Market Commentary 20May12

7/31/2019 Market Commentary 20May12

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Because of the fact that the classic H&S pattern is too well known my the media and Johnny Retail, we may never see alarger scale textbook pattern again. Instead, we may get stuck with messier formations like these where we seeunbalanced shoulders, severely sloping necklines, and fuzzy necklines that will create plenty of false breaks. This isthe way Mr. Market will deal with all the new technical trading software that is empowering the Retail traders.

The Classic Head & Shoulders Pattern is History

REPRINTED from an 11/09/2009 digital missive on market patterns


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Andys Technical Commentary__________________________________________________________________________________________________

Dollar Index Daily - Head and Shoulder Bottom?

I began this update with an older idea--that any realized head and shoulder developments would benon-classical and a little messier than we would like to see. In that light, please observe thepotential huge head and shoulder bottom in the U.S. Dollar Index. The target of this pattern, if theneckline breaks and holds, would be 90+. It would be a significant move that would severelydamage the U.S. Stock market. Its a move that would likely coincide with headlines like: SpanishSovereign Debt Default or Greece Exits Euro.

Left Shoulder*

Right Shoulder

Head

Neckline

* The Left Shoulder of this pattern is what would make this H&S a little odd as it wasformed within a larger down leg.

-a-

-b-

-c-

-d-?

-e-?

Weve been thinking the pattern off the lows wasa triangle. At this point it would have to be anexpanding triangle.Gulp.


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S&P 500 ~ Double Head and Shoulders Top?

At the risk of jinxing things for the Shorts out there, I must highlight thedeveloping complex Head and Shoulder Top**. It would have a double-headed look about it and it would also amplify the importance of the 1338levela level that weve been talking about for several weeks now.

Left Shoulder

Left Head Right

Head

Right Shoulder?

** Please note that weve seen plenty of failed head and shoulders tops on the way to 1422. So, dont put toomuch faith in this pattern, especially if the blabbering bobbleheads of CNBC starting mentioning it.

REPRINTED from 5/13/2012


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S&P 500 ~ Daily -- Small Head and Shoulder plays out

Silly meI was looking for a more classic H&S top last week. This pattern suggestion mightbe a little controversial in technical circles, but this formation certainly has the spirit of a headand shoulders top. The left shoulder is a little small relative to the right, and the neckline ispositively sloped, but it sure did act like a H&S top.

According to this idea, the target of this pattern has been achieved, so maybe we get some kindof bounce to begin the week. Afterall, the sheeples confidence must be restored after thatpunk Facebook IPO.

Left Shoulder

Right Shoulder

Head


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S&P 500 ~ 240 Min. with Support/Resistance

In the last update we suggested that the S&P500 would probe the 1408-1414 areabefore any kind of decline. Indeed, the market hit 1415 and then ran into somedifficulty. The wave count up from 1202 is, admittedly, difficult to decipher. Whats notdifficult to decipher is the fact that the tenor of the market has changed in the lastseveral weeks.

Its difficult to know whether or not the (B) concluded at the 1422 or 1415 high, but ineither case, this market should not be able to retrace a 61.8% if it has truly peaked.

This looks like a sell rally market. 1388 should be used as a stop loss level for anynear or long term short sells. We last cited 1392 has a good stop loss for anydaredevil longs-- that was a good level to have left this market . If youre still long andholding on, then use any break of 1338 to get out.

1202

( B )z?1422

( B )z?

a

b

c

d

eREPRINTED from 5/13/2012


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S&P 500 ~ Daily with Weekly Support/Resistance

( B )

Highlighted in the picture are first and second weekly support and resistance points for the week ahead. Notice how well the 38.2% retrace of the entire advance from 1075coincides with a previous important peak in the market. The S&P 500 seems destined

for some sort of early week recovery. Though, the trading posture must be to sell rallies.This looks like a sickly market. Shorts/bears should consider the 23.6% retrace as astop for some % of their short positions. A break back above 1321 would probably meana further bounce and a better opportunity to re-apply short positions. A break above1368 would force a total reconsideration of the bear position.


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DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. Thisreport is technical commentary only. The author is NOT representing himself as a CTA or CFA or Investment/Trading Advisor of any kind. This merelyreflects the authors interpretation of technical analysis. The author may or may not trade in the markets discussed. The author may hold positionsopposite of what may by inferred by this report. The information contained inthis commentary is taken from sources the author believes to be reliable, but itis not guaranteed by the author as to the accuracy or completeness thereof and is sent to you for information purposes only. Commodity trading involvesrisk and is not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC) has saidabout futures trading: Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before youinvest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much youcan afford to lose above and beyond your initial payment to a broker. Youshould understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the riskdisclosure documents your broker is required to give you.

Wave Symbology

"I" or "A" = Grand SupercycleI or A = Supercycle

or = Cycle-I- or -A- = Primary(I) or (A) = Intermediate"1 or "a" = Minor 1 or a = Minute

-1- or -a- = Minuette

(1) or (a) = Sub-minuette[1] or [a] = Micro[.1] or [.a] = Sub-Micro

PLEASE NOTE THAT THERE IS ADDITIONAL INTRA-WEEK AND INTRA- DAY DISCUSSION ON TECHNICAL ANALYSIS AND TRADING AT TRADERS-ANONYMOUS.BLOGSPOT.COM

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Market Commentary 20May12