Hi Skipper,
Here are some specifics, hopefully it makes it a bit more clear.
Take the SP cash chart. The October high of about 990 and the low that month of about 865. These numbers are rough estimates because I'm just eyeballing a chart on a screen. If you simply draw a line connecting the high and the low, and then bisect that line, you place a dot right there on the chart. What you have is a dot about 7 1/2 days after the day of the high and 7 1/2 days before the day of the low. That dot is actually midpoint in time. That dot is also mid point in price. That dot is around 927.50 or so. Remember, these are just rough estimates. Now, go back to the most recent September low, around 910 or so. From that low of about 910, you draw a line connecting the bisecting dot. Now, you continue to extend that line forward. The line rises. The market will try to reach for that line. When the price eventually touches that line, or penetrates it, there will be a good sell off in prices.
There's lots more to it, but first get this much. Let me know if this helps. BTW, we are fast approaching that line. Just eyeballing it, I think the DOW touched it at around 8150, check it out.
GZ |
