Feb 10, 2000
Any such pattern should be checked out well before use. A thorough check should include at least 100 pattern comparisons, and should be done mathmatically, not by eyeball. But it is often of use to start with an eyebal comparison of 10 or so patterns to get an idea of whether doing the programming to compare patterns might payoff.
Since the Chaos Clinic is done on Fridays, the 4 day pattern says, "Friday will be like Monday." Does it work? Let's take a look.
The chart above is a Monday. This chart is just my TOMORROW'S MARKET EMAIL chart saved. We are only interested in the left half.
Rally to 10:30,decline to 2:30,rally to 3:20,decline into the close.
Friday: Similar pattern, but 10:30 was a swing low. Did get a decline to 2:30, and a rally to 3:20 but no decline into the close. Give that one a B.
Above is a Monday. Early low, then nice 7 move up Chaos Clamshell.
And here is Friday. The low came earlier, but it was followed by a 7 move up Chaos Clamshell. Give that one an A.
OK. Here is Monday again. Up to 11:20, down to 1:20, up to 3:20.
Down to 9:50, up to 11:30, down to 12:15, up to 1:15, down to 3:20. Not a great pattern match, but some times are close. Give that one a C.
Monday again. High at 10:15, decline into 3:15 and a spectacular rally.
Rally to 12:00, decline to 2:00, rally to 3:40, and a late drop. Didn't match Monday at all. Give that one an F.
Note that it did follow the -MoonTide very well.
Monday. High at 10:30, low at 1:00, high at 3:00.
Friday: High at 10:15, low 10:55,high 1:00,low 2:40, high 3:10, low 3:25. Some similarity, but not great. Give that one a C-.
Monday. High at 10:20, low 12:05, high 12:40, then decline rest of day.
Friday: High 9:55, low 10:20, high 12:00, low 1:00, decline to 3:40. So-so. Give that one a C.
Monday: Rally to 10:36, decline to 12:30, rally to 1:50,decline to 2:15, rally to 3:40.
Friday: Sharp drop to 10:40, rally to 12:40, decline to 2:10, rally to the close. Opposite in the morning, good match in afternoon. Give it a B- for good times.
Monday: Narrow range and no trend.
Friday: Narrow range and no trend! Give that one an A.
Monday: low at 11:00,high 1:20,low 2:20,high 3:20.
Friday: early close. high 10:40,low 11:00, high 12:20,low at early close. No match at all. Flunk that one.
Monday: Rally to 11:40, decline to 12:40,rally to 3:05,decline to close.
Friday: Rally to 10:55,decline to 12:00, rally to 12:55,decline to 1:20, rally to 3:05, decline to 3:50. Only the 3:05 drop matches. Give that one a D.
That's why I work to mathmatically model the markets. The markets are very complex. It is not easy to make money trading them. The patterns are constantly changing, and it takes a lot of work to compute them. This computation is not easy, but in the long run, it is probably the only approach that will work.