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Strategies & Market Trends : Charts & Scans
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To: Trader X who wrote (72)3/5/2001 2:12:07 AM
From: Chip McVickar  Read Replies (1) of 5125
 
home.austin.rr.com

That INDU chart is also a diamond formation.
This is clearer on the monthly charts.

There are 7 ways to view this complicated pattern.

1] bullish coil - from Oct daily bars
2] bullish rectangular consolidation pattern
3] symmetrical triangle - Aug
4] two separate symmetrical triangles
1st broke up and quickly failed in August
2nd broke down
5] expanding triangle to the left and a symmetrical triangle right
6] weekly and monthly diamond
7] yearly wedge

These diamonds "...usually show up at market tops." (Murphy)

To me..., this is an expanding triangle that turned into a diamond, which contains a rectangular consolidation pattern or coil which is bullish, because the first touch to the rectangle. It has held fairly well within a fib structure, and sits just above the .618 level.

However, there's very little about this entire pattern that yells BUY. If one looks closely, this rectangular consolidation pattern could also be a triple top and therefore a reversal pattern.

Everyone pro and small player who charts is watching this formation.
I believe the market will break higher and then fade quickly like the first symmetrical triangle did in August.

When 9900 is broken this chart pattern becomes a topping consolidation.
Measured move up is about 12,500..., down about 8500.
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