Just a quick update on the KRE, regional banking etf, which is breaking out from a bullish falling wedge today.

Tonight I would like to show you some new and old charts for oil which is starting to look positive again. I know it seems counterintuitive that a strong oil price is good for the Transportation Average and to a certain degree the stock markets, but that is generally how it works unless oil goes parabolic. A strong economy puts pressure on the consumption of oil and you generally get a rising price. Same thing for Copper which I think these two commodities are telling us.

This first chart for oil is one we looked at last week which shows the classic H&S bottom with the left shoulder and head forming inside the bullish falling wedge and the right shoulder low forming on the backtest to the top rail. Oil has now spent 7 days trading above the neckline.

There are many ways to look at oil from a Chartology perspective. Below is a year and a half daily line chart which shows the H&S bottom we just looked at on the chart above as the right shoulder of a much bigger H&S bottom. So we have 2 H&S bottoms building out a bigger H&S bottom which I will show you later is part of a much bigger H&S bottom. Big reversal or consolidation patterns are generally made up of several smaller patterns.

Now I would like to show you a third pattern that has formed since the first of the year which is the blue bullish expanding falling wedge. As you can see part of the bullish expanding falling wedge is the H&S bottom that formed on the daily line chart above, along with the small H&S bottom, that makes up the right shoulder being the first H&S bottom we looked at on the daily bar chart. Also the $WTIC is trading back above the 200 day moving average which is positive.

Now lets work our way back in time and look at a 3 1/12 year weekly bar chart for oil which puts the blue expanding falling wedge in perspective. As you can see the bullish expanding falling wedge is part of a much bigger pattern which is year and a half  expanding rising wedge that is working on its 4th reversal point. Oil is also trading above the 30 week ema.

This next chart is an old chart I’ve had for many years which shows the parabolic rise into the 147 high and the parabolic decline that followed. The countertrend rally took over 4 years to complete and built out a massive unbalanced H&S top. When you spot big patterns like that early on it can be very frustrating because each time the price action hits the neckline or support and resistance line you would get another rally. This went on for several years with each rally being more frustrating than the previous one as I was looking for a breakdown at any one of those lows.

When the breakdown finally happened in late 2014 oil had one quick backtest to the neckline and then collapsed in a vertical move down. All that negative energy was finally released in one massive impulse leg.

Now lets turn our attention to the bottom of the chart. The chart patterns we looked at earlier in this post are hardly visible on this 20 year chart which make up part of the right shoulder of an almost 3 year inverse H&S bottom. What I find fascinating is how similar that massive H&S top is to the inverse H&S bottom. By that I mean the H&S top was an unbalanced H&S top and our H&S bottom is also unbalanced.

Below is another old chart I was using during the topping process which was a weekly line chart. This weekly line chart shows the topping pattern as a 5 point triangle reversal pattern with a H&S top which built out the last half of the 5 point triangle. Our inverse H&S bottom looks a little clearer using a weekly line chart.

This last chart for oil is a 20 year monthly look that shows the bull market uptrend channel into its parabolic run to 147. The last consolidation pattern oil made before it ran to 147 was a H&S consolidation pattern which formed in 2007. It’s hard to see on this chart but the high at 147 was a H&S top which reversed the parabolic uptrend. Then oil formed that massive unbalanced H&S top to reverse the counter trend rally which brings us to our current inverse H&S bottom. If our current H&S bottom plays out we should see a move of about 25 points from the breakout point which would put oil up around the 75 to 80 area.

As I mentioned at the beginning of this post, if we see oil in a nice move higher, not too strong and not to weak, it would suggest that the world economies should be doing very well as they demand more oil. I also believe that the Transportation Average and the PM complex could also do very well. Just look at oil’s bull market from 1999 to 2008 and compare it to what the PM complex did during those same years. As long as oil doesn’t go parabolic on us I think oil will be a good proxy for the world economies. I also believe oil is presenting us with a big money making opportunity that doesn’t come around very often. If one can find a large pattern early enough that’s where the big money is made if one can have the confidence to ride the price action to completion. Have a great weekend. All the best…Rambus

Just a quick update on the daily chart for GLD which shows the price action gapping below the top rail of the expanding triangle this morning. This gap matches the breakout gap on the way up which is now creating an island reversal pattern. Today’s price action also gapped below the 50 day ema. With the price actin now trading back inside the expanding triangle I have label the breakout back in August as a false breakout.

This is the Short version :

On the 2 hour charts I’ve spotted several small H&S bottoms building out on some of the stock market indexes. It wasn’t until Monday of this week that they began to show themselves when several broke out above their necklines. Some of these small H&S bottoms are part of a bigger pattern that has been building out for most of this year. At a minimum their price objectives should get some of the stock market indexes back up to the top of their 2016 uptrend channels.

Lets start with a 2 hour chart for the SPX which shows it gapped above its neckline on Monday of this week and closed at a new all time high today. A backtest to the neckline would come in around the 2482 area.

Several weeks ago I posted this chart which was showing how the original rising wedge, blue dashed trendiness, was morphing into a bigger pattern as shown by the red circles with a symmetry false breakout of the top and bottom blue dashed rails. It’s getting pretty busy in the apex, but you can see how the small H&S bottom fits into the bigger pattern that began building out back in February of this year. If that little H&S bottom plays out it strongly suggests the SPX is going to breakout topside from that 7 month morphing rising wedge in a new impulse leg up.

Below is a 2 year daily chart for the SPX which just shows its 2016 uptrend channel. On many of the stock market indexes the 200 day moving average does a good job of showing you the angle of the uptrend channel.

Perspective is everything when you discover what may be an important chart pattern. The weekly chart below shows the 2 year H&S consolidation pattern that corrected the last impulse move up. Now you can see how the blue morphing rising wedge fits into the very big picture. Keep in mind the rising wedge hasn’t broken out yet so the pattern isn’t complete. The reason I think the rising wedge is going to breakout topside is because we are in a bull market and patterns like this tend to form in strong bull markets. If we do get the upside breakout from the rising wedge I would view it as a halfway pattern that would have formed between the neckline and the ultimate price objective.

As I mentioned earlier perspective is everything. Below is a 20 year monthly chart for the SPX which we’ve been following before the top rail of the 13 year expanding flat top triangle consolidation pattern was broken. On this chart I’m showing the 2014 and 2015 consolidation period as a bullish expanding falling wedge halfway pattern. I have to tell you that it has been pretty lonely being a long term bull, but it has even been harder over the last several months as the rising wedge has been developing on the daily charts above. It’s these long term charts that take out all the noise that give me the confidence to hang in there when most say the bull market can’t keep going up. This chart shows you the wall of worry since the breakout from the blue bullish expanding falling wedge.

Again perspective is everything when you look at this 75 year quarterly chart for the SPX. The blue expanding falling wedge on the chart above is the small red consolidation pattern at the top of this chart. This chart along with the Jaws of Life on the INDU has given us a look into the future that few want to believe. For whatever reason investors love to hear bad news or that the markets are going to crash. Fear sells where bullish scenarios go by the wayside. For all the reasons this bull market that began in March of 2009 can’t keep going up, it keeps going up regardless of all the reasons it can’t, and there are a millions reasons why it can’t keep going up. The price action above all else has the final say when everything else is boiled away.

This weekly chart shows the INDU’s H&S consolidation pattern with the breakout and impulse move higher.

The monthly line chart for the Jaws of Life.

Below is the 75 year chart for the INDU which shows the Jaws of Life and a glimpse into the future.

The Most Hated Bull Market in History chart for the INDU.

Below is a 25 year look at the NDX which shows some beautiful Chartology. Note the bullish rising wedge which formed just below the all time highs that gave the NDX the energy it needed to finally move on to all time highs. Classic Chartology

There’s always a bull market In healthcare

This next chart is for our many long term holders that don’t like to trade every little wiggle a stock makes and are looking for something to hold on to. This was one of the big leaders during the first leg up and then built out the blue triangle consolidation pattern.

The long term monthly line chart. Think of the blue triangle as a halfway pattern

I had planed on showing you some charts on oil, but I’ve run out of time. The bottom line is that until something changes the bull market, it is what it is and all the negativity about the economy or fundamentals or whatever one uses to gauge the health of the stock markets is not going to make you a dime. Trying to short a bull market is one of the hardest things to do as many have found out. Realize that everybody who has tried to catch THE Top of the Most Hated Bull Market in History since 2009 has lost money.

. It’s much easier to go with the price action and what it’s telling you to do than to fight it. Maybe we crash into October like so many are predicting, but on the other hand what if we don’t? All the best…Rambus

On the 2 hour charts I’ve spotted several small H&S bottoms building out on some of the stock market indexes. It wasn’t until Monday of this week that they began to show themselves when several broke out above their necklines. Some of these small H&S bottoms are part of a bigger pattern that has been building out for most of this year. At a minimum their price objectives should get some of the stock market indexes back up to the top of their 2016 uptrend channels.

Lets start with a 2 hour chart for the SPX which shows it gapped above its neckline on Monday of this week and closed at a new all time high today. A backtest to the neckline would come in around the 2482 area.

At the close of trading last Friday there wasn’t a H&S bottom to be seen until the SPX opened higher on Monday with the breakout gap.

Several weeks ago I posted this chart which was showing how the original rising wedge, blue dashed trendiness, was morphing into a bigger pattern as shown by the red circles with a symmetry false breakout of the top and bottom blue dashed rails. It’s getting pretty busy in the apex, but you can see how the small H&S bottom fits into the bigger pattern that began building out back in February of this year. If that little H&S bottom plays out it strongly suggests the SPX is going to breakout topside from that 7 month morphing rising wedge in a new impulse leg up.

Below is a 2 year daily chart for the SPX which just shows its 2016 uptrend channel. On many of the stock market indexes the 200 day moving average does a good job of showing you the angle of the uptrend channel.

Perspective is everything when you discover what may be an important chart pattern. The weekly chart below shows the 2 year H&S consolidation pattern that corrected the last impulse move up. Now you can see how the blue morphing rising wedge fits into the very big picture. Keep in mind the rising wedge hasn’t broken out yet so the pattern isn’t complete. The reason I think the rising wedge is going to breakout topside is because we are in a bull market and patterns like this tend to form in strong bull markets. If we do get the upside breakout from the rising wedge I would view it as a halfway pattern that would have formed between the neckline and the ultimate price objective.

As I mentioned earlier perspective is everything. Below is a 20 year monthly chart for the SPX which we’ve been following before the top rail of the 13 year expanding flat top triangle consolidation pattern was broken. On this chart I’m showing the 2014 and 2015 consolidation period as a bullish expanding falling wedge halfway pattern. I have to tell you that it has been pretty lonely being a long term bull, but it has even been harder over the last several months as the rising wedge has been developing on the daily charts above. It’s these long term charts that take out all the noise that give me the confidence to hang in there when most say the bull market can’t keep going up. This chart shows you the wall of worry since the breakout from the blue bullish expanding falling wedge.

Again perspective is everything when you look at this 75 year quarterly chart for the SPX. The blue expanding falling wedge on the chart above is the small red consolidation pattern at the top of this chart. This chart along with the Jaws of Life on the INDU has given us a look into the future that few want to believe. For whatever reason investors love to hear bad news or that the markets are going to crash. Fear sells where bullish scenarios go by the wayside. For all the reasons this bull market that began in March of 2009 can’t keep going up, it keeps going up regardless of all the reasons it can’t, and there are a millions reasons why it can’t keep going up. The price action above all else has the final say when everything else is boiled away.

Next I would like to show you some charts for the RUT which has been consolidating longer than the other stock market indexes. Yesterday it broke out above the neckline of its small H&S bottom on the 2 hour look.

The daily chart below shows how the RUT has been consolidating a 10 month flat bottom expanding triangle. The H&S bottom on the 2 hour chart above is forming at the 8th reversal point which suggests the top rail should be reached at a minimum with the possibility of a total breakout.

Below is a long term weekly chart which shows the RUT built out a beautiful and symmetrical H&S consolidation pattern which launched the next leg up. Again, because we are in a bull market the odds favor that the 8 point expanding flat bottom triangle is going to breakout topside. The price objective of the big H&S consolidation pattern is strongly suggesting the expanding flat bottom triangle is going to breakout topside also.

I’m going to go over the charts for the INDU quickly as there is so much to look at tonight. Below is a daily chart which shows the 2016 uptrend channel which looks like a new all time high was made today.

This weekly chart shows the INDU’s H&S consolidation pattern with the breakout and impulse move higher.

The monthly line chart for the Jaws of Life.

Below is the 75 year chart for the INDU which shows the Jaws of Life and a glimpse into the future.

The most hated bull market in history chart for the INDU.

Below is a long term daily chart for the NDX which I call, Just Another Brick in the Wall. The NDX built out a bullish rising wedge as its 2015 and 2016 consolidation pattern. Note all the small blue consolidation patterns that formed during the previous impulse leg up from 2013 to 2015. The 200 day simple moving average did a good job of showing the angle of the uptrend.

Below is a 25 year look at the NDX which shows some beautiful Chartology. Note the bullish rising wedge which formed just below the all time highs that gave the NDX the energy it needed to finally move on to all time highs. Classic Chartology.

Below is a weekly chart for the Transportation Average which has a lot of investors concerned about the bull market in equites. As you can see transports built out a beautiful H&S bottom with the head forming at the 2016 low. The Transportation Average has been building out a nearly one year expanding triangle which is not to far from new all time highs. The bull market strongly suggests the expanding triangle should breakout through the top.

The 20 year monthly chart shows the expanding triangle as a high level consolidation pattern.

Below is the 100 year quarterly chart for the Transports. I wonder what this chart will look like in another 100 years?

This next chart is for our many long term holders that don’t like to trade every little wiggle a stock makes and are looking for something to hold on to. This was one of the big leaders during the first leg up and then built out the blue triangle consolidation pattern to consolidate that impulse move up.

The long term monthly line chart. Think of the blue triangle as a halfway pattern.

Undoubtedly my favorite sector is the $BTK, biotechnology. The daily chart.

BTK weekly:

Below is the $BTK monthly.

I had planed on showing you some charts on oil, but I’ve run out of time. The bottom line is that until something changes the bull market, it is what it is and all the negativity about the economy or fundamentals or whatever one uses to gauge the health of the stock markets is not going to make you a dime. Trying to short a bull market is one of the hardest things to do as many have found out. It’s much easier to go with the price action and what it’s telling you to do than to fight it. Maybe we crash into October like so many are predicting, but on the other hand what if we don’t? All the best…Rambus

Tonight I would like to show you some short and long term charts for some of the PM stock indexes. In the very short term they have had a good run and are getting overbought and need to work off some of the bullishness. This is perfectly normal and should be expected. What we need to focus in on now is where we should look for support to keep the uptrend intact.

This first chart is a daily look at the HUI which shows us a one year support and resistance line. Two weeks ago already, the HUI broke above that very important S&R line telling us the bulls were in charge after the bears held resistance keeping the bull in check. Now we should look for that S&R line to reverse its role to what had been resistance, to now support. Critical support comes in around the 207 area which would be the backtest. The green circle shows where the 20 day ema crossed above the 50 day ema back in August for a buy signal.

This next chart is one we’ve been following for many years and gave us one of the biggest clues the bear market may be ending in January of 2016. This chart is the 35 year ratio chart which compares gold to the XAU. For our many new members that might not be familiar with this chart I’ll give you a quick rundown. The first thing to know is that if the price action is rising, gold is out performing the XAU. For many many years this ratio let you know when it was time to buy or sell the XAU or your precious metals stocks. When the ratio would get up to the horizontal blue line it was time to look for an entry point and when the ratio traded down to the red line it was time to sell those positions you bought at the blue line.

As they say, all good things must come to an end. The end came during the crash in 2008 when the ratio burst above the blue horizontal buy line which had never happened before in history. I labeled that massive failure with the green circle on the XAU chart on the bottom. For years that area suggested it was a great time to buy your favorite PM stocks. That breakout above the horizontal blue dashed line represented a paradigm shift where gold was going to massively outperform the PM stocks.

That major shift actually began all the way back in 1996 when the ratio made its all time low. From that point the ratio began a 20 year parabolic run outperforming the XAU. Even thou the XAU had a decent bull market run into the 2011 high it failed in comparison to gold.

Now lets fast forward to the January 2016 high where the ratio finally topped out at 24.23 and created the small double top. At the time I suggested we could see a strong impulse move down based on two things. The first thing that suggested a strong move lower was the breaking of the 20 year parabolic arc. When a parabolic move ends it can get pretty ugly.  The other thing that suggested we could see a strong move lower was what I call, reverse symmetry. Note how vertical the move was into the double top high. Reverse symmetry suggested we should see a similar move down over the same area on the way up, which we got.

The brown shaded area is where I was looking for initial support to come into play, but the ratio fell a little further down to the 12.50 area. Long term members know we’ve been watching the right shoulder building out for close to a year now. The last time I posted this chart the ratio was strongly testing the 15.75 area which needed to hold resistance in order to have a shot at the right shoulder of a 4 year H&S top. As you can see the ratio is starting to roll over right where we needed it to. A break below the neckline at 12.50 will complete a very large H&S top that was needed to reverse the outperformance of gold to the XAU for over 20 years.

Note how the XAU bottomed in 2016 at the same time the ratio topped out. Now compare the ratio chart on top to the XAU chart on the bottom. It looks like when the ratio chart breaks below its neckline the XAU will do the same thing, which will be just as neat as when the ratio broke down from the double top in January of 2016. Years from now when we look back on this chart it will be interesting to see where the ratio finally bottoms out. Since the January 2016 high is where the XAU finally began to outperform gold after 20 years of underperformance.

This next chart is a weekly line combo chart which has the gold to XAU ratio chart on top with the XAU on the bottom showing you a close up view of the H&S top we just looked at on the combo chart above. When I first built this combo chart I added the black arrows to show how the possible right shoulder may build out based on the symmetry of the left shoulder. The ratio chart on top is showing a possible blue triangle building out as the right shoulder. A break below the bottom rail of the blue triangle will be very good confirmation that the neckline will be the next important bit of support to go.

The XAU on the bottom chart has just completed a breakout and backtest to the top rail of its right shoulder triangle. Also what this weekly line chart for the XAU is showing us is how we should look for reverse symmetry up, once the neckline is decisively broken as shown by the red arrows. One last thing about the XAU before we move on. Note how the neckline symmetry line has been holding support for the bottom of the right shoulder. We are currently close to the second best buying opportunity since the January 2016 low.

Keep in mind that this potential massive H&S bottom is reversing the 2011 bear market. By the time the neckline is finally broken to the upside this H&S bottom will be about 5 years in the making which is big enough to launch a multi year bull market.

Next I would like to show you the GDXJ which is showing some very nice symmetry. Earlier this week I showed you the black triangle on the daily chart which the price action was attempting to breakout above the top rail of its one year triangle. Previous to the current breakout we looked at the breakout from the smaller blue triangle which was the 4th reversal point in the black triangle.

This next chart is a weekly look at the GDXJ which shows the one year triangle forming on top of the black flat top expanding triangle as the backtest. Now we wait for the backtest to the top rail of the blue triangle for the next bit of confirmation the bull market is back.

Below is a longer term weekly look at the GDXJ which brings everything into focus. As we saw with the XAU weekly chart, which is building out a potential very large H&S bottom, so too is the GDXJ. The triangle we just looked at on the chart above looks like it will be the right shoulder of a very large H&S bottom.

This last chart for tonight is a long term monthly chart which is painting a very beautiful 5 year H&S bottom by the time the neckline is finally broken to the upside. This H&S bottom is much bigger than the one that formed at the 2011 bull market top.

There are no guarantees when it comes to the markets, but if these H&S bottoms we looked at tonight on the XAU and the GDXJ play out as expected there will be a multi year bull market in the precious metals complex. Keep in mind we are still building out the reversal pattern with the impulse move yet to come. When we first opened the Doors here at Rambus Chartology in November 2011, we watched and traded for a year and a half for the development of the bull market top which had a beautiful H&S top to aptly crown it off.

Beauty is in the Eye of the beholder .

https://rambus1.com/2013/02/15/friday-night-chart-what-do-you-see/

This present developing pattern we are seeing is no different except it’s forming at the bottom of the 6 year bear market. All the best…Rambus

NXS.V 9-13-17 Update. I was stopped out today at .14…

I’ve been waiting patiently for NXS.V to breakout above the top rail of a falling wedge formation. I’m going to take an initial position and buy 15,000 shares at the market at .19 with the sell/stop at .14.

NXS.V daily:

Below is a daily chart for the SPX which shows you a good example of a morphing rising wedge. As you can see there was a false breakout above the top rail and then an equal false breakout below the bottom rail, symmetry false breakouts, red circles.

When that occurs we need to adjust the top and bottom trendliness to the new high and low to get the new pattern. The original rising wedge is now shown by the blue dashed trendlines with the new rising wedge the solid blue trendlines.

If the price action breaks out above the new top rail we’ll have a bullish rising wedge that has been in consolidation mode going back to February which is a nice amount of time for a consolidation pattern to develop for this type of move. On the other hand if the price action breaks below the bottom rail then we’ll have a bearish rising wedge. My experience has been that the original pattern is the correct pattern with the morphing process just making the pattern a little bit bigger.

Also keep in mind this rising wedge could be a halfway pattern to the upside if we get the breakout above the top rail. Also these types of patterns that slope up in the direction of the trend tells us the impulse move is very strong. So we wait for confirmation one way or the other.

Below is a short term daily chart for GLD which shows it breaking out above the top rail of the blue expanding triangle today.

The longer term 2 year daily chart shows GLD breaking out and backtesting the top rail of the triangle consolidation pattern. It looks like all the work is now finished with the breaking out and backtesting process.

Below is the 5 year weekly chart for perspective.