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In Japanese candlesticks they are called shooting starts. A very bearish
sign.
----- Original Message -----
From: Gitanshu Buch <OnWingsOfEagles@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, April 12, 2000 5:13 PM
Subject: [RT] STK: Failure Patterns
> Jeff Cooper calls them Tails.
>
> Here are some notes from my trading diary.
>
> May help, the next time Elvis is sighted.
>
> Bearish Reversals of the type seen in Apple Computer 2 weeks ago are
> widespread today. Apple chart attached from that day, and new chart
> as of 4/12 close.
>
> Lately these have been good fodder for the bears.
>
> Here are a few recent example signals of exactly the same pattern from my
> trading notes. Those interested can look at free charts on BigCharts or
> LiveCharts.
>
> Gap up open, higher high (often a new high to trap the breakout canslim
> types) and then a sharp reversal into the close on heavier volume
(relative
> to prior day) which follows through - in some cases, for weeks.
>
> 12/14 America Online AOL
> 12/30 Microsoft MSFT
> 01/10 America Online AOL (not a new high bar but all other price-volume
> characteristics met)
> 02/04 The Gap Stores GPS
> 03/03 Sun Microsystems SUNW
> 03/06 Texas Instruments TXN
> 03/07 Motorola MOT
> 03/08 May Heating Oil (HO K0) also a wide range outside day reversal
> 03/22 Dell Computer DELL
> 03/23 Apple Computer AAPL
> 03/24 Chase Manhattan Bank CMB
> 03/27 Cisco Systems CSCO (also a low histvol reversal)
> 03/28 Sun Microsystems SUNW (also a wide range outside day reversal bar in
> low histvol)
> 04/04 Bank of America BAC
> 04/06 IBM, IBM
> 04/10 Cisco Systems CSCO (also a wide range outside day reversal bar)
> 04/10 Sun Microsystems SUNW (also an outside day with a down close)
>
>
> This list is not because I trade only tech - but it shows that signals
tend
> to cluster together for like businesses (eg Dell and Apple, Cisco and Sun,
> Motorola and TI on simultaneous days etc).
>
> So the occurrence of one such tail makes me watch that company's
competitors
> actively for similar setups over the next couple of days.
>
> Today's closing signals are likewise clustered.
>
> They trigger short entries tomorrow on trade below today's lows, with a $1
> money management stop above today's midpoint:
>
> Financials:
> Citibank, on heavier volume.
> Chase Manahattan, on heavier volume.
> AIG, on heavier volume.
>
> Retailers:
> Wal Mart, on heavier volume
> Home Depot, on twice average daily volume.
> Liz Claiborne, on heavier volume.
>
> Indices:
> Dow Jones, volume not verified.
>
> Looks like the distribution of "value" or "old economy" or "currently
> favored momentum" has begun in the earnest.
>
> And the tech party goes on as the last holdouts slice thru their 50 day
emas
> on rising volume and wide range bars.
>
> Examples are CSCO, INTC, EMC.
>
> I wonder what bullish picture the media will paint today. The Motorola
> coverage left me totally confused since I tend to watch CNBC only late
> nights or early AMs. The way they were pushing "Motorola up $2 in after
> hours" the evening of the announcement made me laugh. They were using a
> "special" closing price where no trades were done.
>
> Ah well.
>
> Bullishly, when the faves get thrown to the lions is when we've recently
> (past 3 years) been closer to bottoms than tops. The faves being the
Intels,
> Cisco, EMCs of the world. These have brief 3-4 day selloffs, measuring
> between 20% and 29% from top to bottom - but by then most of the damage
> elsewhere is done.
>
> That, for me, would be capitulation.
>
> Its amazing how clearly the market speaks, sometimes.
>
> Gitanshu
>
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