In yesterday's post, I noticed that the ellipse was fitting the price action quite accurately at the top candidate. It broke up and I can't call it a top anymore. Today's rally right after the break was quite strong. Up until that break, the prices were very accurately contained in that ellipse. I've heard of round top which passes a curve through the peaks of the top but locating/placing an ellipse at the dips and peaks of a top is something I haven't seen before. If you have seen it please let me know.
Ellipses are mathematical equations. They are not arbitrary curves. If you distort one half of it the other side moves too. Therefore, it needs a lot of stretching and moving around to fit the ellipse onto a topping action which of course doesn't always happen. Obviously, not all tops are ellipse tops but when they are, they are very very accurate. I looked into SPX since 2007 and found some of these tops. Take a look. One common feature is, they take time! Hope it helps.
A question.Its only a top if the market breaks down OUT of the ellipse.If it breaks up...that would be bullish?
ReplyDeleteA question.Its only a top if the market of choice breaks DOWN out of the ellipse.However breaking higher eliminates the formation and is bullish...right?Good bit of observation Bouraq...but its not an ellipse anymore...correct?
ReplyDeleteI see it. Thanks for sharing this.
ReplyDeleteThat's right. Maybe I should call it only ellipse and not ellipse top. They can form within any sideways action like this current SPX move. 2 days ago I said "follow the breakout of ellipse" and it broke "up" which was bullish.
ReplyDeleteIt may turn into a larger ellipse like 2011 top but that needs time and some more sideways zigzags.