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For what it's worth, I am beginning to see rounding top formations in a number
of stock charts I looked at tonight. This formation is a classic "Edwards &
Magee" chart pattern. (Recall my post on Friday, October 9 wherein I said that
my review of stock charts showed classic Edwards & Magee selling climax
patterns in Banks, Brokerage and Financial stocks.)
Out of the 80 or so charts reviewed tonight, I picked up 16 with the rounding
top pattern. The preponderance were in the Retail and Tech areas. I have over
1400 stocks in my library and I expect there will be more with this pattern
when I review them tomorrow AM. This high percentage of rounding top
formations coupled with the very slow volume the past few days and the
exceedingly high P/E's makes me very cautious to outright bearish. If the
pattern persists in my AM review, I will be selling my 20% invested position
into any strength.
The Retail Stocks are:
S - (Sears), ROST - (Ross Stores), RBK - (Reebok), LTD - (The Limited), CC _
(Circuit City), BDK - (Black & Decker), ACTN - (Action Performance).
The Tech Stocks are:
ADPT - (Adaptec), GTW - (Gateway), LEVL - (Level One), NN - (Newbridge
Networks), GMH - (GM Hughes), VSH - (Vishay), AVID - (Avid Tech).
I did not see the rounding top pattern occur in the Biotech Stocks I follow.
Remember, the Turtle Moves ONLY When He Sticks His Neck Out. Maybe I'll get
squashed on this call as many turtles do crossing the road. My current
objective is to preserve the profits made in this bull market to date, not to
squeeze the last drop of blood out of it and risk major losses as a result.
Good luck and good trading,
Jim Barone
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