I did a little bit of work on the NYSE Composite Index over the weekend and found some pretty interesting “form and proportion” with regards to the NYSE. And it may be hinting at a market pullback… or potentially worse.
Let me explain what all this means. And note that I am using a weekly chart, so this can take some time for confirmation.
Here’s what I see on this chart below:
- Note the blue triangles
- The vertical represents PRICE and the horizontal represents TIME
- From 2007 high we went down into the area shown “started down” and consolidated for, roughly, 6 weeks and then it broke.
- In Nov 2008 we found a low and rallied the EXACT same as the rally after the first break (the dashed black line)
- From the 2009 lows we move up into May 2011 and then corrected – the EXACT same price. Note, the time was “off” but when it did hit the same TIME the market fell, found support and rallied up into the May 2015 highs.
- We’ve corrected DOWN the same amount and rallied UP the same amount (black arrow) and we are at the “time” for it to start down again.
- The vertical represents PRICE and the horizontal represents TIME
The big question is will it start another steep market pullback (leg lower) or will the Index find support and start another leg higher?
I don’t know… but what I do believe is that the NYSE Composite looks ready to start a move lower.
If you’re a bull then you probably want to watch for either a “busted pattern” to the upside, or for the the first BULL PATTERN to appear/set up on a market pullback.
If you’re a bear, you likely want to trade against the area above the black arrow (i.e. use a stop).
Thanks for reading.
More from Bart: “Trading Setups: USDJPY May Be Near Major Low“
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
