FNM Watch

Fannie Mae (FNM) moved down to touch the lower trendline, a mirror image of yesterday's move to the upper trend, as the price continues to trace a symmetrical triangle pattern.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $$1.21

The chart is flashing bear mode on Person's Proprietary Signal, a "black box" indicator developed by John Person. It will often give ghost signals, appearing and disappearing during the day, and Person has cautioned that only the signal at the close should be considered valid.

The pps can lead the parabolic sar, an open-source signal, by a day or two.

The addition, the macd has been declining toward the zero line for eight straight trading days, and the fast stochastic has plummeted into oversold territory. Both are bear signs.

A significant decline below the trendline would break the triangle.

The symmetrical triangle, if it remains valid, implies a rise of 26¢ from breakout, which would occur near the apex of $1.27 or so. Triangles, like any pattern, are perfect predictors of the market, except when they aren't. I never trade solely based on price patterns.

Also, since capitalist finance collapsed in 2007 and 2008 FNM has come under federal government control, and so is prone to policy surprises.

And also, earnings are to be announced after the market closes on May 6.

In the words of the immortal Alfred E. Newman: "What, me worry?

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This signal will be followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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