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H&S patterns (topping) and inverted H&S patterns (bottoming) are found all
over the place, especially by those who have not looked at the requirements.
And yes, they are supposed to be located at major changes in trend relative
to the time frame. I have seen many H&S topping diagrams presented without
adequate development and/or the right shoulder far above the left. Very few
diagrams are presented with volume much less the required volume pattern of
distribution on the right shoulder (top) or accumulation on the right
shoulder (bottom) which E&M said should accompany valid patterns. Curtis
Arnold in his book on pattern trading found the H&S pattern to be only
modestly reliable although he too ignored the volume aspect stressed by E&M.
Earl
----- Original Message -----
From: "Kent Rollins" <kentr@xxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, January 07, 2003 3:22 PM
Subject: Re: [RT] setups
> I've seen many, many people drawing head-and-shoulders formations
> (non-inverted) on daily charts of the last month or so. Not just in this
> forum but also on free and pay sites. Aren't H&S formations supposed to
be
> topping formations, not intermediate bear market formations? And if those
> same people tried, could they find and inverted H&S formation on the
current
> daily/weekly charts? What does this say about market sentiment?
>
> Kent
>
>
> ----- Original Message -----
> From: "BobR" <bobrabcd@xxxxxxxxxxxxx>
> To: <MedianLine@xxxxxxxxxxxxxxx>; <realtraders@xxxxxxxxxxxxxxx>
> Sent: Tuesday, January 07, 2003 2:19 PM
> Subject: [RT] setups
>
>
> OK, this is the setup I am looking at for a long exit/short entry. Today
> marks the 4th day of a positive NDX net percent up down volume (up -
> down)/total. A lower high on the 4th bar of a 4 bar set with a higher
high
> on the NDX may be a prelude to a down day the next day...at least that is
> the thesis being examined. Perhaps it is reinventing the wheel, but
> discovery sure is fun as is the journey. I had an options system that
could
> quintuple the account in 5 weeks of OEX trading. It was so boring I quite
> trading it, |;-) .
>
> bobr
>
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