The 56 Point TA; Charts With an Attitude Message Board

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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude

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To: bdog who wrote (32062)	9/18/1999 3:44:00 AM
From: Doug R	Read Replies (4) of 79202

Bdog, Hmmmm...an IHS over 3 days on the 3 dRSI is, how shall I say...impossible. Now an IHS over 3 days on the price chart is possible but the circumstances that define one as significant are very rare. A striking coincidence is that INTA actually put one together under the proper circumstances starting on Friday 9/3 with a head on Tues. (after Labor Day) 9/7 and a right shoulder on Wed 9/8. On an RSI it takes a minimum of 3 days to form a left shoulder. Another minimum of 2 more days to put in a head and 1 more to set the bottom of the right shoulder. Think of the left shoulder as a V. There's 3 days in there. The bottom of the shoulder is the 2nd day. The third day is the top of the right side of the V. From there, a head over the next 2 days starts from the right side of the V and dives down lower than the apex of the V. You can only know the head has bottomed when it goes from that low to a higher point. From that higher point, a possible bottom defining the right shoulder is a move down to a higher low than the head's low. This often takes place in one day on the 3 dRSI. At this point you can have a neckline and the next move up on the indicator has a possibility of breaking the neckline giving you an IHS breakout. But 3 days on the 3 dRSI for an IHS to form??? nah. Now for an effective IHS to form over 3 days on the price chart you have a relatively narrow range on each day with the low on day 2 slightly below that of days 1 and 3. Certain chart activity previous to the 3 days gives the pattern its effectiveness. You will often see a local high such as that on 8/27. From that day there is no really definable downtrend. A bottom is put in with the lows on either side of 9/7 that are higher than the 9/7 low while the highs on either side are higher than the high on 9/7. Now if you draw a line across the highs on either side of 9/7 you get a neckline that is the actual current local resistance on INTA and a break over that line will start the momentum necessary to break a definable downtrend. On INTA that is from the highs on 5/10 and 8/27 (which, voodooishly enough, intersects that 3 day long price IHS neckline at the value of 4.15625 on Monday). If INTA gaps over 4.15625 on Monday...that will really get things in gear. Doug R

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