Archive for April, 2009

Mysterious mutant Kilroys? (Better than mutant teens)

Posted on Apr 22, 2009 by WHC Bassetti.

0

Anyone who has experienced the mutant teen knows that you haven’t lived until you’ve had one.  The comic strip Zits nails the experience.  Comic, tedious, enraging — even occasionally rewarding.  And speaking of mutants a common pattern is spreading across many issues.  Some of our very acute students have been looking for a Kilroy (reverse upside down sirsanana H&S) bottom in the major indices.  Here we examine that question:

Continue Reading

Believe it or not, or we don’t believe it, but …

Posted on Apr 19, 2009 by WHC Bassetti.

0

We were just regaled with the fine little book Plato and a Platypus Walk into a Bar… in which one joke invites one to believe in his eyes or …  Friend caught in bed with friend’s wife says to friend, who you gonna believe?  me or your eyes?  Well, who you gonna believe?  Your deep distrust of the present rally, or the chart.  Not that the chart is telling the truth.  The nature of bull traps is that they look like juicy opportunities until you discover your foot has been gnawed off.  But, as we have remarked, like Charlie Brown and Lucy and the football you have to kick that ball because the one you don’t believe  (or kick) turns out to be Microsoft.  Fortunately in the edwards-magee methodology there is a way of dealing with situations you are suspicious of:  scale in.  And you can even scale in to the scale in.  The capital commitment to an issue is divided into tranches — 3 to even 7.  So if the bear eats your foot off in a bull trap he just ate one tranch.  Whereas if it turns out not to be a trap you commit other tranches to it.  This may be one of those situations.  Lots of issues showing breakouts and a bear market rally looking a little aged.  Nonetheless here is a clear buy signal from what has the appearance of a mutant Kilroy (H&S) bottom.   Why are we suspicious of banks?  

Continue Reading

A pretty conundrum…

Posted on Apr 18, 2009 by WHC Bassetti.

2

A little known fact among those who are not conundrum hunters, as well as those in search of a boojum, is that not all conundrums are pretty.  Some are downright distressingly ugly.  The present conundrum is not only pretty but could have some pretty (or ugly) serious implications for the market.

Continue Reading

QQQQs –as we were saying…

Posted on Apr 18, 2009 by WHC Bassetti.

0

In a recent post we observed that the QQQQs were breaking out of a well defined double bottom.  Let us emphasize how important it is to take these trades as they occur.  Hesitating or doubting the signal does nothing but increase the risk.  Every trade has risk associated with it — most of all at inception.  But waiting until the trend is clear measurably increases risk.  This continues to be a trade to take, and is progressing.

Continue Reading

More spaghetti for your wall.

Posted on Apr 14, 2009 by WHC Bassetti.

0

Here is another issue that fits the case of our previous letter — a beaten down tech stock with an interesting bottom pattern.  Interestingly this entire group of stocks has similar looking patterns.  Double or complex bottoms with clearly defined necklines.  Many of these necklines are in close proximity or have just been pierced by power bars.  We remain deeply suspicious about the true nature of this rally and would certainly place carefully considered stops on scale in positions — but when you get buy signals you must honor them –just like Charlie Brown and Lucy and the football.

Continue Reading

 Page 2 of 4 « 1  2  3  4 »