http://rantaboutit.blogspot.com/2007/06/how-can-resistance-support-help-traders.html "The support & resistance levels get stronger and stronger depending on how many times the stock price has historically been unable to move beyond it." http://www.mindxpansion.com/options/support-resistance.html "The more times that support level is tested, the stronger the support level becomes." http://timetotrade.eu/wiki/index.php/Support_Level "The more frequently a support level is tested (i.e. hits a previous support level pivot point but does not fall below it), the stronger the support at that level."
Everyone is looking at the same thing you are. Everyone knows that we bounced off of long term support, and feel like its a short term bottom. What is very telling here is that this time, the US market is not affecting Asia like in August. This actually is a negative for the market. When you see decoupling of a market to the downside, it is usually a very weak market that has much further downside, i.e., the US market.
Do you want to know why you see so few triple tops or bottoms? It's because a triple top is no longer a triple top when the double top is exceeded and vice versa. Very few triple tops can hold up because most of the time the support or reisistance is not there any more, or at least not as strong. Buy triple tops, and sell triple bottoms. You will very rarely be wrong.
EXACTLY. That is why this move today is not going to last. It is almost "too easy" for someone to just buy that support at 1380 and just wait for the market to rocket higher. Unlike the last 2 times that we hit 1380 and bounced, we've already gone through several Fed cuts and bailout attempts (surprise discount rate cut, White House plan, TAF, etc.) and we've still gotten to the same levels. It speaks volumes about how weak this market is and how government intervention isn't working.
He's serious. You see, if the support or resistance doesn't hold the 3rd time, its not a triple top or bottom, but a double top or bottom which failed to hold support the 3rd time. If there is no 3rd bottom, then its not a triple bottom.
I thought the reasoning here was -- the more data points you have --- say hitting support 3 times instead of 2 --- the more data points - the more reliable the information is that not so?
So first you start this thread where you say look out below, and then you start the "We've bottomed at 1380. No looking back" thread, and now you say we're going through the lows real soon??
Do you want to know why you see so few triple tops or bottoms? It's because a triple top is no longer a triple top when the double top is exceeded and vice versa. so, no such thing as a triple top? (serious question)
You have more data points, but that doesn't make the support more reliable, it makes it seem more reliable. In TA, when everyone sees a bullish pattern, it usually doesn't work out because everyone has already gotten long and are looking to exit.