below is our ratio .. if you remember my last post, we were talking about a monthly or weekly close BELOW the consolidation and the market would take off … it started but jumped back into the channel and has been climbing ever since.
what has happened in the market? some interesting selling … but is THE TOP IN?
honestly, have no idea nor do I care if it is or it isn’t. all we know is we now watch the top of the channel … if that gets attacked and we get a weekly/monthly close ABOVE then a health meltdown could occur.
for now -just in the middle of the channel folks. looks like it wants to go higher to hit the upper channel – that’s what its been doing – so why not? higher means some more volatility / selling but nothing to freak out about, yet.
so what do you do? here’s something easy … if your a bul or like buying then BUY the TOP of the channel and if your a bear and like to sell then SELL at the bottom of the channel.
it’s going to be very interesting. hit me w/ any questions …
hey bart, this one of the few charts you post that I actually sort of understand…could you please let us know the XLP green line breaks thru its upper channel. seems once that happens and continues we are in another ball game. also, thanks for posting…I appreciate your take on things. cheers
ask any question … it might take some time, but I’ll always get back to you if you have any questions. I’m trying to be a little bit more deliberate in what I right as I’ve been told that I confuse too many people (I’m sorry ) but this is my stream of conscious at the end of the day or whenever … that being said this RATIO is my go to for keeping me honest. the patterns work GREAT. XLP is a proxy for us – the consumer. NYA is a proxy for the big boy institutions. when they have a risk on mindset they aren’t worried about what we’ll get at Walmart (TP, food, staples of life) and when they have a risk off mindset then that’s ALL we will want. so, strictly from a relative strength perspective when Staples (XLP) outperform (the ratio goes up) the general market then we usually have a pause, a correction or a top. Conversely, when the ratio is going down then it’s risk on and equities generally go higher. so, for pretty much all of 2021 it’s been one big channel .. yes, the market has gone up nicely during this time but you could have caught many gyrations by just investing off the top and bottom of the channel. I’m looking for more “longer” term inflections … hope this helps. Bart
Indeed, thank you.