Uptrend
TSP Pro
- Reaction score
- 74
Here is an observation about the electronic information age and the markets, and possibly how it has made trading more elusive. Noting the recent head and shoulders pattern on the charts of the dow & spx; if everyone sees the same thing and starts talking about it, will it happen?
"Again, I agree that conditions have gotten more bearish and maybe this is just semantics, but if everyone sees the same pattern on the charts, the market is not going to act the way they might expect.
Therefore, I cannot join the crowd of people from literally every corner of Wall Street and financial media yelling "head-and-shoulders." I do see lower prices ahead, but capturing some of those bearish profits may require different tactics."
http://online.barrons.com/article/SB124702532283910139.html#mod=BOL_hpp_dc
Anyway IMO the last little bull fling starts tomorrow before a correction. (I am beating myself up that I missed the entry point by 2 trading days because I mis-judged the neckline as described by squalebear in the article below). How do I know? I don't for sure, but the 15 minute and 60 minute spx charts show the breakout of a falling wedge pattern late in the day on Wednesday. Also bull cross on MACD and stochastics cycling up. The pattern measures to spx 930. The 20 sma is coming in at 913 and so the rally could stall there.
But on the other hand the rally could take off and go to spx 960 or even 1000 as a last little trap. Just too much bearish sentiment. CNBC could go nuts reporting how the bulls are back. If this case one would throw out the head and shoulders pattern and replace with a double top (M) pattern with the right side of the M equal or going a little higher than the left peak. This pattern is very possible and would be less expected. What could get the market up there. OPEX next week with put/call ratio currently at 1.53 (1.60 considered bullish as contrarian indicator), everybody looking for the bear, and the banks report next week with glowing results. After all they have lied before, or at least had accounting gimmicks. Just remember, all they have to do is beat expectations, even if they show a loss and the market should rally.
Moderately scared, but hanging on to the trade. Let's see what happens tomorrow, and Friday.
"Again, I agree that conditions have gotten more bearish and maybe this is just semantics, but if everyone sees the same pattern on the charts, the market is not going to act the way they might expect.
Therefore, I cannot join the crowd of people from literally every corner of Wall Street and financial media yelling "head-and-shoulders." I do see lower prices ahead, but capturing some of those bearish profits may require different tactics."
http://online.barrons.com/article/SB124702532283910139.html#mod=BOL_hpp_dc
Anyway IMO the last little bull fling starts tomorrow before a correction. (I am beating myself up that I missed the entry point by 2 trading days because I mis-judged the neckline as described by squalebear in the article below). How do I know? I don't for sure, but the 15 minute and 60 minute spx charts show the breakout of a falling wedge pattern late in the day on Wednesday. Also bull cross on MACD and stochastics cycling up. The pattern measures to spx 930. The 20 sma is coming in at 913 and so the rally could stall there.
But on the other hand the rally could take off and go to spx 960 or even 1000 as a last little trap. Just too much bearish sentiment. CNBC could go nuts reporting how the bulls are back. If this case one would throw out the head and shoulders pattern and replace with a double top (M) pattern with the right side of the M equal or going a little higher than the left peak. This pattern is very possible and would be less expected. What could get the market up there. OPEX next week with put/call ratio currently at 1.53 (1.60 considered bullish as contrarian indicator), everybody looking for the bear, and the banks report next week with glowing results. After all they have lied before, or at least had accounting gimmicks. Just remember, all they have to do is beat expectations, even if they show a loss and the market should rally.
Moderately scared, but hanging on to the trade. Let's see what happens tomorrow, and Friday.
Just think how much more we would be to the negative side if we had additional IFT's. With the limit of two the FRTIB knows that we will be in a buy and hold pattern (G) and making money hand over fist. :nuts: They have done it for the good of the membership. 
