Importantly, an uptrend pattern occurring at the bottom of a downtrend would effectively signify the end of the downtrend. This is what Charles Dow meant when he stated his major 6th principle about the trends: “Trends will continue, until there is a definite signal that the trend has reversed” (page 37).
There is no more significant a signal that an Uptrend has reversed than the clear Downtrend signal with two successively lower tops and lower bottoms after the All Time High of the uptrend.
Since trends are one of the most important parts of my system, it may be useful to provide a few definitions to clarify their identification, use and application:
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