The entire process left a series of false signals for discouraged traders. Volume, that tends to diminish in a bearish wedge, is erratic in a broadening top. There are multiple false breakouts in both directions, also giving false directional signals. This is why so many professional traders and money managers are throwing in the towel. Their accounts have been chewed up by the whipsaw movements within this pattern.
Tony and I concluded that the final point 5 had reversed into what may be best described as an impulsive wave, followed by a corrective pattern that could not regain the prior highs. We posited that this might be the final gasp of a very difficult trading pattern.
It now appears that the broadening top formation has morphed into a wedge formation. While trading volume appeared erratic during the broadening formations, it declined dramatically in the month of December, confirming the wedge formation.
Please note in the chart below that the relatively strong buying volume in January produced a nominal result, indicating exhaustion and distribution. I would posit that point (w) represents the top of the original (blue) broadening formation. It was followed by point (y), representing the top of the second (red) broadening formation. The third extension (z) has changed its form and character to a wedge. The picture in its entirety takes the form of a Diamond Top.