Question of the Week: 9/12/2005

If structural conflict exists between a shorter and longer-term chart, which do you trust?


This is a very important question and one that most apply wrong. Precise structural cohesion is NOT necessary between one time frame and the next (i.e, if a Contracting Triangle is clear on a Daily Chart, on a Weekly chart that same pattern may only appear as a monowave or as a C-Failure Flat).

Another situation that may arise occurs when your shorter-term chart is bullish and your longer-term chart is bearish (or vice versa). That does not necessarily indicate one or both of your counts is wrong. Maybe you simply have not considered all possibilities on one of the two time frames.

Finally, if the count on your shorter-term chart simply cannot be reconciled with your longer-term chart, and no recent pattern is confirmed complete on either time frame, always trust the scenario of the larger time frame, then work on a shorter-term count to agree with the longer-term count.

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