Market Themes and Variations
Michael N. Kahn, CMT
Technical analysis has always been considered an interpretive skill and often cannot be tamed by mechanical systems. Even the latest “innovations” in setting trendlines and price targets cannot substitute for the human mind in leaving room for variations of traditional patterns. Consider a familiar price pattern in several different ways.
Head and Shoulders Standard
Most technical patterns can be applied to up and down markets with equal reliability. Here the example is a rising market. In 1995, the wheat market (Figure 1) was making a series of higher highs and higher lows, a classic indication of a bull market. In August, the market made a low at about the same level as the previous low and ...