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I received a few private e-mails re: my last T-Bond post in April(see
below)...I forgot
to post to the group... the follow-up, but following the trend-line breakout
as indicated would have worked quite well..........
What's next?????????????
I would be very suprised if this move didn't last for a little while
longer......the pattern that we broke out of took almost 5 months to form.
IF we drop back below 120.10 then I believe we would be headed into a
mutli-year bear market for the bonds and interest rates will have bottomed
out.....As for the upside?????? No one knows, of course, so keep those
stops in place and we'll let the market tell us what to do..........
Tom Stein
comfut@xxxxxxx
POST from 4/23/98.............
A little contribution re: Bonds....This is a long term outlook.......
I will first give you a little Elliot Wave(it's easier than you
think)....then an idea using simple trendlines............
The drop from 123.28 to 118.10 was a 3 wave affair.....this tells us that
123.28 has a very high probability of being taken out again(yahoo for
refinancing!!!!!!).......
The rally from 118.10 to 122.28 was also a 3 wave affair............
Thus we can say that we are either in an ABC correction or an ABCDE
correction....BOTH have the same implications.....123.28 should be
exceeded......
HOW does one make the $$$$$$$.......
1)IF A=C...then we have a downside target of 117.10....maybe a good spot to
look for buy signals??????????
2)IF this winds up being an ABCDE....contracting triangle.....then 118.10
may not be exceeded on the downside....we may be in wave C,now...with a
smaller up then down sequence for the D and E.......
Okay....now for us simple minded traders....draw a trendline from 123.28 to
122.28........
When that is exceeded.....we should be in a thrust that takes us above
123.28...........
I will update as we go along, so that maybe IF I'm lucky enough to be
correct....someone may benefit from the simplicity of using trendlines to
make a little money......
Tom Stein
comfut@xxxxxxx
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