Sometimes we have to be patient while waiting for these patterns to form.  Many people just give up only to get back in after there has been another substantial run-up.  I always have potential clients ask how many of these actually work.  As you can see when the market is going in the right direction just about all of them that I report to you are going to work.  I not only scan for the best formations I also check for the best fundamentals.  I have been doing this a long time and have become quite  good at selecting the cream of the crop.  All you have to do is learn what trade to use in each type of market.  For instance if we look at the 23 Inverted Cup with Handle patterns they all failed to perform as a traditional Inverted Cup with Handle would in a Bear Market which it is designed to work in.  By knowing we are in a Bull Market and applying the correct strategy we turn all but one of them into a winner.

Some of you may have noticed I have been including stocks having a Relative Strength lower than what you have been told you need.  My reason for this is that a lot of stocks have been going through a rough time caused by factors that were not of their doing.  They have still been able to make good profits even in a poor environment.  As you can see it has paid off big time.

I differ from what you have been told by others in that I will include stocks below the $12 limit.  If a stock has a high Relative Strength Rating even though its earnings might not be what we would like I will include it in the DEL Report.  My reasoning is that if the Relative Strength is that high the “big boys” know something we don’t and they are picking up cheap shares so why not get in on the action.  The Chart below for Emerson Radio (MSN) will show you what I mean.  Only trade these in a good Bull Market and limit the number of shares you purchase.

If you would like to learn to trade the Cup with Handle Family of Trades we invite you to join our team.  Until you do you will be missing out on all these great trades.  Where else can you get information about stock trades that are 95% successful?  We will teach you how to meet your trading goals.

Dale Glaspie

Our approach is one that involves searching out those stocks that have set up in either a Cup with Handle or an Inverted Cup with Handle formation, check them out for good fundamentals and then pass them on to our clients in our Daily and Weekly CupWatch Report. Our service does not stop there, each day after our report goes out those symbols listed in the report are then placed in our computerized CupAlerts System and during market hours real-time email alerts are
sent out when the price approaches the buy point. Our service leaves very little for the client to do to prepare for their trading. Other than to review the stocks they want to trade and make sure the overall market is trading in the proper direction for their desired trades.

We do not tell clients what to buy or when to buy. We will provide you with the education necessary to make those decisions on your own. If you are serious about learning a no nonsense approach to trading, one that will lead you to become a successful trader, you have come to the right place. To reach your goal of becoming successful it will require work on your part. You will find the people here at CupWatch a willing partner.

I started CupWatch.com October 6, 2000. Since that time the market has gone through some extreme cycles each of which has enable us to get better at what we do. In future blogs I will show you how to make great trades when the rest of the trading world is in distress. I will show you actual examples that demonstrate the trades we make are based on sound principles. We will be offering online webinars that will discuss those things pertinent to the market at the time along with items that will further develop your skills for the way we do our trading. The only way we can continue to be successful is by helping you meet your trading goals.

Thanks again for taking the time to check us out.

Dale Glaspie

For this exercise I will use the Dow Jones Industrial Index.  After reaching a high of over 14,000, on October 11, 2007, during a powerful Bull Market, it went into a consolidation period through May 2008.  From there it went into a Down Transition Phase which turned into a full blown Bear Market Phase in September 2008.  Because of world circumstances during that period this became a devastating time driving the Dow down to a low of 6,469.95 on March 6, 2009.  At this point it went into a powerful Up Transition Phase where all three Indexes (Dow Jones, Nasdaq, and S&P 500) after breaking down from Inverted Cup with Handle Patterns reversed and crossed back above their Pivot Point TrendLine for large gains.  (See previous blogs for trades made during this Phase).

This was followed by a consolidation period during which all three indexes formed Cup with Handle Patterns.  Many other stocks followed suit and as of this writing have made good gains.  The symbols for some of those breaking out are SKX, SHOO, CPA, CQP, KOG, PRGO, PSA, TEN, and NOG.  Five Inverted Cup with Handles have formed during this time and as would be expected have failed to act like the normal Inverted Cup with Handle.  Instead of breaking down they have all taken off to the upside and when traded using the IHandle Strategy have made good gains.  Take a look at these symbols (MAS, CLR, TSM, BWY, and YUM) to see what I am talking about.

In this two and a half year time period the market has traded through one complete Cup with Handle Cycle.  Once you gain an understanding of these four phases of the cycle you will be able to trade in almost any type of market using one of the strategies associated with a particular phase.  This will place you far ahead of the traditional Cup with Handle trader.

Of course the most important part of this process is being able to determine the type of market we are in at any given time.  As stated in previous blogs I use the Dow Jones Industrial Index ($INDU), the NASDAQ Composite Index ($COMPX), and the S & P 500 Index ($SPX.X).  In a previous blog I showed you how all three had formed Inverted Cup with Handle Patterns just before the market turned around on March 9, 2009.  Below I will show you the charts where all three have recently broke out above Cup with Handle Patterns.  One exception is the S & P 500 chart where our software did not pick it up as a Cup with Handle.  The reason for this is it only spent two days in the Handle.  Our software requires at least four days in the Handle counting the day the Right Side was formed.  Remember the purpose of the Handle is to shake out weak investors.  If there are no weak investors the price is free to take off.

All three charts show breakouts on March 1st.  The three indexes don’t always work this close together but when they do you can bet the majority of stocks will follow suit.  Trying to trade against the tide will meet with unsatisfactory results.  The Cup with Handle Family will always lead the way to show market turn-a-rounds.

Dale Glaspie