Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is a daily chart for the February 2009 Pork Bellies. On this chart there is a Gann Square of 120 and a stochastic in the subchart. This Gann Square is starting from a significant top. We are looking for market turns to occur when the price reaches a price and time marked by several lines on the Gann Square crossing. I have labeled two points A and B on this chart where this occurs.
At point A, the market moved up to an intersection of two lines and the stochastic was very high close to 100. This all indicates the market is ready to make a top which it did.
At point B, a similar situation occurred again. The market moved up to an intersection of two lines on the Gann Square and the stochastic was very high. This situation indicated the market should make a top at point B which did occur.
Gann Square of 120
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is a chart for gold futures that shows a Gann Square of 144 and a stochastic in the subchart. When starting a Gann Square, you need to select a significant top or bottom to start drawing the Gann Square. On the gold chart, the Gann Square starts drawing at a significant top.
When using the Gann Square, you are looking for turning points to occur at the points on the square where multiple lines cross. You also want to see the stochastic either close to 100 for tops, or close to 0 for bottom. On the chart below, I have labeled three points A, B and C which identify where these situations occur.
At point A the gold market made a top against several Gann Square lines when the stochastic was close to 100.
At point B the gold market made a bottom against several Gann Square lines and the stochastic was very low near zero.
At point C near the end of the chart, the gold market is making a top against several Gann Square lines and the stochastic is close to 100. Over the next few days, the market should move down forming a top at point C.
Gann Square of 144
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The chart below shows the Euro currency with a Gann Square of 144. The Gann Square of 144 is a set of grid lines that is 144 bars wide and 144 price units high. The stochastic momentum indicator is also in a subchart. When drawing a Gann Square, the diagonal lines that draw from the top corners to the opposite bottom corners are the same as a Gann 1×1 price time angle.
When the market is in a down trend, as this market currently is, you should look for counter trend moves to make a top against several lines on the Gann Square and the stochastic should be close to 100 indicating an overbought market. When this situation occurs, you should sell the top of the counter trend swing and gain as the market moves back down. On the chart below, this situation is labeled “A”.
At the end of this chart, there is a similar situation occurring. The letters B, C and D identify the time and price where the price may form a counter trend top against several of the Gann Square lines. These areas should be watched for a top.
Gann Square of 144
end.
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below shows a Gann Square of 144. This is a square grid that is 144 bars wide and 144 price units high. Also on this chart is a stochastic momentum indicator in the subgraph. When using the Gann Square, it is often the case that market turning points occur where multiple lines cross. On the chart below, the soybean prices are in a downtrend. In a downtrend you want to sell into the market tops that represent temporary counter trend up swings.
On the chart below, I have labeled 3 tops that occurred where lines are crossing on the Gann Square and the stochastic is overbought, indicating a top. At points A, B and C on the chart below you would sell the market short.
Gann Square of 144
end.
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Recently the MarketWarrior indicator named “Gartley Pattern” has located a Bullish Gartley pattern in the stock for 3M, symbol MMM. You can see this pattern on the chart below. When this pattern completes near AB=CD, there should be a reversal. We will next take a look at the Swing Projector to see what it says about a possible reversal.
Gartley Pattern
The second chart below, shows the same 3M chart but now the MarketWarrior Swing Projector has been applied. The Swing Projector is showing a warning symbol for a bottom reversal. This is the triangle with the letter “B” inside. This warning symbol means that the conditions for a reversal are met and we should watch for a sign that the reversal is starting. Also notice that the Swing Projector has drawn a support line below the price data. I would like to see 3M fall to this support line, at a minimum, before starting a reversal.
Swing Projector
On the third and final chart below, I have added both the Swing Projector and the Gartley Pattern. Notice that the Swing Projector support price level is below the end of the Gartley Pattern. Based on both of these indicators, the time window for a reversal is set in mid December on the Swing Projector support line but above the Gartley pattern starting pivot which is labeled X. If the price falls below the bottom at pivot X the Gartley pattern will fail. See the time window on the chart below.
Gartley Pattern and Swing Projector
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below is a daily chart for IBM. On this chart I have applied three indicators, the Swing projector, the Pitchfork and the Smoothed Stochastic. We can see these three indicators coming together to indicate there should be a swing top in IBM.
First the Swing Projector is showing the warning symbol for a reversal. This is the red triangle with the “T” inside which indicates the market has met the requirements for an upswing and may form a change in trend at any time.
Second, you can see the price has returned to the Pitchfork Median Line. In the majority of cases, the price will return to the Median Line as seen here.
Third, the Smoothed Stochastic is very high above the overbought level. These three indicators all indicate the price is ready to form a swing down.
Pitchfork and Swing Projector
On the second chart below I have moved the Pitchfork to make a price target for the next swing down. The price should again return to the Median Line. In this case the Median Line is now our price target. This is identified by the arrow on the chart below.
Pitchfork Price Target
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is another example of a market in a strong trend. This time the market is in a strong uptrend. This is a daily interest rate chart. One good way to trade a string trend is to use a MarketWarrior stop and reverse indicator. On the chart below, I have applied a stop and reverse indicator and three simple trendlines. When using a stop and reverse indicator, there will always be a series of small losses and a series of large wins. You must tolerate the small losses to be in the market when the large wins come. On the chart below, you can see where I have labeled 3 “small losses” and also 3 “Large Win”. The trendlines help identify an upper and lower swing boundary based on the previous part of the uptrend. This shows that the stop and reverse captured most of the up trend profits so far.
Stop and Reverse
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Recently the markets have been moving downward in a strong downtrend. An example of this is seen below on the daily eBay chart. When trading in a downtrend, a trader runs the risk of selling into a bear market rally. So you still need a method to sell at the right time even in a strong downtrend. One technique you can use is to apply the MarketWarrior stop and reverse indicator and a momentum indicator. When the stop and reverse indicator is indicating a down trend and the momentum indicator is at a high overbought level, it is a good place to sell short. On the chart below, the letters A, B, C and D identify where these sell-short entry points are located. This technique can provide easy to identify entries into a downtrend.
Stop and Reverse
end.
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Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is a discussion of the Horoscope Index using Raytheon stock. This example will use a daily chart. The Horoscope Index is calculated by comparing two horoscopes. This can be setup for a stock in more than one way. I do not have the incorporation date for Raytheon so I am using the stocks first trade date. I would recommend using the incorporation date when ever possible because they have proven to work better for trading than the first trade dates. But incorporation dates are often very difficult to find. In this example I am going to compare the first trade horoscope for Raytheon and the progressed horoscope for the same location. See the version of this article on the MarketWarrior owner’s page for the exact indicator settings used in this example.
When we use the Horoscope Index, we are looking for instances when the index makes a large fast move either up or down which represents a significant change in the energy affecting a market. The start and end points of such a fast move represent a time window where we can watch for a Change In Trend (CIT). On the chart below, I have identified a time window created by a fast move in the Horoscope Index. You can see on this chart, that during the Horoscope Index time window Raytheon stock started a fast upward price swing.
Horoscope Index 1
On the second chart I have again identified the start and end of a time window based on a large fast move in the Horoscope Index. During this time window the market started a down ward price move that lasted two and a half months.
Horoscope Index 2
It is often the case that the price move that starts close to these large fast moves in the Horoscope Index, end up being fast moves in the stock price. On the chart below I have identified a large fast move in the Horoscope Index that moved from the lower boundary to the upper boundary. The start and end of this Horoscope Index move represent the time window we would be watching. A few bars after the end of this time window a fast drop in the Raytheon stock price started.
Horoscope Index 3
The final chart for Raytheon show the next time in the future when the Horoscope Index makes a large fast move. This occurs in April 2009. This move in the Horoscope Index represents a point in time when the energy affecting Raytheon will have a significant change. We will be watching Raytheon to see of there is a CIT during this time window.
Horoscope Index 4
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