Definition of the Common Turn

The Common Turn is simply the gradual and fairly symmetrical change in direction

of the preceding major trend and is very directly the result of a gradual shift in the

balance of power between buying and selling. If, for example, the buying has been

stronger than the selling for some time past, we now know that the result will have

been a general upward trend in the price of our stock or stocks, as indicated by our

pictorial chart record of the trading history.

So long, therefore, as the buyers of the stock remain more anxious, more numerous,

more aggressive, more powerful, than the sellers, that preceding upward trend

will continue. Now, however, suppose that the selling grows a little stronger, while

the buying either weakens slightly or remains stationary at its previous strength.

This slight change in the technical balance will be indicated by a slowing up of the

previous advance.

As the selling increases in relative power it will finally become equal to the buying

power and the result is a theoretically equal balance between the two, with the

result that the market level moves neither up nor down, but remains for a time quite

stationary.

Now assume that the new development continues and the selling grows still more

powerful with respect to the buying, until it is finally stronger. Now the balance is

moving the other way. There are now more sellers than buyers and the result will be

a gradual decline in the price of the market quotations for the stock. If this change inthe balance of
power is fairly steady and continues to its logical conclusion, we can

see, even without the aid of a chart, that our picture of the price movement for that

stock would be one of a long advancing trend slowly beginning to round off, holding

in stationary suspense for a time, and then commencing a retreat, reversing the

previous upward movement into a new downward trend.

The technical chart picture thus resulting would be our Common Turn, or Rounding

Top, the second of our reversal patterns. In truth, it is nothing more or less than

a chart picture of the gradual shifting of the balance of technical power from the buying
to the selling side, or vice versa, to indicate a reversal of the technical position

and therefore a reversal of the preceding trend. The picture is also known as the

‘‘bowl’’ formation, since it resembles such a receptacle, the common up turn in normal

position, the down turn in position of an inverted bowl.