Price Time Volume Investing

Here is a workup of my slope lines based on the range of the five waves from Oct05 bottom to the Oct07 top. As an educational exercise relating to what works for me, here as some the relationships I am looking at.

• Price went through the originating 50/50 point in Oct06. This is a good thing to see to confirm I have a valid range.
• Initial thrust down in Oct07 was greater than the 8:1 down angle and followed that angle down for a significant period of time.
• Price bounced off the 8:1 up angle in Dec07.
• When price bounced, it ignored the 4:1 down angle. This happens more often than not. Sometimes the 4:1 or 1:4 effects price but usually it does not.
• Price stopped at the 2:1 down angle.
• Price dropped straight down to the 2:1 up angle quickly. Price ignored both the 4:1 down and 4:1 up on the way to the January low.
• Price respected the 2:1 up angle until late February before breaking to the 1:1 up angle.
• Currently, the move off the March low is at the 8:1 up angle. The problem is that it gave up this angle and moved back to the 4:1 before the recent bounce back up. My opinion is that this is too early in the run to give up the 8:1… but maybe it will work itself out in the next couple weeks.
• The next natural resistance here is the 1:1 red down angle which usually will be significant resistance the first time it is attacked.

The concept with these angles is to provide an idea of where price is going. When we were dropping in Feb-Mar, the price to watch for a turn was the 2:1 and 1:1 blue up angles. Both effected price as expected and provided an edge for traders watching those price levels.

Chart courtesy of Stockcharts.com

Post Modified: July 3rd, 2008 at 12:21 am

Tags:   Elliott Wave Analysis · Gann Angle Fan · Market Cycles · Slope · Square of Range · Standard and Poor's 500 (S&P500)No Comments