Pretax - I'm not sure I totally agree 100% with your analysis re pennant. We could well see one form, but at present, it's not quite there! However, you used a perfect chart to draw further analysis upon with the gold example! For me, one of the surest reversal signals is the smooth saucer formation (look at that lovely "smiley face" below the gold chart!). Back in August I mentioned that CDN was forming a classic smooth "bottom" - and having completed the formation, looks indeed as if we are in the start of a pretty significant reversal. Also nice to see the MA200 moving north for the first time in over 2 years - we might even see a golden cross in the not too distant future!
Two charts to ponder as a possible comparison to CDN - both of which i've traded due to their formations....Note the smoother the curve the more bullish response, also note that in both there is that period of uncertainity following the inital spike (ring a bell??), but in both very similar formations the bulls held sway! Methinks 1st quarter 2007 will be interesting for holders!
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