NASDAQ – huge trend line support being attacked

12/16/2018 – take note of the MONTHLY LOG scale on the NASDAQ Composite.  I’ve outlined 3 critical areas to monitor on the chart.  Also, you’ll see in the second chart that back last March we ID’d the 7600 ish area as the target zone.  The market went another, roughly 5% and then ran into another extension ratio. The square root of 3 or 1.732.  It did a 173.2 percent extension from 2000-2002.  My bust as this fit nicely into an AB=CD projection that was tracking right along w/ the QQQ.  And, I know most everyone was unable to hear back in March someone advising caution … no big deal.  Anyway, some pretty big support from our LOG trendlines are coming in … it certainly looks ‘heavy’ and as you can see from my previous blog about the XLP/NASDAQ it looks like it has some more room to go … the breaking of these LOG trend lines (on a weekly basis – wait for the end of the week) will signal some heavy selling pressure to come in …

WATCH THE RATIO’s

12/16/2018 – as shown before, the ratio of XLP (Staples) / NASDAQ and the PATTERN that completed gave us fair warning of this correction we find ourselves in .. is it the beginning of the ‘next’ bear market. I have no idea. Is it just the ‘buy the dip’ – I have no idea. I guess if you have 50 years you don’t care but if you have 2 weeks you might.  It’s all relative folks but we do want to find what the best entry/exit points are as we look to manage risk. that’s all I’m trying to do …

the big institutions have a risk on or a risk off mindset. we hear it all the time. ratio’s allow you to try and get a best guess of where they are … in this case the STAPLES / NASDAQ has helped – a ton.

so, where are we now? 

KEY: note the blue arrows. those are the extreme moves up in ‘risk off’ for the institution and then, as shown, the ratio stalls and then the band plays on … believe it or not, we haven’t reached that extreme yet so I simply expect the correction to continue until the ‘target zone 1’ is reached. If your a bull then this seems a logical place to stick your toe int he water else watch and wait for a MONTHLY SIGNAL REVERSAL CANDLE.  Else, we could go all the way up to Target Zone 2.   

Banks

12/16/2018 – the banks lead us up and they lead us down.  note the polarity shown in/around 84. Also, we have 4 ratios coming in around 79-80.  Then we have the 76 polarity level. my ‘expectation’ is that these levels hold for support on the banks which breathes some life into stocks. 

also, note the RSI.  Yes, we are oversold, but not to the very extreme levels yet so would expect 1/ another push into the dashed red line area and, perhaps, a bullish divergence.  Would be nice to have this happen in the areas shown.

Believe it’s too early to call any bottom or a the size of this ‘top’ for now so hold em’ if you got em.

Bart

MSFT vs AAPL .. the great rotation

MSFT / AAPL – note, long term LOG scale and it appears that MSFT (from a relative strength perspective) has broken out this month …

now, this does not mean that the MSFT stock won’t go down – it simply means – from a relative strength perspective – it appears that MSFT is the ‘stronger’ of the two.  If you notice, they both reign supreme for about 10 years and then one outperforms the other.

also, note, since 2012 we have been stair stepping our way UP (higher bottoms) culminating in a nice breakout this month … again, these are MONTHLY candles.

will be interesting to see how this plays out …

Bart

Utilities – holding up pretty nicely

11/25/2018 – you can see some of the former work on the Dow Jones Utility Index here: https://bartscharts.com/2018/01/02/i-still-think-this-is-a-big-deal-utilities-an-update-and-another-update/

as you can see, the index went right up into the target area and fell pretty nicely. that being said, it has held up rather nicely and just recently went up and tagged a nice retracement level.  probability is that it should start back down .. but, there’s the deal, look at the stair steps (higher lows) on the index and as I looked at this monthly chart I noticed – there has never been an AB-CD type corrective move.  so, we are setting up for the first one in roughly 40 years.  IF, the big if, we get down as shown by the red arrows on the current price chart THEN we’ll have to give it a shot and buy it ..

it will be the first one in 40+ years.

stay tuned. this strength is interesting …

hope all had a wonderful weekend and great time w/ family and friends if celebrating Thanksgiving!

Bart

Update to BITCOIN (NYSE Index Bitcoin Index)

if you do a search you’ll find some interesting charts on the ‘parabolic’ rise of the BITCOIN Index.  PARABOLIC RISES ALWAYS END LIKE THIS …period.

what’s important to realize is we are balancing the energy of euphoria (a sell signal) w/ depression/capitulation (a buy signal) … so what’s important now. note the triangle is broke down from (it’s supposed to do that) and now we have some projections via percent change and some trendlines (LOG- which are key) and the vaunted .786 retracement.  why not give that  BUY shot … I’m going to be looking at that …

B

IBM – failure and a new set up

11/03/2018 – well our IBM pattern failed and got smoked. As I’ve shown before, the candle on IBM is what a ‘failed pattern’ looks like … so, as you can see below we have another BUY pattern emerging on IBM. It’s got some ‘time’ and ‘price’ to go but I’ll be watching the level shown below as MAJOR support for IBM.

Remember, this is pattern recognition. It’s all probability folks. We NEVER know which one will work or not but we ALWAYS no how much we are wiling to risk and WHERE WE ARE WRONG.  In this crazy game, especially in the current volatile market we find ourselves in isn’t that the name of the game …?

Here’s the chart … next.

Bart

YEN vs USD …certainly smells like a multi year triangle …

well, when we last posted, we were looking for the YEN to complete a multi year triangle. holy smokes, it certainly dumped today. the key here, as you will see below, is that it did ‘exactly’ what its supposed to do … in a triangle you look for price correlations that are .618 the preceding leg. in this case, we would look for the ‘d-e’ leg to be .618 (or .68179 (musical note)) of ‘b-c’. Guess what – that is EXACTLY what it did today. as you can see, we hit that relationship and the USD exploded against the YEN. So, IF (and this is a big if) our triangle thesis is the correct the YEN is about to get smoked. Now, mind you – the currency markets are HUGE. something around EVERY equity, commodity, futures and bond markets would have to run every day for 90 days to equal ONE day of liquidity in the FX markets. READ THAT AGAIN. The yards (billions and perhaps of trillions) of moves that were occurring was MASSIVE. Yet, the .618 (.68179) relationship held. so, because of that monstrous thrust into the ‘e’ we need to wait for a retest or a BUY pattern to emerge …unreal folks.

New York Stock Exchange – a BUY pattern emerges UPDATED

11/19/2018 – revisiting this pattern from the end of October. The levels indicated have NOT been hit so, believe it or not, this is ‘standard’ corrective move in the NYSE Index since 2009.  Thus far, every major correction has been the dashed red arrows.

also, we have polarity support area and then we have all  kinds of ratio’s coming together – along w/ a BUNCH of projections. so, this area is VERY important. Remember, if we try to filter out the noise and the trend is your friend until the end then WE HAVE TO BUY this level .. perhaps wait for a Signal Reversal Candle but at a minimum believe this is the most crucial support area in 2018.

again, this level hasn’t even been tested yet, so hold on to your hats and everyone just chill … let me know if you have any questions.

note, another lower level has 3 ratio’s coming in (highlighted red) so if we lose the blue, the red is pretty reasonable area for the next target.

Bart


10/18/2018

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