As of 10/03/2024
Indus: 42,012 -184.93 -0.4%
Trans: 15,745 -226.81 -1.4%
Utils: 1,058 -6.74 -0.6%
Nasdaq: 17,918 -6.64 0.0%
S&P 500: 5,700 -9.60 -0.2%
|
YTD
+11.5%
-1.0%
+20.0%
+19.4%
+19.5%
|
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
|
As of 10/03/2024
Indus: 42,012 -184.93 -0.4%
Trans: 15,745 -226.81 -1.4%
Utils: 1,058 -6.74 -0.6%
Nasdaq: 17,918 -6.64 0.0%
S&P 500: 5,700 -9.60 -0.2%
|
YTD
+11.5%
-1.0%
+20.0%
+19.4%
+19.5%
| |
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
| ||
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, pictured on the left, has a complete discussion of measured moves.
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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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