The Expanding Triangle by Kit Webster
Classic chart analysis and Elliott wave theory both consider the expanding or broadening triangle chart pattern to be a reversal of a long-term trend, and further, that such an event may be occurring in the Dow Jones Industrial Average. Here are the details.
As technicians ply their trade, they look at myriad manifestations of price and volume such as stochastics, head and shoulder patterns, and advance-decline lines to attempt to divine the market's direction. Most often the scene we see is a variation on an old theme, played out in new ways. Every now and then, however, something unusual occurs, and this
is such a time for the stock market. The Dow Jones Industrial Average (DJIA), the Standard & Poor's 500 and the New York Stock Exchange index appear to be tracing a rare but powerful formation that will influence the ongoing discussion of bull versus bear markets -and, in my opinion, the formation is decidedly bearish. This rare pattern is the expanding triangle or broadening top.