Intraday Market Direction Thursday: Nasdaq Lower…

Monday 3/6/23. Market Monday: The Week Ahead

My Prediction

This is a chart of the Dow utilities on the daily scale.

Not much is happening on this chart. At AB, we see a pattern called an inverted and ascending scallop.

That chart pattern starts out from a valley (A), rounds over at C and drops to B. B remains above A, often by a large amount such as that shown here. In a bull market in stocks, 95% of them breakout upward.

What’s a breakout? That happens when the stock (or index) closes above the top of the chart pattern after the B bottom. That hasn’t happened yet. Indeed, the index could continue lower and not be a IA scallop at all.

The average retrace of the CB drop as a percentage of the AC rise is 54%, or about halfway down before the security turns up.

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 72.17 points.

Tuesday: Down 232.39 points.

Wednesday: Up 5.14 points.

Thursday: Up 341.73 points.

Friday: Up 387.4 points.

For the Week…

The Dow industrials were up 574.05 points or 1.7%.

The Nasdaq composite was up 294.07 points or 2.6%.

The S&P 500 index was up 75.6 points or 1.9%.

Year to Date…

Dow Industrials

     2.8% down from the high of 34,342.32 on 01/13/2023.

     2.7% up from the low of 32,500.71 on 03/01/2023.

Nasdaq

     4.7% down from the high of 12,269.55 on 02/02/2023.

     13.9% up from the low of 10,265.04 on 01/06/2023.

S&P 500

     3.6% down from the high of 4,195.44 on 02/02/2023.

     6.6% up from the low of 3,794.33 on 01/03/2023.

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 over.

Here’s a symbol list of 151 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AXDX, ADBE, AMD, AJRD, AFL, A, ALRM, AYX, AEP, AEL, AIG, ANET, ADSK, AVY, AZTA, BZH, BIO, BKNG, BRC, BR, BRKR, CBT, CAL, CX, CENX, CDAY, CSCO, CMTL, CONN, CSGP, COTY, CCK, DHR, DFS, ^DJU, EL, EVRG, EXC, FFIV, FICO, FTNT, IT, GE, GGG, GFF, HL, HSIC, HOLX, HD, HOV, HWM, IDXX, ITW, IIIN, ISRG, KBH, KELYA, KBAL, LAMR, LDOS, MHO, MCHX, MKTX, MLM, META, MLKN, MOS, ^IXIC, NI, NWPX, NVDA, OGE, OTEX, PEN, PKI, PETS, PFE, PCG, PPG, PPL, PHM, QTWO, RMBS, RGS, RES, ^GSPC, SLB, NOW, SHOP, SCCO, SWN, SCS, TER, TMO, TKR, TOL, TRV, TWLO, SLCA, UNM, VLO, VEEV, VRSN, VC, WSO, WMB, WDAY, XEL, IYK, IEZ, IDU, FTEC, FDN, QTEC, FXL, BOTZ, QQQ, SOXX, IHI, EWK, ECH, EWQ, EWG, EWI, EWJ, EWL, THD, EWU, QLD, PXJ, PJP, PHO, ROBO, IXN, SSO, MXI, GLD, XHB, XRT, SPY, XLK, XLU, USO, SMH, MGK. Click this link for details (pattern type, start and end dates).

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

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

— Thomas Bulkowski

Friday 3/3/23. Pattern Trading Setups for the Weekend.

$ $ $

Here’s a symbol list of 144 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ABT, AYI, AKAM, DOX, AMWD, AMN, APOG, AMAT, AWI, AIZ, BMI, BBBY, BBY, BIO, BAH, BRC, BR, BBW, CBT, CLS, CF, CRL, CHD, CLNE, CLF, CTSH, GLW, COTY, CRH, CCK, DECK, BOOM, EVRG, FFIV, FDS, FARO, FORM, FTV, GME, GD, GE, GIS, GMS, GGG, GFF, GES, HSC, HOLX, HON, HOV, IEX, IDXX, INFN, PODD, IBKR, IPG, IPI, KBAL, LHX, LZB, M, MKTX, MAS, MDC, MDT, MGEE, MU, NCR, NKE, NOC, NWPX, OMC, OTEX, OUT, PAYX, PKI, PLXS, PRU, RTX, ROK, RCKY, CRM, SEIC, STR, SPSC, SUM, SNPS, TDOC, TDY, TDC, TXT, TRV, TREX, TWLO, SLCA, VFC, MDRX, WRB, WERN, WU, IAI, IYK, IYC, IDU, FTEC, FXI, IYH, IAT, IYF, EWK, EEM, EWG, EWH, EWS, EWT, EWU, PPA, PXJ, PJP, IXN, SSO, XLV, XLI, VIS. Click this link for details (pattern type, start and end dates).

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

$ $ $

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

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

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 3/2/23. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the Nasdaq closing higher has been right 252/446 or 56.5% of the time.

     The prediction of the Nasdaq closing lower has been right 71/145 or 49.0% 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.

This chart looks complicated, but it’s really not.

At AB, we see a double bottom. It confirms as a valid chart pattern when the index closes above the highest peak between the two bottoms. I show that level with red line C. It
confirms when the market gaps up higher at D.

EF is the reverse pattern, a double top. It confirms at G, the blue line.

At H, we see two bottoms that are a potential double bottom. It is unconfirmed as yet (price has to close above the peak at H). It looks promising that the index will confirm it tomorrow or the next day.

$ $ $

Here’s a symbol list of 147 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, ANF, ACIW, A, AA, ALKS, AEE, AEP, AIG, ADM, AIZ, ATO, BCPC, BSET, BKH, BRC, BBW, CENX, CLNE, CTSH, CL, ED, COST, XRAY, ^DJU, DOV, DTE, DUK, EVRG, EXC, FFIV, FDS, FCX, GME, GPS, GNW, GL, GES, HBI, THG, HAYN, HOLX, HD, HOV, IBP, ITGR, IPAR, IPG, NVTA, JKHY, K, KELYA, KLIC, LZB, LANC, LNC, MGY, MKTX, MAS, MTDR, MDT, MU, MSFT, MOS, MYGN, NOV, NCR, NJR, NOVT, NUS, OMCL, PTEN, PPL, PINC, DGX, RGS, RCKY, SBH, SAIC, SEE, SRE, SHOP, SLGN, SO, SCCO, SR, SCS, SUM, TPR, TKR, TJX, TDG, TG, TWLO, SLCA, UGI, MDRX, VC, WU, WLK, WSM, WOLF, WWW, IAI, IYK, IYC, IDU, FTEC, QTEC, ICF, IAT, EWO, EWQ, EWI, EZA, EWL, THD, TUR, PJP, IEV, IXN, SSO, MXI, XLP, GLD, XLK, XLU, USO. Click 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 3/1/23. March Forecast Update

Here’s the updated 2023 forecast, presented in slider format.

$ $ $

Based on sector performance from Fidelity, the best performing sectors for year-to-date performance as of 2/28/2023 were…
(The numbering is how they ranked a month ago.)

10. Consumer discretionary (12%)

9. Information technology (10%)

11. Communication services (9%)

5. Materials (5%)

7. Financials (4%)

8. Real estate (3%)

4. Industrials (3%)

6. Consumer staples (-3%)

1. Energy (-4%)

3. Health care (-6%)

2. Utilities (-7%)

The folks at two firms polled by Fidelity weigh the sectors in this order, as of 2/24/23.

1. Information technology (IT)

2. Health care

3. Financials

4. Consumer discretionary

5. Industrials

6. Communication services

7. Consumer staples

8. Energy

9. Utilities

11. Materials

10. Real estate

Here’s how they rank the industries, but only the top 10 appear. One-year change, as of 2/27/23. The numbering is how they ranked a month ago.

1. Construction and engineering (+51%)

9. Trading companies and distributors (+26%)

2. Oil, gas and consumable fuels (+24%)

3. Energy equipment and services (+23%)

4. Independent power and renewable electric producers (+18%)

New. Distributors (+14%)

New. Machinery (+13%)

6. Biotechnology (+11%)

New. Commercial services and supplies (+9%)

7. Insurance (+6%)

$ $ $

Here’s a symbol list of 113 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AXDX, ALGT, AEP, APH, ANIK, AMAT, ADM, ATO, AVNT, BBBY, BERY, BKH, BBW, BG, CAL, CLS, CHS, CLNE, CLF, CTSH, ED, COP, COTY, XRAY, FANG, DRQ, DTE, EMN, EOG, EFX, FIS, FDP, FRD, GE, HSII, HOLX, HOV, HUN, HURC, NSP, ITGR, IPG, INTU, K, KMB, LZB, LDOS, LLY, LOW, MRO, MTDR, MRCY, META, MUR, MYGN, NI, NWPX, NUS, ORI, OLN, OMI, PTEN, PRFT, PFE, PLXS, PPL, PINC, DGX, RL, RMBS, RES, R, SLB, SAIC, SRE, NOW, SWX, SR, SUM, TPR, TRGP, TXN, TDG, TG, TWLO, SLCA, VLO, VECO, WWD, IAI, IYK, IYE, IDU, IYH, IHF, IGE, IEO, EWO, EWZ, EWI, EWP, THD, PJP, IXC, ILF, XLP, XLE, XLB, VHT, VAW. Click 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