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Strategies & Market Trends : TA setups-ex th traders -- Ignore unavailable to you. Want to Upgrade?

To: MACD X who wrote (3097)	8/29/2004 4:44:14 AM
From: cthruu	Read Replies (1) \| Respond to of 7682

Heheee. Do you want me to give out the secrets of my analysis, huh? I posted the following message on 8/4/04, before I went on vacation. That was before the 8/11 gap. Message 20376452 In my opinion there are no indications of reversal of this trend in SMH at this time. If the bottom was 28.30 on 8/13, it would have been in the middle of nowhere. The MA's on my chart are 13 (red),26(green) and 50(blue). SMH is trending below all three steep MA's. I expect a bounce from 26.50 area because there are two previous spikes and a previous bottom there. I do not know if that will sustain or not, but if the trend were to reverse, it should be in that neighborhood - or next, 24.50-25 gap. I need to see a reversal and a successful re-test to be convinced of a bottom. ttrader.com I need someone to show me why there is a bottom. Forget the bull/bear sentiments or put/call ratio or such other contrarian indicators. They don't mean anything. By the way, I do not like to trade SMH. Too slow mover and low volatility for my taste. I look at ETF's for trend and trade one of the high-beta components in that group, if I like. That is just my style.

To: MACD X who wrote (3097)	9/4/2004 8:45:53 AM
From: cthruu	Respond to of 7682

Hi Vernie: Yor are asking me to make too many assumptions, bro :) First, I expect SMH to make a bounce pretty soon, I do not know exactly where and when. 26.50 is an objective support. However there is no guarantee that that support will hold and the market may continue going lower to 25. I will know that the support has held, when a reversal is made and followed by higher high and higher low confirming a change in trend. And yes, that will be small inverse H&S pattern. Second, a major bottoming inverse H&S pattern evolves over several months. Look at the bottoming pattern of 8/5/02, 10/9/02 and 2/10/03 - those three lows made an inverse H&S over a period of 8 months. A second minor pattern was made by the lows of 1/2/03, 2/10/03 and 4/11/03. The neckline of this is 26.50. So, a little inv H&S over a few weeks or days does not necessarily indicate a major trend reversal. If you look at weekly chart, the right shoulder forms around 27. However this selloff in 2004 has been on extremely high volume - which does not meet the criteria for a true bottoming pattern. Third, objectively, if the trend is reversed, target should be in 33.50-34.50 area. That is an unfilled gap and the neckline of H&S from 9/03-1/04 and 4/04 low-high-low. A 38% retracement of the last wave, from Jan 04 to Sep 04, measures at around 34 and 50% retracement of this wave measures at 36.20. Thus an objective resistance is formed around 34. I can not guarantee that the target will be met, however. Once a higher high and a higher low are in place, I would go long the market and follow with trailing stops, taking partial profits on way. As I posted on our thread the other day, it appears that some positive divergences are developing in the underlying indicators and SMH should bounce pretty soon. I would not try to pick the exact bottom or an exact top. However these are objective support-resistance points in the pattern. As I always say - we will see :) I am going to copy and paste this message on our TA board. Someone else may have another opinion and I'd like to hear that.