Folks, have been sending Andy some pretty amazing work of late. Follow this link: http://www.seeitmarket.com/author/james-bartelloni/
Just sent him over a Agricultural look (DBA, Corn, Wheat, Soybean, Sugar) and how it sure looks like they are going to begin a very strong “corrective” bounce OR start a trend in the bullish direction that could last for a while.
Some pretty significant developments:
German Dax: remember the long term pattern? Well, that level is going to be tested … WATCH AND SEE if it gets thru.
Australian All Ordinaries and AUDJPY – pattern hit on AUDJPY PERFECTLY … a key development to watch to see if the JPY strengthens or not …
CNY (Chinese Currency) – they lowered their rates and … the currency didn’t budge. Something afoot at the circle K.
Japan – NK225 finishing up a nice 3 drives to a top and a 5 wave pattern … could the YEN be ready to strengthen – completely against the BOJ? Hmmmm
Stand by as it’s definitely getting interesting.
Questions to me and make it a great LONG weekend w/ family and friends. Happy Thanksgiving!
you know what, that theory was proven … its’ fact folks, scientific fact. done … no more discussion needed.
so if the physical manifestation of a butterfly can make typhoons happen how powerful are thoughts? thoughts ARE things and EVERYTHING is a VIBRATION so … what IF, just what IF, the PATTERN on the German Dax from the all time low is going to WORK? Somewhere out there for whatever reason the “butterfly flapped it’s wings at the all time low” and set the course for the creation of this wave that has developed. The wave that has developed is a PATTERN and that SELL PATTERN or SELL wave is either going to work or “not develop as forecasted” (willi willi from my flying days)
see the POINT A .. that is where the butterfly flapped it’s wings …energy, vibration, waves, etc. The PATTERN is complete
so, I think (I really don’t know fundamentals or any of that crap) that Germany is important to the Eurozone. I KNOW they have completed a MAJOR sell pattern and basically, they have rallied up like the last time. So, is it time for it to start back down? We’ll see .. perhaps the butterfly flapped it’s wings a lot harder and things explodes to the upside — I do know it’s very important.
rock on, ok?
so, what’s the geometry telling us? well I like to use the first impulse move down (bold blue arrow) to draw the simple squares. You can see where teh key trend line REALLY is so watch closely the two areas labeled.
I’ve shown this technique, successfully, on the parabolic run in IBB, AAPL and others. I’m not going to repeat it here – search on this website for IBB or AAPL and Sir Isaac Newton and the APPLE falling from the tree. But what I’m going to do is go chart by chart to TRY and figure out when the Tv=0 (Terminal Velocity) and it falls like a rock, literally. These types of charts scare me …
I have NEVER seen a parabolic rise that doesn’t swiftly lose 20,30,40,50 % of it’s value .. never.
I have NEVER done this exercise on Nike (NKE) Fact is I like Nike, just bought a pair of running shoes the other day and they employ my daughter at the local outlet mall. But, shoving that all aside – it’s parabolic and that’s just not good.
1. Chart of NKE
note, used the “line chart” so I could fit the history of the stock into the screen and scaled it down considerably. using a line chart helps you.
2. Pick 3 points, that make sense to the eye, and calculate a circle from those 3 points like the dude did in the video link below
Use this link from geometry we learned in elementary school: http://www.youtube.com/watch?v=GUgMOzwCBEE
Or “GOOGLE” – “how to make a circle from three points …
3. Here’s the picture w/ the gravity center and the arc shown. I don’t like it, you’ll see why. So have we done something wrong? No, just not using the right grid. Do you see how the all time lows did their own “mini” parabolic run back in 1997? So, decided to shift up the low horizontal grid line to the “next” low and … look two charts lower. Please pay attention to the annotations on the chart.
Note, by using the all time low to extract the radius from the gravity center it was not a good fit to the eye or thru geometry. Scratch this one …
this grid workds
4. Now, we need to catch the highlighted area w/ an expansion of our 1.0 arc. This expansion is not arbitrary .. it will be derived from sacred geometry ratios, equal octave scale of music and Fibonacci. When we catch this point we then look at the parabolic extreme point at 3 o’clock on the arc.
what you’ll see is I used the musical ratios: 1.12248/1.1892/1.2592.
the green ratio could be it … so what else can we try?
5. Elliott Wave perhaps but in log scale …because that allows us to see long term waves better, that’s and, also, take it out a scale (monthly) to remove most if not all of the noise.
so looks like a nice 3 is in progress perhaps … I’m having a tough time counting the squiggles on this last wave and if that happens I simply WAIT for a form/proportion to show up. Remember, it’s PARABOLIC right now so it is hard to count …but in the context of being on the right side of the market … would definitely look to take profits at the first sign of a weekly signal reversal candle. so, if it’s hard to count then, perhaps go back to the normal scale?
6. How about bearish divergence on ALL of the DAILY, WEEKLY, MONTHLY? (remember his is real time so I’m not sure if it is present or not)
It’s kind of present but not screaming at me ….
7. take a look at volume – it’s holding in there but note the steep drop off the last 4-6 weeks. hmmmmm
8. one last … threw a 50 day simple moving average on their to look for “reversion to the mean” – basically are we at an extreme from the median of the 50 day? YES ….
so, in conclusion, we are parabolic and another 10% move up – really quickly – is not out of the question. Believe the first hint of a SIGNAL REVERSAL CANDLE (weekly) would be time to take profits and, remember this is 3 of 5 (if my count is correct) so I will be looking to BUY NKE after the inevitable pull back in any parabolic.
was too early on this count, as you can see below. Now, we are approaching some very stiff resistance as shown. another target is 295. all that being said, still believe we are in the 5th wave advance here ….
03/31/2014
CLIFF NOTES: very strong probability that a 5 wave advance is complete on BIDU
Here’s the last look at BIDU working on a 188 target for wave 5: http://bartscharts.com/2013/10/21/the-ray-charles-count-on-bidu/
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.
full disclosure … check out this chart below. this is where I was stopped out of a LONG USD vs the JPY.
this game is really hard, if you make it. As my mentor and friend Larry Pesavento says – “trading/investing isn’t hard, but it sure isn’t easy.” I was pretty cocky 7-8 years ago when I was sitting in Larry’s trading room. I asked him “what do you consider a good month?” He sat back, looked at me and stared me directly in the eyes and said “if I make 1 cent.” I laughed … little did I know that one sentence was the most profound statement I would here ….. no kidding.
so how do you get in this move … ? well, you WAIT for the opportunity to come to you. If you look at the line in the sand – 10/28/2011 – you’ll see the “SEED DNA” that started this move. The entry to get in the move occurred roughly a YEAR later …. the triangle shown below was 6 months in the making. the consolidation was 6 months in the making …
so, let’s take a step back and simply allow the YEN to come to US.
where are we now?
the low on 10/28/2011 was a big old 5 waves down from the HIGH in 1972. We have TONS of room to go ….
sure looks like we are in the 5th wave of the first wave UP in this market. So … I just can’t go LONG $$$ vs JPY yet. Have to wait ….here is the picture
I see a 5th wave in progress w/ some serious thrust telling me this 5th wave is going to extend. Note, used the POWERFUL technique of the 1/8 subdivision (work w/ me – it’s musical and based on sacred geometry) and we just hit the .375 (3/8) subdivision. This was taught to me by Mike Jenkins of http://www.stockcyclesforecast.com) and is one of the most powerful projection techniques out there …
so, now, we take a look at the Nikkei 225 …. a 3 drives to a top is present:
so, why are we doing all this work? Well here’s the cliff notes folks, as described by mentor and friend Larry P:
Last Friday, the BOJ unexpectedly boosted its annual target for expanding the monetary base to 80 trillion yen from 60 to 70 trillion yen while Japan’s Government Pension Investment Fund, which holds about $1.1 trillion in assets under management, increased its allocation to Japanese and overseas equities to 25% each, up from 12% each, and cut down its domestic bond allocations to 35% from 60%. [BOJ Boosts Japan ETFs]
On their own, each announcement would have been likely to drive some new cash to Japan ETFs. In tandem, those headlines have stoked a massive amount of inflows to an array of Japan ETFs, including the largest listed in the U.S., the iShares MSCI Japan ETF (NYSEArca: EWJ ) .
Since last Friday, EWJ, the largest single-country ETF, has added nearly $560 million in new assets while volume has frequently been triple or quadruple the daily average, according to BlackRock data.
This unprecedented move places the Japanese people in a precarious situation. Should this SELL OFF it most probably will bankrupt the country. Frankly, nothing surprises me these days but something happened very unusual in the Japanese market this week. Immediately following the announcement the ETF for Japanese shares E WJ spiked up as the Nikkei Dow was rising. Then after one day it collapsed and went below the September lows.
This is highly unusual because this should correlate about 90% of what happens with the Nikkei Dow. Everyone that bought these ETF shares is now at least 10% or more underwater and as you can see by the three drive to a top pattern in the Nikkei Dow on the long-term weekly charts it can get quite scary from these levels.
Folks … batten down the hatches. The BOJ went “all in” and the outcome (I DO NOT know which way it will go) will be incredibly important on the global stage ….
so, in October of 2013 (yes, more than a year ago) I was beating the drum of a very important top forthcoming top/target zone in the IWM. (An ETF of the Russel 2000.) See below the double line area …
The zone depicted from that post in October 2013 is below and , yes, the IWM respected the zone and corrected roughly 12-15%. A “decent” correction so to speak.
so, as of today, as the DOW and S&P recorded new intraday highs, the Russell (and, OBTW, the big daddy $NYA) are stuck at the.786 retracement.
Folks, clear and simple … we are at checkmate w/ regard to the stocks. I’m biased that “the band plays on” and we climb the deflationary ladder of chaos for, perhaps, another year OR we stop in/around here (next week perhaps) and start down w/ a really good and scary shakedown.
but before we try to “guess” what is going to happen next … go put some Pink Floyd on Google Play, pour a glass of wine and just walk w/ me down the musical component of the stock market … don’t try to figure out the WHY or the WHAT and,well, completely throw this away as bullshit if you want.
I don’t care … but the bottom line is the ENTIRE THING HAS BEEN FUCKING PERFECT in regards to the world of music. Bada Bing Bong Boom ….
SQUARE ROOTS RUN EVERYTHING:
.786 … just a number
but one of the most important retracement numbers out there. and, contrary to what people say , IT IS NOT A FIBONACCI NUMBER!
it does derive from 1.618 (which is the golden mean) but here’s the deal … it’s a musical derivation of the Fibonacci based golden mean…why you might ask?
1.618 …
square root = 1.27
1/1.27 = .786.
the frequency of a string is INVERSELY PROPORTIONAL to the SQUARE ROOT OF its weight (length)
additionally, the frequency is DIRECTLY PROPORTIONAL to the SQUARE ROOT of its tension ….
SQUARE ROOTS AND THEIR INVERSES FOLKS !!!!!
so as we look at the TOP in IWM … 121 (hello a NATURAL SQUARE 11*11 = 121) we can see WHY the puppy stopped in/around 104. TILT — HUGH?
121 square root = 11.
11-.786 = 10.214
10.214^2 = 104.32 (PLEASE LOOK AT THE CHART BELOW AND NOTICE THE CLOSES AND OPENS DENOTED BY THE LIGHT BLUE LINE) – THAT LINE IS DRAWN AT 104.
OK Bart … that’s kind of cool. But, for one moment don’t even tell me that it was a 104 calendar day correction from the high at 121….!
all time high 07/01/2014
add 104 calendar days: 10/13/2014 – please see the chart.
folks, that was the EXACT close and the OFF THE IWM went …
so, what the heck does all this mean … as my wife likes to tell me — give me the CLIFF NOTES.
1. this ZONE depicted is a MAJOR pattern from the all time low.
2. the .786 retracement from the 121 high has held the market from going higher
if we lose this thing to the upside THEN it could cook off in a sling shot parabolic move ..
3. the MATH shown is simply to show that, well, it was PERFECT in PRICE and TIME and therefore the subsequent move up was 1) expected and 2) makes sense.
4. IF LONG – in the context of this amazing run in the Russell 2000 – I would just simply hold it and roll w/ it .. HOWEVER if we break that 104 level then cut it and bail.
5. If SHORT – then watch for a WEEKLY (tomorrow) close above the .786 and if you get a graceful exit on Sunday Night/Monday morning get ready to cut it and get long for a good year or so as this puppy launches.
Last thing … I HAVE NO IDEA WHICH SCENARIO WILL PLAY OUT ….
email me if you have any questions …
I just want to make sure you, my bad ass readers, have a clue as what I’m trying to convey.
At a minimum, you can tell your significant other to leave you alone, put some Pink Floyd on and enjoy a glass of wine w/ some square root stuff ….
B
measured moves are powerful tools and on long term charts they are very useful for forecasting price moves. take a look at the chart below … the BLUE arrows are the lengths of the bull moves in the IWM. appears the current move will converge nicely in/around 113-114. Then, since we are all working w/ probabilities, what do you think the probability is that we find stiff/major/topping (?) resistance in around that area…? if that doesn’t stop it then watch 120-121 … either way we have the POTENTIAL for, at a minimum a 6th month correction?
last thing is some very easy time study … note the TIME it took for the first blue arrow to go up…now look at the TIME of this move that began at 34.
we have a convergence of PRICE and TIME in and around here … just saying.
IWM price and time coming together here/now or soon!
In the market, it happens all the time. The same PATTERN in FORM is playing itself out – from a fractal perspective – on a 5 minute chart and on a Monthly. It’s actually pretty amazing to see … trust me, you won’t see them w/ the mess of technical indicators that clobber technicians screens. Clear your chart and sit back and say “show me” 🙂
anyway, this AM, went to LOG scale (very powerful on long term charts to help see accelerating rates of change … and it’s also a very powerful way to see PATTERNS. I saw the corrective move and, well, see the chart below. the SAME FRACTAL corrective pattern is completing.
I am wrong below 12. I like 14 ish.
SILVER FRACTAL
I promise this isn’t going to be a mathematical treatise on the math/geometry behind fractals. We’re going to go down the rabbit hole, slightly, in order to 1) get an understanding of what a fractal is and then 2) relate the current market environment using the Down Jones Transports. We could use more, but that would 1) take too long and 2) I ask that you defy human nature and do the work to prove for yourself. I’m more than happy to answer any questions on a separate thread.
This is from http://mathworld.wolfram.com/Fractal.html : “A fractal is an object or quantity that displays self-similarity, in a somewhat technical sense, on all scales. (my bold) The object need not exhibit exactly the same structure at all scales, but the same “type” of structures must appear on all scales. ” For those not familiar w/ Elliott Wave Theory this is where the “form and proportion” comes into play ….
famous fractal picture ..note how from the LARGE to the SMALL the PATTERN repeats!
For the moment, direct your attention to the far right of the picture above. The large object is the beginningof the PATTERN and produces the form/geometry of all the fractals that will be “spun out” to the most infinitesimal scales. If you spend a modicum of time studying the picture you’ll see that the large “seed” pattern to the right is repeated over and over and over ….
Our thesis is, w/in the traded universe of securities, that PATTERNS do exist and they occur on different time frames and scalesbut, ultimately, these patterns do repeat. W/ an understanding of the mathematical and geometrical properties present, an edge can be produced to put probability in our favor. Remember, an edge is simply a higher probability of something occurring than not occurring. The patterns DO NOT work every time, but over time they do produce and edge. If we can wrap them into the context of the circle of life (fixed income, equities (global and CONUS), FX, commodities) then we can potentially make accurate forecasts of inflection points.
Let’s go back to the picture above … the pattern had to start somewhere. As discussed, the pattern started to the far right. W/in the world of traded securities we use the IPO date or, say, an all time high or low to begin forming the pattern that all smaller fractals/patterns will respect. That is usually from a monthly chart or an .xls spreadsheet w/ the historical data from inception. The patterns that exist in the entire history of this data will, ultimately, make their way to the tick time frame.
So, w/ regard to say the Dow Jones Transports we know that the all time low was 45.59 on 10/29/1896. Additionally, there have been multiple posts over the past couple months looking for the 7580-7620 area to be a PATTERN COMPLETING. This pattern, for all intensive purposes, has completed. And, while it did not hit the pattern level exactly, it did come w/in .003% after 42,281 days. Perhaps slippage, perhaps my lines were too thick … w/ the 5% down day after the level was hit, I’ll say it’s close enough for government work. Here’s the latest post:
The PATTERN that completed was a basic measured move and using the seed of the pattern from the all timelowwe were then able to REPRODUCE that measured move and PROJECT where this measured move would complete a similar move and produce a PROBABLE area of major resistance. Thus far, the market respected this area.
What does this mean …? Well, again, in the context of the fractal pattern present it means we are correcting a pattern that took 42,281 days to complete. So, the probability of a “large” correction is favorable. HOWEVER, in the context of the history of the Dow Jones Transports this could be an amazing BUYING opportunity but not after a 40-60% percent correction. If we are a day trader or a daily swing trader then this seems catastrophic. However, if we keep in mind that a PATTERN has completed that is 114 years in the making THEN we realize in the history of the Dow Jones Transports a MONTHLY swing low has never been broken. Last thing … this PATTERN could fail to the upside and then, well, it’s off to the races. The power of the PATTERNS is we know, almost exactly, where the pattern completes.
So … PATTERNS exist, some BIG PATTERNS have completed across the circle of life and, not a bullish pattern is present. The probability is that the market will respect these LARGE PATTERNS and cause a correction that in the minds of the twitter/facebook/”have to have it now” world will seem crazy and chaotic. But, if you step back and take a moment to respect the historicalcontextof this moment, you can 1) adjust your portfolio accordingly and 2) be calm and understand that after this correction an even bigger pattern is now being formed which might be and AMAZING BUYING opportunity …
That will be hard to do … when, this time, blood is truly in the streets. It’s all probability ….
