From the idea suggested in this seminar, I adopted (with slight modifications) Chase's classification of swings as indicated at the top of page one.   This simple classification method is an explicit definition of the general structure of a market using pattern identification numbers ranging from zero (0) to nine (9).  Each pattern consists of 4 turning points with 3 interconnected "legs" of price movement..

In the pattern descriptions diagram I have labeled the turning/pivot points with letters beginning with  'A'   and proceeding forward in time through  'B',  'C',  and  'D'.   The pattern number is posted to the chart at point 'D'  in all patterns so a particular annotation speaks of the price occurrences BEFORE the annotation..

The logic for enumerating the pattern identification numbers is given in the logic equations below.    The applicable pattern number or (ID) is used in conjunction with the derivation of certain statistics about historical price movements.

The symbol > means that the price of the studied equity/future/... at the position in the pattern identified by the alphabetic notation to the left of the symbol is GREATER than the price of the studied equity/future/... at the position in the pattern identified by the alphabetic notation to the right of the symbol. Conversely the symbol < means that the price at the leftmost position indicated is less than the price at the rightmost position indicated. I have not included the AND notation between each of the definitions but this is implicit and all the conditions noted to the right of a pattern number must exist for the A point in the pattern to be identified with that pattern number.

PTRN#       RELATIONSHIPS BETWEEN PRICES AT 
                     C   : A      D :  B      D :   A       B :  A 

    0                C < A     D < B      D < A        B < A
    1                C < A     D > B      D < A        B < A
    2                C > A     D > B      D < A        B < A
    3                C > A     D < B      D < A        B < A
    4                C > A     D > B      D > A        B < A
 

    5                C < A     D < B      D < A        B > A
    6                C > A     D < B      D > A        B > A
    7                C < A     D < B      D > A        B > A
    8                C < A     D > B      D > A        B > A
    9                C > A     D > B      D > A        B > A

Simple is it not.  But look how powerful -- suppose we said we had a pattern id of 937 then we have identified the relationship of not 3 but 6 contiguous legs in a market (in this case the beginning of a real bear market).  Patterns identified with numbers from zero through 4 have the last leg of the pattern pointing down and generally are bearish.  The patterns with numbers from 5 through 9 have the last leg of the pattern pointing up.

CLICK  THE    Add to Cart   Button TO ORDER the
SwingTimer @ $325.00
                                                                   Next Page (3)