Tonite I am going to show you a "W" pattern with annotations showing where the cycle pivots occur. Here is the pattern:
Tuesday, January 18, 2011
Patterns and cycles - the "W" pattern
2-3 weeks ago I introduced the idea that patterns can be explained with cycles. I also pointed out we could (hopefully) identify the cycles involved and where they fall on the time line. I showed you the analysis of an inverted head an shoulders at that time.
Tonite I am going to show you a "W" pattern with annotations showing where the cycle pivots occur. Here is the pattern:
I have two goals: 1) inform and 2) teach. GL traders.
Tonite I am going to show you a "W" pattern with annotations showing where the cycle pivots occur. Here is the pattern:
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W and M patterns are my favorite patterns next to head and Shoulders. If you look this pattern on your chart it has the secondary V to the right of the W. You captured a very bullish pattern. Thanks again Inlet cool to see it match up with a cycle pattern too.
ReplyDeleteI have noticed that on that after the peak of a cycle and on the backside (downside) you get extreme highs and of course lows...do you have an explanation for this?
ReplyDeleteShadow -
ReplyDeleteIf I understand your comment you are saying that following the "W" there was a strong move up. Let's consider this - we have 2 cycles interacting and showing up prominently. This implies that the other cycles are contributing little or nothing at the time. In other words, there is a good chance they are going sideways at the time (for example - at a bottom and turning) and turn UP (or DOWN if topping) after they bottom (or top).
Hope I understood your point.
Inlet
Steelie -
ReplyDeleteWe learn a lot about a stock and its probable direction by analyzing and parsing the patterns and fitting it to the cyclic action. Enjoy your blog.
Inlet
This is all fascinating, really
ReplyDeleteAre there cycles in FX? I, for one, could not help but notice there is a clear 8 to 9 week ciclicality in EUR/USD pair. Am i right?
USIPKA-
ReplyDeleteLife is full of cycles - day/night, seasons, tides, lunar, seasons, year. etc, etc. As to the particular cycle you reference - I don' know as I have not looked closely at the EUR/USD, but it would not surprise me if it existed. Whether it is 8, 9 or 10 weeks - my guess would be 10 weeks as that is a common cycle in stocks (but the EUR/USD may be different).
Yes, there are cycles in FX and FX traders tend to focus on the very short cycles I believe. For longer USD cycles look at Bussiere's charts (charts 8.0 and 8.1 I believe are the USD). His charts URL is in my Blog list.
If I get a chance I may look at the EUR/USD and post on it.
Inlet
USIPKA-
ReplyDeleteSome charts on the $.EURO using T-Theory money flow you might find interesting:
http://position-sizing.blogspot.com/2011/01/short-term-money-flow-ts.html
Thank you
ReplyDelete