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 September 19, 2004 Commentary (weekend
edition)-
Today I'm going to catch us up on that
incredible GOOG play, briefly discuss gold, and then we'll move on to an
interesting series of charts from a past play.
Let's look at the GOOG chart
first.
GOOG just doesn't seem to want to stop going
up. It has taken out the previous all-time high decisively, and closed strongly
near the high of the day. This is working out better than I ever expected.
There have been some dips, but my scaled exits/trailing stop plan has only
triggered one more scale out (generally I break a play into 20% or 25% pieces
for scaling purposes, but it's not a hard and fast rule). Again, this one may
be done, but I'm waiting for GOOG to tell me it's done.
Gold is still
just moving around, not doing much. It did hit a small bottom and start moving
up, and is in a small uptrend now. It is poised to move right into the area of
the groupings, but all I can do is watch, and wait, and see if the setup comes
together. This one is still of great interest to me.
Let's move on
to something very interesting that I wanted to revisit. Back in January I
discussed a very incredible overlapping of numbers that I was looking at in
FDX. I suggest that the reader go back and re-read the January 4, 2004
commentary to refresh his or her memory about what I laid out there.
I'll show chart 5 from that commentary first.
The fascinating thing is not only how closely
the retracements overlapped, but also which retracements they were. Recall that
we have the .186 and .236 retracements from the major October '98 low, and the
.236 and .300 retracements from the similarly major September '01 low. They
grouped together in two distinct places, which overlapped with the current two
groupings for the pattern. (These additional retracements are fully derived and
discussed in the new book Kane
Trading on: A Totally New 5-Point Pattern.)
I was
overwhelmingly captivated with this 'harmonicity'. Several great potential
trades resulted from this setup, and they were discussed in this commentary.
Let's look at how FDX behaved off the area. I will show the chart that outlines
the lower grouping, which is the one that FDX reacted to.
FDX completed the pattern and jumped up
strongly. The plays around that move were discussed in the commentary at the
time. The FDX rolled right over, and everyone, it seemed, called for the
resumption of the downtrend. I saw FDX react to the grouping once again, and my
play was to go back in long. Again, I discussed this in the commentary.
FDX yielded
another nice 'pop', and then rolled over again, this time reversing above the
grouping. The reader is encouraged to review the archived commentaries, and
also study the groupings from the January 2, 2004
commentary. Where the last 'test' reversed was not 'random' in my
opinion.
Let's look at what happened from here.
FDX made a bigger move this time, and rolled
over again, right to a .618 retracement from the reversal at the grouping. The
readers of my new book will
see the significance in the spot where it rolled over. Many were calling for
new lows when it rolled over. I was thinking that the original grouping area
sure seemed like it should be more significant than these 'bounces'.
Now, here's
the main reason I wanted to show all this. Let's see what FDX has done since
the time of this last chart.
FDX came off that .618 'test' area like a
rocket. It made a strong run, and then had a solid correction. After that it
resumed the uptrend. It is now at new all-time highs. It closed Friday at the
high tick of the day, and the high tick of the week.
It turns out
that the area set up from the October '98 low and the September '01 low, which
overlapped very well with the numbers from the pattern, was a very key area.
And the retracements used for those historical swing-low points are barely
known to most, and rejected by many, or even most, Fibonacci traders.
And how close
was the reversal? FDX turned within six cents of the .236 retracement
off the October '98 low, and within twenty-six cents of the .300 retracement
off the September '01 low. All this with numbers keyed off swing points from up
to well over five years before that time, with retracement values that are
rarely used by most people.
With FDX at new all-time highs right off those numbers,
perhaps it looks obvious now to some what I was trying to show all the way back
in January. Of course, we all know what I think, and that it is just my
opinion. After all, maybe all this is just random, right?
The next
commentary will be the mid-week edition, posted on Wednesday.
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