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W/OT/t 9 /

On the dally chart, you should be looking for that 90th day, and take the last low before that day, and draw a fast angle up from that low. I use a 4X1, or a 2X1, depending upon the scale of the chart, and I look for price to break that angle on, or just after, the 90th calendar day. The reason for this is, if price is going to have a blow off move from this acceleration, that angle will, provide support for the blow off move. When the blow off is over, the support angle will be broken and price will pass through it. If I took a trade from the break of that angle, I might be looking for 11 trading days down to take my profit, depending on the price action.

On the weekly chart, in the 13th week from where the move up started, 4/18/86, price has been moving sideways for three weeks, just above the level of the old top. The week before this week, price moved through the 2X1 angle up from that January start of the fast move up, and did not recover it.

That is th way a 90 day price acceleration happens, and you will see this type of move often when the market is moving quickly. It will happen in both up and down moves in price.

Now, before we leave General Dynamics, I would like to point out a situation on the daily chart. You will see this setup on the daily oharts, and if you are a trader, and you dont mind taking high risk trades from daily charts. You might consider this a trading opportunity. The 45 degree angle down from top is broken to the upside on June 3rd, 1986. Then price reverses down through that angle and closes below it. Again, this is a higher risk type of trading, but you can short the stock or buy puts on this type of move. Use protective stops I

You can see a very similar type of situation on the 2X1 angle down from the high on the date of April 25th, 1986. These are trades that should be taken in fast moving stocks and markets only. The breaking and recovery of support and resistance angles is an indication that you can go with the direction of movement. Keep your stops tight. Remember when you are considering one of these trades, to make certain you do not trade solely upon the angle break and recovery. Look to see where support and resistance are on the weekly and monthly charts. Check the amount of time that has passed since the beginning of the move. Is it 30, 45, 60, or 90 days? Look for a loss of momentum either to the upside or downside. Filtering these trades oan keep you out of a lot of bad ones.

Notice, the monthly chart, March, 1987, was sixty months and sixty points. When price moves back up into a conjuction of 45 degree angles, as occurred in this instance, it was refered to by Gann as a Death Zone.


Look at the GM weekly chart (Illustrations 7.5 & 7.6). Running across the top of the chart starting with the week of January 23rd, 1981, are the counts from the square of the 1965 high price in time, or simply put, the last significant high price at 113 3/4, in this case multiplied by

7, the seventh square of the high counted out in weeks. The next square is the eighth, and so on. Using this counting method is the equivalent of drawing a 1X1 or 45 degree angle down from the high price until it reaches zero, and then taking it from that first square and drawing the 45 degree angle back up to reach the high price for the second square of the high in time, and so on, until you have arrived at the dates indicated. So, you can count it out, as was done on this chart, or, you can use the geometry of the chart to calculate these multiples of the square by drawing the angles.

Fifty percent of that high price, which was 113 3/4, would be 56 to 57, and, if price is below that level of resistance, presents an exceptional price level to look for support.

So, on the week of January 23ra, 1981, you would be considering that GM, on the weekly chart, has moved into a stronger position from top because it is above the 1X1 or 45 degree angle down from the September high. That is bullish. Time is at the 7th Square (in weeks) of the most recent significant high price which is a place to look for a change in trend, and price is down for three weeks into this weekly turning point. Time, also, squares out the April 25th low of 39 1/2, on the week of January 30th. This can be found by counting out that 39 1/2 price in meks from the date of the price, or by drawing the 45 degree or 1X1 angle up from zero, starting on the date of the low. When it crosses the price level of the low, you have the square. This angle could, then, be bounced up and down to find multiples of that square. Additional evidence from the cycle of years and price action would be from the fact that the last drive clown in the stock lasted for 13 weeks, and produced a double bottom, and, of course, the square of that low at 39 1 /2 comes out during the 39th week from the low, or 270 calendar days. It is a doubly good time to look for change.

On the same week of January 30th, the 45 degree angle from the top in September hits that low price level, squaring out the range between the September high and the April low. At this point in time, you would say to yourself, "What would this chart look like in the future, if this is to be the bottom and price moves up from this period?" If the turning point is a bottom, then the chart would show a higher bottom, or a rising bottom after a double bottom, and that is quite a bullish indication.

Next, you would go to the monthly chart (Illustration 7.7). Notice, the December, 1980 low came in on 48 months from a top, 4 years (a yearly cycle), as well as, 72 months from a bottom, 6 years (a yearly cycle). In addition, prioe shows a near double bottom in December, with the low found in April of 1980, which was

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