Tag: financials

The Markets – March 24, 2024

The NYSE Index HIT the square out at 18, 059 and reacted very very minimally (which surprised me to be honest) and is walking up the wall of worry. Today that level is at 18,070.

As you can see above, we have not CLOSED ABOVE the 1:1 trend line from the all time low and I suspect that it will continue to provide MAJOR resistance BUT as it happened last week, it can keep squaring itself out until it reaches the ‘final’ square out. As long as we do not get a close above (monthly) the 1:1 trend line this market remains vulnerable (very ?) to a pullback that could last, at a minimum, a couple months.

Here’s the DJIA approaching or hit an area of MAJOR resistance.

Same story w/ the S&P 500 and the NASDAQ:

The Russell 2000 is VERY weak compared to the other indices:

On prior posts we have focused on the Banks/Financials … the XLF has outperformed and made new highs … the overall market has followed. We are VERY close to a BIG ABCD completing on the XLF. If you remember the post on the Banks/Financials a few months ago, the XLF pattern failed and the market kept going higher.

If we take a look at the Banking index (NASDAQ) you will see it has been lagging badly compared to the overall general market. REAL leadership in the Banks/Financials would have this MUCH higher.

Sure looks like a zig-zag correction and 1.68AB=CD was hit Friday.

Where are you Mr. KRE?

The VIX is/has been flirting w/ going single digits but, it’s been LOW for a very very long time. There is NO FEAR in the market right now.

The sentiment/ fear-greed/bullishness is at MAX levels … NOBODY is bearish.

I was on my good friend Larry’s show and we were discussing he unrelenting advance present. He mentioned, in some weekend mail traffic that the last week on WED-THS there was the HUGE rallly of over 1o0 handles in the S&P500 while awaiting the FED’s decision/action. On both of those days the cumlative net open interest dropped.

We need to also pay attention to the companies that are, basically, controlling the market as custodians. Vanguard, State Street and Blackrock control roughly 70% of all trading going on … One would think that these would be at new highs …like everyone else?

Larry showed this over the weekend:

when we look at the shorter term cycles … we can see this one going on w/ the S&P500. Notice the harmony w/ the lunar eclipse and the moons synodic cycle:

A non-correlated, but a goody, at looking for both bullish and bearish inflections in the market – ratio analysis of XLP/NYA is VERY close to MAJOR support which, in the past, has been “bearish” for stocks. Again, it’s a “institutional gauge” of risk/risk off.

When it’s risky – the smart guys like Tim but toilet paper …the XLP does WORSE (from a relative strength standpoint) than the overall market and vice versa.

The target appearing on the XLP/NYA is the LARGEST MEASURED MOVE correction in the ratio since the inception of the XLP. PAY ATTENTION TO THIS LEVEL and the .618 retracement (from the all time low) a little lower.

There are MANY stocks that are manically parabolic … stocks like LLY will crumble and fall like a stone. As demonstrated before, the parabolic moves, from a pure subconscious level, have to balance and that massive move up will be followed by a big correction. It happens, every time …

NVDA will do the same … yes, I believe NVDA is going higher BUT I think we need a good ole’ corrective move to cool everything down.

Here’s LLY parabolic:

Here is LLY in MONTHLY LOG scale .. bumping right into the upper channel:

The market is overextended. Large, monthly targets are being hit.

If a perennial bull – think of taking profit or have some sort of “loss” stop in mind. Some are calling for a MASSIVE TOP and others are saying this bull market continues for years.

I try, the best I can, to just look for patterns.

ACROSS THE BOARD SELL PATTERNS HAVE AND ARE APPEARING …

IF they work, THEN – at a minimum – expect a good 6-8 week “pullback” that must be bought. LET’S JUST WAIT FOR THE FIRST BUY PATTERN TO APPEAR AND LET IT RIP.

IF the fail, THEN – this market could explode higher … into a parabolic run up that will put the 2000’s to shame.

MANAGE THE RISK … that’s all we can do.

Banks/Financials – January 7, 20224

Last post on Banks/Financials: https://bartscharts.com/2023/12/04/banks-financials-december-4-2023/

Update …

If you’re a BULL you want these patterns to FAIL.

If you’re a BEAR you want them to WORK.

Banks/Financials lead us UP and they lead us DOWN.

Decision time Banks/Financials …

Also, take a look at XLF … completed, not only a Gartley SELL but it also has an embedded BUTTERFLY SELL PATTERN w/in the Gartley. IF XLF gets above the upper zone of the red rectangle – off to the races but it has to get thru a LOT of resistance, first.

Cheers – Bart

Banks/Financials – December 4, 2023

It’s all PATTERNS – at least for me.

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 …

Cheers …

Banks/Financials – July 27, 2023

Saw the gap up today – pretty darn impressive – so I immediately went to the XLF and “figured” that it would have gapped up w/ everyone else and blew over the .786 retracement and off to the races. IT DID NOT. Hmmmmm

Because of that, I cruised around JNK, XLF, $BKX and KRE and saw a lot of TIME convergences and SELL PATTERNS completing ….add that to the amazingly insanely bullish sentiment out there and, well, is this is easy as it looks to get long, set it and forget it?

Not until the financials and Junk Bonds show strength and really rally …until then, I’ll hold my powder w/ regard to the broad equity indices.

WATCH THESE PATTERNS for a clue to what is next.

The banks/financials ALWAYS lead us UP and, also, lead us DOWN.

for the two charts above, note the TIME component of the ABCD “basic” projection …

below is the KBW Banking Index. Same picture but spent a little bit more “time” on the “time” aspect (get it, that was supposed to be funny) and noticed that, since, basically, last year the TIME component of pullbacks have been pretty consistent (see blue arrows) and, now we have an ABCD in price and time along w/ some other “basic” static cycles.

the other thing I want you to study is the “fractal” nature of these two patterns.

pretty key level for the Banks/Financials:

Junk Bonds have tried to break out 8 times from the .618 level. If they break down below the gap zone shown, this could be a big deal. Note the green horizontal lines – no swing low has been broken since Oct 2022. So …. keep an eye on the Junk Bonds

XLF – July 13, 2023 !

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.

XLF – Financials – July 01, 2023

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.

PAY ATTENTION TO THIS LEVEL ON XLF

JPM – May 21, 2023

This is a long term monthly count from JPM that stretches back 50+ years.

Folks, certainly doesn’t “feel” like a 5 wave move in JPM is complete but the count doesn’t break any rules so … 5 waves complete?

Here’s the daily chart below – calling attention to the island reversals and the island reversals that could be at play – right now. Here’s the last post on it: https://bartscharts.com/2023/05/04/jpm-may-04-2023/

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:

Banking Index – April 24, 2023

Last post on the Banking Index: https://wordpress.com/post/bartscharts.com/21122

Well, guess you can say “here we go” or “lets get it on” (cue UFC John McCarthy) …

Banking index has complete the ABCD from the low and the “scary” times … it’s all good, correct? Well, guess we will just have to wait and see.

Next stop: 66-68 or lower. Guess we’ll just have to wait and see, right?

Longer term targets below …

note, the next chart is LOG SCALE

Banks – March 13, 2023 (updated)

Last post on the Banks: https://bartscharts.com/2023/03/09/banking-index-march-09-2023-update/

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.