Bulkowski’s Three Peaks and Domed House

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Three peaks and domed house and its mirror, domed house and three peaks, are patterns discovered by George Lindsay certainly before its publication in 1971 in Encyclopedia of Stock Market Techniques. I searched for this pattern extensively for inclusion in the first edition of my book Encyclopedia of Chart Patterns, but I couldn’t find enough samples, so I never included it. George says it appears in the Dow Jones industrial average.

I think you will find that the more complicated the chart pattern, the less often they appear in a stock, or in this case -- the Dow Jones industrial average -- and the less often they work as expected. Three peaks and domed house with domed house and three peaks -- both chart patterns are very complicated as you will see.

Three Peaks and Domed House

Domed House and Three Peaks

Three Peaks and Domed House

Three peaks and domed house chart pattern

Identification Guidelines

The following guidelines identified by George are keyed to the above figure.

Point	Discussion
3, 5, 7	Look for three peaks rising from the base at point 1 and 2 in a sharp price uptrend to peak 3.
3	The peak usually looks somewhat flat on top.
4	Price retraces the rise from 2 farther than expected.
4, 6, 8	Price drops to the valleys between the peaks.
5, 7	The peaks appear similar in shape and top out near the same price as peak 3. Symmetry between the three peaks is usually obvious.
3-7	The three peaks take about 8 months to form, give or take.
8, 9, 10	A severe drop begins, taking price down to point 10 in two waves, 7 to 8 and 9 to 10. This forms what’s called the “separating decline” which separates the three peaks pattern from the remainder of the formation.
10	Always lower than either points 4 or 6 but often both. If that doesn’t happen, then it’s not a separating decline.
	After you have a valid separating decline, look for a domed house pattern.
10-14	Price forms a base leading to the dome. Price must rise from the low at 10 and then must form two more lows at 12 and 14.
14, 15	Price rises to the peak at 15 in a swift advance, forming the “wall of the first story.”
15-20	This is the “roof of the first story,” composed of 5 reversals beginning with the first one at 16 and ending at 20. The price movement has changed from upward in the first story wall (points 14 to 15) to a horizontal but choppy sideways move 15 to 20.
20	The rise resumes at point 20 forming the “wall of the second story,” which takes price to 21.
21-25	Price moves in a choppy manner forming a dome or roof on the second story.
14-23	The move from points 14 to 23 takes 7 months, and 8 to 10 days.
25-27	After peaking at 25, price tumbles to 26, retraces to 27 before heading lower to 28, completing the pattern. Point 27 often tops out near the price level of point 15, forming the right edge of the first story roof.
28	Price bottoms near point 10. This decline may not be a straight-line affair, but it always happens.
14-15 vs. 27-28	The rise from 14 to 15 balances the decline from 27 to 28.
20-21 vs. 25-26	The rise from 20 to 21 balances the decline from 25 to 26.

George gives several examples and I list them here.

July 26, 1893 (point 1) to Sep 4, 1895 (point 23) in the Dow Jones 20 stock average.

July 26, 1910 (point 1) to Sep 30, 1912 (point 23) in the Dow Industrials.

October 1946 to November 1948

September 1964 to May 1966

October 9, 1966 to January 8, 1969.

Point 3 to point 23 in the Dow Industrials:

Oct 22, 1915 to Nov 21, 1916

June 5, 1919 to Nov 3, 1919

Sept 11, 1922 to Mar 20, 1923

Feb 5, 1929 to Sep 3, 1929

Nov 17, 1945 to May 29, 1946

Sep 13, 1951 to Jan 5, 1953

Apr 6, 1956 to Jul 12, 1957

Aug 3, 1959 to Dec 13, 1961

Domed House and Three Peaks

Domed house and three peaks chart pattern

George then shows the mirror of the pattern, forming a domed house followed by three peaks. One example is from April 1938 to June 1940 with others from December 8, 1890 to April 5, 1893 (Dow Jones 20 stock average) and Sep 24, 1900 to Feb 16, 1903 (Dow Industrials) and Dec 15, 1905 to Jan 7, 1907.