As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 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 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
Initial release: 8/8/2018. Statistics updated on 8/28/2020.
This article describes my analysis of the bearish crab pattern as described by publicly available information and common sense rules to determine valid patterns. Additional rules may or may not improve performance. I tested the pattern using only the below identification guidelines.
The bearish crab loosely resembles a double bottom chart pattern except that the turns are located using Fibonacci ratios.
The above numbers are based on more than 1,350 perfect trades in bull markets. See the glossary for definitions.
For the associated ratios, consult the figure to the right of the table.
| Characteristic | Discussion |  Bearish Crab Ratios |
| Peaks/Valleys | The peaks and valleys in the pattern need not be consecutive. This is not a guideline, but an observation. | |
| XAB | Price climbs to peak at X, the first point in the pattern. It drops from there to valley A and rises to peak B. The BA/XA retrace is one of the three ratios shown. | |
| ABC | Turn ABC shows a BC/BA retrace of one of six Fibonacci ratios. | |
| BCD | Extension DC/BC is one of three Fibonacci ratios. | |
| DAX | Retrace DA/XA is 161.8%. |
Because of the many ratios used, especially the 161.8% DA/XA retrace, the pattern is somewhat rare. I found 1,357 in a bull market.
You'll need a computer with software to find the pattern.
Find five peaks/valleys (turns) where the ratio of one leg to another is one of the Fibonacci numbers listed in the figure. However, I used a 3 percentage point window on the last ratio (161.8% becomes 158.8% to 164.8%) to keep the sample count high.
I don't offer much trading help because I'm new to this pattern.
Price may dip after point D, in fact it's likely that it does so (87% do), but the drop usually doesn't amount to much (14% average which isn't bad for a swing trade). Twenty percent of chart patterns see price decline less than 5% below D.
You may have better luck with the pattern if overhead resistance matches or is near the XD peaks. Think of this as a ceiling which takes some pushing to break through.
I did not test or examine the pattern for this behavior.
For targeting, price drops to X 59% of the time, to A 18% of the time, to B 37% of the time, and it reaches the price of C 23% of the time.
The figure above shows an example of a bearish crab pattern that isn't very bearish. The pattern begins at X and ends at D.
You might complain that X isn't a turning point, but it's a minor high, the highest peak in five price bars, so it's acceptable.
Notice that the stock dips after D, but then recovers and breaks out at E (the first close above the green line, setup by the high at D).
Here are the high/low prices of the various turns
Here are the ratios.
BA/XA = (121.57-113.57)/(127.80-113.57) or 56% (using the high at B). Using the low at B gives: (119.82-113.57)/(127.80-113.57) or 44%. This means the high-low range of B encompasses the 50% Fibonacci ratio.
BC/BA = (121.57-115.74)/(121.57-113.57) or 73% (using the low at C). Using the high at C gives (121.57-118.49)/(121.57-113.57) or 38.5%, which is almost exactly the 38.2% ratio.
DC/BC = (136.24-115.74)/(121.57-115.74) or 352%. Using the low at D gives (133.01-115.74)/(121.57-115.74) or 296%. The 352% to 296% range encompasses the target 314% value, so it qualifies.
DA/XA = (136.24-113.57)/(127.80-113.57) or 159% which is within three percentage points of 161.8%, so it's allowed.
-- Thomas Bulkowski
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