In yesterday's Comment Section, David said...
"Have you seen US Steel (X) lately? Looks like we missed a head and shoulders bottom. Look at a 1 year chart. It has had a breakout and a retest of the neckline."
Yes, I've liked AKS and posted on it a time or two. It's been a huge winner in that sector, up 367% off its November, 2008 low. Notice that since the triangle breakout in April, AKS has had four upside breakouts out of bullish continuation patterns.
6 comments:
Melf,
As a follow-up to the bearish Wolfe wave in SPX, at what SPX level would we get a confirmation that bearish Wolfe wave may be in play and the target would be the 1-4 line? I am just curious about how Wolfe wave can be traded.
Thanks!
test
Joe,
I've been trying to access this site off and on all afternoon. They wanted my password, but wouldn't accept it. Gr-r-r...
If I disappear, you'll know why. LOL. They seem to be switching over to Google, or something or other. At any rate...
As I said this morning, yesterday's close back above the pattern made the Wolfe Wave possibility unreliable. Some players will cover a short position on a close like that (I would). Since the putative Wave 5 high of 1074.77 has been taken out, we now know that wasn't a Wave 5 Fakeout/Breakout high, so that's invalidated.
We're coming off the post-Fed high and we're in the red at the moment, so today's rally could have been some sort of Double Fakeout, but due to the lack of pattern reliability, I'm not confident about a selloff to the Wave 1-4 target line, although we certainly could get down there. I generally pass on patterns that I don't trust, but that's just my personal take.
funny, in the light of today's monster sellof, i was also going to ask for an update to the wolfe pattern on the s&p. looks like you beat me to the punch. either way, this selloff was quite impressive...
what aspects would you look for to determine if there will be any follow through to the downside?
thanks again for your wisdom
Melf,
In good number of instances, I have seen wedges/expanding patterns throw out above upper trendline and reverse back. In fact, I have seen the reliability of wedges increases on throw-out as lot of traders are caught wrong-footed with the apparent 'breakout'. Guess we will soon know about market's intentions as a potential double top seems to be looming ahead, as well.
Good Morning, Joe and Kevin,
Yes, we'll see in the days ahead how this plays out, but the putative Wave 5 Fakeout/Breakout to SPX 1074 "should have been" THE HIGH of the pattern, but it wasn't. Those who shorted 1074 with a stop above there got trapped on yesterday's stop-busting move to 1080. Those who didn't cover the move above 1074 live dangerously. LOL.
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