“I think this is a song of hope …” Robert Plant Live Stairway to Heaven

The S&P 500 has been climbing a stairway to Heaven ..

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folks coming into 2015 we had some pretty strong patterns appearing.  some worked and some didn’t – isn’t that what we expect? that being said, it was prudent to be cautious due to their presence.

here’s what I posted around a year ago:

“Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.”

so, while we’ve sold off for the past couple days let’s not go crazy.  we have broken ONE swing low and that’s it, and it’s ONLY a weekly.  WE HAVE NOT BROKEN A MONTHLY SWING LOW.

so, keep it ALL context of the big picture.  We break a swing low on a MONTHLY and then a second then we have “issues.”

but for now, EVERYONE knows this puppy was on steroids and need some shaking out so let’s look for a pattern to BUY on a weekly (hint hint – it needs to breathe a bit) and if a bear I would still be very cautious.

what do we know and see … ?

  • we know a weekly swing low is about to be taken out and we’ll know that ONLY WITH THE CLOSE TOMORROW … we also know this has NEVER happened since March 2009 bull market began.

so, here’s the logic:

  • if weekly close below a swing low … get defensive.
  • if not, then keep in mind, we have pressure on the downside and it probably needs to breathe down so just chill …

enjoy the post below .. you’ll see some of the patterns were early, some were spot on.  that’s not the point .. the entire post below is around the market action around a SWING LOW or SWING HI and to respect them — very very strongly.

let me know if you have any questions.

chart below is the ES .. note the red horizontal swing lows. those have never been broken on close. it might happen tomorrow …

Bart

S&P Futures Swing Lows since 2009
S&P Futures Swing Lows since 2009

 

 

 


chariot-topper

As we have discussed multiple times in this venue, the move since 2009 has been one heck of a ride.  This chariot of stock market emotion is, literally, off the charts.  It is at an extreme that has surpassed 1929, 2000 and 2007.  For the past 6 months it has defied the powerful cycles and patterns we follow.  However, we are at another “potential” inflection point and based on this weeks price action the chariot appears to be running out of gas.  So, objectively, the cycles and patterns we follow appear to be working.  Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.

djia march 15 2014

Below you’ll see a quick demonstration of the Dow Jones Industrial Average from 2002-2009.  No patterns shown but just an example of the power of the swing low.  Take note, when we lose one swing low there is usually some selling and then it bounces back and, here’s the key point, it fails to make a new high.  Price might congest in this area (going either direction – up or down) and then it starts down.  One thing to watch is “usually” the third swing low. When that gives away, selling is vicious.  So, as much as we see MAJOR patterns completing let’s not get to confident.  THE MAJOR US INDICES HAVE NOT BROKEN ONE SWING LOW IN 5 YEARS.  Over the coming weeks, pay attention to these swing lows and swing highs (note the VIX chart – not one swing high has been taken out since 2007!)
swings
VIX SWING HIGHS
Also, note the Dollar Index swing low track record and the very thin neckline that is coming into play a little lower.  We’ve reached some daily extremes in metals (Gold, Silver) and the Euro and Pound.  Sentiment means nothing when a multi year extreme is taken out and one that has been tested roughly 10 times since 2012.  Folks, a lot of stops are hiding beneath 78-79 on the dollar index.  Certainly hope support holds here …
Dollar Index Swings
so, keep an eye on the swing lows and highs over the coming days and weeks … note price action after a first or second swing low is taken out and, seriously consider safety if/when a 3rd long term swing low is taken out to the up or down side ….
CHINESE YUAN 3152014
DJU March 15 2014 utility and industrials
dow jones transports march 15 2014
COPPER CORRELATIONFXI 032014 EEM 03152014

Swing Low, Sweet Chariot ….

chariot-topper

As we have discussed multiple times in this venue, the move since 2009 has been one heck of a ride.  This chariot of stock market emotion is, literally, off the charts.  It is at an extreme that has surpassed 1929, 2000 and 2007.  For the past 6 months it has defied the powerful cycles and patterns we follow.  However, we are at another “potential” inflection point and based on this weeks price action the chariot appears to be running out of gas.  So, objectively, the cycles and patterns we follow appear to be working.  Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.

djia march 15 2014

Below you’ll see a quick demonstration of the Dow Jones Industrial Average from 2002-2009.  No patterns shown but just an example of the power of the swing low.  Take note, when we lose one swing low there is usually some selling and then it bounces back and, here’s the key point, it fails to make a new high.  Price might congest in this area (going either direction – up or down) and then it starts down.  One thing to watch is “usually” the third swing low. When that gives away, selling is vicious.  So, as much as we see MAJOR patterns completing let’s not get to confident.  THE MAJOR US INDICES HAVE NOT BROKEN ONE SWING LOW IN 5 YEARS.  Over the coming weeks, pay attention to these swing lows and swing highs (note the VIX chart – not one swing high has been taken out since 2007!)
swings
VIX SWING HIGHS
Also, note the Dollar Index swing low track record and the very thin neckline that is coming into play a little lower.  We’ve reached some daily extremes in metals (Gold, Silver) and the Euro and Pound.  Sentiment means nothing when a multi year extreme is taken out and one that has been tested roughly 10 times since 2012.  Folks, a lot of stops are hiding beneath 78-79 on the dollar index.  Certainly hope support holds here …
Dollar Index Swings
so, keep an eye on the swing lows and highs over the coming days and weeks … note price action after a first or second swing low is taken out and, seriously consider safety if/when a 3rd long term swing low is taken out to the up or down side ….
CHINESE  YUAN 3152014
DJU March 15 2014 utility and industrials
dow jones transports march 15 2014
COPPER CORRELATIONFXI 032014 EEM 03152014

Aristotle, Diogenes Laërtius and the Dow Jones

Abstract:  The moral stated at the end of the Greek version is, “this shows how liars are rewarded: even if they tell the truth, no one believes them”. It echoes a statement attributed to Aristotle byDiogenes Laërtius in his The Lives and Opinions of Eminent Philosophers, where the sage was asked what those who tell lies gain by it and he answered “that when they speak truth they are not believed“.[3] William Caxton similarly closes his version with the remark that “men bileve not lyghtly hym whiche is knowen for a lyer”.[4]

the BOY who CRIED WOLF or the CHARTIST who CRIED CAVEAT EMPTOR
the BOY who CRIED WOLF or the CHARTIST who CRIED CAVEAT EMPTOR

DOW JONES COMPONENT SUMMARY: this next week will mark, yet another, very important point in TIME for market to heed.  As seen below, targets and patterns are/have completed (ing) and let make one thing clear.  I am not personally tied to what the patterns are objectively showing.  So, I never have nor ever will “lie” like the fable states above.  I am simply stating the patterns are showing SELL patterns and as one who has said this before, it’s a very very precarious market.  But, w/ full disclosure I have been saying that for a while and the market keeps exploding higher. So, I could be construed as “crying wolf” so to speak.

enjoy the charts and thanks for the comments, questions …

one last — W O L F !!!!!

DOW JONES TRANSPORTATION INDEX: the low on this index was formed before the Industrial average was 45.59 on 10/29/1896.  when we go back into such long time frames we need to let the charts check the validity of this node in time/space. Using this low of 45.59 we find that it held the .382 retracement of the 1987 crash, the .5 retracement of the 2000-2003 low and the .618 (exact OBTW) retracement of 2007-2009.  additionally, as shown by the orange arrows, the “thunderbolt” or “ab=cd” move was exact in resistance at 5537 in 2010 and almost the cause of the 2007 top.  W/ those as our reference points, I believe we can objectively say that we have a good “node” to work from …

the purple arrows are “basic” measured move projections that smack right into an extension pattern in/around 7600.  Additionally, the lighter blue arrows come in around 7535 on the index.  I expect those to be MAJOR resistance areas if not the TOP.  At a minimum, an expectation of a 3500 point decline from those areas (simply the size of the last one) is to be expected.

if we take a look a current levels – 7211 close (and note, closed at the highs) – then another 300 point move or, roughly, 4 percent move isn’t out the question.  expect higher next week into this area of EXTREME resistance.

DJ Transports ... 1896-2013
DJ Transports … 1896-2013

DOW JONES UTILITY AVERAGE: the Utilities Average has a sell pattern appearing a little higher after a very big monthly sell signal.  while the pattern from the all time low in 1942 is still alive, it will be extremely important to watch this SELL pattern coming into play.  If we fail at this SELL pattern then an attack of the “still alive” target up around 570 could be a reality.  either the SELL pattern or the “still alive” will/should stop it in it’s tracks …

all time low DJUA quick look
all time low DJUA quick look
SELL PATTERN appearing on the DJUA
SELL PATTERN appearing on the DJUA

DOW JONES INDUSTRIAL AVERAGE:  back before posting, JC Parets allowed me to “guest post” (thanks) on his site using the all time low on the DOW and our former 2007 top. (http://allstarcharts.com/the-math-behind-historic-dow-charts/) that level was, essentially 15,300 and the DJIA has been bouncing in/around that level for almost 6 months.  that is what THE long term .618 price projection should do – if not be a top or bottom.  but, last week, it gave away and the DJIA took off.  folks, what we potentially have here is a 5 point reverse way pattern on a monthly basis.  IF CORRECT, the bearish implications are very powerful.  trend line resistance exists a little higher, we have a 1.27 extension pattern at 16,308 and the “top of the circle” at 16,827.  I know the “top of the circle” will have people scratching their heads but LOOK at what the bottom of the circle did the last time we were EXTREME in bearish emotion (2009).  It, basically, nailed the bottom.  Would seem natural that the top would do the same…correct?

W

O

L

F

Bart out …