WMT set up …slow down and digest the logic… this is important, I think

BUY WMT (?)

  • note – measured move ( in price and time), polarity and an extension target ….
  • needs to stop here and start back up, IMHO.
  • we are also sitting on a former resistance zone of 15 years folks .. if break down from here – we’ll call that a “what’s the fighter thinking” moment …
  • here’s the charts:

Main20150901212940

Main20150901213152

 

with the above being posted I’m going to try and present the plausible IF-THEN scenario using PATTERNS and ratio analysis

  1. Ratio Analysis is VERY powerful and when coupled w/ PATTERNS it really gives you a flavor for institutional positioning and money flow.
  2. Certain stocks “own” the world of safety, risk-off, “if the word ends tomorrow I buy xxx”, etc.
    1. $WMT is one of those names.  A lot of the public shops at $WMT.
    2. So IF WMT is strengthening from a relative strength perspective then institutions are taking risk off … if it’s losing strength then risk is on …
    3. How do we know when to “wax on” or “wax off?” (Pardon the Karate Kid pun)
      1. HINT: PATTERNS.
  3. Here’s the text books SELL PATTERN on the SPY/WMT ratio
    1. What’s this mean?
      1. IF the PATTERN works then WMT is going to be a “risk off” asset and the SPY will lose relative strength to WMT.

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CLIFF NOTES: why is this important? See chart below … EVERY TIME since 2000 that the ratio inflected the SPY did at the EXACT TIME.

SPY/WMT ratio w/ SPY overlaid (blue line)
SPY/WMT ratio w/ SPY overlaid (blue line)

SO – “if then” w/ me …

IF this pattern holds then the US Equity market is in on the magical mystery tour … step right up, come this way.

IF it fails (the ratio goes higher) then this correction “should” end soon and game on ….

HINT HINT: watch monitor this ratio, closely.

THIS IS WHAT I SEE AND NOT WHAT I BELIEVE ….

Cheers and rock on, ok?

Bart

I’m watching 4 things …

PATTERNS on the ES, $NYA, Banking Index and Yen to tell me if we break out to new highs.

  • Banks are rolling.  That’s bullish – get thru level shown then we should surge higher
  • Yen, after an entire 6 weeks of doing nothing – EXPLODED.  119.80 line in the sand
  • ES “basic” AB=CD complete.
  • NYA shows a possible count calling for lower

Close today will rank in the “big deal” category in my very humbled opion.

Just a pattern guy … no idea what the jobs report, or rates, or any of that “stuff” means …

Main20150206120144Main20150206120327

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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

 

 

bunch of cycles coming together …but who cares

how many institutions are there out there ….?  perhaps 30-50K?  and, if you think about it they own 10MM+ shares of the big names.  the “big names” have, on average, say 5MM shares / day traded.  so, what happens if they try to get out of a non liquid market that has been manipulated by “buy” and “sell” programs …?  That’s a liquidity problem … but, perhaps I am the only remaining individual on the earth that thinks this market can correct — 20-30%.  I’m alone on an island …

here’s some more time/price coming together.

my pivots are 2020 and 1988 …

amazing …

more time and price coming together
more time and price coming together

Here’s what a PRICE EQUALS TIME trend line looks like …

in the world of numbers … well, they (being the numbers) don’t care about decimal points.  A new friend and extremely talented CMT recently twittered that the bull market is 66 months old. if we simply move a decimal point we get 666 which was the low and we also get 2006 days ago at/around a price of 2006.  anytime this market “touches” the “square out trend line” below it usually takes a dip.  one of these days it will take a “big dip.”

I AM NOT SAYING ANYTHING MORE THAN THE MARKET IS SQUARING OUT PRICE AND TIME … NO DOOMSDAY, THE SKY IS FALLING, BEAR MARKET, CRASH, ETC.                                                                      JUST WE ARE SQUARING OUT THE LOW IN THE CASH S&P AND THAT’S SOMETHING TO PAY ATTENTION TO …

a "perfect" price and time trendline
a “perfect” price and time trendline

Gold game plan potential

CLIFF NOTES: prior Gold work – http://bartscharts.com//?s=gold

CLIFF NOTES 2: 1370 will be key to the last leg of a triangle, thrust DOWN and out of the triangle and then a BUY.

CLIFF NOTES 3: note the first chart.  Again, it’s ratio analysis of GLD vs SPY.  What we are looking for is a PATTERN to show a SHIFT in the relative strength of one security versus another. In this case, the S&P 500 has out performed, tremendously, the GLD since 08/2011.  But look what just happened .. we completed a pattern at the .786 and 3 weeks ago,we found support and NOW it’s starting to move UP along w/ SPOT GOLD, ABX and the overarching Gold/Silver Index.  A key development …

ratio analysis of GLD to SPY
ratio analysis of GLD to SPY
GLD vs QQQ
GLD vs QQQ
GLD / DJIA
GLD / DJIA

THIS IS A CHART W/ HISTORICAL PRICES SINCE 1913

gold since 1913
gold since 1913
gold gameplan
gold gameplan

 

note ABX – Barrick Gold is confirming this move … a revisit of our BUY recommendation. ( http://bartscharts.com/2014/05/21/abx-buy/ )

ABX
ABX

Gold/Silver index appears to be on par to put in a MONTHLY signal reversal candle … (http://bartscharts.com//?s=gold+silver+index )

Gold Silver Index
Gold Silver Index