scale, buy the
427
Sample TradeOne way to learn how to trade pipe bottoms is to review what Peter did. Peteris one of the more intelligent software engineers I know. Not only is he smart,but he is personable as well. He is very helpful and friendly unless managementturns the screws and demands that work actually be done on time. Then thepressure seeps in and tempers flare. When the pressure gets too intense andPeter feels the need to take a break, he does not take a walk as most other people do. Instead, he invests in the stock market. Since he has an Internet connection in his office, he is on-line in just seconds. The situation shown inFigure 30.5 intrigued him. Prices had been moving horizontally since April1992, forming an extended base on which an upside breakout of significantproportions would evolve, he hoped.Over the shorter term prices began trending down in mid-January 1994.They reached a low the week of April 4, 1994, accompanied by above averagevolume. Had this downward price spike been alone, it might have signaled aone-day reversal (one-week reversal really, since we are on the weekly scale).However, another downward spike appeared the following week. Prices didnot drop to the low of the prior week (383/8) but they came close at 385/8. Thedual spikes were long enough to set them apart from the surrounding price
stock. Since a stock will often retest the most recent low before starting on asustained journey upward, be prepared for it. Place a stop-loss order H point(to allow room for the retest to drift below the pipe low) below the lowest pipe.
BankAmerica Corp. (Bank, NYSE, BAG)
If hit, then prices are probably going to continue down. In such a case, closeout your position and send a letter home asking for more money!
Table 30.4Trading Tactics for Pipe BottomsTrading Tactic
Explanation
Downward plunge
Many of the best performing pipes show a downward pricetrend leading to the formation. Pipes often occur at the bottomof a retrace in an upward price rise or mark the end of anextended price decline.
Buy
After a pipe bottom passes the identification characteristicsshown in Table 30.1, buy the stock.
Stop loss
Pipes act as support zones but prices sometimes dip up to '/2point below the pipe low, so use that as your stop-loss point.Raise your stop as prices climb.
Watch for throwback
While not a throwback per se (because the weekly scale is beingused and throwbacks happen in one month or less), be awarethat prices sometimes retest their lows and drop slightly belowthe pipe low before beginning a sustained upward climb.
9 3 N D 9 4 F M A M )
) A S
O N D 9 5 F M A M |
| A S O N D 9 6 F M A M |
Figure 30.5 Pipe bottom with preceding brief price dip and following low retest.Peter bought this stock the week after the pipe completed and sold it for a 71%gain 2 years later.
428
Pipe Bottoms
action, certainly longer than the brief, 1-week, dip in mid-March. The following week prices moved up smartly, leaving a clear pipe bottom visible on thechart. At the end of that week, Peter bought the stock and received a fill at 42.He set a stop loss at 377/8, H below a whole number. Peter placed the stop therebecause he knew that whole numbers are sometimes support areas. Placing thestop just below 3 8 would give the stock every opportunity to turn around andmove higher.As Peter watched the stock, he was pleased that it was working out sowell. The real test, he knew, would be when the stock approached the top of itstrading range. Over the prior 2 years, it had reached a high of 55'/2 and a lowof 401/2. If you exclude 3 months when prices shot higher then fell back down,the range was tighter with a high about 49. Peter knew that 49 and 55H werethe keys. If prices pierced those levels, then they would probably continuemoving higher.Peter watched the stock and when it reached a high of 50'/4 and fell back,he knew this run was not the one that would send the stock higher. He sawprices crumble again and hoped that it was only a retest of the low and not thestart of a new downside breakout.During late November, prices reached a low of 385/8, tying one of the pipelows. Then prices moved modestly higher. Peter decided to double his positionand bought more stock. In early February, prices broke out of their congestionzone and zoomed higher. From that point on, there was no looking back.Prices continued rising in an almost straight-line bead until April 1996.Then, after setting a new high (803/8), prices backtracked. Expecting a retracein an uptrend, Peter held onto his shares. He watched the shares sink andwhen they reached 72, he gave up and sold. Prices dipped to 693/4 before beginning upward again. Peter sold too soon (as it continued moving substantiallyhigher). Still, he made $30 a share or 71% in about 2 years.
31Pipe Tops
RESULTS SNAPSHOT
Appearance
Two adjacent upward price spikes on the weeklychart
Reversal or consolidation
Short-term (up to 3 months) bearish consolidation
Failure rate
18%
Average decline
21%, with most likely decline between 10% and 20%
Surprising result
A 3-month downtrend (minimum) leading to theformation results in the best performance, with lossesaveraging 24% and an 11% failure rate.
See also
Horn Tops
If you compare the above statistics with horn tops, you will not find much difference because the two formations are similar, even in appearance. Still, the18% failure rate for pipe tops is quite good, below the 20% maximum for formations that I consider reliable. The average decline is 21 % with a likely lossbetween 10% and 20%. This is an improvement from horn tops, which showthe most likely loss to be just 10%. The best performing pipe tops are thosewith price trends at least 3 months long leading down to the formation. Thepipes appear as part of a retrace in a downtrend and perform much better thanother combinations. They score average losses of 24% with a smaller failurerate of 11%.
429
430
Pipe Tops
Tour
Table 31.1Identification Characteristic
Figure 31.1 shows what pipes look like and how they perform. There are threepipe formations shown in the figure, all of them tops, all warning of animpending trend change. The pipe on the left occurs while prices are still rising and acts as part of the consolidation of the trend. I consider it a failurebecause prices climb significantly above die pipe top before tumbling.The center pipe really marks the turning point. It towers above the surrounding hillside and prices on either side of it fall away. The resulting formation looks like an upside down V.The pipe on the right is the last one before prices really begin tumbling.It flags die last chance to exit your holdings or place a short at a good price.From the high at 39'/4, prices tumble to below 13 by the end of this study—a67% loss.
Identification GuidelinesTable 31.1 outlines the guidelines for correctly identifying pipe tops. First, useweekly charts as they make pipes easy to spot. You should see two adjacentupward price spikes. The twin spikes should be unusual in that they should bewell above the surrounding prices and taller than most other price spikes
Characteristic
Discussion
Weekly chart, upward spikes
Use the weeklyprice spikes. Thsimilar spikes osurrounding pri
Large overlap
The two spikestween them. Do
Small price variation
The price differusually B/B or leshigher-priced st
Upward retrace in downtrend
The best perforretrace in a pro
throughout the year. Also, the two spikes shothem; one spike should not be significantlyshould have many prices in common.The peak-to-peak spike price difference3/8. In the study, only a handful of formationThe vast majority (88%) have differences ofIf you look at enough pipe tops, you wilof an upward retrace during a downtrend su
Advanced Micro Devices, Inc. (Semiconductor, NYSE, AMD)Pipe
Figure 31.1 Three pipe tops. The first one is a failure because prices rise significantly above the pipe top.
Figure 31.2 This pipe top appears during a rdo some of the best performing pipes.
432
Statistics
Pipe Tops
433
You can see that prices peak in mid-March at a price of 397/8, then move downfor just over a month before recovering. The second top does not last longbefore prices start moving down again. Prices take a sharp 1-day drop from3 5'/2 to 29 and move down even further before recovering. The upward retracesees prices bounce to a high of 307/8 from a low of 261/4. That is when thepipe forms.The twin highs of the pipe are just I/B apart and are well above the surrounding high prices. Except for the spike in mid-March, the price spikes areunusually tall when compared with other spikes throughout the prior year.Since the pipe spikes both share the same low price, the two spikes exhibit alarge price overlap.
The pipe signals a resumption of the downtrend. In less than 2 months,prices drop to a low of 18 before recovering slightly.
Focus on FailuresThe vast majority of failures occur when prices decline by less than 5% beforeresuming their upward trend. These 5% failures do not happen that often, only18% of the time for pipes, but their occurrence is significant enough to warranta review of the situation.
Figure 31.3 This pipe top forms near the end of a long symmetrical triangle, Aninvestor should wait for a downside breakout before trading this pipe.
Many failures occur when prices are trending up. The uptrend ranges
triangle, it is best to wait for the actual breakout. If investors waited for pricesto pierce the bottom trendline after the pipe appeared, they could have savedthemselves from a loss. As it is, the pipe shown in Figure 31.3 is a failure ofprices to decline. Prices reached a high of 603/4 in September, more than double the price where the pipe forms.More often than not, a pipe acts as a consolidation of the trend, so youshould not depend on it acting as a reversal. Although a reversal does happen46% of the time, you should invest believing that prices will continue in thedirection of the prevailing trend. If the trend is upward, then prices will continue moving higher. Prepare for the worst; hope for the best.
from several months to over a year and the pipes seem to signal a coming trendchange. Sometimes they do and prices drop, but by less than 5%. At other
times, the drop is more severe, but it is in the future, from 2 to 5 or moremonths ahead. In between the pipe and the drop there are higher prices.Sprinkled among the uptrend failures are those related to downtrends.Pipes usually appear at the end of a long downtrend or shortly after the trendchanges and begins moving up. Instead of an upward retrace in a downtrend,the pipe marks the turning point for higher prices.Consider Figure 31.3, a pipe top in a stock that has been moving sidewaysfor about a year. Upward breakouts from these long, flat consolidation areastypically mark the beginning of a long rise, as in this case. For many chart formations, even those that have a measure rule to predict what the eventual price
will be, there is still one overriding rule: There must be something to reverse.You can see that the consolidation region narrows over time, reminiscentof a long, symmetrical triangle. Even the volume pattern supports the formation by receding most of the way along the chart pattern. Since the boundaries
of a symmetrical triangle mark lines of support and resistance, the possibledecline from the pipe base to the triangle boundary is just 5 %, not a very compelling investment. In essence, there just is not much of a climb to reverse.However, in all fairness, if the pipe correctly predicted a downside breakout from the triangle, I would be telling you a different story. Since it is difficult or impossible to predict the breakout direction from a symmetrical
StatisticsTable 31.2 shows general statistics for pipe tops. I uncovered 443 formationsin just 150 stocks before I decided that my spreadsheet was full enough. Ofthese formations, 54% act as consolidations of the prevailing trend, whereasthe remainder act as reversals. The failure rate, at 18%, is just under the 20%threshold I consider the maximum allowed for reliable formations. Most ofthese failures are of the 5 % variety, in which prices begin heading lower butsoon turn around and climb significantly higher (after falling by less than 5%).The average decline is 21 %, about what you would expect from a bearish chartpattern.
434
Pipe Tops
StatisticsTable 31.2General Statistics for Pipe Tops
Description
Statistic
Number of formations in 150 stocks from 1991 to 1996
443
Reversal or consolidationFailure rate
238 consolidations,205 reversals80 or 18%
Average decline of successful formations
21 %
Most likely decline
10% to 20%
Left pipe volume versus 25-day moving average
123%
Right pipe volume versus 25-day moving average
123%
For successful formations, days to ultimate low
4 months (123 days)
Figure 31.4 shows a frequency distribution of losses. The chart suggeststhat the most likely decline is in the 10% to 20% range. You can see that thefirst three columns are nearly equal in height. Together they represent 55% ofthe formations. In essence, over half of the formations have declines of 20% orless on average. In a statistical anomaly, the volume for both weeks of the pipeaverage 123% of the 25-day volume moving average. In a moment, we will seethat volume—either high or low—plays an insignificant part in whether the
435
decline is large or small. For those formations that decline by more than 5%,it takes about 4 months to reach the ultimate low.Table 31.3 explores some surprising facets of pipe tops. The benchmark,which comprises all formations that work as expected, has an average declineof21% with an 18% failure rate. When we separate pipes into those with pricedifferences between the highs from those that reach the same high price, we discover that the average loss is 23% for those pipes with no price difference. Theaverage loss from pipe tops with different high prices is 21 %.Volume, as mentioned in the preceding section, does not appear to be asignificant determinant to the performance of pipes. With high volume on theleft and right side of the pipe spikes, the performance ranges from 19% to 22%,respectively. Low volume on the spikes results in similar, although slightlybetter, performance, at 21% to 23%. The different combinations, however, domake a difference. For those formations with high volume on the left spike andlow volume on the right, the loss is 18% while the failure rate drops marginally to 16%. When you flip the volume around, that is, low left volume andhigh right spike volume, the average loss amounts to 24% but the failure ratealso climbs, to 22%.I used linear regression to assess the 3-month price trend leading to theformation. When the price trend is up, the chart pattern scores an averagedecline of 19%. However, when the trend is down, the decline averages 24%
Table 31. 3Surprising Results for Pipe Tops
Figure 31.4 Frequency distribution of losses for pipe tops. The graph emphasizesthat the most likely decline is in the 10% to 20% range.
Description
Average Decline(%)
Failure Rate(%)
Benchmark
21
18
Decline for pipes with price difference betweenhighs
21
Decline for pipes with no price differencebetween highs
23
Percentage of high volume left (L) pipes, right(R) pipes, both (B) pipes that score better
LI 9, R22, B21
Percentage of low volume left (L) pipes, right(R) pipes, both (B) pipes that score better
L23, R21, B23
18
High left pipe volume, low right pipe volume
18
16
Low left pipe volume, high right pipe volume
24
22
Linear regression price trend: 3 months up
19
Linear regression price trend: 3 months down
24
Large price spike (4x average)
22
11
436
r
Pipe Tops
with only an 11 % failure rate. When contemplating pipe tops for shortingconsider looking for a declining price trend.I also examined pipes for their height, as measured from the lowest highof the two spikes to the highest high of the two adjacent weeks. Spikes that arefour times or more higher than the average spike (computed over the course ofa year) result in a 22% decline, admittedly not very exciting, especially sincethe benchmark is 21 %.
Trading TacticsTable 31.4 outlines trading tactics for pipe tops. The performance of pipesdepends on the prevailing trend. For larger percentage losses, look for pipesthat appear in downtrends. Pipes will usually appear in an upward retrace of along-term decline. Try to find pipes where the decline is evident but just starting. What you do not want to do is invest near the end of a downtrend. Ofcourse, trying to determine when a trend will end is something of an art. However, if the stock has been trending down for many months (such as a year ormore), then you should probably look elsewhere.In long-term uptrends, the pipe might signal the end of a trend. Sometimes it is premature by a few months, so do not be in too much of a rush to sellthe stock short. At other times, a review of the surrounding price patternsmight be rewarding. Double or triple tops sometimes show pipes on one of thetops, calling the turn exactly.For many uptrends, the pipes represent periods of short-term weakness.Prices will move down for a month or two (sometimes more) before resumingthe uptrend. The decline might be 10% to 20% but seldom represents a significant percentage change. Still, they can be profitable if you are careful (andlucky).
Sample Trade1
Johnny is a civil servant working in one of ththe paperwork for companies just getting stathat go bust in less than a year but there are econtacts to further his investment acumen.helped him spot profitable trends and haveHis interest turned to the steel industrygovernment was thinking of punishing foreithe United States. He learned about the thow prices for steel products were droppicheap steel thought the decline was great butThat is why they started jumping up and doWhen Johnny saw the situation depicunique plan to profit from the pipe top. Hfrom the base (point A in the figure) to poiwas 34% (that is, (193/4 - 143/4)/143/4). Theretrace from points B to C, which turned ouAs he watched the price climb from pohis calculator and discovered that the percethe 34% gain of the first push. He suspecmarked the start of a downward retrace thataround 15% lower. So, he sold the stock shorAllegheny Ludlum Corp. (Steel
Table 31.4Trading Tactics for Pipe TopsTrading Tactic
Explanation
Downtrends
The best performing pipes occur during downtrends. Pricesbounce upward, form a pipe, then resume their downwardtrend.
Watch for trend end
Do not invest if the pipe appears after a long downtrend. Thepipe may signal the end of the trend.
Long-term uptrends
Look at long-term uptrends. If a pipe appears in an uptrend of ayear or more, then the pipe might signal a trend reversal. Becareful as the pipes sometimes are premature by 2 to 5 months.
Uptrend retrace
Pipes often appear in uptrends. They mark short-term weaknesswhere the trend reverses and moves down. These can beprofitable short-term moves.
Figure 31.5 This pipe top appeared at the eprices climb by 35% and fall by 15%.
438
Pipe Tops
32
an order to close out his position should the stock decline by 15% to 19. Onthe other side, he placed a mental stop-loss order at 2 3 '/4, slightly above theright pipe high at 233/i6.The stock moved horizontally for several weeks then tumbled. When itreached 19, his short was covered and he made about $3 a share in 5 weeks.Meanwhile, the stock bottomed out at 183/4, just below his target and anamount similar in size to the earlier retrace.Lest you get too excited about this rise-retrace type trade, let me cautionyou. Although I have used this maneuver profitably, many times things do notturn out quite so neatly. Be careful and make use of stop-loss orders, especiallyif you are shorting a stock. Search for support and resistance zones to helpgauge the ultimate decline.
Rectangle B
RESULTS SNAPSHOTUpside BreakoutsAppearance
Prices trend dowbetween two hoout upward.
Reversal or consolidation
Long-term (ove
Failure rate
0%
Average rise
46%, with the m
Volume trend
Upward
Premature breakout
12%
Throwbacks
61%
Percentage meetingpredicted price target
93%
Surprising finding
Actual breakoutbreakouts 75%
See also
Rectangle Tops
Downside BreakoutsAppearance
Prices trend dowbetween two hoout downward.
440
Rectangle Bottoms
Reversal or consolidation
Short-term (up to 3 months) bearish consolidation
Failure rate
4%
Average decline
19%, with most likely decline between 10% and 15%
Volume trend
Downward
Premature breakout
17%
Fullbacks
70%
Percentage meetingpredicted price targetSurprising findingsSee also
65%
Actual breakout is opposite that shown by prematurebreakouts 75% of time.Rectangle Tops
Like other formations without a classic definition of a top or bottom, I decidedto give rectangles a definition by separating them based on the price trendapproaching the chart pattern. If the trend is downward, then the formation isa bottom. If the trend is up, then the formation classifies as a top. The distinction is perhaps arbitrary, but it does help with searching for reasons to a givenbreakout direction.
Tour
Figure 32.1 shows an example of a rectantrend is upward (for 3 days anyway) leadinI look at the intermediate-term trend, whicfew days before the formation start as an ojust before prices oscillate between the suppThe chart pattern forms after prices1994 to January 1995 period and retracequickly from the support zone at 57 to 52 H,of the rectangle resistance zone at 56 and sliPrices bounce off the two zones like
players paddles. Up and down, up and downis rising. Soon, one player sneezes and the ba
pausing only a day before moving higherclimb and enter another congestion zone; th
with an upside breakout.
This chapter concerns itself with rectangle bottoms. Bottoms have twobreakout directions: up and down (no surprise, right?). The Results Snapshot
Kellogg Co. (Food Process
lists the more important statistics. The failure rate for rectangles with upsidebreakouts is 0%. Do not get too excited as the sample size is small (41 formations). I do not believe that upside breakouts never fail. They do, it just did nothappen on my shift. One thing is clear, though: They are reliable. The averagerise is 46%, above the usual 40% gain for bullish formations. The most likelyrise at 20% is about what you would expect. With such a large gain, it is no surprise that the formation meets its price target 93% of the time. I consider anything above 80% to be reliable.Rectangles with downside breakouts perform almost as well. They have a4% failure rate. That is very good as I consider reliable anything below 20%.The average loss is 19%, just shy of the usual 20% for bearish formations. Pullbacks score well, appearing 70% of the time. That score is high enough on
which to base a trading tactic. After a downside breakout, short the stock thenadd to the position once a pullback returns to the formation and begins moving down again (always wait for the downside move because prices might continue climbing).A surprising finding is that a premature breakout is opposite the genuine
breakout direction 75% of the time. We explore this further in the Statisticssection.
Nov 94
Dec
Jan 95
Feb
Figure 32.1 A rectangle bottom shows an into the formation with an upside breakout. Aftdescending triangle and burst upward out of
442
Rectangle Bottoms
Identification GuidelinesTable 32.1 shows a few identification guidelines for rectangle bottoms. Whilereviewing the guidelines, consider how they apply to the rectangle shown inFigure 32.2.The price trend leading to the rectangle bottom is downward, which iswhat separates rectangle bottoms from their top brothers. I usually use theintermediate-term price trend when considering whether prices are trendingup or down. This is subjective and varies from formation to formation. Asshown in Figure 32.1, I ignore the few days just before the formation starts,choosing to use the prevailing longer trend instead. Prices bounce between twolevels, setting up a support zone at the bottom and a line of resistance at thetop. If you connect the minor highs with a trendline, it should be horizontal ornearly so. A similar line drawn below the bottoms forms a parallel trendline.The two trendlines bound the price action. Occasionally, one of the lines willnot be exactly horizontal or will break near the end, which is fine as long as theslope is not too steep to disturb the overall picture.At least two touches of each trendline are required for a valid rectangle.Figure 32.2 shows three alternating touches. Touches need not alternate, butyou should have at least two clearly defined minor highs and two minor lowscoming close to or touching the trendlines. Except for the brief punch throughthe top in early December, prices stay within the two boundary lines untilbreaking out downward on light volume in mid-January.The volume pattern is somewhat random but it does seem to track thebreakout direction. For Figure 32.1, the volume pattern is up and so is thebreakout. Figure 32.2 shows high volume at the start of the formation and lightvolume just before the downside breakout. I caution against trying to predictthe breakout direction by looking at the volume trend. Although it does track
Table 32.1Identification Characteristics of Rectangles BottomsCharacteristic
Discussion
Downward price trend
The short- or intermediate-term price trend leading to theformation is down.
Horizontal trendlines
Two horizontal, or nearly so, trendlines bound prices alongthe top and bottom of the formation.
Touches
There should be at least two touches of each trendline (atleast four touches total).
Volume
Volume follows the breakout direction. For upside breakouts,the volume trend is upward; downside breakouts show areceding volume trend.
Figure 32.2 A rectangle bottom appears in atom then retrace to the rectangle top before m
the breakout direction more often than notbreakout direction is just above picking the
Focus on Failures
Figure 32.3 shows a rectangle bottom in abottoms act as consolidations of the prevailindownward. Prices drop away from the supporback to the formation. Prices move horizonmately climbing above the top of the rectanrectangle trendline and close above it, I consSince the initial decline moves just 3%Formations that do not move in the breakouwhat I call 5% failures. Although this formdoes so only after closing above the formatishort expecting a price decline, you may beyour worry would climb along with prices.Failures do occur, as Figure 32.3 illustOut of 95 formations, just two are failuresbrings us to the Statistics section.
444
Rectangle Bottoms
Table 32.2
General Statistics for RecDescription
|an92
Figure 32.3 Rectangle bottom in a downtrend. This is one of a handful of rectangle failures. Prices break out downward and move less than 5% before closingabove the formation top.
Upside Brea
Number of formations in 500stocks from 1991 to 1996
41
Reversal or consolidation
41 reversals
Failure rate
0%
Average rise/decline ofsuccessful formations
46%
Most likely rise/decline
20%
Of those succeeding, numbermeeting or exceeding pricetarget (measure rule)
38 or 93%
Average formation length(start to breakout)
3 months (8
Number showing downwardvolume trend
1 9 or 46%
Performance when volume istrending down or up
Down 43%,
Volume for breakout day andnext 5 days compared withday before breakout
163%, 167%91%, 91%, 1
StatisticsTable 32.2 shows general statistics for rectangle bottoms. With prices leadingdown to the formation qualifying the chart pattern as a bottom, only the breakout direction is uncertain. I divided the statistics according to the breakout
type: upside and downside breakouts.Of the 95 bottoms studied, I found slightly more rectangles acting as
consolidations (54) of the prevailing price trend than reversals (41). Expect thebreakout direction to follow the trend leading to the formation. If, upon entry,
prices are moving down, expect them to continue moving lower after thebreakout 55% of the time. That result is not much above a coin toss but it isuseful.As mentioned in the Focus on Failures section, just two formations fail,
I use a frequency distribution of gains orise or decline. Figure 32.4 shows the mostwith upside breakouts. You can see that theall. Even though the tallest column is 60%likely gain (it is just too high and is above thond tallest column, 20%, to be representativeearn. The reason for the irregular looking gr41 samples to spread over 10 categories, thquency distribution. Oddly enough, the talle
placing the failure rate at 4% for rectangles with downside breakouts or 2 % for
of samples—10. The 20% column has 8 samFigure 32.5 shows a similar situation for
rectangle bottoms overall. Let me emphasize that because I did not find any
breakouts. The two tallest columns, 10% an
failures of rectangle patterns with upside breakouts does not mean there are
losses. The first two columns have 12 and 13other columns have 6 samples or less. Again,figure may or may not be accurate. Howev32.4 and 32.5 are about the same as other buA discussion of the measure rule occubut it involves adding or subtracting the recdirection. The result is the minimum expect
none. I just did not find any in the stocks I was looking at. However, as a rule,rectangle bottom formations rarely fail, but they do have premature breakouts,so be careful.The average gain for upside breakouts is 46% and downside breakoutslose 19%. The first number is above the usual 40% gain, whereas the secondis below the 20% posted by other bear