Chart Pattern Similarities Between Indices and Pre-Crash AUD:CHF

Chart Pattern Similarities Between Indices and Pre-Crash AUD:CHF

Looking at various charts of US and UK Indices and something kept bugging me as I recognised a pattern that I’d seen before but couldn’t quite put my finger on where.

Then, having seen someone elses charts, showing exactly the same as my own, but on a different charting package it all clicked together.

Any trader that’s been trading for a few years or more will be familiar with that gut feeling that you get once in a while on seeing a chart, and from my experience, those gut feelings are there for a reason, i.e, that you’ve seen the same pattern before but usually don’t consciously recognise it at first.

In this particular case the pattern I’m seeing on Indices is one I’ve seen on an FX pair I traded earlier this year, however, FX patterns that repeat on Indices don’t always work quite as reliably as it takes far less Capital for big players to move (read as manipulate) Indices in the opposite direction to the “obvious” technical outcome.

Here we have an AUD:CHF descending triangle set up that I traded earlier in the year:

 

Ok, that is on a Weekly time frame and what I’m about to show you is a chart of DOW on the hourly time frame, but you’ll easily spot the similarities:

Where it get’s interesting is when we look back at the final result of that AUD:CHF pattern:

If this pattern is to repeat in it’s entirity on Indices, it would be fair to suggest we might have quite a bit more downside to come next week. In all honesty, I don’t know for sure if this move will continue in exactly the same way as the AUD:CHF move, but you cannot deny there are some great similarities there, the final outcome of which will certainly be a tool to add to our trading arsenal whichever way it ends.

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  • This Weeks Swing Trading Round-Up
    Posted at 00:43h, 08 October

    […] The DOW Versus AUD:CHF crash comparison played out perfectly on the hourly time frame though I kept that as a day trade as opposed to a swing trade. […]