Why do chart pattern indicator signals appear one day and disappear the next?
I use the NR7 chart pattern, but wait up to 7 days for a breakout to occur from that pattern for each stock. Let’s say that the chart pattern indicator (CPI) says that the market is bearish on Wednesday with 150 NR7s completed but price has not broken out upward or downward yet (closed above the highest high or lowest low during the past 7 days). On Friday, let’s also say that the market makes a huge move up, say 150 points. Most of those 150 NR7s waiting to breakout will do so on Friday when their stocks close above the highest high posted by the NR7. Thus, the bullish and bearish counts for the prior 7 days will be adjusted accordingly and that may well cause a bearish signal to disappear. That’s why signals can appear or disappear for up to 7 days from the current day. It happens when the markets make large price swings either up or down.
