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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. He may be reached at

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Picture of the head's law.
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Bulkowski's (not really) Swing Rule

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Busted
Patterns
Candles Chart
Patterns
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Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/27/2017
20,551 -45.74 -0.2%
8,935 6.33 0.1%
702 -3.50 -0.5%
5,840 11.63 0.2%
2,342 -2.39 -0.1%
YTD
4.0%
-1.2%
6.5%
8.5%
4.6%
Tom's Targets    Overview: 03/14/2017
20,100 or 21,250 by 04/15/2017
8,500 or 9,500 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,275 or 2,425 by 04/15/2017
Mutt Losers: None YTD
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Visual Guide to Chart PatternsVisual Guide to Chart Patterns book., pictured on the left, has an entire chapter dedicated to the swing rule, starting on page 299.

If you click on this link and then buy the book (or anything) at Amazon.com, the referral will help support this site. Thanks. -- Tom Bulkowski

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To have this page titled, "Bulkowski's Swing Rule" sounds disingenuous since it's not my swing rule, but Stan Weinstein's.

Picture of Ferro (FOE) on the daily scale.

Back in mid March, I posted a blog entry about Weinstein's swing rule. I have new results about how often it works.

Refer to the adjacent figure. Briefly, the drop from A to B is the same as the rise from D to C, according to Weinstein. Point D is the same price as A.

Swing Rule Testing Methodology and Results: Up Swings

How often does this work?

I cataloged the stair step climbs from the start of the 2000 bear market, March 24, 2000, until May 3, 2011 in over 925 stocks, finding from 24,587 samples (for down swings) to 32,035 up swings. The up swing variety is shown in the figure. The down swing would be a stair-step decline.

I measured how close peak C came to the predicted target. For up swings, the stock was within 5% (plus or minus) of the target 83% of the time. Small swings (a decline less than 10% from A to B) are more accurate than larger declines. Small swings are within 5% of the target 86% of the time.

Swing Rule Testing Results: Down Swings

For downward stair-step patterns, small swings also excel at creating a good price target. It works 88% of the time in a bull market.

Thus, if you want a reliable way to measure how far price is going to rise or drop, calculate the decline from A to B and add it to A for an upward target. For downtrends, you'd do a similar calculation for the projected decline.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. One-at a time dispensers, don't.