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Stig Wrote:
<P>The naked eye can spot a gigantic continuation Head and Shoulder Pattern
<BR>right now, with a MINIMUM potential of 12.94 (close Friday 11.84).
<BR>But what is interesting is that the bottom of the H&S looks like
a wave A
<BR>in a correction, retracing 50% of the advance, and the right shoulder
(Wave
<BR>C) have retraced 50% of wave B.
<P>And if you look at the right shoulder in close only perspective it is
also
<BR>forming a small inverted H&S formation and with just a small advance
we
<BR>will have a break out.....if looked at in the perspective of a
<BR>barchart will form a falling (bullish) wedge.....if we break that wedge-line,
the
<BR>potential in the wedge it turns out that we will probably also break
the
<BR>neckline in the H&S and we should enter wave 3 of 5.
<P>Greetings Stig:
<P>(Please refer to attached .gif):
<BR>The real question is whether the corrective <FONT COLOR="#FF0000">(4)</FONT>th
has really completed or not? Or put it another way, is the market
in the process of going for<FONT COLOR="#3333FF"> </FONT><FONT COLOR="#3366FF">3</FONT>rd
of <FONT COLOR="#FF0000">(5)</FONT>th? Which implies the<FONT COLOR="#FF0000">
(4)</FONT>th wave has indeed completed. I have never trade sugar
but your post has prompted me to spent the whole morning to count out those
waves. It has been rewarding and educational. I will not make
any attempt to forecast any corrective waves; this can be extremely dangerous
to any wave traders.
<P>As of now, there still isn't enough info to tell if wave <FONT COLOR="#FF0000">(4)</FONT>
has completed. There is, however, a clue to the subsequent moves.
Notice after the completion of wave <FONT COLOR="#FF0000">(3)</FONT>, the
subsequent correction is a five wave corrections to <FONT COLOR="#3366FF">A</FONT>:
As I recall, A five wave correction is NEVER the WHOLE of the corrective
phase.
<P>The pattern on the right shoulder looks more like a triangle to me than
a wedge. A wedge has a more exeggerated tilt than the one displays
in this market. But this point is unimportant as far as I'm concerned.
This setup is definitely tradeable. Personally, I'll make sure to
remind myself that there might be a possibility that Wave <FONT COLOR="#FF0000">(4)</FONT>
hasn't completed yet. I'll place an OCO on both sides of the triangle
to capitalize this move. I'll be more cautious on the upside breakout
of the triangle and watch for any drastic reversal of prices after the
breakout (which implies wave<FONT COLOR="#CC33CC"> c</FONT> of <FONT COLOR="#3366FF">B</FONT>
has completed). This is the kind of bull trap that had made many
losing half of their capital here. (See hsi.gif).
<P>Have a good one
<BR>Jeff Harteam
<BR>Hong Kong</HTML>
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