Rule For Keeping Time Periods On Charts
It is very important that you keep the time periods on all of your charts, carrying them across from the bottom and top of each important move, in order to check up and know that you have your angles or moving trend lines at the correct point, and to see where major and minor cycles indicate changes in trend.
Time Periods From Bottoms
When an option makes bottom one month and then the following month makes a higher bottom and a higher top, or, anyway, after it makes a higher bottom and rallies for one month or more, you can start numbering from that bottom. The month that it makes the low belongs to the old or downward movement and is the last move down. Count the first month up as 1, and then number across on the ½-inch squares, running them across, adding 4 each time.
Example: If an option has made bottom and advanced 50¢, and you look down at the bottom of the chart and find that the price is on the 25th month, then the angle of 2x1, moving up 2¢ per month, would cross at 50, while the 45° angle moving up 1¢ per month would be at 25; and, if the price broke back under 50 the following month, it would be falling under the angle of 2x1 and indicate a further decline. If you had an error on the chart in the timing or numbering across from the bottom, the moving trend line or angle would not come out correctly.
Time Periods From Tops
After an option has advanced and made an extreme high and reacted for a few-days, a few weeks or a few months, and you start putting on the angles from the top down, you must then begin to number the time periods across from the top. Apply the same rule for the top: The month, week or day that the option makes extreme high, finishes the upward movement and is not to be counted. You can count the number of days, weeks or months moving across after that, allowing the top month to be 0, the next month, week or day over to be 1, adding 4 across on the squares to get the correct position. If this time period is carried across on all the charts correctly, then you can always check up and find out if you have made any mistake in bringing down the angles or moving trend lines.
This is a simple way to always know when the angles or moving trend lines are correct because you simply add the movement to the bottom and subtract it from the top. Suppose the price referred to above, when the price has declined 75¢, was 150, then subtracting 80 from the top at 150, the angle would cross at 70 and the price of the option down 75¢ would be at 75. Therefore, it would be above the angle of 2x1 from the top and in position for a rally if the time cycle indicated it.
Points From Which To Number Time Periods
The most important point on the monthly high and low chart to carry the time period is from the extreme low of the life of an option. From the extreme low price, the time period should always be carried across on the chart just the same as the important angles should be continued right along for years.
The next important point to number from is a second or third higher bottom, but you should not consider a bottom established until the market has held up or advanced 3 or 4 months, then commence numbering from that bottom, if it appears to be important.
Use this same rule at tops. After top is reached and the trend turns down, carry the time numbers across from the top; but after any top is crossed or bottom is broken that you are numbering from, do not count that top or bottom of importance to number from except to determine a time period on another cycle 3, 5, 7, 10 or 20-years ahead. Tops that stay for a long time without being crossed are always the most important from which to carry the time periods. The extreme high reached by an option is always most important until that high is crossed. Then, the next high price made on a secondary rally, which is always a lower top, is the next most important top from which to number.
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 The Price Range With Time
This is one of the most important and valuable discoveries I have ever made, and if you stick strictly to the rule, and always watch an option when Price is squared by Time, or when Time and Price come together, you will be able to forecast the important changes in trend with greater accuracy.
The squaring of Price with Time means an equal number of points up or down balancing an equal number of time periods, either days, weeks or months. Example: If an option has advanced 24¢ in 24-days, then moving the 45° angle or moving trend line up at the rate of 1¢ per day, the timing line or time period and the price of the option are at the same level, and the price is resting on a 45° angle. You should watch for an important change in trend at this point!
If an option is to continue up trend and remain in a strong position, it must continue to advance and keep above the angle of 45°. If it breaks back under this angle, then it is out of its square on the bear side of the 45° angle and in a weaker position. When you are squaring out time on a daily chart, look at the weekly high and low chart, and monthly high and low chart, and see if the option is in a strong position and has yet to run out the time periods because on a daily chart it has to react and then recover a position, squaring its price many times as long as the weekly and monthly charts point up. Market corrections or reactions are simply the squaring out of minor time periods and later the big declines or advances are the squaring out of major time periods.
Squaring The Range
Refer to Form #12, where a range of 12-points is shown from 48 low to 60 high. Now, suppose an option remains for several weeks or several months moving up or down in this range, never getting more than 12-points up from the bottom and not breaking the bottom. 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 option is holding this range and not going higher, 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 price breaks out into new low levels or new high levels. You will find that every time the 45° angle reaches the top of this range, or the bottom, there is some important change in the trend of the option.
1949, February 9, May Soy Beans, low 201½. To square this price with time on the weekly chart will require 201½-weeks, and the 45° angle moving up from 201½ will be at 403; but the 45° angle moving up from 0 will be at 201½ equaling the price.
The ⅛, ¼, ⅓, ½ and other parts of 201½ must be watched in periods of time from 201½. ⅛ was 25¼-weeks or August 6, 1949; ¼ was February 4, 1950; ½ was 101-weeks or January 20, 1951. May and November Beans made high February 8, 1951, and the trend turned down.
1951, December 29 will be 150-weeks from February 9, 1949, and this is ¾ of 201½, and is a very important date for a change in trend.
1952, January 15, will be 4-years from 1948, high 436¾, also important to watch for a change in trend.
1953, December 29 will be 202-weeks from February 9, 1949, and this will square the price of 201½ with time. Watch this date for an important change in trend.
You can also use the angles of 2x1 to the right of the 45° angle and the 2x1 to the left, as they again divide the time period into 2 equal parts and are of some value.
If an option finally moves out of this range on the up side, then the angles would begin at the new and higher bottom and move up, but from the point where the price went into new high, or from any important bottom made while it was in the range, especially the last bottom that it made, would be most important. You should then begin an angle at that bottom and continue on up again. Watch when this angle is broken or when time is squared out again with price, which would be important for another change in trend, either major or minor.
Three Ways To Square Time And Price
We can square the range, that is, the number of cents from extreme low to extreme high with time; then square the extreme low price with time; and square the extreme high price with time. When the market passes out of these squares and breaks important angles, the trend changes up or down.
The range that any option makes between extreme high and extreme low can be squared, so long as it remains in the same price range. If the range is 25¢, it squares with 25 periods of time - days, weeks or months. Continue to use this time period as long as it stays in the same range.
2. Squaring Time with Bottom or Extreme Low Price
The next important price to square with time is the lowest price or bottom of any important decline. Example: If the bottom of an option is 25, then at the end of 25-days, 25-weeks or 25 months, time and price are equal. Watch for a change in trend as based on its bottom or lowest selling price. As long as the option continues to hold one bottom and advances, you can always use this time period running across and continuing the time period, noting every time it passes out of the square. Watch especially when the price reaches the third square, the fourth square, and again the seventh and ninth squares of its time period. These squares only occur frequently on the daily or weekly charts, as the monthly in most cases would move out of a range, up or down, before it squared a bottom as many as 7 or 9 times. However, this does sometimes happen when an option is in a narrow range for many years.
Example: May Beans, 1939, July 27, low 67. This would require 67 months or 67-weeks to square the lowest price. Note monthly chart marked "Squares of 44 and 67.”
3. Squaring Time with Top or Extreme High Price
The other important price with which to square time is the extreme high price of an option. The time period must be carried across from the high of the daily, weekly or monthly, and the square of the top price in time must be noted and watched for a change in trend. If the top of an option is 50, then, when it has moved over 50-days, 50-weeks or 50 months, it has reached its square in time and an important change is indicated. This can be determined by the position of the angles from top and bottom. Example: May Soy Beans, 1948, January 15, high 436¾. This requires 436¾-weeks to square Price with Time.
Both major and minor tops and bottoms on all time periods must be watched as they square out right along. Most important of all is the extreme high price on the monthly high and low chart. This may be very high and work out a long time period before it squares the top, in which case you have to divide the price like 8 equal time periods and watch the most important points like ¼, ⅓, ½ and ¾, but most important of all is when Time equals Price.
When you are watching the position of an option, after it has squared out from a bottom or a top, always look up the time period and the angles from the opposite direction. If the market is nearing a low price, squaring out a top, see how its relation is to the bottom as it might be in the second or third square period from the bottom, which would be a double indication for a change in trend.
Squaring Weekly Time Periods
The year contains 52-weeks and the square of this in time is 52 by 52. Therefore, you can make up a square of 52-wide and 52-high; put on all of the angles from 0; then, chart weekly high and low prices of an option in this square. Example: If the low price of an option is 50, then the top of this weekly square would be 52 added to 50, which makes 102 as top of the square. As long as the price stays above 50 and moves up, it will be working in the weekly square of 52. On the other hand, if the option makes top and works down, you would make up a weekly square 52¢ down from the top and 52 over to get the time period.
You can take the past movement of any option, put on a square of 52 x 52, and study the movement noting 13-weeks or ¼, 26-weeks or ½, and 39-weeks or ¾-points on time; and the changes in trend which take place when the price reaches these important resistance points in time and price. You would watch for a change in trend around these time periods.
Squaring Monthly Time Periods
At the time an option breaks a 45° angle, if it is selling at 135 on the 135th month, it is breaking a doubly strong resistance level - a strong angle and a natural resistance level. This would be time and space for balancing at resistance levels or geometrical angles and would indicate a big decline to follow. Reverse this rule at the end of a bear campaign.
On a monthly chart, 12-months complete a year. Therefore, the square of 12 is very important for working out time periods on the monthly chart. The square of 12 is 144 and important changes often occur on even 12-month periods from a bottom or top of an option. It will help, if you use the resistance levels on prices of the even 12's, noting 24, 36, 48, 60, 72, 84, 96, 108, etc. Watch how the option acts on angles when it reaches these important resistance points in price.
Price Ahead Of Time
Why do Grain options 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 price crosses the 45° angle the first time, it has not run out or overcome the square of time with price. Therefore, on the secondary reaction, when it rests on the 45° angle, it is at a time when the price has reached the square of price in time. After that, a greater advance follows.
Reverse this rule at the top of a bull market. When an option breaks under the 45°, a long distance from the base or bottom, it is most important. Many times an option will rest on the 45° angle in the early stages of an advance, then later, on a reaction, rest on it again; then have a prolonged advance, react and rest on the 45° angle again, and then advance to a higher level; break the 45° angle the next time, which places it in an extremely weak position because it is so far away from the base and so much time has elapsed since the price made low. Don't forget: It is most important when angles are broken on the monthly and weekly charts.
This accounts for Grains that have a sharp, quick decline from the top and then advance and make a slightly higher top or a series of slightly lower tops, and work over until they overcome the square of the price range at a comparatively high level and break the 45° angle, then a fast decline follows.
Strongest Angles For Measuring Time And Place
|90° angle||Why is the 90° angle the strongest angle of all?
Because it is vertical or straight up and down.
|180° angle||What is the next strongest angle to the 90° angle?
The 180° angle because it is square to the 90° angle, being 90° from the 90°.
|270° angle|| What is the next strongest angle to the 180° angle?
The 270° angle because it is in opposition to 90° or 180°, from the 90° angle which equals ½ of the circle, the strongest point. 270-months equals 22½-years, which is ½ of 45.
|360° angle||What is the next strongest angle after 270°?
It is 360° because it ends the circle and returns to the beginning degree, and is opposite 180°, or the angle which equals ½ of the circle.
|120° & 240° angles||What angles are next strongest to 90°, 180°, 270° and 360°?
120° and 240° angles because they are ⅓ and ⅔ of the circle. 120° is 90° plus 30°, which is ⅓ of 90°. 240° is 180° plus ⅓ or 60°, which makes these strong, angles, especially strong for measurements of time.
|45°, 135°, 225° and 315° angles|| What angles are next in strength?
45° angle because it is ½ of 90°
135° angle because it is 90° plus 45°
225° angle because it is 45° plus 180°
315° because it is 45° from 270°
The angle of 225° is 180° from 45° and the angle of 315° is 180° from 135°
|The angles of 90°, 180°, 270° and 360° form the first important cross, known as the Cardinal Cross. The angles of 45°, 135°, 225° and 315° form the next important cross, which is known as the Fixed Cross. These angles are very important for the measurements of time and space, or price and volume.|
|22½°, 67½° and
|Why is the angle of 22½° stronger than 11¼°? Because it is twice as much - the same reason that a 45° angle is stronger than a 22½° angle. Again, the angle of 67½° is 1½ x 45, therefore, quite strong when anything is moving up toward 90°. 78¾° is stronger than 67½° because it is ⅞ of 90° and, therefore, one of the strongest points before 90 is reached - important to watch on time, price and volume. Many Grains have important moves and make tops or bottoms around the 78th or 80th day, week or month, but don't overlook 84-months or 7-years - a strong time cycle.|
|Division of $1
| Why are the angles of ⅛ of a circle most important for time and space measurements?
Because we divide $1 into ½, ¼ and ⅛ parts. We use 25¢ or one quarter, 50¢ or half-dollar, and many years ago we had 12½¢ pieces.
While the most important figures of our basis of money are the four quarters, we do use the ⅛ part of 12½¢ in all calculations. Grain fluctuations are based on ⅛, ¼, ⅜, ½, ⅝, ¾, ⅞ and the whole figure. Therefore, any price measurement, as well as time, will work out closer to these figures when changed into angles of time rather than ½ or ⅔-points of price for the simple reason that the fluctuations moving in ⅛ proportions must come out closer to these figures. We use the denominations of 5¢, which equals 1/20 of a dollar, and 10¢, which equals 1/10 of a dollar.
Figuring $100, or par, as a basis for Grain prices and changing these prices to degrees, 12½ equals 45°, 25 equals 90°, 37½ equals 135°, 50 equals 180°, 62½ equals 225°, 75 equals 270°, 82½ equals 315° and 100 equals 360°
Example: When an option sells at 50 on the 180th day, week or month, it is on the degree of its time angle.
Follow all the rules, study and experiment, and you will learn to do by doing, and make a success!