Important Correlation

chart below has Palladium w/ the NYSE Index overlaid on top.

the candles are Palladium and the blue line is the NYSE Index ($NYA)

note, currently, Palladium is correcting pretty steeply … in the past, this has led to the overall stock market to correct also. is this time different?

XLP/NYA – wow what a level

wait for a close ABOVE the dashed green line to short stocks.

last post on XLP/NYA: https://bartscharts.com/2021/05/13/xlp-nya-at-it-again/

we have 6 ratios at the low on the ratio – that SHOULD provide monstrous support … but look at the thrust into the level. begs of caution …

so, check out the ratio on Monday and next week look for a daily close ABOVE The dashed green line to short stocks ..

XLP/$NYA – our favorite ratio and a twist…

you realize I watch the XLP/NYA ratio – a lot – and one of the things that I never did till today is look at the “time” component of the first leg down from the XLP inception. today I did and that “time” component aligns nicely w/ a “May” timeframe to really be on the look out for HUGE support in the ratio (which equates to weakness in equities) just a little further below.

if you look at the most recent action certainly looks like we have one more wave lower into the HUGE SUPPORT zone and then, well, it’s judgment day in my humble opinion.

the ratio (XLP/NYA) is the ONLY thing I’m watching w/ regard to equities …

last XLP/NYA ratio post …above

I’ve been monitoring the ratio, daily, for a while as I really wanted the ratio to go down into the “major support” area as I could then feel probability was on my side to take a crack at shorting the market. yes, shorting the market …

if you’ve been reading my blog for a while and for those newer blog readers you will find out/know that the patterns on the XLP/NYA ratio have been exact and helpful in understanding the flow of funds in the big institutions. KEY.

so, I noticed the “key trend line” last time I blogged and noted it but, honestly, haven’t been paying that much attention to it .. just had the lower “major support” level on my hand but, the “key trend line” looks like it has tagged the ratio and provided some much needed support for this falling knife.

now what – well – we are kind of in no mans land … but, I’ll be watching closely and, keep the “major support” level a little below in the back of your head …

don’t forget this target on my favorite ratio …

note, on the monthly, looks like we will start the month closed below the key trend line from 2007. and he market accelerated upward.

that being said, we are approaching the “target zone” for a lot of math and I also want to call your attention to the monthly RSI and the support zone that its approaching …

I went back and checked .. the last two times it touched this low of a level in the past 15 years was 05/2018 which was part of a -40% ish correction and 07/2007 and we knew what happened during that time frame.

Caveat Emptor …

XLP/$NYA update

you can go to any financial site and check out “why” the equities sold off today … it could be any number of reasons. at the end of last week, we had a double 3 drives to a top pattern w/ timing that said “monday” is important … to me, it is as simple as that.

in addition to that, take a peak at the XLP/NYA ratio. bounced off some BIG support so the sell off is nothing that wasn’t expected.

how big will this become – if at all? no idea if it’s a one day blip or a big thump coming. just going to look for patterns ..that being said, a ton of euphoria, a lot of SELL PATTERNS and our ratio analysis showing support and Staples to outperform the broader market which usually means – risk off.

stay tuned …

XLP/NYA ratio …

ratio slowing it’s advance .. pay attention for “trade” like support …

we have a pretty big ‘wick’ up at the all time high on the ratio and closed w/ a doji today at the level that’s basically equal to the close on Friday. Basically, even though we were down 500+ the ‘fear’ subsided w/regards to the Staples/NYA ratio. this lack of follow thru is telling .. is the low in place, yet. I HAVE NO IDEA but I do trust this ratio .. until we CLOSE ABOVE the blue rectangle area on a WEEKLY basis I’ll move to a neutral stance in the equity market for now … trading bounce (not necessarily a long term investment buy) appears to be working into the vernacular …

monitoring the NYSE Inex

my last two posts concerning the NYSE Index and the relative strength of the index (ratio analysis) are here:

just providing an update as it looks like the NYSE Index is about to start a ‘corrective’ leg down … then, ultimately, I will be looking for the BUY PATTERN lower (will try to update if/when it comes) and then an attack on the long term target that I keep showing …

below is the XLP / NYA (relative strength using ratio analysis) – note it is going UP which means staples (on a relative basis) are out performing the overall market = risk off mindset. so stay cautious until we finish this fifth wave up …