JEC, SILVER past fractals and the Pound
Posted on November 5, 2013 2 Comments
Foldbacks are amazingly accurate patterns … they occur on anytime frame and basically give us the “mirror image” of a move … the theory is as they come into an inflection point they will go out of the inflection point the same way. for those still versed in geometry, it’s basically the angle of incidence equals the angle of reflection.
here’s one of many pictures that I have of long term foldbacks in process … it’s a long term chart of JEC (Jacobs Engineering). The first chart shows the geometry of the parabolic move up, the second chart shows price action around the foldback and the third chart shows the result. 
JEC REAL TIME foldback pattern developing
JEC foldback result …
if you go back and study the Silver posts you’ll see that the most recent all time high on silver was just like the above … a mirror image foldback. IF (the big IF) you find the correct balance point then you can watch movement w/ a leading understanding of what to EXPECT (again, only PROBABILITY) Here’s a quick review of the Silver Chart … everything based on the FOLD BACK.
SILVER long term FOLDBACK
price action according to the foldback
so, much like JEC and SILVER we find a nice POTENTIAL FOLD BACK occurring w/in the Great British Pound Chart ….
POUND foldback POTENTIAL
4 hour intra-day look at the pound POTENTIAL fold back setting up
only time will tell if have the fold back working … the great thing from a risk management perspective is they USUALLY only FAIL at the inflection points so a little bit higher on the Pound will tell us a lot.
Here’s past POUND analysis as I continue to try and get short: https://bartscharts.com/2013/10/22/the-pound-gorillas-and-juggling-dynamite/ OBTW ‘best and final’ is still a target so we’ll just have to manage some risk and “scale up” short. Stay tuned …
Fixed Income – TIME is right but what about the price and the underlying trend?
Posted on November 5, 2013 1 Comment
to catch up on prior fixed income posts:
https://bartscharts.com/2013/10/21/plotting-the-next-move-in-fixed-income/
keep an eye on fixed income. the two triangles shown at the bottom of the chart represent the PRICE and TIME extremes that have occurred w/in the context of the top in Bonds last year. Note, the current rally has not exceeded either one in PRICE but we are definitely in the time window of a move down to start. IMHO it’s too soon to call a BEAR market in fixed income as we have just completed a “normal” measured move correction w/ in the context of a 30 year bull run. HOWEVER, we will see early signs appear to give a heads up …right now, w/ this time component being present it will be very informative to watch price action as continued strength above the blue horizontal lines during this TIME frame will cause prices to surge UP thereby suppressing YIELD once again.
TBT another move higher?
SBUX and Coffee Futures
Posted on November 3, 2013 2 Comments
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.
https://bartscharts.com/2013/08/21/sbux-and-the-land-of-not-real/
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 (?))
Great British Pound … continues
Posted on November 2, 2013 1 Comment
“…woke up, fell out of bed and dragged a comb thru my head and … the GBP did not rally as hoping so no short was performed…on a Saturday w/ no market movement here is what I see … we are completely the first AB=CD type of pattern after what I think is the completion of a very important top … the daily chart shows a potential expanded wave correction complete either at the 1.6280 is level or a little higher. W/ most recent action in mind, she might have topped so I am trying to figured the best place for a bounce to short into … mind you, if this analysis is correct we could move 2000+ pips in a devastating wave V that has been building for 4 years. Stay tuned … 
Halloween Pound Update …
Posted on October 31, 2013 1 Comment
continuing the saga of the Great British Pound
as I debrief the action in the Pound vs the USD over the past couple days, I can say that, perhaps, I might have done one thing different … a couple days ago we called for a pattern complete in the US Dollar and that coincided w/ the top shown in the GBP. The GBP is not as prominent in the index as the EURO so I didn’t put that much weight into it. I had my entry order ready to pounce at the top red line (w/ a stop) and, simply, it never went up there …so far, this count has been working nicely. would really like the level shown right now on the Pound to hold to go up and attack the area labeled 4 … at that point, after watching price action, we’ll know where we are -1) at the start of a major leg down in the POUND or 2) a corrective move complete w/ one more rally up into our target area. I don’t know …
Crude Oil … a potential roadmap
Posted on October 31, 2013 1 Comment
I enjoy this chart, not only for the amazing dynamics of the math and harmony but … I’ll tell you in a minute
Exact high on crude oil …
here’s why – it occurred on my birthday! 🙂 July 11, 2008 was the high on crude …
anyway, I have to admit that this scenario I am putting out on the blog is, perhaps crazy, but it’s an interpretation that you can pay attention to or not … the one thing I DO NOT LIKE is that first move up from one ….it sure looks like only 3 waves and, well, that can’t be right BUT in the context of the picture it fits so I am going w/ it. the other thing is wave 4 can’t overlap the end of wave 1 and well, technically, it does go threw there for a bunch of months but NEVER closes below so I’m working w/ that one also .. subjective interpretation so to speak.
so, below are the pictures that I”m working w/ … the thesis is we have a very powerful C wave in oil down that has just begun and one that will, ultimately need to bought – perhaps 6-9 months from now … enjoy.
a POTENTIAL count
it’s FED time and an explanation of the recent price action in fixed income
Posted on October 30, 2013 Leave a Comment
can’t believe it’s been a month …amazing how time flies.
here’s the summary of my post from the last FED meeting (note it was 4 or so hours before the announcement) :
https://bartscharts.com/2013/09/18/bruce-buffer-of-ufc-and-the-fed/
“HOWEVER, in the context of an amazing 30+ year bull market in the fixed income world we have reached the “normal” and “standard” correction that has existed since the beginning of this bull market in the 80′s. We do have one more correction low that “could” happen so perhaps a little lower is in the cards. what’s really fascinating to me w/ regard to the FED FUND futures chart is it hasn’t budged. the traders of the world don’t think anything is going to happen …
Per my post a week or so ago on bonds the BUY of BONDS (sell YIELD) is the side of the market I want to be on ….”
so, the fixed income market has bounced and here’s my explanation of the “why”:
https://bartscharts.com/2013/10/21/plotting-the-next-move-in-fixed-income/
let’s face it, the trend is your friend,and after 30 years this “normal” correction was doing something amazing predicatable w/ regards to the long term RSI and the bullish support zones inherent w/in a bull market. go GOOGLE RSI bull or bear zones and you’ll find that the 40-50 level is BULLISH support and, guess what, that is exactly where the RSI (on a long term chart) bounced. (see chart below)
again, call me crazy but we could see another new high in the bonds … nothing in this chart tells us that the trend is over. HOWEVER, our first HINT that the trend is over is a MONTHLY CLOSE BELOW our support zone shown …
as an advanced pattern recognition trader (music, sacred geometry, fibonacci) none of the most recent price action is surprising at all….
TSLA and going to the octagon …
Posted on October 30, 2013 Leave a Comment
had the extreme pleasure to fly out of Miramar NAS (before it was given to the Marines) in San Diego CA…amazing flying, period. one of the neatest things about Miramar was the “Octagon.” circular in nature, it was 8 fuel stations that you would taxi up to in order to fill up the jet for the next go … it was fun to sit back as your jet received 16,000 (no tanks) or 20,000 pounds of fuel and look at the power of 8 jets around the octagon. do the math, basically 160,000 pound of fuel being unloaded 15,20 times a day.
well, that is the key … in our last post on TSLA
https://bartscharts.com/2013/10/01/tsla-patterns-and-dogfighting-an-f-14-in-afterburner-check-fuel/
we showed how parabolic advances can move equal and opposite the preceding move (advance or decline) and how once parabolic it’s better to either tighten your harness or just get out …TSLA hit our target nicely (see post) and bounced yesterday. A friend of mine has been playing the short side of this moves using options and last week (thursday or friday) I told him to target 153-154 and take profit or some off the table. basically, come in for some gas, debrief and get ready for the next fight.
if you are a bull for TSLA, the 154-155 area was an ideal entry point because it represented the first BUY PATTERN to try and get into this amazing move. here’s the rub, this was a 20% correction (or so) in an very powerful and extended (straight up) parabolic advance, so I still believe caution is warranted. Particularly focus on a CLOSE below 174 after October 31. That will be the FIRST MONTHLY SELL signal since the stock IPO.
here’s the chart that I was working off … pay attention, study it and hit me via email if you have any questions.
Pound Negative Reversal Potential – Long Term Chart
Posted on October 29, 2013 1 Comment
i had the wonderful pleasure to teach, for a little over a year, the Capstone CMT III course…the positive and negative reversal arena usually made both me and the candidates head explode. so, if you want to read about it and catch some understanding, Google: RSI negative and positive reversal by Connie Brown.
in this case we have a negative reversal, potential, on the POUND vs the USD on a monthly chart … negative reversal is when the PRICE does NOT make a new high relative to a former peak and the RSI DOES make a new peak. Basically, price isn’t keeping up so a change in trend might be on the way ….here’s the chart:
Long Term Negative Reversal on the POUND vs the USD (potential)
when we move to the weekly I’ve added the “bearish zones” for the RSI and “THINK” this entire range has held the bearish range as shown and is characteristic of a very large 4th wave triangle that lasted 4 years. recent price action labeled (1) and (2) are the beginnings of a 5th wave that will ultimately take out 1.350 which forecasts a 2500+ pip move in the POUND vs the USD.
bearish RSI zones on the POUND showing how this could POTENTIALLY fit into the context of a 4 year triangle
where are we now? well, if you have been following, my target zone of 1.6320 ish never got hit and it was missed by 60 pips which is just too many pips to swallow right now. so, below is the count I’m watching that could rise us to that area … I have not included the bearish count because it gets too darn confusing (imagine that in Elliott Wave) but the key here is that the “was this the high” could have done it and therefore we are in a wave 3 of something ( :)) so using stops if trying to get long is highly recommended. If we can successfully defend the 1.6020 area and get some THRUST and MOMENTUM going up then perhaps the target will be realized. If we LOSE 1.5969 then I think the top could be in place and I’m going to have to work like heck to get into a move .. sounds easy on this blog, but in the real world w/ massive moves and swings and a 24 hour market it’s simply hard to do …
where we might be …
we’ll see and let me know if you have any questions ….
B
US Dollar as of 10/27/2013 9:00 PM EST
Posted on October 27, 2013 1 Comment
in our last post we discussed the importance of current levels on the dollar or the 78.73 level a little lower. in “counting terms” believe the dollar is carving out a major bottom in what can be coined an expanded flat corrective move. if this analysis is correct, I am expecting a major move on the dollar…
https://bartscharts.com/2013/10/01/dollar-index-done-or-correcting-or-a-little-lower/
the EURO has completed a major retracement, the POUND needs a little higher or right in here, the YEN finished a sell pattern, the SWISS hit a weekly pattern (or perhaps a little lower to the .382) and mulitple other pairs via the USD are showing the potential for a major dollar low in place. what else?
Commitment of Traders (COT): Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, cut their overall US dollar long positions to a total of $692.8 million as of Tuesday October 1st.
Here’s the data in chart form …
here’s the dollar index using red arrows to show the BEARISH and the blue arrows to show the BULLISH positions. NOTE, at the extremes the opposite happened w/ regard to price.
now, when we take a look at the the EURO we’ll see a pretty amazing picture w/ the net positions shown but this time w/ a price of the EURO vs USD overlaid on top of the positions. here take a look …
note the price of the EURO vs the USD .. at extreme levels of BEARISH and BULLISH points, the price did the opposite. When the level of bearishness by the large speculators was extreme the EURO went up and when the level was bullish it went down. take note of our dollar index we have been following since the end of August …w/ everything being presented here and in the past, certainly looks like being a dollar bull in/around here is the side of the market to be on …
dollar index updated as of 9 PM EST 10/27/2013:
US Dollar Index Weekly
US Dollar Index Daily
here is the picture for the UUP w/ potential support points noted … also, believe if the low that we carved out on this chart is taken out by a daily close then all of this analysis is completely incorrect.
UUP Dollar ETF (BULL)
Bart's Charts 