and last five days. The idea is to look at the average correction in price against the trend in terms of both price and time. When ycu see that the latest correction is longer in those two dimensions then, as Gann said, "the trend is changing." That means just what it says. It does not mean the move is over. It means that it is closer to its end. Of course, this is more important on the weekly chart than on the daily.

From the bottom in January, price has a fast move going, and on the 90th calendar day from the start of that move up, a good top comes in after the largest overbalance of price and time that has, yet, occurred in the drive up. The resulting sell off takes price down for an even greater amount in both price and time.

Back to the turning points. The 1X1 angle from the January 23rd bottom hits the price level of the January 7th top, on February 27th to 28th, You would expect a turning point here, but price is moving with good momentum, and time is not in favor of a strong correction either.

The 2X1 angle down from the February 28th top, intersects the price level on the January 23rd bottom on April 8th, forming a large triangle. When a symmetry of angle develops, such as this, it is usually a valid turning point. April 7th is a 22 day count from the March 5th bottom (in trading days). Also, note that on the 7th of April there is a 180 trading day count from the July, 1985 top, and that the 8th is 90 calendar days from the January high.

Notice, the 90 calendar day count from the January high could be taken from either the 7th or 8th, the seventh being the day of the high close, while price made a higher high on the 8th. In a situation such as this, I start my counts from the day of the highest price. Occasionally, this cycle can expire on the 88th day, but that usually occurs during a low momentum movement.

So, from the top in January, notice that the 90 calendar day cycle expires on April 8th, one day off bottom, and then the 90 market day cycle on May 16, on bottom. In addition, note that the 90 calendar day cycle from the January bottom comes in on April 23rd, while the trading or market day count is on June 3rd. So, the counts in and of themselves are indioations, but when confirmed by the squares of ranges and partial squares (such as fifty percent of a full square), they become much more powerful.

Notice on the 20th and 21st of May that there are three divisions of ranges or squares showing, the 1X1 angle from the 3/27 top hitting the price of 222 from where the drive started on 3/5. This square indicates May 20th as a turning point. The 2X1 angle down from the 4/22 high hits the 226 price level, again, on the 20th. The 2X1 angle up from bottom on 5/2 hits the high 245 1/2 on that date, as well.

So, you know that there is a likely turning point here, with a 90 market day cycle and three squares, or division of squares coming out. As price moves into that time, you would looking for the price action to yield a clue to direction coming out of the turning point. On Friday, the 16th (90 day cycle), price closes

down thf4)ugh the last support angle, the 1X2 from the 4/7 low. The next day is an inside day, indicative of price support in the market, and the low, from the day on which price broke the support angle, is not exceeded.

Now, the setup looks good, but what would generate a buy signal? There is a live angle here, the 45 down from the high on April 22nd, which has been tested twice in the move down. Price rising above that resistance angle would be bullish. This occurs on the 20th, Another indication is for price to rise above the 1X2 angle from the April 7th low, which was broken by the move down on the 16th. If price does this, it could indicate a false break down, and price, also, moves above that angle on the 20th. By now you should be looking for a long entry position, using the low of the 16th as a protective stop for a high risk position. One method of entry would be to assume that, if a fast move is to occur, and this is a fast moving market, the 2X1 angle up will provide support. Prince shows support on that angle on the 21st, but closes on the low for the day, and on the 22nd, breaks, and then quickly recovers that angle. Buy.

How long do you hold this position? The move up on the 22nd is a strong one, and in the last strong move up, price did not reach top until eleven trading days after the bottom. That would have give June 6th as top. The move up from the March 4th bottom, lasted for a longer period of time, but had begun to show resistance by the eleventh trading day. One day before the 6th of June, is 45 trading days from the March 27th high, and the 6th is 90 trading days from the January bottom. You would be expecting to exit the position by that time period, if the choppiness of the market was to continue. By the 27th of May, you know that price is in the fast acceleration up, and you might draw a 4X1 angle up from the start of that acceleration on the 22nd to see if it vrould provide support to the move. A break of that fast angle would be an indication that the acceleration was over.

On the 30th of May, price has its first lower daily close in five trading days, but still shows a higher low price than the previous day. If price opens at this same level on the 2nd of June, it will have to accelerate up to maintain the momentum of the move(which has not taken out a daily low since it started). This is the time frame to be watching for a change, and on the 2nd, price opens slightly higher, but does not accelerate, and then takes out the daily low for the 30th and the 4X1 angle up from the low, (Are you out yet?) Price, then, takes out the low of the 29th and 28th, and you know that the move up is at least temporarily over.

There is a bit of analysis which applies to all charts, and some misinformation has been disseminated regarding this analysis. I have heard it taught that you should look for a change in trend at the point of two angles intersecting. This is NOT true I There are two occurrences wHen two angles intersect, which can be used, but it is not true for all occurrences of angular intersection. First, it can occur from double tops, or triple tops or bottoms.

when price forms a perfectly symmetrical triangle between two angles. Preferably, both are 45 degree angles. And, second, when the angles cross at a significant price level.

You can see two angles intersecting on the S&P daily chart on July 18th, at a price of $232. The fact that these angles intersect at this price level means nothing, but the fact that they cross the price level of a previous significant bottom, does make that date important.

Recalling the discussion of the month of January, 1986, from the daily chart, alone, this period of time appeared important as a trading opportunity. However, the movement you would expect from a valid daily turning point would be a three day move at a minimum. Unless that turning point was supported by some other evidence, such as a longer term cycle, you would not necessarily believe that it would be the start of a longer term drive.

Now look at the weekly S&P chart (Supplemental materials). The range of movement from July, 1984 to July of 1985, was approximately 49 points, and fifty percent of that range in time would be 24.5 weeks, or a turning point that can be found by counting over 24.5 weeks from high. Also, you can follow the 2X1 angle down from the July, 1985 high, to the point where it crosses the 147 price level, which indicates the same time. This date, the week of 1/10/86, is fifty percent of that price range in time, or fifty percent of the square, and is, therefore, a week to look for change. From the weekly chart you would move to the daily chart, looking for the exact day within the week to expect a change.

From that high point during the week of 1/10/86, price moves down quickly, for three weeks. The week of the 22nd to 23rd date, shows a 26 week oount which is reflected on the daily charts by the 180 day count. It is, also, the full square of the range from September, 1985 low to the July, 1985 high, and from the weekly charts, once again, a time to look for change. Three weeks down into a full square of a range and a 26 week cycle count, would be an exoellent place to lock for a good turning point, as well as, a fast move to start. A long trade is to go with the trend.

As you can see, the weekly charts will present some powerful trading opportunities, and can give you far better knowledge of the market, and how it relates to the historical action, than a daily chart.

So, using this chart, the weeks of 1/10/86 and 1/24/86 were determined to be important weeks. The range from the July, 1985 high, to the July, 1984 low, has now worked once at fifty percent in time for high, the full square of that same range can be found by following the 45 degree angle or 1X1 angle down to price level of the low, and you will notice this gives us the week of 7/4/86, which is, also, 22 weeks from the January 24th low. Eleven weeks from that low was a good turning point bottom. You notice, from the weekly chart, that this week of July 4th, 1986 is 101 weeks from the July, 1984 low, 90 weeks from the October, 1984 low, and 67 weeks from the March, 1985 low.