BABA update …

last post on BABA: https://bartscharts.com/2020/08/23/baba-3/

note the thrust coming into this very important .786 retracement node. additionally, we have a 1.618 projection a little lower sitting right on top of .841 retracement. (1/1.1892 = .841 equal octave scale of music ratio) and we can throw in some polarity and bullish divergence so would expect some support or a pause.

that being said, I enjoy doing ratio analysis so here’s AMZN / BABA. the first graph below is back almost 4 years ago when I did the same relative strength look because, at the time (believe it or not) BABA was stronger that AMZN. don’t believe me? look at the ratio … it had been going down for a couple years as BABA climbed but then guess what, measured moves and retracements and a bunch of pattern stuff gave AMZN the support in the ratio and off it went and the rest is history. (note, did I mention – once – anything to do w/ sales, or revenue, or anything like that? nope …just numbers and patterns for me)

if seriously trying get long BABA I would watch for a daily or weekly SRC before entering. when I look at those relative strength ratio charts it looks like BABA is about to get smacked even harder so caution warranted … wait for an SRC.

this is the 2017 AMZN / BABA and note the “technicals” at work here …
the first AMZN/BABA chart is the circled area in the chart above .. note, it worked.

Ratio Ratio Where Art Though ….

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 …

AB=CD on the Transports …

we last blogged about the “1.618 level” and the fact that we are in the continuation phase of completing a LOT of 5’s or we completed it at the AB=CD.

that is one heck of a bearish “wick” on that candle folks … but it’s also a LOT of thrust into the AB=CD so WAIT but if your long Transports might want to start paying attention to them …

and then I think ..

“now that I see a MAJOR pattern completing (yes folks they do fail – please remember that) I think of what could be the “news cause” of actually really thumping the transports that, after a little sell off, have weathered the pandemic actually pretty swell ….”

you can imagine the theories …

UNG – Natural Gas – catch the next wave?

last post on NAT GAS / UNG: https://bartscharts.com/2021/11/01/ung/

the game plan/strategy is to BUY the first PATTERN in a “new” trend and if it works then probability is that the trend change is real …

Energy, Ags, etc. are exploding of late and GLOBAL shortages that are becoming apparent pretty much every day are REAL. so, if one thinks (trade what you see not what you think) that Nat Gas prices are due to continue to rise then we have UNG that will give you exposure.

if we break thru the low at 13 then I would consider this a failed pattern but we have some MAJOR support coming in/around 15 for the BUY to get long nat gas and, perhaps, hold this position for a LONG time …

it’s all probability folks …

below, you will see a MONTHLY on UNG since inception. wanted to post this chart so you could see why I wrote the above .. have we broken out in Nat Gas? have we begun a new bull trend? full disclosure, I’m long UNG down in the single digits and will be looking to ADD to my position at this pattern completing – if it ever does.

take note of the volume picking up and the fact that the RSI is at it’s highest level .. the key here, in the coming ongoing pullback, is where the RSI finds support … if we find support on the BULL ZONE (around 40ish) then we can start giving our change in trend some more probability … but, for now, we are speculating that a very investable low is in place .. don’t throw the farm at this one .. nibble at it … as we will see the breakout occur and there will be more time to get LONG if the “low in place” thesis is correct.

additionally, the “length of the base equals the price target potential is also nice here .. we’ve been basing for 6 years and, if you want to split hairs probably 10 years once that low was put in place 2012. bottom line, if this things goes higher, it’s going to go ….

another way to check trend is via long term LOG charts .. LOG’s help you understand rates of change and are very good at giving first hints of big changes in trends or inflections …in looking at this on the long term log scale, certainly appears to have broken the long term log trend line …

last, when you are building a position, it’s wise to see how “strong” or “weak” that security is compared to high fast flyers .. in this case, for no other reason than randomness, I chose UNG/NFLX.

yup, Natural Gas has out performed (on a relative strength basis) NFLX for all of 2020

there you have it …

manage the risk.

Bart

NFLX

last post on NFLX: https://bartscharts.com/2021/10/13/nflx-abcd/

as you can see, the NFLX AB=CD failed by, roughly, 4% and w/ this price point one would have some pretty big exposure if playing single shares ….. I considered that PATTERN failed.

that being said, it was a PRETTY HUGE pattern (hence I called it chart of the year) so I went back and looked at the “form and proportion” of this move up into the high and I saw on a daily that we had some more “count” to go and a projection smacked us right into the high (for now, it’s all probability)I realized my ego got in the way here, putting something out like “chart of the year” … I can’t stand when NFL or NBA players make a big deal out of play … why would I fall into that trap? my apologies.

that being said, this is a pretty big target zone so I do think we need to take this top seriously. however, a REAL change in trend would be a MONTHLY CLOSE BELOW 600 as shown below on this DAILY NFLX chart.

in order to fully understand the SRC or Signal Reversal Candle please pay attention to the chart below:

as you can see above, the SRC is a MONTHLY close below 595. a REALLY conservative play … however, you could do an intraday 60 minute SRC or daily, weekly, etc. it all depends on your risk tolerance.

perhaps a BIG pullback is in the works for NFLX?

IWM … read this post to get your mind blown … if you want

last post on IWM: https://bartscharts.com/2021/08/30/iwm-and-another-upcoming-chat-w-jc/

holy smokes .. the underlying BULL market that we have right now is pretty amazing …

I went on to chat w/ JC of @allstarcharts.com a couple months ago and we talked a LOT about IWM. we went over the MATH of why it stopped where it did and, folks, the math on multiple time frames and multiple techniques was PERFECT. he still hasn’t “published” our podcast – maybe because he knew it was going to break out? 🙂 who knows …he’s a lot smarter than I am but still a GREAT dude. follow him peeps!

and guess what ..IWM pattern, it wasn’t WRONG but it certainly wasn’tRIGHT.

BOOM- we broke out today so guess what? I have to get my eraser out and start over and, unfortunately, that’s happened many many times. 🙂 why should I be surprised? well, keep reading.

the market went up to our target area and hit in/around 233. as we describe above, in an irrationally exuberant bull market, WAIT for the SRC and the signal reversal candle was finally hit the week of my birthday (note a fun fact – the HIGH on crude oil hit on my birthday 7/11 – shown below- synchronicity?)

the HIGH on Crude Oil on my birthday

I show the Crude because of my birthday but also because of the PROBABILITY of what can and can’t happen when a TON of math comes together.

folks, MORE math came together (see the last post linked at the top) on IWM .. so only being human I EXPECTED it to dump and the rest of the market to, well, at least follow along … ? unreasonable?

well there it sat … and sat … and then an SRC

Here is the SRC for IWM:

SRC for IWM

more than likely, a short would have been initiated and we would have been stopped out ….

end of story – right? well from a P+L perspective, yes. folks that is ALL that matters.

from a form and harmony and balance perspective this IWM continues to amaze me.

please see the chart below:

if you have been reading the blog you know we had been targeting this price zone for a while and when it hit you know I (most of the time) say WAIT for a signal reversal candle because it’s probability – right? of course … so sometimes the pattern will act as support or resistance (this is what IWM did for 233 days but ultimately it failed.) and sometimes it will work and inflect to your favor or it EXPLODES continuing the trend … it’s all probability. but I think I’ve shown that “stuff” happens around the patterns – fair enough?

what’s key for me, even though we are dealing w/ probability, is I KNEW there is still a “beat” or “rhythm” to it … that’s why the patterns help you manage risk, right?

so, at the end of the day today, I saw that the market was up again and I thought … “I bet (no kidding, I KNEW this was the case in my gut) we made the PRICE high the same many days (TIME) ago … “

there you have it above … 233 calendar days ago the price HIGH was hit and is it any coincidence that we BROKE OUT when PRICE equals TIME? NO – that is how it works. our job is to figure out what the key master has in store for us regarding the harmony and balance of what we are dealing with … it’s all based on math and music but it’s also a multi dimensional chess game …

why would I type that last sentence?

well, 233 is a Fibonacci number as shown on the chart above … the Architect, what a sense of humor she has ….

Bart

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