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In an up trend, using a weekly chart as an example, the price of the week after the break of the angle should not move below the low price of the week in which price broke through the angle. In a downtrend, the high of the week which breaks the angle is important. In volatile situations (assuming an up move), it is usually prudent to wait for the break of an angle, on a weekly chart, to be confirmed by the price closing on the low for that week. Also, you could watch to see if it develops some momentum downside, or breaks the low of the penetrating week, the following week, before changing any intermediate or long term strategy for a bull move.

The 1983 top, in the Value Line, came on the 45th week from the 1982 low, and on this chart, I have put the square of the range from that high to that low. Fifty percent of the range from the high to low in price is about 160, and in time, the 48th week from the high.

Again, in the 1983 market, price follows a 2X1 angle up, and when you see that happen on a weekly chart, you know that it is a strong bull move. Just buy it. Don try to short it. Accelerated moves into tops like this one will show a pattern of each correction getting smaller and smaller in time and price, and finally, price will have a blow off move. So, any time you see that correctione are getting smaller and smaller in time and price,

rou will know that you have that situation on your hands. From the ow, this market takee off like a shot, and moving into the 3X1 up for the first time, price breaks and recovers that angle on a weekly chart. The acceleration lasts for three weeks before support is, again, found on that angle.

After three Elliott waves up, a eideways A-B-C correction takes place, moving through the 3X1 angle. The sideways move, or consolidation breaks to new highs on the third time against 45 points up from the low. Price movee up from the second low of consolidation for three weeks, and then corrects back to the 2X1 angle. That angle shows good support, and the second leg of the drive up, starts from this point.

Price looses momentum up in the sixth week of the drive, and then pasees through the 2X1, up. If you were basing your stop from the 2X1, and it was a cloee stop, you are now out of this drive. In the next week, price recovers that 2X1, up, and you had better get back in. This break and recovery of angles works exceptionally well with a trend, and is often where an acceleration during trend occurs. Price reaches top at 45 weeks from bottom, or 315 calendar days, a point which Gann said you could look for change. Price moves sideways through the 2X1 angle, and that angle is not recovered. An outside reversal week down occurs, and by now you are reasonably certain that trend hae changed. You might not be short here, but you should be out of your long position.

Three months or 13 weeks from the high, price is up against the 1X2 down from top and shows resistance on that angle for four weeks. The resulting move down, finds support on the 1X1 down from the top, and moves up for three weeks into the 1X2, again. By

now you are ready to short this market, having lower lows and lower highs. Price moves down for three weeks, and then shows support, and moves up breaking the 2X1 from a higher bottom. This move is a three week move, and moves slightly above the 1X3 angle from top. Now, there is a serious question to the bear view. The top week of 1/13/84 shows very little range, and the next week moves back down through the 1X3, and to the 45 degree angle up from the low of the week of 11/11/83. In the next week, that angle is broken, and the 2X1 from the top is recovered to the downside. This is a break and recovery of an angle in a bear trend.

Forty-five weeks from top is a lower top. The square of 90 in time from the bottom is working beautifully. Follow the 1X1 up from the date of the high and the level of the low in order to see where fifty percent of the range is in price and time. Fifty percent in time brings the end of a three week down move, and fifty percent in price, the bottom of this bear market. Because price is above the 45 down from top, and has passed 50 percent in time, you realize tbut the momentum of the move down has not been nearly as strong as that of the move up, and you might be looking to go long at fifty percent of the range when that price is reached. Of course, this is the level of the most significant consolidation of the move up during November and December of 1982.

Price breeks the 1X2 up from the low in the week of 7/27/84, moves down to nearly one point of the fifty percent area, and then recovers the 1X2 from the low. The next week shows support on that angle, and hopefully, from reaching the fifty percent level, you are out of your short positions and (possibly) into a high riek, long position, or a light long position. Notice how price moves on that 1X2 from the low on the rest of this chart.

The July, 1985 top came in on the week that the previous range of movement equared out. From the low in the week of 5/3/85, the 45 degree angle up crosses the level of the hijgh in the week of 2/15/85 during the week of 7/26/85. Notice, price moved sideways for four weeks at a lower level, and then spiked down. That is the setup Ive been talking about- with small range sideways movements, lust after a run up to a high. That July high is, also 45 weeks from the 9/14/84 high, and one year from the low.

That sideways move setup is something that Gann talked about, but it comes at a spike top with big volume, which has no time for distribution. Distribution will come at a lower level, and when you see this setting up with small range weeks or days, in a sideways move below a spike top, and the price level of the low of that consolidation is broken on a big volume day, JUMP ON ITl It is a setup that you can trade every time. But, remember to look for the price break to come on a big volume day. Gann, often, ueed that eetup in his trading.

Now, you will notice that from the July, 1985 top, to the August, 1982 bottom, fifty percent of the square from that price range in time, comes out in the first week of July, 1986. That week is 101 weeks (the square of 90) from the July, 1984 bottom (two years on the monthly chart). It is, also, one year in months from

the high (from the cycle of years). There were numerous reasons for you to expect change in that week in July, 1986.

Where do you start your counts from? From the bottom on August 13, 1982, after three weeks up, you would etart the square of 90 counts and the cycle of year counts. Seeing that price was above steeply rising angles, and was, in September, holding above the previous swing high of May 1982, you would know the index was in a very strong position. When, in October, 1982 price broke out of a horizontal consolidation on wide range, heavy volume, and recovered an acutely rising angle, you should have been convinced of a strong bull market. Pitch, as Gann referred to as momentum, overcomes resistance of both price and time. So, when time moved into the eleventh week, or the 11 1/4 week, you should not anticipate much reaction due to the extreme pitch, as measured by the angles of the ascent. The same idea applies to other counts or time cycles, such as 13, 22, 26, 30, 33, 39, and 45, although you would be watching those times for some evidence of change, you would not ex:i>ect it with the momentum that is being shown. One note or addition is, that as the move went further into time, the more you could expect a change.

this movement would have been poeitioned with protective stops, three to five points below the 2X1 angle. By July 15th or 29th, 1983, price had moved down decisively through the 2X1 angles after the 45 count and after being up over 90 points. So, you would begin counts from the top of 7/1 /83. The next is 360 degrees, or daye, or a full calendar day cycle. But, by that week of 8/12/83, price and time had overbalanced. In other words, the correction from the 45 week top had coneumed more time and price points, than any previous correction. Once that had occurred, you could aesume the counts from the top would be the more powerful cycle to work with.

Of course, swing highs and lows should be used, also, for counts. You will notice that from the low reached on the 52na week f rom t he bott cm, 11 1/4 wee ks in t ime g i ve s the wee of 9/16 through 9/23. During that period, price was showing resistance at the 1X2 angle down from top, and then the following week of 9/30 was an outside reversal week down* On my work charts, I run counts from the significant highs and lows for eome length of time, while I use swing highs and lows for a shorter period.

Understanding the time cyclee may appear difficult at first, but if you will view these on many charts, you will recognize the setups that you can safely trade from, given that time and work. With this in mind, lets take one more look at the cycle of the years, and the square of 90 cycles using the Value Line charts. Return to the Value Line weekly chart. If the daily chart of the Value Line included the 1983 top, you would see these same cycles terminating in the end of June, 1983, a 45 day blow off into a major time cycle. Twenty-six weeks from January 28th, 1983 low was 7/29/83, which was the next high after the top. Fifty-two weeks from the low is 8/12/83, and price accelerates down into that time. Even though the market is looking very bearish, at the time, you

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