| Ending diagonals have
occurred recently in Minor degree as in early 1978, in Minute
degree as in February-March 1976, and in Subminuette degree as
in June 1976. Figures 1-17 and 1-18 show two of these periods,
illustrating one upward and one downward "real-life"
formation. Figure 1-19 shows our real-life possible expanding
diagonal triangle. Notice that in each case, an important change
of direction followed.
Figure 1-17
Figure 1-18
Figure 1-19
Although not so illustrated in
Figures 1-15 and 1-16, fifth waves of diagonal triangles often
end in a "throw-over," i.e., a brief break of the
trendline connecting the end points of waves one and three.
Figures 1-17 and 1-19 show real life examples. While volume
tends to diminish as a diagonal triangle of small degree
progresses, the pattern always ends with a spike of relatively
high volume when a throw-over occurs. On rare occasions, the
fifth subwave will fall short of its resistance trendline.
A rising diagonal is bearish and
is usually followed by a sharp decline retracing at least back
to the level where it began. A falling diagonal by the same
token is bullish, usually giving rise to an upward thrust.
Fifth wave extensions, truncated
fifths and ending diagonal triangles all imply the same thing: dramatic
reversal ahead. At some turning points, two of these
phenomena have occurred together at different degrees,
compounding the violence of the next move in the opposite
direction. |