monkey thursday, page-9

Hello Voltaire,

Im a student of the charts, and not for very long. I really appreciate the informed interpretation of the charts you give. It helps me to learn also. My interpretaion Bullish/Bearish. Well on your two charts I think both are Bearish. I agree with your first chart ( a bearish pennant)however because of the (plain doji) on the second, it usually represents a reversal.(the bull collapsing).

Now if you pull back the microscope from three days to a 12 month daily view on the XJO you will see a 'head and shoulders' triple top from sept 2009 to present. This suggests that the bulls tried 3 times to get up. Now the Bears will drag it down from the neckline.

According to the Balkowski study, which examined 500 stocks over the period 1991 to 1996 the head-and-shoulders pattern apeared 431 times, and resulted in 406 reversals. A confirmed head-and shoulders delivers an average decline of 23% from the neckline, and most often at 15%.

Ill have a punt that we will see a rapid decline from 4500 (the neckline) to 3800 (decline of 15%)
within a week.

A recovery in August

If somebody could post the XJO daily over 12 months showing the neckline. I don't know how.

So I'm out and bearish!

Its just my simplistic theory. DYOR