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Strategies & Market Trends : CFZ E-Wiggle Workspace
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To: Perspective who wrote (10244)4/1/2009 4:44:20 PM
From: skinowski  Read Replies (1) of 41469
 
You may be right, but I think they both make sense. In any case the March 30 low is the important support (which held today).

An H&S top really is a transition from a series of higher highs and lows to a series of lower ones (and the inverse for lows). If you think about it, parts of the structures - "anatomy" - can be more visible, or less - but in the end this is the only way a trend can reverse. All an analyst does is try to nail the reversal relatively early.

That said, if the "right side" of an H&S is an ABC in the opposite direction, it is likely to "fail". If the preceding larger structure is completed, it is likely to succeed.

This is where EW may help. In this specific case, the larger question is whether or not the March rally is done. That I'm not sure about, and the sentiment here could support either scenario. However, the risk / reward seems to be such that a moderate bet may make sense.
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