As of 11/22/2024
Indus: 44,297 +426.16 +1.0%
Trans: 17,367 +194.86 +1.1%
Utils: 1,067 -8.74 -0.8%
Nasdaq: 19,004 +31.23 +0.2%
S&P 500: 5,969 +20.63 +0.3%
|
YTD
+17.5%
+9.2%
+21.0%
+26.6%
+25.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,200 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/22/2024
Indus: 44,297 +426.16 +1.0%
Trans: 17,367 +194.86 +1.1%
Utils: 1,067 -8.74 -0.8%
Nasdaq: 19,004 +31.23 +0.2%
S&P 500: 5,969 +20.63 +0.3%
|
YTD
+17.5%
+9.2%
+21.0%
+26.6%
+25.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,200 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
Three peaks and domed house and its mirror, domed house and three peaks, are patterns discovered by George Lindsay certainly before its publication in 1971 in Encyclopedia of Stock
Market Techniques. I searched for this pattern extensively for inclusion in the first edition of my book
Encyclopedia of Chart Patterns
I think you will find that the more complicated the chart pattern, the less often they appear in a stock, or in this case -- the Dow Jones industrial average -- and the less often they work as expected. Three peaks and domed house with domed house and three peaks -- both chart patterns are very complicated as you will see.
It might be easier to treat the pattern as two separate ones, a triple top and rounded top or head-and-shoulders top, and trade them as individual patterns.
The following guidelines identified by Lindsay are keyed to the above figure.
| Point | Discussion |
| 3, 5, 7 | Look for three peaks rising from the base at point 1 and 2 in a sharp price uptrend to peak 3. |
| 3 | The peak usually looks somewhat flat on top. |
| 4 | Price retraces the rise from 2 farther than expected. |
| 4, 6, 8 | Price drops to the valleys between the peaks. |
| 5, 7 | The peaks appear similar in shape and top out near the same price as peak 3. Symmetry between the three peaks is usually obvious. |
| 3-7 | The three peaks take about 8 months to form, give or take. |
| 8, 9, 10 | A severe drop begins, taking price down to point 10 in two waves, 7 to 8 and 9 to 10. This forms what's called the 'separating decline' which separates the three peaks pattern from the remainder of the formation. |
| 10 | Always lower than either points 4 or 6 but often both. If that doesn't happen, then it's not a separating decline. |
| After you have a valid separating decline, look for a domed house pattern. | |
| 10-14 | Price forms a base leading to the dome. Price must rise from the low at 10 and then must form two more lows at 12 and 14. |
| 14, 15 | Price rises to the peak at 15 in a swift advance, forming the 'wall of the first story.' |
| 15-20 | This is the 'roof of the first story,' composed of 5 reversals beginning with the first one at 16 and ending at 20. The price movement has changed from upward in the first story wall (points 14 to 15) to a horizontal but choppy sideways move 15 to 20. |
| 20 | The rise resumes at point 20 forming the 'wall of the second story,' which takes price to 21. |
| 21-25 | Price moves in a choppy manner forming a dome or roof on the second story. |
| 14-23 | The move from points 14 to 23 takes 7 months, and 8 to 10 days. |
| 25-27 | After peaking at 25, price tumbles to 26, retraces to 27 before heading lower to 28, completing the pattern. Point 27 often tops out near the price level of point 15, forming the right edge of the first story roof. |
| 28 | Price bottoms near point 10. This decline may not be a straight-line affair, but it always happens. |
| 14-15 vs. 27-28 | The rise from 14 to 15 balances the decline from 27 to 28. |
| 20-21 vs. 25-26 | The rise from 20 to 21 balances the decline from 25 to 26. |
More
Lindsay gives several examples and I list them here.
The below chart shows his most recent example cited in his paper.
October 9, 1966 to January 8, 1969 (weekly scale shown).
Point 3 to point 23 in the Dow Industrials:
More
The below chart shows his most recent example cited in his paper.
Aug 3, 1959 to Dec 13, 1961 (weekly scale shown)
More
Lindsay then shows the mirror of the pattern, forming a domed house followed by three peaks. One example is from April 1938 to June 1940 with others from December 8, 1890 to April 5, 1893 (Dow Jones 20 stock average) and Sep 24, 1900 to Feb 16, 1903 (Dow Industrials) and Dec 15, 1905 to Jan 7, 1907.
The below chart shows his most recent example cited in his paper.
April 1938 to June 1940 (weekly scale shown)
-- Thomas Bulkowski
More
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