Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

The Morning Cup of Jo


Gotta go where the party's at.


If yesterday were a race, Snapper the Turtle would have won. After 5 straight down days the markets finally eked out a positive one. However, the Nasdaq only came in with 1.7 Billion shares and the NYSE only pulled off 1.36 Billion - about 10% below 50-day average volume. That's not the kinda volume Hoofy wants to see on the upside (no real buying conviction), but Boo on the other hand is getting more and more excited. (Better than average volume down and less than average volume up.)

But Hoofy, being the eternal optimist, continues to look for opportunities wherever they may lie. Scrolling through his charts and trying to not swim against the waves, he found a pattern in the Nikkei resembling a posting on Bull & Banter yesterday - A Head & Shoulders Bottom. Let's take a look...

WONDA Copyright 2004 William O'Neil + Co., Inc. All rights reserved

Head & Shoulders - this pattern is one of the most famous for not being read correctly. A lot of investors, and Techies alike, read the lines and try to fit a pattern to any situation. This can hurt in the long run and create many false positives. What you should look for in a H&S is a definitive left shoulder after a RH (Relative High). The Head forms when the pattern drops below the peek of the shoulder and returns back to the neckline. (The drop of the 'head' should never be more than twice the depth of the shoulder.) The pattern becomes more discernible when it starts to build the right shoulder. (Investors can start watching more closely once the RH - set back on the left shoulder - hasn't been broken for a 3rd time.) In this shoulder (not in the graph above) the volume should dry up on the downside. This lets you know the sellers are being exhausted. Once the Neckline (Horizontal Resistance Point) is broken - it could be off to the races, but remember - gotta have the volume to support the break.

Always looking for the easy money (large reward, small risk), Hoofy decides to walk away from the Nasdaq, for now, and set himself an alert for an 11,250 break above the neckline to possibly put his money to work in Japan.

I'll be out again today, so won't see ya on BB - sorry.

Until next time...


< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely= reflects the analysis of or opinion about the performance of securities an= d financial markets by the writers whose articles appear on the site. The v= iews expressed by the writers are not necessarily the views of Minyanville = Media, Inc. or members of its management. Nothing contained on the website = is intended to constitute a recommendation or advice addressed to an indivi= dual investor or category of investors to purchase, sell or hold any securi= ty, or to take any action with respect to the prospective movement of the s= ecurities markets or to solicit the purchase or sale of any security. Any i= nvestment decisions must be made by the reader either individually or in co= nsultation with his or her investment professional. Minyanville writers and= staff may trade or hold positions in securities that are discussed in arti= cles appearing on the website. Writers of articles are required to disclose= whether they have a position in any stock or fund discussed in an article,= but are not permitted to disclose the size or direction of the position. N= othing on this website is intended to solicit business of any kind for a wr= iter's business or fund. Minyanville management and staff as well as co= ntributing writers will not respond to emails or other communications reque= sting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.



Featured Videos