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Earl - Good post regarding the triangle. You, me and everybody else has
been watching that thing develop all day long. Likely means a bit more
sideways to higher trading.
I posted a reply, by the way, to ben directly this morning, and will
post much of same thing here:
A move toward 118-03 should be possible, if we cannot, we've got big
problems s-t. This, to me, is dead cat bounce. Open interest FELL in
June bonds on Friday (though rose in 5s, 10s and big time in Sep, but
o.i. there is tiny - spread trades??). There are few shorts to cover in
bonds. Seasonals not too good for second half of May either, though
excellent in early June. Targets in the 116/115 range make sense. Not
sure if that will represent end of wave-3 or wave-5. Too soon to tell.
Fed should tighten bias, but that is expected. If we sell off on that,
and there is no hike (unlikely), that says this market is super weak.
If this next drop is end of five waves, rally back to upper-120s is even
possible. If it is end of three, then a four or five point pop is due
and then drop to Earl's target areas below 112. Long term trend line
near 115-12 I think, is support for this week. Momentum divergence on
daily chart (RSI, 14-day) a concern for bears. Need sharp drop to avoid
reassessing this as wave-5 and not wave-3.
Steve Poser
--
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
Earl Adamy wrote:
>
> Here's a classic progressive bullish triangle and wedge. The horizontal line
> and first upward sloping trendline defined the initial bounds of the bullish
> triangle. Note the deep penetration of the up sloping trendline with close
> above the trendline - this is a signal to get long as stops just under the
> sloping line are cleared. Next we touched the horizontal line again and came
> back to a higher low below the first trendline - an initial sign of weakness
> and opportunity to tighten the stop. The second (lower) upward sloping
> trendline defines a new triangle and the down sloping line across the pivot
> highs defines a wedge - note how the down sloping line provided steady
> resistance. The general indication here is of a relatively weak market which
> has difficulty overcoming even light resistance (the down sloping line).
> This is not to say that we will not eventually get a breakout but is a sign
> one should be monitoring stops carefully.
>
> Edwards & McGee notes that triangles which progress into the point are very
> prone to failure.
>
> Earl
>
> ----- Original Message -----
> From: Earl Adamy <eadamy@xxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Sent: Monday, May 17, 1999 7:49 AM
> Subject: Re: June T-Bonds
>
> > I have the 38% retracement of Friday's decline at 118^00 and the 100%
> > projection using the L/H/L pivots on the 15 minute chart at 118^03. A
> rally
> > failure short of the 100% projection would be extremely negative,
> signaling
> > a high likelihood that Friday's low will not hold. Such a failure would be
> > confirmed by taking out the 117^07 pivot low. As a guess, I would suspect
> > that we need to rally to the 62% retracement area at 118^23 to have a
> decent
> > chance of holding Friday's low. Keep in mind that all of this is off
> > Friday's action only while ignoring all which came before - an extremely
> > limited view.
>
> ------------------------------------------------------------------------
> Name: USJUNE.gif
> USJUNE.gif Type: GIF Image (image/gif)
> Encoding: base64
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