break-even failure rate: 13%.

Throwbacks occur 57% of the time.

Price hits measure rule target 75% of the time.

Industry: Furn/Home Furnishings

Industry RS rank: 16 out of 58

Stock RS rank: 241 out of 579

12/5/19 close: $18.39

1 Month avg volatility: $0.26. Volatility stop (for upward breakout): $17.69 or 3.8% below the close.

Change YTD: 24.01%

Volume: 394,100 shares.
3 month avg: 708,518 shares.

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

 

Chart pattern: Triangle, ascending reversal pattern from 10/21/2019 to 12/05/2019

Breakout is upward 70% of the time.

Average rise: 35%.

Break-even failure rate: 13%.

Throwbacks occur 57% of the time.

Price hits measure rule target 75% of the time.

Industry: Retail Building Supply

Industry RS rank: 20 out of 58

Stock RS rank: 478 out of 579

12/5/19 close: $96.44

1 Month avg volatility: $1.89. Volatility stop (for upward breakout): $92.50 or 4.1% below the close.

Change YTD: 15.58%

Volume: 1,151,500 shares.
3 month avg: 2,128,008 shares.

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

 

Chart pattern: Rectangle top continuation pattern from 10/24/2019 to 12/05/2019

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: Oilfield Svcs/Equipment

Industry RS rank: 54 out of 58

Stock RS rank: 504 out of 579

12/5/19 close: $5.32

1 Month avg volatility: $0.28. Volatility stop (for upward breakout): $4.73 or 11.1% below the close.

Change YTD: -23.34%

Volume: 16,483,300 shares.
3 month avg: 13,612,100 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: Triangle, symmetrical continuation pattern from 08/15/2019 to 12/03/2019

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: 8 out of 58

Stock RS rank: 54 out of 579

12/5/19 close: $85.74

1 Month avg volatility: $2.08. Volatility stop (for upward breakout): $81.11 or 5.4% below the close.

Change YTD: 44.44%

Volume: 453,700 shares.
3 month avg: 245,355 shares.

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

 

Chart pattern: Triangle, symmetrical continuation pattern from 10/29/2019 to 12/05/2019

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: Metal Fabricating

Industry RS rank: 22 out of 58

Stock RS rank: 94 out of 579

12/5/19 close: $142.45

1 Month avg volatility: $2.31. Volatility stop (for upward breakout): $137.36 or 3.6% below the close.

Change YTD: 28.39%

Volume: 53,900 shares.
3 month avg: 117,540 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: Broadening bottom reversal pattern from 11/12/2019 to 12/05/2019

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.

Thursday 12/5/19. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 178/320 or 55.6% of the time.

     The prediction of the index closing lower has been right 54/106 or 50.9% 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.

The index formed a tight rectangle top chart pattern today (Wednesday). I show that by the two parallel red lines on the chart.

Price breaks out upward 63% of the time from the chart pattern, so that’s what I’m expected on Thursday. The above probabilities agree with that assessment. Of course, anything can happen but that’s the way to bet.

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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 12/4/19. 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.

As you can see, the indicator is signaling a red bar on the far right of the chart. It’s changed the green bar (bullish) of a few months ago into a bearish signal with today’s (Tuesday’s) big drop.

However, a large recovery could remove the signal and that can happen for up to a week. So we won’t really know if this is as bearish as it seems.

It’s my feeling that this is a temporary setback. It’s all China trade war related and fears of that come and go. So this will blow over shortly unless Trump wants to deflect more from
impeachment.

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 turned down this week compared to a week ago. They are following the index lower.

I am a bit surprised that the more sensitive red line dropped three percentage points from a week ago. That’s a big move, suggesting a weakening general market. And maybe that means
this retrace has legs.

Of course, time will answer that. It’s been 2 months without a significant retrace, so one is overdue.

As I read over my notes, the prior chart suggests a temporary setback in the China trade war. But this chart says a retrace is overdue and might be lasting. I think I’ve covered the ground
adequately! I’ll let you decide which interpretation you like best.

— Thomas Bulkowski

Tuesday 12/3/19. Slider Quiz! More Scallops

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 196/333 or 58.9% of the time.

     The prediction of the index closing lower has been right 38/76 or 50.0% of the time.

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I show a another slider quiz featuring the inverted and ascending scallop chart pattern.

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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