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A pattern will follow through or it will fail pattern ,which
is as good , better in most cases. As one side is trapped and "out at any price"
is the best opportunity .
The Head and Shoulders price pattern is a lot more than just a
price pattern, it is also a volume pattern , which is more important
.
Volume is the key in all these price patterns. It is what tells the
story.
Like the sub titles in a movie. Without volume there is no
sentiment. No place to tell where the orders are .
Which was the other Fed study .. The more important study one ,
they did .
So,
All good Head and Shoulders are tradable , not all Head and
Shoulders are good .
It is the hidden and the hard ,that make them good or
not.
Mr. Murphy makes this point very well in his books for
the careful reader.
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- 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: Tuesday, July 16, 2002 3:52
PM
Subject: RE: [RT] John Murphy notes: the
market isn't "cheap"
See post regarding the 93% success rate.........I don't
believe it...Bulkowski can't code....thus he probably can't
specify.....thus thetechnique is probably unreliable.>
-----Original Message-----> From: Daniel Goncharoff
[mailto:thegonch@xxxxxxxxxx]> Sent: Tuesday, July 16, 2002 10:32
AM> To: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx>
Subject: Re: [RT] John Murphy notes: the market isn't
"cheap">>> Why would you be 'heavily' short? Wouldn't you
want to take a short> position in anticipation of the move, but not a
big one, since we agree> that it is often inconclusive, and at times
produces a reversal?>> Regards> DanG>> "M.
Simms" wrote:> >> > 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"> > > > >>
> > > >> > > > >> > > >
>> > > > > <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:> > > > >
realtraders-unsubscribe@xxxxxxxxxxxxxxx> > > > >>
> > > >> > > > >> > > > >
Your use of Yahoo! Groups is subject to> > > > > <A
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> > > >> > > > >> > > >>
> > >> > > >> > > >> > >
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/zMEolB/TM> > > >> > > >> > >
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