"House of Pinchers"

[dalcindo]

Re: Pincher

Hello again, Tina.

Trying to understand whether the pincher pattern being formed can forecast the magnitude of the expected rally. So far, I am not sure how reliable I have found it to be - Not criticizing it all either.

There are many instances where I see the pincher happening, but the subsequent rally is not of any consequence. Of note, though, the greatest price rallies I have found occurred after a double pinch (a double top/bottom for that corresponding indicator).

Is there something that I am missing in anticipating a rally based on a pincher pattern?

For instance, in this following charts, the pincher pattern is there, but the rally is more predictably determined as bearish or bullish with the use of other indicators (I primarily use RSI as my primary and leading indicator, then use CCI, STO, MFI and CMF as combined secondary indicators for what I have called "pre-rally patterns" - where 3 out of these four "oversold" secondary indicators have reliable heralded a significant rally depending on how far they return from the oversold area).

One example of multiple failed pinchers - in the sense that the price remained in a donwtrend channel (DTC):


Examples pf "Pre-Rally Pattern formation:
$USD - 10-Yr., Monthly Chart:


BIDU - 36-Mo., Weekly Chart:


CSCO - 12-Mo., Daily Chart:


GOOG - 36-Mo., Weekly Chart:


Again, not bashing or being critical - Just wanting to learn more about this interesting pincher pattern.

TIA.

D.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2140281