• 287 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Three Peaks and a (Complex) Domed House

The internet has been abuzz for several weeks about an analogue (discovered by Tom DeMark and popularized by Tom McClellan and others) of the bull market top in 1929 and our current market. I haven't touched on Lindsay's best-known model, Three Peaks and a Domed House (3PDh), since my August 19, 2013 commentary. With a fresh look we will discover that today's Dow Industrials index has even more in common with 1929 than seen in the popular analogue. We can also develop a price forecast for the bottom of the new bear market.

Lindsay shared two distinct variations on the standard 3PDh pattern. The first was a variation he referred to as Model 3 which was explained in my August commentary. But there has been an additional development since then.

Lindsay called the other variation a Complex Arrangement. He described this variation as when an additional 3PDh is contained within the First Floor Roof of the larger 3PDh. The entire movement between the low in June 1928 and the high in 1929 was a Complex Domed House; an initial Three Peaks formation followed by a second 3PDh formation contained within the First Floor Roof of the first formation. It forecast a low to the subsequent bear market at 41.75. The eventual low on 7/8/32 was printed at 41.22. The formula for forecasting bear market lows is outlined in chapter six of my book George Lindsay and the Art of Technical Analysis FT Press 2011.

Just like 1929, a five-wave reversal occurred during 2013. This is an important part of any 3PDh pattern and is called the First Floor Roof. But it is also possible to think of the May (I), August (II), and September (III) peaks as part of a Three Peaks pattern. It seems we have an additional 3PDh contained within the First Floor Roof of the larger 3PDh" - a Complex Arrangement.

With the above knowledge, a price target for the bottom of the bear market in the Dow Industrials index can be determined; 9,576, a loss of 42%, and a return to the lows of October 2009.

Dow Jones Industrials Index Chart
Larger Image

 


Details can be found in the February Lindsay Report available at SeattleTA. Obtain your copy at SeattleTA.

 

Back to homepage

Leave a comment

Leave a comment