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2004 February 6 Beware of short term signals
On the other hand if you are a fearless speculator you just got one. Cowardly lions, like ourselves, will wiat for the January high to be taken out. Friday was a good example of free money waiting to be raked off the table for the scalper/speculator. For at least six days daily beahavior or the markets looked like the teeth of a saw coiling up in a boxing match between buyers and sellers. Patient predators watch such action with interest knowing that sooner or later the market will explode out of the range and give them a nice little scalp. While an aggressive investor might add to his positions here more prudent traders will wait for the January high.
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Remember -- we think this is all a massive bull trap. By conventional or classic measuring techniques it has fulfilled its minimum potential. We admire investors who are sitting in cash (we know some we respect very much) waiting for the big bear boot to fall. And it will, but Magee technicians are required to wait for the definitieve change of trend. The SPY is in the same position as the DIA. |
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The Qs are a little different. Friday looiks like a signal that this leg (Jan high to here) could be over. In fact a near perfect configuration. This could be a low for a basing point, but we need to make a new high first, or see more time pass without taking the low out. |
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One of our mechanical systems gave a buy signal in gold Friday. Easy decision obvious stop. Clearing the Jan high would be an add-on situation. |
We have a cordial relationship with the people at prophet.net where we get our charts, although we have every brand of software known to man with which to produce them. It's just too easy and prophet is too good to resist. Check them out.
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