click for larger graphic

 

Doug Kass gives us a new look at George Lindsay’s pattern (above).

Doug adds: “I typically dismiss charts like this but so many subscribers have asked me to update the configuration of George Lindsay’s “Three Peaks and a Domed House.”

 

 

Category: Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Three Peaks and a Domed House Revisited”

  1. Pantmaker says:

    *nervous laughter*….gulp

  2. JimRino says:

    Three peaks and then down, 3 times.
    Three peaks and then up, 1 time.
    [ In this time series. ]

    What is this supposed to say?
    Market manipulation? Computer trading algo insanity?

  3. nofoulsontheplayground says:

    When I first saw this pattern in 2001, I thought it was awesome. I haven’t seen it work since that time.

    On another note, as a result of the voting on Tuesday, this weekend worshipers in Colorado and Washington can do Bong HiTs 4 Jesus without repercussions.

    (If you don’t get that reference, look up that Supreme Court Case on Wikipedia)

  4. Jack Damn says:

    I’d be interested to know if anyone has any back-testing data on this pattern. Many blogs post chart patterns without back-testing data and it leaves me suspicious.

    So if anyone has any numbers on this pattern, please post ‘em.

  5. ben22 says:

    the backtesting of this pattern was discussed a few weeks ago when it was put up here, also, backtesting can get very sticky with patterns anyway due to the various ways one could enter and exit different patterns and what kind of risk they want to take each trade

    in any event, there have not been enough examples to backtest three peaks according to Bulkowski, who has done more extensive work on pattern identification than anyone I’m aware of:

    http://thepatternsite.com/3peaksdome.html

    “I searched for this pattern extensively for inclusion in the first edition of my book Encyclopedia of Chart Patterns, Second Edition (pictured on the right), but I couldn’t find enough samples, so I never included it. Lindsay says it appears in the Dow Jones industrial average.”

    You can also see in the link above that Linday himself only offered a few examples of this…and over a fairly long period of time.

    Simply put…this isn’t some head and shoulders which you could see thousands and thousands of examples of on various time frames over the last 100 years…or the last 10 for that matter…..be careful.

  6. JerryC says:

    Has a pretty good similarity to AAPL

  7. carchamp1 says:

    Just please continue posting this the next few years as the green line shoots higher. Looking forward to the regular comic relief. “Three Peaks and a Domed House” – such is the state of modern investment “theory”.

    ~~~

    BR: Its not an investment “theory” — its an interesting bit of technical lore. And George Lindsay had a stellar rep as a trader / technician; I have never read his book “The Art of Technical Analysis: Trading Systems of a Market Master

  8. Jack Damn says:

    @ben22 – Thanks. Appreciate the information. Cheers. :)

  9. Herman Frank says:

    Buy some insurance – a $1K or 2K ladder of out of the money put-options Dow dated Feb, March, April at Dow 1200, 1150, 1100. With the VIX as low as it is today the out-of-the-money part should make them cheap enough to generate a good multiplier effect. Don’t see it as “earnings-model”, see it as portfolio protection. If you want to go hog-wild (instead of gambling in the Power Ball), you lower the Dow levels you’re betting on to 1100, 1050, 1000. If you hit the jackpot “God be with us!”

  10. investorinpa says:

    Here’s one you’ll enjoy reading, BR- an article that meshes politics, gadgetry, apps, poor decision making, and fits into your thesis of testing out theories before trying them out:

    http://blogs.computerworld.com/governmentindustries/21310/inside-look-behind-romneys-loss-epic-failure-its-orca-big-data-app

  11. Patrick Neid says:

    I’ve found that analogues only work if they are secret!

  12. DeDude says:

    So sometimes the 3 peaks are followed by a strong upswing other times they are followed by a strong downturn. So we are either on the way up, or down. I love Chartologists. Why build models based on understanding, when you can just draw lines and pretend that patterns always repeat.

    PS: Why has he put in a fourth peak in his prediction? He already has 3 so we are supposed to point the nose up or down.

  13. FSUNoles says:

    Time for an update? Top out @ 27 and now on way to 1150??? Only next step right?

  14. FSUNoles says:

    Barry, no offense, but I’m sure as hell glad you were wrong on this one!!! :)
    Good start to ’13 in the market and college football……Noles win, and Gators lose!