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Adam,
In theory I agree with your accessment of the market. In principle I'd have
to wave a big flag. Here's why; I took a look at the monthly, weekly, and
daily bars of the S&P. When I looked at the monthly and zoomed out to
capture all the way back to 1996, I saw a bullish trend. This is also
confirmed by applying the trend expert you sent. This then is where I would
disagree. Aug., Sep., and Oct. of '98 were bearish with a drop below the
Gann HiLo. Now if my memory serves me correctly I can remember a whole lot
of people crying about that time. Came close again in Jul., Aug., and Sep.
of '99 but never went below the Gann HiLo...just some congestion. As for May
of this year, I'm getting one of those bright green bars that denotes a bull
trend.
Now when I switch to weekly bars and zoom in to capture all the way back to
Jul. of '98, the picture changes dramatically. Jul.'98 ushered in a bearish
trend which consolidated and corrected to bullish in Sep. and Oct. of '98.
Moving forward to '00, I see another bear trend that began in the last week
of Jan. and ended in the last week of Feb. We then had some consolidation
and finally broke out in the second week of March. Next, we had 4 nice
bullish weeks and have finally entered into another period of bearish
consolidation. Okay, I'm just about ready for CNBC!
Finally, lets switch to the daily chart still using your expert. I'm
displaying all the way back to Feb.,'00 and see that on Mar. 29th we entered
into a bearish trend with some consolidation until April 19th when the
market broke above the Gann HiLo and went bullish until yesterday, 5-29. We
have now dropped below our Gann HiLo and are again in bearish territory.
This is a consolidation bar and not a trend which could mean that we may
again turn bullish (sounds like Bill Williams huh). If I were going to play
this market bearish I'd probably wait for a confirming bear trend bar which
should occur at the 1415 mark.
One final point that I would make and that is that none of this would have
been possible without the expert or the Gann HiLo that you so graciously
offered. I can only say, THANKS. It's one helluva system for analysis!
J.
>From: "Adam Hefner" <vonhef@xxxxxxxxxxxx>
>Reply-To: metastock@xxxxxxxxxxxxx
>To: <metastock@xxxxxxxxxxxxx>
>Subject: (Market) S&P analysis part2
>Date: Tue, 2 May 2000 22:52:18 -0500
>
>Now that I have my basic direction determined from the monthly,
>lets analyze the daily bars: I was noticing over the week-end that
>the daily bars had retrace to the 61.8% line and entered into congestion.
>This congestion suggest a possible reverse from the up move since mid
>April. Monday's close below the lower confines of congestion (around 1458)
>further strengthens my monthly analysis of downward movement.
> Well..now that I have an analysis...how to trade? Well It looks like a
>good
>sell level would be at 1464. with the protection stop around 1495. The
>calculated risk on the protection is 31 points and the calculated projected
>low is around 1350 (100 points). Of course analysis can be wrong, in
>several
>ways. My entry point could be missed and I may not get into the market, or
>the market may reverse tomorrow and blow-up my sell.
>Regardless..this is NOT a recommendation, only an exercise for you to
>critique.
>
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