A long standing theory of reversals for Technical Analysts, buy [or sell] a break of a third trend line has been around for ages. Also considered by some as the Fan Principle, it allows you to wait for supply and demand to battle it out and jump in when the winner [trend reversal] finally reveals itself.........not to mention with a nice base for support [or resistance].
Very often a consolidation within a trend is considered a "resting period" before another leg down [or up] continues but how can one tell if the trend is truly over? That's when a break of a 3rd trend line comes in handy.
It worked quite well when the U.S. Dollar reversed.
I also utilized the method getting long WLT @ $29.60 [just to name a few]
Now I've been stalking bonds to the short side along with every other market participant after having been long TLT in the Spring of 2011 [now flat] but this chart of TBT has truly piqued my curiosity.
I'll be waiting and watching for a 3rd tre
