ABSTRACT
This chapter provides the fact that the Charles H. Dow Theory is of little or no assistance in trading on the Intermediate Trends. In most cases, when a price trend is in the process of reversal, either from up to down or from down to up, a characteristic area or pattern takes shape on the chart, which becomes recognizable as a Reversal Formation. The chart of trading activity makes a pattern just as does the chart of price ranges. If activity attending the right shoulder is abnormally dull, that shoulder is apt to be low but protracted in time. The suggestion a Head-and-Shoulders is really developing may come when the volume record shows that activity accompanying the most recent Top was somewhat less than the one preceding it. Nevertheless, the Head-and-Shoulders are not complete, and an important Reversal of Trend is not conclusively signaled until the neckline has been penetrated downside by a decisive margin.
