I knew it! He's been caught with another intern!

By the way...whatever happened to our pennant?

"...But how do we know that the spike is not the true breakout from a pennant? If it closes near the low on a spike up, then you'd want to exit, because it will commonly bust south in such a scenario. If it closes near the high on a spike down, same applies but in reverse."

The combination of the pennant being formed in a downtrend, as we discussed in part one, and the single spike up which closed near the lows was strong enough to make the price bust through the suppport we had noted. See how important the rest of the chart can be to the validity of a formation?

Any questions, or anything to add to trading pennants? Tell me!

Advance and Decline Line:
A technical analysis tool which is thought to be a good indication of the market's overall direction. Take the number of markets which moved higher and divide by the number of markets which moved lower during a specified time period. It's considered bullish if greater than 1, bearish if less than 1.

ARIES (March 21-April 19): One-sided partnerships will be upsetting. You give the broker money, he loses it. Be sure to get promises in writing, preferably on something hard and heavy so you can beat your subscription service rep over the head with it if they give you a bad recommendation. Self-deception will lead you in the wrong direction with the wrong individual, but at least you'll believe you are good looking.

TAURUS (April 20-May 20): You're in a high creative cycle, great time to fudge your taxes. Make an effort to complete unfinished projects, think about it for a bit then go back to watching tv. You will be able to pick up valuable information if you're at the right place at the right time, but you won't be, so go back to sleep.

GEMINI (May 21-June 20): Your emotions and your capacity for love are growing. The viagra is working. Greater opportunities to meet potential lovers will evolve through attending investment meetings, make sure they're rich before you accept any dinner invitations.

CANCER (June 21-July 22): Sudden romantic attractions may surface through
online events. Be careful not to let your mate in on personal secrets. Problems with partnerships may disrupt your routine, they always get in the way.

LEO (July 23-Aug. 22): You can be the center of attention with your colorful zit. Gain popularity by attending business festivities naked. Don't get involved in the personal affairs of co-workers unless you're into threesomes.

VIRGO (Aug. 23-Sept. 22): Unique forms of entertainment will captivate you and bring about a romantic interest with your computer. You should be able to make extra cash through your creative hobbies as long as you ensure your models are all over 18.

LIBRA (Sept. 23-Oct. 22): You will be concerned about the changes going on in the markets. You don't like to feel unsettled and know that a decision must be made. Look to a close friend for advice, blame them for your misfortune from following that advice.

SCORPIO (Oct. 23-Nov. 21): Talk to individuals you trust and bounce your ideas off them. You have given them your plans, but hadn't anticipated their greed. Kick yourself when they get rich off your idea.

SAGITTARIUS (Nov. 22-Dec. 21): Don't become angry because a financial deal you were working on went sour. You have only yourself to blame. Dealing with dubious investment advisors and taking risks probably means you'll lose.

CAPRICORN (Dec. 22-Jan. 19): Difficulties with emotional traders will be most unpleasant. You haven't had much time to spend with loved ones, console yourself by trading more.

AQUARIUS (Jan. 20-Feb. 18): This is not the best time to deal with your banker. Difficulties will occur with authority figures in financial institutions. You will have to bide your time until you can learn to arm the explosive without blowing yourself up.

PISCES (Feb. 19-March 20): Travel and adventure can be yours. Foreign cultures and customs will enlighten you. You will soon realize that there are entire countries whose people are worse off than you. You will need mental as well as physical stimulation in your relationship, give your hand a rest.