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Gaetano,
I wouldn't be surprised if you're right.
This development is exactly what I often experience with
breakouts on the "wrong" side of a wedge.
i.e. upside in a rising wedge and downside in a falling wedge.
It's not uncommon in Deutchmark.
regards
stig
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Fra: Gaetano A. Evangelista <ageitaly@xxxxxx>
Til: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Emne: An analogy between British Pound and the italian stock marketindex
Dato: Friday, July 04, 1997 12:17 PM
dear traders,
speaking of currencies (a field in which I'm not fully involved, and then I
beg your pardon for any eventual nonsense I state), I noticed how similar
the BP chart looks with respects to the italian stock market index, aka
Mibtel.
Watch closely tha attached chart, showing the British pound on the upper
side, and the Mibtel index on the lower side. In both cases, after a
prolongued decline (from june to the end of july as regards the Mibtel
Index, and for the entire month of january as regards the BP), both
experienced a rally (from 1 to 2); in both case the market was too weak to
go over too much, and then we assisted to a triangular-like formation
(points 2-3-4), after which Mibtel Index and BP marked a new low (5) in
divergence with the previous one. This time was the right time for the true
rally, and in fact both BP and Mibtel overcame the previuos high, at point
2 (6). The analogy continue: both formed a 3-month wedge formation
(delimited by points 6-7-8-9-10), then a new correction, just a little
below point 10 (11), range contraction, and then... the explosion! with
volatility to the heaven and all-time high! The same Mibtel proportion,
applied to the pound, would lead to 177 first, and 185 then. After that...I
don't know. We'll see how the italian market develops and then talked about
BP again. If this analogy will still remain in effect!
ciao!
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<bold>Gaetano Arnaldo Evangelista</bold> - BARI (Italy)
E-mail: ageitaly@xxxxxx
URL: http://www.geocities.com/wallstreet/8492
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