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23

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severe trend down. (Illustration 3.8 CYR)



The square of the high has an exceptional setup, when 50 percent of both price and time come out together, or when the full square in time comes out with 50 percent of price. Of course on a monthly chart this becomes very powerful. (Illustration 3.9)



The United Airlines chart shows a strong ve down. (Illustration 4.0) Support is shown at fifty percent of the high in price, but price is at this level long before fifty percent of the high in time, and it breaks that level. Look at the movement of pra.ce down from the high. One, two, three months down, and then price moves sideways with three bottoms at 50 percent of the high. Again, this is all taking place before fifty percent of the high price in time. In fact, the test of the 5/8 resistance occurs st 1/4 of the high price in time, and a three month down move results which breaks the fifty percent price for the firet time, on the fourth test of that zone. Finally, price moves down for three months into the April, 1980 low.

From the low in April of 1980, price rallies, and moves back up into the level of 50 percent of the high price in August of 1980. Of course, this is also 50 percent of the high in time, and a true setup. Price has been moving up, so, sell short. Possibly you want a little added evidence, so you add in the fact that price made a high one year ago in August. This is a setup, and you can look for a good three month move down, probably to the 3/8 point of the square of the high at that time. It isnt that this is what exactly happened, it is that you can expect that type of a move, and you can trade it.

Price does not move down quickly as you might have expected for a weak stock, and reasonable support is coming into the market at 3/8 of the high price, when, in December of 1980, price moves quickly down to the 1/3 of the high price. At that same time, a 2X1 angle up from zero from the date of the low crosses the same price level.

Again, one of the rules that Gann taught is that if price finds support on a faet angle, you will get a fast move. This is true of resistance angles down, also. This is not to say that price wont give a fast move from a slow angle, but it is much more probable that a fast move will result from the fast angle. Price moves up for 6 months, through fifty percent of the high. The significant low after the high is the one which the angle from zero is based. However, you would, also, have zero angles from the high in August of 1980, and possibly others.

June of 1981 givee an inside month. This is the eixth month of the move up, and the support from the 2X1 angle from zero is being tested. If you were to go to the daily chart and find that on the 180th day that price showed a top, or a lower top, that is a good indication that the six month move could be over and that the trend could reverse down. Again, here is a good setup on this chart.

From the low at 13 1/2 in April of 1980, 13 monthe later, or the square of the low in time, is May of 1981. That, in itself, is an indication. You will note that at that time, price reaches the 1X2 angle down from high; and is at two thirds of the high pride and two thirds of the high price in time in May of 1981, which could be considered a turning point. So, you have a turning point from the square of the low, and at what should be resistance in



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