Greg Carnell solves our first Mystery Chart
by John Sweeney
Picking the winner for our first Mystery Chart (November 1989) was tough, since we received several
great entries. But we had to choose, and finally, we settled on Greg Carnell's effective use of moving
averages, momentum and divergence. A close second was John Fortune's straightforward analysis
starting from the weekly charts and moving down to daily entry and exit signals. Both struck us as being
logical, internally consistent and realistic.
Our Mystery Chart inspired 14 readers to take a swing at guessing where the chart was from and
following up with an explanation of how it should be traded. All but two contestants correctly identified
the chart as the December Deutschemark contract, shown in Figure 1 both "before" and "after." (The
chart was actually a CSI perpetual D-mark contract, a substitution we thought acceptable since it allowed
us to show the chart without rollover effects.) Several analysts also picked up that August 1, 1989, was
missing from our chart.
The "floating continent" formation coming off the bottom of a long decline was unique in my experience.
I thought many futures traders could identify the contract, but not many would attempt an explanation
within the bounds of typical technical analysis. Wrong! All were standard techniques, except Joe
Barics's of Farmingville, NY, whose unique scaling approach is presented in this issue.
With his winning entry, Carnell receives a one-year subscription extension to Stocks & Commodities plus
the title of Certified Technical Genius! Congratulations, Greg, and better luck next time to the rest of
you. I hope this was as much fun for you as it was for me. I also hope just one chart hasn't burned out our
readers' mystery-solving abilities. I haven't received a single submission for Mystery Chart #2 in the
P.S. We won't always use a futures contract. Stock charts are equally likely ówithout notice. We will
warn you of any option or debt charts, though.