Price Time Volume Investing

I have not been a big fan of Gann “0″ angles but have found a case where they work with the Airline index. In theory, the zero angle can work in various time frames and with bars of various durations. Many serious traders who have studied Gann think they work at times. This is the first case I found it to work (other than examples provided by others). I do confess that I have not looked that hard in the past. Zero angle may be best used for long term charts that have been up and down without any real trend.

Zero angles are created by using points per units of time (this case uses points per month). The angle originates at a significant high or low on the chart. In this case I used the 1998 high. Because I don’t have data going back before 1988, I cannot tell if this is an all-time high or only the high in the past 20 years. When possible, it is always better to look back to the early 1900s on charts to see what occurred throughout the past 100 years. Of course Airline stocks could not have gone back that far - but it is a good rule of thumb.

On this example, price dropped and bounced off the one point per month angle twice before slicing through the angle in March. Price then magically bounced off the one point per two months line. I don’t know why it does this. But others have provided examples in the past and it appears to be something to consider when trading an issue. One certainly would not put a buy order in at the 1:2 angle when price breaks through the 1:1 angle. But if price does bounce at the 1:2 line then it is a good place to consider as support for some time period. There are a number of other interesting geometric relationships on this chart to consider - but I will let that up to you to decide what is interesting.

I have also added the one point per month angle from the high. This line should be considered as resistance for anyone who was lucky enough to buy the airlines near the low. Long term, I would not expect price to exceed the 2:1 angle (this assumes airlines eventually recover to be strong enough to challenge the old high).

As a note: Premium Content subscribers will see this chart each week as I have added a Transportation page to track air freight, shipping, trucking, and the railroads. Each week I update charts within the following sectors and industries for Premium Content subscribers: Financial, Energy, Commodities, Technology, Retail, Housing, and Transports.

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