What Do You Really Know About Eiffel-Tower Patterns?
Chris Kimble | 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.
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.
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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