Palladium and the NASDAQ have tracked nicely .. watch the upcoming target closely
09/28/2019 – we blogged about this long term target back in March. It was hit on Friday. When we have two 1.618 projections and extensions coming together – it should be a big deal. The other to note is the fact that we have what’s called a “butterfly sell” pattern that hit on the daily and smacked right into the long term targets from 1996. If we get a weekly close below the 1604 ish level, then advise to become defensive. Updated charts below:
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would watch the target above, very closely, along w/ the NASDAQ weakness in the coming days/weeks.
11/10/2018 – overall, our key 75-76 level was hit and has caused the sell off. take a look at the charts below …
some critical developments:
the XLE/NYSE Index ratio has hit a perfect BUY PATTERN so expecting the energy complex to bounce/hold/consolidate as this level holds. IF IT FAILS then the sell off will be pretty immense. So watch t his level.
on the Crude, anytime you have a .382 and .618 (.382+.618 = 1) present that should act as important S or R. In this case SUPPORT. we have some polarity present also so ‘expect’ a bounce in Crude … will update accordingly.
also, note the correlation between crude and HYG. (High Yield Bond ETF) … perhaps the carnage in Crude will stop at support levels indicated which ‘should’ keep HYG at bay (if the correlation is still holding) but if Crude busts thru then that support cliff for HYG should give away and then it will get very interesting
also, put the oldie but goodie of the HIGH on crude on my birthday and the subsequent low to show some geometry at work and the fact that long term charts can certainly help .. .a famous quote “there is nothing new under the sun.”
06/03/2018 – sorry that i didn’t send out the charts below via my blog .. honestly, I think I just forgot and then went on some travel …big thing here is we hit an important high a week or so ago based on TIME so this could be a very important top in crude.
honestly not sure if we have completed a 4 ( if YES we have BIG MOVE COMING lower) or an end to a bullish bounce and we are correcting to buy ..
either way, this should do it for crude for a while at least. will be watching and, again, apologize for not blogging earlier.
as an FYI, the charts are real time they were just sent out via email …
1/23/2016 – wanted to show these charts again. they are all ratio analysis of XLE (energy) versus the major components of the S&P. Ratio analysis w/ pattern recognition is very powerful.
all of these patterns hit, oil moved down to the 25-27 area, the OSX/NYA ratio worked and Oil popped and the Loonie got 500+ pips in two days.
not sure, honestly, if we have a trend change BUT it does appear that the energy sector has a trade worth bottom in place.
Bart
am looking at the relative strength of the XLE versus components of the S&P that make up more than 10% of the S&P.
sure looks like the RELATIVE STRENGTH of XLE is about to start outperforming the larger components of the S&P based on patterns.
of course, the patterns can always fail and the drift of the energy sector into oblivion continues .. patterns suggest a pause, bounce or strong up move coming.
means to keep on the lookout for that LOONIE buy ….
am looking at the relative strength of the XLE versus components of the S&P that make up more than 10% of the S&P.
sure looks like the RELATIVE STRENGTH of XLE is about to start outperforming the larger components of the S&P based on patterns.
of course, the patterns can always fail and the drift of the energy sector into oblivion continues .. patterns suggest a pause, bounce or strong up move coming.
means to keep on the lookout for that LOONIE buy ….
Update – I want to share this post w/ you again. Why? Well, in looking at the XLE tonight I haven’t seen any bearish (long term) divergence appear. So, what does that tell me? XLE has the potential to go up to our targets mentioned below to produce the bearish divergence. And, as we have discussed, the Energy sector leads at the top and, well, I don’t think it’s done, yet.
Monitor/Watch XLE closely … while it is being sold off, the old high in/around 90 should provide support.
One last, remember, we are looking at signs/patterns that confirm the institutional flow of funds. that is the key w/ ratio analysis. Let me know if you have any questions.
Also, the below was posted in/around mid-June. IT IS NOT REAL TIME ….but a look at the before and after.
BART
CLIFF NOTES: a picture does paint a thousand words. So there are some pictures below. I’ve included the chaos that was 2009 just to demonstrate that, guess what, at the lows in 2009 a BUY appeared on the XLF (Financials) and guess what … when I was Chief Technician for the When 2 Trade Group we put out a piece to BUY THE XLF. Did anyone in there right mind want to do that …? Of course not. Same reason why NOBODY in their right mind wants to sell out and miss any of the last couple percentages of this run.
CLIFF NOTES 2: if you look at the count below, do realize that 2 does go below 1 a couple times BUT NEVER CLOSES BELOW. Folks, that’s good enough for me. Then we roll thru wave 3 not being the shortest and 4 not going below the end of 1 and all RULES are satisfied for this count. What’s that tell us? A good case can be made that we are in the 5th wave for the XLE. And, w/ the sentiment at RECORD HIGHS and the IRAQ situation and the blah blah this puppy has the potential to explode like a shake and bake handshake!
CLIFF NOTES 3: our minor target is hit in/around 97-98 and closed at the “high range” of the weekly candle. That usually denoted strength so we can “assume” the higher target in/around 105-110’s is in play. As far as patterns go … that one is a very nice LONG TERM pattern. If/when XLE does top it will signify the circle of life w/ regard to sector rotation is complete. WATCH THIS TARGET AREA.
CLIFF NOTES 4: go back and look at my “Swing Low, Sweet Chariot” post a couple weeks ago. Swing lows need to be broken before any bull should throw in the towel.
Enjoy the weekend and Happy Fathers Day out there to any fathers out there.
Here’s the PATTERN and the picture as it appeared on March 03, 2009. Note, the CLOSE was 6.18. (.618 for any of those Fibonacci challenged)
XLF and the importance of sector rotation.
here is the picture now, note where XLE (Energy) sits in the sector rotation model:
some more chart work on XLE, key here is notice the volume below is significantly lower than the march into the highs in 07-08.
here is our good old RSI ..a work horse in any technicians tool kit. NOTE – and this is probably our biggest “hint” of things to come – NO TOP IN THE XLE HAS BEEN MADE SINCE IT’S INCEPTION W/OUT THE PRESENCE OF BEARISH DIVERGENCE. Does that mean one of our targets can’t get hit and it falls like a stone. NO. But the PROBABILITY is in our favor that the XLE will hit a target, back off and drive the RSI off it’s highs THEN price will go up and seek a new high and the RSI will fail to make a higher high and THEN we can look for major inflections. Also note – in 2008 it took 8 weeks for the XLE to top and finally crack. In today’s day and age of texting, twitter, digital addiction can you sit on a position and get chopped up for 2 months waiting? Probably not …
RSI on XLE – note divergence is usually present at inflection points
BE PATIENT … full disclosure I have been waiting over a YEAR to short the EURO. Just my style and I know once I jump into the cage w/ the gorilla’s juggling dynamite the die is cast, so to speak.
My former business partner and friend told me his grandfather offered sage advice …
“in this game, you need to just SEE and FEEL that there is money in the corner and you just go and pick it up.”
XLE LOG SCALE
Here is a “quick look” at the trend lines and rhythm of this security. Note, the key to the entire thing is the first impulse move UP from the low. Use that to set the geometry.
XLE GEOMETRICAL trend lines
here are some more targets being generated … note the placement of the LOWS in the CENTER of the square.
CLIFF NOTES: a picture does paint a thousand words. So there are some pictures below. I’ve included the chaos that was 2009 just to demonstrate that, guess what, at the lows in 2009 a BUY appeared on the XLF (Financials) and guess what … when I was Chief Technician for the When 2 Trade Group we put out a piece to BUY THE XLF. Did anyone in there right mind want to do that …? Of course not. Same reason why NOBODY in their right mind wants to sell out and miss any of the last couple percentages of this run.
CLIFF NOTES 2: if you look at the count below, do realize that 2 does go below 1 a couple times BUT NEVER CLOSES BELOW. Folks, that’s good enough for me. Then we roll thru wave 3 not being the shortest and 4 not going below the end of 1 and all RULES are satisfied for this count. What’s that tell us? A good case can be made that we are in the 5th wave for the XLE. And, w/ the sentiment at RECORD HIGHS and the IRAQ situation and the blah blah this puppy has the potential to explode like a shake and bake handshake!
CLIFF NOTES 3: our minor target is hit in/around 97-98 and closed at the “high range” of the weekly candle. That usually denoted strength so we can “assume” the higher target in/around 105-110’s is in play. As far as patterns go … that one is a very nice LONG TERM pattern. If/when XLE does top it will signify the circle of life w/ regard to sector rotation is complete. WATCH THIS TARGET AREA.
CLIFF NOTES 4: go back and look at my “Swing Low, Sweet Chariot” post a couple weeks ago. Swing lows need to be broken before any bull should throw in the towel.
Enjoy the weekend and Happy Fathers Day out there to any fathers out there.
Here’s the PATTERN and the picture as it appeared on March 03, 2009. Note, the CLOSE was 6.18. (.618 for any of those Fibonacci challenged)
XLF and the importance of sector rotation.
here is the picture now, note where XLE (Energy) sits in the sector rotation model:
some more chart work on XLE, key here is notice the volume below is significantly lower than the march into the highs in 07-08.
here is our good old RSI ..a work horse in any technicians tool kit. NOTE – and this is probably our biggest “hint” of things to come – NO TOP IN THE XLE HAS BEEN MADE SINCE IT’S INCEPTION W/OUT THE PRESENCE OF BEARISH DIVERGENCE. Does that mean one of our targets can’t get hit and it falls like a stone. NO. But the PROBABILITY is in our favor that the XLE will hit a target, back off and drive the RSI off it’s highs THEN price will go up and seek a new high and the RSI will fail to make a higher high and THEN we can look for major inflections. Also note – in 2008 it took 8 weeks for the XLE to top and finally crack. In today’s day and age of texting, twitter, digital addiction can you sit on a position and get chopped up for 2 months waiting? Probably not …
RSI on XLE – note divergence is usually present at inflection points
BE PATIENT … full disclosure I have been waiting over a YEAR to short the EURO. Just my style and I know once I jump into the cage w/ the gorilla’s juggling dynamite the die is cast, so to speak.
My former business partner and friend told me his grandfather offered sage advice …
“in this game, you need to just SEE and FEEL that there is money in the corner and you just go and pick it up.”
XLE LOG SCALE
Here is a “quick look” at the trend lines and rhythm of this security. Note, the key to the entire thing is the first impulse move UP from the low. Use that to set the geometry.
XLE GEOMETRICAL trend lines
here are some more targets being generated … note the placement of the LOWS in the CENTER of the square.
if you go back some posts you’ll find me recommending to BUY the banks in March 2009. YES .. BUY in MARCH 2009. there was a PATTERN.
additionally, if you go back you’ll find that the XLF had cracked a couple weeks/months before THE top in 2007 but the S&P 500 kept going. It was pretty obvious that ENERGY was running this puppy and even though the XLF had started down, the XLE (crude) had taken off into a parabolic run to 147. And, after that topped the entire thing caved in.
AGAIN – THIS IS NOT PLAYING OUT RIGHT NOW. THE XLF CLOSED ABOVE OUR PATTERN LEVEL FOR THE FIRST TIME SINCE 2014. AGAIN – PATTERNS PATTERNS PATTERNS. The XLF is going up, the S&P 500 is going up AND the XLE is going up. The playbook was PERFECT from a sector rotation last time. Banks cracked (thank you) and then energy/oil ran and then cracked and then we caved, per the sector rotation model. NOTE – the first XLE target is coming into play. THIS IS THE EXACT SAME TYPE of pattern that the DJ Transports crushed. Don’t know if that means it will fail or not – but it’s the same basic pattern of an AB=CD into a 1.618 extension. A “perfect” butterfly SELL pattern on the XLE. So .. again we have a long term PATTERN on the DAX, a pattern on the XLE and a failed pattern on the XLF.
just showing by the chart below 1) a 5 wave count since it’s inception and some targets and 2) the sector rotation guide that shows energy peaking last before the cycles turn down. we have shown many many PATTERNS that are calling for a sell. Some have worked, some haven’t but as you can see the targets depicted on the XLE are just a little higher and then, again, we take pause and adjust accordingly.
