Friday, August 8, 2008

QUADS Part2, Elegance in Simplicity

QUADS, Part Deux

Obviously just using ONE stock formation is too simplistic. Or is it NOT ? After lots and lots of searching, scanning and reading, I kinda liked the idea of elegance thru simplicity.

I think I remember back when we used PAPER CHART BOOKS, and I’d order my TRIAL Subscriptions and wait for the package that had a return address for INVESTORS Intelligence, like a kid would await the Christmas Catalog from Sears, Eaton’s or [ in my case, Cabela’s ] .

Long days or boring afternoons, I’d scan, scan,and scan again. After all the Point & Figure instructions, I noticed that long flat formations of alternating rows of X’s & O’s would resolve UP or DOWN, and either way, it’d be a pop up or down for the stock of significant dimensions. Oh did I mention I’d chart the X’s & O’s by pencil, and graph paper?

So if the sideways line of X’s & O’s were at least 3 or 4 boxes in vertical height, and at least either intervals long, you’d have the making of a QUAD line, which signified a very bounded trading range. Once either the X’s moved up [ QUAD Top Breakout ], or the O’s move down [ QUAD Bottom Breakdown], you got a formation that would yield an ongoing objective target in whichever direction it broke out.

At least half the time, the stock involved [ Long for basic example] would BREAKOUT to the Upside, only later to be beaten back down into its socks, WITHIN the QUAD Line formation. For my knowledge, most of the ones so thrashed eventually moved back out to the upside. Better yet, many of them eventually resolve [ Long in this case ] into Spread Triple Tops, Triple Tops, Ascending Triple Tops, and like the Energizer Bunny, just keep going and going and going. Others simply hit their first objective and punk out.

In an glimpse like this, I am not sure I can illustrate how to tell the difference without interdisciplinary analysis or intermarket analysis. I can say if you do your basic Candlestick Chart TA, with MA’s and Volume, you can probably head them off at the pass, and decide which ones to keep. If you don’t do Basic TA, you probably ought to…

Yeah it’s a lot of words, But BUT, I do have some examples I pulled from my notes from 2006, and maybe we can learn something from them together. Nothing fancy or complicated or it defeats my purpose…….

Perfect 1st Stage Quad

This resturant chain, CKR, is popping out of the Quad, in its first stage. Watching it should yield some surprises.

1st Stage Quad CLAY

Now CLAY is a due diligence and financial surveilance company. It is showing that someone or a bunch of someones wants a lot of this stock, in a classic first stage pop up.

Quad POP, & failure MIG

This is an insurance company that popped but then never followed thru........... it was a double from about $3.00 per share.


This health goods company had the goods, but dropped the ball. It was an OTC company as is CLAY, but never really panned out.

Next time I will put some up here that have beaten the Energizer Bunny at his own game. !!

Good Luck To All,


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