As of 09/17/2021
Indus: 34,585 -166.44 -0.5%
Trans: 14,268 -187.76 -1.3%
Utils: 904 -12.93 -1.4%
Nasdaq: 15,044 -137.95 -0.9%
S&P 500: 4,433 -40.76 -0.9%
|
YTD
+13.0%
+14.1%
+4.5%
+16.7%
+18.0%
|
 35,600 or 33,800 by 10/01/202115,400 or 14,000 by 10/01/2021930 or 890 by 10/01/202115,600 or 14,700 by 10/01/20214,650 or 4,350 by 10/01/2021 |
As of 09/17/2021
Indus: 34,585 -166.44 -0.5%
Trans: 14,268 -187.76 -1.3%
Utils: 904 -12.93 -1.4%
Nasdaq: 15,044 -137.95 -0.9%
S&P 500: 4,433 -40.76 -0.9%
|
YTD
+13.0%
+14.1%
+4.5%
+16.7%
+18.0%
| |
|
35,600 or 33,800 by 10/01/202115,400 or 14,000 by 10/01/2021930 or 890 by 10/01/202115,600 or 14,700 by 10/01/20214,650 or 4,350 by 10/01/2021 | ||
The simple ABC correction is a measured move down chart pattern nested inside a
measured move up. If measured moves are unfamiliar, then click the associated link for more information. My book,
Encyclopedia of Chart Patterns
If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.
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|
A Simple ABC Correction
|
| Characteristic | Discussion |
| Nested | The simple ABC correction is a measured move down chart pattern nested inside a measured move up. |
| Chart | See the above chart. Point D must be below point C, meaning that the measured move down (MMD: EABC) must not correct too far. MMDs that correct too far fail more often. |
| Corrective phase | The corrective phase of the large MMU is an MMD, like the ABC pattern shown in the above chart. Only one MMD should be present with two straight-line runs, EA and BC. Discard patterns with pronounced turning points within those two down legs. |
| Points | Within the MMD, points A, B, and C are below E. Be especially careful that B not be above E. Point C starts a major price up swing. |
Reference the figure on the right.
| Trading Tactic | Explanation |  |
| Trendline | Draw a trendline from E to B and extend it downward. When price closes above the trendline, buy. | |
| Swingers | For aggressive traders, draw a trendline down from B along the tops and buy when price closes above it. A close above the intraday high at A (blue trendline) also works as a buy signal. | |
| Buy | For conservative investors, a close above B or even E is the buy signal. | |
| Reverse | Be prepared for price to reverse at the price of E -- 36% do and prices drop, confirming a double top. |
The above figure shows an example of a simple ABC correction chart pattern. Point A begins the chart pattern, B is the middle turning point, and C completes the pattern. Another simple ABC correction occurs at points 1, 2 and 3.
-- Thomas Bulkowski
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