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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: Ocote who wrote (11061)	1/22/1998 9:01:00 AM
From: Dave H	Respond to of 79274

Ocote, Newly completed Sell Sequentials to take a look at: CCU GAB GE IONAY TGS To refresh your memory, Sequentials point to an area of low risk, either low risk buy for buy sequential or low risk sell for sell sequentials. They of course aren't always "right" but it does seem that they do find points right before a major move in some direction. I have found that using a definitive stop is crucial with playing these sequentials. DeMark advises using the highest high day of the entire setup/countdown and taking the range of that day and adding it to the high to get a stop for a sell sequential. reverse this for a buy sequential. Basically I look for a good risk/reward ratio comparing this stop price with the price of the lowest low during the setup period as an exit target. If I can enter with minimal risk compared to potential reward, then I decide to give it a try. So far I got stopped out of MRK, am still in JMED, and just started GE. -dave

To: Ocote who wrote (11061)	1/22/1998 12:03:00 PM
From: Doug R	Read Replies (1) \| Respond to of 79274

Ocote, "I also wonder about the line defined by RSI tops of 6/13, 7/30, 10/7, 1/5 & 1/20. It is broken by head of a little H&S at 12/5. Does it still have importance? The length and number of times touched or nearly touched seem to relate to this whole topping out period." That is an example of how long a trend line can remain pertainent. The staying power of trends is the reason I try to use as long a chart as possible when analyzing a stock. The Nov. '96 RSI peak and subsequent downtrend may remain a factor for quite some time. During the time period you are referring to, you can also see 3 consecutive H&S formations in the RSI. We're on the 3rd one now. The first two led to breaks. Those breaks have led to the formation of a left shoulder and head of an inverted H&S (IH&S). It's now in the process of the right shoulder which so far may or may not go deeper. If a breakdown of that 3rd H&S goes lower than the last, the technical picture will start to deteriorate more rapidly I would think. The IH&S scenario would be encouraging for a more bullish outlook. Quite a decision is in progress right now...stay tuned. Doug R