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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 681.44+1.6%Nov 10 4:00 PM EST
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To: Joan Osland Graffius who wrote (49741)5/8/2000 12:25:00 AM
From: Smooth Drive  Read Replies (1) of 99985
 
Good Sunday Evening All,

Updating handcharts and thought these two might be of interest.

GE as my market bellweather reversed down on Thursday creating a Bull Trap pattern, as follows:

                                     + < Bullish Res/Line
165.52                             X  < Triple Top
161.67                     X   X + X O
157.91         X           X O X O X O
154.24         X O X       X O X O X 5
150.66         X O X O     X O X O X
147.15         X 1 X O   + X 4   O X   +
143.73         X O   O +   X *   O   +
140.39     X   C     O 3   X   *   +
137.13     B O X     O X O X     +
133.94     X O X     O X O X   +   *
130.83     X O       2 X O X +       *
127.79     X         O   O +
124.81 A   X             +
121.91 9 O X
119.08 X O X
116.31 X O
113.61 X
110.97 X
108.39 X
105.87 X

The P&F Bull Trap is a bearish signal. When it happens above the Bullish Support Line, as in this case, it's a short term bearish signal, but -- they can turn into long term.

A Bull Trap occurs when you have a triple top (which happened at 165.52) and then it reverses down "Without moving up at least one additional box. This takes out the short sellers stoplosses as well as the traders with buy-stop orders." (The quotes from Michael Burke's book.)

It's worth noting that the Bullish Resistance Line at 165.52 held as well.

The 1% box P&F chart reversed up on Friday. If the above chart reverses back up and exceeds the previous X then we have a bullish pattern catapult and all is forgiven. Do you think that will happen?

Here's a dash of the DJIA 1% box P&F chart:

11790.44
11673.71 X                       +
11558.13 X O                   + < Bullish Res/Line
11443.69 X O                 +   * < Bearish Res/Line
11330.39 X O               +     X *
11218.20 X O             +   X   X O *
11107.13 X O 2         +     X O X O X *
10997.16   O X O     +       X O X O X O *
10888.28   O X O   +         X 4 X O X O   *
10780.47   O   O +           X O   O X O
10673.74       O X           X *   O X O
10568.05       O X O         X   * O X O
10463.42       O X O         X     O X 5   +
10359.82       O   O 3       X     O X   +
10257.25           O X O     X     O   + < Bullish S/L
10155.69           O X O     X       +   * < Bearish S/L
10055.14           O X O X   X     +       *
9955.59            O X O X O X   +
9857.02            O   O X O X +
9759.4                 O   O +
9662.79                    +

This chart looks more and more like a failed rally. The Bearish Resistance Line is in control of the current pattern. Lower tops and bottoms and the first bearish vertical price objective is 9285 and the second is 8406.

There's trend line support at 10257 and horizontal support also at 10257 and then none until 9759.

I guess a little time will tell.

Take care,

Eric
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