Energy is usually the last shoe to drop

CLIFF NOTES: below you will see a butterfly top coming into play in the XLE.  98 and/or 110 should act as major resistance.  Let’s take a look at the potential set-up’s coming into play:

  • DJ Transports have completed a MAJOR BEAR pattern w/ the AB=CD completing from the late 1800’s.
  • DJ Utilities have a MAJOR BEAR pattern just a little bit higher that should act as major resitance.
  • THE XLF (proxy for the financials) has completed a WEEKLY BEAR pattern … the banks usually lead us UP and lead us DOWN.
  • Parabolic Charts have shown the first sign of weakness (IBB, GOOG, PCLN, etc, etc) which usually results in weakness.  The Social Media darlings have “cracked”
  • Multiple Long Term 5 wave counts are complete on some very important big cap stocks
  • And, from a cycles perspective one of my mentors, Mike Jenkins at http://www.stockcyclesforecast.com wrote this:

The biggest cluster of cycles we will face for the next decade hit from April 14 to 23rd, but
not really ending until the solar eclipse on the 29th. In my life I’ve never seen anything like it
except perhaps for 1974. My guess is a Middle East War or major stock market collapse, or
major earthquake. I would be extremely defensive until we get to the May 2nd to 5th pivot.

So, the band can continue to play on but let’s trade what we see … the XLE is important  because it is usually the last to top in a bull market.

rotation

With that in mind we now present a BEARISH BUTTERFLY SELL PATTERN as shown …

I left the background of the chart black for Easter Color affect ...

I left the background of the chart black for Easter Color affect …

We have been watching this target per this post: https://bartscharts.com/2013/09/15/part-iv-sp-and-energy/

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Stay tuned as this market is topping (has topped) folks and w/ the amount of evidence being shown, it’s time to seriously get defensive and take profit or be in cash.   Once these patterns complete …

 

Happy Easter — Bart

 

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