Inflection point for bearish or bullish EEM / FXI now
Posted on August 30, 2014 Leave a Comment
August 30, 2014: the CLIFF NOTES is we are at a crucial point for the EEM, FXI and Copper. Patterns suggest a bearish stance is prudent.
The bottom line is the neckline shown in FXI and EEM did not break and a very strong rally has taken place. That being said, BASED ON THE VERY BEARISH COUNT OF COPPER ON A LONG TERM BASIS, believe the EEM, FXI and Copper should start back down again. The charts will show the PATTERNS. Right now, I remain BEARISH on the FXI and the EEM because of the LONG TERM TOP in COPPER. Note, divergence is present in the recent price action. So, even thought they (FXI, EEM) have been linked very strongly to Copper, this linkage could be broken and they are now decoupled. With recent price action this is a distinct possibility. Let’s see if the patterns shown on EEM and FXI fail before we come to this conclusion.
note the CLOSE correlation of Copper and EEM for a “pretty long” time
EEM sell pattern …
FXI sell pattern complete
Here is the bottom line of these markets (EEM/FXI, COPPER) – If the point labeled 5 below was NOT the high (but a little higher on copper around 5 is the actual target) then these patterns will fail and we’ll see another move higher and I will update new targets. RIGHT NOW – behave/manage risk like the 5 on the chart below is 5 – and folks it’s a long term 5 – then the EEM, FXI and Copper securities should be starting down in/around here. DOES THAT MAKE SENSE? Enjoy the Labor Day weekend w/ family and friends.
please see this post to see why the high in copper is so important: https://bartscharts.com/2013/12/20/the-copper-script/
note a POTENTIAL for an ENORMOUS top in place for Copper 1,2,3,4,5
one last, note below the relative strength RATIO of EEM / SPY. Since 2010, on a relative basis the EEM has been getting smoked by the S&P500 as a whole. Also, note that the .618 retrace supported, for a while, but the broke and is now the REASON for the resistance. A little lower (blue shaded rectangle) is a NICE target to potential watch for a flow of funds into the EEM. Would hold off for now BUT do watch closely as we did break above the median trend line (like in the end of 2012 – which was defeated – blue arrow) and we should start down now w/ the SELL patterns present.
Relative Strength of EEM / SPY
Rock on, ok?
Bart
March 13, 2014:
CLIFF NOTES: the move in copper should not be surprising // we are correcting a multi-decade 5 waves up complete. This has shown to put pressure on emerging markets and china. All according to the script.
if you would like to search for “copper” on this blog you will see that we have had a bearish stance for a good couple of years. A strong case can be made that Copper finished a multi-year 5 waves UP and is now undergoing a potentially very violent correction. if you also click on this link you will see the correlation between FXI (chinese ETF) and EEM (emerging markets ETF) and Copper : https://bartscharts.com/2014/02/01/copper-and-the-emerging-markets-eem-etf/ also here are the highs and lows in Copper: https://bartscharts.com/2013/12/20/the-copper-script/
The most recent breakdown in copper does not play well for FXI or EEM.
Social Media Strategy ($SOCL)
Posted on August 29, 2014 Leave a Comment
08/29/2014: social media is REAL, it makes a DIFFERENCE and it is developing business models that are changing the landscape. I believe in this space …however, all that being said – I believe in PATTERNS more! 🙂 So, throughout 2014 I have been watching the $SOCL mutual fund. (please see: http://money.usnews.com/funds/etfs/small-cap-funds/global-x-social-media-index-fund/socl for more detailed information. It’s not equally weighted but it does encompass a nice landscape of the social media space players. As you can see from the charts below a well defined 5 waves up led to the correction into the middle of the year. From there we have bounced nicely right into the zone of 20-21 which “should” offer resistance and another move down. Here’s the rub … the 1,2,3,4,5 was excellent and warned, nicely, of a coming correction. Please see this chart:
NOTE – going to call the last high a 3 and see this move ongoing taking out a new high
see the change …. ? You know what … I’m going to start the count a little early and note that the recent high was 3 so, w/ the rampant bullishness of the equity market and that it can’t even correct 5 % I’m going to put a “new count” out there to make it go up to make a new high. So, if we can get an intraday pattern to BUY why not give it a change. will be watching …
04/28/2014: expect 14-15 to maybe be support but the 5 wave sequence is complete and I consider this space done for a while …My last post on SOCL is below. Missed it by a buck:
JPM updated w/ a SELL pattern complete
Posted on August 29, 2014 Leave a Comment
August 29 2014: when we use PATTERNS on weekly and monthly charts PATIENTS is a must. If you take a look at the thread below, the JPM PATTERN was identified back in November 20013 and then didn’t hit for 4 months. It hit, perfectly, and fell roughly 20 percent. The rally has been roughly 203 months and now we have hit a KEY area for this to be ready for the next move down. Last, remember, 64 is still a longer term target so this PATTERN could fail and attack that number. Either way, we have a Gartley (blue shaded area) and a three drives (black w/ green shaded triangles) after a MONTHLY Gartley and Butterfly Pattern .. probability is this level holds. We don’t know, we know we have a PATTERN and leave it at that.
JPM Daily
March 23 2014: in November 2013 we targeted this area as a SELL pattern:
much like the movie Inception w/ the dream w/in a dream w/in a dream concept we also like PATTERNS to behave in the same manner. a pattern w/in a pattern w/in a pattern. all this does is increase the probability of a pattern working. does not guarantee it will work but does tip probability in our favor.
w/ JPM we have the following:
- Monthly Gartley Pattern w/ a Buttefly pattern inside of it.
- Daily 5 point reverse wave w/ a butterfly inside of it and inside of that butterfly is a 3 drives.
Folks, only probability but this pattern is complete. If we get a daily open/close above 64 I would assume this pattern had failed.
Interest rate forecast …updated
Posted on August 28, 2014 Leave a Comment
8/28/2014: the 2.358 level did not hold. In fact, in the way I look at the market, the PATTERN caused the gap. the gap below the pattern is a big deal. I’ve shown the projection/pattern that “caused” the low at 2.322. right now, looks like our low back on August 15, 2014 will be attacked.
I’m not trying to call for a increase in interest rates or a continued fall in interest rates. frankly, I don’t have clue about the fundamental aspects of what the Fed is doing or not doing. What I do know is PATTERNS and sometimes they work (which they do — alot) and sometimes they don’t. This pattern, below, clearly failed at the level we were expecting to hold. but here is the deal …on the way up w/ interest rates it was CLEARLY 5 waves up … so this means we are CORRECTING and there is, supposed (the operative word) be ANOTHER WAVE UP ….
10 year weekly
8/22/2014 – if you read below you’ll read “my bet is on the TEN YEAR holding this low and starting back up ….” If that is the case then we have a VERY NICE PATTERN appearing on the Ten Year Treasury Yield that has multiple confirmations going for it ….remember folks, this is a 5 minute chart.
also, I have “copy/pasted” the earlier this week post on Jackson Hole and the fixed income structure …
the PATTERN:
- it’s a nice corrective pattern a-b-c. expectation is that “c” is in work and “should” take yields down to 2.358.
- c = 1.618*a right at ….2.358.
- a 1.618 extension of the “b” wave takes us right to ….2.358
- a retracement from the “key” low that we have watched for a while is .618 at …. you guessed it …2.358.
when all of these numbers line up … in this case SUPPORT usually occurs.
make it a great weekend …
5 minute ten year rate PATTERN
one last … I have ABSOLUTELY NO IDEA what Janet Yellen and the FED did this week or what in the world was said in the meeting minutes. Frankly, I don’t care … PATTERNS, PATTERNS, PATTERNS.
CLIFF NOTES: folks, follow this link to catch up on the Fixed Income story: https://bartscharts.com//?s=fixed+income
CLIFF NOTES 2: this is a tough one … the pattern in the fixed income market (30 year) failed and has gone much higher//the pattern on TBT failed. HOWEVER, the long standing target on the TEN YEAR Treasury Yield was hit on Friday. Quite frankly, I didn’t think it would get hit as the 2.4 level provide some nice support and then, ultimately failed. So we are at THE critical level for the rate structure on the 10 year. I’ll stand by my guns this is corrective in nature, but the Ten Year needs to stop here or we’ll vacuum lower and rates will continue to plummet. I also updated the 30 year count to show a potential NEW HIGH if this count is correct. I will be the first to admit that our pattern failed on the 30 year/TBT. In fact, we found the support for the long bond ( https://bartscharts.com/2014/01/04/thelma-and-louis-and-fixed-income/ ) and it was at a very crucial level at the time of that post. It held and since then has rocketed higher (lower rates).
CLIFF NOTES 3: we are at a CRUCIAL CRUCIAL LEVEL …. not trying to be wishy washy as we have to take a stand but I can see the case of either direction. But in order to take a stand and some risk – my bet is on the TEN YEAR holding this low and starting back up ….
CHEERS!
HI, I am fully aware the FED is leveraged beyond thunder dome !!!!
Fractal Present on the Utilities – check it out
Posted on August 25, 2014 Leave a Comment
August 25, 2014:
CLIFF NOTES: please see below to understand the importance of our recent high at 577. The long term PATTERN from the all time low completed. Now, we have the beginning formation of the trusted and true head and shoulders pattern on the DJ Utility Index. Why is this important …? Well, look below at the fractal that existed at the top in 2007-2008. It’s exactly the same PATTERN. So, in a nutshell:
- we completed a major pattern on the Utilities up at 577.
- a head and shoulders pattern is forming the right shoulder, now.
- the same FRACTAL is present at the time, here’s a cool video to show fractals at work: https://www.youtube.com/watch?v=ZVwoYVkg-m4
folks it’s a PATTERN — it WILL work or it WON’t but it’s a PATTERN.
fractal pattern on the Utilities
4 hour chart showing formation of potential head and shoulders
April 05, 2014
CLIFF NOTES: I am a patter recognition chartist. I am NOT trying to be overtly bullish or bearish. Just using this forum to show the PATTERNS that area ppearing.
On the DJ Transports we have completed a MAJOR AB=CD sell pattern w/ a 1.618 extension. That is bearish. It’s particularly bearish because the pattern using the former all time highs and lows. I am also showing the Utilities almost completing a very bearish pattern. Again … heads up folks, these are NOT 60 minute intraday scalping trades. These are MAJOR patterns that bear close watching.
DJ Transports
DJ Utilities
Palladium at major resistance …
Posted on August 24, 2014 Leave a Comment
Cliff Notes: Palladium converging into to major resistance. This is important because it’s a nice little commodity to watch w/ regard to the NASDAQ and AAPL. In order to build the pattern we are going to to go step by step this morning into “why” Friday’s high was important from a PATTERN perspective.
1. First, here’s WEEKLY charts of 1) NASDAQ and Palladium and 2) AAPL and Palladium.
- notice that when palladium broke out of the consolidating triangle, AAPL took off.
- of late there has been a lead/lag relationship at times BUT the overall directional pivot is clear. As Palladium goes, so does NASDAQ and AAPL.
2. When constructing a PATTERN there are three things we do — PROJECT / EXTEND/ RETRACE. In order to keep this post brief I’ll do the basic stuff …
- PROJECT: note in the two charts below we have 2 “basic” projections coming into the same area. That warns of resistance.
Palladium 1.618 Price Projection
- EXTEND: note, we used the middle point at 593 for the extension pattern. Also, note 1.68179 nd 1.732 are used. musical note and the square root of 3 …
extension from 2008 (shaded light blue triangle)
- RETRACE: from the all time high we have a .786 retracement. This is NOT a fibonacci number. Here’s the math- 1.618/square root is 1.27 and 1/1.27 = .786.
so … as you can see, we have a bunch of NUMBERS adding up to this being a big level for Palladium. And, while a case can be made that, since these are weekly/monthly nodes coming out, it SHOULD be a hefty amount of resistance. That being said, it could also BLOW RIGHT THRU EM’ and rip higher and higher. It’s just a pattern folks.
Last – the BUTTERFLY PATTERN is present. Connect two triangles together and that’s the butterfly pattern …
Butterfly SELL pattern
put it all together and here is the picture:
PATTERNS complete on Palladium …
here’s a potential count — note – 4 doesn’t CLOSE below 1 so I say “go for it” w/ regard to the count. Additionally, alternate targets provided at little higher. Sure seems like it wants to head up that way … ?
Palladium Count Potential
last thing we check is the “relative strength” using ratio analysis. in this case we have PALLADIUM / GOLD. When we overlay Gold on top of the ration there isn’t that big of a correlation. HOWEVER, when Palladium is overlaid (see below) we can see that this ratio is extremely important. And, what do we have on the ratio – a SELL PATTERN appearing, which, in the past, has caused Palladium to inflect. Stay tuned.
note, palladium prices overlaid and how the ratio is nicely synced w/ the highs and lows.
ratio of XPD / XAU – note pattern completing a little higher
So, there you have it … watch this important relationship, closely next week.
BART
Interest rate forecast …
Posted on August 22, 2014 Leave a Comment
8/22/2014 – if you read below you’ll read “my bet is on the TEN YEAR holding this low and starting back up ….” If that is the case then we have a VERY NICE PATTERN appearing on the Ten Year Treasury Yield that has multiple confirmations going for it ….remember folks, this is a 5 minute chart.
also, I have “copy/pasted” the earlier this week post on Jackson Hole and the fixed income structure …
the PATTERN:
- it’s a nice corrective pattern a-b-c. expectation is that “c” is in work and “should” take yields down to 2.358.
- c = 1.618*a right at ….2.358.
- a 1.618 extension of the “b” wave takes us right to ….2.358
- a retracement from the “key” low that we have watched for a while is .618 at …. you guessed it …2.358.
when all of these numbers line up … in this case SUPPORT usually occurs.
make it a great weekend …
5 minute ten year rate PATTERN
one last … I have ABSOLUTELY NO IDEA what Janet Yellen and the FED did this week or what in the world was said in the meeting minutes. Frankly, I don’t care … PATTERNS, PATTERNS, PATTERNS.
CLIFF NOTES: folks, follow this link to catch up on the Fixed Income story: https://bartscharts.com//?s=fixed+income
CLIFF NOTES 2: this is a tough one … the pattern in the fixed income market (30 year) failed and has gone much higher//the pattern on TBT failed. HOWEVER, the long standing target on the TEN YEAR Treasury Yield was hit on Friday. Quite frankly, I didn’t think it would get hit as the 2.4 level provide some nice support and then, ultimately failed. So we are at THE critical level for the rate structure on the 10 year. I’ll stand by my guns this is corrective in nature, but the Ten Year needs to stop here or we’ll vacuum lower and rates will continue to plummet. I also updated the 30 year count to show a potential NEW HIGH if this count is correct. I will be the first to admit that our pattern failed on the 30 year/TBT. In fact, we found the support for the long bond ( https://bartscharts.com/2014/01/04/thelma-and-louis-and-fixed-income/ ) and it was at a very crucial level at the time of that post. It held and since then has rocketed higher (lower rates).
CLIFF NOTES 3: we are at a CRUCIAL CRUCIAL LEVEL …. not trying to be wishy washy as we have to take a stand but I can see the case of either direction. But in order to take a stand and some risk – my bet is on the TEN YEAR holding this low and starting back up ….
CHEERS!
HI, I am fully aware the FED is leveraged beyond thunder dome !!!!
IBB last bit of juice squeezed out … ?
Posted on August 22, 2014 Leave a Comment
08/22/2014 – had the target below on my “alert” but forgot to post so I’m a couple days late. Recommend closing the long from 240 ish and step aside. It’s been a good ride DOWN and UP. Note, below you will see the “high” print and the geometry behind that short and then WAITING for the BUY pattern to appear and logically get a little more juice from IBB and now step aside. Could it go higher — absolutely. It could also go lower …both sides have been played so don’t test your luck. Ha Ha Ha Ha …
IBB … don’t be greedy, take some off
08/02/2014 – IBB has completed a PERFECT buy (price and time equality) PATTERN and believe the result will, more than likely, give us a good flavor for the rest of the equity market in general. Why? Well, this was a PARABOLIC move and if it keeps going then the “overall” mindset of the equity market might fall in line. Might or might not … anyway, IF you are long THEN the level 246 should be on your mind. If we close below on a daily basis would recommend looking at this position long and hard. IF the pattern works THEN risk is anything below 246. Watch this …
I was asked to take a look at IBB again and decided to re-post the below. Look folks, as much as the below is a work of art I’ve also been wrong on the patterns. it’s all probability and the patterns are always CORRECT? Why, because they LET YOU KNOW WHERE YOU ARE WRONG! And, when you become an advanced pattern recognition trader, IF (the big if) you execute correctly THEN you know that you’ve done everything you can do to manage risk and your not SURPRISED or HAPPY when one works or SURPRISE and SAD when one doesn’t. The PATTERN will work or it wont …off my soap box.
Anyway, take a peak at the below and try to follow me … let me know if you have any questions. Sir Issac Newton is still correct about this thing called gravity.
Everything you learned in elementary school geometry is all you need …
Rock on, ok?
Bart
they don’t come any nicer than this BUY pattern on IBB
IBB Daily showing 1) all time high and 2) the BUY pattern present
CLIFF NOTES (my wife says I’m to verbose and geeky (she’s correct) so she always says “just give me the cliff notes”)
- IBB Biotech ETF is in the parabolic stage. Very tough to develop targets in this type of environment (straight up) but an attempt is made.
- At the first sign of a daily signal reversal candle would look at closing a lot or all of any long position // take a crack at a short – it’s going to be a marvelous ride down
DETAILS:
if you click on the link below, you’ll see “real time” the EXACT high on APPLE using simple geometry we learned in elementary school:
per the title of this post, the basic effect of gravity has yet to be proven wrong. what goes up WILL come down unless we blow thru the earths atmosphere and cruise along in space w/ Sandra Bullock. And, why not? the stock market is NEVER going to come down and it’s different this time ….
but alas, someone has to try … the charts below are an attempt to 1)call for caution w/ regards to this parabolic rise and 2) demonstrate some techniques to obtain price targets. Full disclosure – don’t be impressed w/ AAPL. (see my GOOG posts) It’s simply PATTERNS and some work and some don’t. Most of the time they do …it’s an edge, I believe in that edge and the rest is history. ENJOY …
sure looks like the NASDAQ in 2000 … parabolic UP and then down hard …
All Ordinaries .. wonder why it has that name? Sell Pattern inbound …
Posted on August 22, 2014 Leave a Comment
CLIFF NOTES: if you read this blog then you know the pattern. Just like the German DAX the Aussie All Ordinaries showing a beautiful SELL pattern. It will WORK or NOT .. but here it is …
Aussie All Ordinaries
hey, OBTW, it’s a MONTHLY chart above …
here’s the NYSE Index overlaid on top of the Aussie All Ordinaries — quite the divergence, hugh?
BAC – now that our 17 Billion dollar fine is behind us …
Posted on August 21, 2014 Leave a Comment
CLIFF NOTES: BAC (Bank of America) – not so fast. Here’s the monthly chart showing “why” BAC finally bottomed in/around 2 bucks. I see major resistance coming in 1) mirror image foldback potential, 2) daily sell signal (shown below) and 3) a monthly pattern culminating in around 21-13. Believe anything above 24 is an abomination and … that would be the “long term risk” Here’s the rub … this SELL pattern is one that should be BOUGHT for a long term run in BAC. If our mirror image foldback is correct, we’ll get a plunging low and then BUY it ….
PATTERNS behind the low in BAC
here’s the longer term pattern:
BAC PATTERN up at 21-23
here’s the foldback pattern that would be “perfect” to let us know where we are …
BAC foldback pattern
here’s where I think the “first” sell opportunity is w/ the current structure and move occurring …
if the foldback is going to work THEN here’s an opportunity level to get in on it
Bart's Charts 