Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 123 Trends and Reversals -- Ignore unavailable to you. Want to Upgrade?

To: Ally who wrote (128)	2/15/2001 7:18:26 AM
From: Michael Watkins	Read Replies (1) \| Respond to of 147

The wedge discussion is more about the perils of being dogmatic than it is about anything. Re how to select points to draw from, its all about identifying areas of consolidation. A wedge is simply a consolidation zone. So we use volume as much as possible to identify consolidation areas; sometimes the assistance of a tool like ADX is invaluable. When you look at volume on COMPX, QQQ, NDH1, I see generally declining volume through the wedge as drawn; ADX drops off during the entire advance; and the swings intraday become increasingly compressed as it rises. That's all there is to it - its a wedge. So on the break of the wedge, to the norm, the downswings immediately grew larger than the upswings (I'm viewing a 130 minute time frame) which was our first (and strong) clue that price would retrace most or all of the wedge. Re drawing trendlines, if you follow Sperandeo's lead you'll draw them the same way every time, and that consistancy without any emotion behind it will set you on the right path most all of the time. I'm positive some people decide that a chart is X pattern and go down with the ship defending their 'call' to the bitter end. We just have to keep in mind that things change; big patterns are combinations of smaller time frames in lots of different time frames, so be prepared to have an open mind and adjust accordingly.