What Do You Really Know About Eiffel-Tower Patterns?

 | Apr 17, 2013 04:04PM ET

What are and why could Eiffel-Tower Patterns be important to your investments/portfolio? If a rally creates a chart that looks like the left side of said tower, investors often end up experiencing the right side of the pattern too. True Eiffel towers -- on the right side -- decline to where the left side started. In other words, all gains are wiped out.

Apple And Gold

The four-pack below reflects completed Eiffel-Tower patterns in a variety of assets that took place over the last 17-years ... 'completed' meaning the decline wiped out the prior gains.

The Eiffel Tower Pattern

Buyers' Remorse

The Power of the Patterns showed that Apple (SPY ), Health Care (XLV) and Consumer Discretionary (XLY) could be forming Eiffel-Tower patterns. We have no proof that these patterns are in place, yet the potential is there. The outcome of these patterns could have a big impact on portfolio construction.

Remember that when it comes to Eiffel-Tower patterns, it's not the odds of the pattern coming true that's key, it's the impact if it does.

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