Helpful Pattern to Watch for...

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lp2715

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Post Number: 3
Registered: 12-2002

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Votes: 0


Monday, December 16, 2002 - 11:26 am:

There is a pattern that may not have a name but if you look at enough charts
you will see a very interesting thing that does occur. On the 3rd, 5th or 8th
day a stock will generally reverse course! What? That's right. Suppose a
stock is falling. Very often the stock will halt its slide or even rebound on
the third day. Now if it doesn't hold up on that third day watch for the
falling to stop on the 5th day and then again on the 8th day.
Not much has written about this phenomenon, but after watching charts for all
these years it has come through very clearly. Likewise it's often the same
case with a stock that has been moving higher. It will pause on the 3rd, 5th
and 8th day, but interestingly the effect isn't as strong as on ones that are
falling. In other words, when a stock is falling, the 3,5,8 day reversal is
often very strong but on a rising stock the effect is more like a pause than
a reversal to the downside.
Many times when you see a stock listed, it is one that is coming up on either
a 3,5 or 8 day fall and we say something like "this one looks ready to
reverse and head higher". Astoundingly quite a few of them (over 80%) usually
make a one day reversal pop. So, along with other indicators, take the time
to look for stocks that are coming up on that 3,5 or 8 day area and watch to
see if the theory holds true.
Some charting programs actually let you filter for things such as this, as
you can input parameters like "stocks down 2 days" or "stocks down 4 days".
This way you can get a sampling of who is in that situation and watch to see
if the reversal comes through for you.

(Message edited by robin on December 16, 2002)

uturn

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Post Number: 187
Registered: 09-2002

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Votes: 0


Monday, December 16, 2002 - 06:10 pm:

Hi IP2715,

Very interesting observation.

3, 5, 8 are Fibonacci numbers.

If you start with 1 + 2 = 3
then 2 + 3 = 5
then 3 + 5 = 8 etc.

Apparently it is a non linear number system.
I use the numbers as percentages for my Option exit price targets,
and it is amazing how close they reflect the movement in the market.

There is another system, or indicator called Andrews Pitchfork.
As a share rises or falls through a series of sloping parallel lines,
it stops and turns at the lines, or gaps through.
(not all the possibilities)

The numbers 3, 5, 8, may equal the number of days
to travel between / past the lines.

I am always amazed by the symmetry of the market.

Perhaps if a share moves 4 days it can be held an extra day.
Or, 6 days, and it can be held another 2.
Something we all need to know....when to let go.

Thank you, I will watch with interest.

Cheers,
uturn

anutham

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Post Number: 1
Registered: 07-2003

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Votes: 0


Wednesday, July 09, 2003 - 12:26 am:

I have a doubt - Ip2715 says that the Fibnocci days (eg 2,3,5,8 etc.) will be the turn around days when market moves on the opposite direction. Whereas uturn has stated that if a stock moves up 4 days it can be held for another day thereby meaning that it will run in the same direction on the fibnocci day (5th day) also. Will somebody kindly clarify which is right?

uturn

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Post Number: 489
Registered: 09-2002

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Wednesday, July 09, 2003 - 12:46 am:

Hi anutham,

Please be careful.
I used the word 'perhaps' .......etc.,
and 'something we all need to know .... when to let go.'
I don't have a hard and fast rule.

I still count the days, however also rely on the Trend Tracker to time my exits and re-entries.

Cheers ..... uturn

"Whatever comes for your livelihood, accept it." -Papaji
_________________________________________________________________________________
The author is not a Licenced Investment Advisor. The material in this post is of a general nature and for discussion purposes only. It neither purports nor intends to be advice. Readers should
not act on the basis of any matter in this post.

banana_republic

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Post Number: 4
Registered: 07-2003

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Votes: 0


Friday, August 15, 2003 - 01:45 pm:

Hi folks, i thought the turn on the three was usually related to T+3 day profit taking, the five i don't know and the 8, which is the oriental lucky number is also really the profit taking from short 7 day traders...???
Regards BR

updown

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Post Number: 1
Registered: 08-2005

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Friday, August 19, 2005 - 01:53 pm:

Hi All
Thought i would run a quick scan on the 3,5,8 thingo

I've included PBL as it has been rising over the past 3 years and PBO as it was falling. Data seem to show that the number of days the close => yesterday, progressively falls off (which is what you would expect).

Comments welcomed
Regards UPDOWN