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Starting A Religion or The Largest Expanding Triangle In The History Of Finance
Oh, hi there. I’m back from an extended trip into the future. You should go sometime, it is grand. The population boom has been “corrected”. Most of the manual and data-reliant labor is performed by the merger between artificial intelligence and industrial machinery.
This evolution of sorts has left almost all humans with endless time to focus on areas such as philosophy and art. Or, perhaps better stated, a focus on expanding the human potential. I’m sorry to inform you that pursuits such as math and music are dominated by automation, though certain subsets, like “Free Jazz“, have survived .
Though time is mostly spent on intellectual pursuits that cannot be easily automated, there is still a strong competitive nature among the global population. In fact members of the human society, specifically those who outpace the intellectual advances of the automatons, are held in the highest esteem. But the gap between the two species is rapidly converging. In fact, some experts opine that it won’t be long before automatons surpass even the most brilliant human minds, but they have been warning of such circumstances for what seems like ages.
I digress. When I say ‘endless time’ I mean the literal interpretation, as advances in biotechnology have lead to a dramatic increase in the lifespan of the average human. In the time I visited, death is not an inevitability, it is an option. As an interesting and perhaps counter-intuitive aside, only members of the most esteemed classes of humans choose death eventually. They do so though only after reaching an intellectual, emotional and psychological understanding of what it means to be human; the decision is largely based one specific event that awakens a sort-of spiritual understanding.
Oh and I would be remiss were I not to reveal some of the, shall I say, more darker “advances” as well, but I will save that for a different time.
Did I promise you a chart? Looking at the title of this dispatch, indeed I did.
Downward Sloping Expanding Triangle
A downward sloping expanding trend after a period of upward sloping prices is, more often than not, bullish*. However, as with all patterns, it requires confirmation in the form of an upside breakout, preferably accompanied by a surge in volume. While the expanding triangle is undeniably present on the Nasdaq100 index, accurately setting the all important upper boundary of the pattern is difficult. What you see immediately below is after a few iterations and I still do not feel comfortable with the exact placement of the line. On your own charts, play around with the placement it to see what I mean.
Here is an example of a bearish version of a sloping expanding triangle or what is sometimes called a megaphone, using the same chart as above but inverted the trading. Specifically, opposite of it’s downward sloping brother, a upward sloping expanding triangle after a period of upward sloping prices is, more often than not, bearish.
As always, your mileage may vary and please do not base your investment decisions on what you read here. Consider it entertainment at best and subterfuge at worst. Further, always remember that the move following a busted, or violated, pattern is often more powerful than had it proceeded as expected.
*This is based on my own observations of the pattern across different markets and different time frames. I have not found any “expert” opinion (read- published) on sloping versions of expanding triangles. If someone has observed otherwise, please chime in through the comment link below.
[This post has been edited on July 29th, 2009 to add additional clarity and correct for some mistakes.]
