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RT's
I just sent this post, which was rejected because of size. I have taken out
the eclips gifs. But had I just sent a correction to those, so you should
be able to view the charts anyway.
> There has been some talks about solar eclipses, and while I am presently
> looking for arguments for a move in Cotton, which I will share, you might
> find interest in the attached gif files showing solar eclipses from 1980
up
> to now, on weekly charts (CSI's "perpetual", roll over on 4th day 1 month
> prior to expiration).
>
> Frank Taucher (author of Supertraders Alamanc) Has in his Trade of the
week
> (at: http://www.supertraderalmanac.com/february_tips.htm
> which I highly reccomend anyone to look at, even if you don't own the
> almanac), argumented for a Turn i cotton.
> I am not so sure about Turn, I would rather say MOVE. Because if we don't
> get the turn this week I suspect we will have a rather powerfull move
down.
> Arguments for a turn are
> 1. On Feb when CTH made a new low, the May and December did not, thus
> creating divergence and questioning the move.
> 2. In all above contracts we also find divergence in RSI and Stochastic
> indicators.
> 3.We are right at the lower bollinger bands
> 4.We can draw a trend channel from the Dec 17 Bottom and the Feb20 move
> ended right at the lower trend line.
> 5. Final Notice Day yesterday, which acc to Taucher often makes price go
> lower into that day, since many speculators are selling out of their
> positions into that day. After the selling pressure is off we usually get
> what he calls a Launch, and prices usually rise afterwards.
> 6. There are several aniversiray bottoms this week, which sometimes is
> celebrated with another bottom.
> 7. Solar eclipse this week. Look at the attached gifs. Eclipses, the way
I
> see it, are often associated with tops and sometimes bottoms and
sometimes
> extended moves start right after an eclipse.
> 8. Looking at the march contract we find a very interesting pattern (does
> not show in the other contracts), that Larry Pesavento describes in his
> book "Fibonacci Ratios and Pattern Recognition" which he calls "3 drives
to
> a bottom". (Or "Three little Indians in L.B Raschke's "Street Smarts").
> After the Dec 17 bottom(1), we have two (bottom "2" and "3")new bottoms
(=3
> drives). The first has retraced 1,414 (=root 2) of the rise from bottom 1
> and the last bottom has retraced 1,272 (=Root 1,618)of the rise from
bottom
> 2.
> This pattern often signals a trendchange UP, according to LP.
>
> HOWEVER, he warns that if the pattern fails we will have a DRAMATIC move
in
> the other direction.
> Now, remembering the many tops (followed by falling prices) or large
moves
> in connection with Solar Eclipses, a move in either direction could be
very
> rewarding.
> There are some questions with regrd to 3 drives to a bottom.
> a) LP does not permit gaps in the pattern, we have 2, 1 up and 1 down.
> b).He wants symetry. the distance in time between bottom 2-3 is half that
> of the bottom1-2. Harmony yes, but symetry?(I am not clear of the excact
> meaning of the word symetry)
> These two arguments indicate that the pattern will fail.
> c)Open interst has during the 5 last trading days risen by 83% in the MAY
> Contract (From 19600 to 36000) accompanied by falling price.
> d)Especially in the DEC Contract we find and interesting development on
Feb
> 13, 17 and 18 that reminds me of the Candelstick formation Called 3 Black
> Crows. (we even have a fourth crow on the 19th). This is a bearish
pattern
> that we find after a top and is described as a reversal pattern in G
> Morris' book "Candelpower".
>
> Thus we have arguments for a dramatic follow through on the downside as
> well.
>
> BUT If all the "shorts"(?) in "b" suddenly decides to bail out, it's not
a
> bearish argument at all is it? We would have an equally dramatic move on
> the upside, shouldn't we?
> So what do we do?
> Well, I have followed Robert Miner's advice, when we have a "Narrow
Range,
> Inside Bar", place a buy stop order at both the top and bottom of the bar
> the day before the inside day. If filled, place a stop and reverse order
> one tick at the other outside the other end.
> So I did, yesterday, in the MAY contract. Got filled, long, at 66,20 at
the
> high (and then CT turned down at 66,22, ending the day 66,10. Not
showing
> much of strength in the context of break out. But price DID break out
above
> a trend line from Feb 12, so the mini bull IS showing. I will now enter a
> stop and reverse order 1 tick below feb 19 low.
>
>
> Finally, FT has a very interesting argument in his "Comment 91", where he
> describes Technical Analysis" as leading indicator to fundamental events
> "...if you believe the collective intelligence is greater than that of
> anyone individual..." (contrary thinking anyone..??).
> His argument are, that if a new downmove will develop in Cotton, it is
> signaling that the crisis is not over in Asia yet, because of the
sensitive
> nature of Cotton to economic grotwth. I find cotton very interesting.
>
>
> Perhaps Walt has an interesting Option Strategy on this one??
>
> regards
> Stig
>
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