CAT: 5 Impulse & 3 Corrective Waves Flash Sell Signal, Part 1CAT has flashed a sell signal. A five wave (with three corrective waves) harmonic pattern has been completed. Not shown on this chart is the recent strength in DXY. A stronger US Dollar hurts CAT via currency exchange rates. Besides the harmonic pattern evidence, what does the TRADE-MAP analysis suggest?
Here are the letters and what "TRADE-MAP" means to me (first the letters in TRADE):
1. T : Time and space (Fractals); 2. R : Repeating Cycles; 3. A : Advancing Trend; 4. D : Declining Trend; 5. E : Energy in Phase Forces.
Now the letters in MAP:
6. M : Momentum and Velocity; 7. A : Analysis of Structure; 8. P : Price Performance. There you have it: Don's personal "TRADE-MAP.
"Don's Top Ten Technicals": 1. The Ichimoku Cloud is lower than in October, 2015. 2. Prices are falling into the cloud. 3. Prices are falling BELOW the thick red Ichimoku Cloud Conversion line. 4. The thick red conversion line is moving LOWER. 5. The thick black line is the Ki jun-Sen baseline of the Ichimoku Cloud and this is HEADING DOWN. 6. The indicator on the top of the page is RSI / Stochastic , and this is FAILING.. 7. The top-side middle indicator is vortex and this is NEGATIVE (red over green). 8. The Top (bar-type) indicator measures the "phase energy", and this HAS JUST STARTED A ZERO-LINE CROSS-OVER TO THE DOWN SIDE. This suggests the selling has just begun and has more to go. 9. The red fractal arrows (not pictured) are DOWN. 10. Look to the far middle right on the chart, around $72.79. You will notice a yellowish line on the bottom (jaws), with black dots above (teeth), and a blue line (jaw) still below the black dots (but starting to cross). Now, all three are BEGINNING TO CROSS AND OPEN, correct? This is where I ask you to use your imagination and envision these three items as the "jaws, lips, and teeth of a NOW AWAKENING, FEEDING alligator, and the alligator will feed into the DOWN-TREND.
Another huge negative - the recent corrective waves (a-b-c) have BROKEN THE UP TREND REGRESSION LINE (large red arrow).
The combination of all of these technical and harmonic patterns suggest a decline in CAT price.
This is part one of two in this series. Please view part two, a slightly different harmonic pattern for CAT - but every bit as negative.
I hope this article has been helpful, entertaining, and informative. May all of your trades go well. Don.