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2011issue C0438-45

Early rounded bottom recognition on a locked log-price grid

A developing rounded bottom can be hypothesized from a half-cup once a log-price grid, a minimum bar count, and a two-stage directional-strength split are locked. The right rim does not have to be finished.

  • A rounded bottom can be hypothesized from a half-cup: a decline, a quiet low, and an incomplete recovery, without a finished right rim.
  • The recognition window uses natural-log closes, anchors the left edge at the highest close in the span, and sets the bottom at the lowest log close in that span.
  • A 5-by-5 grid and a floor of 20 bars let empty-box and bar-count rules be checked mechanically.
  • Left-half directional movement must sit above 25 and the right remainder below 25, scored on different lookbacks. Early identification is a construction aid, not confirmation.
Entries in this reading2 entries

Hypothesize from a half-cup

A rounded bottom is a cup-like decline, quiet low, and recovery in price structure that can be hypothesized from a half-formed base rather than only after the right rim is complete.

In the historical workflow, a developing rounded bottom is hypothesized from a half-cup: a decline, a quiet low, and an incomplete recovery. The right rim does not have to be finished.

Lock the log-price grid

Pattern recognition here means a fixed sampling window and lookback that scores ordered log closes against empty grid boxes and a two-window directional-strength test.

The recognition window uses natural-log closes. It anchors the left edge at the highest close in the span and sets the bottom at the lowest log close in that same span.

A 5-by-5 grid splits the log-price range and the time span into five equal parts so empty boxes and bar-count rules can be checked mechanically.

A candidate half-cup needs at least 20 bars and no log-close values inside the designated empty boxes of that grid.

Split directional strength in two stages

Directional strength is scored with a simplified Wilder-style index on log closes, using simple rather than exponential smoothing.

The left half of the window must show directional movement above 25. The right remainder must show directional movement below 25.

The two directional readings use lookbacks of twice and three times the grid box length so the decline phase and the later quiet phase are scored on different sample widths.

Treat early identification as construction, not confirmation

Early identification is offered as a construction aid, not confirmation. A half-cup is required if a full cup will form, but a half-cup does not prove that the full pattern will complete.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
12 of 14 in the Rounded bottom track
201316-19 pp.Next on Rounded bottomRounded turns as slope-first trade hypothesesTwo points can share one price and still disagree as long entries: the print while the series is still falling is treated as premature, and the same print after a rounded bottom has turned up is treated as the better long location.
All readings on this track · 14 readings
  1. 1990Constructing falsifiable reversal patterns from price structure
  2. 1995Cup-with-handle construction: confirm the cup, the handle, then the breakout
  3. 1995Cup-completion cheat before the handle breakout
  4. 1998Constructing rounded-bottom cups as testable entries
  5. 1999Rounded bottom landmarks, invalidation, and breakout rules
  6. 2003Constructing rounded bottoms, triangles, and pennants
  7. 2006A five-by-five grid that accepts or rejects a cup
  8. 2006NTRI and the 2005 bowl breakout case
  9. 2006Rounded-bottom screens, first-try breakouts, and Fibonacci retracements
  10. 2007Constructing rounded bottoms as multi-year bases
  11. 2011Early semi-cup construction from the left rim and base
  12. 2011Early rounded bottom recognition on a locked log-price grid
  13. 2013Rounded turns as slope-first trade hypotheses
  14. 2017Evaluating a rounded bottom as a testable payoff structure
All 14 readings tagged Rounded bottom
Also on Rounded bottom5 readings