Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30 years of stock market experience and widely regarded as a leading expert on chart patterns. His four books, including the best selling Encyclopedia of Chart Patterns, have been translated into seven languages. He may be reached at

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Bulkowski's Reverse Symmetrical Triangle

Market

Industrials (^DJI):

Transports (^DJT):

Utilities (^DJU):

Nasdaq (^IXIC):

S&P 500 (^GSPC):

As of 05/16/2012

12,599 -33.45 -0.3%

5,101 -6.43 -0.1%

467 -0.66 -0.1%

2,874 -19.72 -0.7%

1,325 -5.86 -0.4%

YTD

3.1%

1.6%

0.6%

10.3%

5.3%

Tom's Targets Overview: 05/14/2012

13,300 or 12,500 by 06/01/2012

5,400 or 5,000 by 06/01/2012

480 or 460 by 06/01/2012

3,000 or 2,850 by 06/01/2012

1,420 or 1,310 by 06/01/2012

Test Portfolios and CPI

Indus. strength: 11.1%

Mutt Losers: -4.2%

Mutt Winners: 2.3%

Wilder RSI: -2.5%

CPI:

on 05/02/2012

This page describes the reverse symmetrical triangle pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

The figure to the right shows what a reverse symmetrical triangle looks like in a bull market. The reverse symmetrical triangle is a region of horizontal price movement, a consolidation of a prior move, and it is composed of "threes." That means each of the A-B-C-D-E waves have three subwaves. I labeled the B subwaves with red numbers, 1, 2, and 3, as an example.

In a reverse symmetrical triangle, the shape of the pattern follows two diverging trendlines, shown here as red lines. A reverse symmetrical triangle is more commonly known as a broadening top or broadening bottom. According to Frost and Prechter, "There are no variations on the rarer expanding triangle," which is another name for the reverse symmetrical triangle. I have not looked for the 3-3-3-3-3 combination, but I do know that other broadening patterns exist. Check out: right-angled broadening top, ascending, right-angled broadening top, descending, broadening wedge, ascending, and broadening wedge, descending.

The reverse symmetrical triangle in a bear market. A reverse symmetrical triangle in a bear market is an inverted picture of a bull market triangle. The price action swings from trendline to trendline, and diverges. The A-B-C-D-E waves subdivide into threes, forming a 3-3-3-3-3 configuration.

Reverse Symmetrical Triangle Rules

The reverse symmetrical triangle has rules that govern its shape. They are listed here.

The waves bottom and top out following two diverging trendlines.
Five waves compose the reverse symmetrical triangle (A-B-C-D-E).
Each of the A-B-C-D-E waves are composed of three subwaves, so it has a 3-3-3-3-3 configuration.

-- Thomas Bulkowski

Bulkowski's Reverse Symmetrical Triangle

Reverse Symmetrical Triangle Rules

See Also