Technology vs Staples (XLK / XLP) Ratio Analysis

I like Ratio Analysis … I also like to work w/ the patterns on these charts.

If you have been reading my blog for a while, you know that I ‘try’ (the operative word) to not read, watch or listen to any ‘other’ financial news commentary. Yes, there are people that I follow and am very interested in what they see/say (most are the same as me) but I can tell you that NONE of the people I follow or read are fundamental analysts.  Not that they don’t do good work (they do) I’m just not smart enough to understand the information they put out. For me – it’s much easier to use crayons, some geometry and PRICE and TIME and PATTERNS to try to manage risk.  The ‘why’ and the ‘blah blah’, again to me, is just noise.

so ratio analysis:

X/Y – if the chart goes up then X is stronger.

X/Y – if the chart goes down then Y is stronger.

X = XLK (technology = risk on) the Y = XLP (staples = risk off)

XLK/XLP – going up w/ strength. the big guys (institutions) aren’t showing a ‘risk off’ mindset.  the XLK/XLP ratio move up is the LARGEST SINCE THE LOW OF 2002.

So, for me, while we might shuck and jive and perry left, perry right until we have a monthly bearish signal reversal candle I can’t join the camp of the sky is falling and all that jazz.


Palladium and NASDAQ and AAPL Oh My ….

Palladium and AAPL and NAZZIE and XLK (tech ETF) – are VERY interesting right now.

  • Palladium – CLEAR 5 waves up ….
  • Note the charts below – while not exact they do trend the same and while at times leading and lagging each other, once they do turn they sync and roll.
  • Note, the XLK and PALLADIUM.
    • They are almost exact coming into the lows in 2003 and all the way up into 2008 and then down into 2009
    • The most interesting aspect is the big corrective move down in Palladium in 2011-2012.  Note how XLK paused and consolidated and then took off.
    • What’s happening now …?  Palladium has collapsed – big. And XLK has paused and held the highs … with XLK showing a clear 5 wave move up we might be on the verge of a big move in technology.  (hint hint: perhaps the target on AAPL is a BIG LOW and off they go?)

Charts – check em’ out and draw your own inclusion.

Page_16-05-13_08-18-22 Page_16-05-13_08-20-43 Page_16-05-13_08-22-27 Page_16-05-13_08-25-16