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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: kleht who wrote (41103)	7/23/2001 1:58:55 PM
From: exeric2	Read Replies (1) \| Respond to of 100058

Kleht, The problem I see with the trendline is that you have to use the late August peak and use that for the second reaction high rather than the July reaction high. When you connect the line using the late August high it means the trendline overhead resistance has not been surpassed yet. In fact that resistance would be at about 2500 for todays date. That's a big difference. I'd be a little pissed off if I listened to their commentary and immediately got short only to see the market go up to 2500. I think what you are confusing are what some people call "zig zag" charts. Those charts use the points on the graph that the author uses, ie. the absolute highs and lows are connected in zig zag fashion. These charts are typically used to measure retracements and give an indication if a retracement has surpassed the 61.8 fib level, the level at which the previous trend is put in doubt. I hope that helps. I didn't make up these definitions and I think the author should have used the conventions in common use if they are trying to use technical analysis to buttress their position. Regards, Exeric