Here are three VERY NICE SELL Patterns across 3 securities that represent a majority of the banks/financials that are out there. The PATTERNS are saying sell and, if you look at XLF below, the PATTERNS are only 2-4% away so it’s not that inconceivable that they could go up and tag those targets.
Look – folks WE WANT THEM TO GO UP AND COMPLETE the patterns because then we will have, what I consider a GREAT leading indicator to help us position on the short or long side – FAILED PATTERNS.
IF these patterns hold and work then the banks/financials start down which, invariably, will hit the equities. IF they FAIL then the banks/financials surge higher and the probability that this market melts up gains some higher probability.
So, watch these patterns, very closely. They will give us a good idea on where we are … in some of the briefs I do out there I ALWAYS talk about failed patterns, because they do fail, but these failures, in the market we are in now, are very powerful and indicative of what is “really” going on …
Well folks, we are at a pretty big fork in the road. The SELL PATTERN on the SPX is “close” and pretty much hit and then the XLF went up and tagged the lower end of the sell zone … gapped up and then closed at the lower end. One can see a couple small laborious machinations up and down before the SPX target is hit so we can sneak into the upper half of the sell zone before really calling the PATTERN complete and the selling to begin – or not.
If this pattern fails, it might to be early to back up the truck, but the melt up will certainly continue …
But, don’t get too excited for that to happen. SOME STIFF RESISTANCE/SELL PATTERNS PRESENT in XLF aka FINANCIALS.
Trust that everyone enjoys the long weekend enjoying the Birth of our Republic.
Question, when is the last time you hear a politician refer to the United States as a Constitutional Republic?
I pledge allegiance to the flag of the United States of America and to the _______ Republic or Democracy for which it stands? We know the answer …
Anyhoo … enjoy the weekend and the amazing country that we live. Be safe out there!
Financials .. the banks lead us UP and the lead us DOWN.
I really have not idea where we are as in a BULL or BEAR market. I am probably the last dude out there thinking we have another wave down coming. I think that for one reason: the Leading Diagonal pattern. The low in October 2022 was either a 1 or an A. If it was an A, then the B wave could go up and make new highs and then a smashing C wave. Else, we are going up in a wave 2 …
How can we figure out where we are going? New highs or another move lower …?
I like to use a PATTERN THAT FAILS or a PATTERN THAT WORKS and here we are .. a VERY NICE GARTLEY SELL PATTERN ON THE BANKS.
IF IT HOLDS AND WORKS AND THE BANKS START DOWN THEN … I suspect a move down will be coming.
IF IT FAILS AND THE BANKS CONTINUE TO GO UP then I think this will add fuel to the upward move.
34-35.66 on the XLF.
One last, note the measured moves …almost all of them (red arrows) are exact. Those that went a little higher were harmonic w/ 1.27 and 1.618 of the measured move.
Well the count will either be correct or it won’t (yea I know, dugh) but .. here’s the 60 minute GART SELL PATTERN that hit so IF this pattern works THEN JPM should start back down which will put pressure on all the banks. IF this PATTERN FAILS then expect the daily .618 and .786 above to get attacked and, potentially send JPM off to new highs.
But, for now, pay attention the SELL PATTERN present on JPM:
Supposedly … who knows what is true these days .. 1000’s of banks are underwater. OK … whatever.
Here’s when we look at the CHART and we ask should we BUY or SELL or DO NOTHING.
KRE sliced thru the first “potential support” and now we approach, what I think, is the KEY to the KRE. Here’s why:
58.76 – if you look at the purple measured moves you will see that EVERY major swing down has been 58.76%. I’ve used the “close” in 2008 as I’m not sure if that is a good print or not .. either way, that measured move nails EVERY LOW
1.618 projection lands … right at the 58.76 correction.
.707 (square root of 2 = 1.4142 and 1/1.4142 = .707) just a little above this level
Long term LOG trend line right at .. all the above
Note the VOLUME – is that a capitulation spike in selling volume?
RSI sitting at the crucial support level for the ENTIRE bullish move since 2009
Nobody in their right mind is looking to BUY the banks but, then again, I can guarantee you NOBODY was looking to buy in March 2009. Maybe there was someone? Perhaps … me?
DATE STAMPED 3 MR 2009. (March 3, 2009)
So … watch the THRUST coming into this level, maybe wait for a signal reversal candle (bullish).
What I can say is IF we blast thru this level (certainly “feels” like we should) then, yeah, a lot of banks are looking at some tough times and 28 and then 21 are the next targets.
Pay attention to this PATTERN on JPM daily. The past 3 major tops have gapped down and the last two have created island reversals. IF (the BIG IF) we gap down today and leave and “island” then this could be very troubling for the banks and, historically, has led to a pretty big down move in JPM.
No idea if that will happen in the coming days but, again, the TIME is perfect in it’s relation to the the all time high PATTERN and the price is off just a wee bit .. essentially we have the same exact same set up as the high .. now, TIME will tell.
on a monthly level, the “blue measured move” certainly looks to be harmonic w/ JPM. the most recent high in/around mid 140’s was exactly equal to the blue measured move … again, keep an eye on JPM as it’s appears to be the big dog helping out the troubling regional and smaller banks.
If (again the BIG IF) we gap down in JPM to create an island then this big dog could be signaling a much bigger credit crunch on the way.
So here’s the deal folks, I had NO IDEA that there was a banking crisis brewing when I put the GART SELL on the banks – it’s just a pattern. And, guess what, I’m trying NOT to pay attention to the ongoing machinations of the Federal Reserve, or some Twitter expert, or my buddy. I’m just looking at the CHART. In that PRICE and TIME we have the ENTIRE STORY UNFOLDING WITHOUT BIAS AND, FRANKLY, WITHOUT A CARE.
Every emotion, every thought, every decision, every hope and every dream is shown in the candle. Period. Dot. End of sentence.
The update above found a rather important support zone. Important, as my long time readers will understand, means a LOT of math comes together and its “logical” that a bounce or support is found. Cough Cough … sliced thru it without a care.
As we used to talk about flying fighters … (man I miss those days sometimes) .. the “goods” and the “others” so in the realm of that – when we slice thru that important of a support zone. I’ll use what I used back when I started this bank blog (unknowingly in the midst of one of the biggest banking failures ever) – something ain’t right at the circle K.
At this time, I AM NOT advocating to BUY the BANKS. I’m just looking for support as this things falls out of the sky.
From the last post, you can see that we have taken out the “largest measured move” correction (the 2020 COVID scare) since 2009. I’ve updated the TIME and PRICE of the largest correction on the chart during 2007-2009. The price is 45.90 and the TIME is out to early next year. (just putting the last one in perspective).
Tomorrow, 78.26 is important (1.618 extension) but it sure looks like it wants to get down to the high 60’s or the abcd around 60.
Of course we will have machinations up and down but … that’s some serious liquidation folks.
Here is the Banking Index PATTERN that we needed to watch and monitor. Folks, banks are everything. PERIOD. They lead us UP and they lead us DOWN. Something isn’t right at the circle K.
All things being equal, the wave that started today needs to finish 5 waves so I would step aside and let the banks pave the way … the BIG support is 83-86. Why? The red arrow is the largest price correction in the banking index since 2009. What happens at that level will be very key.
Next levels are the measured move down around 56-60 and the BIG ONE at 45-46.