11/2/2018 – ouch.
The area labeled ‘FAILURE OF PATTERN BELOW’ is one of those levels that ‘should’ have acted as extremely nice support for IBM. Guess the operative word is ‘should’ w/ regard to that last sentence. Take a look at that candle … boom. That folks, is what a pattern failure looks like.
so, if you look below, it’s now setting up for a support zone (dare I say BUY zone) in/around 88-89. I’ll do some more work on it over the weekend but the BUY PATTERN mentioned w/ @seeitmarket went the way of the buffalo.
certainly appears to be setting up for a nice one …
I’ve seen the very strong strength shown by IWM (ETF for Russell 2000) but I also see 5 waves and monthly bearish divergence. I’m not ‘sold’ on the bullish aspect of this ETF, yet. Let’s see how it deals w/ the 2 daily butterfly patterns (bearish) that are present right in the zone of the measured move shown on the monthly …
What I can say is that IF these patterns fail this puppy will, indeed, explode. But that monthly tells me … not so fast and be careful of the ‘no brainer’ trade being long IWM.
PS – for those of you who are geeks, like me, notice the close hovered around 161.80’s or the golden mean – 1.618. Note – our subconscious mind doesn’t worry about decimals points.
PS – 1.618 or 161.80 🙂
amazing week in Punta Mita Mexico … after my daughter got married my wife ‘allowed’ me to take some R&R. Worked hard for a week on my SUP skills w/ these guys: https://supnsurfretreat.com/
if you have any interest in Stand Up Paddle Surfing do this … shout out to Chris Sfor ALWAYS being patient w/ me. If I see you out on a wave this summer I promise I’ll at least know what a line up is … can’t promise anything else. Thank you, Chris, for the push.
before that saw 3 straight weeks of travel so I just ‘checked out’ of the markets for almost a month.
came back to the charts and what do I see … a PERFECT SELL PATTERN on the S&P. if your bearish, this is the level …
the only thing that is keeping me cautious and in a wait and see mode is the XLP/NYA ratio. Folks, it’s in full grunt liquidation mode. again, this ratio is a great harbinger of understanding institutional big guy mindset. IF they are risk OFF then the ratio should be going up if they are RISK on then the ratio falls – as it is now. note the support levels shown a little lower …until this ratio finds some stability and support I just can’t be overtly bearish….
good to be back – trust all are well.
06/03/2018 – quick update to the XLP/NYA ratio. Still waiting for a BULLISH SRC to signal a ‘institutional shift’ to risk off assets in the form of staples and this ratio finding support (XLP / NYA) and starting to rise. While we did get a BULLISH MONTHLY HAMMER CANDLE in May we still have lower targets so need to keep the ‘bullish mindset’ for now. Now, that being said, I added an RSI to the picture to get a feel for where we are …
1/ we are at the lowest levels seen since the 2007 financial crisis. yes, that’s true BUT take a closer look and you’ll find the ratio kept going down for 4 more years.
let’s don’t get complacent but, per my last post w/ the XLK/XLP let’s be aware of BIG TARGETS BEING HIT across the circle of life (bonds, commodities, currencies, GLOBAL equities) to see the pivot.
Eurozone is quite the mess right now … where can they go? Well, the US stock market doesn’t seem like a bad place now does it?
I’ll keep watching, closely, but this XLP / NYA ratio certainly appears to want to seek out the lower targets so that’s not bearish, for now.
if you’ve been following me for a while, you know I enjoy using advanced pattern recognition to ratio analysis.
for a bunch of XLP/NYSE Index analysis click here: https://bartscharts.com//?s=xlp+%2F+%24nya also here for @seeitmarket: https://www.seeitmarket.com/market-update-consumer-staples-xlp-nyse-composite-ratio-17676/
now, this most recent multi- week stock correction was ‘expected’ based on a zone of support coming in for the ratio. (see above link to read)
that being said, we did rally and now, of late, we have really started to sell off.
this means that institutional ‘mindset’ is showing ‘risk off’ or bullish market momentum.
this ratio has picked the ‘exact’ weekly/monthly pivots since it’s inception and the tops/bottoms of 2000, 2002, 2007, 2009, etc.
I trust it … it’s falling out of the sky is telling me that, while some selling pressure might still be present, the BIG BOYS haven’t sought cover … (when the crap is hitting the fan they seek staples) so while this ratio appears to being LIQUIDATED the big boys aren’t ducking and running for cover yet.
THESIS: consolidation/correction to occur or maybe even rally BUT we are going to see the RATIO keep falling, especially if we close below and fly thru the 7 years support zone …
sorry folks, no massive sky is falling or this is it from me … until this ratio finds BIG support and takes off like a rocket I need to remain on the bullish side of the fence … for now. Just calling it like I see it. Honestly, DID NOT expect such a BIG sell off in the ratio. But, guess what, that’s what its doing …
let me know if you have any questions …
PS – note the CYCLE (basic) time rolls into sometimes this month of April. And, we are in April so stand buy …
04/01/2018 – update to ORCL chart below. Looks like it wanted to go up and finish the ‘long term’ projection. we have a monthly signal reversal candle as of Thursday so this one could very well be cooked for now. Still have the upper area for targets but risk is to the downside. Now, I have no idea what fundamentally happened to cause such a sell off. What I can say is that almost 4 years ago these NUMBERS and this PATTERN were forecasted to cause a top/resistance. So far, they have.
I have NO IDEA what will happen next .. sometimes they work, sometimes they don’t. (the PATTERNS) Just manage risk and train your mind that it’s all probability.
Also, the second chart is using some of the musical properties of this move. As you can see, the .886 and .841 retracement levels nailed the low in 2002. From here, we can use ‘musical math’ and denote 1/X where x= .841 and .886 respectively. Those numbers (1.1892 and 1.122) are the ratio’s of notes from the equal octave scale of music. As you can see, they were present at the completion of the ‘basic’ projections.
Lastly, an extremely powerful technique shown to me by my mentor and friend Michael Jenkins (www.stockcyclesforecast.com) shows subdividing the signal reversal or DNA of the low candles and projecting up. As you can see, the first projection didn’t work but the second one nailed the high very nicely.
Again, no idea what’s going to happen from here BUT certainly can make the case for a nice correction to come in ORCL.
September 25, 2017 – trust me, back in December 2014 I didn’t have a clue if 53-56 would ever be hit … target area has been hit and I have no earthly idea what the fundamentals are driving this stock or not … watch the MONTHLY close on this one. If we get a MONTHLY SRC, then we could have a pretty big top in ORCL.
December 2014 – target appearing on ORCL.
03/31/2018 – I love measured moves. Frankly I think they are 1/ the easiest and most powerful indicators we have as technicians and 2/ one of the least used.
If you remember it’s how what we used to make an amazing buy on crude as it was plunging into it’s lows … measured moves on monthly/weekly charts is good.
in this case we are looking at the S&P 500 cash. note, since the 2009 bull run the largest correction we’ve encountered has been 14.70% in/around 2015-2016.
if we take that SAME corrective move of 14.75% and overlay it on top of the monthly we come in around 2451.
now, if we do ‘basic’ pattern recognition work we have a perfect BUY right/in around that level. necking down to the daily (second chart below) you can see how all the numbers are coming together in/around 2451-2467. My take, IF (the big IF) this bull market has steam, then this level ‘should’ hold and we go up nicely …
now, it’s just a pattern and DOES NOT have to work – it’s just probability folks. that being said, trends are given life and and have life taken from them w/ failed patterns and patterns that work.
as for me, this level is 1/ the same corrective move of 14.7% and a near perfect BUY pattern as shown. makes it interesting …
03/31/2017 – I like the .786 level in/around 10.95-11.56. Note the percentage change from the 2000 high (-64.69%) and how that same percentage change is present now right at the .786 retracement. We are at 40+ years low on the RSI and some overlapping ratio’s. It’s do for a very nice bounce.
12/7/2017 – see below. it’s pretty darn busted up …
03/20/2018 – heads up, sure looks like an island reversal present on the NASDAQ monthly.
not only do we have the 1.618 extension from 2000-2002 being hit but we also have a 1.27 AB=CD from the all time low and a 3.618 WX=YZ all being hit today. this ‘should’ be pretty significant resistance.
a word to the wise is sufficient …