Page 35 – HowTheMarketWorks

To get genuine materials on an international investing level take a look at Vardy’s Bull Market Alert. It is a fast-paced trading aid that helps investors invest in stock picks that are from the world’s popular markets. There are a lot of stock picks that are unfamiliar to the typical investor. With help from Vardy’s investment background and day-to-day contact with top global investors in London’s exclusive hedge fund community, you’ll feel confident that you are ready to build on your short-term profits and long-term wealth.

Nicholas Vardy is known as an important part of the Eagle Financial Publications group of financial advisors. Many refer to him as The Global Guru because of his expertise in international investing. He utilizes his unique experience to provide the investor with an insider’s look at profitable investment opportunities on global markets. Here are several publications he is editor of. The Global Guru, The Alpha Investor Letter, Bull Market Alert, Dividend Pro, and is also the founder of the London Junto which is a monthly gathering of London’s hedge fund community. There these leading investment professionals gather together to represent more than $50 billion of hedge fund assets. They’ll meet and debate the investment affairs of the day.

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Each issue you read will help you learn which global investments and trends high level investors go towards and their reasoning behind them. By reading The Global Guru you’ll see how world events affect your finances. You will become a knowledgeable investor and learn valuable lessons along the way.

Nicholas Vardy is known as an important part of the Eagle Financial Publications group of financial advisors. Many refer to him as The Global Guru because of his expertise in international investing. He utilizes his unique experience to provide the investor with an insider’s look at profitable investment opportunities on global markets. Here are several publications he is editor of. The Global Guru, The Alpha Investor Letter, Bull Market Alert, Dividend Pro, and is also the founder of the London Junto which is a monthly gathering of London’s hedge fund community. There these leading investment professionals gather together to represent more than $50 billion of hedge fund assets. They’ll meet and debate the investment affairs of the day.

Dividend PRO addresses how dividends play not only to increase your income flow, but also to build your capital gains. At the center is the Triple-Profit Strategy for Income Success which consists of:

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b) selling covered calls contrary to those income generating stocks which boost dividends as much as 5-7.5%.

c) Applying the identical options technique utilized in the Bull Market Alert to gather consistent double and triple-digit winners, this technique has produced 32 winners averaging 83% in the first half of 2012.

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It is High Monthly Income’s goal to help you grow your capital income stream. High Monthly Income is simply here to assist investors in generating acceptable income to suit your needs and desires for the rest of your life as well as protect your hard-attained assets. Their motto is simply Safety First.

You want to be careful not to risk your assets while pursuing high-growth or high-yield investments. Protection of your capital should always be your main objective. Regrettably to many of income investors risk their capital and don’t seem to really realize it. Many income investments purchased based on the safe and steady investments like when the markets were strong and the economy was growing, or when the real-estate prices were rising, and inflation was negligible. But things have now changed, although far too many income portfolios have not made adjustments.

High Monthly Income is extremely helpful in giving income investors important periodically assessments to your holdings. This will be helpful in keeping your investments strong during times of change.

Doug Fabian editor of Successful Investing and High Monthly Income also host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” He took over the reins from his Father in 1992. Mr. Fabian has constantly upheld the prominence of the newsletter as the #1 risk-adjusted market timer noted by Hulbert’s Investment Digest.

He became a member of the SmartMoney 30 which lists the most influential individuals in the mutual fund industry. SmartMoney magazine writes how Doug is a well-known trend follower among the $56 billion list of financial advisors.

Mr. Fabian also wrote Maverick Investing; he also appears regularly at seminars worldwide and is noted on many of the largest newspapers like The Wall Street Journal, The Los Angeles Times and The New York Times. You’ll also hear him on national television like CNBC, Fox News and Bloomberg Forum. Doug has become known for his expert knowledge and timely use of innovative tools like exchange-traded funds, bear funds and enhanced index funds to profit in any market climate.

The ascending triangle is a bullish continuation pattern. This pattern is made by two converging lines. The first line is an upward slant which is the support and the other is a horizontal resistance line. To validate the ascending triangle, there has to be an oscillation between the two lines. Each line has to be touched at least twice for validation.

Here is an ascending triangle chart:

The target price of the ascending triangle is decided by its height from the base of the triangle that is carried over the break point. A similar technique is to draw a parallel to the support line of the ascending triangle from the first contact point with the resistance.

Several statistics about the ascending triangle are:

– In 62% of cases, there is a bullish breakout.
– In 75% of cases, the target price will be reached.
– In 60% of cases, a pullback occurs on the resistance.
– In 25% of cases, there can be false breakouts.

The exit often occurs at 2/3 of the pattern; this is the output level that offers the best performance.

The target price of the pattern is normally reached prior to the end of the triangle.

Any false breaks give no indication on the true side of the exit.

Try to avoid taking a position if the breakout occurs before the 2/3 of the pattern.

Pullbacks are harmful for the performance of the pattern.

The cup and Saucer has a continuous pattern. This pattern is formed by two rounded bottoms, the first is deeper and wider than the second. The height of the cup and the handle will be aligned along a straight horizontal resistance. This is the neckline of the pattern.

A few rules must be noted for the pattern to be valid.

The Cup and Saucer has to be preceded by a significant upward movement. The lowest at the bottom of the cup has to be less than 50% of the upward movement preceding the pattern. The lowest at the bottom of the handle must be less than 50% of the height of the cup.

The shape of the two bottoms of a rounding bottom reflect the gradual breathlessness of sellers. Buyers take advantage once the neckline breaks (psychological threshold), the purchasing power will become very strong.

The target pattern is calculated by plotting the height of the cup at the break point. But it is more advisable to defer only half the height of the cup according to the studies of T. Bulkowki.

Here is a graphic representation of a cup with handle:

Statistics about the cup with handle are:- In 79% of cases, the exit is upward.
– In 73% of cases, the target advised for this pattern is reached (half the height of the pattern).
– In 74% of cases, a pullback occurs on the neckline.

OJ Neil, the inventor of this pattern mentions that the objective to increase is very important and you must let the trade that’s going on to allow all the movement. This pattern is a major continuation pattern. The long-term upside potential is quite important.If the cup pattern has a right side below the right side, giving an ascending neckline, this performance pattern is again important.It is advisable to wait for the pullback to take a stand. Pullbacks have a negative impact on performance.

Doug Fabian has a free weekly email newsletter, be sure to sign up and learn how to build long-lasting wealth. He is also the editor of two paid newsletters which thousands of people have profited from it for years. They are Successful Investing, High Monthly Income as well as a weekly trading service ETF Trader. You can also follow him on his radio show, Doug Fabian’s Wealth Strategies, which is syndicated in several cities.

In Making Money Alert newsletter, Doug contributes his no-nonsense insights and outlook on the international market and how that affects individual investors, which includes places to find the best profit opportunities using ETFs.

Making Money Alert newsletter is filled with helpful advice on how to utilize ETFs, 401(k) planning, the real estate market, life insurance, taxes, retirement planning, the Feds outlook and tons more topics which involve your life and finances.

The rounding top pattern is a reverse U-shape, also called a “reverse saucer. ” The top is rounded with a flat top. But as you’ll see in many cases there are several bullish peaks and they will not put in question the validity of the pattern.

The neckline of the pattern is constructed by the lowest point before the formation of the reverse U. A rounding top can be a bullish continuation pattern but also a downward continuation pattern.

A graphical representation of a rounding top is indicated below:

Differing from the rounding bottom, the target price will be calculated using the classic balance rule. It’s calculated by measuring the depth of the reverse U and then reporting it on the neckline.The rounding top has been discussed as a reversal pattern. But the work of T. Bulkowski indicates that in many cases the rounding top is a continuation pattern. Take a look at the graphical representation of a reversal rounding top.

Some of the statistics about the rounding top are noted:- In 81% of cases, there will be a bullish continuation pattern.
– In 61% of cases, the exit is upward.
– In 70% of cases, the target advised for this pattern will be reached.
– In 48% of cases, a pullback occurs on the neckline.
– In 90% of cases, there is a search of the bullish movement after the breakout of the neckline.

The price frequently makes a break when the price gets back on the neckline.The more the top is flat, the more movement there is at the breakout of the neckline.

Provided that there is a pullback on the neckline after the breakout, the downward movement will be less powerful.

If a significant downward spike occurs after the formation of the top, it is plausible to draw an upward line to connect the low point prior to the formation of the rounding top and the lowest of the bearish peak.

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The Skousen’s Winner’s Circle is an exclusive limited-membership group of highly motivated investors pursuing the highest level of investment success. Since you’re a member you’ll have access to information subscriptions to Hedge Fund Trader, Hot Commodities Alert and High-Income Alert. You’ll also get Mr. Skousen’s investment newsletter, Forecasts & Strategies. You also have access to the up-to-the-minute information, in-depth analysis and expert guidance which you have access to. You’ll be glad that you joined the ranks of America’s first-class smartest, most successful investors.

Dr. Mark Skousen will give you a view of today’s economy and markets you won’t see anywhere else. With the valuable ideas he brings, it will help you safely grow your portfolio even when the market is down.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert.

High Income Alert portfolio highlights somewhere between 4 to 8 investments at a time, with each position holding an average of more than 2 months. With each recommendation you will receive higher income and receive considerable capital-gains potential. You’ll feel confident in your investments and will know about best return and highest-yielding investments offered worldwide.

Dr. Mark Skousen gives you great insight on the economy as well as markets you can’t find elsewhere. This unique awareness will take you to to many ideas regarding safety in growing your portfolio, even when the markets are in a downturn.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert.

Dr. Skousen uses tactful trading to expose profitable commodities investments, regardless of the movement on the market. The Hot Commodities Alert portfolio normally suggests between 4 to 8 investments at a time, with each position holding an average of more than 2 months.

Dr. Mark Skousen gives you great insight on the economy as well as markets you can’t find elsewhere. This unique awareness will take you to to many ideas regarding safety in growing your portfolio, even when the markets are in a downturn.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert.

You can create your own custom-made, private hedge fund by using Hedge Fund Trader. You’ll produce excellent short-term profits by going long or short or by buying calls and puts with this short-term trading service. The Hedge Fund Trader portfolio normally suggests between 4 to 8 investments at a time, with each position holding an average of 57 days.

Dr. Mark Skousen gives you great insight on the economy as well as markets you can’t find elsewhere. This unique awareness will take you to to many ideas regarding safety in growing your portfolio, even when the markets are in a downturn.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert. He also served as editor of the investment series, “Secrets of the Great Investors,” which was narrated by Louis Rukeyser.

fs-icon Skousen’s Forecasts & Strategies utilize a high-gain, low-risk approach for your investment goals, with a 30-year track record of high success.

Dr. Mark Skousen gives you great insight on the economy as well as markets you can’t find elsewhere. This unique awareness will take you to to many ideas regarding safety in growing your portfolio, even when the markets are in a downturn.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert. He also served as editor of the investment series, “Secrets of the Great Investors,” which was narrated by Louis Rukeyser.

Skousen Investor CAFÉ is an electronic newsletter distributed weekly and written by Dr. Mark Skousen. Mr. Skousen offers valuable comments on today’s markets, the economy, politics and other pertinent topics of interest and how they will affect individual investors.

Dr. Mark Skousen gives you great insight on the economy as well as markets you can’t find elsewhere. This unique awareness will take you to to many ideas regarding safety in growing your portfolio, even when the markets are in a downturn.

Mark Skousen, Ph.D., is an investment expert, university professor and professional economist, who has 25 books to his credit. He has his Ph.D. in monetary economics from George Washington University in 1977 and now holds the Benjamin Franklin Chair of Management at Grantham University. He’s taught finance and economics at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, which is a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader, Skousen High-Income Alert, and Hot Commodities Alert. He also served as editor of the investment series, “Secrets of the Great Investors,” which was narrated by Louis Rukeyser.

The U-shaped bottom is a rounding bottom, also called a “saucer. ” The dip is rounded with a flat bottom. But we’ll see in many cases there are several bearish peaks, but they do not question the validity of that pattern.

The neckline of the pattern is assembled by the highest point before the formation of the U.

Here is a graphical illustration of a rounding bottom:

There is no theoretical target price. Some authors will measure the depth of the U and then report it on the neckline like a double bottom. It is not a good suggestion to apply this method, actually the target is then reached in only 36% of the cases. The theoretical objective that is suggested, is to measure the depth of the U then divide by 2, to postpone this height on the neckline.

The rounding bottom reversal pattern has been lengthily considered. Consider the work that T. Bulkowski demonstrates that in a lot of cases the rounding bottom is a continuation pattern. When the neckline is broken, the results are quite good.

Here are some statistics about the rounding bottom:

– In 62% of cases, there will be a bullish reversal.
– In 86% of cases, the exit is upward.
– In 57% of cases, the target advised for this pattern will be reached .
– In 40% of cases, a pullback will occur on the neckline.
– In 95% of cases, there is a pursuit of the bullish movement after the breakout of the neckline.

The price will often make a break when the price gets back on the neckline.

The more the dip becomes flat, the more the movement at the breakout of the neckline will be strong.

If there is a pullback on the neckline after the breakout, the upward movement will be then less powerful.

If a significant upward spike occurs after the formation of the bottom, it is possible to draw a downward line to connect the high point prior to the formation of the rounding bottom and the highest of the bullish peak.

The pennant resembles the symmetrical triangle, but it’s characteristics are not the same. The pennants is shaped like a wedge of consolidation. Its normally appears after a sudden upward or downward movement. The life is short according to the time frame used.

The pennant’s pattern is a continuation pattern. The exit side of this pattern depends on the preceded movement. The formation may intervene in a bullish or bearish trend. This break will occur halfway of the movement.

The target calculation is compared to the prior trend. You should calculate the height of the entire movement, up or down before the formation of the pennant and then extend the high on the last low/high point of the pattern.

A graphical representation of a pennant follows:

Several statistics about the pennant are:

– In 75% of cases, the exit is made in the side of the previous trend.
– In 90% of cases, this will be a continuation pattern.
– In 55% of cases, the target of the pattern has been reached.
– In 16% of cases, a pullback occurs.
– 84% of cases, a pennant occurs on the lower third annual range when the trend is bearish and the highest third when the trend is bullish.

The more the movement prior to the formation of the pattern is powerful, the more the movement following the exit will be strong.

It is with a narrowed base is much more powerful than a pennant with a wide base.

It is more powerful if there are no false breakouts.

Pullbacks are harmful for the performance of the pennant pattern.

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Introducing our Investment Experts:

Our investment advisers feature Dr. Mark Skousen, a free-market economist who has been guiding investors for more than 30 years; Doug Fabian, a seasoned investment adviser who heads a wealth management company; Nicholas Vardy, an American with degrees from Stanford and Harvard universities who is a London-based money manager; and Chris Versace, a former equity research analyst who now focuses on tracking trends to help investors profit from the next growth opportunities. To learn more about them click on the Investment Experts tab and to learn more about their services, click on the Premium Content tab.

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Investing with Mark Skousen

Mark Skousen, Ph.D., is a professional economist, investment expert and university professor who has authored more than 25 books. He earned his Ph.D. in monetary economics at George Washington University in 1977 and currently holds the Benjamin Franklin Chair of Management at Grantham University. He has taught economics and finance at Columbia Business School, Columbia University, Barnard College, Mercy College and Rollins College. In honor of his work in economics, finance and management, Grantham University renamed its business school, “The Mark Skousen School of Business.” Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular and award-winning investment newsletter. He also is editor of three trading services, Skousen Hedge Fund Trader;Skousen High-Income Alert and Hot Commodities Alert. In 1995, he served as editor of the investment series, “Secrets of the Great Investors,” with Louis Rukeyser as narrator.

Skousen CAFÉ

Skousen Investor CAFÉ is a weekly electronic newsletter written by Dr. Mark Skousen. Mark offers commentary on the markets, the economy, politics and other topics of interest and what they mean to individual investors.

Skousen’s Forecasts & Strategies

Forecasts & Strategies uses a high-gain, low-risk way to reach your investment goals, with over a 30-year track record of success!

Dr. Mark Skousen gives you a perspective on the economy and markets you won’t find anywhere else. This insight leads to many unique ideas about how to safely grow your portfolio handsomely, even during down markets.

Skousen’s Hedge Fund Trader

Create your very own custom-made, private hedge fund. You will generate superior short-term profits by going long or short, and buying calls and puts with this short-term trading service. The Hedge Fund Trader portfolio typically features between 4-8 investments at a time, holding each position for an average of 57 days.

Skousen’s Hot Commodities Alert

Dr. Skousen employs opportunistic trading to uncover the most profitable commodities investments — regardless of overall market movement. The Hot Commodities portfolio typically recommends between 4-8 investments at a time, holding each position for a period of 3–8 weeks.

Skousen’s High-Income Alert

Every recommendation will pay superior income and have great capital-gains potential. You’ll be in the know about the best-returning — and highest-yielding — investments the world has to offer. The High Income Alert portfolio also features between 4-8 investments at a time, holding each position for an average of a little more than 2 months.

Skousen’s Winner’s Circle

The Winner’s Circle is a limited-membership coalition of highly motivated investors seeking the highest level of investment success. As a member you get every shred of information Mark Skousen has to offer… including subscriptions to Hedge Fund Trader, Hot Commodities Alert and High-Income Alert. Plus, you’ll receive his investment newsletter, Forecasts & Strategies. You’ll be entitled to an array of up-to-the-minute information, in-depth analysis and expert guidance available only to you and your fellow members. Join the elite ranks of America’s smartest, most successful investors.

Investing with Doug Fabian

Doug Fabian is the editor of Successful Investing and High Monthly Income and hosts the syndicated radio show, “Doug Fabian’s Wealth Strategies.”

Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest.

Fabian’s Making Money Alert

Learn how to build long-lasting wealth with Doug Fabian’s free weekly email newsletter

Making Money Alert by Doug Fabian is a free newsletter sent via email every Wednesday.

Doug is the editor of two paid newsletters that tens of thousands of people have been profiting from for years — Successful Investing, High Monthly Income and his weekly trading service ETF Trader. He also has a strong following for his radio show, Doug Fabian’s Wealth Strategies, syndicated in several cities.

In Making Money Alert, Doug shares with you his no-nonsense insights and outlook on the world markets — and what they mean to individual investors, including where to find the best profit opportunities using ETFs.

In addition to Doug’s market commentary, Making Money Alert is full of useful advice on how to use ETFs, your 401(k) plan, the real estate market, the Fed’s policy, life insurance, taxes, retirement planning and many more topics involving your life and your finances.

Fabian’s High Monthly Income

If your goal is capital growth plus a steady income stream, here’s why High Monthly Income is for you…

Our goal at High Monthly Income is simple: to help you generate enough income to meet your needs and wants for the rest of your life while protecting your hard-earned assets.

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So if you’re the kind of open-minded income investor who knows how important it is to periodically reassess your holdings in the cold, hard light of contemporary market realities and if you want to increase your income stream, then I’d like to offer you the very best advice today — right here, right now with High Monthly Income.

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Fabian’s Successful Investing

Steady, market-beating double-digit annual gains for 30+ years!

Successful Investing was started in 1977 by Doug Fabian’s father, Dick Fabian. It is designed for investors who are in the growth stage of investing. We’ve beaten the market consistently and kept our subscribers’ assets from harm in bear markets by following The Fabian Plan. Instead of using guesswork, predictions, forecasts, or emotions, we base our investment decisions solely on the established trend of the market.

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Originally, we used mutual funds to produce these profits but we are officially OUT of the mutual fund market. You can quickly find out if you own a “lemon” fund by searching the Fabian Lemon List database.

For several years, Doug has been strongly urging subscribers to shift away from mutual funds and move into the best money making tool available today – Exchange Traded Funds (ETFs). Doug was one of the pioneers to advocate and profit from ETFs and has become one of the leading ETF experts in the financial world.

Successful Investing is a proactive investment advisory service, using ETFs for both domestic and international equity allocations. The Fabian Plan guides our buy and sell decisions, and when we do either, you’ll get an email recommending specifically what to buy and how much of your portfolio to allocate.

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Fabian’s ETF Trader

In 2008 my ETF strategy gave investors 11.5% returns… while the S&P lost 39%. Discover the right way to use ETFs here…

Doug Fabian started moving investors into ETFs long before most others recognized their strength and value. Doug is known as one of the safest, most conservative investment advisors in the business. But being safe doesn’t mean being left out of the big profits. Just the opposite – you have to play it safe when you’re after big profits.

Safety is key when the stakes are high: It’s all about knowing what you’re doing, minimizing risks, and never straying from a system that works.

And that’s just what ETF Trader is designed to do – capture rapid-fire profits by combining the power of ETFs with our top-ranked timing system,The Fabian Plan, the same one we’ve been using for more than three decades in Successful Investing for safe, long-term market-beating returns.

We “supercharged” the system by compressing it to a short-term time frame to catch and ride the market’s strongest trends. We make just a few targeted buys each month and hold them for as little as a few days up to 60 days. Many Wall Street firms have entire teams of analysts that are paid to come up with just the kind of recommendations that you get with ETF Trader.

Once you join ETF Trader you’ll never need to worry about what stock to buy, when to buy it, when to sell, or how to keep what you make.

Every detail has been thought out to make trading ETFs easy – and profitable. We do all the work for you. We track every single ETF in the world and we use our proprietary indicators to help establish a direction and our money-making recommendations.

Nicholas Vardy

Nicholas Vardy has proven his knack for making money in markets around the world. He writes Bull Market Alert, a trading service that focuses on making short-term profits in the world’s hottest markets;Dividend Pro, a dividend-driven trading service; as well as Alpha Investor Letter, a monthly newsletter focused on longer-term investments. He also is chief investment officer of Global Guru Capital LLC, where he manages separate accounts for high net worth individuals. more»

Chris Versace

Chris Versace is a financial columnist and equity analyst with more than 18 years of experience in the investment industry. He is the editor of a weekly, e-letter called PowerTrend Brief, a monthly investment newsletter called PowerTrend Profits and the trading service ETF PowerTrader. All three focus on his use of eight proprietary PowerTrends that help him to discern the sectors that provide the best investment opportunities and the stocks that he recommends for purchase. In addition, he has been ranked an All Star Analyst by Zacks Investment Research and his efforts in analyzing industries, companies and equity securities have been recognized by both Institutional Investor and Thomson Reuters’StarMine Monitor.

The symmetrical broadening top is called a bullish continuation pattern. This pattern is formed by two symmetrical horizontal lines that are divergent. It looks like an inverted symmetrical triangle or an open triangle. The oscillations in the middle of the two bands of the triangle are consequently becoming more and more sizable. Each line has to touch at least twice for validation.

The symmetrical broadening top will show how the growing nervousness of investors will affect their indecisiveness. If this pattern is not identified right away, this movement may seem totally irregular and then trap many investors.

This formation pattern should be preceded by an upward movement. The pattern is frequently due to profit taking that will lead to the formation of new lows. But, the buying pressure will remain strong and the indecisiveness will dominate.

The target price will be given by plotting the height of the triangle at its beginning on the break point. A different technique is to extend the maximum height of the triangle on the break point.

Here is a graphical representation of a symmetrical broadening top and a symmetrical broadening bottom:

Here are some statistics on the symmetrical broadening top:

– In 53% of cases, there is an upward exit.
– In 75% of cases, the target of this pattern is obtained by acquiring the maximum height of the triangle. With this downward exit, the percentage fell to 64%.
– More than 72% of cases, a downward breakout occurs when the price is into the highest third of its annual range. No bullish breakouts are identified into the lowest third of the annual range.

Be careful of indecisiveness patterns. Bullish breakouts will have more potential.

From the 5th rotation (i.e., the fifth points of contact on either resistance or support), there will be an 80% chance that the exit will occur at the next contact point with the support or resistance of this symmetrical triangle. From the sixth rotation, the percentage rises to 96%.

Definition:

The descending flag shows as a continuation pattern. The flag is built by two straight downward parallel lines which is shaped like a rectangle. It is oriented in the direction of that trend which it consolidates. Contrary to a bearish channel, this pattern is quite short term and shows the fact that buyers will need a break.

The creation of this pattern will occur in an upward trend. Often, this break will occur halfway through the movement.

The object calculation will be compared to the previous trend. A calculation of the height of the overall upward trend before the formation of the descending flag and then extends the low on the last lowest point of the pattern.

A graphical representation of the pattern is as follows:

Look at some statistics about the descending flag:

Descending Flag statistics

– In 87% of cases, there is an upward exit.
– In 90% of cases, it shows a continuation pattern.
– In 62% of cases, the target of the pattern will be reached .
– 76% of cases, it occurs when the price is at the highest third of its annual range.
– In 10% of cases, a pullback occurs on the support.

The more the previous movement precedes the formation of the descending flag it is powerful, the more the bullish breakout will be strong.

It’s performance is not as important when it is oriented in the direction of the trend.

A descending flag with narrowed lines is performs more than a flag with outspread lines and is more powerful if there is no false breakout.

An ascending flag is a continuation pattern. The ascending flag is formed by two straight upward parallel lines which are shaped like a rectangle. It is adjusted in the direction of the trend that it consolidates. Contrary to a bullish channel, this pattern is quite short term and marks the fact the seller will need a break.

The formation of an ascending flag will occur in a downward trend. Often, this break will occur halfway through the movement.

The target calculation will be compared to the previous trend. A calculation of the height of the overall downward trend is before the formation of the ascending flag and then extends higher on the last highest point of the pattern.

A graphical representation of an ascending flag follows:

Here are some statistics about the ascending flag pattern:

– In 87% of cases, there will be a downward exit.
– In 90% of cases, the ascending flag is a continuous pattern.
– In 62% of cases, the target of the pattern is reached .
– In 76% of cases, the ascending flag occurs when the price is at the lowest third of its annual range.
– In 10% of cases, a pullback occurs on the support.

The more the previous movement precedes the formation of the flag holds powerful, the more the bearish breakout will continue to be strong.

The performance of an ascending flag is much less important when it is oriented in the direction of the trend.

A flag with narrowed lines is more performing than a flag with outspread lines.

A flag is more powerful if there is no false breakouts.

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Definition:

Descending Flag statistics

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