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John,
Thanks for posting this.
Hurst also shows in his
book using the
H&S Pattern with cycles.
I learned this from another
trader that I respect highly;
The 80/20 rule applied
to trading. 80% of
the decline in Price will come in the
last 20% in Time of
a Cycle low. <FONT face=Arial
size=2>Vice
Versa Coming off a low.
80% of the advance come
in the first 20 percent
of Time.
The majority of damage in Price
since
the last cycle high came
in the last 20%. Once
we broke the neckline; the acceleration
substantially
increased even more so.
Applying this cyclically; an
intermediate cycle
low is due now which we
did get a powerful recovery
coming off the lows last
week. .
If last
week's low isn't
broken and also confirmed
by taking out
last weeks highs with
another weekly close
higher; perhaps
a tradable Intermediate term rally
back
up to the neckline.
Then with the next intermediate
cycle
low, could hit the H&S target.
We'll see.
Best,
Rhonda
<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:
John Cappello
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Cc: <A title=MedianLine@xxxxxxxxxxxxxxx
href="mailto:MedianLine@xxxxxxxxxxxxxxx";>MedianLine@xxxxxxxxxxxxxxx
Sent: Saturday, July 27, 2002 9:42
PM
Subject: [RT] H&S Formations
I cut my stock market analysis teeth on this and maybe
I am late in the thread. But there is a very interesting article in the
April '02 edition of TA of Stocks and Commodities by Martin
Boot.Summation:Using a data base of 8,315 NYSE and Nas stocks
from '97 to '01 results indicated:1. H&S occurs
frequently2. 35% of the occurrences are profitable.3. The
largest profit comes within a 4 week time frame. After 12 weeks the
average profit drops below the profit of the first week.The above are
the most salient features of the research although there is
more.The conclusion of the article is that H&S can be helpful in
determining trendline breakouts. However simply identifying them will
not provide a high success rate.Knowing the phase of the cycle in
which the formation occurs can turn the H&S into a "goldmine" This
last comment leans heavily on the work of Merrman who identified the
cycles and morphology of H&S. Hope this was not
redundant.JohnTo
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