would still like the ratio to get down to the “major support zone” to get a real feel for the continued bull run. also, continue to watch Banking Index.
we had a VERY nice pattern coming in around the 370’s and it’s basically failed.
as you can see the high was a 1.27*ab=cd but w/ this strength thru the lower pattern that failed, would WAIT for a daily close below 372 before putting any type of short out there …
w/ the strength in the financials and the Banking Index (shown below) I would be hard pressed to put a short on w/ regard to the banks until the target above is hit … we hit that target, could be game on.
Banks are very important to the overall health of the market … key support approaching! monitor closely …
blogged about the banks a couple weeks ago here: https://bartscharts.com/2020/09/09/banks-where-are-they/ since then, they have continued to lose strength and now the Banking Index has a very important BUY pattern which should hold and the ratio of the Banks/NYSE Index has key support a little bit lower.
banks lead us up and lead us down so these areas below are KEY to strength of the overall market. bounce here/little lower on the ratio and we should stabilize. if we cut thru these levels w/out a whimper and continue lower then i would expect continued pressure down the line …
there is an old adage – the banks lead you up and lead you down. the market has blasted to old all time highs or thru them and the banks…? well, they rallied a little but have not shown the strength of the overall market, especially technology.
let’s keep a close eye on them over the coming days and weeks … important.
here’s the support charts that I posted back in the past to show the patterns at work – it has NOTHING to do w/ me. I just pull out the crayons and try to find the patterns. keep it simple.
this chart was finding support at the “first” level after a pretty liquidating sell off from 112. pay attention … a LOT of math and patterns coming together. One of the key aspects of the chart below (if you have read this far) is watching for former FAILED PATTERNS.
as you can see, that level worked and the banks rallied … I apologize for not having the SELL pattern but I never posted it. Do you see it? After not making it above the 117 level it sold off big time … and, using some math and patterns we found a support zone ….
in the chart below I show you the SELL PATTERN on the banks. YES, this is after the fact and I DID NOT post this at the time but wanted to show 1/the harmony of this index and 2/ the pattern for illustrative purposes. the other reason for posting this is to demonstrate the bank rally off the March 2020 lows has been feeble …
and as we can see, the banking index / NYSE Index is tepid, at best. really don’t think the banks are too healthy right now …
the banks lead us up and lead us down … continued strength which causes a failed pattern is needed by the banking index right here …
CRUCIAL support level for the banks!
here’s the last post on the Banks: https://bartscharts.com/2018/12/26/very-important-level-on-the-banks/
note, we are pretty much at the important support zone … can go down into 53 and still have a support zone alive. remember banks lead us down and lead us up .. support here and a bounce should relieve pressure on our equities.
I’ve been following STOXX for a friend overseas and I truly hope that he and his family and friends are OK w/ all this craziness going on …hat tip, friend.
here’s the link to the STOXX posts on my site: https://bartscharts.com/?s=stoxx
net-net, my friend contacted me a couple years ago and asked about European Banks and, in particular, the STOXX. it was hard to email him back because what I saw – which unfortunately was proven to be correct was a multi-year triangle that had been forming since 2009. it’s ramifications? well, the STOXX WOULD go to new lows and, more than likely, ACCELERATE the move lower because … that’s the nature of moves out of triangle. in my world of using crayons, I have no idea, nor do I care ‘what’ caused the market move one way or the other. there are ALWAYS a thousand reasons. for me, it’s a pattern that helps one manage risk and help one determine how much $$$ to risk and then pull the trigger.
Here’s the updated STOXX chart:
I went back and captured the daily chart showing the target zone … two years ago, chart below:
03/18/20 – last time I posed on the banks you can see this level held and then rallied nicely. it never made a new high. now, take a peak below as we can see a nice support zone that has appeared around 53-57. the 1.618 extension is the low of the day today. the ‘low’ might be in …banks lead us up and lead us down. I see this as a ‘bounce’ but one that is needed …