the last time this happened the market corrected 26 percent …

11/9/2017 – as you can see below and on other post we have been hawking the ratio analysis of XLP / NYSE Index. Won’t go into the why here as that has been done a number of times.

some key points to consider:

  • we have completed the EXACT measured move correction and biggest since the 2009 lows.
  • the last time this happened the market corrected 26% – just calling it like I see it.
  • from a timing we are still not in the ZONE so it could shuck and jive here …
  • RSI has hit the lower end of the range BUT note it banged around this level for a while as the market (overall market) kept going higher into 2000.  so, it doesn’t HAVE TO cause a reaction.
  • and, one last, today the market lost some ground right as the ratio was completing the measured move that we’ve been talking about for weeks if not months.  questions?
  • two charts – an update to the ratio and the NYSE Index showing how it delayed for a month once the ratio bottomed and then sold off 26%

keep an eye on this ratio!

NYSE Index showing correction once the ratio bottomed



10/26/2017 – as you know, we were looking for support to hold on a .382 retracement of the XLP/NYA ratio. this support would cause a bounce or a move higher in the ratio and therefore bring volatility into the market.  NOT EVEN CLOSE … that level has been pierced and now lower targets are shown.

folks, if your thinking of shorting I would wait .. when .382’s from all time lows don’t even cause a weekly/monthly move then something bigger is at hand going on …

I did some basic cycle work to show a time zone when the next support could come in December 2017-April 2018.

Until we elect a weekly or monthly signal reversal candle in this key ratio I wouldn’t touch the short side.


Author: BART

BART is a CMT and an expert a "advanced" pattern recognition used w/in the intermarket analysis discipline. He's also an accomplished Business Development Executive providing solutions to a myriad of business markets.

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