This blog is committed to the serious study and valid understanding of technical analysis and its objective application to stock selection, risk management and execution primarily in the context of trading stocks listed in the Philippine Stock Exchange (PSE).

Saturday, April 26, 2008

DJIA, CRITICAL SIGNALS LEADING TO A REVERSAL SCENARIO


A hypothetical reversal scenario of the Dow indicating the technical signals that forewarn each stage as they unfold. This is an application of the typical reversal patterns that I posted earlier [Thursday, April 3, 2008|BOTTOMS AND REVERSALS] and a follow thru to my article about spotting reversals and continuations [Sunday, April 20, 2008|DJIA, SPOTTING REVERSALS, CONTINUATIONS AND CONSOLIDATIONS] . The appearance of a higher low in the primary trendline constitutes a provisional major uptrend. A 2nd higher low confirms the major uptrend and the existence of a bull market. A bull market exists when the primary trend is advancing.

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