בשלביה האחרונים של המגמה ובתחילת היווצרותה של
התבנית הטכנית הקלאסית, השוק מאופיין בתנודתיות
יחסית גבוהה ושינויי כיוון חדים. לאחר שלב זה התנודתיות הולכת ונחלשת
במקביל לפיתוח התבנית הטכנית, עד שמגיע שלב קריטי המסמן את "תחילת
הסוף" של פיתוח התבנית. שלב סופי זה, ממש לפני הפריצה, מאופיין
בירידה דרסטית בתנודתיות (יחסית לזו ששררה בתחילת פיתוח התבנית).
המחיר כמעט ואינו זז ונראה כאילו עומד לפני הצתת פתיל הפריצה. ניתן
להשתמש בכלים שונים כדי לאמוד שינויים בתנודתיות. אחד מהם הוא מתנד
ה-ADX שפיתח וויילדר.
מתנד זה מבוסס על ממוצע שיאים ושפלים בפרק זמן מוגדר (מומלץ לעשות
שימוש ב-14 יחידות). ה-ADX יציב יותר בהשוואה לאומדני תנודתיות טהורים
(יחידות סטייה למשל). למרות שה-ADX מופיע לרוב בספרות כמודד חוזק
מגמתי, אין מניעה להשתמש בו למטרת אומדן תנודתיות. תנודתיות גבוהה
תסומן בידי רמות ADX גבוהות (יש להתעלם מה-DI+, DI). תנודתיות נחלשת
תסומן ע"י קו ADX יורד. סיום פיתוח התבנית (והצפי לפריצה) יסומן,
בדרך-כלל, על-ידי ADX היורד אל מתחת לרמת 20 וסוגר ברמת 10.
Descriptions by Recognia
"Although there are commonly held "high-level" definitions
for the key chart patterns, many experts have different opinions
on their significance, importance, subtleties and trading implications.
Recognia provides you with a balanced perspective from a number
of published experts in the field of technical analysis, including
Edwards and Magee, Bulkowski, Murphy and Schabacker. Recognia has
also included the opinions of active traders that use patterns,
such as Elaine Yager Director of Technical Analysis at Investec
Ernst and Company in New York and a member of Recognia's Board of
and Bottom Patterns
Anatomy Of Tops, Desmond, 2006
An exploration of the nature of bull market tops. Study of 14 peaks
shows they don't come out of the blue. Major market tops are not
the same as major market bottoms. A 2002 Lowry study titled Identifying
Bear Market Bottoms and New Bull Markets showed that major market
bottoms can often be identified by evidence of panic selling (one
or more 90% Downside Days) in which investors dump stocks with abandon.
Then, with the desire to sell having been exhausted, buyers suddenly
rush in to snap up the bargains (and cover short positions), resulting
in a 90% Upside Day. The combination of panic selling across a broad
spectrum of stocks, followed quickly by broad, enthusiastic buying,
produces what might be described as a classic “V” pattern of prices
at major bear market bottoms. Bull market tops, on the other hand,
tend to develop gradually over a long period of time. The reasons
for this gradual process are easy to understand: It is the Law of
Supply and Demand at work. Just as bull markets result from strong,
persistent investor demand for stocks, bull market tops evolve when
investors gradually stop buying. Some investors simply run out of
new money to invest. Others begin to see individual stocks as being
overvalued, and begin to hold back on new purchases. Whatever the
reasons, the stock market cannot continue to advance without Demand
exceeding Supply. The evolution of investor psychology from strong
buying enthusiasm for stocks to passivity or complacency does not
occur suddenly. Thus, bull market tops are commonly diffuse, possibly
lulling most investors into inaction. There are several helpful
tools that technical analysts have used for many decades to warn
of impending stock market tops, such as the Advance-Decline Line
and the number of stocks recording New 52-week Highs. History shows
that these indicators often top out and begin to contract, as individual
stocks fall by the wayside, months in advance of the final top in
the Dow Jones Industrial Average. Therefore, it would not be a surprise
to find that all stocks do not reach their peaks simultaneously
or in unison with the DJIA. But, it is the degree and the intensity
of the divergences of individual stocks from the DJIA that had never
been measured before - until now.
Declines Are Not Equal - Revisiting Three Price Patterns, Yamada,
While prices may all head in a southern direction, what is important
is where that decline began in the more structural price pattern
of each individual stock. We seek to identify what the individual
price patterns signify in the supply and demand factors underlying
the decline. We have characterized declines in three distinct patterns.
Indicators, Ritholtz, 2003
This paper reviews the signals known as "contrary indicators"
produced during the Bear market of 2000–2003. Using both quantitative
data and qualitative events, we assess a variety of different indicators.
We have determined that many of these were of enormous value to
traders and investors. We attempt to answer the most frequently
asked questions about Contrary Indicators: What are they? How do
they work? What different kinds of indicators are there?
in August, Yamada, 2002
Technical analysis is well known for a lot of "exotic"
patterns that develop based on the market forces of supply and demand.
Over the last year, we've coined and added our own "Christmas
Tree" pattern to the nomenclature. This pattern represents
a parabolic advance and a slippery, equally dramatic, decline.The
psychology of investing carries a desire to be bullish and we find
that even after the severe 90% declines in individual technology
stocks, investors are still asking if it’s "time to buy".
Interestingly, the "Christmas Tree" pattern that is so
prevalent today across the technology front is identical to what
corresponding issues traced out, commencing in 1926.
[Edwards and Magee]
Classical technical criteria required for a "head-and-shoulders"
A: A decline, climaxing a more or less extensive downtrend, on
which trading volume increases notably, followed by a minor recovery
on which volume runs less than it did during the days of final
decline and at the bottom. This is the "left shoulder".
B: Another decline which carries prices below the bottom of the
left shoulder, on which activity shows some increase (compared
with the preceding recovery) but usually does not equal the
rate attained on the left shoulder decline, followed by another
recovery which carries above the bottom level of the left shoulder
and on which activity may pick up, at any rate exceed that
on the recovery from the left shoulder. This is the "head".
C: A third decline on decidedly less volume than accompanied the
making of either left shoulder or head, which fails to reach the
low level of the head before another rally starts. This is the
D: Finally, an advance on which activity increases notably,
which pushes up through the neckline and closes above it by an
amount approximately equivalent to 3% of the stock's market price,
with a conspicuous burst of activity attending this penetration.
This is the "confirmation" or "breakout".
and Shoulder: Not Just a Flaky Pattern, Osler and Chang, 1995
"This paper evaluates rigorously the predictive power of the
head-and-shoulders pattern. Though such visual, nonlinear chart
patterns are applied frequently by technical analysts, our paper
is one of the first to evaluate the predictive power of such patterns".
Noise Traders: The Head-and-Shoulders Pattern In U.S. Equities,
"This paper identifies a specific set of agents as noise traders
in U.S. equity markets, and examines their effects on returns. These
agents, who speculate using the "head-and-shoulders" chart
pattern, are shown to qualify as noise traders because (1) trading
volume is exceptionally high when they are active, and (2) their
trading is unprofitable".
Benefits of Imperfectly Rational Trading: the Head-and-Shoulders
Pattern, Chu and Osler, 2004
"This paper provides evidence of imperfectly rational trading
in U.S. equity markets, and shows that such trading brings microstructural
benefits in the form of narrower bid-ask spreads. Focusing on the
"head-and-shoulders" chart pattern, the paper presents
three principal results. First, trading based on the pattern is
imperfectly rational because it is not profitable. Second, the pattern
has stimulated substantial and undiminished trading for forty years,
despite its consistent lack of profitability. Third, spreads narrow
significantly when head-and-shoulders trading appears to be active.
The well-documented psychological phenomenon of "illusory correlations"
may explain the continued use of this unprofitable pattern".
Technical Trading Rules Profitable? Evidence for Head-and-Shoulder
"This paper focuses on the prominent head-and-shoulder pattern
as a representative trading rule which incorporates various "technical"
ideas such as smoothed trends, trend reversal, resistance levels,
and volatility clustering. For various combinations of the building
blocks of head-and-shoulder definitions the result is generally
negative: Returns to head-and-shoulder trading rules are not significantly
[Shaw] Primarily continuation
patterns, the three types of triangles that are most often found
are the symmetrical, the ascending and the descending. Two of
the triangle patterns have some predictive value: namely, the
ascending and the descending. These two configurations reveal
a positive force of market action versus a neutral force. The
ascending triangle, for example, illustrates a positive force
of buying (higher lows) versus the neutral force of selling (the
flat top). In most cases, the positive force will eventually win
out, indicating that the ascending triangle is a consolidation
phase most often found in an uptrend. Conversely, the descending
triangle has the same qualifications: an aggressive force of selling
(the descending highs) against a neutral force of buying (the
flat bottoms). The descending version is, therefore, most often
found within a major downtrend. The symmetrical triangle, as illustrated,
is made up of two positive forces - the buying side (the ascending
bottoms) and the selling side (the descending tops). Although
such a triangle is often completed with a move in the direction
from which the stock came, there have been many times when a symmetrical
triangle has also been a reversal pattern. By using trendlines
and following closely a stock's movement within the neutral trend,
a hint is often given as to the possible direction of the impending
move. Volume trends and relative strength analysis can often be
additional aids toward determining the eventual direction of the
The classic Descending Triangle illustrates the painful rollover
from bull to bear market better than any other pattern
Flags and Pennants
Aside from the triangles, there are number of other technical
configurations that qualify as consolidation patterns. In particular,
there is a pattern called the Wedge and then there are two short-term
configurations that go by the names of Flag and Pennant. The Wedge,
as a consolidation configuration is somewhat similar to the triangular
variety except that the trendlines move in the same direction.
the Falling Wedge usually occurs in a major uptrend pattern. The
slope of the trendlines indicates that the sellers may be aggressive
but the buyers are relatively less timid. This is indicated by
the fact that the slope of the underlying trendline is not as
great as the slope of the overhead downtrend line. In addition,
as this short-term phase of profit-taking occurs, volume usually
shows a marked decrease. The Flag and Pennant formations are very
short term in nature and indicative of a spritely market for the
stock under observation. This patterns will most often occur early
in an upward or downward trend. Most often, it is an illustration
of short-term consolidation before a resumption of the underlying
timing: a test of a charting heuristic, LEIGH, PAZ and PURVIS
"We implement a graphical (or ‘charting’) heuristic,
the ‘bull flag’, which accepts a particular pattern
of historical prices as a signal for a future market price increase,
test it with several years of New York Stock Exchange Composite
Index history, and find positive results. The results support the
validity of technical analysis for stock market price prediction
and fail to confirm the efficient markets hypothesis".
Peaks and the Domed House
Peaks and the Domed House - Revisited, Leib, 2000
1968, George Lindsay, a master technical analyst, published an
article in which he outlined a repetitive chart pattern that he
had specifically found at the end of long sustained bull markets.
He called his pattern "Three Peaks and a Domed House",
and used it to predict a peak in the DJIA for October 31, 1968
or a little later. Lindsay spotted this idealized formation on
several different occasions in the chart of the DJIA between 1906
and the early 1960's, some with small variations to the idealized
pattern, but none with more significance than the point 23 high
made on September 3, 1929.