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Its a damn poor example of a head and shoulders. If you
were defining shoulders for a computer test, this wouldn't cut it, else every up
and down swing could be defined as a H&S. You gotta squint to see the
shoulders.
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
wavemechanic
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, July 16, 2002 2:09
PM
Subject: Re: [RT] John Murphy notes: the
market isn't "cheap"
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
M.
Simms
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Monday, July 15, 2002 5:09
PM
Subject: RE: [RT] John Murphy notes:
the market isn't "cheap"
WARNING, WARNING....John is getting pretty old and so are
histechniques.....backtesting Head and Shoulders patterns shows
no better than a 50%prediction of significant, tradeablebottom or
top.
Bulkowski's book
indicates that the failure rate is only
7%.<FONT face=Arial
size=2>
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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: <A
href="mailto:Realtraders@xxxxxxxxxxx";>Realtraders@xxxxxxxxxxx.
Com> Subject: [RT] John Murphy notes: the market isn't
"cheap">>>>> <A
href="http://www.murphymorris.com/affiliate/market_watch.html";>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:> <A
href="mailto:realtraders-unsubscribe@xxxxxxxxxxxxxxx";>realtraders-unsubscribe@xxxxxxxxxxxxxxx>>>>
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