David Singer annotates your world, with a look at an infamous technical pattern, the famed Head & Shoulder:
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In any great organization it is far, far safer to be wrong with the majority than to be right alone. —John Kenneth Galbraith
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
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November 3rd, 2009 at 12:56 pm
I believe David incorrectly drew the neckline on the May-July H+S formation.
November 3rd, 2009 at 1:02 pm
where’s Dead Hobo? I love his “magic chart” comments.
November 3rd, 2009 at 1:26 pm
that 2nd Chart should be attached to all Papers discussing the EMH Thesis..
and, probably, should be mailed to the tens of Millions of Mutual/IndexFund (bag) Holders.
“Mutual Fund is a convenient medium through which a common man can invest in the equity market. A Mutual Fund is actually a trust that pools the savings of a number of investors who share a common financial goal. The money so collected is invested in capital market instruments such as shares, debentures and other securities. Professional Managers known as investment bankers are employed by mutual fund houses to make investment decisions on behalf of common investor. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus the Mutual Funds offer the common man an opportunity to invest in a diversified professionally managed basket of securities at a relatively low cost…”
http://source2update.com/Mutual-Funds/
nice~
and, http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=trusts+pools+in+1929+Crash+
Disintermediation is a Beautiful thing (?)
November 3rd, 2009 at 1:27 pm
@Wave
I was actually looking at this chart last night and realized that in fact the May-July H&S broke under the neckline and then quickly reversed – so you are right, i.e. if the neckline on the top chart was drawn slightly higher, you can see that price actually broke down under the neckline albeit momentarily…
Perhaps the word of caution should be, if you are trading patterns like this, wait for a breakout/down then a sucessful retest and move, in order to avoid the whipsawage…
Another caveat re: trading solely based on patterns is that although they yield good price projections, they are much less reliable with respect to the timing o when prices will reach measured targets…
Y’all can check out my stuff on Scribd @ http://www.scribd.com/SINGER$MARKET
November 3rd, 2009 at 1:45 pm
can u make such a chart for gold too?
November 3rd, 2009 at 2:08 pm
Market seems to be getting a lot of “good” news again today with the auto sales numbers. Interesting day for the psyche of the market. Are we heading higher from here? Keeping close watch with my short etfs.
November 3rd, 2009 at 2:28 pm
35% of our local school dist. out due to flu.. can’t be good for biz if happening elsewhere.
http://timesargus.com/article/20091103/NEWS01/911030358/1002/NEWS01
November 3rd, 2009 at 2:28 pm
What happened to his rising wedge pattern from last week?
November 3rd, 2009 at 2:30 pm
I’m talking out both sides of my mouth here, with both long and short positions. Fundamentally, I’m bearish, and technically, we’re certainly on the cusp on something big. I guess I sell the losing side and let the other side go where it will. Should be interesting!
HCF
November 3rd, 2009 at 2:31 pm
@Vermont Trader:
Any excuse to stay home and eat Ben & Jerry’s… I’ll take it!
HCF
November 3rd, 2009 at 2:39 pm
Dow has made three unsuccessful runs at getting above yesterday’s close. If it continues to fall, as I mentioned earlier, to close under 9700, the scenario for the swift sell off is still firmly intact. IMO.
November 3rd, 2009 at 3:09 pm
CNBC, wow, the purveyor of greenshoots is now talking FIAT money, lol, if this get’s some traction bar the doors katy………..bens worse nightmare, something like fiat money becoming common place, ooops
November 3rd, 2009 at 3:12 pm
@jsgarber
see this link for an update on the wedge pattern…
http://singerprofitcharts.blogspot.com/2009/10/annotated-rising-bearish-wedge-in-djia.html
November 3rd, 2009 at 3:57 pm
I have noted for some time now similar H&S patterns in multiple timeframes on my publice site on Stockcharts.com, here is a link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3409190
In addition, there is a similar comparison to be made between the March ‘09 bottom and the March’03 bottom, here is a link to my “instablog” on Seeking Alpha.com, click on the article entitled “March ‘03 vs. March ‘09/ Comparisions and Projections.”
November 3rd, 2009 at 4:27 pm
@singer
At what point do you consider it a confirmation that the rising wedge patter is in play?
November 3rd, 2009 at 4:36 pm
Oh my…
And what are we looking at if your “Head” is really but a mere left “Shoulder”…?
Reality I guess.
November 3rd, 2009 at 4:37 pm
H&S patterns rarely work on the major averages, especially if they’re so obvious everyone sees it. Why do you think the pattern failed in July? Because everyone could see it. All the shorts lines up on the right shoulder, then the big money trapped them.
November 3rd, 2009 at 5:53 pm
@js
its in play now but I would not go short until we get through 9430 on the DJIA… you can always get a rally back to the apex and I have read on a good pattern site by Bulkowski – http://thepatternsite.com/risewedge.html, that these are not the most reliable patterns…
@Steve C – no time to get into the littany of H&S on major indicies but see this post DJIA H&S top…
http://singerprofitcharts.blogspot.com/2008/01/indu-dow-jones-industrial-average.html
Also, what about the big H&S bottom on the weekly S&P chart above? Also H&S bottom on Nikkei before its run into the 2007 highs?
@I-Man -
maybe… if prechter is right, we go to SP 350 then to 1900 when the full thing plays out in a couple a years….