It should go without saying that I like patterns. I see them everywhere: not just in charts, but in physical objects, human behavior, and events in my life. There’s even a term for it – apophenia – which isn’t necessarily a laudatory title. It can suggest seeing patterns where there really aren’t any.
As the proprietor of this little corner of the web, I try to do a good job showing patterns that I see, but there are certainly times when a given pattern – – even a remarkably good one – – can “go sideways“, as the expression goes. That is to say, it starts to do what it shouldn’t do, and it ruins the pattern. Here are a few examples from some long-term continuous futures contracts that I just thumbed through, and I’ve marked or highlighted the areas where things went bad.
(more…)