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Does this definition mention anywhere how many bars
(minimum) there should be to make up the pattern, or indeed, one or other of the
shoulders?
Bill Eykyn
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Earl Adamy
To: <A
href="mailto:realtraders@xxxxxxxxxxx";
title=realtraders@xxxxxxxxxxx>realtraders@xxxxxxxxxxx
Sent: Thursday, January 11, 2001 6:59
PM
Subject: Re: [RT] H&S on the
Bonds
E&M 6th ed page 64 on "The Head and
Shoulders"
A. A strong rally climaxing a more or less
extensive advance, on which trading volume becomes very heavy, followed by a
minor recession on which volume runs considerably less than it did during the
day of rise and at the top. This is the left shoulder.
B. Another high volume advance which reaches a
higher level than the top of the left shoulder, and then another reaction on
less volume which takes prices down to somewhere near the bottom level of the
preceding recession, somewhat lower perhaps or somewhat higher, but in any
case below the top of the left shoulder. This is the head.
C. A third rally, but this time on decidedly less
volume than accompanied the formation of either the left shoulder or the head,
which fails to reach the height of the head before another decline sets in.
This is the right shoulder.
Thus E&M does not agree that the volume on
the right shoulder is not compared relative to the volume on the left
shoulder.
Earl
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Steven W. Poser
(psn)
To: <A
href="mailto:realtraders@xxxxxxxxxxx";
title=realtraders@xxxxxxxxxxx>realtraders@xxxxxxxxxxx
Sent: Wednesday, January 10, 2001 7:40
PM
Subject: RE: [RT] H&S on the
Bonds
<SPAN
class=120292502-11012001>Earl -
<SPAN
class=120292502-11012001>
<SPAN
class=120292502-11012001>While I agree with you that the pattern is too
small to call it a h&s pattern, at least as defined by E&M, the
volume pattern that you discuss is not a good argument only because volume
can rise on the right shoulder from days between the head and the right
shoulder, as long as it is lower than at the head. For that matter, the
volume I show on my chart for 8-Jan was the lowest since the high anyway to
that point. It looks as if your charts show previous day's volume beneath
the current bar (see my chart attached). The low volume on the left shoulder
is at least partially because it was pre-Christmas (wasn't the 22nd a
shortened day?). Note also that volume properly increased as prices fell the
next day. The volume pattern looks even better in the benchmark 10Y futures
(though the left shoulder is still low).
<SPAN
class=120292502-11012001>
<SPAN
class=120292502-11012001>The most incorrect thing about calling this a
H&S is that it is no place near being confirmed. The neckline is one of
those ugly downward sloping ones. It comes in tomorrow near 103:20. The
measured move off the high will be about 2:14, so we will get the signal
more than 1/2 to the target. Not a great risk/reward. There are much better
patterns and indicators that would have told you to be short than this
possible H&S.
<SPAN
class=120292502-11012001>
<SPAN
class=120292502-11012001>One thing that I strongly believe in is that the
requirements that E&M put on patterns as far as length go are not
useful. These patterns also show up, and seem to be reliable, even on an
intraday basis. Of course, as an Elliottician, I think all patterns can work
even down to very short time frames. It is a bias I have and a cross that I
have to bear.
<SPAN
class=120292502-11012001>
<SPAN
class=120292502-11012001>Steve Poser
---Steven W. Poser, PresidentPoser Global Market
Strategies Inc.<A href="http://www.poserglobal.com/";
target=_blank>http://www.poserglobal.comswp@xxxxxxxxxxxxxxxTel:
201-995-0845Fax: 201-995-0846
<FONT face=Tahoma
size=2>-----Original Message-----From: Earl Adamy
[mailto:eadamy@xxxxxxxxxx]Sent: Wednesday, January 10, 2001
9:09 PMTo: RealTradersSubject: Re: [RT] H&S on
the Bonds
I've previously reminded TBT of the required
qualifications for a H&S with E&M and Curtis Arnold
references to proper identification of H&S patterns but he keeps
throwing these things up as H&S. For the benefit of new traders
on the list who pickup such misinformation and try to use it to their
financial peril, I have attached a GIF which shows what disqualifies this
as a H&S. The idea is simple - high volume on the rally into the
left should indicates buying while low volume on the rally into the right
shoulder indicates lack of buying. Finally, the pattern here is much
too abbreviated (too few bars) to qualify as a H&S.
Earl
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Don
Ewers
To: <A
href="mailto:realtraders@xxxxxxxxxxx";
title=realtraders@xxxxxxxxxxx>realtraders@xxxxxxxxxxx
Sent: Wednesday, January 10, 2001
3:45 PM
Subject: Re: [RT] H&S on the
Bonds
Bill,
I noticed that too, but as another astute investor (Earl) saw the
volume on the right shoulder is larger than on the left, so be careful
about this "topping pattern" and getting too bearish. Could just
be a minor wave 4 of big wave 3 (not a big wave 4) in a continuation
pattern? Minor 4's screw more trades up, I have learned to respect
them (Vs predicting a big wave 4).
don ewersTo unsubscribe from this
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