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Strategies & Market Trends : Why the markets will continue higher... -- Ignore unavailable to you. Want to Upgrade?

To: ViperChick Secret Agent 006.9 who wrote (497)	1/14/1998 10:49:00 AM
From: Kapusta Kid	Read Replies (1) \| Respond to of 745

Lisa, unfortunately an explanation of Dynamic Gann Levels is not simple. One of Gann's most famous quotes is "When time and price coincide, change is imminent". Don Fisher has devised a series of mathematical equations to project price and time, based upon the famous Gann retracement ratios. I started studying these methods about 2 years ago, but I abandoned them because the market was more conducive to trend-following. However, the discussion on this thread about Andrew's Pitchfork and the fact that the market has been range-bound lately have caused me to pick it up again. If you are interested in the math, I suggest contacting Don Fisher. DGLs are not some "magic indicator", but rather a tool for mapping where the market might be headed. If the market is moving towards an important support or resistance level, use other methods to determine if a penetration or a bounce is likely. Also, most DGLers trade in futures, including the SP500. I find it useful with the major stock indices (S&P, Dow, XAU, XOI), but less so with individual equities. The lines represent projections in time and price from key turning points. The white lines are 3/8 projections, magenta 4/8, yellow 5/8, red 6/8 and green 8/8 (the Gann ratios). Fisher has found that the yellow, or Level 3, lines tend to be very strong and when other lines converge with a Level 3, a bounce off the line is more likely than a penetration of the line. The numbers on the right represent where the lines project into the future. In the examples I posted, I chose one day. The values in Level B and Level C at the bottom of the chart are the turning points used to create the most recent (short-term) projection. Level B, for example, was the high on 1/5/98. Also, on the Dow chart, the magenta line from the 1/5/98 high sloping down and to the right is known as a Level 2 channel. It is a line parallel to the Level 2 line from the 1/5 high, which is not shown (it was already penetrated). This, I think, is very similar to one of the outside tines of Andrew's Pitchfork. So 7784 represents Level 2 overhead resistance today, January 14. Normally, with the market this oversold short-term, I would expect it to be taken out. But the last two comparable short-term oversold readings (I use ARMS and TICK) resulted in very feeble rallies. I line up with GROUND ZERO on this one: I think it's an excellent place to sell this market. The SP500 has made a triple top, but each of the subsequent tops has shown weaker readings in other indicators (breadth, leadership, and possibly volume). Until there is a change in the internals, I will assume that the path of least resistance is down. Pete