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Re: a beauty of a classic H&S



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----- Original Message -----
From: "Al Taglavore" <altag@xxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Sunday, October 08, 2000 11:09 PM
Subject: Re: a beauty of a classic H&S


> Mr. Maas,
>
> The volume factor is not a theory, it is critical as to what the investor
> psychology and reactions were that caused that pattern or any TA pattern
to
> form.  To further confirm, I would refer anyone interested to John
Murphy's
> book "Technical Analysis of the Futures Markets", page 111, under the bold
> heading "The Importance Of Volume".  Mr. Murphy states, "The accompanying
> volume pattern plays an important role in the development of the head and
> shoulders top as it does in all price patterns."  This is a direct quote
> from the book.  My copy was published in 1986.  If you are going to be in
> attendance at the TAG seminar next week, I am certain that John would
> discuss this with you....he has answered all of my questions in the past.
>
> Also, Mr. Murphy states on page 153 of his book concerning the diamond
> formation, "It is a relatively rare pattern but is more often seen at
> market tops.  More often that not, it is a reversal rather than a
> continuation pattern.  He also discusses the volume reactions that should
> accompany the pattern.
>
> Good trading,
> Al Taglavore
>
>
> ----------
> > From: A.J. Maas <anthmaas@xxxxxxxxx>
> > To: Metastock-List <metastock@xxxxxxxxxxxxx>
> > Subject: Re: a beauty of a classic H&S
> > Date: Sunday, October 08, 2000 8:06 PM
> >
> > E&M also write that a Diamond is "only a correction" pattern. Now, for
> the
> > life of me, that must be (along with their personal Volume theory) one
of
> > their greatest bloopers in that further excellent splendid book.
> > -----------------------------------------
> > For starters
> >      -you should not believe everything that's written.
> > Second
> >      -personal experiences are more valuable.
> > Third
> >      -other people's theories should not come between you and your
> Charting.
> > Fourth, the E&M's personal volumes theory is that of the 194x-era,
where:
> >      -Exchanges were basicaly local affairs {now it is an International
> affair, even
> >        an Internet-off-hours affair, where trades made outside the
> Exchange will
> >        not ever be included in the daily volume that gets traded on that
> Exchange}
> >      -Trading baskets hardly existed and Derivates etc did NOTexisted,
eg
> so
> >        at that time the stocks were the only traded underlays back then,
> whereas
> >        nowadays the derivates traded greatly overexceed the stocks
> traded.
> >      -(Personal) Computers had to be invented yet.
> > Fifth:
> >      -Price rises or falls aren't based on volume, but these are based
> >                             -on the supply and demand (both incl.
> competition)
> >                             -on the free market flow
> >        Many of these aspects that we now know, weren't known or present
> back
> >        then.  And if these latter 2 basic are now also present in other
> markets than
> >        there where the stocks are originaly traded, eg see above
> global+internationaly,
> >        then naturaly for minimum, a distorted picture is painted if you
> would stick to
> >        and only focus on that one(1) of the many available markets that
> might make up
> >        the Price. Price is thus a very broad global ruling, wheras
volume
> is a minor local
> >        and statisticly an unimportant and for Charting a minimal value.
> >
> > Sixth:
> >      -Volumes should not even come between you and your Charting, eg
> between you
> >       and Price, because of its contradictions.
> >      -Contradictions(Price/Volume) in the markets:
> >
> > -Most recent: -the chips, pc's and other components' prices that despite
> the
> >                         huge demand, and thus increased volumes, have
all
> dropped
> >                         tremendously since the early 90's.
> >                       -the oil prices that despite the huge demand, and
> thus increased
> >                         volumes, have still leveled with the 1960-1970
> price ave's.
> >                       -internet access that was only recently quite
> expensive, wheras
> >                         despite the huge demand, and thus increased
> volumes, now most
> >                         providers will give away their FREE internet
> access.
> >                       -the automobile prices, that despite (or is it
> because) of its increased
> >                         demand, thus increased volumes, have only
> quadrippled in price
> >                         since the late 1960's.
> >                       -the house prices, that despite (or is it because)
> of its increased
> >                         demand, and thus increased volumes, have 10+
fold
> multiplied
> >                         since the late sixties/early seventees.
> >
> > -Compare a trade in the futures market using futures' volumes of the
> underlay.
> >   Now also compare it using its options volumes(eh.....what to use:
calls
> or puts or
> >   both??). Then also compare these vs local stock market volumes. Finaly
> also
> >   compare these to its internationaly elsewhere traded volumes. For
> example
> >   use the Dow Indu.
> >
> >   Now who's volume figures to believe when charting a Dow's H+Ss
pattern?
>
> >
> > Seventh:
> > -I am for this mail bypassing the fact that for "esthablishing" the
daily
> traded
> >  volumes,  on some Exchanges, "tossing a coin" is the eod rule-set to
> "only
> >  get some figure" out to the dataproviders.
> > -I am also for this mail bypassing the fact that direct trades, between
> parties
> >  outside the Exchange, will not be included in the Echange's daily
> volumes.
> > -I am also bypassing the fact that large trades made on a falling or a
> rising
> >  price during that day, will not be reflected in the eod volumes, eg a
> trade
> >  can be "heavy" but not known is if someone's selling or buying, eg a
> heavy
> >  traded falling trade or a heavy traded rising trade.
> > -I am also not including in this mail if it is a "thin" armered stock or
> a "thick"
> >  armered stock, where large trades in a thin armered stock will be much
> >  more reflected in its daily price (and volumes) than the same or a
small
> trade
> >  in a thick armered stock.
> > ------------------------------------------
> > The volume's myth unraffled and therefore also E&M's very personal (see
> above)
> > -stemming from ancient 194x's theory-  unraffled.
> >
> > (All done in a very simplistic way only).
> >
> > Regards,
> > Ton Maas
> > ms-irb@xxxxxxxxxxxxxxxx
> > Dismiss the ".nospam" bit (including the dot) when replying.
> > Homepage  http://home.planet.nl/~anthmaas
> >
> >
>