TM,
Bulkowski's Chart Patterns Encyclopedia, and he says with reference to triangles, "Prices trend down then form lower highs and higher lows following two sloping trend lines that eventually intersect. The breakout is downward."
Hmnn, I have to say that Bulkowski's Chart Patterns Encyclopedia is wrong, flat out wrong.
Triangles are consolidation zones, or pauses within a trend. In particular, the symmetrical triangle implies no bias other than the normal resolution would be a continuation of the trend. Not "down" and not "up" as the quote you provided suggests - but a continuation of the trend in place.
However, in the end consolidation zones or pauses can resolve in any direction -- a pause. You'll see descending wedges in an uptrend that resolve both up and down, even though the classic resolution should be up. It doesn't make the pattern invalid - its just a failure and you know, trading failures is about the most fun there is, since typically price action speeds up as other participants realize that their expectations have not been met.
And frequently people place their bets before price action confirms... human nature I guess.
Having said all this, I don't know how applicable all this is to short term charts (your 15 minute chart), but for the sake of conversation I was just assuming that it is. gg
Price action repeats itself in all time frames. We can and should use the same principles on 1 minute charts and on weekly bar charts.
Another factor that I keep looking at is the fact that the DOW broke a diamond pattern to the down side and it owes me a trip to 8448, in the longer term, culminating on or before April 29.
It may well be that transpires. I am not calling a "bottom", I just see some structure here in the action of the past few days that could under the right conditions lead to a move up from here, and possibly a surprising move.
Its also very possible that the prior swing lows are immediately tested and do not hold.
I have posted some charts here on SI over the past month that show SPX at 900ish as a completely possible scenario, but at the same time measured moves and patterns do not always play. So, it is important not be too fixed in our opinions. |
