Technical Analysis Trading Methods and Techniques (Collection) by Tatro Quint & Dickson Richard A. & Knudsen Tracy L

Author:Tatro, Quint & Dickson, Richard A. & Knudsen, Tracy L. [Tatro, Quint]
Language: eng
Format: epub
Publisher: Pearson Education (US)
Published: 2011-12-29T22:00:00+00:00

The 1969 Market Top and Targets for the Bear Market

Taking the major tops and bottoms already discussed in chronological order, our initial venture into establishing a count is with the market top in 1968–1969 (Figure 6.2). The first step is to establish the level at which to take the count. In this case, this is the Last Point of Supply (LPSY). We then count from right to left to the initial sign of weakness, the point of Preliminary Supply (PSY). Keep in mind, not all the columns will necessarily be filled with an X or an O, but all must be counted nonetheless. Moving right to left from the LPSY to PSY establishes a total of 11 boxes. Given the relatively low price of the DJIA in 1969, we have assigned a box size of 10 points per box. Because this is a three-box reversal chart, the projected range is calculated by multiplying the box size (10) by the horizontal count (11) and the box size (3). So 10 × 11 × 3 = 330 points.

Figure 6.2. Establishing a count at the 1969 market top

Charts created with Metastock, a Thomson Reuters product.

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