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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: Frederick Langford who wrote (20301)	7/10/2002 7:44:33 PM
From: Susan G	Read Replies (1) \| Respond to of 26752

3 leg down moves and bearflags... you guys saw me post about bearflags all day long, probably thought I was nuts since the index was creeping up <g> Well here's what I was seeing... mywebpages.comcast.net Today's pattern was a classic 3 leg down pattern. Most of the recent selloffs have been this pattern. Visible on the regular chart, but even better on today's all sessions chart as so much of the BS action was premarket. What a bulltrap that CSCO ramp was...they started heavily distributing into it within minutes of the open. And selling the futures even before 9:30. Once you see the first bearflag form, and the trend is confirmed as down you can pretty much "count on two" and "expect three legs" as Teresa Lo teaches. (Thank you T!)And sometimes, especially lately, you get 4 in a row...or even more after a short consolidation or rising wedge. The bounces are just bearflags, and tend to fool many into thinking it's a reversal, shorts start covering, longs pile on and then the bearflags hit or pierce moving average resistance and down they go with a vengeance. They do break out the top occasionally, which is what often starts short squeezes and then rallies. The higher highs and lows can really fool if you don't spot the pattern forming ahead of time, or realize it's the start of a downtrend and not a buyable dip. Sometimes they take hours to form fully and break, especially on longer term charts like 30-60 minutes. Daily ones can take weeks to form before they crack, making higher lows all the while... The bearflag that broke down on the 15 and 30 min NQs right after 1 pm, started forming around 11 am and trapped everyone who went long the lunchtime move up and didn't get out fast... Spotting these patterns can help everyone avoid that pain!