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This chart from 16D shows my confusion perfectly.
Notice it shows a wedge inside of a wedge. On the outside wedge he counts the first touch as 1. On the inside wedge he doesn't. He counts the other touches as 1, 2 and 3. Which way should we count these?
Thanks in advance!
Gregg
I think the point that Al wants to make here is that there are 2 trendlines intersecting each other, increasing the chance of reaction from the market, especially because they come from the same type of pattern (wedge, nested wedge). He probably called that touch point 3 for both to show that it's in common, but you could have called it point 4 for the nested wedge.
In general, don't be too strict with yourself in counting this sort of things, if you see 4 pushes count it as 4, because you never know where the computers are counting from, some see 3 some see 4. What matters is that there are 2 trendlines of a pattern that has a high chance of a two legs correction sideways to down so you can be prepared to trade that.
Yes, later in another video he says that if a move up to a touch is strong, the traders will reset the count. In this case, since some computers are looking at one wedge and some the other, when they hit together like that selling pressure would probably be immense. Thank you!
Gregg
