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Jeff,
A VERY interesting post!
I checked On Balance Volume after reading it and looking at OBV you will
notice that it topped on July 28, while sugar topped on August 27, with a
dramatic development afterwards, not exactly in line with my vision....
It looks like it can be rewarding to use EXTREME caution on this trade.
Good work!
Regards
Stig
PS. Douglas, I hope you read this also.
Stig Wrote:
The naked eye can spot a gigantic continuation Head and Shoulder Pattern
Greetings Stig:
(Please refer to attached .gif):
The real question is whether the corrective (4)th has really completed
or not? Or put it another way, is the market in the process of going
for 3rd of (5)th? Which implies the (4)th wave has indeed completed. I
have never trade sugar but your post has prompted me to spent the whole
morning to count out those waves. It has been rewarding and
educational. I will not make any attempt to forecast any corrective
waves; this can be extremely dangerous to any wave traders.
As of now, there still isn't enough info to tell if wave (4) has
completed. There is, however, a clue to the subsequent moves. Notice
after the completion of wave (3), the subsequent correction is a five
wave corrections to A: As I recall, A five wave correction is NEVER the
WHOLE of the corrective phase.
The pattern on the right shoulder looks more like a triangle to me than
a wedge. A wedge has a more exeggerated tilt than the one displays in
this market. But this point is unimportant as far as I'm concerned.
This setup is definitely tradeable. Personally, I'll make sure to
remind myself that there might be a possibility that Wave (4) hasn't
completed yet. I'll place an OCO on both sides of the triangle to
capitalize this move. I'll be more cautious on the upside breakout of
the triangle and watch for any drastic reversal of prices after the
breakout (which implies wave c of B has completed). This is the kind of
bull trap that had made many losing half of their capital here. (See
hsi.gif).
Have a good one
Jeff Harteam
Hong Kong
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