Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: [CANSLIM] head & shoulders patterns on the indexes (was Fw: Amateur Investors Weekend Market Analysis)
Date: Mon, 20 Jan 2003 07:52:25 -0500
Previous Article (by Author): Re: [CANSLIM] In this trader's market "Tom Worley"
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The major averagesthis is in reply to Rolf's post asking for opinions on =
the h&s patterns on the indexes. I find that it easier (or harder) to =
see a h&s pattern depending on which site you use for charting. This =
site shows it fairly clearly, while on DGO it looks to me more like a =
double bottom with a handle.
- ----- Original Message -----=20
From: Amateur Investors=20
To: stkguru@bellsouth.net=20
Sent: Saturday, January 18, 2003 3:31 PM
Subject: Amateur Investors Weekend Market Analysis
Signup Today for a "Free" 2 Week Premium Trial Membership to =
Amateur-Investors.Com
and see which Stocks to Focus on in 2003
Weekend Market Analysis
(1/18/03)
The major averages (Dow, Nasdaq and S&P 500) have now completed the 2nd =
Shoulder of a bearish looking Head and Shoulders Top pattern which looks =
similar to what occurred in the Summer of 2002.=20
The Dow ran into strong resistance near its 200 Day Exponential Moving =
Average (EMA) around 8850 early last week which led to the development =
of its 2nd Shoulder. By the end of the week the Dow had dropped back to =
its 50 Day EMA (green line) which was near 8600. If the Dow is unable =
to hold support near its 50 Day EMA then the next major support area =
would be at its Neckline in association with its Head and Shoulders Top =
pattern near 8250. =20
The Nasdaq ran into strong resistance early last week near its 200 Day =
EMA (blue line) near 1460 which allowed for the development of its 2nd =
Shoulder. By the end of the week the Nasdaq had dropped below its 50 =
Day EMA (green line) near 1390. If the Nasdaq continues lower the next =
major support is at its Neckline in association with its Head and =
Shoulders Top pattern in the 1320-1325 range.=20
=20
The S&P 500 stalled out early last week just above the 930 level which =
led to the development of its 2nd Shoulder and by the end of the week =
had broken below its 50 Day EMA (green line) near 905. If the S&P 500 =
continues lower the next major support area is at its Neckline in =
association with its Head and Shoulders Top pattern around 870.=20
Meanwhile the Semiconductor Index (SOX) is also exhibiting a bearish =
looking Head and Shoulders Top pattern as well. The key level to watch =
in the SOX is around 285 which is the Neckline support area in =
association with its Head and Shoulders Top pattern. If the SOX breaks =
below its Neckline then this will likely lead to a retest of its early =
October 2002 low near 210 (point A).=20
=20
What is even more bothersome too me at this point is the amount of =
complacency and lack of fear being exhibited by a few of the Contrarian =
Indicators. The % difference between the Bearish (point B) and Bullish =
(point C) Investment Advisors still shows a wide gap between the two =
which has existed for several weeks now. =20
=20
Furthermore the Volatility Index (VIX) still remains at a very low level =
(point D) and didn't rise much this past week despite the weakness in =
the market.=20
With the Contrarian Indicators showing an absence of fear in the market =
and the major averages exhibiting bearish looking Head and Shoulder Top =
patterns the potential for more downside pressure appears high. The key =
thing to watch over the next week or two will be if the major averages =
can hold support near their Necklines which are 8250 (Dow), 1320-1325 =
(Nasdaq) and 870 (S&P 500). =20
Signup Today for a "Free" 2 Week Trial Membership and receive our Daily =
Breakout Reports
Amateur-Investors.Com
Send this Amateur Investors Newsletter to a Friend=20
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<HTML><HEAD><TITLE>The major averages</TITLE>
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<DIV><FONT face=3DArial>this is in reply to Rolf's post asking for =
opinions on the=20
h&s patterns on the indexes. I find that it easier (or harder) to =
see a=20
h&s pattern depending on which site you use for charting. This site =
shows it=20
fairly clearly, while on DGO it looks to me more like a double bottom =
with a=20
handle.</FONT></DIV>
<DIV> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Damateur-invest@mindspring.com=20
href=3D"mailto:amateur-invest@mindspring.com">Amateur Investors</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dstkguru@bellsouth.net=20
href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A> </DIV>
<DIV><B>Sent:</B> Saturday, January 18, 2003 3:31 PM</DIV>
<DIV><B>Subject:</B> Amateur Investors Weekend Market =
Analysis</DIV></DIV>
<DIV><BR></DIV>
<P align=3Dcenter><A=20
href=3D"http://m1e.net/c?2762030-J4Kt/Dkk0NG1w%40130299-PK0iTqH8128TY"><I=
MG=20
height=3D50 src=3D"http://www.amateur-investors.com/2d-d5543.gif" =
width=3D505=20
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href=3D"http://m1e.net/c?2762030-f6/SOnptFp/yc%40130300-idf4.evesVBAU">Si=
gnup=20
Today for a "Free" 2 Week Premium Trial Membership to=20
Amateur-Investors.Com<BR>and see which Stocks to Focus on in=20
2003</A></B></P>
<P align=3Dcenter><B><FONT size=3D5><U>Weekend Market =
Analysis</U></FONT></B></P>
<P align=3Dcenter><B>(1/18/03)</B></P>
<P align=3Dleft>The major averages (Dow, Nasdaq and S&P 500) have =
now=20
completed the 2nd Shoulder of a bearish looking Head and Shoulders Top =
pattern=20
which looks similar to what occurred in the Summer of 2002. </P>
<P align=3Dleft>The Dow ran into strong resistance near its 200 Day =
Exponential=20
Moving Average (EMA) around 8850 early last week which led to the =
development of=20
its 2nd Shoulder. By the end of the week the Dow had dropped back =
to its=20
50 Day EMA (green line) which was near 8600. If the Dow is unable =
to hold=20
support near its 50 Day EMA then the next major support area would be at =
its=20
Neckline in association with its Head and Shoulders Top pattern near=20
8250. </P>
<P align=3Dcenter><IMG height=3D400=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_Dow7Jan03.gif"=20
width=3D620 border=3D0></P>
<P align=3Dleft>The Nasdaq ran into strong resistance early last week =
near its 200=20
Day EMA (blue line) near 1460 which allowed for the development of its =
2nd=20
Shoulder. By the end of the week the Nasdaq had dropped below its =
50 Day=20
EMA (green line) near 1390. If the Nasdaq continues lower the next =
major=20
support is at its Neckline in association with its Head and Shoulders =
Top=20
pattern in the 1320-1325 range. </P>
<P align=3Dcenter> <IMG height=3D400=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_Nas7Jan03.gif"=20
width=3D620 border=3D0></P>
<P align=3Dleft>The S&P 500 stalled out early last week just above =
the 930=20
level which led to the development of its 2nd Shoulder and by the end of =
the=20
week had broken below its 50 Day EMA (green line) near 905. If the =
S&P=20
500 continues lower the next major support area is at its Neckline in=20
association with its Head and Shoulders Top pattern around 870. </P>
<P align=3Dcenter><IMG height=3D400=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_S&P5007Jan03.gif"=20
width=3D620 border=3D0></P>
<P align=3Dleft>Meanwhile the Semiconductor Index (SOX) is also =
exhibiting a=20
bearish looking Head and Shoulders Top pattern as well. The key =
level to=20
watch in the SOX is around 285 which is the Neckline support area in =
association=20
with its Head and Shoulders Top pattern. If the SOX breaks below =
its=20
Neckline then this will likely lead to a retest of its early October =
2002 low=20
near 210 (point A). </P>
<P align=3Dcenter> <IMG height=3D400=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_$SOX4Jan03.gif"=20
width=3D620 border=3D0></P>
<P align=3Dleft>What is even more bothersome too me at this point is the =
amount of=20
complacency and lack of fear being exhibited by a few of the Contrarian=20
Indicators. The % difference between the Bearish (point B) and =
Bullish=20
(point C) Investment Advisors still shows a wide gap between the two =
which has=20
existed for several weeks now. </P>
<P align=3Dcenter> <IMG height=3D526=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_Bulls5Jan03.gif"=20
width=3D695 border=3D0></P>
<P align=3Dleft>Furthermore the Volatility Index (VIX) still remains at =
a very low=20
level (point D) and didn't rise much this past week despite the weakness =
in the=20
market. </P>
<P align=3Dcenter><IMG height=3D346=20
src=3D"http://www.amateur-investors.com/_derived/Weekend_Market_Analysis1=
_18_03.htm_txt_Vix4Jan03.gif"=20
width=3D798 border=3D0></P>
<P align=3Dleft>With the Contrarian Indicators showing an absence of =
fear in the=20
market and the major averages exhibiting bearish looking Head and =
Shoulder Top=20
patterns the potential for more downside pressure appears high. =
The key=20
thing to watch over the next week or two will be if the major averages =
can hold=20
support near their Necklines which are 8250 (Dow), 1320-1325 (Nasdaq) =
and 870=20
(S&P 500). </P>
<P align=3Dcenter><A=20
href=3D"http://m1e.net/c?2762030-9MwtpfFqkAquU%40130300-CzpvUOaFGHL7I"><B=
>Signup=20
Today for a "Free" 2 Week Trial Membership and receive our Daily =
Breakout=20
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