 We have with us, Mr. Basil Chapman from Harvard University. Basil, how are you doing today, my friend? Hi Larry, how are you? Good to speak to you. You knew that I went to Harvard, didn't you? Yeah, I drove by myself a few times. No, no, I went to lunch there too. Hey, what are you seeing in the market? Are you seeing this crazy volatility that I'm seeing or am I just being? Well, I must, you know, it's really interesting because as far as I'm concerned, you see this all the time. It's just that today it was a little squashed and it happened a little quicker. But, you know, you can see the, you know, I've got it. In fact, I've got 100, I don't know if you can see it. I've got 120 minute chart up here. And there's this pattern that I call, it's the Eiffel Tower. What happens is the price spikes up sharply and then gives it all back almost in one move. And it looks like, it looks like the Eiffel Tower goes straight up and straight down, very narrow lane up and down. It also looks like an uppercase and it fails. But then what happened is I have a pattern that I call and I thought I'd talk about this just because you're all about patterns. I've got your book right here at the back. Trade what you see. I love reading it. This is always so much to learn. But there's a pattern, there are patterns that I look at all the time. And one is, I don't know if you've noticed it, but sometimes the chart just goes into this really long, narrow rectangle. And you keep thinking it's going to break to the top and it refuses. It's like a glass tube and the little ping pong balls bouncing around. And then you think it's going to break to the bottom and it doesn't goes right back from the bottom to the top to the bottom. It just keeps doing that until eventually it pops out a little bit to the top side. And then it usually comes all the way back and takes out the low and just it wipes out longs and shorts. And then it goes back into that channel. Or there's another channel that I love to look at which is the large rectangle. My expression for the long narrow rectangle is it lasts a lot longer than your patients. And the large rectangle, which is what we're looking at right now is this one that you can see. I don't know if you can see it, but I've got it perfect. Yeah, it looks like a big. You see this cup formation. Yep. And I always talk about cup. Here's the one minute chart of the E-mini. Here's this cup formation. I'll call it about price symmetry. We can get the exact number of bars to the upside to the number of bars to the downside. But every once in a while you get a lopsided one where there's a rectangle formation. And I'm always looking at a low bar that takes you to at least four higher peaks. Peak A, the next one, even by one penny is vague bead stars. And then it becomes a peak B for it makes a peak. And then it goes C and a D. And fourth highest peak is the objective in the chamfer wave methodology. It can go higher, but it really objective is to get you to that D. And if you're looking at this pattern of the rectangle, you can see there's this cup formation. I've outlined this in pink. You can just see it was not pink and yellow. It's great. But this is big rectangle and it has already gone to a D. But I know you don't use these things, but I use nine-period moving average, a 14-period moving average for the very short term. I use the mag D, the moving average convergence say virgins. I use the stochastic over 80% or under 20%. And these are all positive at this particular time. So here we are in this rectangle and we've gone slightly above the previous high and it's trying its best to get to the upper part of the rectangle. And my rule of thumb here is that if this sharp move down starts to make higher highs and higher lows, it can make those four peaks that takes you to just under the previous high, right on or just above and then you got to be careful. So now we've got this rally that's going and you can see the one-minute chart. So I'm using these particular techniques and in my show, the Tiger Technicians Hour 10 o'clock each morning, Eastern Time, I often do these, I often do them live as well just to show the veracity of the techniques. Hey folks, stay with us. Basil Chapman and I will be back. Talk more about charts in just a moment. 877-927-6648. Okay folks, we're back and we're talking with Basil Chapman. And he was, this is Larry Pesavento and Basil Chapman setting in for Tom O'Brien today. Basil, you were referring to that cup and handle pattern. I don't know if you remember when they started investment business daily way back in, I think it was in 1882. Well, yes. Yeah. Well, the number two man beside Bill is, was Al McGregor. Al passed away about four or five years ago. Well, his son, his son, Mike happens to be my daughter's significant other. Oh, very nice. Yeah, they've known the family because they went to high school together all those years. It was her second boyfriend, I believe. She married her first boyfriend. He passed away seven, eight years ago. And then of course he's been, she's been with Mike ever since. Good family, nice people, but Bill O'Neill was a real class act. And he said he could- And what he did to charts, I mean, it was unbelievable. There was nothing in the Wall Street Journal occasionally that have a chart, but he produced the most incredible, it just, it wasn't just a financial newspaper, it was just a genuine newspaper. It had so many articles. And then he produced charts. And ever since then we've started to look at charts, but he was the one that every side, I looked at those all the time. I still look at that. It was a, it's a fantastic paper. Yes. So he surpassed the Wall Street Journal I think 20 years ago is pretty close to that. Cause I know he just did an incredible job. Anyway, tell me, Basil, when you, what is your favorite, do you have one favorite stock that you'd like to trade? Someone just asked me that question. And so we'll pass it on to you. Do you have a favorite stock that you like, Apple or as Google or somewhere? Is this just what you see on the plate? I do the futures, there has to be futures all the time, one-minute charts all the time. I mean, the trading, I'm notating it all the time. It's a learning instrument for me as well as a practical instrument. And as you know, fractals, these patterns are human nature, so they get repeated. You would not be able to tell this was a one-minute chart or a monthly chart, charts are charts, they look the same. It doesn't matter what timeframe. As far as I'm concerned, it's just a speedy way of doing it. I have limited time sometimes to do a trading. So if I'm able to do something on a one-minute chart, instead of a daily or a one-hour chart, why not? It's just the same thing. I'm looking for my peak Ds and Es and get out. That's just a nice way to do it. But what I want to actually just mention to you is that the same patterns refer, if I'm looking at the daily chart, you'll see there's another big rectangle right here. In my, let me just, on the left is the daily and the middle is the week each, on the right is the monthly chart. And yet we made that fourth highest peak D right here at 34,342. And I believe that was the 13th of, no, was that, was the, yes, the 13th of January. And we pulled back quite sharply. We've been along the diamonds to the various, either both the diamonds and the three times long, the UDOW, the most recent trading position we've taken some of it off. But one of the reasons is, he has this rectangle and it keeps bumping up against resistance. And if people don't recognize resistance, then they anticipating a move to the upside that could store for a while until that resistance has got enough momentum to break out of it. Look at this. This is about the fifth or sixth time in over, it was about two and a half, three weeks that the DOW is stored right there in the 34,300s. And as long as you recognize that, it tells you you could treat this as a trading ban. And if you look at that rectangle in the weekly chart, look, there's very little difference. I'm gonna show you, this is the 10 minute chart. There's that rectangle that got stored at the resistance. It's the same thing. I'm looking at the weekly chart. So you've gone from a 10 minute chart to a weekly chart. It does two different time frames completing a net. The pattern's repeating, yes, that rectangle stuck in a rectangle formation. So I love doing this. And if people are interested, they can come to my show at 10 o'clock Eastern time on the weekdays. And I do it in Tiger Technicians Hour. I show these charts, I do them sometimes live on the spot so that you can see exactly what's going on. And you don't have to use all these different techniques. In fact, sometimes you could just use the nine period over the 14 period. Look at this, the weekly chart is very strong. To get this weekly chart to change in the DOW, you probably have to see a close below 32,800. And it's at 34,142 right now. So some of the techniques can keep you in a position a lot longer than you think, if you use the right technical indicators. Well, it certainly doesn't look buried. That's for sure. This looks like a pattern ready to bust out to the upside. And also it's very important to have these digestive. I mean, this is the digestive phase right now. It has a different chart pattern for the S&P. I'll just move over to the S&P. On the left is the daily. In the middle is the weekly. On the right is the monthly. And you can see there's a pattern that I call the falling ax. It just looks like an expanding code leaning on its side. And it has higher lows, sorry, lower highs and much lower lows. And all of a sudden it finds some support and it starts to make the cup formation. If it takes out that resistance level, it can quickly go to the next peak on the left side. And then it could even go to the original peak. In this case, 4195,44 in the S&P. So so far, this is acting very well. It's holding the key metrics that I look at. Look, the nine-period moving average in the daily is way over the 14. And finally you've got, I call this the inside track repellent zone. Look at this pattern. It's such a simple thing. I just joined the lines. And the green line says, as soon as you break out of it, that's good. And if you stay in it under the pink line, it's not good. And look how many times exactly on that, I haven't made anything of these other lines. The S&P, until four weeks ago, could not break out of that trend line. Now it has. So that's another positive. So I'm looking at many positives, but it is a rotational market. And as such, you've got to be quite specific in where you are. But this is a very important thing for me. Finally, you've got the S&P weekly chart improving. The monthly still has a lot of work to do. But this monthly is improving. And the bank, these goods, the casting set, 84%. That's good. This is an unbalanced volume here. I like balanced, unbalanced volume. This is the old general, Joe Granville, unbalanced volume. It's just a single price movement here before you have to add up all those figures. Every single day of running, total was incredibly difficult. I used to do it way back when I started. So now you've got automated lines. And the line says, and the unbalanced volume in the weekly chart is still not great. So that needs to improve. But you can use all these techniques just as you have your specific techniques. You look at them, you monitor them, and then you make a judgment on whether or not that's the position you want to be in. And so that's what we do all the time. And as I say, I like to use technical indicators as much as I can. Sometimes you get in the way of thinking things through. Sometimes thinking is not doing those business. Yes, for sure. You know, when you mentioned Joe Granville's name, anybody that knew Joe, if they hear his name, they have to smile because he was a real gentleman. He and his wife were just so wonderful. And you folks, you couldn't pick up a check if Joe Granville was around no matter what the price was. Your money was no good when you were around Joe Granville. He laughs sometimes. He said, well, I probably regretted some of that, but he sure made an influence on so many people. But what a generous fellow he was. And he had so many stories, much like you do, Basil. And it was really fun to be around him. So when you mentioned his name, a big smile came on my face because I could literally, and he was a good friend of Arch Crawford's, by the way. And so I met him with Arch a couple of times, but he was a real class act. I mean, we're talking about someone who added a lot to the technical analysis. Not necessarily always used it correctly himself, but wow, I think he added a lot. When he spoke, the Dow moved 20 or 30 points. That's when the Dow was trading at 7 or 800. That was, I loved it back in the late 70s too, and then in 80s it was a little different. But yeah, that's how I got, that was technically how I started this business. Nice to speak with you, Larry. Hey, okay, Basil, thank you very much. And thanks for helping out today, buddy. I really appreciate it because you've got great stuff and people like to hear it. We'll be right back, boys and girls, stay tuned. Thank you.