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If that's the case, then you should be heavily short....
on anticipation of the neckline "break".
> -----Original Message-----
> From: Adrian Pitt [mailto:apitt@xxxxxxxxxxxxx]
> Sent: Tuesday, July 16, 2002 5:37 AM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: RE: [RT] John Murphy notes: the market isn't "cheap"
>
>
> You mean I can trade a Head and Shoulder top for a small risk and make a
> great gain on many occasions, 50% of the time? Your right...sounds
> pretty ordinary...i want something that works 90% and makes 10/1 reward
> to risk.. :-)
>
> Adrian
>
> > -----Original Message-----
> > From: M. Simms [mailto:prosys@xxxxxxxxxxxxxxxx]
> > Sent: Tuesday, 16 July 2002 7:10 AM
> > To: realtraders@xxxxxxxxxxxxxxx
> > Subject: RE: [RT] John Murphy notes: the market isn't "cheap"
> >
> >
> > WARNING, WARNING....John is getting pretty old and so are his
> > techniques.....
> >
> > backtesting Head and Shoulders patterns shows no better than
> > a 50% prediction of significant, tradeable bottom or top.
> > Many fantastic "reversal" rallies have emanated from the neckline....
> >
> > GOTTA DO YOUR HOMEWORK, John....and less appearances !
> > > -----Original Message-----
> > > From: Gary Funck [mailto:gary@xxxxxxxxxxxx]
> > > Sent: Sunday, July 14, 2002 8:02 PM
> > > To: Realtraders@xxxxxxxxxxxx Com
> > > Subject: [RT] John Murphy notes: the market isn't "cheap"
> > >
> > >
> > >
> > >
> > > http://www.murphymorris.com/affiliate/market_watch.html
> > >
> > > John Murphy's Market Watch
> > >
> > > by Mr. John Murphy, President of MURPHYMORRIS.COM
> > >
> > > Sat, July 13, 2002 - HEAD AND SHOULDERS TOP?
> > > WHAT IS IT?... Quoting from the Glossary in my book
> > Technical Analysis
> > > of the Financial Markets: "A head and shoulders top is the
> > best known
> > > of the reversal
> > > patterns. At a market top, three prominent peaks are formed with
> > > the middle
> > > peak (or head) slightly higher than the other two peaks
> > > (shoulders). When the
> > > trendline (neckline) connecting the two intervening troughs
> > is broken, the
> > > pattern is complete." While most major averages show a similar
> > > pattern, we're
> > > using the NYSE Composite Index for illustration purposes because
> > > we believe it
> > > probably gives the best overall measure of the state of the
> > > "market". There's
> > > no question that the chart has the look of a "head and shoulders"
> > > top. The two
> > > "shoulders" were formed during 1998 and 2002. The "head" formed
> > > during 2000.
> > > The "neckline" is drawn under the 1998-2001 reaction lows.
> > As of Friday's
> > > close, the neckline is already been pierced on the downside, but
> > > not by much.
> > > There are two other support levels that bear watching. The
> > first is the
> > > intra-day low hit last fall (which is at 494). The second (and
> > > more important)
> > > is the late 1998 low at 463. Friday's close was only a
> > shade below last
> > > September's low, but not by enough to call this a clear breakdown
> > > -- at least
> > > not yet. Regarding the breaking of the "neckline", there's also a
> > > 3% rule which
> > > comes into play at major chart points. That means that the
> > > neckline needs to be
> > > broken by at least 3% before we can call it a "major" breakdown.
> > > We may get
> > > there (about 485), but we're not there yet. Unless the market
> > > attempts a rally
> > > soon, however, a breakdown could be imminent, which could
> > carry the market
> > > lower into the September/October period.
> > > [...]
> > > THE MARKET ISN'T CHEAP... The purpose of looking at the long-term
> > > charts isn't
> > > to scare anyone. Our main goal is to show that this market
> > isn't cheap. In
> > > fact, it's still historically very high. We've expressed the view
> > > several times
> > > before that we believe the twenty-year bull cycle has ended. That
> > > means the
> > > current bear market could last longer -- and fall much further --
> > > than most
> > > people realize. We don't know how low it can go. It's the
> > direction that
> > > matters most -- not the actual numbers. The "head and shoulders"
> > > tops shown in
> > > the preceding charts is another warning that things could
> > still get a lot
> > > worse. As the message is finally getting across to the public
> > > that this bear
> > > market is indeed different from those in the recent past,
> > mutual fund
> > > redemptions are starting. Imagine what could happen when the
> > > public finally
> > > decides to start selling.
> > >
> > >
> > >
> > >
> > > To unsubscribe from this group, send an email to:
> > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> > >
> > >
> > >
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> > >
> > >
> >
> >
> >
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