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To follow up Bob Hunt's excellent reference to the Street Smarts' Holy
Grail set-up, I thought it might be interesting to see what other chart
patterns (and lack of them) would have enabled a trader to read this
particular tape.
Bearing in mind that we are into very new country for the bonds - which
opened with a Gap to Follow, so that one was immediately on the alert for a
down day. A J-Hook singled out a major bounce - and a good trade to the
Double Top, which put the market on course again. The lack of any
reversal pattern on the intraday low would have signalled holding short and
the reversal on the re-jigged S2 (in the absence of anything else) ended
the move.
The "thank you" trade (for day traders paying their dues on getting out!)
would have been an extra profit, provided that the double doji was adhered
to as a positive warning of change of trend.
All in all, an excellent example of the readability of the bonds, using
very simple patterns - even when in relatively uncharted waters.
Happy Presidents' Day Holiday - it means we have one too on this side of
the fish pond, because the FTSE et al cannot do much without you guys...
Bill Eykyn
May the US Dollar beat the Euro and save the British Pound.
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