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Crouching
Tiger –
Hidden
Dragon "Fortune Favors the Informed" A portent of the coming year’s big movers? Don’t miss this pattern if you want some great winners! My apologies to Sony studios and Ang Lee, but the blockbuster thriller’s title seemed appropriate for the action of The Dow Jones US Energy Index and with particular reference to a chart pattern that takes on the form of a dragon. The thought that the "end" of the Iraq war would mean the "end" of concerns about energy prices. It appears that the battle is won, but the war is far from over. The chart tells many stories. We see an expanding pattern of uncertainty, and then a drop below resistance levels. This is the hidden tiger. Cats stalk their price alike - just observe your domesticated moggy approaching its still alive hot meal: ears flattened, body low to the ground, ready for a powerful spring at the unsuspecting prey. In this case it was the unsuspecting investors.
Next the "Hidden Dragon" emerges, and rears up, leaving most speculators dozing at their computers or sleeping through the latest gold bugs report. Indeed, "all that glitters is not gold." When we look at last year's winners, we see that construction services was well ahead at 100% plus! It was considered a stellar time for gold and silver, but this came in fifth behind computer storage equipment, audio and video devices, and technology retail. I looked for this pattern amongst last year’s top group, and sure enough, the attern was there! The example below is of Centex Corp.
In fact there were two tigers lurking here. Finally the dragon emerged to reward her longer-term holders. Most who used charting and technical analysis would have slivered off the beast’s scales. In a bull market, the "Crouching Tiger – Hidden Dragon" is to be looked out for. It is a sign of hidden strength. We are seeing this pattern evolve in a number of sectors and stocks right now. Recognize this pattern as it emerges and you will breathe some fire back into your 2004 portfolio.
© Copyright 2004 John Tyler. This article can be copied and reproduced as long as acknowledgment is given to the author and a link to www.infognome.com is included. Disclaimer: These are personal views and not intended to replace professional advice. We make no claim to be licensed. Contact
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