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To: marginmike who wrote (50643)	8/19/2002 11:42:48 AM
From: AllansAlias	Read Replies (1) \| Respond to of 209892

A Hound signal is when a clear setup for one direction ends up going in the other direction. For a H&S, it means that instead of making the measured move, we reverse and go higher, usually above the head, which in this case would mean new highs in SPX. It's hard to accept that and I don't much worry about whether that's even a possibility. Now, getting back to waht's tradable, a Hound for the apparent SPX H&S would be that we either: 1) Go up from here plain and simple 2) Stall and the neckline, retrace some, but then blast on up from this retracement. So, I am not saying "If we rally above neck why do you believe it to be such a hound signal?" What I am saying is that we will retrace at the neckline in any case, after going up over by enough that the bears will doubt we'll even get a retracement -- in other words, a throwover. Imo, it is from this retracement that we would get a Hound move if it's not a real H&S. It is how the market would get enough new short fuel to make it happen. To put it another way, it is how the market would get the largest number of people looking the wrong way, just as it did last week when things were right on the edge and we had that mad ramp.

To: marginmike who wrote (50643)	8/19/2002 11:49:25 AM
From: AllansAlias	Respond to of 209892

BTW, the most common Hound signal that I have noticed is moving up out of bearish rising formations: either rising wedges or bear flags. Last week's ramp came on a rise out of an apparent bear flag -- a Hound signal. It makes sense that Hound signals are the most reliable setup in technical analysis, since at the point of the turn, we have so many people in positions that are against where price is going. One of the best Hound signals of all time was the move out of the rising wedge that formed after the 1987 crash. This is the move that kicked off the bubble and 14 quarters of up bars. The only other run that compares to this was the move in 1953. (BTW, most Elliott types would see these two moves as 'iii of 3' moves. This is not just based on the fact that they were the strongest moves, but more based on where they came in the count.) On a smaller scale, but another incredible opportunity, the move out of the 1957 low was also a breakout from a rising triangle. The triangle was formed over a 6 month period or so (I am going from memory) and came at the end of a very ugly decline. It looked WAY bearish. But, price moved up out of this bearish triangle and lead to a fantastic bull leg that had hardly any pullbacks.

To: marginmike who wrote (50643)	8/19/2002 11:51:31 AM
From: Haim R. Branisteanu	Respond to of 209892

MM, it's about time to know that financial market are not correlated to reality but to dreams and manipulation ...... they always are <GG>

To: marginmike who wrote (50643)	8/19/2002 12:00:58 PM
From: AllansAlias	Respond to of 209892

The fact is, there are not many examples of big H&S tops in the price record, basis SPX or Dow there are none. The next largest one would probably have been the putative H&S that formed off the 1937 high (end of wave 1 in the Dow). The right shoulder was suspiciously large and as we know, this H&S did not resolve to the downside. Oh sure, there was the very nice initial fall through the neckline that lead to the 1942 low, but we all know what came out of the 1942 low, now don't we. Another large H&S, but not NEARLY as large as this one, occurred in the 1970's that lead to the 1974 low. That one looked, smelled, and acted like a H&S. It was the real deal -- right out of the textbooks. However, fwiw, that one came halfway through a bear market, not at the end of a huge bull run.