Ratio analysis, you gotta love it …
Last night we showed you a bunch of charts. The most important, at least for me, was the chart of the XLP/NYA ratio. Been blogging about this target zone for a WHILE. Was getting really sick of it to be honest :), and, remember, the PROJECTION lies right on the .786 so ‘ technically’ it hasn’t been hit but, I’m making the call based on the PRICE and TIME confluence (price being percentage same).
Here’s another one popular among technicians. Discretionary / Staples.
Discretionary – I’m going out and buying my NEW CAR! Let’s go the bull is on ….! woot …
Staples – everyone needs TP, propane, toothpaste, etc. The ‘staples’ of life. Ain’t nothing discretionary about that!
So, when the chart is going UP UP and AWAY life is good …when it’s going down, not so much. Not surprised to see it has been going down the past couple days/weeks (kind of makes sense) but what I did not expect was the PATTERNS that are completing to be present like they are. Especially in light of the beautiful BUY pattern present on the XLP/NYA, the financials topping at their measured moves and the YEN did not go above the pattern we were discussing last night. Well, ok then …
Folks, we have an ABCD (monthly) and a BUTTERFLY (perfect CD leg in price and time) along w/ a three drives to a top pattern. WOWZA …in normal terms, it appears that people aren’t going to be buying their new cars anymore because this ration has smacked into HUGE resistance.
Last, look at the harmony w/ the ‘monad’ to the left of the screen. All the moves are harmonic to the solid blue arrow. Just stop and try to comprehend, what is going on here … this chart is bouncing around – somehow – with harmonic fractals to the measured move that nailed the top. Even look at the ‘red’ corrections – yup, the same.
Then, it does all go back to geometry:
Folks, pull the plug, the tops in.
This analysis is wrong if the .786 level on the XLP/NYA breaks down w/ a daily (or weekly for more conservative) close below this level.
Oh, and don’t forget, it’s just a pattern. 🙂
