Trend Analysis

29 Apr Posted by in Trend Analysis | Comments
Trend Analysis


All forms of technical analysis are arbitrary from the standpoint of attempting to indicate what should or could occur. They are also arbitrary to the extent they attempt to anticipate a change in the market’s behavior, say from moving up to down or vice versa. The one exception to this is a certain pure form of trend analysis that mirrors the market. Even standard criteria that are used to define trend are often arbitrary. Tools such as trend lines, and pattern criteria such as higher and higher bottoms and tops in “rising trends”, or lower and lower tops and bottoms in a “falling trend”, are are arbitrary and work well only when they agree with a deeper  trend characteristic. Recently I indicated in a Webinar that it is exact repetition which is the basic building block of pure trend. Exact repetition translates to symmetry.

Any price action which is symmetrical to past price action corresponds to the most probable course for that price to travel, and as such, ought to constitute an initial forecast. Details of how to generate a forecast by this approach have been worked out by Jimmy Sloman and Welles Wilder. Ultimately, the symmetry and the high probability market forecasts generated from such, are a consequence of energy flow constraints imposed by Newton’s first law.


Please click on the chart to make it full screen.
Perfect Market Symmetry




Leave a Reply