ABSTRACT
Very short-term phenomena—of a one-day or a few days' duration—can sometimes be indicative of not only short-term direction, but also give hints as to long-term price behavior. This chapter considers eight classes of chart patterns that appear at more or less important Reversals of direction in the trend of prices. They are as follows: the head-and-shoulders, multiple or complex head-and-shoulders, rounding turns, symmetrical triangles, right-angle triangles, rectangles, double and triple tops and bottoms and one-day reversal. The Broadening Formation may evolve in any one of three forms, comparable, respectively, to inverted Symmetrical, Ascending, or Descending Triangles. Distinction between Triangle and Broadening Formation is in the volume chart. The Orthodox Broadening Top has three peaks at successively higher levels with two Bottoms between them, with the second Bottom lower than the first. In a Symmetrical Triangle, the Top border slants down, whereas the Bottom border slants up.
