1935

[57] January: Steel high at 40 1/2, a weak rally and still under the 45 degree angle from 1932 and 1933 lows. However, it crossed the angle of 2 X 1 coming down from February, 1934, top, but never closed above this angle, indicating a weak position. The trend turned down again in February, breaking the 2X1 angle from the bottoms of 1932 and 1933.

[58] March: Low 27 1/2, still higher than the bottoms of 1932 and 1933 and getting higher support indicating that it was in position to rally.

It was under the 4X1 angle from 21 1/4 low, but above the 45 degree angle from 0 in February, 1933, and on the 2 X 1 angle from July, 1933, high. Note in 1925 the low was made in March; in 1915 the low wae made in February; in 1905 April was top. Note that it was 25 months from 1933 low and 33 months from 1932 and 49 months in the second 30-year cycle. Looking back 7 years, we find March, 1928, low. Now, we look at 1905, 1915, 1925 and find that they were all years of advancing prices for U.S. Steel. [59] In April, 1935, U.S. Steel started up and crossed the angle of 2 X 1 from February, 1934, top and for the firet time held above this angle. In July, 1935, high 44 against the 45 degree angle from July,1933, top. In August, Steel crossed the 45 degree angle from 1933 top and got back above the 45 degree angle from 0 from June, 1932. This indicated that it was in a stronger position. Note the 2X1 angle coming up from 0 at the time of the top in February, 1934. It rested on this angle in May and June, 1935;

in October, 1928, we find a low. Fifteen years back, or 180 months, September, 1918, was high. Therefore, there are many indications for a change in trend and bottom in October, 1933.

1934

[56] The stook started up and advanced to February, 1934, when it made a high of 59 3/4. Again we find the trend turning down and changing m February. The stock failed to reach the highs of July, 1933, a bearish indication and sign of lower prices. The top at 59 3/4 was under the 45 degree angle from the July 1933 top. Looking ahead we find that May, 1904 was the extreme low of the stock, therefore, we would expect the stock to be down until May, 1934. May, 1934, ended a 30-year cycle from the bottom. Also, look up 1914 and 1924 to tell how Steel should run in 1934.

Septembet*, 1934, low 29 1/2. This was 60 months or 5 years from the 1929 top and indicated a change in trend. Note October, 1924, was low, and in 1914 Steel was low in the month of November on the curb, the New York Stock Exchange being closed. In 1904 Steel started up in September. Look back 7 years to 1927; we find low in October.

also on the 45 degree angle from the low of June, 1932, and on a reaction in October, 1935, rested on the 2X1 angle from the low of March, 1935, and where the 45 degree angle from July 1933 coming down crossed the 2 X 1 angle from March 1935, low. The low price at this time (October, 1935) was 42. This showed that it was getting strong support on these angles.

In November, 1935, it advanced to 50. Note the 45 degree angle coming down from the last top of 105 1/2 made in July, 1931, will crose at 53 1/2 in November, 1935. Looking back at the previous cycles, we find 1905 high of the year in December; 1915 high of the year in December; 1925 high in November; 1928 low in December. Looking at 1930, 5 years back which was a bear year, however, we find the low in December. In 1935 Steel is following and repeating the bull cycles of 1905, 1915 and 1925."

METHOD FOR TRADING THE OVERNIGHT CHART

The Overnight Chart and the method for operating it is purely mechanical. You use no judgement, but simply follow rules and reverse your position when the Overnight Chart indicates it. If you buy and sell and use stop loss orders according to rules this method will make a large amount of profits over a long period of time.

The Overnight Chart is taken from the daily high and low chart and the rule for keeping it is as follows:

As long as a stock makes higher bottoms each day, you move the Overnight Chart up, but the first day it makes 1/2 point or more under a previous days bottom, you move the Overnight Chart down to this level, but always recording the highest top reached, before the Overnight Chart turns. Then as long as the Overnight Chart makes lower bottoms, you continue to move it down. Should it make a higher bottom and a lower top the same day, you would move it up to the top of that day because the Overnight Chart is based on bottoms. When there is a wide swing and the market runs up earlier in the day and makes a lower bottom, you first move your chart up to the top, or higheet point reached during the day, and then bring it down to the lowest level. Then euppose the next day it makes a higher bottom, you move it up to the top of that day.

You can use the Resistance Levels in connection with the Overnight Chart, but the only rule that I use in connection with the trading record on U.S. Steel, which will follow, ie the halfway point, or taking extreme low and extreme high or the last move and dividing it by two to get the gravity center or half-way point. Then buy or sell when thie point is reached and protect it with a 1 point stop loss order. The other trading indications are according to the Overnight Chart.

When a stock reaches a new high where you have no Resistance Levels between a previous high and a previous low, you simply follow the Overnight Chart and reverse position when the rule indicatee it.

You should watch the daily highe and lows on your daily chart around Permanent Resistance Levels as they will help you to determine a change in the major or minor trend on the Overnight Chart.

RULE 1: Buy or sell on double or triple tops or bottoms with a stop loss order 1 point above the top or 1 point under the bottom. This is the rule that I use. However, many times you will make more money if you use a 3 point stop loss order but by using a 1 point stop loss order most of the time, the stop will not be caught very often, and when it is, it will be time to reverse. The greatest advances and declines usually start from triple tops or bottoms, but remember that these triple tops or bottoms must be