Wednesday, April 25, 2012

Carl Futia: Three Peaks and a Domed House
see also


Below it is a schematic of George Linday's three peaks and a domed house formation.

Above is a daily chart of the Dow going back to the beginning of 2011. 

... [A] 3pdh formation [is] still in progress. It is illustrated in the Dow chart above which has its highs and lows numbered to correspond with the schematic above it. In this formation point 10 is the October 2011 low point. Lindsay observed observed that point one of points 21,23, 25 or even 27 generally occurs about 7 months and 10 days after point 14. This time projection lands in early July 2012. Sometimes the time count has to be made from point 10. That count ends in mid-May. So there is about a 7 week interval beginning in mid-May during which we should see the development of several of the highs associated with the peak of the domed house.

... While it never pays to be dogmatic about these things the fact that I see no significant underlying technical weakness in the US market leads me to believe that another rally to new highs will develop before any substantial correction begins which has any chance of revisiting the 2011 low points.