The Big Picture

  • August 9, 2000
  • Eddie Kwong

This daily chart of the
Securities/Broker Dealer index
(
XBD |
Quote |
Chart |
News |
PowerRating) shows an interesting example of three
patterns within a pattern.

In the big picture you have a cup and handle
coinciding with an inverted head-and-shoulders bottom. In the shorter term, there
is a breakout over a mini-triple top located in the handle of the Cup and
Handle. All of this is occurring against the background of the following
fundamentals:

  • contract high in interest rate futures.

  • bond yields low.

  • Productivity report highest in 17 years.

  • home constructions increased this quarter.

  • all these are possibly signaling soft landing and no new
    rates hikes from fed.

As you can see, there are a number of both technical and
fundamental factors tending to support a continued rise in the XBD. The astute
trader keeps his eye on the big picture.

Until tomorrow,

Eddie