As of 11/29/2023   Indus: 35,430 +13.44 +0.0%     Trans: 14,817 +0.30 +0.0%     Utils: 862 -5.36 -0.6%     Nasdaq: 14,258 -23.27 -0.2%     S&P 500: 4,551 -4.31 -0.1%	YTD  +6.9%    +10.6%   -10.8%    +36.2%    +18.5%	Targets    Overview: 11/29/2023     34,500 or 36,400 by 12/15/2023   14,500 or 15,800 by 12/15/2023   900 or 825 by 12/15/2023   13,700 or 14,450 by 12/15/2023   4,450 or 4,650 by 12/15/2023
Chart Pattern Indicator: on 11/17/23

As of 11/29/2023   Indus: 35,430 +13.44 +0.0%     Trans: 14,817 +0.30 +0.0%     Utils: 862 -5.36 -0.6%     Nasdaq: 14,258 -23.27 -0.2%     S&P 500: 4,551 -4.31 -0.1%	YTD  +6.9%    +10.6%   -10.8%    +36.2%    +18.5%
Targets    Overview: 11/29/2023     34,500 or 36,400 by 12/15/2023   14,500 or 15,800 by 12/15/2023   900 or 825 by 12/15/2023   13,700 or 14,450 by 12/15/2023   4,450 or 4,650 by 12/15/2023
Chart Pattern Indicator: on 11/17/23

Bulkowski on the Descending Triangle Elliott Wave Pattern

This page describes the descending 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 descending triangle looks like in a bull market. The descending 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. Expect volume and volatility to recede as the pattern moves toward the breakout, but this is not a requirement.

In a descending triangle, the bottom of the triangle finds support at a horizontal trendline (the horizontal red line), and the top of the triangle slopes downward following another red trendline.

A descending triangle in a bear market is not an inverted picture of a bull market triangle. Rather, the chart to the right shows a descending triangle with the waves inverted while still obeying the flat bottom and down sloping top trendlines. The A-B-C-D-E waves subdivide into threes, forming a 3-3-3-3-3 configuration.

On rare occasions, a descending triangle can nest inside a descending triangle. You see this when the wave count exceeds the A-B-C-D-E format, forming a nine wave pattern. Also, Frost and Prechter say that when price reaches the apex of the triangle, expect the market to turn.

Descending Triangle Rules

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

• The waves bottom near the same price, following a horizontal trendline.
• The tops of the waves generally follow a down-sloping trendline.
• Five waves compose the descending triangle (A-B-C-D-E), unless extended.
• Each of the A-B-C-D-E waves are composed of three subwaves, so it has a 3-3-3-3-3 configuration.
• Volume and volatility tend to recede over the life of the pattern, but this is not a requirement.

-- Thomas Bulkowski

See Also

• This article has performance statistics for descending triangles.
• Here is the main resource for Elliott wave information.
• Support and resistance. Learn the various types.
• Market direction. 7 tips to determining.
• Trading cycles help time your entries and exits.
• Trend change detection using a triangle apex.

 

Support this site! Clicking any of the books (below) takes you to Amazon.com If you buy ANYTHING while there, they pay for the referral.
Legal notice for paid links: "As an Amazon Associate I earn from qualifying purchases."

My novels:

My stock market books:

Copyright © 2005-2023 by Thomas N. Bulkowski. All rights reserved.

Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

Some pattern names are registered trademarks of their respective owners.

Home Advertise Contact Donate Privacy/Disclaimer ☰

I didn't climb to the top of the food chain to become a vegetarian!