If you look to the right hand side of the chart you can see there is a potential red bullish rising wedge that is knocking on the door of the top rail. This next chart for the COMPQ is a long term chart that shows the bullish rising flag that formed back in 1999, same pattern that is on the chart above. The two red rectangles are exactly the same size that measures price and time. The chart below shows how I measured this bullish rising flag as a halfway pattern. As with alot of consolidation patterns they tend to form at a halfway point in a rally. If one would have know that these type of patterns existed he could have gotten out at almost the exact top just before the crash took place in the tech stocks. Next I would like to show you a six point bullish rising flag that formed back in 1999 on the COMPQ. It actually went down faster than it went up. I just want to take a minute and show you another parabolic spike that crashed and burned in oil back in 2008. Even after almost five years the SSEC has been dead in the water unable to make new highs. This is generally how parabolic moves end. Note how the parabolic uptrend collapsed once the uptrend reversed down. At the time I made a comment after the H&S top formed that something wasn’t right because China, which was the strongest market in the world, was topping out. Again you can see the two lower red consolidation pattens that formed were pointing up into the uptrend. Back in 2005 the SSEC formed a nice inverse H&S bottom that launched the parabolic run China had over the next year and a half or so. Lets look at one more example of how these small bullish rising patterns work in a strong uptrends. The last reversal point in this pattern started the parabolic move to the top at 700 or so. The third little red consolidation pattern took on the shape of a six point bullish expanding rising wedge that is pointing up into the uptrend. The second little red consolidation pattern was your more ” normal” consolidation pattern that was a bull flag that pointed down into the uptrend channel which most chartists would have recognized. The first one was a bullish rising wedge that is slopping up into the uptrend. Before it went parabolic there were three small consolidation patterns that formed. The move was so strong that the bulls never let the correction take on the shape of a normal consolidation pattern that forms pointing down in to the uptrend or a sideways type pattern such as a triangle or rectangle.ĪPPL had a strong move up off of the 2009 crash low that went parabolic starting at the end of 2011. Note the three red bullish rising patterns that made up that impulse leg to the double top at 775 area. Note the inverse H&S bottom that formed at the end of 2011 at roughly 450 or so. PCLN is a perfect example of what I’ve described above. Lets look at a few charts that shows a very bullish move up that is made of several bullish rising wedges or flags. They are also like any other consolidation pattern that generally shows up as a halfway pattern. The opposite is true in a downtrend where you can have a series of bearish falling wedges or flags form. When a stock is in a strong move up you can see series of these patterns that from one after another until a top is reached. I have found out through many years of following these bullish or bearish wedges or flags that they tend to show up in fast moving markets. A typical consolidation pattern, like a bullish falling wedge or flag, points down in an uptrend which everybody sees and is accepted as the norm. Instead of pointing down into the uptrend these type of patterns point up into the uptrend. I’ve been following these two types of patterns for many years and find that are just as reliable as any another consolidation or reversal pattern.Ī bullish rising wedge or flag forms in an uptrend. That means anything is possible regardless of what is taught by the so called experts. Keeping an open mind in the stock markets is the first lesson to learn. These type patterns are missed by 95% of chartists because they supposedly don’t exist and if they do exist they can’t be trusted. I’m repeatedly told to go back to charting school to learn my lesson. I have gotten more negative e mails from folks that assure me there is no such thing as a bullish rising wedge or flag. In today’s Chartology Report I would like to clear up a misconception about rising wedges and flags.
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