Yukitoshi Higashino, MFTA

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Friday, October 8, 2010

“Border Line” Pattern for the“Border Line” Pattern for the IchimokuIchimoku

KinkoKinko HyoHyo (Candlestick Chart)(Candlestick Chart)

IFTA 23rd Annual Conference

11

-- Positioning with 26 Base Lines and Timing forPositioning with 26 Base Lines and Timing for

TimeTime--Based Loss CuttingBased Loss Cutting--

Yukitoshi Higashino, MFTA



Five Factors of the Ichimoku Kinko Hyo (hereinafter Candlestick Chart)

1050

1100

1150

1200

1250

S&P500 (daily chart: June 2009 to August 2010)

Conversion line, base line, leading span 1,

leading span 2, and lagging span are the five

factors of the candlestick chart, and a chart

showing those five factors is the “kinko hyo”

(equilibrium chart).

April 26

1219.80Conversion line

Leading span 1

(P)

Aug. 9

1129.24

2222

800

850

900

950

1000

2 0 0 9 / 6

2 0 0 9 / 6

2 0 0 9 / 7

2 0 0 9 / 8

2 0 0 9 / 9

2 0 0 9 / 1 0

2 0 0 9 / 1 1

2 0 0 9 / 1 2

2 0 1 0 / 1

2 0 1 0 / 2

2 0 1 0 / 3

2 0 1 0 / 4

2 0 1 0 / 5

2 0 1 0 / 6

2 0 1 0 / 7

2 0 1 0 / 8

2 0 1 0 / 9

2 0 1 0 / 9

Base line

Leading span 2

Feb. 5

1044.50

July 8

869.32

July 1

1010.91

Lagging span



Ideal Top and Bottom Pattern in a Candlestick Chart

26

Double bottom Double top

c d

3333

The ideal period from a low price “a” to “b” and from a

high price “c” to “d” is within 26 days.

Why?

26a b



Bottom Pattern Shifting from Fall to Rise

26

○Within 26 days from the

expected low "a," the price goes

above “a” to “b” before turning

upwards.

Within 26 days from the

" "

Ⅰ

a b

Stock price

4444

26

26

△

,below "a" to "b" before turning

upwards.

Starting from the expected low "a,"

the price falls to "b" which is higher

than “a” and then rises, but in a

period that exceeds 26 days.

Ⅱ

Ⅲ

a

a b

b



Ceiling Pattern for Shifting from Rise to Fall

26

26

○ The price goes to lower “d” thanthe expected high "c" within 26

days and then goes down.

The price goes to the higher “d”

Ⅰ

c d

d

c

5555

26

△

t an t e expecte ig c wit in26 days and then goes down.

The price does not exceed the

expected high "c" and goes down

after hitting "d" but in a period of

over 26 days from "c."

Ⅱ

Ⅲ

dc



Base line: the middle price between the highest and

lowest rice in the ast 26 da s includin the current

Important Points in Base line and Lagging Span

・ “Border line” - The ideal top-bottom pattern thatintroduces the daily change concept of “26 days” from the

base line to the lagging span.

6666

day (highest price in a period of 26 days + lowest pricein a period of 26 days)÷2

Lagging span: current day’s closing price projected intothe past by 26 days including the current day



What is the “Base Line”?

6200

6400

6600

DAX and base line (daily chart: March 2010 to August 2010)

26 daysApril 26

6341.52

7777

5400

5600

5800

2 0 1 0 / 3

2 0 1 0 / 3

2 0 1 0 / 4

2 0 1 0 / 5

2 0 1 0 / 6

2 0 1 0 / 7

2 0 1 0 / 8

2 0 1 0 / 9

2 0 1 0 / 1 0

* “26” used here is the important basic value in the concept of the kinko hyo (candlestick chart).

Base line = (highest + lowest in the past 26 days)/2

On the following day, the same calculation is

conducted by including the prices of the new day

but excluding the prices of the oldest day in the base

line calculation period.

May 25

5607.68

July 5

5809.37



What is the “Lagging Span”?

2800

3000

3200

SX5E and lagging span (daily chart: May 2009 to August 2010)

Upturn

DownturnDownturn

Jan. 11

3044.37

April 16

3027.14

Aug. 5

2849.45

8888

2000

2200

2400

2600

2 0 0 9 / 5

2 0 0 9 / 6

2 0 0 9 / 7

2 0 0 9 / 8

2 0 0 9 / 9

2 0 0 9 / 1 0

2 0 0 9 / 1 1

2 0 0 9 / 1 2

2 0 1 0 / 1

2 0 1 0 / 2

2 0 1 0 / 3

2 0 1 0 / 3

2 0 1 0 / 4

2 0 1 0 / 5

2 0 1 0 / 6

2 0 1 0 / 7

2 0 1 0 / 8

2 0 1 0 / 9

2 0 1 0 / 1 0

* “26” used here is the important basic value in the concept of the kinko hyo (candlestick chart).

Feb. 8

2617.77Upturn

May 25

2448.10

Nov. 3

2693.80

A line connecting daily values in the past 26 days including today’s closing



26

○

・Base line: (highest in 26 days + lowest in 26 days)÷2

What the “base line” means in the border line.

When the price makes an upturnwithin 26 days from the expected low

"a," the base line goes up in 26 days

from the expected low "a," and

therefore stock prices tend to go up.

Ⅰ

When the price goes below the

expected low "a" within 26 days from

a

Stock price

Base line

b

9999

26

26

×

△

Ⅱ

Ⅲ

"a," the base line cannot go up and

provides resistance to the increase in

stock prices, which increases the

possibility of the price going down.

When the price does not go down

below the expected low "a" and makes

an upturn after a period of 26 days, thebase line moves sideways and then

drops to become resistant to the rising

of stock prices.a

a

b

b



When a dip to "b" is strong relative to the

expected low "a," the leveling period of

the base line tends to be extended. In that

period, if the stock price does not go back

up and exceed the high, the high of the

base line during the calculation period

becomes lower, thereby causing the base

The softer the downtrend, the stronger the market (base line). Why is that?

Ⅰ

Stock price

Base line

10101010

26

26

When a dip to "b" is weak relative to the

expected low "a," it is relatively more likely

that the price will go up above the recovery

high. Therefore, the high of the base line

during the calculation period go higher, and

the uptrend of the base line continues,

making it likely to create a stronger market.

.a

a

b

b

Ⅱ



26

What the “lagging span” means in the border line.

・Lagging span: current day’s daily closing price projected into the past by 26 days

When the price makes an upturnwithin 26 days from the expected low

"a" after hitting "b," then the lagging

span exceeds the stock price. (upturn

or buy signal).

a

Ⅰ ○

When the price hits "b," which is

lower than the expected low "a"

Stock price

Lagging span

b

11111111

26

When the price does not go down

below the expected low "a" but takes

an upturn after hitting "b" in a period

of over 26 days from "a," the lagging

span is highly likely to go down below

the stock price again. (downturn after

upturn, sell signal).

Ⅱ

a

26

Ⅲ

a

×

△

within 26 days from "a," then the

lagging span remains below the stock

price. (continued downturn or sell

signal).

b

b



When the dip to "b" is strong relative to

the expected low "a," the lagging span

tends to touch the stock price of 26 days

ago and thus is more likely to fall below

the stock price. There is a high

possibility of becoming a downturn.

The softer the downtrend, the stronger the market (lagging span). Why is that?

Ⅰ

Stock price

Lagging span

12121212

26

26

When the dip to "b" is soft relative to

the expected low "a," the lagging span

tends not to touch the stock price of 26

days ago and is thus relatively less likely

to fall below the stock price. There is a

low possibility of becoming adownturn.

a

a

Ⅱ

b

b



Basic Pattern for the Border Line

・ The border line is composed of the ideal patterns of the lagging

line and the base line.

26

△△

An ideal case is that the

line does not go down

below the base line and

makes an upturn in

about 26 days from the

second lowest bottom.

△△

13131313

26

26

Lagging span

Base line 26

▽▽

An ideal case is that

the line does not go

up above the base line

but drops again about

26 days from the

second highest peak.

▽▽

a b

c d



・ The value goes above or falls below the recovery high or the immediate low within 26 days.

The Strong Border Line Pattern and the Temporal Loss Cut

26

△△

▽▽

The base line continues to rise,

and the stock price shows a

strong up trend.

△△△△

14141414

26

26

26

26

Lagging span

Base line

▽▽ Loss cutting due to the fall of the base line

The base line continues to fall,

and the stock price shows a

strong down trend.

△△ Loss cutting due to the rise of the base line

▽

△△

▽▽

▽▽

a

c

b

d



＝

＝

＝

＝

3E

＝

＝

＝

＝

3E

E Calculation after the Border Line (Setting of the Target)

1000

950

900E

850

800

50

600

650

700

800

50

E

26

26

750

15151515

A rise from the second lowest bottom or a drop from the second highest

peak is often accompanied by a gap.

Double of the increment or decrement of the initial move becomes anequilibrium point.



42

65

76・ Basic values

26

Equilibrium Point is the Arrangement of the Lateral Axis and Vertical Axis.

＝

＝

＝

＝

＝

Stock price

No. of days

(9, 17, 26, 33, 42, 51, 65, 76,

Equilibrium point (important

change day)

83, 97, 101, 129…)

16161616

88

81

168 (53+29+88-2)

53

116

29

・ Equivalent

values

168

53

②

①

③

④② 53+29-1

③ 29+88-1

④ 53+29+88-2

26

＝

＝

＝

＝

Stock price

No. of days

Equilibrium point (important

change day)＝



Time Theory (Concept of Equivalent Value)

= == = = =

17171717

II II

VV II

NN II

II VV

VV VV

NN VV

II NN

VV NN

NN NN



Itochu Corp. (8001, daily chart)

January 2003 to November 2003

65 6452

39

348

351

347

18181818

26

39

39

●●Low within 26 days

26

△△

△△



Nomura Holdings, Inc. (8604、daily chart)

November 2002 to September 2003

179

89 90

1803

1800

19191919

26

179

179

●●

△△

26



Marubeni Corp. (8002、daily chart)

March 2008 to March 200926

102

102

102

102

●●

High within 26 days

20202020

129

102

102

102

274260



140

160

180

200

AAPL UW (daily chart、Feb. 2008 to April 2009)

19.73

May 14, 2008

192.24

48

152.78 152.91

($)

●●

48

19.73

19.73

February 2008 to April 2009

21212121

60

80

100

120

0 8 / 2 / 1

0 8 / 3 / 3

0 8 / 4 / 1

0 8 / 4 / 2 9

0 8 / 5 / 2 8

0 8 / 6 / 2 5

0 8 / 7 / 2 4

0 8 / 8 / 2 1

0 8 / 9 / 1 9

0 8 / 1 0 / 1 7

0 8 / 1 1 / 1 4

0 8 / 1 2 / 1 5

0 9 / 1 / 1 4

0 9 / 2 / 1 2

0 9 / 3 / 1 3

0 9 / 4 / 1 0

0 9 / 4 / 3 0

173Jan. 20, 2009

78.20

Sept. 18, 2008

120.70

19.73

19.73

73.86

19.73



1632

1626

1095

151150(08.3.24)

270

270

45 46

77

Sumitomo Metal Mining （5713、 daily chart ）

2222

26

270

270

August 2008 to July 2009



26

Sumitomo Metal Mining （5713、 daily chart ）

May 2010 to September 2010

2323

2626



NTT DOCOMO（9437、 daily chart ）

26 26

October 2009 to August 2010

2424

26

26



40

50

60

70

October 2008 to September 2010

Deutsche Bank （ daily chart ）

2009.7.27

52.60

2010.4.15

60.552009.10.15

58.29

2009.6.5

49.62

49.78

8.6

8.6

58.37

€

2525

10

20

30

0 8 / 1 0

0 8 / 1 1

0 8 / 1 2

0 9 / 2

0 9 / 3

0 9 / 5

0 9 / 6

0 9 / 8

0 9 / 9

0 9 / 1 0

0 9 / 1 2

1 0 / 1

1 0 / 3

1 0 / 4

1 0 / 6

1 0 / 7

1 0 / 8

1 0 / 1 0

8.6

952009.1.21

15.38

●●

8.6

8.6

189



37

39

41

43

SAP（ daily chart ）

●●

2007.9.21

42.08

1.97

1.97

1.97

1.97

€

August 2007 to Match 2008

2626

27

29

31

33

0 7 / 8

0 7 / 8

0 7 / 8

0 7 / 9

0 7 / 9

0 7 / 1 0

0 7 / 1 0

0 7 / 1 1

0 7 / 1 1

0 7 / 1 2

0 7 / 1 2

0 8 / 1

0 8 / 1

0 8 / 2

0 8 / 2

0 8 / 3

0 8 / 3

832008.1.22

28.31

1.97

1.97

1.97

28.29



Nomura Holdings, Inc. (8604、daily chart)

March 2010 to September 2010

2727

26

26

▽▽



March 2010 to September 2010

Mizuho Financial Group（8411、daily chart ）

2828

26

26

▽▽



This report is intended to provide information that helps the user to

make proper investment judgments and does not aim to promoteparticular investments.

The data contained in this report are based on reliable information,

but we do not guarantee the correctness or integrity of the data.

Caution

29292929

.is prohibited for this report to be provided or redistributed to any

third person, or modified or changed in any way. It is also prohibited

that copies or modified versions of this report be assigned or

transferred to or used by any third person.

T&C Financial Research,Inc.

Yukitoshi Higashino

[email protected]

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Yukitoshi Higashino, MFTA