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Strategies & Market Trends : Charting & Technical Analysis for Stock Indexes
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To: MechanicalMethod who wrote (201)4/28/2002 4:37:05 PM
From: chartwiznyc   of 211
 
Mike, if the secondary fails, it fails, it wont just become a new primary trend, yes a failed continuation pattern is powerful in oppostite direction & could be considered a trend reversal sometimes, but you want to see a trend start & form in opposite direction to first confirm a reversal of trend, takes time not a 5 bar deal.........it also states in dow theory that you may NOT get 1/3 retracement & you may have more than 2/3 & this is basically a failure of the secondary
its not a absolute rule, things happen, & nothing is 100%, how do you know when seondary will become the primary ? each chart is different & you have to evaluate if the failure of the secondary was news related or did we test a major support/resistance or failure to make retest up this is in bull market...I am just pointing out something I seen & showing, dont want to get into the abstract of what could or will or may unless we have some good examples to prove the case........have a great rest of the weekend......below see the statment from the DOW THEORY on the 1/3-2/3 rule & simply a statment of probabilities & not an unbreakably law.

Thanks for your post !!

Note, however, that the one-third/two-thirds rule is not an unbreakable law; it is simply a statement of probabilities. Most Secondaries are confined within these limits; many of them stop very close to the halfway mark, retracing 50% of the preceding Primary swing; they seldom run less than one-third, but some of them cancel nearly all of it.
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