back start next[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [ 52 ] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] 52 /8 /£ /9 98/01/9 / /« / I/ N/»/» BS/fl/»re/I /» DCi ra/fli/f * /fiThe 2X1 angles from top and zero intersect zero, and the price level of top, respectively, on this same date, 1/27/84. When the 1X2 angle from top crosses the end of the square on 8/10/84, it indicates, once again, the fifty percent mark on price. If this angle is extended to zero, you will see that it gives us the date of the second square of this high price on 9/6/85, This is, also, shown by the "H" on the chart at that date- 113 weeks from the week of the high.So, from the top on 7/8/83, there is a 1X1 angle which cuts the square in half from corner to corner. The next angle up is a 1X2, whioh indicates fifty percent of price when it reaches the end of the square. The next angle up is a 1X3, which, when it reaches the end of the square in time, and at a price level between 37 and 38, indicates two thirds of the square of the high price level. The next angle up is 1X4, so when it hits the end of the square between 42 and 43, you have a price level that is 3/4 of the high price (squaring the high). The last two angles coming down from the high price are a 1X8, and a 1X16.Remember our rule- the first time price comes down to fifty percent of the high, is a good time to look for a buy point in the stock. This happened with Merrill on the week of 10/21/83. On 1/20/84, Merrill turned down one week prior to the fifty percent of the high in time (where the tw 45 degree angles intersect on 1/27/84). Hence, there wes not a good setup at fifty percent in time. Merrill found bottom on 3/8 of this square of the high, whioh is the next support level after 50 percent of the square. Once fifty percent of the range of price is broken, the square of the high becomes very important.When viewing the square of the high, as long as prioe remains below 56 1/2, every fifty percent, and full division in time should be marked on the chart. The first square of the high came on 8/10/84. One and one-half squares in time would be 84 3/4 weeks, two squares is 113 weeks, and 2 1/2 squares is 141 weeks. The third time the square works out is 169 weeks from the 7/8/83 high, or October 3rd, 1986.Next, we look at the square of the range, which Gann said was on of his most important squares or cycles. If in your own analysis you should decide to draw out full equares, you could use a colored pencil to draw these squares so that they are easily distinguishable from the square of the high. Again on the weekly chart, where the 1X1 angle from top reaches the price level of 10 1/2, the level of the old bottom on 8/13/82, this indicates the end of the aquare of the range from the 10 1/2 low to the 56 1/2 high, or 46 weeks or points. You can see this point on your charts where a small line intersects that 45 degree angle on the date of 5/25/84, at prioe level of 10 1/2. The 45 degree angle, or a 1X1, up from the 10 1/2 price level, starting at the date of the high at 7/8/83. completes the square of the range.where those two 45 oegree angles intersect is fifty percent of the range in price between 33 and 34. This is, also, fifty percent of the range in time at 12/16/83. After falling well through fiftypercent of this range, the first time price came up to this level in August of 1984, resistance to the move was found. The level was tested three times in the coming weeks before a breakdown, and a forth test, which also, failed.Finally, the second range from this high would be the range from the high price to the low price at 27 1/2 during the week of 1/28/83. The 45 degree angle up from that price level, and the date of the high crosses the 45 degree angle down from the high during the week of 10/21/83, indicating fifty percent of that range in both price and time. As you oan see in the drive down from top, support was found at the fifty percent mark of this range for some time before breaking that level. In addition, when fifty percent of the range oame out in time, price was near the bottom of that range and very close to fifty percent of the high price in the week of 10/21/83. The first rally, in the drive down, ensues from this time and support level.Now, lets look at the square of the low. You should use the square of the low in, both, price and time. From the 10 1/2 low on 8/13/82, you should count over multiples of that low, or squares of that low prioe, paying particular attention to the 1st, 3rd, 7th, 9th and 12th squares of that low prioe. The bottom of 22, in the week of 6/1/84, was at the square of the range and the 9th square of the low in time. The small tic marks every 10 1/2 squares from the bottom, are the counting off of the squares of the low. Actually, a double bottom formed at 22, so we ehould, also, look for resistanoe at 33, which is fifty percent of the 22 price plus the 22 price. Resistance should be found at a full 100 percent of this 44 price.You may have already noticed that the cycle of years on the Merrill weekly chart is somewhat difficult to find, as it was on the Control Data chart. There are some relationehips on this chart to the cycle of years and the 13, 26, 39 , etcetera counts, but they are elusive during this phase of the stocks price action, at leaet on the weekly ohart. The square of 90 counts show a better relationship here, and to see this, look at the weekly chart and the high of 2/15/85. Notice an 11 week count to 5/3/85 is a bottom, 22 weeks for a top, then 33 for a bottom, 45 for a bottom against a 1X2 angle, and 56 weeks is a top. But, lets look at the monthly ohart to see if this etock follows the oycle of years in the same fashion.On the monthly chart (Illustration 8.2), youll see that bottom was found in July of 1984 against a 1X2 angle ooraing up from the August, 1982 low. This bottom was found in the last week of July, almost 24 months from the Auguet, 1982 low, and twelve months from the 1983 top. From that July, 1983 top, two years is July of 1985. From the high in February of 1976, two years is the low in February of 1978, and 6 1/2 years is the low in August of 1982. The high in February of 1980 is four years from that 1976 high. From the low in September of 1974, 15 months is the December low in 1975, 48 months is the September high in 1978, 120 months is September of 1984, and a ten year cycle from low to high.[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [ 52 ] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90]