DAX, Single Busted Head & Shoulder Top

INDEX:DAX   DAX Stock Index
102 15 3
After a prolong uptrend, when Head & Shoulder appears it is normally deem as a form of topping pattern by the bulls
However, at times when the right shoulder neckline breakout downwards, drop less than 10%, reverse and continue upwards and finally has a close above the head.

Statistically, price can gain as much as 31%. If that is the case, we might see another ultimate higher high before the real collapse!

This is the hardwork down by our friend who did the backtesting - Thomas Bulkowski

Guten Tag Mickette,

You analysis is almost right, multi busted H&S, if another big red marubozu come to meet that neckline and then rebound for Christmas Rally! :-)
Hi Jangseohee.
Good observation on the DAX and thank you for the educational link.
If I have correctly understood we have in this case no "single busted H&S Top" but it looks like more like an upcoming "double busted" (final top and collapse of the markets) or a "triple or more busts". Now waiting for the reversal target of the past AB-CD at around 9300.
+1 Reply
How certain are you of this actually. Direction is tenuous at best, and I can make argument both ways. Care to give a percent up or down belief from here, and what are you waiting on as confirmation? It would be profitable to be right here, I have 2 disabled daughters to care for (really I do). Ad if a violent collapse is iminent, might go big short. Thanks :)
jangseohee claydoctor
Hi claydoctor, i sympathize with your situation to take care of your two disabled daughters, what happen to them?
Base on a 10 years stock market cycle, i do not think a big collapse is really coming like 2008 even though i am 75% bearish. However, i do acknowledge that whatever ATH that is coming, a MAJOR CORRECTION of up to 20-25% is immiment, only question is when?
Unless you are able to hold it for at least 0.5-1 year, it will big really risky to go big short or in my term (SHOW HAND) in view of your need of cash for daily expenses.

a petty that tradingview still do not have this feature:

1. Yearly chart (not until 31 Dec close) now i am seeing a DOJI
after a yearly uptrend for 5 consecutive year, finishing as a DOJI above 8yma is showing market is doing nothing the entire year. Still gotta wait til 31Dec close to confirm

2. Quarterly chart:
After finishing yearly around 9600 in Dec 2013, the next 3 quarterly candle (Jan-Mar, Apr-Jun, July-Sep) there are all high spin wave DOJI with a range around 8900-10100 where 9600 is the mean!!!
And right now this quarter (another two weeks to form) is yet another BLOODY high spin wave DOJI

So it has been consolidating in a whipsaw since DEC 2013, either it will lead to an up move or down move after this.

Last but not least,
Using a stage analysis from Stan Weinstein with only one indicator 30weeks moving average,
currently this line is FLAT
claydoctor PRO jangseohee
Thanks for the kind inquiry re my daughters. Really don't want to post specifics on here, but we care full time for them after accidents and issues some 15 years ago now. So the income from investments goes to pay for their needs, simple as that, since my "day job" never seems to be enough, as is the case with many these days. So about 5 years ago, I started to study charts, etc. started with real money in end of 2008 and lost as most, however... as goes most my days, life is all about turning adversity into opportunity. Tragedy is just another opportunity to love. So after more and more study, investing with scared money, I will say I made a deposit into my account in March 2009, on the day of the bounce. So from then, I study stocks maybe 3 hours a day, before I start my day, and I am doing pretty good. I am not a pro by any means, and always looking to see what others who are successful think. I also believe we should help each other, hoping that we all will succeed. As much as I don't why to try to "catch a falling knife here" with oil, all my study reveals a bottom very soon, and the markets are tied to that like a dog on a leash right now. Might try s mall position, not sure what vehicle to do it with yet, suggestions? So I cashed out all recently having long VXX, short TZA and HAL, and thinking I will turn bull soon, short term and see. Watching the last week in December for higher volume than last couple years, and also to see direction, for pre curser to January month indicator for 2015. Thanks again, I see you are caring person. :)
claydoctor PRO claydoctor
actually that was long vxx (3x VIX), long tza (short russell 3X), short hal(options). I see VXX topping, oversold, MF out, indicates lower VIX, but watching, waiting, what you think?
jangseohee claydoctor
one more gap to be filled in VIX!
jangseohee claydoctor
i have a hunch (which could be very wrong) a high spin DOJI that finish off as Dec 2014 candles, in two more weeks
If you care to check the wicks in 2008.
I am almost fully short 200+ short position, options expiry at lest June 2015 or longer
but for energy stock, my fingers are itching to be long though :-)
and my latest Shipping post, may also consider long those
jangseohee claydoctor
Hi Claydr,
thank you for bother to elaborate a little more about your situation.
I know those Bills will kill you if you don make extra.
Like you i lost 50K (which took me 10 years to save) in stock market in 2011 market top as i followed my "dump money" father.
So i rest until Dec 2013 until my friend when for some TA preview, after taking up only from one teacher, i have been studying it 6 hours a day to get myself back in high notes.
jangseohee Mickette
Guten Tag Mickette,
Wie ist Ihr Wochenende? You just update your profile with pretty lady :-)
I didnt really post DAX on a weekly basis, but because of that failed Head & Shoulder top, it requires some attention.
As far as the close on Friday, it is only a single Busted H&S. I agree totally with you that in time to come within 1/2 months, it could develop into a double/triple busted H&S. Besides, this seemingly half-completed Megaphone pattern could lead to a whipsaw that form a diamond shape before another REAL and actual big move. Assuming that the neckline will not be broken
There is still a GAP from 8987 - 9079 to be filled, it has been filled with "wicks" already, but filling it with "SOLID" candle bar would have complete the picture. Even if DAX rebound on 9300 for Christmas Rally, the gap is liken to a magnet will still attract it to come back eventually some time.

The last jigsaw puzzle is whether or not Draghi finally follow the little Dwarf from Fed to press on "PRINT" buttom officially :-)
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