Kimble Charting Solutions Blog

Five weeks ago the Power of the Pattern reflected that two of the broadest measures of the stock market, were up against key resistance levels and that prices back in 1999 could impact portfolios today (see Party like its 1999).

Below is an update to how the NYSE and Wilshire 5000 have handled this resistance, 5 weeks later...

CLICK ON CHART TO ENLARGE

This weakness does not mean the mother of all bear markets is taking place or will.  When is comes to portfolio allocations/risk allocation management, in the past, investors usually want to see these broad index's going along for the ride.  It can pay to reduce risk asset exposure up against long-term resistance lines and so far, for those that did, it helped them maintain higher portfolio values.

Until these two can take out key resistance, it does make the S&P 500's rally and break above its highs of last May at little suspect!

CLICK ON CHART TO ENLARGE

In 2008 and 2011, when Copper broke below rising support, the 500 index soon followed. 

At this time Copper finds itself nearing the end of a flag/pennant pattern at (2) in the above chart.  Odds are pretty high that a breakdown in Copper would "Drag" the 500 index to lower prices! 

Copper futures have been pretty boring of late, which is typical towards the end of a flag pattern.  Including todays decline, the S&P is down around 5% from its March highs, not too large of a decline.  Keep a very close eye on what Copper does in the upcoming weeks, due to this key flag pattern.

CLICK ON CHART TO ENLARGE

Line (2) has been very hard for the Dollar to stay above since late 2010.  At the same time the top line of a large Flag pattern is coming into play at the same time at (1).  Stocks and Commodities have been soft of late, while the Dollar has undergone a 2% rally. 

The Power of the Pattern suggested in the chart below that the markets will remain "Choppy" until this pattern breaks (See Dollar choppy post here) 

CLICK ON CHART TO ENLARGE

It shouldn't be a surprise that Silver is on support while the U.S. Dollar is up against resistance!

This is key resistance for the U.S. Dollar and no matter how the world looks right now...Resistance is Resistance until broken!

CLICK ON CHART TO ENLARGE

When an asset creates what looks like the Left side of an Eiffel tower pattern, the right side often follows!  Joe Friday shares this morning that Silver is setting on a multi-year support line right now.

The Right Side of an Eiffel tower pattern could pick up downside selling momentum if the rising support line breaks in Silver.

CLICK ON CHART TO ENLARGE

A long-term support/resistance line looks to have impacted the S&P 500 a year ago at (1) in the chart above.  This line didn't cause the 500 index to fall a ton last year (only 16% in a few weeks during the fall of 2001), yet it did slow down a very sharp rally.

Is this line doing the same thing again at (2)?