The XLP/NYA ratio is approaching KEY resistance. If this resistance holds, then the market (s) should find support …
Well, looks like the market broke …LOL.
For support, our first target has appeared nicely.
Watch this level on the XLP/NYA … probably tomorrow or Monday the way things have been going.
Also, don’t forget about the 1×1 trendline from the all time low on the NYA … if bullish, this should offer some support …
More targets, albeit lower, are appearing …
I sense/believe (therefore probably wrong) that this rally will be a chance to fade and short again.
While I’m aware, obviously, of the tariffs I’m not paying attention to any of it. The patterns warned us all the way back in December.
Folks, we have two nice projections into what SHOULD be support … hate to say it, IF these patterns fail, then this could REALLY accelerate to the downside. Stay vigilant …
BIG MOMENT of inflection here … this support needs to hold for a correction to unfold or we could be exploding higher.
For those of you who have been following this blog, you know how much I “lean” on the XLP/NYA ratio.
It’s one of the best tools to monitor ‘institutional money flow’ or ‘risk on- risk off’ appetite of the ‘big guys.’
Ratio goes UP then the numerator is stronger – XLP.
Ratio goes DOWN then the denominator is stronger – NYA.
Going up signifies rotation (the Staples are getting stronger from a relative strength perspective) and stocks correct or going down …
Going down signifies “risk on” as the institutions are rotating out of defensive names and have a more “riskier” appetite.
A few weeks ago, we did the near perfect PRICE and TIME corrective move in the XLP and the importance was the correction was the largest measured move correction since the XLP came on the scene in 1998. Pretty big deal …
At almost the same time, the NYA was smacking into the 1.618 price projection from the all time low and beginning of the NYSE. We had LONG TERM price projections hit in BITCOIN, Transports, Semi-Conductors, etc.
Time for a correction – right?
Hold your horses … for only the second time in 14 years we have penetrated a long term horizontal line of support and we are sitting right on two very important ratios.
Take note, the two times we did penetrate this level (appears to be two months in a row) we sprung back (the ratio) and it led to an almost 2 year correction.
So, PAY ATTENTION TO THIS LEVEL as it’s not a far stretch to believe that this level gets smoked to the downside and we vacuum down to the .786.
We are a BIG point of inflection … stocks stop here OR the can explode higher and higher.
Markets are topping or have topped. Caution is warranted …
Folks, next set of targets, across the board, are here … the prior pattern targets all failed so who knows what is going to happen next. It’s just patterns folks.
CAUTION certainly warranted here …maybe take profits w/ a weekly/monthly signal reversal candle?
The market relentlessly continues its push higher and higher and higher. Will this rocket ship ever run out of gas?
Folks,
have to admit, somewhat ‘surprised’ at the continued strength of the US equity indices.
the YEN ‘surprise’, the all time low square out on the NYA, the perfectly harmonic measured moves on the DJIA, etc. etc. etc. and the market just doesn’t seem to care.
so, we have ‘another’ major target on the NYA a little higher (about 4-6%) and that “SHOULD” cause resistance but …who knows.
The entire read area is the big zone of resistance. So, while it is exciting to see the strength of the market (s) – they are banging into STIFF resistance.
So, CAVEAT EMPTOR, for now … let’s see them blow thru the above resistance before I really get on the bandwagon.
Then there is my “go to” – XLP / $NYA.
Yes, there are only 30 stocks compared to the 5000+ for the NYA, I’m looking for “institutional sentiment” by the ratio.
The thesis being IF this was truly RISK ON THEN this ratio would be falling hard. Note, it is not. In fact, it found support at the largest (pink) corrective move in the history of the ration (roughly 20+ years) and there was a “daily 3 drives” right at that level and, thus far, it’s showing strength.
Hence, the market should be finding resistance/going down … it’s not so something is amiss now isn’t it? Yes.
Either the ratio blows thru (to the downside) the .618 retracement and the .618 abcd and the largest measured move down ever (pink arrow) and, finally, a daily 3 drives then YES this is a very bullish market and the ratio will probably go lower causing the markets to explode even higher and target the lower level … then she tops.
Who knows? For now, I’m just waiting to see which way she blows and then try (operative word) to get a piece of it and not be greedy or emotional. Tough sometimes, isn’t it?
Then we can’t forget to mention the coolest/craziest square out that we’ll ever see in our lifetimes again – today is 18, 121 calendar days from the all time low in 1974. I took a look at the last time the trend line was hit and it took almost 5 months for the market to finally give away. So, perhaps we shuck and jive up hear up and down until she just gives? Certainly a possibility….
Take a look at the chart on the hourly. Note, the “exact” trend line could be off w/ slippage and the chart package but close enough. So, I just don’t see the market taking off like crazy w/ this square out happening – now. But, the market is always right, so maybe it doesn’t care about the biggest square out ever ? Perhaps not?
The concept of a “square out” is one of the most important in all of harmonic trading.
In this case, we believe that PRICE and TIME are the same thing … they are a NUMBER and they are intertwined. Say price makes a high (or low) of 50 … then 50 seconds, 50 hours, 50 days, 50 degrees of planetary motion (time), etc. etc. are spun out.
For the NYSE Index we have a BIG square out approaching.
The all time low on the NYSE Index was on 10/03/1974. That was, from tomorrow, 18050 calendar days ago.
18050-17728 (Friday’s close) = 322 points.
We are 322 points away from a HUGE square out of PRICE and TIME.
Take note of the last “big high” about 2 years ago … in that case, the market closed at 17,259 which so happened to be EXACTLY 17,259 calendars from the all time low. That is the significance of the red trendline – it’s the 45 degree angle and 1:1 or 1 point/day trendline. We REALLY want to NYSE Index to climb another 300 points to tag that red trend line … perhaps that happens mid-late next week.
Additionally, we have pretty large bearish divergence on the MONTHLY RSI and we have the same “fractal” pattern that existed in the move before the 2020 thump.
Then, just a little bit higher we have the measured moves which have been responsible for EVERY UP MOVE since the beginning of this index.
I sense/ believe, we are getting very close to a top (maybe THE top but I sense “A” top) ….
You’re probably aware the fear and greed sentiment indicators are thru the roof w/ extreme greed and then “Mr. Reliable” shows up … the “magazine cover indicator”
Last, here’s the geometry of the NYSE Index derived from the BIG MOVE off the low from 1974.
On this chart you will notice I put the “retracements” at the lows of 2002, 2009 and 2020 using the “node” of the all time low. The reason I do this is to check and see (Ronald Regan – TRUST but verify) if this is a significant node. As you can see, drawing the retracement grids using the all time low as near perfect.
2002 = .382 retracement
2009 = .618 retracement
2020 = .382 retracement.
This is a good number …how good?
Well, 350*51.50 = 18, 025 which so happens to be the exact angle of the Great Pyramid of Giza. Just saying …. 😉
That vector (blue arrow) represents the “rock hitting the water” and creates the harmony and music ….
And, of course, all this means is it could very well blow thru this level and take off parabolically.
Just like the last post on the Banks ( https://bartscharts.com/2023/07/01/xlf-financials-july-01-2023/ ) the NYSE Index – an index composed of all the stocks traded on the NYSE (~5000 securities) – is tipping it’s hand and showing a VERY important SELL PATTERN.
In this case, we have ABCD in PRICE and TIME.
If this market is bearish, this sell pattern will work …
If this market is bullish, this sell pattern will fail and the band will play on …
The PRICE AND TIME aspect of this PATTERN make this one VERY important …
