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.
But it is often a good trading signal and we have seen a slew of these patterns, some mentioned over the past week and a plethora mentioned in the title of this posting.
We note with egoistic satisfaction that we caused the euro to tank yesterday.