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by Dennis D. Peterson
A descending right triangle seems to have formed.
Position: N/A
Dennis D. Peterson
Market index trading on a daily basis.
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DESCENDING TRIANGLES
Which Way Is The Nasdaq Headed?
02/06/03 09:50:46 AMby Dennis D. Peterson
A descending right triangle seems to have formed.
Position: N/A
| Right triangles are one of the more reliable patterns. Looking at daily data for QQQ you see a price pattern closely resembling a descending right triangle (Figure 1). |
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| Figure 1: Daily QQQ Price And Volume. Trendlines drawn along the peaks and valleys of recent price history nearly forms a descending right triangle. |
| Graphic provided by: MetaStock. |
| Graphic provided by: Data Vendor: eSignal. |
| |
| The price pattern is only close to a descending right triangle because the bottom trendline is not perfectly horizontal; however, with an upsloping bottom trendline the pattern forms a bearish wedge. Either way, wedge or triangle, the pattern favors bears and shorts. Does the Nasdaq composite say anything different? |
 Figure 2: Daily Nasdaq Composite Price. A gap down is a strong indication that the triangle base will be the target before a reversal is seen. Currently, 1150 is in play. The Nasdaq composite gives a clearer picture that we have descending right triangle and today's gap down only confirms a move down. Ideally prices would been coming down into the pattern. Nevertheless the odds favor shorts. VXN should confirm. |
Market index trading on a daily basis.
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