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T-92
Applying Technical Analysis
GET



The Fear And Greed Cycle ”
It is extremely difficult to predict the fear and greed behavior of traders in advance. However, we can
overcome this difficulty in a roundabout fashion.

When a market makes a major low or bottom which results in a very large price swing, it is reasonable
to assume that the general public has expressed their emotions to an extreme. In other words, at a major
top, the greed of the traders has peaked and the subsequent market decline is due to the fear of the same
traders. Having defined this, we can go one step further and state the following: When a major top is in
place, the majority of trader emotions (greed, in this case) are synchronized for that moment in time.
Thus, Gann angles from such a major top, originate at the infancy of the next trader emotion cycle
phase; Gann angles from a major top can better define the larger emotion cycle than Gann angles from a
minor top.

In simple words: Gann angles originating from a major price swing are more useful in defining future
price swings than Gann angles originating from a minor price swing. The GET software provides
more importance to the major Gann angles.


Defining Price Swings ”

This leads us to the question of defining major price swings. It is easy to look at a price chart and say
“this is a high,” or, “this is a low.” Our task was to teach the computer the same.




By measuring the percentage price swing from each high and low, GET software defines price pivot
points as: P= primary, J = major, I = intermediate, and M = minor. (Illustration is shown above)



T-93
Applying Technical Analysis
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Gann angles originating from primary lows/highs have higher priority in defining the future path for the
trader™s emotional cycle. The next in line will be angles from major highs/lows, followed by the interme-
diate and minor pivots.

In general all Gann angles could provide support and resistance for price swings. However, the higher hi-
erarchy angles, such as angles from primary or major pivots, typically provide a more sustained and
stronger support/resistance.




T-94
Applying Technical Analysis
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USING GANN ANGLES WITH ELLIOTT WAVES
(for Waves 3 and 5)

When the market is moving up in a five wave
impulse, draw Gann angles going up from the
previous PRIMARY PIVOT HIGH. The angles 5
should provide resistance for the tops of wave three
and Wave Five.



3




P 4
1


2



2




4
1


P
3



When the market is moving down in a Five
3
Wave impulse, draw Gann angles going down
from the previous PRIMARY PIVOT LOW.
The angles should provide resistance for the
bottom of Wave Three and Wave Five.



T-95
Applying Technical Analysis
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USING GANN ANGLES WITH ELLIOTT WAVE
3
(for Wave Four)

When the market is moving up in a Five Wave impulse,
draw Gann angles going up from the previous PRIMARY
PIVOT LOW. The angles should provide SUPPORT
for the BOTTOM of Wave FOUR.
4
1



2




P

P 2




4
1




When the market is moving down in a Five Wave
impulse, draw Gann angles going down from the
previous PRIMARY PIVOT HIGH. The angles should
3
provide RESISTANCE for the TOP of Wave FOUR.




T-96
Applying Technical Analysis
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OPTIMIZED GANN ANGLES




Optimal Gann Angles For
TRW (Stock)




In the past versions, we provided a pre-built scale for Gann Angles for selected U.S. com-
modities. This created two major drawbacks:

1) The built in scales could not be altered to allow for day to day volatility of the
markets.

2) Gann angle scales were only available for selected markets.

We have now added our routines which allows the user to find the optimal angle for any
market loaded on the screen including Stocks, Spreads, Cross Rates and Foreign Issues.
The routines also include volatility adjustments.

The optimized scale is printed on the chart and can be saved for future reference.




T-97
Applying Technical Analysis
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GANN BOX ANALYSIS
One of the drawbacks in most programs is the lack of adequate timing studies. We have at-
tempted to meet this need with studies such as the Time Clusters and the GANN BOX
ANALYSIS. The word Gann scares a lot of traders simply due to its complexity and no
clear direction on how to use it. In the past two years, we have researched this field quite
extensively and have found precise ways to use the Gann Box. The software allows you to
draw Gann Boxes in various configurations. So users that follow the traditional Gann
methods can still use it as presented in most of the published materials. However, we have
used the results of our research and added the PRE-FIXED GANN BOX.
The major criteria we found in our research was the Ratio of the box Rise/Run should be 1
or multiples of 1 such as 10, 20 etc.; Gann Boxes are drawn from Major Pivot Lows or
Highs. The amount of price from the pivot is the RISE and the number of bars from the
pivot is the RUN. The box shown below uses 450 bars (RUN) and 450 price from the pivot
low which is the (RISE). The ratio of RISE / RUN = 450/450 =1.

RATIO = RISE/RUN = 450/450 = 1

RATIO = RISE/RUN = 360/360 = 1




©
PRICE

©



©
RUN = # BARS RUN = # BARS
The preferred ratios (in order of importance) are as follows : 1, 2, 5,
10, 20, 40 and (2.5 as a last resort).

T-98
GET Applying Technical Analysis

Our research on all markets and on all time frames show that if you used the
following ratios (in order of importance) 1, 2, 5, 10, 20, 40 and 2.5 (as a last
resort) and draw Gann Boxes from Major Pivot Lows or Highs, the angles gen-
erated provide Support and Resistance levels as the market progresses into the
future. In addition to the ratio, this technique also requires you use a Fixed
Time interval of 45, 90, 180, 360 etc.; The following boxes show some of the
other ratios that can be used.
GANN BOXES drawn with various ratios.
RATIO = RISE/RUN =
1800/360 = 5 RATIO = RISE/RUN =
900/360 = 2.5 (LAST RESORT)




RATIO =
RATIO = RISE/RUN
RISE/
= 900/180 = 5
RUN
=3600/
360 = 10




RATIO = RISE/RUN
= 1800/180 = 10



Since the Box is drawn in advance, it provides a pathway or a road
map for the market. The combination of the Fixed Time Intervals
and the Pre-Fixed ratios provide amazing end results.

T-99
Applying Technical Analysis
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As explained on the previous page, we use pre-fixed time (bars) length of 90, 180, 225,360, 450
etc. along with pre-fixed prices to provide the BOX RATIO of 1,2,5,10,20,40 and 2.5 . By using
the PRE-FIXED Ratios, the underlying Math stays the same regardless of the Box Size. In the ex-
amples below we use various boxes as the market progresses.

Here we start out Now we switch to a
with a 90 by 1800 90 by 3600 Box
Box with a ratio of with a ratio of 40.
20.

«
«




This Box provides sup-
port for the prices
marked by the Arrow. This new Box continues
to provide the same sup-
port but with a different
angle.




New Box
New Box
180 by 3600
180 by 1800
Ratio = 20
Ratio = 10


í í
«
«




Again the same prices
are supported by yet an
other angle. Also no-
«
tice the new price resis-
tance marked by the
new arrow.



T-100
GET Applying Technical Analysis

As the price range expands, the user simply draws a larger Box that confirms to the Pre-
Fixed Ratios. The underlying math automatically adjusts itself by shifting angles
around but still providing the same Support and Resistance as the market
progresses.




í

« í




New Box
225 by 2250
Ratio = 10

ARROWS INDICATE THE SAME PRICE REVERSALS PROJECTED BY
DIFFERENT ANGLES FROM BOXES WITH VARIOUS RATIOS.



Long 95 Mar
Short 95 July
WHEAT SPREAD




T-101
Applying Technical Analysis
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March 95
Bean Oil




New Box 360 by 3600
Ratio = 10

í

« í




ARROWS INDICATE THE SAME
«
PRICE REVERSALS PROJECTED
BY DIFFERENT ANGLES FROM
BOXES WITH VARIOUS RATIOS.




Gann Boxes drawn with these ratios work on all Commodities, Stocks and Spreads
using Weekly, Daily and 60 minute charts. The Gann Box also works well with Elliott
Wave Analysis.

T-102
GET Applying Technical Analysis




APPLE
Computer




March 95 Yen
- 60 min


T-103
Applying Technical Analysis
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USING PRE-FIXED GANN BOX WITH ELLIOTT WAVES.
The PRE-FIXED Gann Box can be used along with Elliott Wave analysis. There is not
much to explain on how to use this combination. Remember the public service announce-
ment that says "Here is your Brain, here is your Brain on drugs, Any questions?". Like-
wise, here are two charts with Elliott Wave analysis and the Pre-Fixed Gann Box.
ANY QUESTIONS?




FEB 95
Live Cattle




MAR 95
SUGAR




T-104
Applying Technical Analysis
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REGRESSION TREND CHANNELS
This is a simple but very effective study. The idea is to draw an upper and lower channel by using a Stan-
dard Deviation of the prices. It is similar to the Bollinger Bands which draw bands using standard devia-
tions of a moving average. However, instead of using a moving average, we are simply using the Linear
Regression line of a swing identified by you.




Upper
Channel
®




«
Lower
© Channel

«
Linear Regression
Channels drawn by
Line using the Mid-
using a 2.5 Standard
points of data.
Deviation of the
Midpoints and the
Regression Line.

The chart on the left shows two market swings from low to high. The line drawn through the middle is a
standard Linear Regression line using the midpoints of the swing. The chart on the right shows the upper
and lower channel drawn using 2.5 standard deviation of the Regression Line and the Midpoints. The Re-
gression Channel menu allows the user to calculate the Trend or Regression line by using the midpoint,
high, low etc; It also allows the user to set the amount of Standard Deviation for the Upper and Lower
channels.
In addition, a Pearson's r is included that shows how well the Linear Regression fits the data.




T-105
Applying Technical Analysis
GET


USING THE REGRESSION TREND CHANNELS
When the Market is trending or just trading with a bias in one direction, the Regression Trend
Channels can be used to define the upper and lower boundaries of the market. As long as the mo-
mentum stays in the same direction, the market tends to stay within the channels. As soon as the
market changes bias, the prices break the channel signalling the end of the move.
The primary functions of the Regression Trend Channels are A) catching the end of a Wave Two
to trade the Wave Three phase B) Protecting profits inside a Wave Three C) Entering at the end
of a Wave Four for the Fifth Wave sequence D)Protecting profits in a Fifth Wave and entering a
trade in the opposite direction at the end of a Fifth Wave. The following examples will make this
very clear.



Take profits at the
Buy at the end of
end of Wave 3
Wave 2


¬


«




Buy at the end of Sell at the end of
Wave 4 Wave 5
í


«




Take profits at the
end of Wave 5

T-106
Applying Technical Analysis
GET



T.J.™s Web Levels
The T.J.™s Web Levels are special price arrangements based on Fibonacci relationships from the
previous weeks market action of that stock. Three areas are calculated for the following day:
neutral zone, resistance area, and support area.

NEUTRAL ZONE: This zone is usually narrow and is a few points above and below the
previous weeks close. When the prices trade above the neutral zone,
the stock is considered to be strong, and vice-versa.

RESISTANCE AREA: Above the neutral zone, there are four resistance levels called RA,
RB, RC, and RD. These are Fibonacci resistance levels based on the
previous weeks stock actions.

SUPPORT AREA: Below the neutral zone, there are four support levels called SA, SB,
SC, and SD. These are Fibonacci support levels based on the previ-
ous weeks stock actions.




R R
RD
E E
S S
I I
RC
S S
T T
RB
A A
N N
C C
RA
E E

NZUP
PREVIOUS
NEUTRAL ZONE NEUTRAL ZONE
NZDN
DAYS CLOSE


SA
S S
U U
SB
P P
P P
SC
O O
R R
T T
SD




T-107
Applying Technical Analysis
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On the next page is an illustration of how to use T.J. Web Levels. T.J.'s Web Levels are
shown for McDonald's stock based on Friday's close.
The Web Levels suggest support and resistance levels for the next trading day. If the
stock price rallies on Monday, the last resistance level (RD) suggests this stock should
not trade past the $34 level. Equally, the last support level (SD) suggests that this stock
should not trade past the $30 level. On Monday, McDonald's stock traded to a high of 31
3/8 and to a low of 30, containing stock price movement to within this day's SA and SD
Web Levels.
This example has been given to illustrate the principle behind T.J.'s Webs. You cannot
expect these Web Levels to hold true all the time, but if used on a continual basis they
willFRIDAY'S CLOSE good support and resistance.
(1) consistently provide (2) TRADING ACTION FOR MONDAY



T.J.'s Web resistance levels
based on Friday's close




neutral
levels

high


This is where
this stock
actually
The T.J.'s Web Levels
based on Mondays traded to
close are shown on Monday
on the next page. low

T.J.'s Web support and resistance
held at the high and the low end range
T.J.'s Web support levels
for the day.
for Monday




T-108
Applying Technical Analysis
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The T.J.™s Web Levels can be used with intraday indicators such as the slow 21 bar sto-
chastics and the Elliott Oscillator on a five minute bar chart. When the Elliott oscillator
gives a true Elliott divergence, as described in the earlier in this section, and the stochas-
tics is above the 80 level, a short signal can be initiated at a T.J.™s Web Level using the
next Web Level as the stop. A buy signal works exactly the opposite.




(4) TRADING ACTION FOR TUESDAY
(3) MONDAY'S CLOSE


T.J.'s Web resistance levels based
on Monday's close




high



neutral
levels

This is where the stock
traded to on Tuesday
low




T.J.'s Web neutral levels
held at the high and low
T.J.'s Web support levels
end range for the day.
for Tuesday




T-109
Applying Technical Analysis
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Extended Fibonacci Time Ratios
1.62 X 2.62 X
Initial Initial
Time Between
Time Time
Two Swing Points


P or J


P or J


Extended Fibonacci Time Segments
Between Two Major Highs




Extended Fibonacci Time Segments
Between Two Major Lows




P or J


1.62 X 2.62 X
P or J
Initial Initial
Time Between
Time Time
Two Swing Points




T-110
Applying Technical Analysis
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Extended Fibonacci Time Ratios



1.62 X 2.62 X
Initial
Time Between Initial
Time
Two Swing Points Time




Fibonacci Time Segments
P or J
Between A Major High & Major Low




P or J




The general idea is to take the initial time between two Primary or Major Pivots. These
pivots can be identified by the user or from the labels generated by the software from the
Pivots Menu.

This initial time is extended to the future using various Fibonacci ratios. We suggest 1.62
and 2.62. However, you can use any combination. If you do not like the preset ratios we
have added, you can enter your own values such as 3.79 , 2.94, etc.

The theory is to look for a potential change in trend at these future extended time periods.




T-111
GET Applying Technical Analysis



FIBONACCI TIME CLUSTERS
Take the time distance (number of bars) between two pivots and extend (project) ratios
of this time distance to the future. You will notice that many of the future pivots (change
in trend points) occur at these extended time periods.



QUESTION:
What ratios should I use? Do I use all the pivots or just the Primary and Major ones? Do
I use High to High swings or Low to Low swings?

ANSWER:
A very large number of traders use this method. However, each trader uses different ratios,
different sets of pivots, and different types of swings. You can basically use any
combination and still obtain accurate projections some of the time. From our research, we
have not found any one combination that works best all the time.


Extended
Extended
Ratios
Ratios
Time Distance
Between Two Pivots




Potential time
periods for change
in trends




Extended
Extended
Time Distance
Ratios
Ratios
Between Two Pivots

T-112
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QUESTION:
Then how does one use this technique?

ANSWER:
Use all reasonable combinations, and look for a group of Clusters. Lets assume numerous
traders are using this study, each using different ratios, pivots, etc. Regardless of which
combination is used, the collective projections of all traders will result in certain areas
where a majority of the traders will get a CHANGE IN TREND PROJECTION.

Thus the areas identified by a group of Clusters define such collective projection levels.


Future Projection Using
Various Methods
Time Distance
Between Two Pivots


Method A

Method B

Method C

Method D

Method E

Method F

Time Distance
Between Two Pivots


Collective Results


Areas where a majority of methods
collectively project a future
change
in trend.




T-113
GET Applying Technical Analysis



Example - Fibonacci Time Clusters

The chart shown below is the Daily December 1989 D-Mark. The Time Clusters were
generated by using the following:

# All Primary and Major Pivots.
# Fibonacci Time extensions of 1.62 and 2.62 with 100 % weighting.

# High to High Swings plus Low to Low swings
# Minimum 10 bars in between pivots
# Maximum 100 bars in between pivots.

For more details on the above, please see next page.




Circles show Change in Trends
that were projected by the
December 1989
Fibonacci Time Clusters.
D-Mark



Projection For:
Future
Future
C.I.T
C.I.T
2/08/90
1/11/90




Fibonacci Time Clusters.




T-114
GET Applying Technical Analysis



FIBONACCI EXTENSION PRICE CLUSTERS

Fibonacci extensions and retracement levels are used by just about every trader. Sure they
may all have their own unique methods of applying them, or their own secret Fibonacci
ratios.

Regardless of the numerous methods used, the collective projections of all traders will
result in certain price levels where a majority of the traders will get the same support or
resistance projections. The software can identify such collective levels by way of
Clustering.
2.62 x Z




Fibonacci
1.62 x Z
2.62 x Y Extension
Cluster

1.0 x Z
1.62 x Y




1.0 x Y
Z


Y




T-115
GET Applying Technical Analysis



Example - Fibonacci Extension Price Clusters
The chart shown below is the Daily March 1992 Swiss Franc. The Fibonacci Price
Extensions were generated by using the following:

$All Primary and Major Pivots.
$Fibonacci Price extensions of 1.62 , 2.62 and 4.25 with 100% weighting
using Rallies.


Using 1.62, 2.62, & 4.25
March 92
Fibonacci Ratios
Swiss Franc
as of 11/04/91 Major Resistance
Level at 7360
Cluster of Fibonacci
Price Extension Identified
By GET.




Projection made on 11/07/91
when price was at 68.17




Projection: March 92 Actual High 73.93 on 1/7/92
2 Months Later
Swiss Franc
as of 11/04/91
The initial cluster of 7360 was
projected by the software as early as
November 7th, 1991.

Result:
Two months later, the March Swiss Initial Projection made
from here to 73.60
topped out at 73.93.



T-116
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FIBONACCI RETRACEMENT PRICE CLUSTERS

Just like the extensions, traders all around the world use Fibonacci Price Retracement
levels to determine support and resistance levels. Different traders use different retrace-
ment levels and also calculate from different swing levels.

Regardless of the numerous methods used, the collective projections of all traders will
result in certain price levels where a majority of the traders will get the same support or
resistance projections. The software can identify such collective levels by way of
Clustering.




38 %
50 %
62 %

38 %

38 %
50 %


50 %
62 %



62 %
FIB RETRACEMENT
CLUSTER




T-117
GET Applying Technical Analysis


Example - Fibonacci Retracement Price Clusters
The chart shown below is the Daily June 1992 Crude Oil. The Fibonacci Price
Retracements were generated by using the following:

$All Primary and Major Pivots. Fibonacci Price retracements of 38%, 50%, 62%
and 75% with 100% weighting using Declines.


June 92 Crude Oil Using 38%, 50%, 62%, & 75%
Fibonacci Retracements
on 1/22/92

20.10 to 20.40 level
Major Retracement Cluster
Identified by GET




Projection: June 92 Crude Oil
on 2/25/92
Actual High
The initial cluster of 2010 to 2040 was
at 20.00
projected by the software.

Result:
The actual high in the June 92 Crude Oil
was at 2000.




T-118
GET Applying Technical Analysis


Retracements, Extensions, and Elliott Extension Buttons:
Three different types of Price Clusters can be calculated. They are graphically dis-
played below:

Retracements Extensions Elliott Extensions

Z + 262%
262% of
Z added to
Retrace-
Swing ment Low
High
Z + 162%
162% of
Z added to
Z + 100 % Retrace-
ment Low
Swing
Swing
High
High

Z
Z
Retracement
Low
Swing Swing
Swing
Low Low
Low
Retracement of Fibonacci Extension Fibonacci Extensions
Swing Range added on to the end added to the end of
of the Swing a Retracement. These are
normal Elliott Wave type
extensions as used in
Waves 1,2,3, etc.




T-119
GET Applying Technical Analysis



ANDREWS MEDIAN LINES
Dr. Alan Andrews developed a technique called Median Lines. His method by itself is
used as a complete trading tool by many traders. Over the next few pages we will discuss
the application of Median Lines in conjunction with Elliott Wave Analysis.

To draw a Median Line, you need three points. Once three market points are identified,
you are ready to proceed with Median Lines. The first point is called the Base.






BASE 

ƒ
Connect a straight line between points 2 and 3. Find the midpoint of this line.




MIDPOINT
í

BASE 

ƒ
Draw a line connecting the Base Point with the Midpoint. This line is called the Middle

Line.




«
MIDDLE LINE

BASE 

ƒ
T-120
GET Applying Technical Analysis


Draw lines from point 2 and point 3 that are parallel to the middle line. These lines are
called the Upper and Lower Parallel Lines.

UPPER PARALLEL
LINE



MIDDLE LINE

LOWER PARALLEL
LINE
BASE 

ƒ

The downside Median Line is exactly the opposite of the upside Median Line. Once again
three points are found. The first point is the Base Point. Find the Midpoint on a line
between points 2 and 3. Connect the base (point one) through the Midpoint. This line is
the Middle Line. Then draw lines from points 2 and 3, parallel to the Middle Line. Again,
these are referred to as the Upper and Lower Parallel lines.



ƒ UPPER PARALLEL
LINE

BASE



MIDDLE LINE




‚ LOWER PARALLEL
LINE




T-121
GET Applying Technical Analysis


Per Dr. Andrews rules, the prices will do one of two things as it approaches the Middle
Line:
1) The price will reverse at the Middle Line
OR
2) The price will trade through the Middle Line and head for the Upper Parallel
Line and then reverse. Some examples of both situations follow:


REVERSE FROM MIDDLE LINE





BASE

ƒ





§




REVERSE FROM MIDDLE LINE



BASE

ƒ





§Reverse



T-122
GET Applying Technical Analysis




§R e v e r s e
GAP THROUGH MIDDLE LINE






ƒ

BASE 




Extended Parallel Lines

In some instances, the standard parallel lines have to be extended. This is necessary to
accommodate fast moving markets. Again, the standard median line is drawn. The Up-
per and Lower parallel channels are drawn. You are then ready to extend the normal
parallel lines. Find the distance from the Middle Line to the Upper Parallel Line. Us-
ing this same distance, draw a new Parallel Line above the Upper Parallel Line. The
same procedure is used for the Bottom Parallel Line. If you are using the Pitchfork
tool from the Global Toolbox, this can be done by simply turning on the ratios over
100. This will automatically measure the distance from the Upper and Lower Parallel
lines (which is the 100% ratio) and draw the Extended Parallel Lines off of both the
Upper and Lower Parallel lines.




T-123
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UPPER PARALLEL
LINE


MIDDLE LINE




LOWER PARALLEL
LINE




Extended Parallel Lines

UPPER EXTENDED
PARALLEL LINE




ô
UPPER PARALLEL
SAME




LINE

MIDDLE LINE




ô
SAME




ô
LOWER PARALLEL
LINE
SAME




LOWEREXTENDED
PARALLEL LINE




ô
SAME




T-124
GET Applying Technical Analysis


It may be necessary to draw extended Parallel Lines to catch the top of Wave 3. This
is usually the case when the market really gaps through on a very powerful Wave 3.



UPPER EXTENDED
PARALLEL LINE
UPPER PARALLEL
Wave Ž LINE




Wave Œ




Wave 




Wave 




Wave Œ

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