FTSE 100 February

[bonsai]

Let's start off with the channel chart.

What happened last month ?.
We visited the fib at 4516 twice and got buzzed both times.
Then back down to the bottom line again. So we live in critical times.
However, if you take a closer look at the chart, you may see we already have problems.
<img src="http://web.onetel.net.uk/~gawgaw/channel4.gif">

To illustrate the point, I have also posted a 'close-up' of the important section of the chart.

As I said on Thursday, a failing rally on Friday should be given a real hard look.
See what has happened for yourself. A rally on Friday which failed to break up through the support line.

We are also now below the level of December Expiry.

Not a good omen going in to the weekend.
So we must bounce in very short order to regain the support line if the trend is to continue upwards.

However if we do bounce, what is important is that we now have
clear headroom to move up to 4800 without banging our heads
on the top line. (and that will take us through resistance around 4750)

 

[china white]

Bonsai - very good analysis.

One suggestion - I'd do it meself, but I hvnt got FTSE on my QCharts - did u try an inside Andrew's pitchfork anchoring at March lows, similar to what I do on "Trading ES (Q1 2004)" thread?

I cant be sure before I c it - but by the way FTSE looks on yr charts u may get a bombastic picture.

 

[bonsai]

China
No I didnt put Andrews on the chart. (I tend to use pitchforks for longer term issues)

But do tell , what is ES pitchfork chart telling you ?

Still trying to work out what a 'bombastic' chart looks like ?



Go on , give us a clue .

 

[china white]

bonsai - again i cant be sure b4 i c it - but I think if u use same anchors as what I do for SPX - u'll get a strong pitchfork lower boundary support a bit lower than what u reckon - somewhere btwn 300 and 350 - again i am guessing here. Which (IF i am right) wud be consistent with ES dipping to 1110-15 and then flying up to re-test the upper boundary of the pitchfork.

And - wud make a break of 4420 to the downside a non-event really. But Bonsai, as i said b4 - i need to c it 1st. Otherwise its just faffing abt on my part

 

[barjon]

bonsai

and if we continue south? where do you see possible support
coming in?

jon

 

[bonsai]

u'll get a strong pitchfork lower boundary support a bit lower than what u reckon - somewhere btwn 300 and 350

Unless I have missed it, I was hoping I hadn't given a target for the downside !


I will look at that if we fail to regain the bottom line this week.

 

[china white]

bonsai - of coz u didnt m8 - i was referring to yr 4420ish cross of channel lower boundary sup and the horizontal one. It just seems to me - again i repeat w/o the proper pitchfork chart I am just blabbering abt here - that 4420 is of lesser importance than that lower pitchfork boundary support.

 

[barjon]

aw, that's not fair bonsai - we might already have shot through
womens lingerie and be on our way to china and tableware by
then

 

[china white]

barjon - "china and tableware"??? what hv i got to do with tableware? lol

 

[bonsai]

Ah !
china, I understand now

barjon
the problem is that if the market gains downside momentum
it could go anywhere ,imo
the level may have more to do with bond/equity premium ?

anyone got a chart of that ?

 

[china white]

that'd be a really explosive (and bombastic) chart

 

[bonsai]

China
if FTSE had reached the upper boundary of my trend line
then I might have thought Andrews.

We had our chance, god knows, but we blew it.
We got stuck around 4400 and that took the wind out of the sails.

So I'm not clear that it applies to FTSE in the way it does to ES which has reached the top of your pitchfork, I think ?

 

[china white]

bonsai - thats exactly my thinking - i bet u if i had a chance to see a pitchfork on FTSE (which i cant because QCharts dont give me FTSE and I am currently in Brasil so I cant use Bloomberg) that 1st test of 4516 wud be EXACTLY the test of the pitchfork's upper bound, so the centre line (actually probably yr 4420) and the lower bound become mega-important.

i hv to apologise again for speaking w/o hard eveidence. if some1 cud take my anchor pts for ES and apply them to FTSE we might hv a very clear pic. which also means i cud be totally wrong

 

[Hooya]

how does one decide where to draw a pitchfork anyway.

 

[china white]

Hooya - good thinking

I personally never use "standard" pitchforks as I find the choice of the 1st anchor rather arbitrary.

Schiff's version is very good for exponential "explosions" - but thats not a very common occurence.

The Inside modification (pls c my posts under "Trading ES (Q1 2004)" is IMO is the most realistic one - as it measures the first massive thrust and then establishes a trend at a lower slope.

 

[bonsai]

Been away, getting things organised for tonight.

Football seems to increase thirst (and appetite) !

Anyway, on Pitchforks.

Hooya, I think you have asked exactly the right question.
Unless you are careful, they just represent a classic case of
'curve fitting' !
Everybody seems to choose their own starting points and they are often different. But if they dont fit the subsequent action, then 'just change the starting points' !
One of then is bound to be right, I suspect.

For example,and in my opinion, if they are to mean anything , they must start at a significant LOW. What better than 3277 ?
Not only have yours not been drawn from that point, I suspect it doesnt even appear on the chart.
Sorry about that, but it was helpful to illustrate my point.

?

edit
I guess all that only means I don't trade 'em so I don't show 'em

 

[bonsai]

Barjon



I did suggest on Friday that xx82 was a favoured watering hole ?

Remember, I am still in a Bull phase.

Below that it's a case of pick a number ?

As China says 4350 ?. Certainly looks inviting on the charts

4200 would be a nice consolidation level although I had thought
as we had moved up so slowly, we were consolidating as we went. ?

But below 4082 would be a killer, I suspect.

But I am not forecasting any of these.

 

[Finirama]

Bonsai,

Got a complex head and shoulders on the 60 min chart with suggested target of 4,356 ish.

Bulkowski stats -

- short term bearish reversal
- 8% failure rate
- 27% average decline, with most likely being 20%
- 64% pullbacks

So we might see a pullback/retest of the channel before the drop down??

 

[Hooya]

looks like my patriots won ...only...just. Was it any good?

 

[bonsai]

A bit like an Irish wake ?

we all gathered around the box and sang and drank ourselves
under the table.



remember something about a kick in the last minute !

deja vu ?