Thanks Hoop
So is it more likely to break upwards from the triangle given the higher lows ?
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I think shape (investor behaviour) does factor in..With the ascending triangle shaped pennant it would mean the investors are more bullish than say a descending triangle shape where the investors would be cautious and less optimistic...But remember these are Pennants and are seen as a pause event in a continuing trend (downwards)....so chances of break down is higher
There's been media articles saying there was symmetrical triangle formed....which would indicate a upward breakout occurred this morning (NZtime)...strictly speaking though it is a still a pennant event with a symmetrical shape
Some info about hoops shape
The resistance at the top of the pennant has been hit many times - bullish
The preceding trend of the pennant was down - bearish (some info about this part is below)
http://www.chartpatterns.com/images/hgbear~1.gif
"Bear" pennant in the beginning of a downtrend. After a dramatic two day plunge, the market has a short lived consolidation. The rout continues and the market collapses. You can see activity dry up in the pennant. The breakout though, was made on extremely heavy volume.
http://www.tothetick.com/bear-ascending-triangle
http://www.chartpatterns.com/flagandpennantcharts.htm
Thanks Hoop & Frostboy
Thanks Frostyboy..nice example..
Just an addition to this DCB pennant scenario....We are working with historic data to gain probabilties of a happening...When we observe an event within an event we have to be careful, as it is wrong to assume that an against the odds break upwards of the secondary all ready formed event (pennant) would indicate that the primary event still forming (DCB) has failed...
Most investor's perception of a DCB is a long drop small bounce (physically..dead cats don't bounce well) and then a lower steep drop...In reality but rarely a DCB can spring back to 100% (start of the Steep drop event) before declining again and still be called a DCB event.. This is where it's important to define whether the DOW has done a cyclic reversal into a bear market cycle or not...Picking when a cyclic Bull dies is near impossible at the time and it is only with hindsight that a cyclic reversal has occurred and even then it's still a guess..It's not until the first capitulation wave occurs followed by a failure to form a new record high do some investors start to realise....40 days ago ..well before this recent drop I made a guess that the DOW bull died back in March 2015. Now I'm still open minded about this cyclic reversal thing as we have seen the wave down but we have to wait for bear cycle confirmation ..that of a lower high before the next wave down.....Seeing a DCB event in play at the moment is an important piece of the Bear Cycle puzzle but it's not confirmational until it's form is completed or (if months pass) we see the DCB event formation fail but morphed into another confirmational longer term bearish pattern.. This is what makes charting so exciting to me as with each twist and turn a new scenario can develop .....perhaps a white swan event may occur and push the DOW back into forming new record highs... who knows for certain... eh?.......but playing the odds at the moment the money has to be on the DOW revisiting the 15650 area
Thanks for your thoughts hoop
If this pennant broke upwards I Would only be bullish to the S&P500 2030-2060 level as there is three quarters of a year of resistance. There is also money to be made trading within the trend lines of the pennant.
http://i.ytimg.com/vi/K13WIXJK9tc/0.jpg
Yep who knows for certain, the goal is making money
Posting Nasdaq in the Dow thread tsk tsk.
Attachment 7610
DOW closes below the short term rising support trend line of the pennant formation, a break down.