XLE ratio analysis worked well, this time

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 ….

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continuing to work a long Loonie potential- more

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 ….

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monitoring the top 10% weighted sectors ….

I really liked this post: http://bartscharts.com/2014/03/16/swing-low-sweet-chariot/

CLIFF NOTES: our PATTERNS have been hit across the board in the top weighted sectors of the S&P.  However, doesn’t mean a darn thing till the swing lows are taken out. Review the post above …

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Continuing to watch the components (>10%) of the S&P 500 – an update

CLIFF NOTES: the biggest development of this past week was the CLOSE above our pattern level on the XLF.  It is my belief, and history has shown, that the banks LEAD us UP and LEAD us DOWN. As long as the banks are stable, this market will continue it’s “Wizard of Oz’s” climb …also, my last post had the “white flag” at the bottom as I have given up and thrown in the towel to the bear patterns.  It’s different this time …

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CTRL-ALT-DELETE. The S&P 500 sectors, AGAIN

CLIFF NOTES: the “chart of my lifetime” is still just that – an amazing chart of, quite frankly, my lifetime.  I think it’s safe to say that the pattern from genesis of the Dow Jones Transports has been defeated.  A pattern that took 45,000 days (+) to form and complete.  Again, please, let that sink in … read it again, and one more time.  In the world of probability this was a highly probable pattern that should have at least cause some pullback congestion ….!  NOPE … not even close.  Take a look at the BREAKAWAY MOVE and the explosion from the pattern area.  Reminds me of the GOOGLE short at 921…if you remember, that level held for 6 months!  Then exploded higher in a 100 point gap that was definitely egg in my face.  O U C H …but, this pattern was less than 10 years old and it held GOOG for 6 months. Please, again, go back a couple sentences …the Transports pattern was 100+ years old.  The PATTERN didn’t even hold it for a week …

CLIFF NOTES 2: I’ve gone back thru BA, AAPL, WYNN, PCLN, FB, IBM, LNKD, AMZN, SBUX, etc and those patterns WORKED and while they have all retraced the initial crack lower they sure do appear to be ready to surge forward w/ the rest of the market.

CLIFF NOTES 3: I’m baffled, a little concerned and well quite angry.  Why?  Not because the PATTERNS failed or didn’t….that’s called probability folks.  I’m sharing my emotions because this puppy NEEDS TO CORRECT and that’s a good thing.  Mentors of mine that have traded for 40+ years have taught me (which I believe) cycles that are extremely reliable and some of the most BEARISH CYCLES that we have ever witnessed (if you know it or not) hit in MAY and NOTHING happened.  Read that last sentence again … it was, literally, the perfect storm of cycles. Am I questioning the cycles – nope.  I AM QUESTIONING WHAT THE HELL IS GOING ON !!!!

CLIFF NOTES 4: if you have read this far. thanks.  so, in order to do what the subject line states I am spending this SAT AM W/ you to reevaluate the S&P 500 sectors that “weigh” more than 10% and, as I type, I have removed any bias from patterns or talking head pundits or any outside influences.  It’s me, the charts and 10,000 hours + of chart time (see this link: http://www.dailymail.co.uk/news/article-1078842/Practice-makes-perfect-Why-takes-10-000-hours-success-according-academic.html )

Here we go …as of 5/31/2014

1.  IT makes up 19% of the S&P 500.  I have chosen to use the VGT ETF as a proxy.

  • I see blue arrows which represent maximum measured moves since 2009.  We are completing one of those moves up against the 5 year trend line.
  • I see a black/yellow triangle which represents TIME and we are 7 weeks past the last major move w/out a “nice” correction.
  • I see BEARISH DIVERGENCE
  • I see an increase of volume which reminds me of FOMO “selling at the bottom” and “buying at a top”
  • CONCLUSION: resistance and correction ahead.  Expect anywhere from 94-100 to hold this puppy back.  64 is not out of the question for a correction.
IT ETF 19% of S&P 500
IT ETF 19% of S&P 500

2.  Financials are 16% of the S&P 500. I have chosen XLF as our proxy vehicle for this sector

  • I see the “basic” AB=CD (blue arrows) holding, so far.
  • I see bearish divergence
  • I see very very low volume
XLF Financial ETF
XLF Financial ETF
intraday XLF
intraday XLF

3.  Health Care is 13.3% of the S&P 500.  I have chosen the XLV as a proxy

  • I see NO PATTERNS nothing but a straight up rocket ship.  I reference Sir Isaac Newton and the law of gravity.
  • check out the RSI … so much for bearish divergence.  A YEAR OF IT! But, HERE IS A KEY POINT – NOTE THE SPIKE IN THE BEARISH (RED) VOLUME AT THE LOWS (BLUE SQUARES) EVERY TIME THE SELLING SURGES THE ETF BOTTOMS.  LOOK FOR THAT AGAIN ….

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4. Consumer Discretionary is 11.9% I have used XLY as the proxy vehicle.

  • I see STRAIGHT up w/ a POTENTIAL BUTTERFLY SELL PATTERN FORMING.
  • I see bearish divergence
  • I see an intraday sell pattern.

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5. Industrial s make up 10.7% of the S&P 500. I have chosen XLI as the vehicle proxy.

  • I see the same picture as the past couple. An amazing and powerful bull move up w/ no hint of corrections at all. some daily patterns are present in/around here.

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6. Energy makes up 10.5% of the S&P 500. I have chosen XLE as the vehicle proxy.

7.  VIX – it’s different this time and there is NO FEAR IN THIS MARKET – NONE.  All I can say (note: bold,underline, italicized) is REALLY ?????

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8.  I have shown the importance of ratio analysis and especially the XLP/SPX ratio.  I expected it to be making new lows based on the equity action – NOPE, it’s showing remarkable strength which tells me the “big boys/girls” are rotation into this sector.  Watching the “standard” .618 and .786 retraces to hold this pullback. If we go into new lows the equities will continue to surge …

XLP / $SPX ratio
XLP / $SPX ratio

 

 

 

 

going thru the heavy weights that make up the S&P …

in Mid-December 2013 we went thru the top weighted (by percentage) sectors in the S&P after the most re-weighting … at the time, most of them were either finishing or approaching or hitting sell patterns.  As of this writing, the patterns have held w/ no significant failures or break-outs.  this is bearish … only time will tell if we have entered a CONTINUATION of the bear market that began in 2000.  here is the link to the post mentioned at the beginning of this diatribe:

the importance of the recent reweight in the S&P 500

updated charts showing where we are w/ regard to the patterns:

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the importance of the recent reweight in the S&P 500

yesterday was a quarterly option expiration AND an important S&P reweighing .. our last  post at the sectors of the S&P 500 were dominated by technology, energy and financials … that changed, pretty substantially.  now, hot of the presses the sectors are:

  • information technology 18% : using VGT as a proxy.  see chart below.  SELL PATTERN complete/completing.
  • financials 16.4%: using XLF as a proxy.  see chart below.  SELL PATTERN complete/completing.
  • health care 13.1%: using XLV as a proxy.  see chart below.  no discernible pattern however it’s approaching PARABOLIC
  • consumer discretionary: 12.5%: using XLY as a proxy. see chart below.  no discernible pattern however it’s approaching PARABOLIC.
  • industrial 11.1%: using XLI as a proxy. see chart below. SELL PATTERN complete/completing
  • energy 10.3%: using XLE as a proxy.  see chart below.  no new high, an extension sell pattern complete at 88 but perhaps 97 is where it will go.

so, note the inclusion of health care, consumer discretionary and industrial and there close to parabolic states continues the advance. additionally, am using VGT and the NASDAQ as proxies for the IT sector.  70% of the S&P 500 are either approaching parabolic or SELL patterns are completing …

stand by …..

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financials
financials
health care
health care
consumer discretionary
consumer discretionary
industrials
industrials
energy
energy