Triple Top taking place in this broad based index?

triple top pic

Below takes a look at the Valu-Line index over the past couple of decades. Could a “Triple Top” be in play in the broad based index?

valu line geometric triple top resistance test april 28

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One year ago this week (4/24/15) the Valu Line peaked, as it was hitting the highs it reached in the late 1990’s and 2007.

Was this index influenced by the “Sell In May” theme one year ago this week?

Did a “Triple Top” take place a year ago? The jury is still out on this billion dollar question.

One thing that is for sure, over the past year, this index remains in a down trend, as it has created a series of lower highs and lower lows, inside of falling channel (A).

At this time the index is testing falling resistance at (1) and it is being presented an opportunity to break this down trend.

A key test of falling resistance is in play at (1) above. How this index handles falling resistance, should tell us a ton about where the S&P 500 heads over the next few weeks and months.

Since it is that time of year ago (Sell In May), this would NOT be a place that bulls would want to see weakness start creeping into the markets!

 

Crude Oil- Hits two 25-year support lines and is breaking out!

I was very blessed and lucky to be influenced by Sir John Templeton, a couple of decades ago. Sir John shared that other than the bible, the book below was the most important book he had ever read.

populardelusionsbook

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Two months ago in our Sector/Commodities Sentiment extremes report, we addressed that a “Popular Delusion” could be taking place, in the most important commodity on the planet. The Power of the Pattern made the case at the time that Crude Oil was due a rally and the rally in Crude Oil, could be good for stocks.

On February 25th we shared the chart below, reflecting that an asset had just experienced its largest 2-year rally ever and momentum looked to be overbought. What would you have done with the chart below, two months ago?

joefriday largest 2 year rally in history feb 26

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The chart above was shared two months ago (see post here)  What would you have done at this price point? The chart above was “Crude Oil” on a monthly basis, which was inverted (turned upside down). We made the case with Premium Members that Crude Oil looked to be on support and that a rally in Crude Oil, could be good for stocks. A couple of days later, members shorted the Fear index, buy purchasing XIV. The following month, stocks had a good rally and XIV screamed higher, moving up 31% on the month.

Below is an update on the chart above.

crude oil breaking key falling resistance april 27

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Crude Oil on a monthly closing basis, hit triple support at (1), two months ago, when it was trading near $30 a barrel. Since the time of the Joe Friday post on 2/25/16, Crude Oil has rallied nearly 50%, in 60-days. Now Crude Oil is breaking above falling resistance, while monthly momentum remains oversold at (2) above.

The Power of the Pattern felt like a Popular Delusion was taking place then (way too many people were bearish Crude Oil), the most important commodity on the planet. As mentioned above, while Crude looked to be presenting an opportunity to make money in oil and stocks in general and we still feel Crude Oil will highly influence stocks going forward.

If you feel you could benefit by this type of research and Power of the Pattern analysis, we would be honored if you signed up and become a member of our daily or weekly research reports. 

If you would like a free copy of the Popular Delusion in Oil report, produced two months ago, send an email to services@kimblechartingsolutions.com and we will be honored to email it to you.

 

 

Should you sell in May? What happens here could tell you!

 

nyse crude oil one year trend resistance april 25

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A popular theme has been to “Sell In May, and Go Away!” Following this idea paid off last year, will it again this year?

Historically, stock market performance hasn’t been the strongest from May to October and last year was no exception. The above chart looks at Crude Oil and the New York Stock Exchange, over the past 8-years. As you can see, a decent correlation has been taking place with these two.

A year ago, Crude Oil and the NYSE Index both peaked in May at (1) above. It paid to lower exposure to Crude Oil and Stocks a year ago.

Crude Oil and the NYSE Index both remain in down trends (lower highs and lower lows). Both are attempting to change this trend, as both are testing falling channel resistance at (2) above.

At this time, resistance and resistance is resistance until broken.

Both assets are testing breakout levels at this time. Portfolio construction could be highly influenced by what both of these do at (2) above.

How these assets performance at resistance, could go along way, in determining if one should “Sell In May” this year!

If both of these breakout, it could well be different this time!!!