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angle, a fast angle up on December 6th. This is a good indication that the acceleration into top is beginning.

On December 31st, price shows an outside reversal day down. This is a good indication of weakness, and a trendline up from the high on 12/17, to the high on 12/20, and continued upward to the 31st, will show that price has shown a loss of momentum on the upward movement.

On the third day up of the second rally, the seventh of January, resistanoe is found on the 45 degree angle down from top. Remember, the three day move against the trend. So, on January 7th, the setup is as follows. Time is past 90 calendar days from the September bottom. In addition, time is past 180 calendar days from a previous bottom. There is a loss of upward momentum, and the third day of this rally brought price up to a 45 degree angle down from top. Price is at resistance. If, on the rally, price had only been able to come up to the lower resistance level of the 2X1 angle down, then the resulting move down from this resistance would likely be a fast one.

There is no good setup on market day counts, but price is 270 trading days from the bottom (not on the chart). Therefore, a high risk put position could be taken, using a protective stop a little above the 45 degree angle, which price had shown resistance. An objective for such a trade could be the 45 degree angle coming up from the December 3rd bottom, or about 149 1/2 on the eighth of January, 150 1/2 on the tenth, etcetera.

Notice that the angle from the September 26th low, comes up to that level of 158 1/4 on January 13th, thus squaring with the high price. That could be your objective in time. Eleven trading days from high could be a possibility, too. But you would not want to get greedy and should close the put position out on the first move down to that 45 degree angle up from the 12/3 bottom. In a situation such as this, you must always remember that distribution has not taken place in the stock, and that, although it may not go higher, a test of the previous highs would be likely. The next day, the 8th, prioe hits 149 1/2, and you would sell the put position, having picked up five points on the stock with a big down day, as well as, a premium expansion in the puts.

The next turning point is that squaring of price, on January 13th. This is not an exceptional setup in time (using the counts), but support is being shown on the 45 degree angle up from the low on the 8th, with minor breaks and recoveries of the angle on the 13th and 14th. If you had not gotten out of your short position earlier, this support, and the assumptions about a possible test of the high should be enough evidence to take the position out.

On the 15th, the drive up begins from that support angle, and moves above the 2X1 angle down from the lower top on the seventh, an indication that the sharp down-thrust is temporarily over. Remember, you should seldom take a long position in circumstances like this until price can move above a 4X1 or 2X1 angle down from top if price is following either of those angle down, unless there is more substantial evidence from a longer term chart. This is.