[RT] trading signals

["Dick Crotinger" <dangle@xxxxxxx>]

Here is another view of "cluttered lines."  I wish I could say I made money
on this, but this is certainly the view I take of a tradable move which is
not difficult to anticipate.

This is the breakdown in Honeywell, certainly one of the stellar stock
market trading opportunities on the short side over the last month.  The
Gann lines are standard 5.6 degree angles (1x8), pinned from the low in
March and the high in June 99, just prior to the Allied-Signal buyout
announcement, which was consummated in December.  Note the sizeable break at
the merger in December... definitely a warning of things to come.

Any market analyst worth his/her salt following this market would have seen
the shorting opportunity at the green arrow, which was the culmination of a
number of "signals" discussed here recently...

--- failure of an almost-six-month cup-and-handle...

--- failure of the breakout to a 26-bar high, at minimum a "Turtle" buy
signal gone bad... Earl described this as a "Wyckoff spring reversal ."

--- break below both a downtrending 200 bar sma, as well as a struggling 50
bar sma... when the 50 turns down as a result of this kind of break, this is
typically a BIG flag of things to come...

--- break of a 5-bar low, one of my personal favorites for short-term
trading... the next day broke to 48-bar lows.

and best of all (!)...
--- break at and below the confluence of two Gann lines, one the [white]
downtrend of 12 months, the other the [green] uptrend that had held for
three months.  This is the signal I believe Gann enthusiasts live for.  Can
you trade it?  I would, if enough other confirming indicators had been in
synch, which they certainly were in this case.

Note that there was plenty of time to take advantage of this signal... big
moves usually take time to unfold.  There were similarly multiple signals on
the HON weekly chart... stochastics, failed 50-week sma, and others.

I don't follow the stock for trading, so missed the signal.  But this
demonstrates how multiple confirming signals can add up to big opportunity.

Dick Crotinger





Attachment Converted: "f:\eudora\attach\HOND.gif"