bottoms and tops of circles …S&P 500 an update

05/17/2016 – the noise in the market right now is crazy – bull this, bear that, Trump this, Fed that and on and on …today’s sell off hit the top of a circle.  see how easy that makes it …? the below was posted 5 months ago looking at this area for a resistance zone.  there is a reason but perhaps it’s as simple as it was the top of a circle?  Probably not, but that’s what I think …

 

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1×1 exceeded since inception … kaboom

12/10/2016 – ‘so just hang on to go up or down …’ – looks like it wanted to go up. note the explosive move behind the first time – ever – of going above the 1×1 since inception.  a monthly close above this line is very explosive.  BUT, I DO BELIEVE WE ARE CARVING OUT THE LARGEST TOP – EVER – in the Equity Market.  Ride this pony while you can …

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11/12/2016 – wanted to provide an update.  the ‘square out number’ isn’t static.  in fact, it changes every day. in this case, as we continue vortexing thru space we see that we are now, essentially, 2180 days since the ‘birth’ of the S&P 500.  Of note, the post election crazy rally was stopped dead in it’s tracks by 2180.  that’s the ‘key’ number right now … the market ‘wants’ to balance itself (remember: form, proportion, balance) so it’s no real surprise that the market went right up to that NUMBER.

so, what happens next? I honestly have no idea … but i do know that the market will move from these levels, usually, w/ a vengeance so just hang on to go up or down … a “weekly” close above one of the numbers tied to the square out would be bullish.  a big break down below some former support would be bearish.

for now, as we bounce around these harmonic numbers of price/time – just chill and let it make up its mind.

hope this helps.

Bart

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10/7/16 – just wanted to check in before the weekend.  below is a chart that “visually” depicts the SQUARE OUT where PRICE EQUALS TIME and the TREND LINE you can create.  In this case you can see the 1×1 is currently the REASON for the resistance on the S&P and then we simply did a 1/2 point/day and, why were were at it, a .382 point/day.  HINT – why not try “musical notes” *days since inception or all time low.  I bet, if we use, say .9438*days we’ll get close to the 2000 high and, while were are it, 1.05946*days we’ll be resistance on the cash S&P.  It’s early on the West Coast … I don’t feel like doing it. Try it yourself.

also, we are using a CONSTANT 1 point/day “velocity” (in this case we use PRICE and TIME to create the vector math) and what else moves in a CONSTANT ? (hint – look up in the sky) YES, you got it … so, while your at it, use a planet and move them a certain amount of degrees in a certain amount of time. How about 100 degrees/100 days – 1 to 1 and see what happens.

Have a GREAT weekend.

B

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08/27/2016  – looks like we are still “squaring out” the date of the inception of the S&P500 w/ this past weeks weekly close.

again, this is not “bearish” or “bullish” but a heads up that at “square outs” stuff happens … go w/ the flow.

rock on, ok?

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PATTERNS … work and they fail.

PATTERNS tell us of possible inflection points.

PATTERNS also tell us very important areas of interest to trade around ..

What if .. what if the PATTERN on the cash S&P has finished or is very close to finishing a sell signal?

That would mean we are at major resistance and the market “should” respect a PATTERN that has its genesis from it’s all time low 50 years ago….

IF the market DOES NOT respect this area and goes higher then we are really really really strong and I wold look to go LONG after a monthly or weekly close above these levels.

so, don’t shoot me- I got tons of crap this weekend for posting about the Utilities Pattern hitting (seems to be working so far) and I’m just mentioning that a “classic” AB=CD PATTERN is pretty much done on the S&P.

Pay Attention ….

Bart

PS – tons of cycles are hitting this week so just go w/ the flow and catch the wave that should begin soon.  No idea which way it goes, it’s just a pattern.  TRADE IT or NOT.

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PS — also, the you’ll note the SK&P was BORN on March 4, 1957 or 21708 days ago.  21708/10 = 2170.8.  Were only 10 points away from that price … if we close below 2171,2172,2173 etc. in the coming days the market has SQUARED OUT PRICE and TIME.  “Stuff” usually happens around those occurrences.  An FYI …

Update on the ‘birth’ of the S&P500 and Friday’s close

11/20/2016 – again, “she’s getting ready to blow” but who knows what direction, right?  Just pointing out that we did ‘another’ square out on Friday. This one, as they usually are, was perfect. Math is below on the chart.

I plan on just going w/ a Signal Reversal Candle – if going short the LOW of the candle that made the high is taken out ON CLOSE by the daily or weekly and if going long a close above 2200 (daily or weekly depending on your timeline) should suffice.

Also, the ‘price’ could grind/gravitate up a wall of worry so to speak.  but, it’s been my experience that the ‘break down’ or ‘break up’ usually occurs at one of these square out numbers.

Do well, be good and rock on – ok?

Bart

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11/12/2016 – wanted to provide an update.  the ‘square out number’ isn’t static.  in fact, it changes every day. in this case, as we continue vortexing thru space we see that we are now, essentially, 2180 days since the ‘birth’ of the S&P 500.  Of note, the post election crazy rally was stopped dead in it’s tracks by 2180.  that’s the ‘key’ number right now … the market ‘wants’ to balance itself (remember: form, proportion, balance) so it’s no real surprise that the market went right up to that NUMBER.

so, what happens next? I honestly have no idea … but i do know that the market will move from these levels, usually, w/ a vengeance so just hang on to go up or down … a “weekly” close above one of the numbers tied to the square out would be bullish.  a big break down below some former support would be bearish.

for now, as we bounce around these harmonic numbers of price/time – just chill and let it make up its mind.

hope this helps.

Bart

page_16-11-12_13-37-43 page_16-11-12_13-39-31

 



10/7/16 – just wanted to check in before the weekend.  below is a chart that “visually” depicts the SQUARE OUT where PRICE EQUALS TIME and the TREND LINE you can create.  In this case you can see the 1×1 is currently the REASON for the resistance on the S&P and then we simply did a 1/2 point/day and, why were were at it, a .382 point/day.  HINT – why not try “musical notes” *days since inception or all time low.  I bet, if we use, say .9438*days we’ll get close to the 2000 high and, while were are it, 1.05946*days we’ll be resistance on the cash S&P.  It’s early on the West Coast … I don’t feel like doing it. Try it yourself.

also, we are using a CONSTANT 1 point/day “velocity” (in this case we use PRICE and TIME to create the vector math) and what else moves in a CONSTANT ? (hint – look up in the sky) YES, you got it … so, while your at it, use a planet and move them a certain amount of degrees in a certain amount of time. How about 100 degrees/100 days – 1 to 1 and see what happens.

Have a GREAT weekend.

B

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08/27/2016  – looks like we are still “squaring out” the date of the inception of the S&P500 w/ this past weeks weekly close.

again, this is not “bearish” or “bullish” but a heads up that at “square outs” stuff happens … go w/ the flow.

rock on, ok?

Page_16-08-27_09-03-43



PATTERNS … work and they fail.

PATTERNS tell us of possible inflection points.

PATTERNS also tell us very important areas of interest to trade around ..

What if .. what if the PATTERN on the cash S&P has finished or is very close to finishing a sell signal?

That would mean we are at major resistance and the market “should” respect a PATTERN that has its genesis from it’s all time low 50 years ago….

IF the market DOES NOT respect this area and goes higher then we are really really really strong and I wold look to go LONG after a monthly or weekly close above these levels.

so, don’t shoot me- I got tons of crap this weekend for posting about the Utilities Pattern hitting (seems to be working so far) and I’m just mentioning that a “classic” AB=CD PATTERN is pretty much done on the S&P.

Pay Attention ….

Bart

PS – tons of cycles are hitting this week so just go w/ the flow and catch the wave that should begin soon.  No idea which way it goes, it’s just a pattern.  TRADE IT or NOT.

Page_16-08-09_12-12-10

 

PS — also, the you’ll note the SK&P was BORN on March 4, 1957 or 21708 days ago.  21708/10 = 2170.8.  Were only 10 points away from that price … if we close below 2171,2172,2173 etc. in the coming days the market has SQUARED OUT PRICE and TIME.  “Stuff” usually happens around those occurrences.  An FYI …

Using Elliott wave, the easy way

I love Elliott Wave –  when it works.

I used to teach CMT III and the Elliott Wave principle and tried to make it easy. I am guilty, probably like a lot of you, of trying to count every squiggle and label this sub-wave that sub-wave and into oblivion we go.

So, here’s how I use it:

  • LIVE BY THE RULES
    • 2 can’t go below/above the beginning of 1
    • 3 can’t be the shortest
    • 4 can’t correct and overlap the end of 1 (we’ll get to this later)
  • If you can’t count it, it’s probably correcting.
  • If you see a 3rd of a 3rd figure out where it could end and BUY after Wave 4 correction over …
  • If your going to study anything .. STUDY CORRECTIVE MOVES!
    • Flats, Zig Zags, Triangles, Double and/or Triple Three’s, etc.
  • Again, if your going to study anything… STUDY THE CORRECTIVE MOVES.

That’s it … if your a sub-wave of a sub-wave kind of guy/girl so be it.  count away!

so, why bring this up now?

Well, we are at a critical juncture and, understanding the wave principle RULES will help.

below is a daily chart of the S&P 500 cash since January 2015.

note I didn’t label the top a 3 or 5 … I’m not ready to do that because I want to see what happens next week.

you see, let’s go back to the 4 can’t correct and overlap the end of 1.

see the blue rectangle around 1990 (go Navy, class of 1990 (that’s synchronicity at it’s best on Army Navy day) ? IF we are to go higher in the near term and take out the new highs for another run we cannot close on a daily basis below that level.  I don’t mind if we get an intraday spike below it but close above it on a daily or weekly basis but if we take that level out then the August lows will be attacked.

it’s that simple …we are finishing a near perfect BUY pattern on the cash index.  as we have shown when patterns fail, the move is usually big and strong in the opposite direction of the pattern.  if this BUY pattern works, then wouldn’t be surprised, at all, if we attack 2120 and higher in the coming months.

make sense?

Bart

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here’s the BUY PATTERN ..

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1856 ….

if you read my last post (here: http://bartscharts.com/2015/08/20/i-think-this-is-a-song-of-hope-robert-plant-live-stairway-to-heaven/ ) you’ll understand the importance of a “swing low.”

I’m watching 1941 – blue arrow measured move that has happened before but, more importantly, 1856.  1856 represents the largest correction down since 2009 BUT MORE IMPORTANTLY is a KEY swing low area … if we take out 1818 then this puppy could really breathe.

also, note how 1970 (close today) calendar days ago we did a plunging low in October 2010, rallied for a bit and then another climatic plunging low.

PRICE will ALWAYS equal TIME.

One last … don’t go long the equity market till the EURO starts back down …once dollar goes back UP then believe this cleanse could be complete.

Have a great weekend .. enjoy the ride.

STUDY the CHARTS and turn the TV pundit dorks off …

S&P 500 weekly
S&P 500 weekly

 

CHANCE favors the prepared mind …

I have learned almost everything I know about the TRADERS MINDSET from Larry Pesavento of http://www.tradingtutor.com.  He first introduced me to harmonic pattern recognition and after about 6 months I had trained my eye (thru his tutelage) to understand and see the swings.  Others – Michael Jenkins (www.stockcyclesforecast) have fined tuned my understanding of vibrations, patterns and the “other stuff” acting on the market.  I am so thankful for their friendship and tutelage.

Larry skyped and emailed me this AM (Sunday) and I thought I would share.

I felt compelled to attach the following video and charts – it’s simply PROBABILITY and, more than likely, VERY LOW PROBABILITY that the market will gap down on Monday.  IF it does then there is a PROBABILITY (again, probably very low) that the market could suffer significant losses.

So, give me or Larry NO credit for trying to be a “market timer” or “crash caller” or any of that nonsense.

It’s like this … before I became a student (always learning) of the markets I had the opportunity to fly for the Navy and attend TOPGUN.  At TOPGUN we planned missions and ALWAYS “what if’d” E V E R Y T H I N G.  Why?  Because , at 1.0+ IMN (indicated mach number) shit happens fast and if you haven’t thought of everything BEFORE the flight then when it happens you hesitate and then the shit hits the fan.

“He who hesitates is lost.”

The other thing I learned is there are A L W A Y S “causal factors” or “links in the chain” which forewarn events, mishaps, crashes to happen.  MOST OF THE TIME, not always, YOU HAVE TIME TO REACT.

So, simply put this in your portfolio or trader gameplan … it’s that simple.

IF **** THEN ***.

TRADE YOUR GAMEPLAN and rock on, always.

Bart

PS – Larry has been TRADING in the markets for 50+ years. (yes, you read that right) so when he “foot stomps” I listen.  How many of us have that longevity in the market and can, as you read below, actually discuss trading DURING THE 1987 crash? Just saying …



From Larry:

“As we come into this week’s trading we are looking at a very similar situation that occurred in 1987. I’ve sent out the previous video to explain this pattern. In 1987 I was heavily involved on the short side of the market looking for a big drop. In August I had purchased October put options. On Friday, October 16 the Dow Jones was down hundred and three points at options expiration and I have made a substantial amount of money. However, had I purchased November put options the amount would have been 50 times greater. Crashes do not happen very often in fact usually once in every generation i.e. 80 years or so! Everyone thinks of the Federal Reserve has the back of the banks and the public for investing in stocks. But what if they don’t? Unfortunately I’m not able to bring out a lot of charts to verify this but we’ve done this to the videos this weekend. The one chart that I did attach year that I think is very important is the one that shows a lack of volatility in the market. This chart also shows the reverse point wave pattern i.e. expanding triangle pattern that is so bearish!

In order for this crash scenario to unfold we must be down sharply this week. Keep in mind that this is a rare occurrence if it does happen but the pattern is certainly similar in the state of the market is certainly similar as we have more declining issues than advancing issues. On Friday there were 10 times more issues declining than advancing at the New York Stock Exchange. Declining issues at the NASDAQ were 2 to 1 over advancing issues, not to bullish in my opinion.

volatility 1929 1987 2015 (2)

all probability … check out Asia and, if you want to wake up and check out Europe around 3:30 AM (EST) then look for volatility in those markets as a roadmap – perhaps.

we all know this market can and will never go down anyway …

make it a great weekend.

Bart

revisiting the XLP/SPX ratio … AGAIN in June 2015

time for another update … take note, HIGHER LOWS in the ratio and it bounced off the .786 retracement w/ a nice MONTHLY hammer.  It sure appears this ratio is about to go up, which should put pressure on the stock market to move higher.

this has taken a LONG time to itself out ….

potential count for the ratio - note the higher bottoms since 2009.
potential count for the ratio – note the higher bottoms since 2009.

 

inflection points in the ratio correspond to movements i the VIX. NOTE THE HIGHER BOTTOMS IN THE VIX
inflection points in the ratio correspond to movements i the VIX. NOTE THE HIGHER BOTTOMS IN THE VIX

one last, below, showing the importance of this ratio and the monstrous divergence present.

  • w/ the Equity market soaring to new highs the RATIO should have been falling like a stone.  IT HAS NOT….again, in fact, it has made higher lows. This is a very important sector rotation development that needs to be paid attention to closely.  It WILL resolve itself.
EVERY HIGH and LOW in the equity market has corresponded to an inflection in the ratio....
EVERY HIGH and LOW in the equity market has corresponded to an inflection in the ratio….


 

folks, bringing this up, again, because this divergence is MONSTROUS.

in order to show the divergence and how something is “not quite right in toon town” I’ve actually inverted the ratio to show the S&P 500 on top this time.  t

the only reason is it shows the amazing divergence present .. when you look at the chart below notice the perfect synchronicity between the S&P500 and the S&P500/XLP.  but notice around 2011, the dance breaks up … that’s a big deal to me and while it’s true you obviously can’t fight the fed and it’s different this time what I believe it tells us is the “smart money” has stayed in staples or haven’t jumped into this amazing bull market as much as anyone thinks.

notice the divergence!
notice the divergence!

now, here’s the same ratio but this time we have the STAPLES has the numerator … note, when this ratio BOTTOMS the S&P 500 TOPS and when this ratio TOPS the S&P 500 bottoms.  EXACTLY … the theory is the institutions move in/out of “defensive” names during times of volatility so we expect the relative strength of the XLP’s to increase during bear markets / sell-offs (the ratio goes up) and decrease during bull markets/rallies (the ratio goes down)

the ratio HAS NOT GONE DOWN during the past 2 year rally phase … tells me the institutions have kept their powder dry.

XLP / SPX - note divergence and NO NEW LOWS on the ration ....
XLP / SPX – note divergence and NO NEW LOWS on the ration ….

just a matter of TIME …

IF you do ONE thing please WATCH this video …

Larry Pesavento (www.tradingtutor.com) is not only a mentor but a true friend and guiding example of integrity, passion and truth in the financial markets. He’s 75 (acts like he’s 16) and has made his living trading the markets for 50+ years. It’s an extreme honor to call him a friend.

SPOILER ALERT: over the years he called my family and left a message on the answering machine playing Santa for my kids … he’s that kind of a guy.

He’s worked w/ me around the MENTAL aspects of trading and working thru losses and a drawdown that I had in my CTA which had not occurred after 7 years of positive trading year over year.

Bottom line – when he speaks I listen.  We skyped tonight after the football game about the Chinese Yuan, Silver and being above ground and I asked him permission to post a video that he put out this weekend which I think was extremely important.  Of course he agreed because I truly believe he cares for all of us.

Here’s the deal – I full admit I went bearish in 2012.  Why? Well, it’s in this video – my thinking was not based on patterns but on an emotion of “how could they surpass the debt from 2007 after that chaos?”  I “think” it made sense BUT as anyone can see – the market has relentlessly marched upward and onward.

If you read this blog, you know I really don’t know anything about fundamentals. I am proud to say I am a pure play chartist and, quite frankly, pretty darn good at it. (Just ask Larry … :))  So, this video that Larry put out speaks to me … I don’t know “when” we get thumped but I am pretty confident that it’s going to happen sometime in our lifetime and it’s going to be RELENTLESS and BRUTAL and knock the teeth out of the financial landscape as we know it.

So … use a stop.

ENJOY and to Larry – my mentor and friend – thanks.

Bart