ABSTRACT
A Dow Theory Line in the chart of one of the Averages may be a Consolidation or Reversal Formation, but is rather more likely to be the former than the latter. A Dow Line is, of course, a sort of loose Rectangle. Two formations, which are characteristic of Consolidation only, are the Flags and Pennants, which are curiously related in certain aspects to Triangles, Rectangles, and Wedges. Three out of four Symmetrical Triangles will turn out to be Consolidations rather than Reversals—and Rectangles in about the same proportion. Head-and-Shoulders Consolidations of the Complex or Multiple types seldom appear on the charts. The charts of stocks that take this sort of course show a picture of strikingly similar and symmetrical Rising Scallops, one succeeding another with little or no pause between. Symmetrical Triangles are apt to be somewhat looser than they were in the 1920s and 1930s—not as clean-cut and conspicuous on the charts.
