Dump, bump, run — BAC C EEB NYC SLV ETCETC

Posted on Feb 19, 2010 by in Letters

We have previously pointed out this pattern, which occurs on "corrective" downwaves of short duration.  The sharp sell off starting a downwave, the rally within the plunge, continued price deteoration.  This pattern allows the drawing of a tight downtrend line.  When broken by a power bar or a stong gap this furnishes a buy signal.  As to whether this buy signal will initiate a real trend is not known until the top of the "bump" wave is taken out, and then the top of the "dump" wave is taken out.

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