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Three peaks question


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#1 CLK

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Posted 30 January 2007 - 02:53 PM

Anybody know the exit targeted measurement on shorting a " 3 peaks and domed house" formation ? Is it well below the 3 peaks area ?

Edited by CLK, 30 January 2007 - 02:54 PM.


#2 NAV

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Posted 30 January 2007 - 03:08 PM

Anybody know the exit targeted measurement on shorting
a " 3 peaks and domed house" formation ?


Is it well below the 3 peaks area ?


I have been hearing about this 3 peaks formation for the last three years. The peaks only keep moving higher and higher. IMHO it's a waste of time analyzing something so unreliable.

Can anyone show me a real life example of 3 peaks and domed house occurence in the stock market ?

Edited by NAV, 30 January 2007 - 03:09 PM.

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#3 fib_1618

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Posted 30 January 2007 - 03:10 PM

Anybody know the exit targeted measurement on shorting a " 3 peaks and domed house" formation ?

The price objective is the starting point of the pattern (see chart below...February was the starting point).

Fib

http://stockcharts.com/c-sc/sc?s=$GASO&p=D&st=2006-01-01&i=p71939202156&a=83667613&r=17.png

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#4 CLK

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Posted 30 January 2007 - 03:15 PM

I thought this looked close, but maybe not.

Just looking for a short.



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#5 PorkLoin

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Posted 30 January 2007 - 03:16 PM

Hey CLK, It can vary, at least in my opinion. It depends on what degree of trend is being completed. The "three peaks" zone or range is a common stopping point if what is being corrected is only the move up through the peaks and to the dome. If a larger trend is done, one of greater significance, then the decline can go far below the three peaks. Most models of the pattern show a little move up, then sideways or down, then a larger move up to the first of the three peaks. If the dome is not only ending the famous "three peaks" pattern but a trend or trends of greater magnitude, then the decline can go below the origin of the first move up to the first "peak," possibly far below. Best, Doug

#6 Mtrader

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Posted 30 January 2007 - 03:19 PM

GS will buy their own stock. That is how they make money.
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#7 fib_1618

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Posted 30 January 2007 - 03:29 PM

I thought this looked close, but maybe not.

Anything less than a daily time frame is questionable for this kind of pattern to take place and it rarely, if ever, takes place in the equity markets because of it being the main focus of the masses.

I have been hearing about this 3 peaks formation for the last three years. The peaks only keep moving higher and higher. IMHO it's a waste of time analyzing something so unreliable.

It's a reliable pattern - it has it's rules as many patterns do - it's just analysts misinterpretations of this same pattern, and its rules, that are the problem.

Here's another one, though a bit on a sloppy side because of political influences, but it also reached the price objective of the pattern in spite of such anomalies.

Fib

http://stockcharts.com/c-sc/sc?s=$WTIC&p=D&st=2006-01-01&i=p71939202156&a=96465674&r=5947.png

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#8 NAV

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Posted 30 January 2007 - 03:34 PM

I thought this looked close, but maybe not.

Anything less than a daily time frame is questionable for this kind of pattern to take place and it rarely, if ever, takes place in the equity markets because of it being the main focus of the masses.

I have been hearing about this 3 peaks formation for the last three years. The peaks only keep moving higher and higher. IMHO it's a waste of time analyzing something so unreliable.

It's a reliable pattern - it has it's rules as many patterns do - it's just analysts misinterpretations of this same pattern, and its rules, that are the problem.

Here's another one, though a bit on a sloppy side because of political influences, but it also reached the price objective of the pattern in spite of such anomalies.

Fib

http://stockcharts.com/c-sc/sc?s=$WTIC&p=D&st=2006-01-01&i=p71939202156&a=96465674&r=5947.png


Fib,

Can you show me one occurence of three peaks and domed house pattern on DOW or SPX over the last 100 years ?

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#9 mdwllc

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Posted 30 January 2007 - 03:41 PM

The late Jerry Favors used to be a "Three Peaks " advocate. I used to subscribe and looked for any of his material, but I don't seem to have it any more. You might want to do a Google search on Jerry and see if any of his material or articles are mentioned. Mike :)
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#10 fib_1618

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Posted 30 January 2007 - 04:18 PM

Can you show me one occurrence of three peaks and domed house pattern on DOW or SPX over the last 100 years ?

Well, I could, but to show such a pattern in the Dow or SPX I would probably have to go back about 20 or 30 years to dig a clean one up (the early 1970's was the last one I believe, and then the early 1960's) and I don't have the data handy to show. However, when it comes to individual stocks, you can find the pattern more readily, but even then, it's still a challenge.

Overall, it's a rare pattern (the recent one with gasoline was the first one I've seen in a long while), and it's more than likely you'll only see such a pattern turn up in more thinly traded futures related price patterns than that of the equity markets because of the cyclical emotional element that creates such patterns to begin with. But at the same time, the equity markets do tend to make rounded tops and spike bottoms, so I'm sure there are many rounded top patterns over the last 30 years, but not with the 3 peaks pattern before this same "domed" top (no less the couple of other factors that would create this same price pattern).

Just my personal experience - maybe someone else could provide one after the 1974 bottom to answer NAV's challenge?

Fib

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