CONTROL DATA

Now use the Control Data weekly chart (Illustration 6.6). The square of 90 and its counts can be quite effective with weekly charts, especially when combined with other techniques. Remember, what we are trying to locate on the charts are specific setups in price and time. Then look for a change in trend.

In Control Data, price made a low in the week of August 13th, 1982, and then drove up. The first low in the drive up came very close to the 7th week of the last drive, and the 13th week of the drive produced a consolidation which lasted for eight weeks, ending with an outside reversal week up on the square of the August low. This is shown when the 45 degree angle up from zero and the date of the low crosses the price level of the low. At twenty-two weeks from that low in the week of January 7th, 1983, and twenty-six weeks from the lower high during the consolidation move, the high of the move was found m June of 1983. That high is, also, 52 weeks from the momentum low of the move down into bottom during the week of 6/11/82.

In the drive down from this high, there should be price support at fifty percent of the range from the August, 1982 bottom to the June, 1983 top or a price $42 and $43. Price moved down to 43 in the week of 10/21/83, which was, also, the third square of low, and this produced a 2 1/2 to 3 week rally. But resistance was found at $49, or 3/4 of the square of the high. I would like to point out the value of the use of the cycle of the years, from all signifioant highs and lows, such as momentum lows and lower highs in a drive down. So, note that 13 weeks from the high produces a lower high, and that 13 weeks from the lower high in the week of 7/22/83 is very close to being the first test of the fifty percent of range. From that same July high, 26 weeks, or 180 days is the week of January 20, 1984, and 1/2 of the square of the high.

In the week of 11/18/83, price was down 22 1/2 points in 22 1/2 weeks, which is a squaring of price and time. This can be seen by price showing a low exactly on the 45 degree or 1X1 angle down from high. These are divisions of the square of 90. Again price is testing 50 percent of range, and produce a second bottom. At that point, you could look for a change, but would ask yourself how far can this rally move? Of course, you could look for a three week rally, which would be the normal move against a bear trend. Also, you can look at the resistanoe zones on the weekly chart- 49 or 48 1/2 which was 3/4 of the high price, the 45 degree angle moving down from the 9/9/83 top, and the 1X2 angle moving down from the 6/10/83 top which had proven itself twice as resistant.

In the week of 1/20/84, price was against two proven resistance points, the 48 1/2 zone which had shown resistance on 11/4/83 and the 1X2 angle from top. Moreover, it also was against fifty percent of the square of the high in time. The nine week movement in to that resistance setup was very unimpressive or weak, and as I pointed out earlier, this week was 26 weeks from the first lower high in the drive down. Now, besides all of this evidence

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