the XLP / NASDAQ ratio complete a BUY pattern ..

if you have been following me for a while you will know that I really trust PATTERNS and also ratio’s w/ the patterns.

in this case, we have a near PERFECT BUY pattern on our XLP/NASDAQ ratio. Which means, the Staples (a source of risk off for the institutions) ‘should’ start outperforming the NASDAQ from a relative strength basis which ‘should’ cause the NASDAQ to sell off .. IF and ONLY IF the PATTERN works. As you can see below, we have two levels to watch (the one we are at right now) and then one a little bit lower …

my guess (as I NEVER know which pattern will or won’t work) is that the next sell off will occur ‘here’ or the other target a little lower. if we blow thru them w/ power and they fail then it might be game on again .. but let’s not get too hopeful yet. let’s see what our patterns do on the ratio first …

Bart

BUY pattern on the ratio

note the NASDAQ is inverted (blue line) in this depiction

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