Mew erceR mens son Ww. D. GANN NEW YORK 5, N. ¥ THE BASIS OF Wy FORECASTING HETHOD Mathometict is the only axact science. All power under heaven ond on earth i# given unto the men who mesters tha simple science of mathemetics. Emerson said: "God does indeed geonetrize." Another. wise man said: “There is nothing in the ahiverse but methenatical points." Pythagoras, one of the createst natho- maticians that ever lived, after experimenting with numbers ond finding the proofs of dil neturel lows, said: "Before God was numbers." He believed that the vibration of nunbere created God and the Diety, It has been scid, "Pigures don't lie." Men have been convinced that numbors tell the truth and that all problem? can de solved by then. ‘The chemist, ongineer, astronomer would be lost witnoat the seience of mathematics. Zt ts s0 simple ond caey to colve problems and gat correct onswers and re- aulta with figures ‘thet it coome strange so few people xely on them to forecast the future of business, stocks and commodity markets, Tho basic principies aro easy to learn and understand. No matter whethar you-use geonetry, trigonometry, oF calculus, You uso the simple ruloa of arithnotic. You do only two thinga+ You incroase or decreces. Thore cro: two Kisids of numbsrs, osd and even. Ve add numbers together, which Le inergosling. We mvltiply, which 4s a shorter vay to increcea, We sub~ tract, hich decreases, and we divide, which aloo decreases! ith the uae of higher mathemotics, wo find a quicker and easier way te divide, subtract, add and multiply, yet very simple whan you understand it Everything in nature is mals and fenale, white end block, hermony or innarmony, Tight and left. Tha market moves only two vays, up and down. There are throo dimensions which we know héw to prove--width, length and height. We use three figures in geometry—-the ‘circle, the square, and the triongle. We get the squcre ond triangle points of @ circle to determine points of time, price and space resistance, We use the circle of 360 degrees to measure Time ond Price. There ané three kinds of angles-—the verticel, the horizontal, ond the diagonal, which we use for measuring time ahd price movomenta, We use the square ef odd ond even numbers to get not only the proof of morkot movements, but the HOW 70 MAKE CHARTS Charts ard records of pest narket movements. Tne future 19 but a repetition of the past. Thoro ie nothing now. Ac the Bible saye—"Tho thing that natn boon, 1t ia thot which sholl bo.* History repeats and with charts and rules we determine when and how it is going te repeat. Therefore, tho firet and most important point to learn is how to moke charts correctly because if you make an error in the chart, you will meke on error in applying tho rules to your trading.YEAELL GUAR?: You should Koop a youyly high and Low chart, thot 4s, recording ro oxtrone low and the oxtrene high prise nede during tha calendar your on one Line, ho epsoing for the prise canbe Need one poise to cech 1/8 inch er two points or nore, cccerding ta the sctivity end range of the stock, MONTHLY CHART: You must always koop up a menthly high end lew chart, which ts tho most important chert of ali in doternining the main trend, This chart reserds the extrone high and extrone low price ‘fos the culndar month on cne line, and eack space or i/& inch on the cross-section chert papor should reprosont oxo point or $1 por share. WEEKLY CHART; The next and ono of the very important charts to koop is a woekly igh end low chart. there stocks aro selling bolow 60, 2 usaelly poya to nake thie obert up using cach 1/0 inch to represost cao-half foint, or ‘ono spocos to roprosent one TULL posnt, or four points fer such ono-inch space. When stocks become very active, especially when thoy are solling above $100 por sharo, then you can take ip tho woclly shact askag sash peso oF 1/8 inch om tho chart paper to roprosont ono point or $1 por sharce SEUI-WEEELY OR LAY OWART: Tho noxt chert of importance to the Weokly Chart is @ S-dey chart, thet 4, taking tho oxtrono high end extreno low price made from tho opening of tho market on Monépy morning uti tac close on Wodnosday wight, closing tho chert on Wodnosday night~ thon from tho ‘oponing on Thursdey to the close on Seturdoy, teking the oxtvome high and low and closing tho chert on Saturday. This gives you a timo period showlng one-half of tho wook, This chart ts vory importent as Will bo oxplaiued lator on in tho Amstructions, The spacing for this chart cm to tho samo as for tho vookly nigh end low chart, 2 MOVING-AYERAGE OR MEAN ROTH?! To gob _o Wookly Moving-Avorugo, wo take ‘sho oxtrone low for the wook aud the ox trouo high for the week and divide by 2, getting the half-way or meon point for the week, This ean bo rovorded on the weokly high and ow chart or on a soparate chart, recording the Woekly Moving-Average with a dot and using ono line on the chart for sch Week. Importance of this Woolly wean Point will be explained late DALLY HARE: Yon you cro trating in a stock thet 1s active, you should alveys ~~~ kosp up o daily high wig Low cha¥t, but for study purposes it 44 enough to keop up the Weokly oné'Monthly Charts, which give you the main trond. ‘The Daily Chart shows tho minor trend and shows a ohenge in youd mich oftover ‘than ony of the other charts, but tho indication doos not last as long or rim 60 far. ‘This chart shoo2& bo Kopt up the semo as tho others, oxcopt whor stoke ere solling below £0 or whan thoy aro in ca inactive tradiag range then tho specing should bo 1/2-point to cach i/S~inch on tho chart papor, allowing two spaces. te Foprosont ono full point or $1 por sharo, hon stooks aro ortive ind aivancing vory fast, naking e wide. rengo sash dey, ‘thon yan oan melo tho Daily Chart the sano as tho Woolly or Monthly, that ie, using ono point for ecoh 2/o-inoh on the chart popor, This chart down and Keops it in a renge whore St ds easy to soo and etions are wide. Wo spaces aro skipped on tho Daily Chart for helideys or Sundays, therefore ‘the time porded ie for actual mericet days and nov calendar days, Eowever, you should carry the calendar days clong ct loast ovary two weoks, as Jeter, imder rulos for Timo Periods for chango in trond, you will find that it is nosessery ‘to check up and low when tho stosk is 80,60, 80, 120, 185, ote. days fron a topor a bottom, which moans calender doys, tho oxact nosevrowent of Mao fer the Gaily chart. Often the Daily Chart on actual daily movements comes out on cm oxeot mathonaticcl angle ef time meneurament at the sane tine the calendar gaye como out on exact tine measurement, raniing it a doubly dmportont point for change in trond. GHOMPTRICAL ANGLES Aer long yoors of practical oxpertonso, I have discovered that Geonetrica’ Anglos nonsure ascurately Syece, Timo, Volume and Price. Uathonatios is the enly oxact science, as I havo seid before. Every antion on the Saco of the earth agroos that 2 ond’2 make 4, no matter whet lenguags it speaks, Yet a1] other sciences are not in accord ac nethonsticel ackonse. “We find disverent non in different professions along seientifie Lines disngrosing on problems, but there can bo no disagroonont in nathonatical cealeulation. Thore are 360 dexreos Ina circle, no matter horlarge or hew emoll the eivele ney bo. Corbain numtors of Uhoyo dogroos and angles aro of vast importance and Sn@ioate whon dnpertent tops and bottoms ovcur on stocks, us vel] as denote inportont Resdetaneo Levels, When oaoa you havg thoroughly nactored tho Soonotri~ eal Anglos, you wil} bo ublo te elves any problom and determine tho trond of any stool. Avtor 35 yours of rescarch, tosts ond practical applieetions, T have per- Footed ud proved the most important anglos to bo used in detarmining the croud of tho stock market, Therefore, concontrate on vhoso angles tntil you thorongn= ly wmdorstond then. Study ond experinont with each rule I givo you, and you will malo « succose. Wo use goonetrical engles to measure Space and Tine yericde becouse it is a shorter and quicker method than addition or multiplication, provided you follow tho rules end drew the engles or lines accurately from top: md bottoms or ox— rome highs and lows. You may aake a mistake in addivion or multiplication, pat the geonctricel engles eocurately dravn will conrect this wistoke. For sxanpl: IE you should count soross the botton of your chart 120 speces, which represensé 220 days, Weeks, or months, thon you vogia at "O" and nunbor verbicelly on your chart up to 120- then from this top point a& 120 draw a 45-Cegrov angle noving down, this wil] come out at “0" oa 120 poimbe over from the beginning. If yoa have mode e mistake in numbsring, this will cossect ity Angles drawn on a ohart always Koop bofore you the position of tho stock ond Ate 4zend whereas Af you had a resistance point on time written dom, you night nisley it or forgot it bab these angles are always on the ohort in front of you These egies or moving-average trond Jinoe correctly draw will koep you fron naking mistakes or misjuiging tho tron. If you wast and fellow your rales, these engles wil] show you when tho trond changes. The moving-everago as commonly used is obtained by taking the extreno low price end the extrons high price of the cclonder dey, weok er month, ond dividing At by two to get the moan or avavage price for the day, wack or month, and oom ‘tinuing this ct the ond of cach~tine period. ‘Thie ie en irregular movenent in spaces er points por wook docause at one time 2 may move up 2 points por veokand at enothor § pointe por wook, while tho time poried is a regular unit. Thero- fore geometrical anglos, vhich oro roally moving-avorages, move up cr down of on uniform rato from my bottom or tep ou a daily, woekly or monthly chart. HOW 10 DRAM CROMBIRIOAL ANGLES there aro threo important points thet we oan prove with methonttics or geouetry: the Girele, the Scuaro, end the Triangle. Aftor I heve nado the Squere T cen draw n Circle in it using the same dianctor, and thereby produce the Tri- engle, the Square end tho Circle. Ths Angles or moving-trend-Line averages measure and divide Tine end Price Into proportionate parts, Refor to Forn "\", whore IL hevo drawn the squere of 28. ‘You will note that this is 26 high end 28 vide~ in oshor words, 26 up and 28 egross. Tt is the seme as a square roon whieh has a bottom or floor, a tap o woiling, ond sido walle. Everything hs width, Jongth, and hoight. To got tho strongest and most important points in this Square, I divide it anto two qual parts by drawing 2 horizontal ma a vertical lino. Wote angle morked "A" which divides cach of the snellor squares into two equal parts ond runs from "0" to "28" diagonally, This iz a diagonal line movizig on a 45° angle and divides the lerge Square into to equal perte, Thon note angie "J" at "IE" running horizontally across, This divides the Square into tro equal perts, ote eagle No", which 13 ¢ vertical lino, runing up from "Ls", whioh is one-nalr of "20", This crossos ut tho contor or half-way point at 14, whore tho other -anglos cress, dividing tho Square inte two ogual parte, Them"neco unglo "D", which Forms ‘gocher 26° aagie moving fron tho N, M. corner ¢o tho §, B. corner, eross— ang "14" at tho oxact halfway point. You aoc dy this that if wo draw tho first limo thru the eonter of the square, we divide it into two ogual parts thea whonwe draw lines from Une other directions, we divide it into four equal parus- then by drawing the two lines from eech'corner, we divide the square into 6 equal parts and produce 8 triangles. 4s you look at Unis Square, it should be easy for you to tell with your eye where Uhe strongest sugport point is or resistence peint is. It is at the center where all the angics cross. Pour angles cress et Ubis point, so naturally this would be a stronger suppor point shan a place where only one angle crosses, I could divide each one of these smaller equeree inte four or eignt equal parts by drawing angles in the same way. Laser, when 1 give you the rules and examples, Twill explain how to square the Range of a stack, that is, the difference be- tween Lhe extreme low and the extreme high prices, or the difference between any low point and any high point, and also how to square the bottom price. For ex= ample If the top of a stock is 28, this Square of 28 x 28 would represent squaring the Price by Time, because if we have 28 points up in Price, and we move over 28 spaces in Time, we square the Price with Time. Therefore, when Lhe stock has moved over 28 days, 28 weeks, or 28 months, it will be squaring its price range of 28. PATTERN CHART FOR GSOMBTRICAL ANGLES The Square of 90, or vhe Pattern Chart, shows all the measured angles that are important to use in determining the position of e stock. These angles are as Follows: Bi, 7k, 15) 18%, 254. 50, 533, BTL, 45, G24, 564, 6O, CBE, 71d, 75, B24, 864, ani 00 degrees. It is mot necessary to measure these angles with 2 protractor. Al] you have to do to get the angles correct is to count the spaces on the chart. paper, using 8x 8 to the inch, and draw the lines or angles accordingly. On tte square of 90, which you Will receive with these instructions, note how equal angles drawn from Lhe top and from the bottom prove themselves by une point at which they cross, For example: The angle of 8 x 1 drawn from "0" and the angle of 6 x 1 drewn from "90" down both cross at 45, 5-5/8 points over from "0" counting to the right. Then, the angle of 4x1 from "0" and the angle of 4 x 1 down from "90", you will notice, cross at 11k on 45, equidistant from the other angle ard twice the measure. The reason why these anzlea prove this way is because the 45° argle or 45 points or degrees from "0! to 45 is one-half of 90 Therefore, parallel angles begiming at "O" going up and at 90 coming down, must cross on a 45° angle or at the gravity center. AM ANGLES FROM A LOW POINT RECORDED BY A S700K An exemple marked "Form 2" shows you the most important angles to use when @ stock is working higher and advancing. (See page 6! EIRST INPORTANT GEONBTRICAL ANGLE: eon The first and always most important angle to drew is a 4b-degree angle or a novirg-average Ubat moves up one point per day, one point per week or ore point per month. This is 2 45° angle because it divides une Space ani Time Pericds into two equal parte As long aa the market or e stock stays above the 45° argle, it is in a strong position and indicates higher prices. Yeu cen buy every time a stock rasis on the 459 angle with a stop lose order one, two or three points under the 45° anyle, but remember the rule— never use a stopGA-8 lose order more than 5 points away, Unless stooks aro noor tho low levels or gust starting in e bull market or Selling ct vory low pricos, I always usa stop loss order one point usdor the 45? anglo. If this angle is brokon by ono paint, you will usually find that tho trond has changod at leaut temporarily and tho Stock Will go lower, 4m onsy way to caloulate accaratoly haw to put on this 45° angio is: For oxemplo; Tf the timo 1 26 diys, 20 wooks, or 28 monthe from tho point whero ‘the stock was bottom, thon the angle of 45° mist bo 28 points up from tho botton ond would oross at 26, This ts ono of the eustest ongles to put on and one of ‘tho sinplost to leam, You can beat the merket by trading cgeinet the 45° anglo alone if you stick to the rule wait to buy a stock on the 45° anglo or wait to sell it ogainst the 45° angle. cect NEXT IMPORTANT AIGLE is the angle of 2 x 1, or the moving-averags which moves up Zzir at the rate of 2 points per day, week or month. Tt divi the space between the 45-degrea engle and the vertical eagle into to equal parts and nessures 632° That is why it 4s the next ctrong- est and nost important angle. fs long as a stock holds aboro this angle, it is ina strenger position than when it is resting on a 45° angle because it is ¢ Bore acute ongle, When a stock broaks under this angle of 2 x 1, or two points for eech time period, then 1 indicatos that it will-go lower and roosh the 45° suglo, Heuonber tho rude of all angles: No metter what engle the stock broek vader, it dndicatoa a decline to tho noxt angio volow it.THIRD IMPORTANT ANGLE, which is ov4ll otrongor as long as a stock holde ebeve it, UT TERY ~~ is the onglo which moves up 4 podnts por duy, wook, or month, This angio is ¢x 1, or 4 points or Speco equal one period of Time. Jt monsures 75° and divides the space betwoen the angle of 2 x 1 and the 90° angle into two oquel parte. Any otock that continues to advance 4 points per day, 4 points por wook, or 4 points per month, ond romaine above this angio is in a vory strong position as long ns it steys above it, but when it breaks wndor, it Indicatos the noxt angle or next support point according to the position of tho stock on no, EQURIK IMPORTINT ANGLE is tho angle of 8 = 2 or the one that moves up § points por day, weok or month, This onglo moasures 825°, As long as’ stock cat hold atove this engle on daily, week ly or monthly chart, it is in the strongest possible position, but when it rever~ ses trond and declines bolow this engle, then it indicates a decline to the next anglo. ex NEXI_ANGLE; Tt 4s possible to uso an angle of 16 x 1, or 15 points of Price to “HERD wie ported of Timo, watch measures 863°, but this anglo is only used 4m fect, advancing narkots, Like 1929; wnen stocks aro moving up oF dows 16 peinte or more por Wook or por month. Thoro aro vory fow stosks thee will nove up 36 pointe por day, vook or month, and vory seldens ‘You will noto that with those four importent engles we show tho strong or wullich sido of tho markot. All tho time ty dividing tho Spaco with angles we are getting tho holf—way point or tho gravity center of Mims and Price. SX ANGLE: Noto the glo dram in Groot, marked "Sx 1", which moves up ct tho rate of 5 points por day, week or month, measuring 714°, This angle is important at tines after markets hevo hod a prolonged advance end cre e dong distenco up fron tho bottom, It is an important angle to use on Monthly end Wookiy charts. Thoso aro all tho angles you need as long as a stock continues to advance end werk up und stays above the mgle of 45° or the moving-averago of one point por dey, “ook or month. Whilo thoro are 360 dogrots in a civele ond angles oan forn eb any of these dogroos, al] of tho important angles form betwoon YO" and "90" booauso 90 33 straight up and dom and the most cote mmgla on which n stock can rise. For oxample: Tho 45° angle divides the space fron "0" to "90" in half. The ngle of 155° is simply another angle of 46° because it is one-half of tho noxt qucdrant dotween 90 and 180, 225 ond 516 in a circle aro also 45° anglos. Thorefere cll of the onglos valuable in dotormining tho trond of a stock aro found Batwaon "0! and "90" dogroos. Whon we divide 90° by 8 wo got tho most important cnglos to uso~ thon divido it by 5 wo got 20 and 609 anglos, which aro important to uso fer Time oud Rosistance Points. WHAT KIND OF BOTTOMS TO DRAW ANGLES OR NOVING-AVERAGE LINES FROM DATLY GEARP: If a stock hep heon doolising for some tino~ then starts to relly (by rallying from o bottom it must make highor bottoms every day ond higher tops) thon after a S-Aay rally on the daily high ond low chery, you gan put on tho 45° unglo and the angle of 2 x 1 from the bottom or low pointy As a rulo, it will only be necossary to pub on those ovo eagios eo first, “Ef thiebottom holds and to not broken, than you cat pub on chy other umglus srom tho votton, WEEKLY CHART: If c stock is declining end reucts for more than ono weok and ocu~ tines dom, ve will sey, for three wooks or more, thon starts to relly oad cdvancos two Wooks or moro, you would stort to put tho angles on fron the low point of thu declino, only using tho anglos abovo tho 45° angle until tha stock agein brocks under tho 45° anglo- aftor that you would uso tho ethor ngloa on the lowor or boarich uige of the Square, WHAT 10 DO _APTER THE 45° ANGLY FROM BORTOM Is BROKE Actor u stock makes top, oithor temporary or otherwise, and breaks under tho 45° mgle ond starts moving down, thon the first thing you de is to draw anglos below tho 45° angle, starting fron the bottom or low point. Note oxnmplo marked “Born #5" FIRST sNOLE ON DEAR SIDE OF THE SQUARE: Tho first angle that you draw on the —————gal ‘deur side of the Square is the angie or 2x 1 or Z points cvor and one point up, which moves at the rate of oueshalf point per day, Wook or month and measures 264°, This 35 tho first support angle which tho steck should roach after it brea} under tho 45° angle, As a general rule, whon tho stock roaches this angle, itwill roooivo oupport and rally. Sonotimos 4% will rest on 4t for a long period of timo, holding on this gle ond melding higher bottoms, But whon this ongle of 2x 1, or noving-avorage of one-half point per day, weok or month is broken, ‘When you must drew tho next angle of 4x1, NEG MEORTWNT INELE; The next important aagle on tho boar eido of the Squaro, =I which moves up at tho rete ef 1/apoint por day, ie the englo of 4 x 1, measuring 16°, Te will be tho next strong support angle which the stock should got support on ond rally frome NBXT ANGLE 8 xl: Thon efter tho 4 x 1 engle is broken, the noxt inportent —— englo that you will put on your chert is tho angle of 8 x1, which moves at the rato of 1/8-point por day, woek or morth ond monsures 72°. Tais is often a very strong support anglo. ittor « stock has had o big declino, At will often rest oa this onglo sovoral times or may make final bottom and start up from thio englo, crossing othor aaglos and gotting beck into a strong position again. Therefore this cngle is inportent’ te vso on a monthly or weokly: chart after o prolonged declino. ANGLE 16 = This englo con be usod on a month}y chart aftor a long period of timo hes olapsod from an importont tattom. Tt movoe at the rato of 1/16 point per month and moasures 32°, AONB OP 3x3: This angio, drow in rok ink, is a vory important engle, Voontng st up g,, Masuring 168°. 1 strongly advise using it at all tines and keoping it wp on monthly charts from any important bottom. Ib can else bo used bo advantage at tines on woolly charts, but is seldom of much valuo on a doly chart, It moves ot tho rate of ono-thiré point por day, wook, or month. By @rawing this on tho noathly chart for 2 long poried of yoars, you will soon bo convinoed of its valuo and also by tosting 1¢ on a woolly ohart, will find it veluable, This completes ali of the angles thet you will need to use from any botton ot my time. HOW TO DRA ANGLES FROM TOPS Ov DAILY, WEEKLY OR MONTIULY CHARTS SEDATE, WEEKLY OR MONTIOLY CHARTS, POSITION UNDER 45° ANGLE DRAWN FROM TOP: After a stock has made top and declined “three dene, tees voce, wun, fort reasonable length of fines sey, three days, three vooks or threo months, broaking previous bottoms, then you start to dray angles down fron tho top.” Noto oxanpie marko’ "Perma" witch Le the pattora for érewing mgles from the top uder the 45° angle, (soe pace 10) 45° ANGLE FROM MOP; The first angle you draw is the angle of 45° or a moving- or month. de aang ggAYorHe® whoh intisases « decline ef one point per day, week or month. As long ac tho stock is uelow this angle, it is in the weakest yosition and in 0 boar narket, OTHER ANGLES: In many cases a stock will start declining an everage of @ points vvotmwe por egy rer 2e¥s MOCK or month, or 4 points por cay, Wook oF month, “or? points per day, Wook oF month, thorofere you should put on all of Chose angles from the top, vhich move down faster then tho angle of Ase. ‘Mpakzs? Postrr Tho stock is in the weakest possiblo position when it declinos and keops under tho angle ef 8 x 1, It is in the noxt wook-est pocition wan it ie dropping down ot the rate of d-pointa por day, wook or month, or under the ongle of 4x1. Zt Se in ite ext Weakest position when dt Le dropping dow waler Uhe angle of 2 x ly STRONGEST FOSTTION; thy stock is in a stronger position aud indisetes = better ———"__yally wnen it crosses the eagle of 2 x1, bub this depends on how far it is down from the top ond how for the angles are epart, as will be oxplained later under tho rules. CHINGING OREND; As long as a stock is declining one point per dey, wesk or month, or falling bolow or mdor the 45° anglo, it is still dn a boar werkgt end in a vory week position, hon a stook relies end crosses the anglo of 45° after a prolonged declino, thon you are ready to put on the angles on the cthor side of the 45° anglo, which shous thet the stock is in a stronger position in e boar merkot and uay Se getting resdy to change into a ball market. a FOSIPION ABOVE 45° ANGLE DRAM FROM TOP Refer to Form #6, whieh is tho pattern for drauihg angles chove tho 45° angle fron tho top. (Soo naga 11) 2 x 1 ANGLE FROM 70 Tho firet angle or noving-avorage you dea after tho 45° caglo fron Uke top is croused ond after the stock indi~Oa, cates that it haa mado a tenporary botion 4s tho onglo of 2 x 1, moving ovor 2 pointe ond down ono point, or 1/2-point por unit of Time, This is moving down fat tho rato of 1/2-point por month, wook or day. 4x LANGIZ: The noxt is the onglo of 4 x 1 which moves dam at tho rate of ———————" 1/4-point per day, wook or month. 8 x 1 ANGLE: The noxt engle is the exgle of 8 x 1, which moves down at tho rate “of one point every 8 days, 8 woeks or 8 onthe, or 1/8-point por ‘timo pordod. YTT = STRONG POSITION: Attor tho stock Yas crovsod the anglo of 45% hd ralliod up to the angio of 2 x 1, it will moot selling and roact to somo angle coming up'from the botton of tho last movo, but itis in a stronger position whon it holds above this angle of 2 x 1 ond. is in the noxt strongost position hon it crosses tho ongle of 4 x 1, Croscing the mgle of 8 x1, which As of loust Smportanco, it indicatos thet if is im a vory strong position agein from the top, You must always considor @ movouont coming up fro bottom ond its position on anglos from the bottom to determine its otrongth, It is important to cousider. the mumbor of points it has moved up from the bottom, and how many points it is down from the top. 3 x1 ANGIB: Tho anglo of § x 1 drovm in rod on Form #5 movos down at the rate of one point every three days, throo.wooks or thyoo months, or ono- third point per dey; wook or month, This aiglo is important to uso aftor pro- Longed doclinos. This completes tho forms of all tho onglos that you will nood.to uso at any timo from tops or bottoms. Practico putting thoso angles on tops and bottoms un~ AL you thoroughly understand how to do thon and Imow that you aro gotting thomcae abselutoly aceurate. Thon you ecn bogin to otudy the rules for deternining the trond oscerding to the position of the steck on onglose NDT DoUs! Ors OR BOTIONS ANGLES OROSSTNG ZASH OPHER: won thore 1s e double Dottom sovorel days, wooks or months epert, you draw angles from those bottons, which are nocr the same price levols. For examplo: Fron the first bottom draw 2 46° ungle ond from the sooond tetton drow on angio of 2 x 1- thon whon those angles cross esoh other, it will, be on important poiut for a chenge in trend, Note on chart uarked ¥orm 76 that I have drawn tho 46° englo fron the first bot- ‘vom "IB" ond the angle of 2 x 1 on tho right hand side of the 46° angle, Then, fron the second bottom "25" T havo drawn ¢ 45° angle and the englo of 2.x 1, which gains 2 points per day, week or-nonth, on the left hand or bull side of the 45° englo. You will note that the angle cf 2x 1 from the second botton crosses the anglo of 2x 1 cn the bear cide from the first botton ot 43, md that when, the stock treals under thoes angles, a chengo in trond takes place and it goes lower. Wote thet the mele of 2 x 1 from the third betton "SB" crosses tho angle of 2 x1 on tho boar cide fron the first bottom ab 65$ ond crosses tho 46° anglo fron tho sccond bottou ob 63, This would be a point to watch for ohange in trond. ZT have placed a oirole where those angles Tron tho difTereat bottoms como together Spply this rule to double tops and triple tops in the samo way. It is not necessary for tho tops or bottans to be oxcotly ob tho samo price lovol, but near tho seme lovel. Romonber, ulvays draw 45° anglos fron all important tops and Dottons. | T T Porellol mglos or lines run from important tops and bettons. As proviously oxplained, tho 45° onglo is tho most important and showld bo dravm from ali important ‘tops ond bottoms, If a stock ctarts advonoing, wo éraw a 45° melo fron tho bottom then if tho stock makos top, deelinos ané makes a higher betton- thencanis advancos and mekos a kighor top, we drow 9 45° angle fron the firct top, raming tho Lino up, This will givo ths oscillation or width of fluetuction in a parallol, between the 45° angle fron ths botton and the 45° angle rusning vp from the top. Oftea a stock will navance to tho 45° mnglo from the first top, fail to orcas it, then decline and rest on tho 45° anglo from the fret bottom then advance wgein, working up for s prolonged bull campaign totween these parallel mglos. Yihen tho angles ore very far epert, you cam draw another. 45° ongle equi~ distant bebvoon thom, which is often a strong subpert angle from which a stock will relly, but whon it brosks under, it declines to the bottom parallel. Forallols con form botwoon the wmglos of 2x lor 4x1 just the samo as dotwoen 45° angles, which often oscurs in slow-moving stocks. GEOMETRICAL ANGLES OR MOVING-AVERAGE LINES DRAWN FROM tO! When © stosk roaches bottom and starts up, you have been instructed to draw ingles from this exact low point, whioh shows the cupport in tine porieds, bub thero exo othor mgles that lator on will be just os dmportant and sonctimos moro portant ‘thea tho angles dram fran the bottom of a stock, ‘hese are tho anglos hat bogin st “O" or coro and move up at the sano rate that they nove up fron tho vottom, The starting point must De on the cane line that tho botton is mace on gs tho time poried ‘vogins fron this bottom, but the angles move up from "O". Those angios shoule vo atertod ovory timo @ stock makes a bottom, ocpoctally on wookly cid monthiy charts, und should also bo carricé up on important movononts on tho dadiy chart, Example: Soo chars marked Form #7 on page l4y Hf a stool makos low at 20, as shown on the shart, starting the 45° anglo from "O", whon will this engle reach 207 Anewor: Tk wil) rocch 20 in 20.dayey 20 wooks or 29 months from the bottom or its starting point. In othr worde, in 2 days, 20 wooks, or 20 wonths, it will be up 20 frem "0" and ct tho price whore the stock mado betton, Thon th angle will continue on up ab the eauo rete, and lator, when the stock breaks under tho 450 engle from ths actual bottom mate ab 20 and breaks the cther support angles dram from the sctual bottom ab%@, the next important poiet for eupport will be the angle of 40° moving up fron "0". Whon this engle te broken, it is im tho wockost possible position and indicates much lower prices, bus this depeads on how high the stock 4s selling and hov much it hes doolined as the time Lt treaks the 45° angle fron "0", ‘These anglos arewa from "0", espectally the 48° angle, proves when Prico and Time aro belmne~ Sug or when the stock is squaring out. from its bovtom. NO" ANGLES STARTING AT THB TIME TOP Is MADE When a stock resbhos oxtrenc top on a daily, woekly or monthly chart and the trend turns down, you should start an ‘angle of 450 fron "0" moving wp from the exact space and date that the top ic meds. This will prove the square of the ‘ine poricd. It is very importent when thie englo Le reached and indicate: 2 change in trond. Tt is tho lest strong oupport and when brokon, it will indicate auch lower prices. Z have inatrusted you in oach case to firat draw the 45° angle from votton, ‘top and fron "0" at tottom ad top, but this devs not moan that you mist nob vse the other onglos. All of tho othor anglos can bo uscd from "OM, but tho 45° emglo is the firct ond most inportaat. After this onglo is broken, thon you can veo tho othor angles. It is not necessary to cerry oll of thon along util youGa-24 need them, but on the monthly chert, efter @ Jong sordos of yoors, these other angles should be carricd along when the stock begins to approach tho levels wheré thoy would bo broken or where the stock would rest on then and revoive support. 45° sNGLE YO" 20 When @ 45° engle moving up from "0" — reeohes ‘the line or price of the betton, At to vory mportent— thon again when dt reaches tha point of the oxtrone high price, S¢ de very important for a chaxgs in trezd. You should carry 46° ongles ond cthor angles up from #0" from ell important first, socond, aad third higher vostoms, espectolly those where vary mush tine has olapsed betwoen theso bottoms, You should also start the .mgle of 45° up from "0" from the first, second, and third lower tops, ospecially those which show mach time period elepsed. ‘These mgles are the most inportit to be carried on the weokly and monthly cherte., Nover overlook keeping up the engles from °0" because they wil} tell you wnen Time is squaring out with Price from tops ané bottoms and Will locate sap port angles cr moVing-cvorago lines at 2 point on the bear side after the first 45° mgle from a boston is broken. You could not locate this support point in any other Way exsept by the englos from "0". You showla go bask ever past records ond bring up these angles and square out dirserent tops and bottoms so that you can prove to yourself the groct value of using those mngles. -ANGLES FROM TOPS DON 70 "oO" AND UF AGAIN A 49° angio starbing dowa from any Lmportant top on a monthly or woolly chart should be continued down sntil it reachos FO" end thon started up again at the game rata. Aftor « Long numbox cf years botwoon important tops and bet~ tons, thia ongle coming down ond cong up again is importout, A 45° anglo can also’ bo continued dow from any inportart botton-to “O" nd thon started up again, This will ehow tho squoring of Prico with Mo from oither top or botton, Jaglos can be started from "0" ot the timo my important time cyeke runs out. For exemple: U, S. Stood made extrene low in 1904. May, 1924 would be the ond of o 20-your cyclo or 120 months, In May, 2924 Steel, ado top ot 109 against 0 45° angio bogiming ot "0" ab tho time botton was mado at 58 im February, 11S, On oscount of tho importonos of this top ond 0 20-yoar cyclo running out hero, we would start a 450 anglo end other angles, $f we mood thom, fron 40" in May, 1924, May, 1951 weld ond a T-yoar cycle ef 84 months fron 1924, The 45° angle runniug Gp fron "0" in Moy, 1924 crossoé ct 64 in Moy, 1951, Noto that Stoo) nede lov at 834 in Juno, 1951, In Jue, 1924 Steel nace the last low at 942, showing tho importunce Of tho ond of the 20-year cycle, The 45 angle moving up from "" in Juno, 1924 crossod at 84 in dime, 1951, and Stool doclined and resto on this onglo. Wo 45° ancLes Ou sam sorrou As wo hove proviously oxplainod, tho 48° anglo moves up et the rato of one point per nonth nd moves down at tha rate of ona point per month, Refer to exemple on Chart 48;You will note that tho low ou ube chart 49 vhowa az 62 and tho atook moves up Yo w high of G8. 4 46° wachs iy drwim up from Uho Dalton, ead after the stock roachos top and sterte to vork down, it bronke tho 45° angle, gotting undor it ot a price of S68. Youwill note thet T have dram enothor 45° anglo dom from the votton at 62, ht the point whore the stools broaka undox tho 45° englo moving up fron 62 to tho 469 angio moving dom fron 52, sho Adstanso Sn points ie 16, thero~ foro tho anglec havo widened until tho obese could doling 18 points, if % wont straight dom, before it reached tho 45° mgle moving dorm from tho bottom, Note thet I havo shown én tho chort that tho stock contimice dovn until 4b rovetion 40, whore & recte on tho 45° anglo from the botton ob 62. This would Enauecto tho etrangect euppert point onda least a tenporary relly, eepoctally ez tho stock 4s down 23 pounts fron the Sop Lator you will find wader "Rosset ence Levels” thet 22% to" 24 pointe Sen atrong support point, Us. SPEBL; fake the oxtione low point of V. 8. Stool at 124 in Jentery, 1627. Stert a 486 angio on Phe monthly chart waving wp ct tho rete’ ot one point per month- thon stert a 45° ongla moving down ot the samo roto, ‘This shows tho eprouding of tho cnglos and what con happon whon Stool broaks under tho 45° englo conihe up from thet bottom and tho point where 4t o¢n decline im exe tromo penicky markets, like 1931 end 1932. Tho 45° angle coming up fron tho low of Jonuory, 1927 crossed ct 186 in ostoter, 1850. Whon U. £. Stool broko this angio it wont right on dom to 1348 in Deventer, 1980, whore it tasted on the angle of 2 x 1 from thi bottom of Janu ory, 1927 thon ralliga to February, 1981, and at tho timo it broke under the ongle ef 46° from 111%, it was on tho 45th month, omothor indication of a skerp, sovoro doclino, Hore wo look at tho 45° tnglo moving dam from 1124 end find 1¢ is 90 points down from the 45° angle moving up fron 1113. Those anglos soparate at tho rete of yo points por month and boing 45 months from tho bottom, tho ctock would have te docline 90 points to strike tho 45° anglo moving down fron tho bot= ton. the oglos being so wido apert indicntod taat tho stock eculd hve a wido- open brock, “This happened in Deconber, 1981, whon Stool broke wméor the 45° angle oving down ?ron 1114, putting if inte’a vory wonk position in fect, Jn the weckest position that 2 stock can got in util it eon recover this angle. In Junc, 2932, whon I. §. Stocl doclinod to 21$, it hed dropped undor the 45° onglo moving down trom the last low of 113% mado in Morch, 1925, and closed two months below this anglo boforo it started to recover anglds. This shows that whon a stock gots into a vory wock position by dropping m~ dor important anglos moving down fron dottons, after having broken strong anglos moving up from bottons, it can doclino to vory low lovols, Those extrono fluctue~ tions ‘and declines havo happened in tho past and will hapgon ogain in tho future. This proves the squaring out of Tino on the down side or tho baloncing up of Prico mé Mma, Hore is anothor illustration of tho balancing of Prico with Mimo: The engle of 35° moving up fron "0" from tho botton at 216 from October, 1907 crossed at 262 in September, 1929 aud Stool advanced to 2512, which shows thet in 262 neaths fron the botton in 1907 Steel had advanced on equivalent of one point per month. By striking the 45° angle and failing to cross it, it indiceted that the Tne was up end that tho stock was turming dombrend for a prolonged bear market, ANGLES OR MOVING-AVERAGE LINES FROM ONE TOP 10 THE NEXT TOP Refer to exunple on chert #9 on page 17.You will see that ve have started the bottom ab 60. ‘ho stock advences six months to 74, to a point marked "0" ond nates top-—-reacte for thros months to 64, ‘Yroaking tho 45° angle but rosting on the snglo of 2 x 1 from the dovton--thon starts sdvoncing and finally crosses again the 45° angle from 60, getting into a stronger position, having rogainod this mglo, Ta order to determina whore it might moot resistence, as St is in acw high territory, we @raw a 45° angio from ‘the top ab 74, The stock edvances to $0 on the 2énd month from the votton, strik- ing tho 45° angle fron the first top at 74, on the 16th month from the first top, Boing 16 points up abovo tho first top, the Timo oquals tho advanco in’tho Price above tho first top. The 45° anglo shows that this iz a strong Rocistance point ané_a place to go short with stop ono te throe pointe above the 45° angle; A doclino starts md in tho third month the stock ogein brocks under the 45° engle from tho bottom (at 60) at 4 very, high level. Im other words, 1t ls 2 points up from tho botton end da now in a much wouker position, because it 1s so fer from tho baso of support, wad indicates a doolino agein te the angle of 2x 1 (marked in green). Don't ovorlook this rule: After a stock hes advanced to a new high level, then declines to the clé top at 74, this may be a sapport point unlose it breale S points under it. If it does and also brenis the angle of 2 x J, st will be in a woaker position and the next point to watsh for eupport end a rally would be the next bottom at 64, ANGLES PROM BOTTOM OF FINST SHARP DECLINE Whoa a stock thet has been advancing for some time, makes top ond holds for several deys, soveral weeks or soveral nonths, then turns the trend dom and hes & sharp, severe doctino, there is clays a rally after this first decline, It usually nakas @ lower tep on this secondary relly and then starts to work Lower agcin. The bottem of the firct decline is a very important point to draw anglesfrom, cspeoselly tho 46° angio noving down, as T havo done on thy chart murkod Form if10, ‘This chart shows the stock rellying up te around 75, wherc the 45° angle coming up fron tho last botton crossos the cagle of Z x 1 coming dows from the top. Then tho deviino started and ct 66 the stock broko back under tho melo ef 45° from the top, which put it in a very woek position, It declined to tho engle of 46° soning down from tho bettom of tho first sharp decline, this would bo tho equaring out of tino fron the bottem and would be a plaso te buy for a relly. A stock will often decline and drop a little bolow this angle from the potton—then if it holds for soverc! deys ar wooks undor this angle or on it, it is e place to buy for a rally. On a Monthly Chart always carry this anglo dom-fron the bottom of the first sherp decline, as it often becomes very importont loter on in e cecpeign. After a stock has boon advancing for some time end then has a sharp breck lasting 2 to 5 days, 2 to 3 weeks, or 2 to 3 uonths—thon rallies and eftorward breaks under the lows of this first sharp breck, it indicates that the mein trend hos turnod down ond that it is going lower. Apply the sane rule whon © stock hes been declining for a long time and thon makes 6 sharp, quick recovery fer 2 to 3 days, 2 to 3 weeks, or 2 to 3 months, then roacts ani thon crosses this first relly point thot it made, en indication of higher prises. Last swme NA BULL OR BEAR MARKET Tt is important to draw engles from the point where the market starts up end mokeg ite last run in a bull narkot. Refer te Chart #11 on page 19. In this example note point marked "lest bottom". Tn tho lost stage of the wull market a fast udvance follows to a price of G4, We havo drawa tho angleof 2 x1 (a goin of 2 points por dey, woe or month) end tho 45° angio from this Yolten. When tho angle of 2x 1 wes brokes, 4¢ indicated thas she Grond hed tumed down. Tho etook doelined and roatod on tho 46° imglo~-thon rallied and modo a second lewer bop-~ than broke the 45° anglo-- declined sharply aad rosted on tho 45° angle drawn from the top ot D4, which indicated that Timo ond Price had squared out or wore oqual. This would bo a point to buyjwith a atop lees erdor 2 to 8 pointe undor this angle, for a rally beok to the cngle of 2 x 1 from tho top, as show on tho shart, Ya vory cotivo fast-noving markets x tho eaglo ef 8 x 1 fron tho “last bobton," after this first coubo anglo is trekon, Lb in dow, stock may stay above tho angle of 4x1 ut on tho daily or woekly chart cates that the trond has turned Alvays romembor that after prolonged advenco,,whon the main trond turns gown, it is safer to woit for rallies en soll short then to buy against the trond, f All of thoso rules aro reversed at tho ond of « desr markot or shurp do~ chino. It is important te uote when tho markot starts dovm from tho lest top cr relly ond makes its last rm to botton, Drow angles fron this last top and watch whon the market roaches these important angles end erosses thou. Por exemple Oa March 9, 1932 tho Dow-Jonos $0 Industrial Avoragos nado last top at 90, from whieh a decline foLlowod, with vory small rallies, recohing bottom ct 41 on duly 8, 1952, Noto on sho wookly chert that the engle of 2 x 2 from the top at 90 eressod wt 5D An the wool onding July $O, 1932 end after thoy crossod this lovel ‘they nover doclimed to 50 agcin, ard a¢vimeod to G1 in Soptombor, 1952, The cross~rdication that the naln trend hed ing of this angle was the first definite turned up. It is also important to review the oajor swing from Novenber 9, 1931, when the Averages reached a high of 1192, to the low at 404 in July, 1932. This was the last big swing of ibe bear market, a decline of 79 points. ‘The half-vey point of this was at 60, In Septenber, 1952 the Averages rallied to 8l-~ then after they reacted to $0 and advanced, getting above the half-way point, and crossed 61, they indicated an advance Lo 119 anyway, After they crossed the half-way point the second time and advanced above Gl, they never sold down vo it again until they advanced to 140) in Novenber, 1935. Atter 2 stock has been advancing for 2 long tine, in the last run when there is a lot of monentun, it may cross angles from previous tops or bottoms, then fall back under them, which is an indication of weakness. When @ stock has @ sharp decline and is tmking bottom, it will drop under impertant angles and then re- cover quickly, getting ebove them, which shows thal it io getting into a strong position and changing trend. AIGLES PROM HIGHER BC 70 AnD LOWER ‘OPS. What rule should be followed when stocks make higher bottoms and lower vozs? 4 stocks advance ard make higher bovuoms on the monthly, weekly or daily chart, you should always drew angles from higher bottoms. Then, in the last section of 2 bull market, if these important angles ere broken from the last bet~ von, you know that the trend hes turned down. Apply this same rule ac a market declines. Drew the angles from each lewer top and vauch thetangles until the stocks again cross the 45° angle froma second, third, or fourth lower top. The second lower top or second higher ‘votton is al- ways very inportant to draw angles from and to measure Time from as well. Exanple Dow-Jones. Industrial Averages— Septendar 3, 1020 - Extreme high- November 13, 1929 - Bottom of first sharp decline- April 17, 1939 - Big rally in bear market, second lower Lop- July 8, 1982 - Extreme low, final bottom Soplenbor 8, 1032 - Top of first sharp advance efter bear market ended~ February and March, 1933 - Second higher bottom from which bull mrket wes resumed. These are Uhe most important tops and bottoms to draw angles fron. SBCTIONS OF NARKET CAMPArONS. All market campaigns, up or down, move in 3 to. 4 sections. When an advance otarts, the market runs for several weeks or several monvhs amd then halus for several weeks or months, moving up and down over a range of 5 Lo 20 points, ac- cording tothe price of the stock--then the advance is resumed and the stock crosses the high level of the first section, moves higher, helte again, ard reacts for a period of tine-- then crosses the Lop of the second section and moves up egain for another period of time and aalis for the third time, which is a very important point to watch as markets often culminate at the end of the third section and @ bigger decline follows,Most markets run out in chree important sections or campaigns. However, after resting and reacting, if a stock crosses Uhe third top, ib will then move Up to the top of the fourth section, This fourth advance may be @ shorter period of Vine than the previous sections, or in some cases may consume @ greeter period of tine, especially if vhe stock is very active and high-priced. This fourth top is very important and generally marks a culmination and a reversel for a bigger decline. For example: On March 12, 1935 CHRYSLER MOTORS declined and made low et 31-- FIRST SECTION of the advance carried the stock up Lo 49% on May 16~ then the stock declined to dla, SECOND SECTION— On June 27 the advange started and the stock advenced to new high levels, reaching 622 on August. 10, which wes top of the second section then there was a reaction to S?L and 2 resting period. THIRD SECTION— Then there was another advance which started August 22, The stock crossed the top of the second section and reached high at 74 on September 11, top of the third section. Then followed @ reaction to 68 on September 21. FOURTH SECTION— In October the top of the third section was crossed and on Novenber 18 Chrysler reached 90, top of the fourth section, where it held for 5 weeks in a 6-peint range while distribution was taking place. This was a most importent point to wateh for a final top and e change in trend. Then the trend turned down, Reverse this rule ina bear market. Watch the action of the market when it makes the third and fourth decline. But, remember, in a bear market when ral- lies cone, they may make only one section or one move or in extreme cases only make the second section- then reverse and follow the main trend dom. You will find it very helpful to study and watch these various cect iage of g cempaign end by applying the angles fron Lops and bottoms you can detect the first minor ard mejor changes in urend, STRENGTH OR WEAKNESS DaNOTED BY NOW ANGI - ‘The engles on the Monthly and Weekly Charts ere of gr those on the Daily Chert becalise the daily trend can change quite often, while ouiy the major changes ere shown according to the angles on the Monthly and Veek~ y Charts, eater importance than Always consider the distence a stock is from ite beginning point when it breaks any important angle or crosses any important angle. The further avay from Ube beginning point, the more inportant the chatige in trend, whether this is crossing an argle from the top or breaking under an angle from the bottom. WHEN A STOCK IS IN THE WEAKEST POSITION 4 stock is in the weakest position when it has completed distribution and broken under @ 45° angle from an important bottom on the weekly or monthly chart. Ty is also in the weakest position when it has broken under the half-way point between any inporvant top or bouuom. The longer the time period has run and tho higher the price, the weaker whe position, For example:Ifa atook hae advencoa to 160 and has only moved down 26 posnts wnon tho 45° onglo fron an oxtyoms low on a wookly or qwonthiy chert is Urokea, thon it as in a vory Wook position booauco it is so fer above tho half-way point on its prico movenont, alroady having equered out the timo period with prise, Viocknoss in a stock doveloys whon it tresks the 8/4-point, tho 2/S-point, tho 1/2-point, ote., but the position on the timing anglos from tho bottom tells you still more about the weak position. A stock shows its first woalnoss when, it breaks the first important angle coming up from the last botton in the final ron ine bull warkot WEEN A STOCK Ts IN THE sTRONGRS? PosTPION: A stock is always in the strongest position coming up from a bottom whon it is holding cbeve the very scuto angles on tho daily, wookly or moxthly charts, especially on monthly and weekly charte. As long as © stock holds above the angle of 2 x 1 (a gain of 2 pointe por @oy) on the deily chart, i¢ is in a very strong position as far as tho bottom $e concerned. Jn fact, 4b iz clvays in a strong position on the daily ce long ae At holds above the 45° angle. Tho seme applies to woekly ond wouthly charts, which are the most Amportent trond indicctors. I have found that the stocks which heve the biggest advences ere those thet alveys hold obove the angle of 2 x 1 on the monthly chart or goin Z points por month for o long poriod of tine, I have soon stocks rest 10 or 15 times on tho angle of 2 x 1 and novor break it until they hove advanced 100 points or more. In this way a stock stays uhosd of time ond steys within the squaro of timo by voing far above tho onglo of 45°, ond thoroforo is in a very strong position. But tho time must cone when the cycle has rum out and the main trend begins to change frome bull market to « denr market--then the breaking of the engle fron ‘the last bottom shows a change in trend. Another indication that a stock is in a strong position is when it advences and moves up above the helf-way point of the previous price woveneat and then holds the half-way point, that is, avences above it ond then reacts and fails to bronx under it, This is just tho seme as resting on a 45° angle and indi- ectos 0 vory strong position. STRONGEST BOYTNG AND SELLING POINTS. ‘ho oinch buying peint ie whon « stock roots on a 45° angle, placing a stop less order below ib. Imother point to buy is on the half-way point of the price novonent, placing fe stop loss order ander the half-way point. Won the main trond is up, it ic alse safe be buy when « stock reacts to the angle of 2 x 1 (a gain of 2 points por time persed) on the weakly or monthly chert, REGAL 1G ANGLES OR CROSSING LINES: Renenbor, won any stock breaks under the 45° angle fron the extreme Lew point of @ move on the daily, woekly or monthly chart, it is then inc very weak Position end indicates a decline to the noxt englo, Hovever, whon © stock eanCABS regain the 45° onglo, it is in a stronger positicn. Mo samo rule applioz to a 45° mgle drwm up from ony top. Whon a stock crosses the angle on the duily, weokly or monthly ond stays abeve tho 46° angle er any cther angle te tho left of the 45° englo, it is in a very strong position, After a stock onco drops below or gots sbove any inpertent englo ond then rovorsos its position by cotting back above tho melo or éropping back tolow it, it changos tho trond agein, YEDDA STOCK 18 IN STRONG POST? TON FROM BOTTOM AND IN WEAK POSITION FROM SOP A stock is tn a strong position from tho bottom when it is Keoping above the engle of 48° or the angle of 2 x 1, bat at the samc time it cam be in a woak position when it rallies up ond strikes against « 45° ongie or the angle of 2x1 coming down from the top— then it is a short sale until it con cross these angles or cross proviows tops, When it brooks tho angles from tho bottom, it is in a woak position ond indicates lover. A stock can be in a strong pocition grom the top and iu a weak position from the botton, that is, it mey cross soma important angles from tho top after a long period of timo, but et tho same tino moy broak ‘under the 2x 1 eglo or 45° angle fron the bottom, vhich would indicate that it is in a weak position ond getting rocdy to go lower. WHEN ANCLES PROM. EXTREME P. OSSBD: The 45° engle drawn from the extreme high point of a stock is most important ond when it is crossod, a major move may be oxpocted. For example On tho wookly chart of tho DowJonos Industriel Averages, note tho 45° angle moving down from 506, the high of Soptonbor 5, 1928, Jomuary 12, 1955 was 279 nooks fronvtho 1029 top. Tolding 279 from 868, wo got 107, tho price ab which the angle of 45° would crocs. Those Avoragos advanced to 1064 im tho wock onding Jaavery 12, 1955-— thon roacto’ to 100 in the waok ending February 9. This was the first time that they had hold within one-half point of this angle ond tho first time thet they had ever roachod it sinco the top wes mado. During tho Wook ending Fobrucry 16, 1935, tho Avorages crossed tho 45° anglo at 103 for tho Siret time, and during tho wook ending February 25, 1935 advanced to 103, whore thoy hit the mglo of 49° moving up fron the low of 85} in Soptenber, 1934, and also hit tho angio of 2x1 coming up fron the low of July 6, 1052, | Tris was a strong resistaneo point ond the Averages resetod to $6 in the weok onding Merch 18, 1995, whore they rested on tho 45° anglo fron the 1929 top and also whoro the 3 £1 anglo (a gain of 1/5 point por ook) from Septonber, 1929 coning up fron No" crossed tho angio of 45° coming dova from tho 1929 top. This was « strong support pesnt for ¢ change in trond. Tho aevenco sterted end tho Avercgos noved vp te now high lovels. This proves tho importance of anglos, espocicily the 45° angle dram from any oxtrene top, and tho peint at which ony cthor angle orceses tho 45° ongle. Wotch the 45° angle from 1929 top when it reaches “O" or whon it is 386 woeks down from the top, This will bo in tho latter part cf Jauary, 1957. Noto what happens at that tine, ANGLES TOR DL CHART Tho seni-wockly chart is a great he: 0 ond of oxtremo advences orextrenes declines. By applying all of the rules and using the geonetrical aneles from tops and bottoms on the semi-veekly chart, you will often’ get en indication of a change in trend two to three days before @ change. in trend is shown on the weekly chert. 4 change in trend on the semi-weekly chart is of greater importance than a change in trerd on une daily chart. It is much better to rely upon this chart vhan on the daily chary wher markets are in @ narrow trading range. ANGLES POR WEY LIST! OK Years of experience and rescarch, which hes cost me a large amount of money have enabled me to develop a method that wil] account for all mrket moveronts and give rules to determine the trend from any top or botton. It is important to know how to determine the trend when a stock is first Listed on any exchange. When a stock has never fluctuated before, we have no top ar bottom to draw angles from, Therefore, in order to determine the trend, we use the square of 90, which is 90 up and 90 ecross, and put all the natural angles on, like the Pattern Chart, As we have szid before, the square of 90 is very important beceuse it is one-quarter of a circle of 360°, and as 90° or the ver- tical angle is the greatest angle vhat can be used, all of the other angles are found between "0" and "90", If a new stock opens at 18 or any point below 224, then you could make out a square of Z2k to determine the position of the stock on angles. If Lhe stock opened av 30 or any point between 224 and 45, you could nake up a square of If it opened et 50 o between 45 and 67, you could make up a square of 674, How- ever, you could place any stock opening at any price below 90 in the square of 90 and get_ite preper position and strength or weakness on angles. If the stock opened st 100 cr sbove 90 and under 135, you could mate up a equere of 135, or could make ancther square of 90 numberirig from 90 to 160. You could start a monthly chart on a square of 90 at the price where the Stock opens or treding begins, as shown on U. S. Steel, (Refer to Special Analy- sis of U.S, Steel.) After the stock breaks any of these naturel angles drawn from "0", it is just the same as breaking under an angle drawn from a botton. When it crosses any of the angles draxm down from "90, it. is just the same as crossing an angle froma top, as you can see by experimenting with U. S. Steel or any other stock, but always consider price resistance levels end how mich the stock is up or dovn from the bottom or top. You can determine the first change in trend by the $day or semi~seckly Chart, daily chart, and weekly chart by bringing up the important Geometrical Angles from any higher or lower bottom as the market, moverents develop. Iv is not necessary to draw these angles froma point a long way back, You can make the calculation and determine where they cross. For example: Sup- pose in 1900, in the month of January, @ ctock mde bottom at 15, and we wish to calculate where the 45° argle will cross 10 years later in January, 1910. The 45° angle rises at the rate of one point per month- then 10 years would be 120 points or months-- add this Lo 15 at the bottom then the 45° angle would cross at 135 in January, 1910. All of the other angles my be calculated a long period back in the same way.ANGLES SELDOM USED Sx 2 ANGLE: This anglo cf 3 x 2 on the loft side of tho 45° angle risos the AWS rato of 8 points in J2 noutas, A stork must show a goin of s/A~point por month in order $0 Koop abeve this angle. This angle can be used vhon ether inportont angles fron the botven hows eproca fer opart, so it wild thew tho position and rosictonce or sapport point bebroon she other angles « DE_AND LONGLYUDS On all charts ly--the price must move up or dom on the Yortical anglos. Thorofore, tho price movemant is tho sano es letitueo. You should bogin with zoro or "0" on ony chart—~dily, weekly or nonthly--nd are tho importunt anglos and rosistanoo levels across, which neasuro latitude. Noxt,, numbor the timo points in days, woeks or months ecross, ond drew the horizontal engle at cash importont natured angle, ouch os, 114, 252, 353, 45, 56k, 67%, 76, 90, 1014, 112% 120, otc. Thon you will know whon prico r these important ongles iné moots resistence. chos Longitude measuros tho tino running scross the chart, az it movos ovor onch doy, wook or nonth. Thorafore, you mist koop your chart numbered from oach importent top ond botton in ordor to got the timo moaguromonts according to engles. Those important angloz, such as, lic, 22%, 352, 45, S64, 60, 67S, TOR, 90, e8s. from oceh bottom and E6p will show you vhoro tho strongost Tosis’ im’ price end timo takes place. hore ongles prove the Parallel er croscing point. Study past rocords end soe whet has Nappened when prices on nonthly charts reached ‘these important angles or time periods. For example, 90 poipts.up in price from "0" we draw om angle horizonelly across the chart, Thon 90 days, weeks or months, goiug to the right ceross the chart, we draw a vortdecl crglo up, which will crose the horizontal angle at 90 end prove the square, By Keoping cl thos ongles up and understanding them on your charts, you will know when important time eyeles are runing out. Te the price of a stock at 60 comes out on the 60th day, week or month, will meet strong resistance besause it hes recched the square of price with Tt As ct the some latitude or price and the sane longitude or timo period. can slvays put tho square of 99 on a chart--oither daily, weekly or monthly. use the naturel ongles, but I advise only using this on tho woekly 2nd monthly. You con bogin this square of 99 fren any bottom or top, that is, going up 90 points, or frem tho raturnl points, whish are 90, 158, 100, but you must not foi] £o squere the extrome low and high’ prico as well as the second and third lower tops ond higher bottoms with Time. mu Fo! BBPING TIME ODS ON CHARTS It is very important that you keep tho time periods on all of your charts, ying them ceross from the bottom and top of each important move in order to chock up and know that you havo your angles or moving-averaged at the corroct point end te coo whore major and minor sycles indleate ohengoe in trond. ‘Tie PERIODS (08 BOTTOUS: “hon a stock makes bottom one month end then the following month makes o higher bottom and « higher top, or myzay, afver it makes a higher bottom and rellies for one month or more, you son start numbering fron that botton, The month that it makes the low belongs to the old or downward movenont aad io the last move dom. You count tho first month up as one and then mmmber soross on the 1/2-inoh squares, runing thon ocress, adding four oach tine. For exemple: If a stock has nade botton and advenced 50 points, you look dowa at the dDotton of the chart and find that you are on the 26th nenth- then the angle of 2x 1, moving up 2 points por month, would cross at 50, while the 45° angie, moving tp one point per month, vould be ot 26, and if the stock broke tack under $0 the following month, it would bo falling under tho angle of 2 x 1 ond indicate a further decline. Now, if you had an error on tho chart in the timing or numbering across from the bottom, then tho moving-evarags line or angle would not come out correctly. IMS PERIODS PROM TOPS After a etosk hae sdvanced ond made an exbrome high and reacted for a fow days, « fowwocks, or ¢ fow menthe, ond you start putting on the wglos from the top down, you must then begin to number the time porieds across from the top. Apply the samo yale fer the top: The month, week or day that « stock mckes ox- ‘rome high Limishes the ugward movement und ig not to be counted, You can cou ‘the nunber of days, weeks or months noving across ofter that, allowing the top month to be "0", the next month, week or day over to be "1", adding ¢ ucross on the squares to get the correct position, If this Time Period 4s carried scross on ali the charts correctiy, then you can always check up ond find out if you have mede any mistake in bringing Gown the engles or noving-cvorage lines. Fer exonple: After a stock has declined 75 points, either on a weekly or monthly chert, the mgles move down tho sane, excep? whore the spacing is dif- ferent. Assuming that the spocing is ono point wr ous—pighth inch, ofter it has moved dom 75 points ané all tho angles aro dremm down from the top, there nay de aa error iu the angle of 2 x 1 because your ruler may havo slipped and you may not havo placod it correctly after it is dom a distance from tho top. Now, in order to prove exactly vhere the angle of 2x 1 comes out, you determine the number of tine pericds thero are. If 40 days, vooks or moths have beon required 0 deoline the 75 points, the engle of 2x 1 moving dom 2 points per unit of time, would be dow 80 fyom the top. Lf you find that this mgle does not cross at 86, thon you mow that you nado an error and shold correct At. This iz a simple way to always Imow when the englos ov noving-lmes are correct becuse you cimply add tho movomont te the bottom me subtract st from the top. Suppose tho prise referred to above, when the steok has declined 75 points, was 150, thon subtracting 80 fron the top ab 150, the angle wenld cross et 70, ond the price of the stock down 75 poiuts would be ct 75, therefere it would’ be above the englo of 2x 1 frem Une top and in position for a rally if ‘the tine cycle indicated it. FOINIS FROM WHICH 70 NUMBER TIME PERIODS The most smportent point on the monthly high and low chart to carry the time period from is fron the extreno low of the life of « stock ond also from the dete of incorporetion or from the date tra@ing in the stock began on the New York Stock Exchenge. From tho oxtreno low point the time period should al- ways be carried across on tho chart just the sano os the important angles should bo continuod right clong for years. ‘The next important point to number mm is @ sccond or third higher bottom,but you should not consider a Bottom established until Lhe market has held up advanced tlvee to four monvha, Uhen commence nunber ing from Uhl bovlom if 1 appears Lo be important. for example: U.S. STEEL was incorpcrated February 25, 1901, Numbering the months across ‘you will note that February, 1931, was 360 months, or 30 years, Crom the date of incorporation. Then start a new cycle and begin numbering across from #0". This will be working cut the second cycle cr circle of 360%. The next impertant point is the extreme lov of OF mde Moy 14, 1904, On the monthly chart carry the nunbere across from this betton, because It io the lowest botton and therefore the mest important. Note this 30-year cycle or 360 months ended May, 1934, ‘The next important point vo number from and draw the angles from, is the low of 214 in Gotober, 1907, the first higher boston. Then, the next important is the third higher bottom made in February, 1918. Always draw the angles and nun ber the moriths across from any other important bottons where campaigns start. Use this same rule at tops. After top is reached and the trend turns dun, then carry the tine numbers aerest from tha top, but after any top is crossed er betton is broken that. you are numbering from, then de not count. that. top or bottom of imperyance to number from excapt to deteraine & vine period on another cycle 3, 5, 7, 10 or 20 years ahead. Tops that stay for a long time without bo- ing crossed are elways the most Important vo carry the Tine Pericds from The extreme high reached by a stock is always most imporvant until Lhat high Is crossec- Uhen Uke next high point nade on @ secondary rally, which is alweys a Lower top, 18 the next mos important vop to number Tron. For example: On U.S. Steel you would carry the monthly neasurenent across firet from vhe high in April 1601- then from the extreme high in October, 1909, and next from the h{gh in May, 1917 then fron the final high in Septenber, 1929, being the most important to measure from, end also number from the April, 1930 vep. AMDUSTRIAL AVERAGES: The Dow-Jones 30 Industrial averages reached extreme high on Sepuember 3, 1822-- then declined sharply in the panic, reaching low in Novenber 1929-~ from this low there was a rally vo April, 1920, which was Lhe lad high and very important to munber from because it wes a secordery top, the lest rally in a bull market. After final low of the bear market was reached on July €, 2982, 2 sharp raily followed to September, 1932, when top was reached-~ then a slow decline followed, reaching bottom in’ late February and early 1033, making this a secondary higher bottom, from which stocks advanced to new high levels. The bottom in 1982 ie the most important to number from and the next bottom of March, 1933 is next in importance. Apply this sam rule to weekly and daily bottoms and tops, Discontinue the ‘ime periods when any minor top or potlom is exceeded and carry only the main figures on tine periods from important tops and bottoms as long as they remain unbroken, The rule for discontinuing the use of tons and bottoms for Tine Periods is: When a bottom or top is exceeded by three points, then discontinue the time period {rom that bottom or top. Always note the number of months between extreme high and between extreme low points and note what angle the tops and bottoms come out on,SQUARING ‘tH PRICE RANG WITH nt This is one of the most important and valuable discoveries Uhat I have ever le, and if you stick strictly to the rule, and always watch a stock when Price is squared by Tine, or when Tine and Price cone together, you will be able to forecast the important changes in trend with greater accuracy. The souaring of Frice with Tine means 2s equal under of points up or down balancing en equal runber of tine periods--either days, weeks or nonths. Por example: If @ stock has advanced 24 points in 24 days, ‘then moving the 45° angle or moving-average-line up et the rate of one point per day, the timing Line ‘or tine period ard the price of the stock are at the sane level and Uhe stock is resting on a 45° angie and you should wateh for an important change in trend at this point. If a eteck is to continue uptrend and remin in a strong position, it mist continue to advance and keep above the angle of 45°, If iv breaks back under this angle, then it is cut of ite equare on the bear side of tho 45° angle and ine weaker position. When you are squaring out Time on a delly chart, look at the weekly nigh and low chert ard monthly high and low chart and see if the stock 1s in a strong position and has yeu to run oUt the vine periods, because ona dally chart iu has to react and then recover 2 position, squaring its price many times, as long as the weekly and monthly point up. Nerkel corrections or reactions ere simply the squer ing out of minor time periods and laver the big declines or big advances are the squaring out of major tine periods. sat Refer Lo Form #12, where a rarge of 12 points is shown from 45 low to 60 high. Wow, suppose a stock remains for several weeks or severe) months, moving up or down, in this range, never gett more than 12 points up from the bottom and not breaking the bottom: We start the 45° angle from the bottom of 48 and move it up to the top of the range to 60, then when we see the stock is holding this range and not going higher, we move the 45° angle back to the bottom; then back to the top of the range again, moving it up or down over this range until the stock breaks out into new le Jevele or now high levels. You will find that every tine the 450 angle renches the Lop of this range or the botten of this range, Lhere 1 come important change in tren of the stock. Mou gan also use the angles of 2 x 1 te une right of the 45° angle end the 2x 1 to the left ae they ogain divide Une Time Period into tno equal parts and If @ stock finally moves out of this range on the up side, then the angles would begin at the new end higher bottom and move up, but from the point where the stock went into new high, or from any important bottom made while it wes in the range, especially the lest detton that it made, which would be most important, You should unen begin an angle at that bottom and Continue on up again; watch When this engle is Dreken or when Tine is squared cut again with Price, which would be important for another change in trend, either mor or minor.20 period from the bovtom, which would be @ double indicacion fer @ change in trend. SQUARING WEEKLY TIME _PBRTODS: The year contains 52 weeks and the squere of this in Time and Price is 52 by 52. Therefore you can mo up a equare of 62 wide and S€ high; put on all of the angles from "0"; then chart the weckiy high and low prices of any svock in this square. For exemple: If the low price of & stock io 60, then the vop of this weekly square would be 62 added to 50, vhich makes 12 as top of the square. As long as the stock stays above 50 and moveo Up, it will be working in the weekly square of 52, On the other hand, if the stock makes top and works down, you would make up @ weekly equare 52 points dow from the top an 52 ov to get the time peried. You can take the past movement of any stock, put on a square of 52 by 52, and study the moverent, noting 13 weeks or one-fourth, 26 weeks or one-half, and 39 weoks or three-fourths points on time, and tke changes in trend which take place when the stock reaches these important Resistance Points in Tine and Price. You would wateh for a change in vrend around these tine periais, SCUSRING VOVTHLY Tne pep rons: At the time @ stock breaks a 45° angie, if it is selling at 135 on the th month, it is breaking @ doubly strong Resistance Level- a strong angle ard a netural Resistance Level. This would. be Time and Space balancing at Resietance Levels or geonetrical angles and would indicate a big decline to fol- low, - Reverse this rule at the end of a bear campaign. On a monthly chart twelve months completes a year, therefore the square of 12 is very important for working out Lime periods on the monthly chart. The gousre of 12 is 144 and important changes often occur on even 12 months! periods fron a bottom or Lop of @ sveck, It will help you if you use the Resistance , Levels on prices of tne even 12's, noting 24, 36, 48, 60. 72, 81, 66, 108, etc, Watch how the stock acts on angles when it réachés these important Resistance points in Price, PRICE AHEAD OF TIME "hy do stocks often cross the 45° angle on the daily, weekly or monthly chart, then have an advance for a short period of time, decline and rest. on the same 45° angle? Because when the stock crosses the 45° angle the first tine, it has no run out or overcome the square of Time with Price, Tharefore, on the Secondary reaction, when it rests on the 45° angle, it is at a time when the Stock hes reached the square of distance in Time. After that a greater advance Follows. Feverse this rule at the top of a bull market. When a stock breaks under the 49° angle 2 longidistance from the base or bottom, it is most. important Many times @ stock vill rest on the 45° angle in the carly stages of an advance, then later, on a reaciion, rest on it agein: then have a prolonged advance, re- act ard rest on the 45° again, and then advance to a higher level; then break Une 48° angle the next time, which places it in an extremaly weak position be- cause it is so far away from the base end so mich Lime has elapsed since the Stock made low, Don't forget—It is most important when angles are broken on she monthly and weekly charts,his aooounts for etocke that have a ¢l t advence and make « elightly higher top or a sorics of slightly lowor tops, ork over watil they overcome the equaro of the prico range gh lovel ond break tho 46° anglo, thoa a fast declino follows. p, quick decline from tho top and STRONGEST ANGLES FOR MEASURING MIME MID PRICE why is the 90 dogreo snglo tho strongost anglo of all? Becauso it As vorties) or straight up and straight dow, 180° i2GLR: What is tho next strongest anglo to the 90° angio? Tho 160° anglo becnuso it ts square so tao 90° cnglo, boing 90° fron the 90° cnglo. 270° ANGIZ: Whot is tho noxt strongost anglo to tho 180° anglo? The 270° engle ‘becauso it is in opposition to 90, or 180° from tho 90° anglo, which cqyats 2/2 of tho cirelo, tho ctrongest point. 279 nonths equals 22h yours, vhich is 1/2 of 45, 380° What is the next strongost englo aftor 2702 It is 580°, becouse it cds tho cizelo and gots back to tho boginaiag point and is opposite $e0® or tho halfway point, er tho angle waich oquals 1/2 of the circlo. 120° AND 240° What onglos are noxt strongost to 90, 160, 270, ond 360°? Answor: 120°na 240° angles, bocauso they are 1/8 amd 2/3 of the dipole, 120° 32 90 plve 30, which ds 1/3 of 80. 240 ic 100 plus 1/5 or "60, which makes these strong angles, especially ctrong for neasurencnts of tine. 5°; What angles cre noxt in strength? Ainswor: 45° ) desaase it is 1/2 of 90, 155° anglo, decaase it 4s 90 plus 45, 228° angle, because it is 36 plus 106; end 315° angle, devause it is 46 from 270. ‘The angle of 225° is 180 from 25 and the angle of 515° is 180 from 135. CARDINGL & ‘The angles of $0, 180, 270, end SOU form the first important cross, FIXED CROS: kmomm as the Cardinal Cross, The angles of 48, 155, 225, and 315 for the next importent cross, which 1s mown es the Fixed Cross. ‘Tnose angles are vary important for tho measurenents of time ond spose or price, and volune, 108°; Why is tho angio of 22? atronger then 114°? Because it te ‘orice as much, being the same reason that a 45° engle is stronger thane 22° angle. Agedn, the ongle of S7H° fs 3} times 45, torozore quite strong when anything is meving vp tovard 60°, 766° is strenger then 67°, booause i Se i/e cf 90, end therefore ono of the strongest points befere £0 is rowhoi--inportant to weteh both on timo, price, ona Vaio. Ieny stocks havo impertent novos cad make tepe or Zottons arewid the 7th te 60th day, Wook or month, but dente everiock 8¢ nonthe or 7 yonre, strong time cycle. DIVISION OF $1: Why ore the ongles of 1/8 of a cirele most important for timo as cad epece nocourenont? Boootes we aivido $1 into 1/2, 1/4, rma1/8 party, We woo 26 conte or ono quurtor, 60 conto or half deliar, and Long Joare age no hod 228 cont pivcees hile the most Amportent, figura of our Haske Bp money ore tho four quarter, wo éo ven tho 1/8 gare or 12h corts in oll cel culations. Stock fluctustions ure based on 1/8, 1/4, 8/8, 1/2,.5/8, 5/4, 7/6 and the vaele figure, Therefore, eny prive measurement sé well es Gine wild work out olosor to these figures whon chonged into angles of time taoz 1/5 or 2/3 poluts for tho simplo roason thet the flwtuations moving in 1/8 proportion mus Eome cut closer te those Pgures Figuring $100, or per, az a basis for vteck pricos oad changing those prices te dogress, 12% equals 46°, 25 equals 90°, $74 equals 155°, 50 oquals 160°, 62% ovals 2258, 76 oquals 270°, 32% equals S1S°, and 100 equals 380°. For oximplo: hon a stock sells at 60 on tho 180th day, wook or month, it is on the do~ graa of its timo anglo. on Fobruary 1, 1915, U. 3, Sto) nado a low ct 88, which ds closost to a price of 87%, which’ is 8/8 of 100 and equals 185° anglo, Stool wes 14 yeors or 156 montns old on February 25, 1918, and Rit tho angle of 155°, ‘hich showed that Stecl was behind timo, Dot thet it was in @ strong sition, holding nt 88 nbovs tho 136° angle or the prico of 37H. Whon Stcol roached 200, it equalled 2 cireles of 860, Hhon it advanced to 2612, it wns closest to 624 in the third 100 or nearest the 225° angle or 5/8 point, whieh te the strongest angle artor tt croscod the half-way 7 A oy) Novonbor, 1855