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3 black crows


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#1 Chart Guru Doug

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Posted 22 January 2005 - 06:07 AM

but fridays stick was just as bad....here are charts for comparisions...

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I am not your registered investment advisor. This is not a recomendation to buy or sell. This is my opinion and that is all. I may be long or short any security and change my position at any given moment in time. Do your own due diligence before investing any of your own financial assets.

#2 eminimee

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Posted 22 January 2005 - 08:56 AM

Doug...have you got a link for an explanation of the pattern please. cheers

#3 Modest Trader

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Posted 22 January 2005 - 09:28 AM

Not just three crows, but three identical black crows. While coming off the high, they are clearly very bearish, when they occur some time after the decline is already well underway, many times they are signs of selling exhaustion. So, while they may be signaling more selling to come, the reliability is not nearly as high as when they come right after the top.

#4 Sentient Being

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Posted 22 January 2005 - 09:39 AM

Nison: If there are three declining consecutive black candlesticks it is called three black crows pattern. The three black crows presage lower prices if they appear at high-price levels or after a mature advance. Three crows are also soemtimes called three winged crows. ......... The three lines should close at, or near, their lows. Each of the openings should also be within the prior session's real body. The analyst swould also like to see the real body of the first candlestick of the three crows under the prior white session's high. ---------------------------------------------------------------------- I guess crows are found hanging around meat about to die!?

Edited by Sentient Being, 22 January 2005 - 09:39 AM.

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#5 Rogerdodger

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Posted 22 January 2005 - 11:47 AM

"Be very alert when you see three black crows appear on a chart. Their appearance indicates a period of powerful selling pressure. If on the fourth day the stock cannot gather strength, then lower prices are likely ahead."
Here's a good overview of "3 black crows:" Streetauthority.com

It is a reversal pattern rather than a continuation pattern.

The NDX is different after the Thursday gap down. Here is my wish for you bulls for Monday & Tuesday: AN ISLAND!
BUT, don't get your hopes up. The 50% retrace & 200DMA are just below @ 36.18 QQQQ or 1468 NDX.

Edited by Rogerdodger, 22 January 2005 - 12:06 PM.


#6 Modest Trader

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Posted 22 January 2005 - 12:06 PM

The three black crows candle formation does not happen very frequently in stock trading, but when it does occur swing traders should be very alert to the crow's caw.

The candlestick pattern's metaphor is three crows sitting in a tall three. Essentially, it is a reversal formation that occurs following a strong advance.........Be very alert when you see three black crows appear on a chart. Their appearance indicates a period of powerful selling pressure. If on the fourth day the stock cannot gather strength, then lower prices are likely ahead.


That's why Monday's trading will be extremely pivotal. If the market moves big in one direction or the other on heavier volume than Friday, the direction of the next 1-2 week's trading will become self-evident. However, as noted earlier, the three black crows have occurred well into this decline, and not at or just after the top as suggested in the commentary. Following this pattern as a low risk new short entry is not advisable. That's not to say that selling won't continue, but the odds have started to turn in favor of this being nearer the end of the decline rather than closer to the beginning.

#7 Chart Guru Doug

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Posted 22 January 2005 - 12:29 PM

quote]

That's why Monday's trading will be extremely pivotal. If the market moves big in one direction or the other on heavier volume than Friday, the direction of the next 1-2 week's trading will become self-evident. However, as noted earlier, the three black crows have occurred well into this decline, and not at or just after the top as suggested in the commentary. Following this pattern as a low risk new short entry is not advisable. That's not to say that selling won't continue, but the odds have started to turn in favor of this being nearer the end of the decline rather than closer to the beginning.

<{POST_SNAPBACK}>

[/quote]

The blackbirds on the other charts came well into the declines. Here is a chart of 2002 showing the the index had already started to decline before the crows showed up.
By looking at these charts, I doubt we can put much weight on mondays move as it looks almost inevitable that there would be some type of price higher then Fridays close. I think one of the most noteable things here is that a consolidation that hangs out at these lows and then breaks down should bring on some strong selling but we also would not need the consolidation.

One other difference on the recent chart is the the major ma's are not tilted down as strongly, this is because this selling is closer to price highs then in a already established downtrend.
cheers

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I am not your registered investment advisor. This is not a recomendation to buy or sell. This is my opinion and that is all. I may be long or short any security and change my position at any given moment in time. Do your own due diligence before investing any of your own financial assets.

#8 Entropy2.0

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Posted 22 January 2005 - 12:36 PM

Nicely spotted Doug. FWIW According to my copy of Stephen Bigalows Candlestick Trading, he has some more detail on the pattern - He differentiates two versions of the pattern - 1. Three blacks crows - having higher OPENS that previous closes i.e. bodies should overlapp visibly. 2. Three identical crows (doji sanba garasu)- where the OPEN is at the very near the exact close. What we have in all the above is by his definition (2) and is more bearish according to Bigalow because - "the selling is more severe, there do not appear to be any buyers at the next days open". This agree's with the EW count that has potential for a wave 3 of (3 or C) here as i said at the close Friday. That doesn't mean it IS, its just the price patterns have a higher risk of that now, than if these patterns hadn't setup -its all probabilities that all. What's more to the point, is none of these patterns support the idea of a swing bottom being in at low friday, so why risk being caught in a big gap down monday - why not wait to at least see how price opens, as odds favour a low retest and lower risk entry next week no matter what. Mark.

Edited by entropy, 22 January 2005 - 12:37 PM.

The most important question in trading is 'where is your stop', because u can 'call it right' but be stopped out for a loss, and if u trade without a stop u risk destroying your account. The hardest part of trading is dealing with emotions whilst in a trade, to think and act as if you have nothing on the line, when infact you do. I try to think like the 'criminals', and trade like a robot :-)

#9 Modest Trader

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Posted 22 January 2005 - 12:44 PM

[quote name='Chart Guru Doug' date='Jan 22 2005, 11:29 AM']
quote]

That's why Monday's trading will be extremely pivotal. If the market moves big in one direction or the other on heavier volume than Friday, the direction of the next 1-2 week's trading will become self-evident. However, as noted earlier, the three black crows have occurred well into this decline, and not at or just after the top as suggested in the commentary. Following this pattern as a low risk new short entry is not advisable. That's not to say that selling won't continue, but the odds have started to turn in favor of this being nearer the end of the decline rather than closer to the beginning.

<{POST_SNAPBACK}>

[/quote]

The blackbirds on the other charts came well into the declines. Here is a chart of 2002 showing the the index had already started to decline before the crows showed up.
By looking at these charts, I doubt we can put much weight on mondays move as it looks almost inevitable that there would be some type of price higher then Fridays close. I think one of the most noteable things here is that a consolidation that hangs out at these lows and then breaks down should bring on some strong selling but we also would not need the consolidation.

One other difference on the recent chart is the the major ma's are not tilted down as strongly, this is because this selling is closer to price highs then in a already established downtrend.
cheers

<{POST_SNAPBACK}>

[/quote]

As IYB has noted many times, it all depends on whether we are in an IT decline, or just a correction in an IT uptrend. In 2002, in the chart you picked out, we were clearly in an IT decline, no one could argue any different on that. But now, the jury is still out as to whether we have started an IT decline, or as IYB and a few of us others believe, this is just a very scary correction in an IT uptrend. If the former, much lower prices are straight ahead, and if the latter, new highs in 2-4 weeks should be expected.

#10 Chart Guru Doug

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Posted 22 January 2005 - 01:16 PM

That doesn't mean it IS, its just the price patterns have a higher risk of that now, than if these patterns hadn't setup -its all probabilities that all.

What's more to the point, is none of these patterns support the idea of a swing bottom being in at low friday, so why risk being caught in a big gap down monday - why not wait to at least see how price opens, as odds favour a low retest and lower risk entry next week no matter what.


Mark.

Very well put Mark, must be that name "Mark" :D

As IYB has noted many times, it all depends on whether we are in an IT decline, or just a correction in an IT uptrend. In 2002, in the chart you picked out, we were clearly in an IT decline, no one could argue any different on that. But now, the jury is still out as to whether we have started an IT decline, or as IYB and a few of us others believe, this is just a very scary correction in an IT uptrend. If the former, much lower prices are straight ahead, and if the latter, new highs in 2-4 weeks should be expected.

Well, at what point do you not call this a correction?
I am just noting that several of the jury members have already voted. Maybe the others can sway them back, I dunno...... Certainly I can understand buying support and then just cutting it if it doesn't get going, same as shorting at top and cutting it if it gets going. I am for whatever makes you money.
cheers
I am not your registered investment advisor. This is not a recomendation to buy or sell. This is my opinion and that is all. I may be long or short any security and change my position at any given moment in time. Do your own due diligence before investing any of your own financial assets.