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Strategies & Market Trends : Candlestick Charting--The unknown indicator
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To: Greg McDaniel who wrote (1164)3/25/1998 4:55:00 PM
From: MonsieurGonzo  Read Replies (1) of 1589
 
RE:" Morning Stars "

>from Greg McDaniel on Mar 4 1998
>...CTXS has a bottom abandoned baby pattern today...
>...indicates a major bottom reversal possibly and is very rare...

- excellent call, Greg. It was a Doji Morning Star and is a reliable indicator of sentiment though not the extent of a reversal; often there can be a delay of 2-10 sessions as the stock consolidates.

When I see a Morning Star - I look for the nearest option boundaries and buy the most near out-of-the-money CALL 60-days out and sit on it.

Note the proliferation of Morning Stars on 12-JAN. That was one of those, "oh jeez - the HangSeng has just crashed!" days. Many stocks recovered that day. Absolute confirmation was provided the next session. That was the start of this remarkable, linear UpTrend.

There was a Morning Star on little CY FRI/MON/TUE and I bought 1000s CY @ 8-1/2 leveraged with 40 CYEB MAY 10 CALLs @ 1/4. It popped real good today, up to ~9.

I have found Morning Stars to be great indicators. The "abandonded baby" can be a Doji Star a spinning top "star" a hammer or an inverted hammer -- above average volume for that pattern is a real give-away that a bottom has been reached.

-Steve
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