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 …

New York Stock Exchange Index – $NYA

the NYSE Index has a TON of stocks in it and is a very good gauge of the overall health of the market.  As you can see there is still a much bigger target (almost perfect – an AB-CD and 1.618 extension on top of each other ON A MONTHLY) out there in/around 14217. But note the blue measured moves … they have been very consistent in causing resistance … so, we might be in for another bigger dump if you look at the daily.

strength should get this puppy moving up to the target mentioned above around the 14,200’s so watch this index closely in the coming days and weeks.

have a great LABOR DAY weekend and enjoy your life …

Bart

 

Continuing to Monitor the XLP / NYA important ratio …

did this for Andy and the gang @seeitmarket: https://www.seeitmarket.com/are-consumer-staples-signaling-a-volatility-omen-17331/

here’s an update as of Friday’s close:

If I learned anything from getting my CMT it was the power of ration analysis.  X/Y …. If X is stronger the chart goes up and if Y is stronger then the chart goes down. And, since we are charting securities guess what works on them –the PATTERNS.  So the theory goes IF the insititutions are risk off the chart goes down and volatility is suppressed.  If the institutions are risk adverse then the chart goes up and volatility picks up and stocks sell off.

Thesis:

  • MONTHLY of XLP / NYSE Index w/ candles being the ratio and the blue line being the NYSE Index.
    • Note, at EVERY major inflection of the NYSE Index the RATIO pivoted … it either inflected to go up or down BUT every move of the NYSE Index respected this move.
  • Monthly XLP / NYSE Index.
    • Note, most oversold in 6 years and slammed into the .382.  Weekly bearish close … did expect it to respect this area and w/ Bradley Date, Martin Armstrong Directional Change and the note from Mike – along, and most importantly, the PATTERNS I did expect this to find support and give at least a daily BUY signal.  It has not done that …but all is not lost.
  • Monthly XLP/ NYSE Index
    • Note, if we don’t find support here then we have a measured move target a little lower and, ultimately the big green target …
  • Daily XLP/NYSE Index
    • Note, the time component (somewhat of a 3 drives to a bottom but still in line w/ ‘time’ of every rally ….
    • Note, the 1.618 w/ an AB=CD (nice time on AB=CD) right at our .382 from the all time low
  • Intraday (5 minute) XLP / NYSE
    • Yes, we closed at the lows … but yes we ‘really didn’t’ break the lows so in order for this market to pivot and correct next week believe this level needs to hold and rally tomorrow morning.

 

Conclusion: believe this ratio remains important for the overall health of the market and if it can hold these lows then volatility should uptick and the market sells off. IF we breakdown from these levels THEN we’ll seek the next lower target and the market will continue top march up a wall of worry.

New York Stock Exchange … PATTERN COMPLETE in Price and Time. CAVEAT EMPTOR

Personally, I like this index – why? as far as I know, they no longer have a futures market for it so “what you see is what you get.”

From Wikipedia: The NYSE Composite is a stock market index covering all common stock listed on the New York Stock Exchange, including American depositary receiptsreal estate investment truststracking stocks, and foreign listings. Over 2,000 stocks are covered in the index, of which over 1,600 are from United States corporations and over 360 are foreign listings; however foreign companies are very prevalent among the largest companies in the index: of the 100 companies in the index having the largest market capitalization (and thus the largest impact on the index), more than half (55) are non-U.S. issues.[1] This includes corporations in each of the ten industries listed in the Industry Classification Benchmark. It uses free-float market cap weighting.

Funny, it hasn’t made a new high has it?  if you have been following our work of late, we have rolled 6 major thesis points in the intermarket world that shows a top is at hand or in place.  We have also looked at ratio’s of staples/spx and wallmart/spx and have shown PATTERNS that have completed.  we also have used extremely long term points to look for resistance areas (see DOW post) and now we are using the all time low on the NYSE Index to show how in October 1974 at 347.7 and showing how that is a key node for projections and retracements ..

so what do we have now … we have a major pattern completing on this “pure index” on a monthly basis.  also, and I think most importantly, we have the purple triangles equal to each other in PRICE and TIME.

but, I’m going to be objective here — PATTERNS do fail.  I am an intermarket musician and I try to weave patterns across multiple aspects of the circle of life and look for key inflection points.  I am NOT a TIMER or a BOTTOM/TOP picker.  I’m a pattern recognition trader and if that is a top or bottom, I really don’t care …

I’ll leave you w/ one final thought … a fellow trader, mentor and dear friend has lived and breathed and still trades the market after 60 years of being in the game… his quote today was “I have never seen anything like this in my trading life.  SOMETHING is not right in camelot.”

And the band played on … a chart for your viewing pleasure:

New York Stock Exchange Index
New York Stock Exchange Index