Joe Ross
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This question was sent to me from one of our students: “Hey Joe! Can you use trend lines to spot turning points? Is there a way to know if the turning point represents a trend change?”
When down-trend resistance line intersects the up-trend support line a "Turning Point" is formed. Expect the trend line with the longest time period value to win the battle between these buying and selling forces. A longer term down-trend channel resistance line should overpower the first challenge of a shorter up-trending channel support trend line. Expect either a short term trend reversal or rapid short term trend acceleration at the Turning Point. The first rule, after a support trend line is broken, is to look left, and find the first two days minimum reaction bottom directly below the current price level, that price becomes the next downside target. The lowest price of that two bar correction and lowest close are a support zone, where prices could find support and create the new trend channel support trend line.
When down-trend resistance line intersects the up-trend support line a "Turning Point" is formed. Expect the trend line with the longest time period value to win the battle between these buying and selling forces. A longer term down-trend channel resistance line should overpower the first challenge of a shorter up-trending channel support trend line. Expect either a short term trend reversal or rapid short term trend acceleration at the Turning Point. The first rule, after a support trend line is broken, is to look left, and find the first two days minimum reaction bottom directly below the current price level, that price becomes the next downside target. The lowest price of that two bar correction and lowest close are a support zone, where prices could find support and create the new trend channel support trend line.
