Wednesday, May 16, 2012

domed house update

The chart at the top of the post shows daily bars for the Dow industrials going back to the beginning of 2011. It has been labeled to correspond to the schematic of Lindsay's 3 peaks and a domed house formation. I have been tracking this particular formation for quite some time now.

I am sticking with my interpretation of the December 2011 reaction low as point 14 and the start of the first story of the domed house. As a rule one can expect the top of the domed house, labeled as point 23 in the schematic above, about 7 months and 10 days from point 14. There are times when this count should be taken from point 10 which here is the October 4, 2011 low. That would have put point 23 yesterday and so is obviously not a very good fit here. I think it is more likely that we are seeing the roof of the first story developing - points 15 through 20. Then point 23 is due toward the end of July.

If you want to learn more about Lindsay's 3 peaks and a domed house and like having it explained to you step by step with lots of historical examples you can buy a 50 minute presentation of the whole theory on DVD from Ed Carlson, author of George Lindsay and the Art of Technical Analysis. The DVD comes with extensive cover notes describing the main points of the 3pdh and you will find it a handy reference guide.


BullandBearWise said...

Sure looks more like we're between 25 and 26 here.

Esoterictrader said...

With July labeled as 7, couldn't one interpret this with the late July high as 9, initial Aug low as point 10, and the October low as point 14?

Points 10 through 14 feels to me to be a consolidation after the initial sell off from point 9, building strength for the rally to point 15 (Nov highs). Thereafter, the market consolidated until end of the year with the end of the year representing point 20 and the subsequent rally. This would then lead us to currently being at point 26, with a potential rally back to point 27 in the near future.

AristotelCostel said...

24 or 26. :)

Graph1159 said...

I'm not very familiar with Lindsay's methodology. Would it be uncommon for the roof of a previous formation to be the three peaks of a new formation?

Adsense said...

Hi Carl
Looks like we are in agreement for a change ,lol the transports sill holding in there and the spx weekly still fits as a wave 4 . interesting to note is running a parallel trend line off of the week oct oct 24 2011 at 1292.66 on the spx cash labeled ( 1 ) and running the line off of the low on dec 19 2011 at 1202.37 ( not traditional i know .also a .382 retracement from the 1158.66 low to the 1422.38 high has 1321.63 as its level . none of it perfect mind you but enough to consider if we see a reversal which really should start sooner rather then later .also there is a 2 year cycle top due july 19th which also fits with in your parameters for a high , my concern at this juncture though is will it be a lower high
and the 3 peaks domed house a failure ??? cyclically the market is rolling over as it should be and technically id like to see the 3 peaks domed house pattern finish .the market is oversold yet can become more so may 21 is a key day and ideally a high not a low . early june would be a reactionary low ( higher low ) to give me more confidence. that said i took a small bullish position today .

JW said...

Sell in May and go away has worked quite well the past two years.

I hope Carl's Lindsay analysis is right, but it does look bearish.

PRB said...

If we have seen the top we missed the second wall. Not likely. Looks like there are variations to Carl's picture. A lower 3rd wave in the roof is a possible. I think Carl is right here.