Energy is usually the last shoe to drop
Posted on April 20, 2014 Leave a Comment
CLIFF NOTES: below you will see a butterfly top coming into play in the XLE. 98 and/or 110 should act as major resistance. Let’s take a look at the potential set-up’s coming into play:
- DJ Transports have completed a MAJOR BEAR pattern w/ the AB=CD completing from the late 1800’s.
- DJ Utilities have a MAJOR BEAR pattern just a little bit higher that should act as major resitance.
- THE XLF (proxy for the financials) has completed a WEEKLY BEAR pattern … the banks usually lead us UP and lead us DOWN.
- Parabolic Charts have shown the first sign of weakness (IBB, GOOG, PCLN, etc, etc) which usually results in weakness. The Social Media darlings have “cracked”
- Multiple Long Term 5 wave counts are complete on some very important big cap stocks
- And, from a cycles perspective one of my mentors, Mike Jenkins at http://www.stockcyclesforecast.com wrote this:
The biggest cluster of cycles we will face for the next decade hit from April 14 to 23rd, but
not really ending until the solar eclipse on the 29th. In my life I’ve never seen anything like it
except perhaps for 1974. My guess is a Middle East War or major stock market collapse, or
major earthquake. I would be extremely defensive until we get to the May 2nd to 5th pivot.
So, the band can continue to play on but let’s trade what we see … the XLE is important because it is usually the last to top in a bull market.
With that in mind we now present a BEARISH BUTTERFLY SELL PATTERN as shown …
I left the background of the chart black for Easter Color affect …
We have been watching this target per this post: https://bartscharts.com/2013/09/15/part-iv-sp-and-energy/
Stay tuned as this market is topping (has topped) folks and w/ the amount of evidence being shown, it’s time to seriously get defensive and take profit or be in cash. Once these patterns complete …
Happy Easter — Bart
Dow Jones Utilities Long Term (1942) Price Pattern
Posted on April 19, 2014 2 Comments
CLIFF NOTES: major target appearing on Dow Jones Utilities at/around 573. Definitely the stronger of the Dow components but 1) monthly divergence is presenting itself, 2) a possible 5 wave (monthly) count completing, 3) THE AB=CD pattern from the all time low in 1942 is a little higher …so, believe this is the most important index to watch over the next couple weeks.
this never gets old …
Posted on April 18, 2014 Leave a Comment
CLIFF NOTES: I have NEVER taken an econ or business course in my life. I wouldn’t begin to even know how to look at anything that has to do w/ the fundamentals. I am not saying that fundamentals (CFA) aren’t applicable or don’t work or anything like that … I am only saying I know NOTHING about them and I look at the market ONLY threw the lens of numbers and patterns. Quite frankly, in my mid-40’s, I’m 1) too lazy and 2) not smart enough to climb the wall of the CFA or MBA in Finance.
So, I fully acknowledge that trading the market based on sacred geometry, musical theory, square roots and their inverses, geometry and fibonacci (note I put that last) is not necessarily in the main stream. Come on … SPOT FX is a 3-4 trillion /day market. At any given time 1000’s if not 100,000’s of computers, eyeballs and mouse clicks are buying and selling. And w/ the massive flow of funds on a global basis I’m going to pull the trigger on some numbers coming together based on a $50/month charting package in my pajama’s here in Leesburg, VA? That is crazy …well, for those that know me, I am a tad bit off the beaten path.
Full disclosure, in order to step up to the plate and take the trade I consumed the theory of “why” these numbers and concepts worked everywhere else in the world. And, you know what? These PATTERNS are everywhere, the same NUMBERS that govern these PATTERNS are present everywhere and since EVERYTHING is vibration then perhaps the market is also vibratory?
Let’s take, for instance, JPM. I know JPM is a big company and I know that they do “stuff” w/ Finance, Banking, etc. And, that’s about it. In my mind, I only see “J P M” on the top left but other than that I just look at the PATTERNS:
I presented this and a couple more charts at the MTA Conference in 2009 as an “Emerging CMT” –
JPM at the low
I think the PATTERNS are the holy grail … because they work EVERY TIME. TILT …? Are you saying they are perfect? YES – they are perfect at letting you know where you are wrong so you can manage the risk each and every time !!!!!!
To put this in context … let’s visit a book that is necessary in every investors library. Mark Douglas ‘s Trading in the Zone
- Anything can happen
- You DO NOT need to know what is going to happen next in order to make money
- There is a random distribution between wins and losses for any given set of variables that define and edge
- An edge is nothing more than an indication of a higher probability of one thing happening over an other.
- Every moment in the market is unique.
Here is my edge, which never gets old:
Have a wonderful weekend w/ family and friends …
B
S&P Cash updated
Posted on April 16, 2014 Leave a Comment
CLIFF NOTES: remember, this has been an amazing 5 year run. with multiple classic patterns completing on a Monthly basis, parabolic charts along w/ rotations from the institutions I favor a continued corrective move. therefore this chart is provided:
And the band played on … ?
Posted on April 10, 2014 2 Comments
the band on the titanic
CLIFF NOTES: couple days ago, posted the “chart of my lifetime” and it showed a very long term pattern completing on the Dow Jones Transports:
We did have a break down after levels were hit and, on an intraday basis, a 5 wave count down can be seen. The BIG QUESTION: is that the top of a big correction or resumption of a bear trend? Who knows .. it was a pattern and they either 1) work or 2) don’t …so, to put it in context I have attached a long term MONTHLY chart of the S&P cash and show the POTENTIAL PATTERN (bearish) at play and then go all the way down to a 5 minute chart to show how the lower time frames might be giving us a warning of what is coming OR not ….
either way, it’s all about the swing low and STRATEGY of either 1) taking profit or 2) moving stops up or 3) trying to get short … believe the charts below can serve as a road map.
one last thing … keep in mind the past couple months of charts. not ONE has shown a BUY pattern and 5 wave counts are everywhere (FB, AMZN, LNKD, BIDU, etc), parabolic charts are everywhere (PCLN, TSLA, IBB, GOOG, etc) and indices are completing all kinds of patterns (SELL) on decreasing volume. Not to mention there is absolutely NO FEAR in the market and EVERYONE surveyed is bullish. Margin debt is a big deal and the geo political environment is always a big deal … folks, it’s time to be very prudent in allocation, stop placement (if long) and for goodness sakes don’t listen to the talking head TV pundits …
WMT / SPX ratio revisted
Posted on April 6, 2014 Leave a Comment
CLIFF NOTES: support found in the relative strength of WMT/SPX. When this ratio goes UP the stock market goes down, when the ratio goes DOWN the stock market goes UP.
In the world of ratio analysis we are looking at the relative strength of something versus something. This has nothing to do w/ the RSI. If the numerator is BIGGER (more strength) than the denominator then the ratio goes UP and vice versa. This does not mean that the individual securities being compared will not go up or down. Just they should go up or down based on the strength or weakness.
The concept behind the WMT/SPX ratio is one of volatility and risk. The only thing I can say is to look at the chart below:
WMT/SPX ratio w/ the S&P (blue line) overlaid
when this ratio hits a bottom the market tops and vice versa. now, we have been watching patterns get hit and work for a time but then fail (BUY patterns of the ratio) and, most recently, we hit another pattern and the ratio has shown strength and, well, the S&P has shown some weakness. Also, note the new highs in the S&P were NEVER confirmed by new lows in the ratio. per a couple posts ago – it’s all about the swing low – so watch weekly swing lows. Until they are taken out, this band can definitely play on. Guess it doesn’t matter that the band is on the Market Titantic.
Just bringing up a simple technique to look for POTENTIAL correlations that most would not consider …
Palladium and NASDAQ
Posted on April 6, 2014 Leave a Comment
Cliff Notes: noted below is that Palladium and the NASDAQ do move together, but at major inflection points there is some lag. After the lag, they sync up nicely and move up and down in similar fashion. The past 4 years have been highly congestive for Palladium …something that (obviously) wasn’t the case w/ the NAZZIE.
I have attempted to label a potential count on the monthly Palladium chart. Either way I look at it, believe we are in the final stages of a final move up. Expecting the .786 (monthly) to be targeted resistance. Key here will be to watch for weakness in Palladium if the NAZZIE starts to roll lower.
Silver update …
Posted on April 3, 2014 Leave a Comment
for review, here’s the past Silver work …
https://bartscharts.com//?s=silver
CLIFF NOTES: complex correction unfolding in (4) – waiting for the 14 level to BUY on Silver. $$$$ question – was the high up in/around 50 a 3 or 5? Not sure..either way 14 is a pattern.
Spot Silver Weekly
the most important chart in my lifetime
Posted on April 1, 2014 12 Comments
CLIFF NOTES: the most important pattern in the history of the US stock market was hit today. Period.
- all time low on Dow Jones Transportation Index was 49.59 on 10/29/1896
- that low when used as the key node for retracements was responsible for the LOW in 1987 (.382 retracement ), the LOW in 2003 (EXACT 50 percent retracement) and the LOW in 2009 (EXACT .618 retracement).
- it was also the beginning of the projection for the high in 2007.
- now, currently, the 1896-2007 leg is projection to an area EXACTLY to where we close today …additionally a 1.618 extension from the 2007 top is at the exact same area.
folks, I incorrectly assumed that a top had been made in the transports when we went down 4% in one day. figured some slippage or something like that. well, it kept going up and, guess what — it went up and smacked (today) the ONLY PATTERN that can be complete using the all time low.
the market is so beyond thunderdome that I expect it to get crushed and the band will simply play on and on and on …but the prudent investor, trader, institution would BAIL AT THE FIRST HINT OF A WEEKLY SELL SIGNAL …
one last – these numbers we are dealing w/ have their genesis from the all time low in the Dow Jones Transports some 42887 days ago. what does that mean? well, it’s a big flipping pattern that completed today is what it means…you can argue if it takes into account inflation or stock splits or any of that other stuff … none of that matters. Look at the chart and there right in front of you is the retracements and projections.
that 49.59 has been responsible for EVERY major high and low in the history of the Transports …
Dow Jones Transports 1896-2014
Bart's Charts 