HERE IT IS!!!
Hi Theodore,
In this post, I will explain how I do it. I just want to tell you what made me search for it. When the U.S. grain market was moving lower for months with no end in sight, the median support line was reached in price and time the same day Mt. St. Helens erupted and the grain market exploded skyward. Coincidence? Who cares? It happened, check it out. I watched in disbelief and became curious then.
Staff posted a question, what if you could used the median lines to calculate where the market will bounce.
Well, here's how it's done:
You can use any chart. I use the DOW and SP charts primarily. Take the SP chart. Take a ruler and place it right over the chart as you would if you were taking measurements on a nautical navigational chart. You kind of are doing that. With your pencil, connect the April97 low with the October97 high. Draw a line connecting those two points. Then, bisect that line and draw a dot on the chart. What you have is a point in time and price midway between the low and high of that move. Now, go back to the February97 high and draw a line from that high to that midpoint. Don't stop there, but keep drawing that line and you will find it rising.
You will notice that the line, when extended to november97, is support and the turning price just seen three weeks ago. Need more proof? For further confirmation, do the same thing with the August97 low and Oct97 high. Bisect that line and draw a line that now decends from the earlier August97 high. Notice how that declining line also provides a turning point for the drop three weeks ago.
There is so much more to it that just this, but this will make my point that price movements are not random, but are rather predictable. This recent bottom was determined by the highs made last February and before. This goes on and on.
If I lost you, please let me know.
Enjoy.
GZ |
