Head, Shoulders, and the Neckline.

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posted on Feb, 13 2004 @ 08:01 PM
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Folks, this is important, this is the current event, this is ready to happen in a short while...

(Please read to the bottom)

I have made several posts, complementing other's posts on similar subjects,...and after looking at the numbers, a change is technically preparing to happen.
(feel free to search ATS for these posts)

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First...the Head and shoulders.....

Volume is usually highest during the left shoulder formation. As prices slip back, volume recedes, when a second rally forms, volume is again high, the head of the pattern is formed when surging prices and volumes begin to ease and fall back again. The trough between the head and the right shoulder must be below the peak of the left shoulder for the pattern to be considered a head and shoulder pattern. The right shoulder is another rally in prices but typically volume is lower than the volume that created the left shoulder and the head. Once the head and shoulders formation is complete, a breakout down through the neckline can be a good indication that the trend of prices will continue in the direction of the breakout.
www.trade10.com...

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So what does this mean?...

Well, the USD is on the floor right now, the Euro is on the ceiling, and Gold is about in the middle.

BUT the pattern has been made, and will soon complete, and if a breakout occurs, it will typically demonstrate the trendline.

And it doesnt look good for the US dollar.

Saudi has chattered about only accepting gold for oil.
Japan has announced their inability to re-direct the US dollar, and has settled on just slowing the fall.
The Fed cannot raise overnight bank rates, without detrimentally affecting the popularity of US treasury notes, which pay for the US government.
Unemployment is stagnant at elevated levels, while the corporations reach new stock price highs thru shareholder appeasement via increased productivity. (false signal!)

Lets look at the current charts to see this pattern.

GCJ4 - GOLD April 2004 (COMEX)

ECH4 - EURO FX March 2004 (IMM)

DXH4 - U.S. DOLLAR INDEX March 2004 (FINEX)

If you look at the last couple of month's of each graph, you will notice the technical formation of the Head and Shoulders pattern, with the right shoulder not yet complete.

If (and I suspect in the next month) the right shoulder completes and the price meets the neckline, the following trend move will be a likely indicator of the following trend direction.

And if this IS holding true, notice Gold and the Euro have a positive positioned H&S pattern while the USD is inverted, and all of them coincide with the same timeline.

If any one of these break out into the suspected directions in the next few weeks, then all three (and other's) will react accordingly, then you will witness the above trends to be established for the medium term. (couple of month's?)

But the Euro is near a recent all time high, and the dollar is sagging w/o international currency purchase support (Japan), and Saudi upset about the Dollar conversion losses over 40% and considering Gold as a Petro-dollar (for the time being, prior to converting to Euro's), and other chatter from oil producing countries considering converting to the Euro-petro-dollar, all the while the US is frantically trying to keep USD dollarized countries in the US pocket, as well as converting other countries that formerly solely traded for Euro's (IRAQ !)

Folks, dry, not as fun as J.Jackson, and in an election year, terror alerts, criminal activity, and whatever else, to keep you distracted from the underlying facts that are happening right now.

What countries will stockpile USD's to buy oil, when the oil producer's dont want them, and what countries will buy Treasury Notes, when the payout is not as good as Euro Notes, and what other method's are there to finance a half-a-trillion US budget deficit, when nobody wants to play with the US monopoly money anymore?

Think about it!

..

[Edited on 13-2-2004 by smirkley]




posted on Mar, 9 2004 @ 07:28 PM
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Well the markets have been in a sideways up-n-down movement for the most recent term, and the actual pattern is becoming more difficult to define. It still does 'appear' to be a "head-n-sholders' pattern forming, on all three indicators, but they are a bit deformed now that some time has passed.

Notice Gold on the upswing, after it's last dip.
Euro, too, and USD (inverted).

And so I have been watching,....and watching.

Today I started to look at a few other indicators in the same sectors.

SIU4 - SILVER September 2004 (COMEX)

...Caught my attention immediatly. Notice how in the time of events in the gold chart, silver reacts along with as expected, but most recently silver has continued up to 16 year highs !!
I am thinking this may be a sentiment indicator. Even though gold is off it's high's a while back, it is starting to make it's way back.

Maybe this is the final stage of forming a classic head-n-shoulder pattern, historically foretelling the next trend?


Maybe there are other factors to consider?

OK, how about OPEC lowering production, and threatening to trade oil-for-euro's instead of Dollars?
128th (Extraordinary) Meeting of the OPEC Conference
In this connection, the Conference also noted, with some concern, the decline in the purchasing power of the barrel as a result of current US dollar weakness vis--vis other major currencies.

Opec considers ditching the dollar
At a conference on the "hidden threats of currency crises" back in March 2001, Venezuela's ambassador to Russia Francisco Mieres-Lopez first publicly evoked a possible switch.

"What's more, Russia, one of Opec's competitors, has been threatening for several months now to switch its oil market to euros", the source said.

A trader at the Rothschild bank in London added: "Trading in petrol involves enormous sums of money. If the dollar loses its role as a currency of reference, the United States, the world's largest oil importer, will no longer be able to have outside countries finance its abyssal trade deficit."


Of course President Bush is not going to stand idly by,...

Opec cut puts US economy at risk, says White House
President Bush expressed alarm last night after oil cartel Opec threatened to undermine his chances of a second term in the White House by announcing a surprise cut in production from April.

"It is our hope that producers do not take actions that undermine the American economy and American workers - and American consumers for that matter," said White House spokesman Trent Duffy.

The Bush administration is concerned that higher fuel prices will eat into disposable incomes, raise business costs and add to a $500bn (267bn) annual trade deficit that is already undermining the dollar.




I really dont know what to make of the coorolations that could be drawn.

You have Venezuela telling the USA that it would wage a 100 year war if the USA invaded them. Now where did that come from?! Why would Venezuela be worried? Venezuela was the first opec Country to consider the euro-switch. Libya had openly talked about it, and they now stand with their arms in the air in surrender.

The mop up is about complete in Iraq, and the next direction looms,...

Pakistan for their nukes?,..North Korea for their nukes?,...Saudi Arabia for the oil?,..or Venezuela for the Petro-Dollar?

I think everyhting is in place and poised, for something to happen. And it will involve the USD, Euro, Gold, Oil,...and maybe,...another war.

And as quiet as it has been lately,............



posted on Mar, 31 2004 @ 02:48 PM
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Well Gold has crossed the neckline, made the indicator, and now has trended up to $430/oz in the October contracts.
GCV4 - GOLD October 2004 (COMEX)

Of course Silver pre-empted the move, and the USD/Euro connection is lagging but following.
Notice the volume of contracts. They are definetly UP indicating interest has increased greatly. BUT the runup on volume usually precedes the peak of the trend by several weeks !!


Folks, save your pennies!!
Inflation is just around the corner and it will be very noticeable soon.
Dont count oil and food, but ther deflation of the dollar value will bring on major increases in the costs of products counted in the inflation figures.

It aint gonna be pretty for many with debts and large dollar holdings.


With the rumours of Greenspan having a heart attack, as well as OPEC announcing today they are cutting production quota's by A MILLION BARRELS A DAY the economy is looking like a recovery is more of a pipe dream than reality.

This is very a percarious situation whether on the front page or not.

This will effect the future for many years unless things change now!



posted on Mar, 31 2004 @ 02:51 PM
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There is nothing I can really say, But, it is what it is.

I wanted to post, And tell you GREAT POST!!!



posted on Mar, 31 2004 @ 02:58 PM
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The ECB might drop Interest rates which will lower the Euro's value. Good for exporters and bad for commodity purchases such as oil.

If there is a good jobs number in the US on Friday, that may be all that's needed for the US to raise it's Interest rates.
They don't want to raise them before they get a sure sign of a turnaround in the economy.

Once they do that, the dollar should rise in value.

If the jobs number is worse than expected on Friday, that will most likely be very bad for USD.

[Edited on 31-3-2004 by AceOfBase]



posted on Mar, 31 2004 @ 03:07 PM
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AceOfBase,...too true, but keep in mind the official job numbers are commonly revised after the official release.

The first release of the job numbers sometimes are not clearly indicating the facts.


As a note, the dollar and Euro diverted from the trends of the original post, although somewhat tracking, and the head and shoulders 'inverted' pattern is a bit rough and hard to see, and possibly did not follow the normal definition.

But still Gold is the haven for those who 'fly to safety' in uncertain or inflationary times.


Notice how the economy is always guaged by the 'upcoming reports'.

It seems to me if the economy was turning around, it would be obvious, and would not require a future report to define it.

I suspect the new countries just added to the EU may have a negative effect temporarily on the Euro and an opposite effect on the USD, but this would stabilize as the new member countries assimilate the new currency into their economy.



posted on Mar, 31 2004 @ 03:19 PM
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Thank god I got my order in for my silver eagleswhen I did:

Bought @ $8.75 each

Now selling for $ 9.75 each

GO SILVER!!!

As for the Market: Do your research. Do a DD on the prospective companies( homeland security is hot right now). Watch the indicators! No matter how bad the economy is, you can still make money with a little investing.

I believe Mr. Perot started with $1000. Look where he's at now.



posted on Mar, 31 2004 @ 03:19 PM
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If the UK would switch to the Euro then it would really earn it's place as a true reserve currency.
I don't know if it'll happen though.

I see you mentioned Iraq's decision to switch to the Euro as the currency of choice for oil sales was followed up by an invasion.

It's perhaps unrelated but Russia also said that they would consider selling oil for Euros and now, you see a lot of US activity in that region.

Really adds to the Petro-dollar/ Perto-Euro conspiracy theories.



posted on Mar, 31 2004 @ 03:35 PM
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Originally posted by AceOfBase
I see you mentioned Iraq's decision to switch to the Euro as the currency of choice for oil sales was followed up by an invasion.

It's perhaps unrelated but Russia also said that they would consider selling oil for Euros and now, you see a lot of US activity in that region.



Yes I have corrolated that about Iraq in this and other money threads. Interesting though when Iraq converted to the Euro-petro dollar, the US and Financial analysts laughed and laughed. Then a couple of years later, no more laughing. It was a successful conversion,...

just prior to the war.



posted on Mar, 31 2004 @ 04:06 PM
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fantastic thread is all i can say ...
Smirkley is a stockmarket...economic whiz kid...

i dont know how old this thread is but i thought id run it back to the top considering the new all time highs of gasoline in the U.S.



posted on Mar, 31 2004 @ 05:24 PM
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Originally posted by watcheroftheskies
i dont know how old this thread is ...



I started this thread in February after watching the run-up faulter and begin to form a pattern.

Updated today to show the current level.

Probubly will update once a month for one or two more month's, as the rally continues, or other related world events influence the market.

Looking at the breadth of the last pattern I am in the thought the run-up will continue for a month or two, peaking out at about $500-550.

Of course a major world event can easily exacerbate the current direction or otherwise.



[Edited on 31-3-2004 by smirkley]





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