CONNECT ALL BOTTOMS OR TOPS NO SKIPPING ALLOWED
is that in the rule book? if you were to connect every bottom and every top it wouldnt be a trendline, it would be a trend squiggle or some kind of price band that for the most part is subject to the chaotic nature of any market...a trend line is a subjective observation on the "general" nature and direction of a particular stock, index, future etc. etc. To connect every bottom and every top as a "rule" is not only wrong its impossible to accomplish and substantially more confusing and counterproductive.
A trendline is a line used to represent the general direction and parameters of a chart pattern...When I drew the descending resistance line connecting the 2 year of high @ 39.00 to the second 'highest' price point I made 2 decisions: 1) A bear pattern is forming because this high broke the preceding high around 37 but failed to break the 2 year high after a very strong rally from sub 20.00 2) To use the previous resistance points around 37 would be foolish as this resistance line was invalidated when the price broke the short term descending resistance line being formed, in early June, yet failed to hold it and later pulled back and broke through the LONG TERM ASCENDING SUPPORT...
Like I said, trendlines are subjective and not subject to someone's stringent rules...I beleive the QQQ is a short until it breaks the descending resistance line I've drawn...If you disagree thats great, go long and we'll see where we're at in 6 months - lol
