W.D Gann the Basis of My Forecasting Method

8/6/2019 W.D Gann the Basis of My Forecasting Method

1/33

W ....l..L S'jJ"'lJ",j~,CTSi!'O ....t{ ;S~I~z~';ronN''I'W UlfO,':'K ' ' ' ' ~ t < D O~To;""'I'~,1\

.t"!:Q:W 'iji',) M,ia.~fll lJOi'iI1J~if'I:tr"llN! COMI~Dw..I.T.IIIIIIi, W. D. GANN82 WALL. .S'l!RE'E'TN' IOiw Vo:FU(5, N.:v,

t f : i a . t h~HmatiCD 1~ t no onl.y exc et a d.ane',e. AU 'Power unc:lQ'f ~HiI~v~n otItld 01'1.~Huthiii qi . 'YGn urn't ,o- th!l!' m ~O \ .....:1:\01rno.::Itcn;:: the, ~imple, sci,e nc1 t! ,e ,t. nt(lth~mQtic~. E : m . ( ! ; l " ' !j. (.HiI,5Q id:' "GDdi doe:; Lnde ed ge ome,tr i~'e. ,,, M,ot -he", . ""he r r \ < . 1 ; r 1 1 , .~.attl: "'l'he,Ttl ie nQUd,;rLgin ttiJoe Iln!:.ver.~e but mat.liemQtic.'Cll PQ~fit~, II PythagO:tQ,5, ene tit the gnQte~t JiI1;Qt!HI~mat :i.cian 5 tJlLat &ViijT ll'ii'od.. aftar eKIIl"' ifl'i~!'Lt .it'llg wUh n~m~e:r$ 'Qn~ flnd$.nQ theproof~ of nil no.tul"'Ql hn"rll,,j said: ! l iB,@ior'e God. ""'M : 1' r 1 . um : b< i; !l " S . !1 He bliJ1l9'1'ed th:atH~~ vi l5,,; 'o.t ion of ntiinbe!i. '! ;! C : ~ trnoai'ke ,t .l1I\ov-emerlt~. T'h0 ru.t ura ~ iii bu,t Cl . it{)p'lJt.i t ionDfth~ 'pCl~t. TI!L(n:,,~10 !'IoUd""(1 now. A!I:l thE'! tUble ll leo:rn ish"' .... te make chQ rt a C"or.T.'!ct1y' b~cQus. e if you. m.o.k~ ,One!"~o:r in the 'c:hQrt~ you 'w i 11 make 'In sr.ror- in a.pplv,ing the :I."'uie, to your tro.d.!.n9.


2/33

Y 'B Jt.R LYC 1LA lt E .~ Y o u ,.! J;h o u ld lcco~ u YOfll.ly hiGh. n n d llO 'll(,ohliWt.,,:tha:t is, r6oQ:rd ln~- .-0ZZ ;. -_- &Etii t,hi!3 e,xtrtlme. l'ClW an.d thJ~ ~Jxtr'etiVJ hi,gh pl:i,o 0 made dUl'!ling t.h;eO.ll.l~iD,j"a;l- y{l~l" il;)n. on e lino.. Xh,e spa,o,i"fi.!; f!Or thoe -pri;jiJ'C!. cau. be lili1ledl 'oVJ;~point toe ~C:h lie i'n.ch er two ;point s or m.or;o ,e: .c~ Ql'dill. g : - b o . . th@ ;act i'Vi ty and. l"p;n.~,e Q,fthestoQ;k.,MOUta:L't (lli,!B':{': Y'lf!i,ll,mu.:st; a.1W\a.ys kllle!l up s. )l1.Onthly hi ;,h .flIl;d. l'ow eh:art. whiel. i$tbo most- ir.nportilitl.t cho.:rt ,of all -in det-a:rminillg t,hGll1!llI,in t..'w.nt!'.'.rhi Iii o : h . I! I. : t . . .r e a " O , r ,. ,d S the ,ext. l Z O r n e h,lP-.,.':,.00'l i;~ , ~xt'~Omti.1QW,price'f, ~'!r thtii .eu.leon~ril.~m.onth~n one l:l:n,e'j,e.ndeo.cbBp~~ O J : , " 1/8 :l:rlch ' 0 1 1 0 . the c::r:Qs2-s.e,ot1in oh.~rt p.atp'.!1lr~'h.ouldrepr Q I : : ; I ~n.t o~.\t)point or ; i l l L po r BliIQ,r.G! WEEK LY CR 1t:R :T ': !I:hen .e::c t an d One oith~ ' V ' O . r y 1m,p,ol" t \n1 ; oi'i."1'0 tll.koth o oxtr[).Il1i;G i ,oW' : ! ' tl : D ; : " t,h@ 1; ' IOQk mUI the o.x~tr'eltlm hi~ .tor t.heweek and. di.~d,e by .2~g;et'ti'~~. the hfLlr . -v ,ny or m{l.an,point rO,tthe wBIek. . This: eunbe' r(lOordeo. o n th~ i'lO~kl:Y' h,igb ro:r.d 'lowch.o.rt o ;r o u - (Ie sepo:rs; t,e,cn.lll"t! reoord.in.1; the Wa!}kly M01li:ng.-Ave;n:'ri'J.f!li(l with, a .. dQtm.d ;u ' ,s:m.g Ql'I:O line on. theanan .for G~h .W.Ei.e'k~ ll.Oij;lorl,f);n.(i!$ of' t.hia; Weo~k:ly MpAA ' :Poin ' !; ; ' ' l 'i i 'i l l l;r~ s;x:J?lo: li .no .d. le.telJ.J!tL :r ",,~ l!J.R T~ V lh en y ott l"l"tltrnd-it:l@; :in astoek tJ1Sithao"i~,. yo u sH ou ld. t:i..lw ay:s

k O , @ i l ' u p ~ d L e . i ly hie;;h. u nq l o o t c .h.a,j ;t ~.- l:J~ ;:( '0 .1" si;;'Udy J;lur i ; l0.Ms it 1 , . 1 ' :Gnou~. 1 ; , , 0 , ~pup th e Vi'@~kly W'ld' ~.:on. thly Ch:rllrts ~ ' 1r h :ic h gb.r e; yOT\1 thil ;m,ain , i ;a;,on:d. ' th! i l Dc. : " il y {lha~t p h o O W 5 th.emin.oi' tre'l'Ld ~d shot;s .6 . o'han&e.' in trona m U o h 'Oft.anal"than: W ' l, y Q t: thE:! ,other eho.rt e , bl,l;t th~ind.:t C:D o t i(ltt. d 00 a not' 1a.st n.s 10...~ Dr rtlU IIIofar.. Th:l. i> chlil..rl :shofltld; 00 kept-upthO' .~t.m.t'I Q.S t Q Qtho :rti .... 0;';:';;' IOpt . . . r n . , u 3tI)C ks &:r ~s,r(I,lling: lH:'llcw .1500Qr wh~ th!li,Y tI.:re in an ino.ctivo trfl,di-nflj 'l'@,g~- thonthospo:cingshQ1liild. bu,l/2'-llOiu-t 'to ench l/S-inch. ~nt;h9'ohl;l,rt pa.PQl'. o.llowing two SPlleO:'J ;;'.0t'Oi]?r!l);80lti,t en o tiltH j#Qinto' l:" $1 per shar o , 1 'f1 ;l.o n .s :bo o b i;.~eMtin Mdt M'~I!l!'l.Gitl~."iI'Cll:'Y' .tn :st ~ l ' I ' ! a l d . n ! ' 1 ; D ~id~" rango 6 ac h d!~y~ 'bhon YQUG an ma:lrm tno D.IJ ,1 i; '1 "Gh.a t" t the;S.OillrIeoCI"S tho W~okly '0'1" Mon.t:hly I that i!j1';o u~:ing On.0 po1'nt t'Ot : a.o .ch 1/6 -i :'O .ah Ion th0chart po..por,. 'fhi!> ~pl4;;.!'O.g ~\lIts thl;!CA!lI.rt d~ and ke'O'psit in (l; !'!Xo.'go wooro it s ~asy to aee W "I;rl 1"'000 whQr. ! f'h~tu~tir1'n~ VLl"1llw:td().

'No spn .OOS (1.1"00 s.kippod. on. '1::110Daily Ch!l.l" fm c holi,d.c..ys -O r .8\l1r\i:lnyu, therefOrethO' tim.o p()l'i,odl. ie j~or o.otuc.l. mn.rk:~t d . .. ..S' c.nd. n.ot oa.JLen.d.nr days. Howov,.: i r". you~h~~ld Clo,r:ry tho CQ'!Lond!.(l,.l' doys ~lo'n~ at loa,:s:t 'OVi3ry 'tW'O w,e'(i.ktl, M lator .;. lIl!lo.,e:r.rul~s t - o r ;;[':1moPolod s 1'0 r~h~.Le in tr-~nd , if'ocl;l.wi 11 tindth Q , t i.t it n.oc es:~0 ! . r : Yt.o, c hoc k 'U p ~d mo\'l' When tho s;:' cc k i~ 300~ BOo ;80. 1 O O ~ . l:SS J Qt.c. d.::I:y$ fr'!;iln c. t.O]?


3/33

a 1" a. batt om. vJhio h 'IinO::.n!J, e ~ l,.onQ1!.'!,:rd t\Y'S" tho o:t.:;.~C't llUl r.lii... ;rQ:mQn:to f ':rimo .fa 1" t. t Ido.i ly chari;;.. O,rton tho Do. ,Uy Ohtlli:J!.i en. .(lc't;uo.l d(!:.ily' Il'lovem.~ts ' O O ' I D C : : >. : ! O out on (':n,axact: mnthemo.ticul ~g,l{il oftiroo ~r.o,o.su:r0m'~rlt a'b t:h.0 s di:l!,.Otim!l tn.!) c::tl.mdnr ,d~gcOiIm out on o~,c.Gt til'(lomel;l.~i.U'om~ntl! tnnld .n .e ; it 11doUbly impoT'hncc l?l)int l ' o rc .ho.ng 'o1.n t. ond , . .

GIDO:ME"fRICAL J .J fGLES.... ~ ,i!i1.,..J~:iI .., """" .. ' - , iI. ! I' ! ..... pI "!! "! of! I .., +

Arter loJ1!.~,yoo.l'~ at' pl-t\ctical experitilnco!'l hevl); d.bcoy,el'~d that Ge,ometricce..l..An~1*.5 me:i. \ .sUl"e I1J.lC:cu:rrltelySps..ooijlinuli j VohlJlie an d Pr_ ice.Mo.th.G]JUl.tio~. iB, th0 on.ly- e1:1tfi.Ct 50ie;M'~ ~ f J . , s I h.~V'f;l,s~id b.efQ;r,e,~ l!krery nat:i..ohen the face of th~ eo.r!:;'b c.g,reI3S that 2 . ond 2 'make 41. no )lia.t-te:t. what lWlg'J.:C-S'0it 'spe uks . reb a.ll ot.h(l::r so i6'nGe s are ll.ot in ace ordis,s :rtIJ:o.th.Elili'ifJ.tie.o.15e lone < IlI~ : - Wa,

find ~1i:rt"el'e'n-tillen in d:H'farent I?rof~s$i,!'Il,!; el.onr; so.ionti:fic lin0s_ dia'il!;re'ei::q,s,on pr'QblJoIl1B,but thore o~ be no dis[J.f.l;r~~ilV.!'!ltillmath0rn.o.ticd o:nlculilt ion.

'1'ho~a I ! l 4 : "Q seo de'~:rQQs ~:n .0. ci.r'c 119", no mlld'Gtar ' h.cw l,e.l' ga, or how ;small the ciJ;"-c,lamOo .y"bo. C o r t (lI.in. n u~b():r so t~hC :) e () , 0 . e e ;r 00S Wid. v;n g;lo ~ n :r -o 0 r "a~,t hl:lpo 1 ' 1 . ; u n o e n n dind.ioo. t( l, wh.~;n irn :l?o rtan t to ps tlI~d bo" f o~5 QO'ICUl"' o n stQok.a1 J:l.Swoll Il..S d~notoimpor1:;,unt .R~~i$t~o~ 1"v01s;o Wli.(!InOlti,oo you hnvt,l, tMl"Qugb,lYI'fI.[l.lf.ItlJi"Qd tho, O~01iIIotl"i-00.1 Anglo;.l ~ ~rQ'uwi11 00 ub:lo to solve uny pro,bl~ftI. o.nd d.~t.~r:mino thu tr(,lnd. of ImY':e, to~lc .

Atter 3,6 YG,.a:r 's Qf i '"e,t>1'HIl" 'ch.;, t~'!'its and. :pr!il.-o;::tico.l fipopliee.tion:.s, I ha""e, P~r'~fe.ct'Old a:iilld'prov~dl the m.'os1timporto.nt ~!l;lQ,s to be uso,a. indotoJ;'mini,ng the treudo r tho st 0 Ck~tark

W{Iu.se S5'ol!lei;r!ee.lmglos t~lI'\e,&i.iSUr'O' Spt'iO-o and T~e]le::rilod.:s because it is 9-shiGrter ~.d qUiebr 'metno,d, th.an, ~.aitiiOli:b. QI " lilultipU.,c;&t;i-Ol1,. ,pl'Qvided! yo u to11oilthe: rul,es and draw tho angle~ or Une~ f l . . ! :>Cl. l l ' fS;ceoly froill to:pa. md "botto!ll.sor ox-tramr;,. highs ,~d. lQ1;ilS" Yo:u may ma.kEla mi.s;t.ak:e ';in.. Rddititfn er tn:'O.lti!?U.c:,ation~ ,I:tbthe g;eometric;('l.l twlgle:s Siccuirc..toly drawn 'WilL. c(')'~l'!"IHrb 'thi3 mistnke>., FC!,rex;e;mpl'l;gIf Y"Ou r;;fl:(]Iuldcoun.t ncl'"O'ss the bottol;1. of youreh;art "l20 lrpaa 6S ~ whichrel?I"iEhs~etl.t~1,2;0 da.y~, '' !\ i'eo@k :s , Q r 'mlouths"then you begin ;nt nair OOld,n;\lli'iIb,o,l'ertically IOn YO'Ul'g , h i 1 i . X ' t , up to l ~ O ~ then 1':rOlN thh top p~in.t; L t : 1 2 : 0 d r - W f l ' 0; !5-ilog:r",eOl!:!l~:le m c r v 5 : a @ ;dOW'.a, this willc~e out at 110 Iii on 120: ~~i-nb's over 1'l'QUl. t h : . a , 'beginning.. It youhave ml:l.citco.,mi s~Slk{i in Jl!,1;lffibe'Tn.S ,. tbisrill 0 o);"rElet it

.Anglc;8 dl"uwn on 0. oh!.nrtfilwnys koaphotorl 'li ji'QU the p(;l:dti,oD. of' the stoolc fl.n:aits tro'OO. whe:r eas if you hw:l! a. ro s"i st ~t'lIc,epoint; ont:illl.A;l li'O:i.vt ~nd.O'o'm~ YOllll'li I.'itlIti,;s 1.0.1' it or forget it but th~e angl.e,s al"O a.lwnys on 'bhe ah!ll"t i,n ,front ot you.t

1b'$~o.n,gle:$ Qr moviug,-avo}",il.f;C trend li.'t1.oB cor:rect"'ly drlXlllU will keep you frommQ..kin g tni,sii: .nk0' 5 01" mi:;: ,j'lld(Smg t:h~ tT O T U .1 1 . :r : l' yo u we .it find fQ 110w yoUr' l'U lGC>~ teo,:Hlanglos will "how you when. ' l : I 1 ! . b 'trond G ' h .I I D & ~ o s .The, mCnrill,!;~~"I\f\erD.fiiO < 1 ; : 1 ; CJ.oUW\~nly ''IJ"s'e,(J:is ob"t:ui.ned. 'by 1Juk;!.nE:; tIl", o.ztre'ti\:G lOWpric $ and th~ Q:;ct;.rellW hi.gl:l pri,;'e of ttHl {;l\lond.C!.l::' dQ.Y'~ "I'UlQ\c o X " 1I:I0'nth~ Gn.d a:.irld:iu~it by' tw'l:l t'ICI' ,get the l lIl.@CUl. O~il:'\i'~4'"a!l;.e :pl'i~ i"Ql(" the d;e,yI w~'ek: 0'1." m.onth~ and. QOO-tinuing this ~t. the end :o f efieh~,ti'Ole peri'od. 'l'his is an ir:r'og;ulo:r mov~'i!il:ent };n.s:pa.ceso l" po in ts pOr. ' w'06k b'i!I,ce..ws.e- CIt: on o time ..i~ iJ"I :o.ym.oY!3> up 2 : point:!; per waGle


4/33


5/33

we draw lines frofllt.he o't,he!" dI.i"'~CLiOlq$1 we d lvld.e i t , . , in'l"o foul equal !ptlrt.s-then by df'El.!wll1iJ"!Lhe two linej. fr'Q!'!'Jeach corner , w e di.1vtde t.Ile' square int.o 6 equal~ts: and produce 8 t.r .iangle5 .

As, you look at.. this: Squar'e~ it i7>hould be easy for you to ten with yow eyewMre the st~ro,ng.$t support. pOint Is Or' res h,t.(i[lCe po,int, is. It is at.t he centerW'here~ll!. the angles er-oss , lI'oucr ang"l.m. crO$sat. 't,his point J ;so' na.1t,ura.Uythi~:would be a $t.ron~er auppo r t. po ir,t tfu:"~la pla


6/33

1'0is tl ~l'd~rlIlo 1'0 thm S po ints o . ' W f J . ' t. . . Un10 s 3 ,~d;;,~os: 0.1' e no o.l" t n . 1 : ) low lil!V'~hi Ol:t"just stCl!;rting:tn a bull market Or s:011iij~at "i;ll"~' low p:dcos 1 1 Il.lwa.ys U${l$sto,plo~s orn!~l"on;!il pomt mld@r' t,h~ 45 Ullgh:. If' this OOlgl.e is ll:i!"o'l:oon.y 000' '[:lQint,you wi':U u~ui;:l.ll,Y rind. tIu,\~~th.e t!'t)ud h~~ chlmglil,d (1,:1: loo'llt tl(:iiln!,o'X'nrily Md thestock ' 1 ' 1 1 $ . 1 1 f S , I ) l C W ' e r .

lLn (;llnsy l'if'a.y t.o ealol1,1Q,too..ccuro.:t~ily hOVl to put on this 45 .ilIlglo i.s:For oXWIl.plo:. If' thiGti'ill,Q : ; ! ; : s : 28 df>yS. 26)'/(i.l01(:s",. or 28 lnon'l,,nt: fr 'om thopoi.nt whercth!


7/33

TH:r Jl:D I M P'Q R'l' A N '1 ' ANGLE" 'l.rhich is cti1J_ll;trMl.~et' " D . : ! l l Q n s ; o .~ $ 5tO,ckh.oleJ.f; aho'V'e it~4 :x : .f i~the ;OO:l~10 which ' l ltOV,(;l: l: up 4, l'Klmt:,3 pe'!: duy ... w'o,elc~ o r1llon'l;h. 'l'hi;;;; nni~1a i~ + 1 X 1,. o:r4 j;)oin't::s o f S i J) ,i( !J .c oe 'C I un l

0110 poe'rioa: .Q.f Tim.e. It mC}l').~ures.750 ~d di"tides the space between "h.~ Illl"le .ad;'2 . x 1 and. ths 90 ~I$ll!i. into i , . " I . . . .O @C J : . 1 ! I I t : . l pal"t.;;;;.. Jrny s t o c k i:he.~ ~ont;l.nuQ$t..Q ~H~,"I"~C~!l .points 'per day I 4 pointsp0 by d:i,v:l.d1ng tho 6puoo wl:t.h un.(;lo~ W~n:l"e gottine;the hnl:C.. . .wu.y po in t O 'r the &l'.Q,vity o@uter '01" 'l'ime : rmd_ Pric~

.0' X l lINGLE:. Not(J the rol.g,lQ dr,L\'Wn in Groen" InO;,rkedl"l3 x lli.~.hi,c.n. 1n?V~&- u:p I;l:t thel::'AtJ o:r 2i points. P(J ) ; : "d.ny~. " !HCO k orm.on,th,~ 'm6nSli ! : r ing;71 '.. ' . ! : ' h . i $lll\gl.o i:, iTO,po rto .n t Attim .es arto ): 1I! l(1.. 'r ' icets ~Vtll ho .do . proloni ! :od o..t \v.cmce c.nd. 0.1"130 .lO!l~ d.iston-co up froJJ'i. th~ lb?t.to:m.. It i.s 00 import,rmt .ongle to 'us:e, 00 Miou,th1y end

W'ook lo y 0harts.':l'heS 0 l;ll'1 all th... Cil1@;los:rou nie~ as long !l;S t.l,. at 00 k ea,ntiQ.ue ~ tQ o . d V'W).C eilll.d vmrk: up E ! D . d sto.ys nbo'V"G tho m l . g l - o ot 4,50 ortha m.o"ll'ing-~vr~@ ot one p.a'inti!a;r any~ wook Ol~ l l l lDn: t . l :' ! ..Whilo thoro Q,.r@ -3,6Q do.gro.e .i) :in. VI a h',cle, 00l.d ~.gl~$ 0& form n:t ,o.ny ,of tb.o.se,d.eP~;oos, 0.11 o,t' thoimporl:::Pnt c.n.gl(),;s fol"m b()twGon. 1~6ii OOld!l90n 'bOC-lluse 90' is

stl'!lig;ht up Olld d.0'iVl"l Md th.o 'lllLOst MU~O !!I.tI.gleon which. a ,stock 'crut ri5~ ~ Po,l'oxrunple: The ! ; 1 hom. th,e bo't"'ib-o,m,01 " 10\'/ 'P0in .'b ~ ,~Q, rulo". it'wi.l.l only '\;oe'nCOO$;:J(I,ry -Co :put on t.hoso two W11!(l'0'S ~t .first. If' 'b;h.i~
mailto:a.ngl@mailto:a.ngl@


8/33

bottonl ho :td:J an d 10(;1n o~~ lh!'oko1'l, th{ltl y\J\l -:'(1.11put o n '\;.h;(I 'Oth!Jl' ;LUlt;lo!;l fl"o!ll thocottom."WEE1


9/33

will rQooivo iJu.ppo.r-t undo rl.l.l.1.y. SOr.~otiKm.m i~ will rost en it {'ur u. l'cm~ peri.od.of timo", holdip,g on thio:; o.l'i.g10ond m.e.kin~ hi{l;;t\(lrbottOlM. 'Burt whort this I l m g l . . @of :2 j;: 1 >. Q:r ll),Ovi.n !5~o:~r'Clil' cq,;~-Q t o ' !{I .Q~hCl l , fpo in t per do ;:r ~ weo k 'Ql'month .b brolGI!I,n.thpu you lnI.ist dra.w -th,a n.-eilr l o.llgleot , 4 . ) : 1 " . N ' E X ' J . ; lM.P'.QH:TP.N'~ANGLE,: Th.o next impo~ta. ....: a'lll!.:).oCiI:l't'}f!.O oo,ar ~id!Q of 'the Sql!:oorQ,'4 ; xl ' whi.ch m.OVC1,IS up at tho rarte of l!4---poi:nt "p,G;l' day II 'is therulglo 0: 4 x 1", 'Ill:t;)a~ti.l"ins;15, It ..ill1ba tho next si: ' tonGSUP!;HJort an.~l~ which. t 'nE) ,::;i;oc'k,:ihol.l:ld .g-ot .support on , r w . a . r -~llyfrOOl ..NID.::r lINGLHi 8 ~ 1: Then a;tte:r tho . 4 : ;: .: ;1 engJo is ct"okm, th~ : 1 l . i O ' X t i ln ,por tOOlt.". ~ OOl.gl.a, tha.t yo u will pub qn yo'\J::~ ch!l-l't is thl(l nngl.e Qf. e x : l~Which JJlQVO:;: a t "the 'ro-to, .of ljS...:point POl" d~y~ we-a , } , : : o r month .a . '1d inQ! : l: l luro;s, 1~.This ~s Q,fien a . . Y C J . r y strong:;lIlppo'l"t anglO'. Aft,or ,0 . s ; to:clc ho.s h:o.d u bi,g decUno tit'trUl O o : r t era :ro,$t OD, t:h 1.3 ml..g 10 S oV'~r.o.lt im",,'s Q r" m.lly T I l . ! l l J : o o f,Ulnl bot:t '0 m M,dsta:r.t up !'rCltlll.M.s. onglQ} crQ:sdn.g ,othor. ongl~s o.nd,gGtting book: into 0. st:ron~!;i'osition, o.g,:il.:in. '1"hore:!'ol'othb mg;h is hlporto.n,t" t.o usc on .. ().monthly or ""HlOoldycn[U"t : n:f:t;er a :p:rfJlonil:ed de c line ~

. ANGLE 101" :5 xl : 'l'hisu.ngl..CI ~ d.l"to.'ro. ill l"{]lk in.k., is i,,\ Tory impor ' too . t il,.'~tle~moasuring lS~ w Ii;i"l;r0ntly o.dvise using it. at. n.ll :till'tIO'~ :nnd.kb@pmg: it; up on. :mtllnthly ehi.i!r;l::s :from:. OOl.y impo;rt~u.t o o t t ! C I l 1 : l ' . It cem ,e.ls:o 0.0 \l!leOlto o.di.vllll;alOgo at t1rn flf> on "wQo,kly en.artS'1 . put, iff'!:l do'l'l'n f'n~t'~'r than tho ID'I.!l;leoJ: 450waJ!KEST f'OSITIOH-; Tho stoc~ is ip the 1' feuKr.q; : t p,os,!i;iblo. :position when i~ d(il'clinas

o . : n d k:e~"psundlill" tho Wl.gl.e ,ot $ . x 1. l't i.s illtho noxt wonk-


10/33

e::l't p()"6j;bh:m ''han i"t is dl'opping d C ) 1 l 1 ' n ' ~t tho :rnto o f 4 - 'poi.n:tn POl;' d.c..y., woek 'Or:ll\onth~ .ol' ~d'6l"' thQ li!.n.~lo ot '1 x l.. It i.$ in, it:s ;p.~~ wea.kes~ ,)?osit1o..>::t. when itdes dro'P'pin f,j.d,own W;ld.e:r the a'tl.e;le .;;J:a x 1,wrR0l:1iIE:STPOSI"t lOll: ~ 1'h~:>t o c k is iu 0 .. sia:ol1g:~'r .po,~itCin ana i.no. ' M ; . a: t es a" lHl,tte!:.":r 6.11yl'(h~n 'it e r esse 5 theei.l.glG o . r ,2 X 1' 1bU'b thh Q , o E ! P;(llJds'on, how fa.r it. ; 1 . " " d~'+!L tl'i:lPl t~~ 'bqp ~d. nO'i{ ,t'o.;rthe; O1!'l.;glesa)tfl, apart; M 'will beC1Xpliti'iled. later' und,er the rules.CHJJilGDtGTUND:As long as a st(JGl!: i :s de:olinin,g o';ncpoint per di\y~ week OJ; '

m,onth" Or fallintbo,loW or' und,ell' the 450angle~ it i.3 ,:;;till 'ma bear tn.arket ~ in tl. 'ery lI(eak posit:i.o:n~. Vrh~,na stock re.liias and 'crosus the,o.ng.l.o or 45 utter a prOlO:ried. decline. the;n y'O\liU'~ ready -to put on the anglQ.5o,'nthe othal' si,d.e of the 45 o.ngl.(l..,. 'Kh:ic;h showstn.a.t the stQ'cli:;;S .S in a :.:tN:tl!{5ifJ il'PQsitio in iu ~ . "be,e,.rmQ,rkottWlQ. tn~y' 'b e ~etting re1ady 11; '0ch@g!:J ' into .[).:bull ma ..r ko - t "t.. .- ;"'~,...i II'~':"""'~ c_ ~ 1- .,' .'i"''' ,"; I I.''''r-"l - .1cJ=' ~, 1 : 1 1 _ I 1 :1 .1 1 "i:=+=I~'_H~I~: =ill ~, __LJ i I'!-' n:P"t/ p :: : , - I' I, Iuw - -, b,OC; 1 " .~ ._ ;l!1 1~.-I-+",..- I I W : I _ I . M~-!ISt...d-I- IA J I ~ ~! ...It:\; I' iNi- I:\; I ~ 1 ~ . - -

I \ I . r r - t , ' ! ~~ iii ,

Refer to Ji'orm.*.S"~wbich isi:he pa.'btGl'"l1!. for dr,u\~;inJ:l gn.~lelil a . . o ' O v ; @ 'b'ho 45;Ill.g'l.,. f,r-'omtho top.. (:SeG 1la.~\D 11)2 ;;C 1 JJiGLE l"R0l4 to;P~ The first ~.l1gL(!ll or moving.-nverOi.ge you drCi.w !l.itol'the 415Q

tmglQ frO~ thQ to)? is .cro:]..s.od and [\1"Cer th,Q .$toc,k :in.di-


11/33

Qo.tos tl1,r:\tit hu.~,mtldo c . t:olltporo:ry "hO,ttQll~1~ tho, OllIS.le of 2; x 1, mQ'lfinl::;o'Ver 2 :pc intB nn.d. dovln ana pOli.nt. or l!Z-po:Lnt po);"uni t or T1i!1.e. Thi~ is m.oVin,f;down.nttho rat~ Qf' 1/2-PQ'i.nt 1'ti>l' month ~ 'i'(aako:r day.

~e llo.xt iiS; tho Jl.:ngl.~Qt - 1 ; : ( 1. which. 'lml"ll'GSdq.m o . : t tho rnto of'l/4~l?oit!


12/33

GA-12.i:\l)iiiolu:toly ~oc\i,r!l:te,. Th>Olt yo,u e nn oQt;in to f)tudy thG rulo;.; for dot..Qrmiuin.g: t.het.O'Mrle.cord;in~ tq tlloo p,oGitiono'tnc 5too'k on. Ol1~h1i ~

DO'UBI.l, ;; Ji,N,D'I'17. ' lf l;a l r O l " S . OR . :;OO'I.'TOlllS__ .__ _ J _ _ _}..N 'G LE S C R OS S J.N G E J.IJ.:m :OTHBR: iId'llOn thQ:r~ :i!l (lo douo.10 bot-t{)lTI!. .:5ovore.l dfiY'5. w~eksor inontihs a.P~J yOU drilW @.gl,t:Ioil :tl'orn thC):;lo bo't t .O'"rn.: : ; .Wh1.ch ~:r~ neo . r the:s tIl;li;a PJ" ;lCQ lQ'I J' "O1;$. ~o r e : ; : o , l ' G . p , ' i e : Fro -m th~ t:brsi bottom, drc..wD o Mio M.~li1l nnd. l'rO'!ii'J.he, ::;econ.d. bet:tom (h~~ e m . ana;lo of 2 x '1- thon, 'l.'rhon bh.ese.anghs er-e s.s ,siloh o't;helc:l itwill. bean ilnpol"ta:ntpol:rrt 'for a .h,$llge in ,trend.:N"ot6 on. ohart l l1 'u l l "keo. Form 1~6 t.ha.t I ha'! l '~ d.r~ the -45 OOl,gl~ from. the fil'st bot ...t.oa ~j lBii nnd the Ul.gl.e of 2 . : : ; c 1 on iihe 'r'i~ht h:M.d s.id.,e of the 450 ,angle. Then~tl'om, tn,e' . o s : ee 'CillO. bottom, III2rJ.~I I hnv~ drm'll1ln '-15 EingjJ_e.un~ the Elllgl'[ilo t2 x 1 J1whi:c.h gs.i:n1O Zp


13/33

wiV[Il}.C()!i and mnKe$ 0. hl~or t0E' . '~{Cdr',(fl\," 0. 46.0 an,glo f,~~0mth~, :t'irst tOll ~ tl,llluingths 11n .0 up. Thi i$will gi V"0\:.'1'I0 0 ~cill i:l\:i on 01" wid.th 01: :!'l='bUl}Lt i'on in n po.roJ.leI'b~tvI"6{ln. tho 45,0 Il-li.glo from thr} bOll:tO'lu tJilld. th.o 150 OIngb rUllTl,i:nK::..llP ,!'}"om the top .~tt;Q:tl!. tIi. ,;stook will e.dvllill(l{lto th~ ~H)oongle f!"o~ th(') tbst ,tQ!)~ fnilto (ll'O:.'::$ it:l-then decli:n.e ~rel;it r;1nthtl 45,oo:nghl from the first bot.tO'm~- then c.dvanca a!l;!i'!.in..workinl?; up tor . s . . . l?rolon~od bulloID'lt:l?~"',r;n. ':bewo~(n ,th'~:lii:O l?ll,rliL'il~l m . J: g 'l . o . . . ~

Y .l ih en t he 8ll,Sh,.s {:Ire vs:r::y ,tu a]l~rl,~ y(lU c ali d l" a'lI Ii' a l;J .o :tb ~r 4 .5 a :n ill:l~ e'\1\l!.i~,d.isi;;!Ult bet\"I'l3eth thal!l~ wnich, is ofton n . str,ong :suplJort ~~le f."rOIll which C & . stOckwill l' I>.lly ~ out whO'n it: tr@a:.ks vnd,e:r " itdecUn ea t~he bot'!:: ~ m . paro.lle 1.

i'o.r~ll,ol.to O~ .form bo!o\;\.'{Qo~.he, o . . ' I l g , ' h J . l > oj: 2 x 1 or 4:x: 1 ju:.;t th,Cil :: > eino . 0 . : : :~obween 4,5Q 'W'li.&h~!I w01e11 otton. occur-s in ;:;low....;mcnring, atooka; ~

GEDMS:r R;E .C lL L .AN a L E E OR M O V m G ~ A V E : R . . ' i . G B -!N:EsDRB'rnFROM II0 II

TIn,e ,n C i . . lS t.o ~ k r 'a o .- ch C 5 bot t .o(] l1Q,Dind ,s t;(l.r t~ u p ~ yo u, hQ"ii'll 'he~in i.n.5tr'U.e;tcd, to' dl.rawiDID.,gle3l"ct!ntbi5 eXCJ..Ct l oW' poin.t j wil:t:1.obshows the s\1!Pl)Ol't in tD9 po rio ns ~ butth~:rQ {l,l"O oth(ll(' rm.gle:. tho;t, lnter QU"l.dll be just !lI$ jmpo,rttmt nnd $.om.et.imos:m,Qr(lim.po.:rt o:nt, "thou thofUTlgll',fi; 'll.r-mm. .fr o : m , the bott otLl.' 0 1 ' a. m;o(; k, Th:~S 'C l : : : I . } : " , I ? tho an glo s.that "hog.in nt lion or,~l)ro. Q.."Jidmo....~ up a"t th-.e . :snmo ro..tethllt 'they lillOVOup f'ro:m.t!h.Q\bottom.. ;rhe .stlJlrting point bms,t h~ on th~ O'J;!I;ml.~ lino' tho.t the 'bottom ;Ls m;.o.da ! J i l lo.s th{[l time! pori"od 'bogifl.s, fl"o'm thi.t b,ot-tom, but th@ o:ngle$ m.ov,~ u:p f'rQll'Io ln o" ~1'h(l.s~an,ml,oef!hQuld "bo, gto,:rtQd o'Vac~ ~1rno, tJ. stoe1: !lloJoo(l 0. b,ottOtll. ospoo l.o.11~t onw'OQkly ,N':I,dmon'th.ly onart:t'O u~nd sho.uld tl.ls'o llo G nrl'ied up on impDrts.:n.t ll\Q.votfient.son thQ daily chnrl:. B.x~:plo,.~ 800 chart m.o : rkod FQli"lli14f7on pngel 14" '450'~(!;.le, from "bQttom~top Pnd frem !IOU ~b bottom. Irmdtop, but this d,oas not 1 1 1 < 0 0 0 1 , thLt you mns:t not: usebhe athol" CIn!51os~ All o! th-o Qth.o):, Mg;lQS can bo liJSod. front uO~~. but tho 45,Qangl~ is th.e fiut cm,d. m.o.st i'm'port Ql:I"CA Mt::ot" tr.d_ ~ Mgl..O i,5 borGkon t th.o~. :you. 0 Qll.u,se tho, othol" oog le s ._~ 'It i . snbt n.(;l"foSS n .r y t:o co .r ry Il.llof t h G \ 1 l 1 . o.lon.g un.bH y-o 'Lt


14/33

~oCtd t:;:n,om~but on. ttl) 'mon.t.h.ly churh.!, uft;Q];," U. l,ong ~.ol("ie.s of ;r(ll1.l's t 1;ho.:>o cth,at"Ml!;.1G~~h:ould. blj c!l.T'll'ioQ donG when tnt) sto,ck Deginl'li::o f;lcp;proiliththe bvolflwho r e . t.hoy v.r(Juld 1b Q ct,ol.cet:r..or wlu;),ro tht'! !iitoolo;:.would rQ:Bt on thorn ond 4 ' > < 1 , 0 gi'!fIJ:;.upport. .4 5'1 ;- }\llG L B : F RO .:M ~~Oll ' '1'0 'I'D? l iN D B OT TO M ~ ""/fu,en e. 450 ( !i l" J .g l e 'I lI Io "V ing up f :t c l< "~ \"Ou

ro aohr;is the 11n~ Oll;" pri.,e'G! c.j' theboct;tCi~".it h. vory1mpol"tan.t- t .hOtiJ.o. 'E: ' l. r~i l '1w'hon it re'Mho:l tho point of tho o~t rem0 highp:rice.~. it is Y (lry important .fIor 0. c: ' i :um.{;;


15/33

A 45" ongll Gtt:.".rtin.t; down. from nn.y' l':n.por.tont top (In 0 ., fIl!.Q'I'l,.th)'y o. wQoE) ,k lychart .should b~ c,ontinuod. d.ownwatil .i.tr6010h,I1)S 1tOllruld. thoo ~'~!l.rtod up t\@;il,~no .t tM :;I~e rf:J,to. A{'t"(i!:i;+a l.=.g :n~m:bQ~of yeo.l"'l'bO~lH)n l;!li[i0,rti:lnt to'pa, tlifid bot-toms" th;L5 ongl.~ eom1l"ifl; d'CiM'i,Wid ~ofu.6 u.p O;,[So,i,n is il'lt1Pc


16/33

'[ou 'o'{ill r.cr!;Qi 'bhnt th~ ).QW on thi1} QhQ.~t,; h i~own. I\:~02 o.."ld tho :.I,tock fnOVOa upco {t high or C ~. A 460 lU1!.lt,J,o;:,_1 . : : ; Ch,Lvm up trOtll l ,;.hQ'bo,t!'';:GiI~t,. l :I .nd nJ:tc~ uht!) ~tQe kr-o~chos top Md s:'lifU'I"'1;3, to 'WOoI'l:c down, j,tbra ~1kst.ho ~,I;5,'OMg10~,gott in f 5 undor it at.0. pl" ic 0 o f5 9 ~ Yo :u ...dU n o tio t'h.nt I h ~VO _dr Ct'l'm OO1ot .hOr-"1-5Ullg 1 0 dOll'in fr Oill tho ,bottom net 52. At tho 3?o'int "\nrhQro tho ;:l:bock br'oak~ u:nda,r tho 4:5' ,o:n,glo movin~ lltpi':rom. $2:t.o 'bhO' ~Q :an..1:;lomo'Vinll)dO':!tn. from 62. tlw d istllw;i 0 in 'i'!:;d.nt$' i~ 16., thol"o-fO o z- o thiO C l .n ~ JL O i,z :;h o .v owid o nt:d !. \ lu ti 1 tho {>to (;ik CQuld ,do,c:linQ 16 po i n t s , it' :ilt 'i'.i"ii:I,n,ts"brtl.ish:l:: drn,m., bof'Qro i:t l"o,.O,c'hood tho4-50~n.~,bmoyi,ng d.cNm. .:fro m tho ibot to 'm.

No't,o thct. I have sho'\m 6n. tho chart tho.t tho stock !;lonti'll"~o.s drnm until itroc~chos 40 .. '\\'jh.Ol"@ it 'rQ,sts .on tho 450 on~le f)?om. the bottom u . t :52. Thh would!ind io r:.t:o tho .st.l'on.l;ost ::.'Up'port point;; ond 0 . 1 ; ; 100l.9t (h. t.emporo;ry Ttl.lly, ospocinl1yas the stock is dQ1'/'l'l:. 23 polnt .. fromthc top, LtLi:.!),!" you. ''!ill rin.d under iiResht=enco LevQ,b i1 t'llcoi; 2;2.1fto 2!1l point~ h n str'ong a,lIlpport pO'int,11. s. _sT~EL~ Tal:::~ th.o (;),x1;i'emolo\w po in.tof U. S. $t{H"1 . nt 1n . - . t ill J(J.'nUfi](:':', 1~2 '("Sto.rt O! . 4:30 onglQo.n,1.;,h'f !jrnon'ii:h. ly e:hOLt"t mo'Vi'l\~ up .[itt 'l::.hl!l' rnt(;)o ofen e po i1. t P"l' n ~ O ' C I .tIl'" ' l; h. on ~ r l .;0 : .1 ' \1 ;V. 1.50 o n gle nlo'1ling d,O "" 'Il;. :ttho s .avn10 :r n t 0.. 1'htsshm~'3 th.o s'Pl'aoAin~ of tho nngl'o~ ,Mel who.tcon ho.lPPon 'wh,(i)u Bto~ 1 lOnnie .. undor- thoi5 c.nglo CQ.t.i:i~g up i'r'Qm.thai; 'b,ottomond tho p,eint "l'theI"o it e en doclin,e in. ~X ...tro!l\O 'p,C',ni~ iIlPl'kQ,t,s) Uko 1951 "IiI,d 1932.

Tho 45,0 ro:':lglocoming'; up f rom th(), 1o, \!{ ot Jc:;nucryJO 1927 e r osaed n t 156 inoct0bGt' ~ 1950.. 1":han 'U . s. 81; 1 i f I tr.o b ott.QID. tll"o r ; : otec 1 0 ;would! huva to doelin(') 90 'pbi'l'I ':Cs to strU::o bhe 45 ~n.glo ]rul'!v;ij.nf,dO"iffii'rcla thQ b01t:;-tom~ 'Th.D ,rmcglos'boing, so 'Wido ~plIJ.~t ind:icntad. thil:~tho i>toc,k ,ou'ld hOi'\'l~ ,0. w:l ,dG-opon croak. 'l'bis h,uppon'od in IOocombe: r" 19::S1"whon Stoelbl"oKe un,de!!' tho 450engle, mo"1tw.gdo\\"'rufrom. lllt~p1JJtting it into 0. vorY'ff13nk poa:i:tion- in. :tnct., intho wca.kest posit.i'Oll that n .stockeen get in until it"~n r!J;covor this , :Angle, ~In. J 1 . i . I 1 i O ' , j lS::'i2~ "'"non JJ. ' S. ,$t,ocl docUnod to 21.i~ it had dlro'ppod ~Qr tho 4SPongJl.O iiilOvinl'lj dmyn f ' l"o-m tho In:s-b low ;;;;! 11~! IDOido i.n Mtlt'C!h.. 1925", n.:nd o,loGgd twotuonths holow this, o.n~leb0i'oY"o it stc..rtod to :t'ocovoro.ngld'=;;, ..

This shows "bhut whO'll U :stiDckgot,s i:t'.:to C i. very wock position 'b y drop'ping \ltt...dcrr importilll.t onglos moving d.O\i 'm. from batt,oms., o.:rtor huving br'OK(m strong .o.ngllll:!5moving up ! 'lro!jn bo~ttQll1.s, it Cilln Q(lclino t'o. Yory .l,o w lev~h.;; Th.oso e,Xibrel!1o fluctun. ...t;i.Q'tlS Cind Qlel'3,nos ho.V


17/33

I 11/ IVl, .....- ,1'1 __,: '1/, P, I : ,'II 11/1--, "':,1.t:-4::;>'H,-+1+-H-t-t-;-H-t--t--t--I

I : i I -" I; I, I,

You will see tha.t WEllheve sta:rted. 1!he bottlom C i t , 60. The, st.ook: ttd""'iiln,cas $ix'JD,Qnths to, 'ii'4~ to' 0. po,int '~lUl:dc~d"Ttl {lIld makes: tOP--i",~a.cts: ~ror' 'Ul,,,O~ m01!'DthsoS4,j''bro(:)ckLnr;tho, 450' M,~h'but lo.stin~ on th() nl:l'l] Cit 2 ; x 1 front tho bottoQm-~thonstarts !l.d,vffi1;Qill1~, @d, l'inallyc:r'os s 105, ngain. the 45" ang;,la :f.rom 60, g,E)"ttin.~ -iiQto (lst;:r'o'l'l.,t'J:F.!rpOs ib ' io n . ~ ' i' u ,1 :" !f i, nS 'r~,('i,i;l.';i,n od this l.'Iillg; la.In 0 re i e . r to ' dO'tormin e whG:t a itmight moe,to 17f,)Si:stWCH,~,~,(lS it i.sJ..u 'n~w high tQ:rri1i:.ol"Y, ""'10 d, rc.w, a. 4Go Wll:to from.tha:! top nt 74.. Th.e st 0 ek advntl:c C 51 to 00 en the, 22rnd, m.on.th ft'01Ii. t:'h~ lioott,em , stl"ik~ing tho 45'0 angle f'r,omthGifir!;rt tOl:l at 74" on. the Hli;h month froll".:.tho i"il';sl:; top-.Being J!.6points up abcvc tho .f'i:.s;t tQIl~' the Timoquo.ls thv' (l..d.VOl).CO in tho-PriceOI lS'DYe tho first t,op ~ fbe, 45 OO1gl. ( lsh.ows' thrJ.t;,this ie; f . I I . st,r'O:Q~ ' R 'o :. id il l: nCG po :i.'!!: l,tO i n d : i i i . p'lo..c@ to g'O short 'iYith sto;pOtil. to t.hl"Je points I1hovc the 45 antlo., - ,}.d~,clino .stl1:..rt~; t r Q , d , in th'Ol thirCi. ,month. the stookii.'lgeJLn, br~'Elk'S un,du the 45 tnglifromtlo,CI bott otIl (at 60) at ,0, 'W ry high hc 1. Xi!!'otnc r l'10rds J: itLs :2 o : 1 r point s upfrom tho bottom a.nd 1..s.. nm


18/33

from.. o..,:}?eoio.lly tho 1,6' ffil.g1,), movb':ll; d{nm.~ us 1 hOc 'VO done. on 'I0:o 0. pt"i.(}{~o-ra4 .1 . " 1 . th0 lll.:,;t ,s:I;r:;.geof the

"{('eh:!.'Ve d.lo,wn tho .,n@;l~


19/33

oi. 2 x l ( D . . ;o.i 'il o$; :2 point:;; p~r d(lY, ' !IlO;,;;"~~Or month) @d. t;bQ ~~o o:nglo !'rol1~th,isbott.om~ Whon thg,OOi,~10 of '2 x 1 WM 'bro'kon i' :it i1t:I.die(Ii'bod thll!t t:hc t.rooo.. h.El.dtUI"l'l.~d ClO'\ 'ffi. ' rho (;'\::00 k


20/33

ling 'of tbis a,t;8'lel1l'f'.s the fir s l de finH lila ic~ t.i on LhaJ:, t...h~:LT!edn I..Hr~ he-at.u:rned up ..It 1$ ~l:so import alit!. 0 rev .ilCl:W the Ir~ jOI ~ sviitiS' :fr'OJIi) Novl:ribe r '9 < ,lI.'9:n ., when

the A ve,r a& ;o !S :$ rceched e " hi[fn o f 119AI to the lC!1Ifa't,40'_& in JulY', 1932. 'fh,is was:r..'l1el!l:8t big swins- orLh~ bear :rr::ari~~H a. decHn of '79' pOints .T't!,ehalf ~aypoint Q[I;.!l.lswasat 80. in 66pte.rf.'ber; 1g~,Z the Avera'Ef,es rallied to 81- ..- then.aft'er they Fe~Gt,ed:to 50 aooC'ldvanc:0d./ eel,t. l ' ! i 8 " ' ~l bQ' iJ 'e t he halt-way potnt, ,and.crossed 81, they ,!.rll:!L ca ted ,a n edvance ~o 119 1l:J:J\y'r.\I.a:y". i\.'ter they cro.l;!,:,;:,ed. the:he.lf-way point.l be seccnd \,1me and advanced ab'if1e 81~ they nevers.old d oW.ill:. 0it?gai'l:'; U"t):t n.t-hey aO...;Oxlced t-o 14.9~ i.n Ho~rn!berj 1~35.

Aft ,er a :$ t.ock has been advane ing fora.. 1Qin;Stroe, in the last. rUn. w'Metl .t,hereis a kot of !JiI)O~.ir]trut1:1 itJ i ' t l Z : ! , j ' Ct'03~ a:ng;les frIJ-liIiI p.rev ious tops. at' bot..to~j t.hen f.!!,UbacH: : U J r I . d ~ : r 'th @ H i}'iI? hiL ch is a n :iJ'Kiica.:tiot! o f w ,*a .k bie iS s. W h~n a 8'tock has a s ,ha rpd e:c 1 1 n e and 1:S , l' l1akingu .o t tO.m, it wi U dr o :pU !o oer im po rtan t angl ,8; s :a ;[) .d t .b en r e =cover qU!i(:klY~i3'et.ti.ngabove th~m . which~hoW's thaI, it 18: g'etting int.o a ~tron-gPO$i..ion .and ch~'f;!g:Lng t.r'8tJti ~

1'.5 ;5tOC ks ad.va.:I 'lC~ a:nd. ~i

!),QW- Jones. [email protected] r()l,g,l.'i!s~S eptem be:r 3 ~ 1 S


21/33

HoSt. m~t'ke't,~: I"\lnoI,l,L i.n t.hree l. ilipor:(.&nt sect, ions Or' c!'!LfJiip8..i:s'nG. Hawever)aft.,e:r rest ingand f'ee.ct. i . n a : . if a . at.cck Ci"'!l;)5!leS the third top, it will then l'I~oveup 1 . . 0 the top ""rt.he r OU f ' i . h . ~.ect-i~}J:"l. Thies fourth advence ~,y be a. shQrt.,erperi~0 ' 1 ' tillf~ t!Jan the previous .sect ,iqn:!>,. or .iiI.SO,~ eas es .: may cQn$\1IJ1.e ~. g-ree.t~r pen.ooof!. hl".eJ, espec!![tlb ifl:.he stock is , V '.;)!r y ~tive and. hia:n.-pr Ieed , 'F'his fOljJJ:"th top'i : " ; ; very imltJortant BJ" }d :generally marks a culmination and. a. revers,a} fora big~,ercec J l. ,uw .FQf" e~amp]e: On. f~ch 12 ) 1935 CH RYSUR .M OTORSd,e :c line,d and mde low a il. 31 - -

F IR Si' S EC TIO N of the adv ance CM.r ied 'li;.f:!estock UP t,O', 4 '9 '~ o n ..M e i .,y 1 6 -then the stock de'c1itl.ed to 4H. .SECONDS~CTlON~ On June 2.7 the ed vand e star'!;.,~d and t.M st eek advanced "tone'W'hi8' 1 1 l.:e Is ~ reach itlB" 62-ion A.ugust 10, which ~a.~ t.opof t..he second :sect. 100- th~n t.here was a re,ac"t. ion 'iLO : 5 ' 7 1 1 ;an d ~ r e s t i . : I 1 t 3 ' pe r i00 'I 'H l RD S~C '!'iON - '!'hen. ther-e wM another' advance which st.arted AU! l 'u,sL .2B.The ~t eek er-ossed to o top of the aecond s~et 10n and r aacbedhigh at 74. o n Sept.,ember ll~, to p of the third. sect. ion. . , ThenfQU ow - ed . a :r e:a o 01 .- io n to 68 on Sep'temtN~r 21 .FO i.lR .THS !tC '!'IOM.._ .In O "C to ber the to p o f t.het..hird, sect io nw S$ c: : rosseda: :ndo n N ,O"ve,r n lb 'e t 18 - Chrysler r e , a . ' c n e : d . 90, top 'of tll :fo urt.heect.iol1} where itheld r for 5wee~ks - i- n a S"poin:tf'aJ1ge, while'dis~ribut.,.l-o!n was tak.ine place. This wa.s 'a most important'p-oint. to lO '1a t c ,h f ,o l :" ,8. . t inal to p and 8, c : n a l 1 t . 8 ' , F , ; ! in trend.. ll;enthe t;rend; turned d'o1fm,Reverse :t.hls rult;l 10 a. bea.r ~;~et... Wat,qh the 8(),t ion. of t.h e m a .rK \e t. when it.~kes thethi:rd and ,fourthdecli:n.e. :6ut~ remeJr;b,erl i'n a,"bear~r];oot when ral-H,e,s ,c:o.m;: r t.hey w,~,y Mke o'nly o.ne section o r o , n e mov'lE!or in extr,e~ eaS'eS' onlyiT .a .k e th e se co nd ;6e\ttiQn.., then rev e rse and fo llow the!'l1ain t.re nc i U 'O 'Im ..You wiUnnd. tt v'ery helpful to studyartd wat.eli thsse var lOUS ~ect.i:.!il:IO$of

lJl Caillllp!li. i({n a,rldby apply.Lng th~ tl.i'ig l . ( : i : ~ l'r om t,cps a.nd boOtI. o:tlfI5 you. can d ~te ct thefinn. minor 8 0 0 0 . Il'aj'or chaJlges, in trend.;

The engles on the Mont.hly and Week.ly Char'ta; are af g,reater import,am!,e thant.hose on the Daily Char'l, because t.he d.ai!y tnmd! can ,change quie of1,.en, while?tI.1Y.the 1m. ajorchane-es; are' G h o w , n eeccrd ing t.o t.he ang'les o n ' t.he M o n thly ,an d W eek-ly Chart.s ,.Alwa.y:s cons id.oeli the d lBt. .


22/33

rr 0. .. tcol~ hC!,~ ,['I[dY[rf1cQ~~tQ l~'l) o,n,{ib,:;V)}Q,.,.Jy mov,!] j,d , d . O il,l,11 2! ) po);nl : i : 1 t : - i~,n.lso sat~ to1l:nxy wh~n['< sto'c, k ro,Qvc:i~ to t,hQil:)l!)lc;l Q : f : g .x '1 ((l,~ D..in "t':1: poi fit::l p~It it. illloJ pe,d Qd ) on, ,t'h'il! V / 't il ~ l~')Ly 9~rnQnth lych~.rt

Rememlber~."'i'nsn nnysto~k brf)D.kl5 undQ"J:' 'tn@4SQ Ol1g1e fr'om th~ ~xt:r,crrJlC low'pointoi' tl. 1i'IlC}V(l': on th.e ii.aily, 'i1oekly 0-" mon.th.ly chD.rt.J~ it i.s then in ~ v~,n"ywc~';,k]folsi'tiQU UThd inCllic,c[to~ til (l,gcli.~1!.O: tothiJ' n.Gxt o..f.l.gJ.fJ. H.O'i'ro";!']JIl', "lVh~ ~1.~'l::ock C ~m


23/33

I'ho, slll:lW :r-ulo o.ppl. ios to .(l, 1.5 fU'l,t;Ji.()CJ..rro'fn ! l l i . 1 J ? f."orn G U l . y top., 1I ' lhon IIlI :!:i30Q.keros Sf) S t~QC!t'L,gl(l, on the dlAny.l' v(f:okly Cor 'm.on.th1y n r ' . . o . s,tClYS o.bo.yo thQ, 4S.P tm,gl~OX" c.:ny Qth~r ~gl'~ ~o the, lCiift of th.e 4J;;o :lln~JI.Q. ib :;i~ in 0. 'v'e~y s'i:rm.1,[5, 'p-o,~ition..

Ai't~l" a .st()~kQnC0 drops be10""" or ff;~ts ~hov\O tw.y im'PQrtW'lt OOlg;lo CIltd 'thw~l'OIVO 1 " 0 5 '0 5 it.s po ;ti.it i . on. loy e;ottinr;, h E t C , k: n bo v-~ th fl o n g10 o r d r o 'p]? 'in ,f$ OO i.{}: b a lo w itJit ch,OI. ...,g o :l - th o tl"end tL 5 i\.in "'

A otO{l. k is in aGtl"'on~ position, i'rol.lt tho 'bct'iGo,mi rnon it i~ k:lapin!; o.hol'lT,1;)hoImg;:l,o. of 450

Wabchthe 4500 OO1t.gle .f:itotn 1929 tCJp ythell it rOM,he:!i !iO~b 'IH" ..then. 'i.t i:!; :386 Woe ksdown .fr-om 'the top ,.i;his wi 11 b(lin tho 1ntt e r po.rt of' ,J rul1!ll~ry~ 1931. Not: ,e hath:o:]?pe!fl.$ at thO:.t tmq,


24/33

e:K:treme:s de,ell.ne$. !3yupply il:\g aU of tne ntle,s and us ina- 'the geo.rrJet. r .leal ang~e$from: t-ops and bol..'l..orns.on t.he: semii.-!tilZekb chart, ~ you 'dl11 onen get. an i r K ! ka-lionof a chanae inl"f@nr.:lt..wo to thr'ee daY!:; befor'~ a cmnlZe.:in trend is snco'rln on thewt:!E!: kly chart.

A (:h;;Jcn ge i.n tren d o n th~ 5eu1:)'.i",;'~kty char-t is, of grat,e.r import.anC'~t,h~n ach"'Ulze ,L.nt.rend oOn~he daily ch.art, h. is much better-to r.ely up o n t.his char tthan en the da.ily chart when 1t!at"l'~ets are i.n a. lliM"r o w traG: in!? r,~r:I8'e.

Y,ears of experience and reseer-en, which hes cost, ! l IE ' a la.rge1i!lmount. of motJ(aYhave enabled m to devel.ope met.hc:dthat will account fo r all lnark;et rnlQve~ntsand give rulest-o det.er-mirie t.he tr,end from any top or bot.tom.

it is imp'ortant.to know how to' det .e rmine the: t . rend when a etcck is fi.r,stU.$,te,dI on any- exc~8'e. Whena~;;;L.oc}::has never nu,c;tuat.'ed before. we have no topor bot'tum 'toodraw angles from. "I 'he.refox--e" in order to d,e'iter-mine the t.rend, w euse th !O'C!,l!!f'ff'i3 of ~O. which is 90 1 . C L p and . 90 across j and put ,a.ll the l1atUl"'al ang lees00~ 1U~e the Patter-n Chart. As we have !':l;'f i.d. her ore I the s'qlJ.areof 90 ltii ver yimportant beceus e lt. is one-quart er of a eire 119o f 360Q ~ and as 90 or the ver ...t lea..! anile 1,$t.he grea.test atIg1e that, can be usedi all of the other angles arefound between IlOU! a:nd ~1901l .ta n~w st.cekopene a.t 18 or any point. belO'i'122~~ then you could I1Bk.": .out asquar-e 0-[ Z . 2 ! ! to' determinet he po::;:i.tion of t. he st.ock O.n. angles. H' \.he~t.ockepened at, 3'0 '0, any point b(9twecn82A and 45, ::f'OU Gould. . IT. I3.keup,a,!;>quare of 4.5"If .it. o'pened. at 5 .0 or betw e~n45 and 6 '1 ~ you CO' I I l JLd.:make up- a. squa re ' o f 6'7~. How-~e'r, you could p'Iace any stock iOip'nln[ at any price belorw 90 in t.he square of90 and get its proper -position and streng-ttl or weakne61 ; i on anS'les, If the: stockopened a.t 100 or above 9'0 and under: 135. you could make upa squar-e of 155, orcould Jil:'bkeanother equar-e of go numbering Crom 00 to 180.You COl,lldstart a. H10illthly chart on a square ,of 90a:1,. t.he .pt'ice wherei;,.hest.ock OpE!i't50r t.r ad log bear ins j as .sh;::"dn on. U. S. Steel,. {Rf;!fer to Special Ap,aly~

s is of U. S. S teeL I Aft,er th@ , at.ock breaks any o f these n,a:tlli"'a.l ~'les dra 'WnfromllOIi> it is just the' iSM. as breaking- under an atl[le- drawn from a bottom,When .it cr osaes any of the al'l[les Q,I'"'


25/33

:5 ; . " 0 ; : 2; .mGL! ~ Tbil> Qj,'ii,c;;).e,c- Z ;{2 on th lQ1,..; , t ) j_G.e Qf t .h.e 45' f 1in gl oO .is o s (\t therntQo'.f' 8 point::; in 12 1:w:;mth:o" A stock must show Il (;nin of3/4-point por month in ordo'i:' ilo kol!.l'P 'Lbo.t~ th.is M,~le. This o:n~10 eoo 'be USGod

.oi t lO'J: l otE~ t :w i~ L i,p ca - t W 1 l 1 . : : a ng:l Q,~ f~"om 1;1'10 lJot-t om ! 1C \." 14 il~ p r 0-00 f ~t' ..Utll,n:rt > m.: it ~l.ll~ho'w' th~, ];i'OSition ,o.~~drQ.~ii;t:CI.n~o Or s'Uppo'l"t pointlof)t\;wOll. t.ho,o,tho. nnglfj::$.

On all charts-~do.ilY'1 wo-okly ortIlQ'l'J..'bhly-':'tho ~pric(l tI1i\Uit :mOV() up Or d.o\'m enthe "ilorlioal o.ngl,QI$. Thor'ed'(H,r;. the prico m(tvcmeni:; is tho same as It:'.titudo. Youshouldh(')gin ;!ti:th "oro Or tlIJH on nny cho.rt--d.:'i.ily ~ "I(~or.1Y' ,or r.l",?utllly .. -t ' ,no. ar-~:,;! thoimportunt Oi.ngloa and l"QsistCtrl.oo Leve Ls ,n.cross, 'dhi~h mellL:;;;uro l~t itudo IIorl '~'"nUtilDOr t.he t,itno poi n .t s in d i o . y o . s j .'U,l,O ks or mouths c,Qro s s ~ tL:i1dg:r t : : \ ' ; \ ' th~

~o; rhont. [Ll c~'}lglG f ! . t . oC'.ch iJnp(; ir to. :o. t "llr .ctu_r~~l _OO'!,glo" $U~h as ~ 11!. 22 i; 5~.4 5.5",2. '".,]. . ThQse l.l!lporto.nt M.glo~ j '(11'01'0 th.Q rtro'l:!lSfJst TQsiBi;;c.,no;,c,:in. ~r'i,c ocndti~no to.ko,,s p 1


26/33

1,Qn,1$5to tho old or' rlo,wn,wo,rd Il"l~vq,mont @cl , i:; the lo.st ~QV'I;:! dO\Iffi" You count thofirst m"onthu!, as ons end then numb~lr u.c:ross on the 1/2~1'na.h squares, "'\m,n.~nt!;them. ec:r os 5 J a.ddi n.g four eae h tm.1.

F() r exlhlill.p16: If G. ~t0(;k has madill! -:bot:tom and! ady(l.!l.c eo. S,Op.oint 5} you 1Qekdc;wn at t l ', . E : i 'botto,mo:t 'the. ch,acr.i::Emd findthlltyo'u Ill."!ii O IlL th,~ 25th mt:mtlln 'l;;hen.th'e;tUJ. ~ 1e Qf 2 . . . . . 1. "tQ,Qvin,!)up 2; po ~Ll1!.t~ p Q r :!llQ'!;'lil,;h.. wO\ll& a;~ 50 ~ whi1e tho 4 " 5,0iEl i igle, mQvint U:E"one ;po,int ii,eicm.out:b.. would. bG tA t 2S~OOld if the s tock b~'oke O(1.cKund,e:r '50 th~ following month. it, WClu1do('l i'lIl.l1in~ und'arth~ angle of: 2 . x 1 llndindic a:t.a 0. further a~'cl ine Now.. i.f' you had an errOr on the ch,al"t in. the, ti.tnih;gor nuC\b,elt'in~ MlI'oss:fr,oin the '!JottQmf then therno"Vin[!;~e;V'erage l'ine or angle wouldnot ceme Qutooif"rectly.TIME PERIODS FROM. 'rOPS:

Af'-b:):t' il ; > : t O Q K h.a~ o.d.vonced. and mJl1Ld.~o m . t : i J x t r e - t : n , G high ~ndl r1;lacd;.~d. fol' c. f < G ! wda:ys ~ a r~eeb" Or Q t ' ( lw Il'ion:ths,. and you start pu'lJ; 'bing On. t;he ~mgl'Elis from the, top dow:n.~ you . mJI.l.st then be gint ( In U !llib e;r tho t7 r n J @ : p, er ~ ,od . se . .e rQ ' , s, s fro'!., 1: :11~'to -p Ap_ply the ,s.a'IT.e,ruh for th~ top~ 'Tn:1[! lTho'nth, '\l\I'osakor d.~y 'thut&. stock r.HllJGes ex-tr'l:lm~ :hi~h tiuishes the upw '&: rdmo,v ! :HULGIut und is nlOtto be c'ount, (Dd.. You cun countthe 'llu-rn.borQf d e.ys ~ WE!of l ks 'Or r",on ths ill.oViIl.gaero as ilifher thnt ~ allo\n ug, the top.;m.onth to DF.) liOIl I t l l ."nextrn 'onth.. wee,K or day C)'V01' to ba, v' l n" :u.d"c.i 'ng;4 ~M'n'O:S is o nthe ~qUD.re~ too J:;et the correct po~d.:i;;..OrL. -.f thi:; 'limo Pe:d.od. is (:Eirr)_,l;Id aereason. all the cha.rt.s corTectly~. th.en. you ean al'r1ay,s checkup ru"J:!df'indo,ut if' yo uha.v'e made any mi.stake in bri.n!;in.g dmmtt1.s enJ1;;les Or 'ITlo'Vinc-(')..vaI'


27/33

but yotlsh{tuld 'not com; ld~r ~bQt.t,om e$labU,r"hedunt. i1he m':!.rket.. 1~ h(~ld 'Up or-a


28/33

: - + . 1 - . - - c ~ ~ f ' : ' I f = ~ '; ; F - ~ l ~ : ' ~ ~ ~ I_ : . , I , . . .1-1- rl-~~! i I I i _ ]f-. - _. I L - - - . . . . I-H- - - hl~I:--I- - :-I~I= - - -If-.IF--1-11- -- ~1."F4--I-+-~i-+-+-I- ..f-I-- - -_,_-r--~-'b:....~_ --H-'-"'- -_.-~-- -'- --I .- -1'--1--'1" . I ._:1-1-1-'~~.~f-.-':_-:-I~-~=~-~I---_;-~A ~b-I~d"-'~k!-:: _. If'- . I . : . - 1 - .--- -~~-++--_.-1-. - I . 1 3 1 ,L ; - i~!-JJ:: .- -. - 1 4 ~ - -1- _.' - l : - .JII~I- -1-1-~~.-_._-.,...- ._ -, :", :bdl. , '" ,,-- ..~ - _ . - ,- . ~ , I " " . - ~ ': ~ " - - - " - F : ~ [ ~ , - " . . . : " ' : . . . , ~ ~ , ~,:.u~ .~ ~I'-I--- I-I~I- - -, - - I.J-._.. I, 1 = = _ ,_J ...

I I I 1 1 II- . . J :~ _ _ 1 I, I I " . / I I II I I 1 II ' I

i I I i IT]1 I I I I I i I I


29/33

This ~s oni!'.of tbe most. i.mpQn~.n1. and valuable discoveries that. 1 huveever-nade , and if youst it.ck svr ictly t0 tb~ ru!e. t;i.~t:d .eclwa,ys watch a stoe1-::~fhen Pr iceis squared by l'illie~or when TlIDS and Pr ice COITJt t.oget.her> .you w.in be: abIe to'(,ore-cast. th: i,IDp,o:rtant C~:h$,.'llge.sn tr,endwilth S'f""e,at,er eccurscy.

'the squa.t ing of .Price wt.h Time ~ans as equal n I . 1 n m , e r of points u p or downba'l.ancLng an equal number 0 , 1 " ' t-ime fericds--~it.he:r days; weeks orrnonths. Forexample: If a at ock he.se.dvanced 24 poi.ntsl;.p 24 . da.ys. t.hen ! i B O V iog t.he 45atle-1,e or movi.ng-averatge....:1ine up at the rate of one p,oint per day" the t1rfilnglitl,@ o r time: pe r iod e nd th e pr ic e o f thE! s t. o ck a.re at '1 . he s ,a .u meleve-la .ndt . hestock is resting on a 45 angle~Tld you should, watch fot" an inrport,ant. cha.~e int.rend at t.hls point. If a st.ock is to cent. inue uptrend and r'emain m a strongpoo.ltt ion. l, t must cent, mue t o advance and keep abOVE! tM angle of 45.0. , If itbreak3 back under th rs ang Ie , then H is out o f its square on tlli:h:ar s Ids of'!:,he 45 aLngl~ and kn ,a 'In!ea.kt ]josit,i.on. When you a:r,e 8quar.ing o~t 'time: on ade.ily char-t ~ 10'Q1\ at 'the Wie'eklyh igh and low char t and monthly high a.nd lo w char ta o o see if the ~lftockis ln a. sLr,ong pes ition and has yet to run out , t .ne ' timeper loos, because on a daily ehar t, it. has to react and 'then recover a pos iti..on,8quar Lng it.s pI'.1ce many tin:es ...as 1Qne:-a8 the weekly aM monthly point u p.f"'ia! ke ~ 'C crr-ee t, 1o.t':i;sor r l i l ' 1 1 ! . C I:.lens ar-e s.i.iT;ply~h~ squar i.ng out o f r n i n.crr t . . i.lml perIedsand la1.er the 'ib,1gdeclines or bft~ advances aret he squaring out of major til1".l!;per reds ..~!,,!bHl.!:!Ll'll~RANG!L. Refer vo For-IT;1f!12J'where aran15e of 12 point,$ is shown. .. f.'Porn 4.8 l'OWto 60 high. Now suppcae a stock; nmins .for$,evera,l weekso.r sE!v;eral IfOCInthf>..r.1Oviin~ Up or dO'ilitlj, in this ra,nJe~T1l;lvertf,E'itt :l..ngmore than 12 po int.s up from t.hebot.toIll and not br,e,ak:ing 'the bottOOl! We st.artthe 450 ,a,ng:l~ from the bot.tom of 4.8 and move itup to the "t"op of the range to60.. tnen when 'W'esee the st.ock is holdi.ng t.hisra.nge' and no'tgoifii higher I \-Iemove the 15 atlgle back to the bottom; then back 1.0 t.he to]) of to o ra,rllSe again,moving' li.t U.p or down over this range until the, st-ock h;r"'a.l"s out into new l . D w 'llil:vele or new his-.h levels. You will find t.ha,t every 1. i l O O t . h 6 : 4 . 5 angle reachesthe t.op of t.hh{ ranse .or the bol.t,Qm of t l : 1 . ! . : : J rarlf{'e, 1 ;. her-e 1.$ ~'om::: important... chang'l;:in t.rend of t.he st eek.

You can alao use th~ ;;ltngJL@sof 8; x 1 to 'the r ig'ht;. of t-he 45,0 angle. and the. : e . ~ . 1 t .ot.n: le ft a s t.. 'h,ey aga... i t1 , c l : iv lcl(! l t.he T1I1 '1 )Per iod: into t;;.,o equa.:l.p':l.r'ts. andare of SOWle value.ICa Sl,..oek finally moves ou:t.Qf thi s range o n t,.he up side, t.hen t.he a1'Tl8"lesw.ould begin at the n~w' and hi~hei bot-tall") and move up, hut f'rom u . h e point. 'dh~rethe st.,oct. 'iIi'~.nt into new hi~E-~~ or from any important. bottom .roadie1ii{hile it w a . s inthe range JE!:S peelally the last bat tort'! that. it made f wh tc h would be mOISt ,import antjyou shoutd then beg in en .ang 1e at.. that:. bott om and cont .i.nue on up again; w&t.chwhen this angle is broken or when Ti~ is squared out ~ain w,itlri Price.>which wou.ld be itP.pW"tant for enot.her chanie in t.rend , ei" i 1 . ! . l ' " mjor or minor.


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W fJ Cun . 3 q\1i,a,r,@ th e> RU 'O ,l? ;o ! I, 'l;h ~t is.. 'tr.0 TlLuii'iloGr 0it' po in't S from, '11X,tI' ';mr. lcrwt go0xtrC'l 'ff[l:O h.i,~h ,wi'th ' l':im o,- 'll.ho l,,:jqU o.ro th.o oxl>r;)IIlO low poindt, wtth. ';['i,]\Il;(i)- lirto;l!, 1l1'3~o.ra,t:he f;)~r eme hi gh po in twi th ')!"~mo. 'i{'h Q:!'!. the m~ k4't pll.~:ss:;; out of t.h,ese sq U:e.::r@!>a.nd br~ !ilk:!;import !m; rolfj l!3:S.. the t emd Cll,a.t.r. jl l l9s u:p 1 0 r d;O\!m.1 ~. .The r n n . ~ C 1 I th,c.t a stock !J~~ke$ bet'e'leen. e - x t l " . e i l ! ' l : e ; hil\\;h and~J:'i!:)md' lrO'w can b'G!

S~Ufi;.rad =50 long as it remains in tho, $ 1 . l l T h ~ 1~wric6 l'ffi:'l!ie,. If the, ran.~:e is 26Iioin:ts, it :;qua:res with 25 periMs Of T'ima~ de.::rs~weeks or mrt~th.s. -Contit1J: ' loI; \to us e this tim,6 pofJriod us long u.s it sta.ys inthG .:;;mnerWlge.

2 SQU ilIilNG '!']J.iB 'in THBOT'1 'OM o n EX.TREMITl 1O\ ': /" PBICE:'the next iJ~por-t,@:.t !'1~ioot9 s8:U!lLre ~'I'":itl:il 'Time is th~ J!_owe$t pdc{!: or-bottom.at' iJi'!'!..yiln]?D rtnnt d~c1iil' i@' FOl'~xarn:pla,~ 1 ; " 'th,e 'bottom of a st O~ k i$ 25~ thenat t.hG elTJ.d 0 1 " 2 5 d:.,a.ys ~, 2.5 weeks o r 25 months.~ 'Tim .o nn di. Prie$ a1!"0IE:,q1lJi.a.l.. 'Thet'.watch ,f .~ st'oc!le c()'Ut. inu~s to M,ld:, ous bot tom nnd ;E!t be n.01::6(1.find wut;,c;hed for" D .. Cnanm~i l l t:;;-'Il;oo. If th6 top ,c,f U !l'toc'k is 50~~h'aln"/hlnit 'has mo-vc.d QY~,r- 50 do,YBi ~ 5'0 IN\tlel~~. Or' 50 lTho'nt..hs J it h,o,,s ,eacnlldi. i.t,~ squarein Time ff!ld ' { l . l ' i!lllH)rtr:'.nt change is ind.ic.a.t.ed., Thi s C&U DC ,determ:i,ndd by theposition of: th~, angloa frQm top andooutom. 1"0'1' ~A:(lIDple:Po\"'~~e~ I~di.tl.~,tr;;i,d A"Ve:r~ges- ~h~ high of.: s a e o,n Sept@iIltbe;r :3 ~ 1929 \'fo'~ld:r~,quil"e ~at: [email protected],x days '(;0 eg_ue.l th~lPriein. ~;I.~.;!!. fhi~ ()CC'll.1"!t"ed onSlllpil~mb~r 2$~ 19'30. Look . ro t : . t.he chnr't and netre how the. trend ch.a:."'1.,~ed ::i.ndtU.'t:n(')G do"l'ol 'Tl !lX,o'm'ld .f; h > : . t t.me '1'hQ:!4.. on O(';tOOeI'. 14 ~ JL951, . :it l''LlB '0ut, this[poTioQ o!';cin- and ;(!.~o.i;nNO'VGmbe:r 4" 1932. UQ'\I'f :I, rr.ib'"'I"25. 195:3 ~Do!J ombel" 16.19;)1, and. J nIm a:ry G~ 19::55. I.oQ k u'p th.e ::l'~ d(tt ~s : '1111ld.you will s (Je thatir:npor-ta:nt chc.,n~o~ )X~ tT'ond oQcu:rr~.a. on. iGh~Daily Ghw-twh!;)nthi.s tirn.c~ period91: 3,[email protected] "bo.1N'lced. the p:riC'c Qf sss , .Bothmtl.jor ahd min,or tops :!'md! b01:;:t ;Qms 9lJ !:l,.U time p(i)iriod~ : r . r u : s t D'i;lWIl:li: c had, asthey oS'quare out, ri~;ht o.lo'i!:l!.g. Most t.'Ql![lart~nt of I;I.U t:> the erlr,eIl'l!t~ 'hi~h;poointon th( j l mon.th.ly hi~h .t :md low chart _ This miRy be Very n:i~ ('lInd woO:rk O!!Jru~ lo n g t:L m ~ p'(ilr i.o dbefo l"'C l. it ! !lq u ll);:r e::;:~ h~ to ,~ .. in wh.iok ctJ.s:e youh.i'ii,.v,e; tod5.v:h.da the price into n equ.al time 'Pc.rioda audw()."tcn the mQs,t imucOJ;"t::o.ntpoints~ liko l/4:! 1/3, 1/2~ 3)4~ bU:1;:most 1tr1PQrtMl.t of.aUb 'i'(h.~n.fim,o oqti~l~P~ic(;j"' l ' I 1 1 , ~ : m :rQtlar$ ..tatc~ing t..l"1opositi,ou. of' i). $'0ok rt.f't'till' it h,ng g'\l'illolored o'ut froma, bottom Oll" atop, o..lwo.ys look up th~ tim'" ;poriodi" ond the ang:lo:$f:r-om 1;h,e op-:posito3J d:it'Gction. If thooillo.:rkot is uoo,rin,ge. low point~. 5qll:!!'ring;, out: 11 . top ~ soe

h..Ollf it,~.'g,latiou: i,~o the 1>Cltt,orn tl.:;; :1:tmig;htbe ;i.tl.the !i!:GCOOO o r 'thir-d sq'~>l"r$


31/33

The year' contains 52 w;':'G:,'In~nd the square of this in T:i.me and PI"'lee 1S 5 . aby :5.2. Ther ef'or-e you call mal.-.:!ep a squa.,r.e of 52 ",fide and 5211iB'h; F~t on allof 'tM angle:s from I~OIl ;thllim chart. t.hewe,~klY hlgliand 1,01;.:'ori,tes o!any stockin this $ioi;:j:I!,le.()ir 'e~~,:mpl.e;: If l.fle 10'W pr te e of ast.o ck re 5.a;t.hen the ' l oOpof this wee~~lYsquare would be 52: added 't.o SO. which roakes 102. 8S top of thesqua:r-e. As 1011'S:as t.he stock st.a;y;s above 50. and move.s Up, itwill 'be w,orkingin the ' I iJe'e'kly square C if 52. On t O n e ' o,th~r hand , if th e st-ock makes top and ....orksdown, you would mike up a wee,kly square 52 points down frQ.m the't.op and s a over1 : . . 0 :getthe ti!l':ep~rr iO O : . .

You can take t.hepa,st moveilfteint.of any st.eck, put on a squar,e of 52 by 52"and. st-udythe movement~ not ing 13 we~ks Dr one-fo 'l. !! l" 'th" 26 we,gks or one-half~. and3S1w~ek6 or thr,ee-fol.M"th:;opoi:nts on time~ and t.h~ changes in trend. which takeplace when the stock reachee t.hese important Res;.:tstance Point.a in. Tirr.e a:nd Price: ..You would watch fClt ,a , change ttl t.rend- ar-ound these tin:teperlods.

At the t . i i l 1 l e ' a stock brea};::s.a .450 e:tligle~ if it is selling at. 135 on the135th mo:nt.h... it. l.$ b


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This I\CCQunts f',O!" stodcs tho.t h::::'VID .. shti.rp ~ q'j;],Ck '0'! '\)'C l.;i.l'i.Qtrom.:;'ho ' l':op ::.ndthen Qd.Y~m.cot:l.'ndmncko a slightly highor top ,orn 501'5.05 Q ' f : .sUgh'hly lowor to]Js,(';no -;mrk ovcr\Xl:1ltil t,hcy o'to:::"CQmo tho .sq'lJ.o,l-O 0;; tb.o pri,(::,o T;l)l,U~C e,t c, COi'.t~~::TC'.''t:i''''G-ly hig'~ hr ' ifolr - .nd broo.k 'tho, 4;".5 ilngl!,Q" thon [l.f~$t. aLool in . o follOl'fs.

:S:T'B.ONG~S'T , A i ' , l G I . : B S l :i 'OR M'ElISURING'! ' IMEJl .ND . ' P 'UICB.'Why is tho. 90 dog~'co c.ngla tho stro,ng:ost


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lin :Di:\l~t!J. WQ 'i"l,OQ ~G Q{)l'l't~ Oro n o ~UU lt'Ol r 6'0 oon"l . ,o Q}," h0.1 do llll:t , i))1.(l, 10'1').(:YOi:i.I'Si age 'Il~ hud, l2 '~ ' c@nt '!;;lice ~iS .:"lhi 10 "t!;,e, roost i'lllp'OT'tcnt, r1 t;u:'r~$ of our b;a.:;:),::;of iul\,lTIGYare thorour qUff.rtc!'s, VlO do 'IlS(l thE} liS f,I{).rt QI' 12* conts in 0.11 cd-ol l l~tions . stock fluctuo.ti'On:i1 Un;), l,;,Q.:H;\ lQo n 1/87 114. 3/8,. 1/2,. SiB, 3/4, 7/0,!:.mil.the whio,la f i gu re. 'rh~.~fo:r'?~ EiZlYprico m~M) . s 1 j; ;r e "m on t . . s "1all as "t:i:mewill 'i'loTkout 'olosor to these f'ir;;ure~ whQIt chc~n~,od. i.nt:oOOi.~les of tim!!) thffO 1/5 Ox- 2/':'points .. to)."tha simlplo ro.;1;!,jon. thiEl.t tl:. il'luotuo.tions ~ll):;nting~in. lIB ~ropoTti'on. m;J~tcom.e o,ut c;loseJ' to th''i,se i'i.guY'e~,.

Fit,\ll.it!,.(l; $100., orpO-l'j M .~b.~"i.r. :!f'0l" :,;toclli:. prl.cQ~. uIl..d chl[!J;l(1;ing these price!;.to d.()g,r'Eil(~s~. 12~ @qul:!.ls 46 ~ 25 $.q'~o.li590c ~ 5'7t ,E)quc.ls 1350' I 50 i@,oUal$ 180' ~ S2:~-!i)~l;li!l.h2'2J)O ~ 15 oqu.a.1s 2'700 f :82i~'Qiqu.al.s 315O'~, O l ! l d 100 ~"1lua.ls360o. Yo):" ell:.~:"'mple:

filhGn. u stock se.l1s at 50 'On th.tJ lS0th dey. v.roo,k IH" m.onth, it is on th'fl 0.0--grM of it.s timl!l .onglo.On ]',o,brua.:ry1~ 1915 z ij. s , :8to~1 rn( \d~11 hm at '~B. which is olo;se:3tto~,'Pric 0' 'O f 37.1!" c1flhi~h1$ :3/8 ,of ' 100 . nndoqu: ; I ,18 1;35Q - o .n gJl.o ., S to o '1 'ii!;lS 14y~Hlrj Or 'UlS ~llo.ntns ol:u on l"o b ;."Y ,m ;'J! '5 ~; 1 91 5" Q .t'.d h it th(1)o ~n@;h of 135.0"which :>ftoW'odtho.:h st, 1 we.:;: b~hi1"l.d.timo I 'but the";:: it,v.:J..s in. e, .strongpodti'Qn~ holdin~ r-J.::38 ttbov~ the '156'0 en~le or 'th,sprico of S'7~.When S trcJ(!)l :r ,C H1C ho d 200z it OCiluo"llod :2 ciFclr.1ls e seo". '(~hen:l.:it :::;dv(wlcodto 261-i it~'(n;sc 10 3e""t to 5 :it-hl th,ett.ird 100 0 rnetl.r e st th~ ~2500 o.."lgbOr 5 /e point .. ,'i'tdci.if::, t.he st:roll1!,;oa't f.m.g'1c nftor itGl"o3sod.the bt'.lf ...wf : : . y:PQint~ ut 26,0. 0)" 1eOQ flllI.gh.

f7~. '[>:.-...e7 / / 1 ;1;)/1/1...Vi .r(1 'Je/V I/YY ~ \. j . .

W.D Gann the Basis of My Forecasting Method

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Transcript of W.D Gann the Basis of My Forecasting Method