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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Bwe who wrote (8697)	10/14/1998 9:11:00 PM
From: Smooth Drive	Respond to of 34812

Hello Bruce, I asked my good SI friend Dave Horne to say a few words relative to your head and shoulders question. I've had numerous PM discussions with Dave as I've found him to be most informative and he's forgotten more TA material than I'll ever know. The discussions he referenced are here: www3.techstocks.com www3.techstocks.com www3.techstocks.com Dave's comments today as follows: Hi Eric, we talked about H&S on the TA Science projects thread. I went into a fair amount of detail in posts 192,197, and 201 (this was relative to the Nasdaq Composite). For the DOW as it stands today, I wouldn't call it a proper H&S because the price peaks and valleys aren't confirmed by volume (opposite what they should be), but that only means we can't use H&S guidelines for projecting the possible decline, not that it WONT decline. You could argue the DOW is hammering out a base here as a continuation of July '97 (and it may), or you could argue that a further decline looks likely (if you have an argument as to why the DOW would move UP from here and start a new uptrend, i'd love to hear it). I think the decision by the market of which scenario plays out depends on the timing of the realization that the forward look certainly isn't changing for the better yet versus a significant action by the FED. I don't follow the DOW that closely so I don't know how many components have reported earnings and had conference calls yet, but probably not many. I'd have a hard time believing the FED has accumulated any data of significance since the rate cut to convince them they need to make a further cut IMMEDIATELY, so I'd bet the soonest they'd act is the mid November meeting (but who knows). In that case, all the earnings and conference calls will be over, and the market will likely be lower because the trend of the forward looks has been from "we just can't say yet--too many unknowns" to "looks pretty grim for the next year." dh If you have a question or thought about old fashioned TA, cutting edge indicators, or you just want to knock something around, I would encourage you to post them on Dave's thread or via the PM. His responses are always well thought out. He's one of the brighter dudes around SI. Take care, Eric