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EWZuber
1,373 posts
msg #28969
Ignore EWZuber
10/1/2003 12:23:57 PM

Watching AAC this morning to see if it breaks trendline resistance at about $0.47.
More precisely on the hourly chart, a trendline drawn from the high at the opening hour @ $0.67 on 9/22 across the high of the first hour of 9/25 @ $0.59 to the present ends up at about $0.47.
Looks as though a wedge pattern is forming there within the past 4 days. JMHO


EWZuber
1,373 posts
msg #28970
Ignore EWZuber
10/1/2003 3:25:42 PM

DROOY is forming a rising bullish wedge on the 5 minute chart.
Drawing a line from the high formed at 1:30 @ $2.98 across the high at 2:15 @ $2.96 to the present.
The lower trendline support starts at the low formed at 1:50 @ $2.86 and angles up.
Watching for a break above this resistance trendline for a trade.
Got in at $2.86. A poor entry but it may work.


EWZuber
1,373 posts
msg #28971
Ignore EWZuber
10/1/2003 4:31:38 PM

DROOY broke the wedge pattern to the upside to confirm the bullish nature of the pattern. It broke out at 3:50 @ $2.93 and closed the session with a bullish +DMI(2) and increasing price with declining stochastics on the hourly chart ( also very bullish ).
I expect DROOY to either open higher or move higher after the open and probably run up against resistance at the 50HR.MA @ $3.04.

Also bought a little MCEL @ $3.19 just before the close on a bullish +DMI(2) indication and ratio of buying/selling volume.
Second testing the DMI theory with real American dollars.
First was successful.
All JMHO



txtrapper
548 posts
msg #28977
Ignore txtrapper
10/1/2003 7:04:48 PM

DROOY could have been bought at 10:15am ET @ $2.80 using L/R for a nice profit, I never chase a stock, it's already displaying red "selling" volume signals.

Prophet.net "realtime charts" 2d/5m

txtrapper


EWZuber
1,373 posts
msg #28982
Ignore EWZuber
10/1/2003 11:09:21 PM

txtrapper
Interesting viewpoint. Your comments made me take a closer look and even though I knew there were bearish indicators I didn't realize the extent. What alerted me to it before I took the position was that the Weekly chart stochastics fast line has crossed under the slow line, indicating a medium term distribution period could be starting.
However there is a phenemonon that occurrs when a stochastic wave is making almost continuall small oscillations very near the overbought area like DROOY has since the end of March on the Weekly charts. This is always a bullish indication,IMO. Not saying it couldn't end here though.

Your comments made me take a closer look and there was a lot more going on than I thought.
This alerted me to a large head and shouilders pattern has emerged on the hourly chart that started back on 9/9/03. The neckline is at about $2.89.
Sitting within that right shoulder is a consolidating wedge pattern that started on 10/01 @ 1:30 on the 5 minute chart.
Seems like DROOY will have to break $3.05 during this hourly chart accumulation phase to remain bullish.
I believe it can do it if it breaks out of this wedge with some force.

XAU ( gold and silver index ) is in long term distribution also on the weekly chart.

Also on the daily chart there is a good sized Head and Shoulders pattern and the right shoulder is being worked on right now.
So its not confirmed bullish or bearish yet.

On the bullish side Long term 3 yr. Monthly charts indicate the very beginning of what could be a very long term accumulation phase. The last one lasted 6 months. And look at the buying volume the past couple months!
There is definately an influx of money into this stock.
the Bollinger Bands were tight around the bottom of the daily chart stochastic cycle and DROOY bounced up off the lower band, this is usually bullish.
If you look at a 3 year daily or weekly chart you will see that DROOY gapped up directly above a 1.5 year resistance trendline on 9/9/03 @ ~ $2.98 ( & falling ).
That trendline was tested successfully as support this morning @ $2.82 which happens to coincide with support around the gap formed on 9/8. That could be very significant.
Important in the short term, IMO, is the stock just closed above the 25 DMA @ $2.93 and daily stochastics just started an accumulation phase. If the weekly cycle stays overall bullish then its handy to have this 25 DMA in an uptrend that will work very well as support for a while.
Also, just saw that the 25 Month MA which has been confirmed resistance for 6 months straight was just broken today @ $2.93. It still needs to be confirmed as support.
If this wedge on the 5 minute chart breaks to the upside then the play would be a hold until next resistance is confirmed or until trendline support or MA support is violated.
If the wedge breaks to the downside then I can still get out a tad in the green.
Volume was just shy of ADV but gains were decent.
DROOY closed the session looking fairly bullish in the very short term and set up for a good open, JMHO.
I try not to be too bullish or bearish, my opinion doesn't mean anything. I just try to let the charts do the talking and I try keep my own sentiment out of it as much as possible.
Thanks for the heads up and making me think about taking a better look.
A lot of the time thats what is good for us.

Yes $2.86 was not a good entry. It was overbought on the 5minute chart when it broke trendline resistance so I shouldn't have gone for it.
It would have been better to wait for the start of the distribution cycle which was right around the corner and let it test new support. It broke it twice before bottoming out.
A bounce right off of support at the boottom of the gap dead on at $2.79 today would have been the killer setup and completely doable if it were all mapped out on the chart before the day began and a buy order already sitting there.
Need to do that more.
Havn't been very concerned so far because if I see the longer term bullishness correctly then this could add some upward momentum.
Short term is the major influence at this stage of the trade tho.
Sorry about the length.


EWZuber
1,373 posts
msg #28997
Ignore EWZuber
10/2/2003 8:42:35 PM

DROOY did fairly well today. Good buying volume in the morning and again near the end of the session. Most of the day was spent consolidating and taking care of sellers at a lower price before the run up.
Without doing this it wouldn't have been possible for DROOY to have moved much at all.
Even then many of the sellers would settle for nothing less than selling near resistance around $3.
Short term resistance from cycle highs ~ $3.05 ( hourly chart ) formed on 9/29 & 9/30 held it down quite a bit.
Still need to see that break and close above $3.05 to remain short term bullish ( higher highs & a new short term uptrend ) which is where resistance at the 50 HR.MA happens to be also.
Also notice that the during the distribution phase on the hourly chart from 1:30 on 10/01 through today the price was actually rising just a bit. In the short term this is very bullish.
These muted distribution cycles occur when the more predominant stochastic periodicities are in phase with the shorter term cycles.
In this case its the Monthly, and daily chart cycles that are also in accumulation with Weekly chart giving an extremely muted and very bullish indication where the distribution phase is so muted the stochastic value hardly drops below neutral overbought/oversold territory before swinging back up into accumulation again. This affects the hourly chart cycles and mitigates the distribution phase allowing the stock to stay in accumulation mode for extended periods of time.

I would like to explain something at this time that I suspect you may find interesting.
When Stochastic cycles of various periodicities align in phase with one another ( all in distribution or accumulation at the same time ) a unique phenomonon occurs.
To illistrate this point bring up a chart of the NASDAQ. Some charts use '.IXIC' some use '.COMP'.

Bring up a 2 year, Monthly periodicity chart of the NASDAQ with Slow Stochastics(5,3).

Notice that there was a Monthly chart stochastic cycle +xover ( Fast line cross above the slow line ) in Oct. of 2002.
Now bring up a Weekly chart. Here we see that this cycle periodicity had a nice accumulation phase from Oct. 2002 to Feb. 2003 aided by the Monthly chart +xover in Oct. The weekly cycle stayed in accumulation mode ( overbought territory ) for an extended period. Even after it hit overbought value of 98 during the week of Oct.27th it remained in overbought territory for another 4 ~ 5 weeks. Still though it did eventually drop to an oversold value of 11 in Dec. 2002 and 7 in Feb. 2003.
But now look, something strange has happened to the weekly chart cycle starting in Feb.2003 and goes right up to present time.
The Weekly chart cycles never dropped below a stochastic value of 40 the entire time, basically moving from neutral territory to overbought territory all Spring and Summer. ( basically staying in accumulation mode the entire time )There was no real distribution phase. Markets were very bullish.

Now Bring up Quarterly periodicity on the same 2 year chart.
Here is the reason this has occurred.

Notice that we had a +xover of the Quarterly chart Stochastics right around Feb. 2003. That was exactly when Weekly chart stochastics began oscillating in overbought territory for months.
By Feb. the Quarterly, Monthly and Weekly chart stochastics had all become aligned in phase, all in accumulation.
To put this phenomonon in perspective look at the way the waves are formed on Weekly charts ( and daily charts ) and compare the cycles starting from Jan. 2002 through the market decline to those starting Oct. 2002.

Notice how the waves are broader at the bottom and spend more time in the oversold part of the cycle through most of 2002 then are more broad at the top and spend more time in the overbought territory after Oct. 2002. ( anyone in electronics might think of this like pulse width modulation )

Then check out the relationship between the Quarterly, Monthly and Weekly chart cycles in the beginning of 2002.
In 2002 they were all in phase in distribution mode, while now they are all in phase in accumulation mode.

As you can see the Monthly chart stochastic cycle is just beginning a long term distribution phase now. So it is likely we will see some drop in stock valuations for a while.
With Quarterly chart cycles rising in accumulation we could very well see this influencing the Monthly chart waves and they may also be sustained, oscillating near overbought territory and have shallow distribution cycles after the -xovers.
Watch and see where Monthly chart cycles have the next +xover again. This Monthly chart distribution cycle may very well be mitigated by the rising Quarterly cycle.
These indications can be very helpful in determining the bullishness or bearishness of a chart in any time frame.
JMHO

If anyone feels this stuff is cluttering up SF just let me know.



mika
131 posts
msg #28999
Ignore mika
10/2/2003 9:22:19 PM

EWZuber,
I commend you on your effort. It would take me weeks to type half of the volume you've put out in one day. But my intuition tells me we'll be heading up for a while longer. (Nasdaq 2300). We might be a little over extended here but not so much for the shorts to really brave the risks.




EWZuber
1,373 posts
msg #29004
Ignore EWZuber
10/2/2003 10:58:52 PM

mika
I also still think that the NASDAQ will hit 2,100 ~ 2,300 but may take a good while with Monthly chart wave starting distribution.
The downtrend is already in place.
It was first revealed when the NASDAQ gapped down and tested trendline support as resistance and confirmed it on 9/23.
I suspect the NASDAQ will rise to possibly as high as 1,883 where trendline resistance has formed from ( on hourly charts ) the high of 9/19 @ 9"30 @ 1,913 to the high of 9/24 @ 9:30 @ 1,904.
If drawn to the present time it ends up at 1,883 ( & falling ).
I don't see any way we break above that any time soon.
Notice that today the market was stopped by resistance at the 25 DMA @ 1,850.
Also notice that the 25 DMA is starting to flatten out and I suspect that shortly it will roll over.
Notice how oversold NASDAQ became on the daily chart this time before ending distribution and starting a new accumulation phase?
From my earlier post regarding the pulse width modulation of these waves this tells us that something is changing.
The distribution phase is becoming longer and deeper.
A weekly chart distribution phase we went through from mid July to August 8th gave us that long drawn out cycle bottom.
Thats because it was made up of 2 Daily chart cycles that ended in phase with weekly chart stochastics in a distribution mode.
These are the things that can happen when you get complex waveforms.
That is, waveforms that move in and out of phase with one another.
When they align you get a big move.
The NASDAQ dropped -7.6%.
However this time we have the Monthly chart cycle in phase with the Weekly chart cycle distribution phase.
The fact that the Daily chart stochastics are just starting accumulation phase I suspect will not be anywhere enough to counter act the other two more influential and longer term waves.
I suspect the Daily chart wave will be muted.
All the indications are there.
This is the first time we have had a deep cycle oversold bottom since the last distribution phase convergence. The next one will be a big one.

At the end of this daily chart accumulation phase that just started, the Monthly, Weekly and Daily charts will ALL be converged in a distribution phase. JMHO

I know this is dificult to swallow. I would be skeptical myself had I been the one reading this.
It takes time to see the implications of this Stochastic Convergence Theory.
Lets watch and see what happens.


EWZuber
1,373 posts
msg #29005
Ignore EWZuber
10/3/2003 12:53:25 PM

Sold DROOY just after the open @ $2.99.
Big money ran it up past resistance at $3.05 to $3.12 right out of the gate with a huge blocks of 100K share Bids.
Someone sold into this strength and took the whole lot. That started the slde.
Apparently news about the strengthening dollar had an impact on gold stocks today. XAU is the only index on my watchlist to be in the red. Its down ( -3.5% ) now.
So only about +4.5% gain on DROOY trade.

Even though the 25 DMA had been broken to the upside it was never really tested as support.
DROOY has broken down now confirming the 25 DMA as resistance.

DROOY bounced up off of short term trendline support on the hourly chart in the first hour but in the second hour was broken at $2.93.

A close below $2.79 means the trend is seriously down.
Looks like it is being tested right now. JMHO


EWZuber
1,373 posts
msg #29013
Ignore EWZuber
10/3/2003 5:19:10 PM

Just a follow up on todays NASDAQ action.
Notice that today the NASDAQ moved above the resistance trendline I mentioned yesterday at about 1,883.
However it closed below that line confirming it as resistance for now.
With Daily Stochastics only at 83 it is possible to see this trendline tested again as resistance before the next distribution phase begins.
Even if NASDAQ manages to close above it, it seems likely at this point that it will be violated as support as soon as distribution begins.
I will concede that the Monthly chart stochastic distribution phase may be mitigated by the rising bullish Quarterly chart wave.
It just doesn't seem likely.
JMHO


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