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Jim,
your mail was really interesting for me, since it seems that you use really different
channel constructions than I do.
You wrote:
>Looking at my indices, the Dow Jones
> Industrials broke through the bottom of its Intermediate Term Up Trend
> Channel (ITUTC) on 8/7, the OEX and SPX did the same on 8/8, and the New
> York Stock Exchange Index broke through the bottom of its ITUTC. The NASD
> and Russell's index are close to the bottom of their channel. I think this
> means we will get the long anticipated rotation out of the large cap stocks
> to the small cap stocks, so I'll stick to small caps on my new selections.
> The other possibility is that we will get an overall correction or even a
> bear market.
Where did you start drawing your ITUTC for the Russelīs index? I guess thatīs around
April, 28 - correct? And do you talk about a Raff Channel as available in MS?
I donīt use this feature, since often I canīt follow the construction.
And: I do not necessarily start at a significant low, as at the end of april.
Why? Because I search for Channels (or letīs say trendlines) that follow a kind of "orderly"
movement.
You can see what I mean looking at the Russelīs chart. End of april/beginning of may the
index "jumped up" by almost 10%. After this it started a orderly (or better regular?) climb
up to the latest top at about 420pts.
For this climb you can draw a trendline starting mid of may and is touched three times
before it reached the top.
To me this looks much more useful than a channel starting at the first mentioned low.
What do you think about this?
By the way: "My trendline" was broken at Aug 08, so for me the intermediate upward move is
finished. The same complies for the value line index.
I agree with you for the NASDAQ (100) Index.
Since all of the indicators I use completed top formations (most of them H-S-H ) for all
indexex (except NASDAQ), or broke their own upward support lines, I expect a greater loss
than you!
So I bought some put-warrants last monday morning in Frankfurt.
Looking forward to your opinion on "orderly trendlines"!
Thomas
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