"The bigger the base, the higher in space” is a stock market technician’s adage. Alan Shaw, and analyst at Smith Barney, Harris Upham & Co., said in 1985 that he had two guidelines: “The bigger the base, the bigger the rise; the bigger the top, the bigger the drop.” The slightly different “the bigger the base, the bigger the move” was cited in print in 1988, and “the bigger the base, the higher in space” was cited in a 1998 book by Louise Yamada. That is, a big company at the bottom can have a big upside.
“The bigger the top, the bigger the drop” is a related saying.
Market Technicians Association
Alan Shaw, now retired after 46 years on Wall Street, joined the brokerage firm of Harris Upham and Co. in 1958. He began his career as a fundamental securities analyst and, in the early 1960s, became actively involved in Technical Analysis. He served as Research Director at Harris Upham prior to its merger with Smith Barney in 1976. At the time of his retirement in April 2004, Alan was a Managing Director of the Technical Research Department at Smith Barney having turned over the management of the Department in 2000 to his protégé, Managing Director, Louise Yamada.
Having attended Susquehanna and Adelphi Universities, Alan received an honorary doctorate degree in May 1999 from Susquehanna University in recognition of his Wall Street accomplishments. Alan is a Chartered Market Technician (CMT), and was an Allied Member of the New York Stock Exchange and a Supervisory Analyst. A member of the New York Society of Security Analysts, Alan was a founder and first president of the New York Society of Junior Security Analysts, and was a founder and the second president of the Market Technicians Association. In 1997, he received the annual Market Technicians Association lifetime achievement award.
14 June 1984, The Advocate (Stamford, CT), “2 analysts see the market’s top (IBM) toppling” by Dan Dorfman, pg. D2, cols. 2-4:
This gloomy forecast was just fired off to clients by the two top fellas in technical research at Smith Barney, Harris Upham & Co.—the well-regarded Alan Shaw and his savvy sidekick, Robert Colby.
In technical terms, explains Colby, the bigger the top, the bigger the drop. “And we have a whopper of a top in IBM,” he says.
22 February 1985, Alton (IL) Telegraph, “Over-the-counter stocks outdoing listed exchanges” by Vartanig G. Vartan (N.Y. Times News Service), pg. B-12, col. 3:
In so doing, he (Alan R. Shaw, chief technical analyst at Smith Barney, Harris Upham & Co.—ed.) bore in mind two guidelines: “The bigger the base, the bigger the rise; the bigger the top, the bigger the drop.”
Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets
By Stan Weinstein
Homewood, IL: Dow Jones-Irwin
BIGGER IS BETTER
There’s an old saying among technicians — “the bigger the base, the bigger the move” (the corollary being, “the bigger the top, the bigger the drop"). I heartily subscribe to that statement.
Riding the Greatest Bull Market of the Century
By Louise Yamada
New York, NY: John Wiley & Sons, Inc.
Recall that, in technical analysis, one assumption is that moves tend to have relationships to one another. Simplistically, the bigger the base, the higher in space; the bigger the top, the bigger the drop.
High-Profit Techniques for Investors and Traders
By Thomas J. Dorsey, Tammy F. DeRosier, Paul L. Keeton, Susan L. Morrison and Joshua B. Parker
Hoboken, NJ: John Wiley & Sons, Inc.
In keeping with the horizontal count, the bigger the base, the larger the price objective; or said another way, the bigger the base, the bigger the move (or “bang for your buck”) up out of the base.
The Heretics of Finance:
Conversations with Leading Practitioners of Technical Analysis
By Andrew W. Lo and Jasmina Hasanhodzic
New York, NY: Bloomberg Press
Some people say that the bigger the top, the bigger the drop, or that the bigger the base, the higher in space. But the point is that there is a relationship between the extensiveness of patterns and the moves that follow.
The Bigger the Pattern, the Bigger the Break
Apr 20th, 2009 | By David Grandey
The market tacked on another positive week — its 6th consecutive — and like the week before, it ended Friday with a modest gain on rising volume.
We are seeing longside and shortside patterns form in some of the leading stocks. Just remember “Bigger Is Better”. The bigger the base, the bigger the break. And the bigger the pattern, the bigger the break– long or short.
Bob’s Gold Price Column
SATURDAY, AUGUST 15, 2009
Buy Gold and Silver Now
Buy Gold and Silver Now. Do not wait for the blast off into new high territory. It will probably take people by surprise and be relatively fast. Gold and silver have been building a big, over a year long base. The bigger the base, the bigger the move up. And, don’t be fooled by the talking heads in the mass media. Most are clueless. We are just in the eye of the storm at the moment.
“THE BIGGER THE BASE, THE BIGGER THE BLAST OFF INTO SPACE”
1:42 PM - 24 Nov 2009
Thursday, 02/11/10 06:41:42 PM
Re: chart guy post# 75
Post #77 of 115 Go
I agree the bigger the base the bigger the move. While it has appeared to have taking a break (for now) the news that they have gotten may have given this one the energy it needs for its next leg up?
Mastering Market Timing:
Using the Works of L.M. Lowry and R.D. Wyckoff to Identify key Market Turning Points
By Richard A. Dickson and Tracy L. Knudsen
Upper Saddle River, NJ: FT Press
In today’s terms, this law is often stated as “the bigger the base the bigger the rally.”
Deemer on Technical Analysis:
Expert Insights on Timing the Market and Profiting in the Long Run
By Walter Deemer and Susan Cragin
New York, NY: McGraw Hill Professional
The old saying is, “The bigger the base, the higher in space” or “The bigger the top, the steeper the drop.” Big swings in one direction beget big swings in the other direction.
All Star Charts
May 11, 2015 at 9:38 AM
Agribusiness is My Favorite Base In The World
The bigger the base, the higher in space. That’s the old saying that I learned from my technical predecessors years ago. I was on the phone with legend Louise Yamada earlier this week and I asked her who came up with that phrase. She told me she wasn’t sure but 35 years ago she used to hear Ralph Acampora and Alan Shaw say it all the time. Regardless, remembering this simple phrase has helped me tremendously allocating assets for our investors.
October 2, 2015
This beaten-down currency looks like it’s ready for liftoff
J.C. Parets, All Star Charts
Canadian dollars have been one of my favorite shorts around the world for a long time. We’re talking about one of the most beautiful bases I’ve ever seen in my career. The old sayings are “The bigger the base, the higher in space” and “The bigger the top, the bigger the drop.”
I learned these from technical-legend Louise Yamada, who told me that she picked these up from Alan Shaw, a retired technician and legend in his own right.
New York City • Banking/Finance/Insurance • Friday, October 02, 2015 • Permalink