as you can see from below the Homebuilder Index (XHB) has broken out most recently from the congestion area highlighted in the link below and now has a target of 38. Not bullish or bearish – just a pattern guy. so, as you can see below, we are finishing a PATTERN but what about the top 10 holdings of this ETF?
CLIFF NOTES: all top 10 XHB components have SELL PATTERNS. So, IF these work then they will weaken. IF NOT then this ETF should make new highs. We know our line in the sand …
Here are the top 10 holdings of XHB in no particular order – all are showing SELL PATTERNS
CLIFF NOTES: can see why this current level is important using Adams Pitchfork Method. The Head and shoulders shown in the post below never materialized by breaking the neck line and we rallied a buck or so higher. Still looking for this to be an “end of move” pattern …
Folks, back in October the post below the two dash lines was searching for a low to be in place on the AUD. The form and proportion were just about right. However, w/ the big move in crude, the interest rate extravaganza and the a whole host of other fundamental reasons the real issue is the PATTERN level didn’t work … it went approximately 300 pips below. HOWEVER, the overall thesis that the Aussie is bottoming versus the dollar still holds true. It’s showing some nice strength tonight …would love to get a very nice pullback to go long in/around these levels.
Updated charts below:
Note the monthly RSI levels … the BIG MOVES UP occurred right where we are sitting. Also, a case can be made that 4 is complete and we are going to new highs …
last time I checked the Aussie wasn’t part of the US Dollar index … so, watch this one closely. At a minimum we are completing/completed an A and a nice B wave up is to occur.
let’s just get on the right side of the trade and right now that looks like bullish entry for the AUD vs USD.
The Aussie has been correcting for a while and, folks, the move down from 1.100 ish certainly appears to be corrective. What does that mean? We are “at” or “near the beginning of a multi year advance that will take out the high July 2011. Here’s the monthly picture …
TILT … everyone is talking about US Dollar strength – yes, but they are talking about the dollar index which the Aussie isn’t even a part of it. Or if it is the weight is negligible so in this case we have to take this pair as a single entity – not a weighted index.
here’s the weekly:
note the 3 waves down … that is the key. it was not a 5 wave movement. has this correction been complex – yes. But it’s falling right in line w/ a double three labeled w,x,y.
and, the daily, shown below, just completed 5 waves down. While it would be perfect symmetrical three drives to a bottom is we go down and attack 8400 – there is a good case to be made that a low is in place. we’ll have to wait for an intraday pattern to appear …
and finally, we’ll see the move down on a 60 minute chart is a clearly defined 5 waves.
so … there ya have it.
what to do? Well, our thesis is we are beginning a multi year move to take out the old highs from 2011. IF THAT IS CORRECT THEN WE ARE IN the first stages of the advance. the first move up (wave 1) will complete and then wave 2 will come and, more than likely, w/ a vengeance because everyone thinks the “old trend” is in play. That’s the BUYING OPPORTUNITY and price should never go below the low that was formed last week.
had some fun on @seeitmarket (www.seeitmarket.com) after the CES show in Vegas – http://www.seeitmarket.com/wynn-resorts-stock-chart-oversold-broken-14006/
W/ the engulfing nature of the candle from last weeks actions, a case can be made for a FLAT correction being complete and coffee resuming it’s move up.
also, here’s an updated chart of SBUX and note the BUTTERFLY SELL PATTERN that has completed.
here’s the relative strength chart of coffee and SBUX. Note, the ratio has also finished correcting and that “should” put pressure on SBUX.
my last post on SBUX saw the 73 area as the potential price target to finish a parabolic run. it worked for almost a month but ultimately was defeated.
so like any good chartist it was “erase” and back to the drawing board.
one would think, as I did, that the price of coffee would certainly be a pretty close inverse relationship to the performance of SBUX. not making any excuses for my no “economic courses” world but if the price of coffee goes up or down then wouldn’t that affect profitability? here’s the chart …
Coffee (line) and SBUX (candles) plotted together …
I can look at this one till I am blue in the face and I really can’t see any correlations … in fact, they both took off together for 10 years and, back in 1997 as prices came tumbling down (as now) SBUX just kept rising. this confused me …there has to be “some” correlation doesn’t there?
so on this wonderful fall morning it came to me “why not try the relative strength of coffee vs SBUX using ratio analysis (KC #F / SBUX)?” and, well, there it was … when Coffee has LESS relative strength (candles are going down) then SBUX rolls like the Crimson Tide. however, when the price of Coffee starts to outperform on a relative strength basis (the candles go up) then the price of SBUX flips on a dime. Picture paints a thousand words …
relative strength of Coffee/SBUX.
so, as someone who is a pure PATTERN recognition chartist, naturally I want to find the PATTERN on this ratio that will signal a bottom and cause the price of SBUX to crack and, once again, prove Sir Isaac Newton correct that something that goes UP will, ultimately, come down. (read: gravity) This move in SBUX is amazing .. what is even more amazing is noting the ratio support, once broken in 06/2012 (blue horizontal line at bottom right of chart) is when the parabolic advance really began in earnest …
ending diagonal and bullish divergence present for the ratio
there isn’t a clear pattern coming into play as I look at the monthly and weekly charts …standard projection/extension techniques have targets that are (-) numbers and that “dog don’t hunt” so we can use RSI bullish divergence (present), contracting ending diagonal like pattern (present), very little volatility (note the small candles) (present) and the fact that we are coming to extremely important support on the continuous contract (.786 retrace from a monthly node)
Coffee Continuous Contract Monthly approaching major support
if not NOW then, in the very near future, believe 1) Coffee will find significant support and 2) the relative strength of Coffee vs SBUX will bottom and start back up and 3) this will cause the parabolic advance of SBUX to flame out …. it is inevitable.
SBUX potential targets and count that doesn’t break any rules (valid (?))
The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.
Here’s an excerpt:
The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 29,000 times in 2014. If it were a concert at Sydney Opera House, it would take about 11 sold-out performances for that many people to see it.
Folks, what a wealth of information from Andy @seeitmarket …..
Here’ what I’ve been up to – check out the links and all of the amazing contributors:
the Banks … they lead us up and they lead us down. PATTERNS suggest they are at MAJOR resistance and what this means for the overall market: http://www.seeitmarket.com/bank-stocks-near-make-break-point-2015-13986/
IBM … a complete laggard. A case can be made, however, this a stock to own in 2015: http://www.seeitmarket.com/ibm-stock-reverse-higher-2015-investing-13980/
Copper … a BUY has been BULLISH for China and we completed an intraday BUY at the end of the year. Perhaps a nice bounce is coming? http://www.seeitmarket.com/copper-prices-falling-buy-zone-13975/
the DOW … is it going up into 20,000 in 2015? As my loyal readers, you know I was watching the .618 projection from the all time low at 28.48 and it did not hold at all. so, the logical next target is the AB=CD and, folks, that’s up at 20K+ here’s the link … http://www.seeitmarket.com/dow-jones-targeting-20000-djia-investing-13972/
the TRANSPORTS …the AB=CD got crushed. so, perhaps higher is in the cards: http://www.seeitmarket.com/dow-transports-move-higher-targets-13969/
YAHOO – will it stay or will it go? http://www.seeitmarket.com/yahoo-yhoo-sell-price-pattern-important-time-price-13965/
Wanted to do a follow up on some Natural Gas questions that have hit the blog. THANKS FOR ASKING
The chart below is back from August and it showed the completion of a “large” AB=CD PATTERN and then a BUTTERFLY PATTERN appeared and held. The natural flow of things calls for a BUY once a key retracement level is reached. So, we are approaching the .786 level as shown and believe that should be respected.
Additionally, when I do mirror image foldbacks I try to recognize (try being the operative word) the last major correction that happened in the past and then see how that lines up w/ the rhythm/balance of the chart. Some charts below will show that concept: JEC, Silver and the US Dollar.
The “real” reason for the foldbacks is, believe it or not, planetary in nature. It “usually” involves a combination of 2 planets moving in/out towards conjunctions OR a big planet going retrograde. It’s hard to find the right combo or pair so, frankly, I just go w/ what looks good to the eye and then look for a PATTERN and SENTIMENT that makes sense.
First chart is JEC … the first chart was showing the parabolic nature of the move and how it was pretty much done. Now, note the very nice symmetry of the move down from the high. so that “last” move up going from the top and down left to right is EXACTLY equal to the move in the “current” time and the “are we here.” Rest was history …
Here’s SILVER ….buy at 8 and foldback up the big plunge down. Forecast was upper 40’s. IF IT WAS THE CORRECT POINT. We NEVER know …this one worked.
Here’s my favorite on a LONG TERM MONTHLY of the US Dollar. Study this one …this chart below has NOTHING to do w/ the global macro fundamentals and EVERYTHING about the PATTERN.
so where does this leave us w/ NAT GAS? if you look at the chart below, you’ll see the 2.903 level as a key level based on 1) the .786 retracement and the measured move down that completes the foldback. That is what I’m watching….
hope this helps and let me know if you have any more questions.
HAPPY NEW YEAR!
Bart
so far, it’s been a very nice and symmetrical move in Natural Gas futures …
if (the big if) the mirror image is at play THEN either 1) here or 2) a little lower and we should see Natural Gas foldback up the blue arrow shown by the “we are here (?)” in the middle of the chart.
NOBODY believed me when we said BUY Silver at 8 and it could go to 48. They didn’t believe me when they should take profit either…just PATTERNS folks.
So, if this is correct, Natural Gas is getting ready to explode.
the oil complex is in the midst of a deflationary thump BUT do believe it’s coming into a zone of support.
posted for Andy @seeitmarket http://www.seeitmarket.com/correlation-watch-crude-oil-services-loonie-13951/ and so far the $OSX and Loonie have held.
why 50-51 for a bounce in crude:
3 ratio’s – .786 retrace, 1.618 and 1.27 extensions
NOTE the TIME of the oil crash from the all time high is equal to the time from the June high in Crude.
NOTE back in 2007 oil BOUNCE after it had traveled a distance shown by the blue arrow. it rallied 20 dollars/barrel and that same move down in price is right at your ratio’s. Additionally, that “balance point” in price represented the next move into the lows.
so … watch the 50-51 as we approach this crucial level. (note: 48 and then 42 are other targets)
so far, it’s been a very nice and symmetrical move in Natural Gas futures …
if (the big if) the mirror image is at play THEN either 1) here or 2) a little lower and we should see Natural Gas foldback up the blue arrow shown by the “we are here (?)” in the middle of the chart.
NOBODY believed me when we said BUY Silver at 8 and it could go to 48. They didn’t believe me when they should take profit either…just PATTERNS folks.
So, if this is correct, Natural Gas is getting ready to explode.
