Over the next several days, we will publish Minor Reversal Patterns, as published in John Hill’s book, Technical and Mathematical Analysis of Trends in the Commodity and Stock Markets.

The reversal patterns listed are based on only several days of action.  They can be very useful when used in combination with the overall chart pattern and when used with other technical tools.  I will emphasize that these factors or formations used by themselves can result in trouble and lead to whip saw action.  Also, market action may not be exactly as shown.  There may be several more days of movement.  My intention is to introduce new concepts.

Pattern 11: BREAKING OF MINOR BOTTOM THEN LACK OF GOOD DEMAND

pattern11On the day after breaking minor bottom, some buying came in.  However, on balance it shows lack of much follow-through.  Shorts were not in a hurry to cover.  Continued weakness is indicated on day (1) if lack of follow-through on upside is still apparent and the spread is relatively wide with a bottom closing.

Pattern 12: SHAKEOUT

shakeoutpattern12A shakeout is characterized by one or several days of movement below a formation and this is followed by an equally fast recovery.  The recovery shows widening spreads and increasing volume.

 

 

Copyright 2015, John Hill & Futures Truth Company

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