Transports and F#

Transports at critical level

The last time I posted about the Transports they were finishing measured moves and the target w/ in around 9700-9800. The index blew thru that area after some consolidation and tapped out around 11, 500. We now have a very nice pattern taught to me by Larry Pesavento – the 1-3-5 and it appears that the index is starting back down. There are two interpretations that I’m showing – 1 is very bearish and the other is very bullish. Either way, in the near term, I expect a pullback and if we get a BUY pattern I’ll buy w/ a stop and if we get a SELL pattern I’ll sell w/ a stop. I’m a pattern dude do I’ll just wait and see …

Kind of cool that the price projection from the all time low from the 1930’s was 1.68179 (F#) and we stopped on the .68179 retracement. In the world I live in (you might not, so don’t worry about it or believe) what’s that usually telling me is the ‘index’ is respecting (OK vibrating) to that ratio and it’s inverse …

The bullish case is that we stopped at exactly the same price point as we did every other time since this powerful move began in the early 2000’s …

hope you have had a good weekend.

Bart

“I think this is a song of hope …” Robert Plant Live Stairway to Heaven

The S&P 500 has been climbing a stairway to Heaven ..

download

folks coming into 2015 we had some pretty strong patterns appearing.  some worked and some didn’t – isn’t that what we expect? that being said, it was prudent to be cautious due to their presence.

here’s what I posted around a year ago:

“Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.”

so, while we’ve sold off for the past couple days let’s not go crazy.  we have broken ONE swing low and that’s it, and it’s ONLY a weekly.  WE HAVE NOT BROKEN A MONTHLY SWING LOW.

so, keep it ALL context of the big picture.  We break a swing low on a MONTHLY and then a second then we have “issues.”

but for now, EVERYONE knows this puppy was on steroids and need some shaking out so let’s look for a pattern to BUY on a weekly (hint hint – it needs to breathe a bit) and if a bear I would still be very cautious.

what do we know and see … ?

  • we know a weekly swing low is about to be taken out and we’ll know that ONLY WITH THE CLOSE TOMORROW … we also know this has NEVER happened since March 2009 bull market began.

so, here’s the logic:

  • if weekly close below a swing low … get defensive.
  • if not, then keep in mind, we have pressure on the downside and it probably needs to breathe down so just chill …

enjoy the post below .. you’ll see some of the patterns were early, some were spot on.  that’s not the point .. the entire post below is around the market action around a SWING LOW or SWING HI and to respect them — very very strongly.

let me know if you have any questions.

chart below is the ES .. note the red horizontal swing lows. those have never been broken on close. it might happen tomorrow …

Bart

S&P Futures Swing Lows since 2009
S&P Futures Swing Lows since 2009

 

 

 


chariot-topper

As we have discussed multiple times in this venue, the move since 2009 has been one heck of a ride.  This chariot of stock market emotion is, literally, off the charts.  It is at an extreme that has surpassed 1929, 2000 and 2007.  For the past 6 months it has defied the powerful cycles and patterns we follow.  However, we are at another “potential” inflection point and based on this weeks price action the chariot appears to be running out of gas.  So, objectively, the cycles and patterns we follow appear to be working.  Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.

djia march 15 2014

Below you’ll see a quick demonstration of the Dow Jones Industrial Average from 2002-2009.  No patterns shown but just an example of the power of the swing low.  Take note, when we lose one swing low there is usually some selling and then it bounces back and, here’s the key point, it fails to make a new high.  Price might congest in this area (going either direction – up or down) and then it starts down.  One thing to watch is “usually” the third swing low. When that gives away, selling is vicious.  So, as much as we see MAJOR patterns completing let’s not get to confident.  THE MAJOR US INDICES HAVE NOT BROKEN ONE SWING LOW IN 5 YEARS.  Over the coming weeks, pay attention to these swing lows and swing highs (note the VIX chart – not one swing high has been taken out since 2007!)
swings
VIX SWING HIGHS
Also, note the Dollar Index swing low track record and the very thin neckline that is coming into play a little lower.  We’ve reached some daily extremes in metals (Gold, Silver) and the Euro and Pound.  Sentiment means nothing when a multi year extreme is taken out and one that has been tested roughly 10 times since 2012.  Folks, a lot of stops are hiding beneath 78-79 on the dollar index.  Certainly hope support holds here …
Dollar Index Swings
so, keep an eye on the swing lows and highs over the coming days and weeks … note price action after a first or second swing low is taken out and, seriously consider safety if/when a 3rd long term swing low is taken out to the up or down side ….
CHINESE YUAN 3152014
DJU March 15 2014 utility and industrials
dow jones transports march 15 2014
COPPER CORRELATIONFXI 032014 EEM 03152014

Dow Jones Transports – almost parabolic.

September 17, 2014: below you will see some of the continuing work I have done on the transports.  Quite simply, an incredible move …

there are, however, some things we can learn from this from a PATTERN perspective:

  • my “job” as a PATTERN chartist is to do my best to find the patterns and then present them to you, my readers.  (thanks for the following also)  As a PATTERN chartist you are NEVER wrong.  The PATTERN works or it doesn’t it … it has NOTHING to do w/ you.  On long term time frames, well, the patterns are “easier” to construct.  An all time low to a “former” all time high gives you AMAZING projection capabilities. In fact, it is one of our easiest PATTERNS to form – the “zig zag or AB=CD” PATTERN.  Folks this formed on the Transports and got SMOKED … not even a token of resistance.  Wow …
    • when a “zig-zag” or “AB=CD” PATTERN fails it will usually go to 1.27 or 1.618 of the PATTERN.
  • so, what do we have “now”
    • note the all time low of 13.43 was on July 05,1932 a mere 30,024 days ago.
      • using that low and a 1.27 AB=CD we get a target of 9149
    • note, the “old” all time high in 2000 to the 2009 high was a 1.8877 extension (musical note).  sometimes, the PATTERNS repeat the same harmonic. NOPE not today … blew threw it.
    • also, you can see the blue arrow projections and the “minimum” objective of the head and shoulders BULLISH top that formed comes in around 8880

      some other projections shown for the Transports
      some other projections shown for the Transports 

Since this move is going PARABOLIC it’s sometimes helpful to bring out the old geometry … this is simply the technique of how to draw a circle from 3 points.  (full disclosure: I have NO IDEA where the GRAVITY CENTER is going to end up.) Note, when using this technique our gravity center is, basically, the zone for the past major top in the Transports.

finding the gravity center
finding the gravity center

 

now that we have found the gravity center we can get to work ….

  • note, the gravity center (blue horizontal line) is the “reason” for the major tops
  • note from 1994-1999 price “hugs” and rolls right up into the top. that tells us we have a nice gravity center …
  • note also that when we draw, from the gravity center, harmonic trend lines we find the “major reason” for support and resistance …
  • when projecting from a neckline, remember, the depth of the neck is how to project UP (in this case) to project a minimum target. (again, it’s minimum target, NOT the target or though it can be)

gravity center harmonics
gravity center harmonics

CLIFF NOTES: this is an incredibly powerful move.  Some more targets are coming into play as noted above.  when the PATTERN around 7600 failed the vacuum up was to be expected.


 


 

June 12, 2014: more than likely, you saw my long term transports post a couple months ago and as this target got attacked I was truly looking for a “little” resistance.  I mean, come on, it was the ALL TIME LOW to the “old” ALL TIME HIGH and we have a 1.618 extension RIGHT ON TOP OF THE LEVEL.  As patterns go .. this was a doozie.  However, as patterns go, it failed.  Folks, it didn’t even put up a fight …

so, I hit “erase all” on the chart and, quite frankly, left it alone.  the joy of patterns and charting …

I went back to it tonight and I still think we have a pattern forming so I went back and said “self, what did it do the last time we surged past an old high and into a new high?  Well, guess what?  It surged thru the 1.618 extension in 2007-2008 an stopped on the 1.8877 extension!  TILT … 1.8877? Well, that is exactly a major seventh ration in the equal octave scale of music. So .. perhaps it did that again?  Please see below …we smacked into the minor and, quite frankly, the major is still out there.  However — this sure looks like a MONTHLY 3 DRIVES TO A TOP pattern.

Keep the mindset (defensive) of ‘breaking a swing low’ …until we do break a weekly or monthly swing low this puppy will still keep running but if we break 2 or more weekly swing lows … we could see this thing drop to the old highs at 5600.  Stay tuned …

What a run! Hugh?

Main20140612220624 Main20140612221917

Also, please be advised that a reader corrected me on the price and time of the old time low.  I did some more research and it appears the low was in the 1930’s around 30 points lower than the one in the late 1800’s. Negligible when we are up at 8000 BUT extremely important.

When you look at the Yahoo Finance Chart below – try to disregard this is the entire life cycle of the Transports – and just look at the symmetry of the 3 drives to a top pattern that is appearing.

 

notice the decreasing volume and POTENTIAL 3 drives to a top
notice the decreasing volume and POTENTIAL 3 drives to a top

 

Fractal Present on the Utilities – check it out

August 25, 2014:

CLIFF NOTES: please see below to understand the importance of our recent high at 577.  The long term PATTERN from the all time low completed.  Now, we have the beginning formation of the trusted and true head and shoulders pattern on the DJ Utility Index.  Why is this important …?  Well, look below at the fractal that existed at the top in 2007-2008.  It’s exactly the same PATTERN.  So, in a nutshell:

  • we completed a major pattern on the Utilities up at 577.
  • a head and shoulders pattern is forming the right shoulder, now.
  • the same FRACTAL is present at the time, here’s a cool video to show fractals at work: https://www.youtube.com/watch?v=ZVwoYVkg-m4

folks it’s a PATTERN — it WILL work or it WON’t but it’s a PATTERN.

fractal pattern on the Utilities
fractal pattern on the Utilities

 

4 hour chart showing formation of potential head and shoulders
4 hour chart showing formation of potential head and shoulders


 


 

 

 

April 05, 2014

CLIFF NOTES: I am a patter recognition chartist.  I am NOT trying to be overtly bullish or bearish.  Just using this forum to show the PATTERNS that area ppearing.

On the DJ Transports we have completed a MAJOR AB=CD sell pattern w/ a 1.618 extension.  That is bearish.  It’s particularly bearish because the pattern using the former all time highs and lows. I am also showing the Utilities almost completing a very bearish pattern.  Again … heads up folks, these are NOT 60 minute intraday scalping trades.  These are MAJOR patterns that bear close watching.

DJ Transports
DJ Transports

 

DJ Utilities
DJ Utilities

Dow Jones Transports and the Major Seventh …

CLIFF NOTES: more than likely, you saw my long term transports post a couple months ago and as this target got attacked I was truly looking for a “little” resistance.  I mean, come on, it was the ALL TIME LOW to the “old” ALL TIME HIGH and we have a 1.618 extension RIGHT ON TOP OF THE LEVEL.  As patterns go .. this was a doozie.  However, as patterns go, it failed.  Folks, it didn’t even put up a fight …

so, I hit “erase all” on the chart and, quite frankly, left it alone.  the joy of patterns and charting …

I went back to it tonight and I still think we have a pattern forming so I went back and said “self, what did it do the last time we surged past an old high and into a new high?  Well, guess what?  It surged thru the 1.618 extension in 2007-2008 an stopped on the 1.8877 extension!  TILT … 1.8877? Well, that is exactly a major seventh ration in the equal octave scale of music. So .. perhaps it did that again?  Please see below …we smacked into the minor and, quite frankly, the major is still out there.  However — this sure looks like a MONTHLY 3 DRIVES TO A TOP pattern.

Keep the mindset (defensive) of ‘breaking a swing low’ …until we do break a weekly or monthly swing low this puppy will still keep running but if we break 2 or more weekly swing lows … we could see this thing drop to the old highs at 5600.  Stay tuned …

What a run! Hugh?

Main20140612220624 Main20140612221917

Also, please be advised that a reader corrected me on the price and time of the old time low.  I did some more research and it appears the low was in the 1930’s around 30 points lower than the one in the late 1800’s. Negligible when we are up at 8000 BUT extremely important.

When you look at the Yahoo Finance Chart below – try to disregard this is the entire life cycle of the Transports – and just look at the symmetry of the 3 drives to a top pattern that is appearing.

 

notice the decreasing volume and POTENTIAL 3 drives to a top
notice the decreasing volume and POTENTIAL 3 drives to a top

 

update to the “chart of my lifetime”

CLIFF NOTES: we are up almost 3% above the PATTERN that completed from the all time low on the transports some 46,000 ish days ago.  Is that statistically significant?  Well, I honestly don’t know.  We do have the 1.618, 1.68179 (musical note F#) and the 1.732 extension targets that are being played with …so, my “line in the sand” so to speak will be the 8050 level.  IF WE GET A DAILY CLOSE ABOVE 8050 THEN THIS PATTERN HAS FAILED.  Again, this pattern is 46,000 days “old” and SHOULD be massive resistance.  Not calling for a crash or anything like that but it certainly should pause it.  And, let’s take a look – no swing low has been broken and it just keeps on “trucking” so to speak. (pardon the pun)

here is the post w/ the chart: http://bartscharts.com/2014/04/01/the-most-important-chart-in-my-lifetime/

I do see a 5 wave sequence coming into play so we’ll just have to wait and see …

Main20140521195730

DJ Transports and Utilities updated

CLIFF NOTES: I am a patter recognition chartist.  I am NOT trying to be overtly bullish or bearish.  Just using this forum to show the PATTERNS that area ppearing.

On the DJ Transports we have completed a MAJOR AB=CD sell pattern w/ a 1.618 extension.  That is bearish.  It’s particularly bearish because the pattern using the former all time highs and lows. I am also showing the Utilities almost completing a very bearish pattern.  Again … heads up folks, these are NOT 60 minute intraday scalping trades.  These are MAJOR patterns that bear close watching.

DJ Transports
DJ Transports

 

DJ Utilities
DJ Utilities

Swing Low, Sweet Chariot ….

chariot-topper

As we have discussed multiple times in this venue, the move since 2009 has been one heck of a ride.  This chariot of stock market emotion is, literally, off the charts.  It is at an extreme that has surpassed 1929, 2000 and 2007.  For the past 6 months it has defied the powerful cycles and patterns we follow.  However, we are at another “potential” inflection point and based on this weeks price action the chariot appears to be running out of gas.  So, objectively, the cycles and patterns we follow appear to be working.  Let’s don’t jump up and down and scream the BEAR MARKET is here till this chariot of the bulls breaks a swing low.

djia march 15 2014

Below you’ll see a quick demonstration of the Dow Jones Industrial Average from 2002-2009.  No patterns shown but just an example of the power of the swing low.  Take note, when we lose one swing low there is usually some selling and then it bounces back and, here’s the key point, it fails to make a new high.  Price might congest in this area (going either direction – up or down) and then it starts down.  One thing to watch is “usually” the third swing low. When that gives away, selling is vicious.  So, as much as we see MAJOR patterns completing let’s not get to confident.  THE MAJOR US INDICES HAVE NOT BROKEN ONE SWING LOW IN 5 YEARS.  Over the coming weeks, pay attention to these swing lows and swing highs (note the VIX chart – not one swing high has been taken out since 2007!)
swings
VIX SWING HIGHS
Also, note the Dollar Index swing low track record and the very thin neckline that is coming into play a little lower.  We’ve reached some daily extremes in metals (Gold, Silver) and the Euro and Pound.  Sentiment means nothing when a multi year extreme is taken out and one that has been tested roughly 10 times since 2012.  Folks, a lot of stops are hiding beneath 78-79 on the dollar index.  Certainly hope support holds here …
Dollar Index Swings
so, keep an eye on the swing lows and highs over the coming days and weeks … note price action after a first or second swing low is taken out and, seriously consider safety if/when a 3rd long term swing low is taken out to the up or down side ….
CHINESE  YUAN 3152014
DJU March 15 2014 utility and industrials
dow jones transports march 15 2014
COPPER CORRELATIONFXI 032014 EEM 03152014