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AABBCC PATTERNSPATTERNS

Presented by TIGER UNIVERSITYAt TFNN.COM

Your Host…Bud Rolfs

Welcome to our ADVANCED CHART PATTERNS SERIES

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AGENDA FOR AABBCC PATTERNSPATTERNS

1. BACKGROUNDA. USE IN TECHNICAL ANALYSISB. ADVANCED CHART PATTERN SERIES (TIGER UNIVERSITY)

2. WHAT IS AN ABC?3. SHORT HISTORY OF CHART PATTERNS

A. CHARLES DOWB. RICHARD SCHABACKERC. ROBERT EDWARDS & JOHN MAGEED. H. M. GARTLEY

4. 20 CHART PATTERNS IN “CHART PATTERN WEBINAR”5. ARE ABCs “CONTINUATION” OR “REVERSAL” PATTERNS6. EXAMPLE OF AN ABC-UP AND ABC-DOWN7. 3 KEY CHARACTERISTICS8. HOW FUNDAMENTALS PLAY INTO ABCs

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AGENDA FOR AABBCC PATTERNSPATTERNS

9. WHERE DO ABCs OCCUR?10. OVER WHAT TIMEFRAMES DO ABCs OCCUR?11. WHAT HAPPENS AFTER AN ABC?12. WHY ARE ABCs IMPORTANT FOR TRADERS?

A. WHERE TO ENTER ABCs-UPB. WHERE TO ENTER ABCs-DOWN

13. WHEN DO WE EXIT?14. ABC PATTERN FAILURES…15. “CHANGING THE B-POINT” (RECOCKING THE PISTOL)16. COMPLEX ABCs17. MULTIPLE ABCs18. ABCs AS CONTINUATION PATTERNS19. ABCs AS REVERSAL PATTERNS20. REVIEW21. QUESTIONS

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1. BACKGROUNDUSE OF PATTERNS IN TECHNICAL ANALYSIS

“Technical Analysis is a security analysis discipline for forecasting

the direction of prices through the study of past market data, primarily

price and volume.” …WIKIPEDIA

Technical Analysis“Attempts to EXPLOIT PATTERNS AND TRENDS”“Uses various techniques and tools, [but] the STUDY OF PRICE CHARTS IS

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2. WHAT IS AN ABC PATTERN?

PUREST SIMPLEST FORM: A. 3-LEGGED MOVE UP OR DOWN B. STOCK, ETF, OR INDEXC. OCCUR IN MONTHLY, WEEKLY, & DAILY TIMEFRAMESD. BC LEG GOES IN OPPOSITE DIRECTION OF OTHER TWO LEGSE. MIDDLE LEG LENGTH BETWEEN .382 AND .618 OF FIRST LEGF. THIRD LEG MUST PASS “B” ON HIGHER VOLUMEG. AB = CD (AT LEAST…CD MAY BE LONGER)

A

B

AD

C

BC

D

“ABC Patterns – A Short Lesson” by L. Little on tatoday.com

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THINK OF AN ABC AS…

2 STEPS FORWARD, ONE STEP BACK, & 2 STEPS FORWARD

A

B

C

D

“A-LEG”

“C-LEG”

“B-LEG”

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3. SHORT HISTORY OF CHART PATTERNS

Charles Dow (1851-1902) …Wikipedia.com

o Founded the Wall Street Journal.o Invented the Dow Jones Industrial Average and “Dow Theory”o Laid the groundwork for Technical Analysis

Richard W. Schabacker…Market Masters; “R. A. Schabacker a Market Master” by Neil Costa

o Often called the “Father of Technical Analysis”o Youngest Financial Editor of Forbes Magazine.o Wrote a number of books on markets, patterns, & trading.o Highly respected trader and market forecaster.

Technical Analysis and Stock Market Profits: A Course in Forecasting (1932)

o Died at the age of 36.

Robert Edwards and John Magee…Market Masters; “R. A. Schabacker a Market Master” by Neil Costa

Technical Analysis of Stock Trends (1948)o Commonly referred to as the “Bible of Modern Technical Analysis”o Almost totally relied on Schabacker. (Edwards’ Uncle)

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H.M GARTLEY

• TRADER AND TECHNICAL ANALYST (1899-1972) 1

• WROTE PROFITS IN THE STOCK MARKET (1935) 1

• ON PAGE 222 OF THAT BOOK HE DESCRIBED THE AB = CD PATTERN THAT FORMED THE BASIS OF THE ABC PATTERN WE KNOW TODAY. 2

• YEARS LATER: FIBONACCI RELATIONSHIPS WERE ADDED 3

• GARTLEY CLAIMED 70% ACCURACY OF THE PATTERN (MODERN TESTING VALIDATES THIS CLAIM) 2

3 “The Great Gartley Controversy” at Harmonictrader.com

2 Larry Pesavento Explains the History of the Gartley Pattern at Traderslog.com

1 Reversal and Retracement: Meet H.M. Gartley

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4. 20 Chart Patterns covered in the“CHART PATTERNS WEBINAR”

1. SYMMETRICAL TRIANGLE2. ASCENDING TRIANGLE3. DESCENDING TRIANGLE4. WEDGE5. FLAG6. PENNANT7. RECTANGLE8. 3 GAP PLAY9. CUP & HANDLE

12. DIAMOND13. BULLISH “W”14. BEARISH “M”15. HEAD & SHOULDERS TOP 14. HEAD & SHOULDERS BOTTOM15. DOUBLE TOP16. DOUBLE BOTTOM17. TRIPLE TOP18. TRIPLE BOTTOM19. SAUCER TOPS & BOTTOM20. BROADENING TOP

PRIMARILY CONTINUATIONS

PRIMARILY REVERSALS

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5. ARE ABC-PATTERNS REVERSALS OR CONTINUATIONS?

ANSWER: “ABCs” OCCUR AS BOTH(And we’ll show examples of BOTH later in our presentation…)

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6. SIMPLESIMPLE AABBCCss…..”ABC…..”ABC--UP”UP”

SIMPLE ABC-UP

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6. SIMPLESIMPLE AABBCCss…..”ABC…..”ABC--DOWN”DOWN”

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7. 3 TYPICAL CHARACTERISTICS OF A CLASSIC ABC PATTERN

A. VOLUME HIGHER IN AB THAN IN BCB. LENGTH OF BC LEG TYPICALLY .382 - .618 OF AB LEG;

BUT BC LEG CAN ALSO BE LESS THAN .382 (SIDEWAYS)C. CD LEG MUST PASS “B” ON HIGHER VOLUME

A

B

AD

C

BC

D

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8. FUNDAMENTALS IN AN ABC PATTERN

ABC-UP PATTERN

AGGRESSIVE BUYING IN ABLIMITED PROFIT TAKING IN BCRESUME BUYING IN CD

ABC-DOWN PATTERN

AGGRESSIVE SELLING IN ABLIMITED BUYING BACK IN BCRESUME SELLING IN CD

A

B

AD

C

BC

D

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9. WHERE DO ABCs OCCUR?

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ABC PATTERNS OCCUR IN STOCKS, ETFs, & INDEXes

FORD MOTOR COMPANY (F)

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ABC PATTERNS OCCUR IN STOCKS, ETFs, & INDEXes

SMALL CAP ETF (IWM)

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ABC PATTERNS OCCUR IN STOCKS, ETFs, & INDEXes

DOW TRANSPORTATION INDEX (DJT)

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10. OVER WHAT TIMEFRAMEDO ABCs OCCUR ?

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ABCs OCCUR ON MONTHLY, WEEKLY, & DAILY, & INTRADAY CHARTS

MONTHLY ABC EXAMPLE

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ABCs OCCUR IN MONTHLY, WEEKLY, DAILY, & INTRADAY CHARTS

WEEKLY ABC EXAMPLE

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ABCs OCCUR IN MONTHLY, WEEKLY, DAILY, & INTRADAY CHARTS

DAILY ABC EXAMPLE

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ABCs OCCUR IN MONTHLY, WEEKLY, DAILY, & INTRADAY CHARTS

10-MINUTE CHART ON AAPL

A

B

C

D

THEY CAN TAKE AN HOUR OR TWO…

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OR TAKE MANY YEARSOR TAKE MANY YEARS

A

B

C

D

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11. WHAT SHOULD WE EXPECTAFTER AN ABC COMPLETES?

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AFTER AN ABC PATTERN?

AFTER AN ABC-UPSIDEWAYS OR

MORE COMMONLY..DOWN

AFTER AN ABC-DOWNSIDEWAYS OR

MORE COMMONLY..UP

A

B

AD

C

BC

D

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SO WHAT…?SO WHAT…?12.12. WHY ARE WHY ARE AABBCCss IMPORTANTIMPORTANT

FOR TRADERSFOR TRADERS…?…?

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WHAT GOOD IS AN ABC PATTERN?

TECHNICAL ANALYSIS…”EXPLOIT PATTERNS AND TRENDS”IF WE CAN RECOGNIZE THE ABC FORMING DURING B-C….

WE CAN GO LONG ON “ABC-UPs” AT THE “C” POINT.WE CAN GO SHORT ON “ABC-DOWNs” AT THE “C” POINT.

OBJECTIVE: “CATCH THE CD MOVE & EXIT”

A

B

AD

C

BC

D

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13. WHEN DO WE EXITEXIT?

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WHEN TO EXIT AN ABC PATTERN?

ODDS @ 70% THAT CD ≥ AB WHEN BC ≤ .618 OF AB AND WE PASS THE B-POINT WITH HIGHER VOLUME

██████████████████████████████████████████████████████████████████████████████████████████████████

ADD THIS: IF YOU GET THE ABC…

ODDS ARE 90% THAT CD WILL BE BETWEEN A1.0 AND 1.382 FIBONACCI EXPANSION OF AB

MY PERSONAL STUDY OF OVER 350 ABCs OVER PAST 10 YEARS

A

B

AD

C

BC

D

$10

$10-$13.82$10

$10-$13.82

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MORE ON EXITING AN ABC

D1: 1.0 -1.382 EXPANSION…EXPECT NORMAL RETRACE. (382-.618)

D2: 1.382 – 1.618 EXPANSION…EXPECT DEEPER RETRACE. (≥ .618)

D3: 1.618 - < 2.0 EXPANSION …OFTEN TREND REVERSAL.

D3: D3: ≥≥ 2.0 EXPANSION2.0 EXPANSION …EXTREME DANGER OF “COLLAPSE”.

A

D1

B

C

1.0

FIB RATIO

1.618

1.382

2.0

90%

97%

99%

CUM. PROB. OF TOPPING

D2

D3

70%

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14. ABC PATTERN FAILURES

A. EXCEPTION TO THE RULE (≤ 3 OF EVERY 10)B. TYPES OF FAILURES

1. SHORT CD LEG2. CD LEG REVERSAL

1.0 FIB EXPANSION

A

D1

C

BEXPECTED

D2

D3

.618 OF AB

WHAT LOOKS LIKE AN INITIAL FAILURE MAY WIND UP BEING A FAILURE.MORE ON THIS ISSUE LATERMORE ON THIS ISSUE LATER…!

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“SHORT CD LEG” EXAMPLE

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“CD LEG REVERSAL” EXAMPLE

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15. 15. CHANGING THE “BCHANGING THE “B--POINT”POINT” OF AN ABC PATTERN

ONE OF THE CRITICAL ASPECTS OF AN ABC IS FOR IT TO TAKE OUT THE HIGH OF THE AB LEG WITH HIGHER VOLUME…

BUT AN ABC SOMETIMES CHANGES THE HIGH OF THE AB LEG WITH A “LIGHTER VOLUME B-POINT”

MAKING IT EASIER TO CONFIRM THE ABC.

(AKA “RECOCKING THE PISTOL”)

A

B

AD

C

BC

D

“ABC Patterns – A Short Lesson” by L. Little on tatoday.com

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EXAMPLE OF CHANGING THE B-POINT OF AN ABC

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16. COMPLEX ABCsTYPE A. SOMETIMES…THE

AB LEG OF AN ABC SPLITS INTO AN ABC,THEN GIVES YOU A NORMAL CD LEG

TYPE B. SOMETIMES…THE AB LEG OF AN ABC IS STRAIGHT, BUT THE

CD LEG SPLITS INTO AN ABC

TOUGH TO PLAY WELL

EASIER TO PLAY WELL

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TYPE-A COMPLEX ABC

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TYPE-B COMPLEX ABC

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17. MULTIPLE ABCs

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EXAMPLE OF MULTIPLE-ABCs

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ARE ABC-PATTERNS REVERSALS OR CONTINUATIONS?

ANSWER: “ABCs” OCCUR AS BOTH(I TOLD YOU EARLIER THAT WE’D SHOW EXAMPLES

OF BOTH LATER IN OUR PRESENTATION…

LET’S NOW LOOK AT THOSE EXAMPLES.)

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18. EXAMPLE OF AN ABC IN A CONTINUATION PATTERN

ABC-UP CONTINUING AN UPTREND

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18. SECOND EXAMPLE OF AN ABC IN A CONTINUATION PATTERN

ABC-UP CONTINUING A DOWNTREND

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19. EXAMPLE OF AN ABC IN A REVERSAL PATTERN

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19. SECOND EXAMPLE OF AN ABC IN A REVERSAL PATTERN

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20. TIME TO REVIEW

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WHAT WE COVERED IN AABBCC PATTERNSPATTERNS

1. BACKGROUNDA. USE IN TECHNICAL ANALYSISB. ADVANCED CHART PATTERN SERIES (TIGER UNIVERSITY)

2. WHAT IS AN ABC?3. SHORT HISTORY OF CHART PATTERNS

A. CHARLES DOWB. RICHARD SCHABACKERC. ROBERT EDWARDS & JOHN MAGEED. H. M. GARTLEY

4. 20 CHART PATTERNS IN “CHART PATTERN WEBINAR” 5. ARE ABCs “CONTINUATION” OR “REVERSAL” PATTERNS 6. EXAMPLE OF AN ABC-UP AND ABC-DOWN7. 3 KEY CHARACTERISTICS8. HOW FUNDAMENTALS PLAY INTO ABCs

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AGENDA FOR AABBCC PATTERNSPATTERNS

9. WHERE DO ABCs OCCUR?10. OVER WHAT TIMEFRAMES DO ABCs OCCUR?11. WHAT HAPPENS AFTER AN ABC?12. WHY ARE ABCs IMPORTANT FOR TRADERS?

A. WHERE TO ENTER ABCs-UPB. WHERE TO ENTER ABCs-DOWN

13. WHEN DO WE EXIT?14. ABC PATTERN FAILURES…15. “CHANGING THE B-POINT”16. COMPLEX ABCs17. MULTIPLE ABCs18. ABCs AS CONTINUATION PATTERNS19. ABCs AS REVERSAL PATTERNS20. REVIEW21. QUESTIONS

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ANY QUESTIONS?ANY QUESTIONS?

IF YOU ARE VIEWING THIS WEBINAR LIVE:PLEASE TYPE IN YOUR QUESTION NOW.

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On behalf of all the folks at TFNN.COM; I’d like to THANK YOU for the honor of teaching you all about “ABC PATTERNS”. The ABC Pattern is but one of three ADVANCED CHART PATTERN WEBINARS. Please also consider attending the upcoming GARTLEY and BUTTERFLY PATTERN WEBINARS either live on November 3rd and November 7th; OR by way of the “ON-DEMAND” service of Tiger University. You might also consider the “BASIC CHART PATTERN WEBINAR” (ON DEMAND) to learn about 20 other classic Technical Analysis Patterns.

THANK YOU ANDGOOD TRADING..!