Archive for the ‘Square of Nine’ Category
In Harmony with Nature
To most people, price action on a stock is often regarded as a random event. Many years ago, W.D. Gann recognized that price action was not random. He realized that price action was related to the square root.
Take a significant price high (or low). Express that price as either a 3 or a 4 digit number. For example, $43.25 would be 4325.
Take the square root. Subtract 2. Re-square the resulting number. Repeat. Repeat. Each time, draw a horizontal line across the chart at the calculated price. If dealing with a significant low price as a start point, you will add 2 each time.
Take the significant price start point and take the square root. This value will be your time factor (in chart bars). Draw a vertical line at these intervals. For example the root of 4325 in round figures is 66. Every 66 bars on the chart, draw a vertical line.
Here is an example of Micron Technology (MU) using a significant high as a start point.
Notice how many of the subsequent high and low swing points touch (or nearly touch) one of the horizontal lines. Such is the harmony between price action and Nature.
Square of Nine
Take a significant low point on a stock’s chart. Calculate the square root of that value after converting it to a 3 or 4 digit number. For example, suppose the low price was $3.00. Express that as 300 and the square root is 17.3, which can be rounded off to 17. From the low point on the chart, add a vertical line every 17 trading days (or have a software program do it for you).
Next take the square root of 300 and to that value add 2. Re-square the sum. Example, 300 root = 17.3. Add 2 gives 19.3. Squaring that value gives 372 or $3.72. Draw a horizontal line across the price chart at $3.72. Keep repeating this exercise and keep adding horizontal lines.
After some hard work, you will have something that looks like:
The above chart is that of Bloom Energy (NYSE:BE). Note the dark arrows on the chart. These are times when price action exactly hit a horizontal line. I did not add all the lines to this chart because I wanted to keep it clean looking. Of course, you have to also use things like MAC-D and a moving average to help with your decision making. But, the Square of Nine lines certainly add to one’s confidence. As for here and now, the MAC-D is hinting that it might wish to cross over negative. Meantime price is having trouble penetrating a horizontal line. A clear signal to be cautious.
This is exactly the type of material you will learn about through my Astrology Letter subscription. No subscriber is ever with me forever. Once people learn the basics of Astrology and learn how to apply it, they tend to move on and fly solo knowing that they now have some powerful astrology techniques to take their trading and investing to a new level.
