Home About Blog Books Contact Donate FAQ Glossary Privacy/Disclaimer Site Map Visual Index What’s New Subscribe to RSS feeds Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral. My books... Kindle Kindle

# Bulkowski's Predicting Trend Changes

 BustedPatterns Candles ChartPatterns EventPatterns Small Patterns
 As of 04/23/2019   Industrials: 26,656 +145.34 +0.5%     Transports: 11,003 +26.03 +0.2%     Utilities: 773 +1.99 +0.3%     Nasdaq: 8,121 +105.55 +1.3%     S&P 500: 2,934 +25.71 +0.9% YTD  +14.3%    +20.0%    +8.4%    +22.4%    +17.0% Overview: 04/12/2019     26,900 or 25,500 by 05/01/2019   11,200 or 10,500 by 05/01/2019   825 or 755 by 05/01/2019   8,250 or 7,850 by 05/15/2019   2,975 or 2,800 by 05/01/2019
 As of 04/23/2019   Industrials: 26,656 +145.34 +0.5%     Transports: 11,003 +26.03 +0.2%     Utilities: 773 +1.99 +0.3%     Nasdaq: 8,121 +105.55 +1.3%     S&P 500: 2,934 +25.71 +0.9% YTD  +14.3%    +20.0%    +8.4%    +22.4%    +17.0% Overview: 04/12/2019     26,900 or 25,500 by 05/01/2019   11,200 or 10,500 by 05/01/2019   825 or 755 by 05/01/2019   8,250 or 7,850 by 05/15/2019   2,975 or 2,800 by 05/01/2019

## Predicting Trend Changes: Summary

This article discusses how to use the apex of a triangle to predict a short-term change in the price trend.

\$ \$ \$

My book, Visual Guide to Chart Patterns, shown on the left, has a complete chapter on apex turning points, starting on page 289.

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

\$ \$ \$

## Predicting Trend Changes: The Triangle Apex

In the book, Elliott Wave Principle , authors Frost and Prechter write that the market often turns when price reaches the apex of a triangle.

I tested this using three methods and found it to be true in all cases. Price reaches a minor high or minor low 75% of the time within a few days of the triangle apex. Price turns from down to up or up to down 60% of the time.

As an example, the chart shows a symmetrical triangle on the daily scale. If you draw the two trendlines carefully along the top and bottom of the pattern, they converge at the triangle apex sometime into the future. Expect price to turn near the date where the trendlines join.

In this example, the triangle apex is at A and the market turns at B. Clearly the turn is not a lasting one, but price drops by 8%. It is not a trend change as much as it is a pause in the upward price trend.

 More

## Predicting Trend Changes: Ascending Triangles

Not only does the triangle apex signal a reversal in symmetrical triangles, but other types of triangle patterns as well.

Outlined by two red trendlines is an ascending triangle shown in Energy Conversion Devices (ENER) on the daily scale.

The triangle apex nears the date at A, right at the formation of a minor high. Price drops from a high of \$21.27 to a low of \$11.83 (not shown), a plunge of 44% in just over 2 months.

## Predicting Trend Changes: Descending Triangles

Pictured is a chart of Boeing (BA), on the daily scale. Outlined in red trendlines is a descending triangle.

Price breaks out downward from the triangle and crashes like an airplane out of gas.

In March, when the general market began a recovery, so too did Boeing.

Price takes off, rising to A in a stair-step move higher. At A, price reaches a high of \$38.68 before dropping to B, \$34.21, a decline of almost 12%.

-- Thomas Bulkowski

 More