head and shoulder
#1
Posted 17 July 2004 - 12:26 PM
#2
Posted 17 July 2004 - 12:28 PM
#3
Posted 17 July 2004 - 12:44 PM
#4
Posted 17 July 2004 - 01:26 PM
I agree!just want to coment that I think the "Head and shoulder" pattern is the most over used and misused chart pattern out there
To be used correctly -- IMO -- one should look to play it BOTH ways...especially if it fails!!!
1 -- A H&S that breaks the neckline should be traded -- but a violation of that neckline is a signal to get out of the trade and look to go back long -- as with number 2 below.
2 -- A H&S that fails to break the neckline -- or a retest of the neckline after it is first broken -- and then goes on to take out the right shoulder is a very often a HUGE opportunity for catching a big move in a continuation of the original trend.
In general any formation that fails is OFTEN a much stronger signal than the "expected" move one sees as it forms....most people just get out when these formations fail, sit buy and miss the bigger move.
Carl Swenlin, founder of Decision Point and original Fearless Forecasters board.
#5
Posted 17 July 2004 - 02:13 PM
Better to ignore me than abhor me.
“Wise men don't need advice. Fools won't take it” - Benjamin Franklin
"Beware of false knowledge; it is more dangerous than ignorance" - George Bernard Shaw
Demagogue: A leader who makes use of popular prejudices, false claims and promises in order to gain power.
Technical Watch Subscriptions
#6
Posted 17 July 2004 - 02:19 PM
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=$indu,uu[e,a]daclyyay[dd][pb50!b200][vc60][iub14!la12,26,9][j33565023,y]&r=4890.png
BIGGEST SCIENCE SCANDAL EVER...Official records systematically 'adjusted'.
#7
Posted 17 July 2004 - 02:59 PM
The key volume characteristic of a head and shoulders pattern is that the volume that accompanies such a price structure should have above average volume on the left shoulder, as much if not more when forming the head, and then lesser than average volume on any construction of the right shoulder. The other key element is that the formation of the head must have greater volume than that of any low point from where the left shoulder ends and the head begins.
As represented by the Dow chart shown below, the volume characteristics of the right shoulder may have been one idea, but the "head" of the pattern was barely able to maintain greater than average volume, and never took out the climatic volume low of late November.
Because of this, the pattern being traced out was more than likely a consolidation pattern, which eventually did lead to the smart advance that followed in the December period.
Fib
http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=$indu,uu[w,a]dahayyay[d20031001,20031201][pc200][vc60][i]&r=5696.png
Better to ignore me than abhor me.
“Wise men don't need advice. Fools won't take it” - Benjamin Franklin
"Beware of false knowledge; it is more dangerous than ignorance" - George Bernard Shaw
Demagogue: A leader who makes use of popular prejudices, false claims and promises in order to gain power.
Technical Watch Subscriptions
#8
Posted 17 July 2004 - 03:47 PM
Weclome back, an excellent post.I agree!just want to coment that I think the "Head and shoulder" pattern is the most over used and misused chart pattern out there
To be used correctly -- IMO -- one should look to play it BOTH ways...especially if it fails!!!
1 -- A H&S that breaks the neckline should be traded -- but a violation of that neckline is a signal to get out of the trade and look to go back long -- as with number 2 below.
2 -- A H&S that fails to break the neckline -- or a retest of the neckline after it is first broken -- and then goes on to take out the right shoulder is a very often a HUGE opportunity for catching a big move in a continuation of the original trend.
In general any formation that fails is OFTEN a much stronger signal than the "expected" move one sees as it forms....most people just get out when these formations fail, sit buy and miss the bigger move.
I've heard or read or both, that the DOUBLE BOTTOM is one of , if not the most, reliable of indicators. Anyone can confirm and elaborate on this?
#9
Posted 17 July 2004 - 03:53 PM
~ Johann Wolfgang Von Goethe ~
#10 Guest_Hawkeye_*
Posted 17 July 2004 - 04:47 PM