The Pennant Race To The Bottom
October 22nd 2008 18:42
While the pennant races are decided and the World Series, between the Phillies and Tampa Bay, are set to begin, there's another "Pennant " race to the bottom that may be set to begin.
I was clued to this pennant race by an email from Colin Twiggs of Incredible Charts. Twiggs sees pennant formations in Gold, the USD/JPY, and the AUD/USD
But first what is a pennant? From StockCharts.com comes this explanation:
The important thing to keep in mind is that pennants are continuation patterns.
On Monday, Twiggs saw a pennant in gold showing a possible test of $740. That happened today with gold trading down to $725.
His focus on pennants got me looking at the DJIA chart with new eyes (see chart). If you connect the two most recent highs (9794.37 and 9284.55) and the two most recent lows 7882.51 and 8197.67), you have a pennant in the DJIA and the DJTA also shows a similar formation. A braking of support in the DJIA pennant gives a downside target of 6194!
I was clued to this pennant race by an email from Colin Twiggs of Incredible Charts. Twiggs sees pennant formations in Gold, the USD/JPY, and the AUD/USD
But first what is a pennant? From StockCharts.com comes this explanation:
Pennant: A pennant is a small symmetrical triangle that begins wide and converges as the pattern matures (like a cone).
On Monday, Twiggs saw a pennant in gold showing a possible test of $740. That happened today with gold trading down to $725.
His focus on pennants got me looking at the DJIA chart with new eyes (see chart). If you connect the two most recent highs (9794.37 and 9284.55) and the two most recent lows 7882.51 and 8197.67), you have a pennant in the DJIA and the DJTA also shows a similar formation. A braking of support in the DJIA pennant gives a downside target of 6194!
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