MDA - Market Direction Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis

SPY 695.17

+0.2%

4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: mishedlo who wrote (80651)	7/21/2001 5:51:36 PM
From: HairBall	Read Replies (1) of 99985

mishedlo: If you don't mind I'd like to throw in my two cents...<g> This is the first time I have seen any educational stuff from pristine.com. Paul Lange appears to be charting in linear rather than my preferred scale of semi-log so my charts compared to his charts will be a little different but because of the narrow range fairly similar. I illustrated a similar rising channel on my charts after the 4/17-18 gap-up. Where I differ with his view is with his very loosely plotted falling trading channel after the 5/22 pivot high. I first plotted and illustrated on my charts a falling expanding triangle (also referred to as a falling megaphone or broadening triangle) in June shortly after the June pivot low. bobby beara posted a chart by Security Trader illustrating the same falling expanding triangle earlier this week. I replied to bobby's post linking the ST's chart and made the same point I am about to make again. I am just going to use Paul Lange reference points to make my point clearer...<g> The expanding trends lines were as follows for the falling megaphone: The support line is drawn by connecting the lows from point E to F and extending right. The resistance line is formed by connecting the highs from point 3 to 4 and extending right. I think Paul Lange's falling channel is a "forced" pattern, which can only be created by using very loose (inexact) anchor points. In addition, I think something both he and security trader are missing is that while the low for point G is a lower low it reveals a change in momentum, which is a characteristic of a bottoming and pending resolution of a falling megaphone. The support line for the falling megaphone has probably been taken out of play by this momentum shift, not absolutely but likely. IMO a new support line has formed and can be plotted by connecting the lows of point F to G and extending right. This new support line when combined with the previous resistance line forms a falling wedge. (In addition, I would adjust the resistance line by re-plotting it by connecting the highs of point 3 to 5 and extending right.) While all channels eventually resolve, some can take a very long time. A wedge by its very nature is comprised of two converging trends providing obvious finality to the formation. The normal break of a falling wedge is up. Of course, all of the above is IMO and I could be wrong...<g> As with all analysis chart formations are not 100%, so keeping an eye on both constraining trends lines for both a normal break and a negative break are always advisable. Regards, LG

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next