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In a message dated 99-07-08 23:14:35 EDT, eadamy@xxxxxxxxxx writes:
<< Where do you see a cup and handle? Are you seeing a possible handle if we
get a retracement? There was a very sloppy cup and handle completed on 6/30,
however the handle had such a deep retracement (more than 38%) that it would
generally be prelude to a failure.
Earl >>
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Not sure I agree with the cup and handle on the SP, but in the vein of
classic chart patterns the bonds have a nice little head and shoulders
developing. They are also through the downtrend line, and used it as support
for today's rally. There is also a triple top just overhead and markets
rarely leave triple tops--- so eventually look for them to break. As well,
the bonds are getting close making the first 20 day high in some months. This
is usually roughly coincidental with getting the trend floowing systems the
funds use to kick in, which would increase the buying pressure more.
WD Gann said always look to the secondary low to enter a trade. There are
actually some Gann time/price squares at today's secondary low above the
major low of a couple weks ago.
Also looks like the Dm likely completed wave 3 of a declining diagonal
triangle. This means lower US dollar if correct, although it is more of a
question than bonds might be. That might make one question the bullish SP
scenario. Lower dollar, lower SP, higher bonds though, is a scenario that we
have seen some occurrences of in the past. Of the 3 markets, bonds higher
looks like the best bet, with the low Thurs being the uncle point on any
longs.
jd
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