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I agree with your possible H&S in bonds. Looking at the all session, we have
tough overhead resistance just above at 116^00 30Jun PH and 116^08 17Jun PH
with the 116^08 being the more important of the two as breaking through it
will confirm a change in short term trend from short to long. Just above 08,
we have 116*20. Either the 08 or 20 appear to be the focal point for both a
head and shoulders bottom and a possible cup and handle. I suspect we'll get
through 00 at the open, perhaps even breach 08 and then do some backing and
filling between 08 and 20. If that zone holds bonds could be off to a run
toward 119^09 which appears to be a w1 pivot low and should not be violated
if this move is corrective rather than impulsive.
In the vein of cup and handle, ND (Sep NASDAQ 100) completed a very nice cup
and handle on 30Jun. Recently, have been looking to ND for the clearest
chart patterns and wave counts.
Currencies were one of my favorites until I hit a long spell of not being
able to identify any pattern. DM was the worst - would look like it was
putting in a bottom (frequently with the higher PL) but just couldn't hold.
Generally, the only trades I will entertain these days in currencies are
short which is with the major trend.
Earl
----- Original Message -----
From: <JCDuffy@xxxxxxx>
To: <eadamy@xxxxxxxxxx>; <realtraders@xxxxxxxxxxxx>
Sent: Thursday, July 08, 1999 9:36 PM
Subject: Re: FUTR: Cup and Handle in the SP
> 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 >>
> ===================
>
> 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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