The geometry of stock market profits

w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T w w co m tA ll Ge he w T ~~ Table Biographical or Contents Sketch Acknowledgments Preface Chapter - lntroduction Chapter - Why Chapter - to Cycles 15 Technical Analysis 18 25 Chapter 4- Theory of Geometry 30 Chapter - The Chapter - Proportion Chapter - Trading Basics Chapter - lmpulse Waves m Charts co Hourly Chart 60 65 76 Chapter - Trading Options 82 he Ge tA ll and Harmony 48 97 w T Chapter lO - Cycles Chapter 11- What is a Professional? - Professional w Chapter 12 w Chapter 13 - Common Trading 108 113 Sense Trading Rules 117 Chapter 14- Ten Trading Tips to make you Rich 124 Chapter 15- Comments on Fundamentals and Economics 147 Epilogue 149 Appendix - Trader's Check List 151 Trader's Daily Worksheet 153 Exhibits 154 13 ~ ~==~C~i- ,:_1 co m ll Ge tA he T w w w w Ge he w T w m co ll tA 150 , Appendix Trader's Checklist 1.What is the main trend? Higher bottoms(up), or lower topsandlower bottoms(down)? What ti me perspectiveafe thesetrends?(Hourly, Daily, Weekly,Monthly?) l.c om How long hasthis trendbeenin effect?(Are cyclesreadyto turo?) How manydays,weeks,months,3 1/4weeks,6 1/2weeksfrom last low, (high)? ShouldI go with the currenttrendor wait far an expectedreversaltrend? Ge tA l What vehicleshouldI useto exploit this trend? Stocks- buy dips on stocksmakingnew highs he - geli rallies shorton stockshitting new lows Options - buy options only on ACfIVE LEADERS with volatility w T - Are optionsover/undervalued? w Futures- is the trendso surethat I canuserealleverageandget out with a reasonable w stop? Wheredo I put my stoploss? Price level - last swing or trendline Time periodstop- gelIif no profit within reasonabletime Are thesestopsmentalor mechanical?(actuallyput on the specialistsbooks) 151 - 1rader's Daily Worksheet Dateof last low (high) Price of last low (high) Todayis NumberofTrading Hourssincelast low (high) m NumberofTrading Dayssince last low (high) ll Numberof Weekssincelast low (high) co Numberof Calendardayssincelast low (high) tA Numberof Monthssincelastlow (high) Ge Checktheseperiodsfor knowncycle lengths,numerology,or Fibonaccinumbers(i.e 30, 45, 60,90, 120etc., or 3, 5,8, 13,21,34,55 etc., or 9, 16,25,36,49,64 ) he I Checkfor price squareouts suchas 100daysfrom a price of 100 lx2 w lxl w w T PriceAnglestoday:Numberof dayssincelastswing,multiplied by 2, 4, 8, etc.andaddedto swing low or subtractedfrom swinghigh to get today'sgeometric equivalentof Gann's1 x 1,2 x 1,4 x l angles.(example- 100daysfrom last low of 3000Dow 100x plus low - 3200or 100x plus low = 3400etc., or 3000- 100- 2900or 3000- 400 - 2600).Also, this hourly, weekly,andmonthly 1x , l x8 153 Exhibits On thefollowing pagesexhibitshave beenreproducedfrom Mr lenkins' Stock CyclesForecastNewsletter CO CLLY I - DRUGS w T he Ge tA l l.c om LILLY ELI' w w li a r;ous T e c~ 11ipue.s l' l';:;; I / l' l' " () o/ lf1ea.slA.~e.iX ~OV's nT" of ~Q."'e Gl.WOO.- I 154 , - "'O i ~ ":> ~ì',C" ~ ~ ~ \J ~ "') '-') ~ ~ ~ ~ '-i=- \) r JÇ) ~ ~ ~ Y) , ~ ~ \J ~ ~ ~ ~ ~ -R ) (:I '"' \ ~ ~ - l') - ~ '3 ~ 1"'- ti) " d V j ~ ~ o;!, ~ k ~ I () ~ () ~ 5.~ ~ ~~ '> -+ '"~ "" ~ -\.l ' I.- -(: ~ ~ ~ ~~ J"- ~ ~ ~ -""""', c.f ~ :: () , ,~ Q V1'":>~ \I -é J J o ~ u o v ~ tA o - o ~ w ~ ?h ~ ~o T ~ ; w w ~ o he Ge I '1 :s t >- ~ 'I? m ()~ ~ ~ ',/) - ,.J co l J"~ ~ (I) ~ V) !J') ll ~ tA H w T he Ge o ~ C+o I:J w o w r: -~ ~-J ~~ t-\ ~~ ~~ ~ t- ~ ;;) T"- 1° (I.) ~ :: ~ (n ~ } O -J ~ J ~ ~ C\) t~l.- 'J ~ a'~ ~\ r- \J ~ ~v "\I) \- , I~ - ~ '+ ~ ~ l- ~.L° ""i :j y ~ \I~-) "" li') ~ ~ ~ ~ J "3 o ~ I, J ~ '3 - 1:)'., ,.1 - ~ !' -C ",,' co -, Il -J '" ~ - ~ J ~ ,:- < ~ ~ ! ~ ~ ~~, I ,,1\ m la~~~~§~~~§ :s ,- ~ l''- , :l I 'j I}O "- ~ ~ ~v O r- ~~ :f O V') ~ ~ ~ \ ~i- - ~ ~ ~~ -, ~~~ c ~ i ~ ~ ~ ')(, ~ ~ +- ~ ~ ~ t Q o '" ~ ~ - D '" ~ ~~ f""~ '" \/, '~ f ~ ~ -t '-' \- ~ VI '.' \" ~I i ~ Q) ~ ~ oe::> ~~ k ù ~',J:-.' ~ IÙ ':f -,- { '>-~: ~ ~ ~ () C\) \b ~ I ~ a I - "' oD '~'~~"~:1~~/-:._'r-' '" ,-,/~ ~ -.-;., '."" ~ -,' ~ ~)"r'" ~ - v-6" -' V"-;.?' 1'-' ,~: ~ ~~ : cl' ~ ":'0 '-' ~ " ',,~ '.#~ I , ~ \O ~ -; ~' i p I ~ c > C") r-4 ~u '\ ~ +-, i ~ - I~ cè ~o- ~ ' o c ~ ';=' ~ '\i '4 v ~VJ ~ 'J~ ~v '::;> ~ 0\./1 ~ ~ L .g, ~ o > o- ~~ 4- ~'T' -.', '.:] ~ r ?" ~ ~:r-.tI S) ~ ~ ,.) c!I 'J o '" ~~ ?o ~ ',t : s O ~ c":» '-\I > ~ fuI ~I '1",,' ) ll :~I !~J '. ;il :,,1 :!.:":"Y."-:, 'sn-tII ~ ft = : " i IA '60": ' Ù w ~" = ~ ~: ~ \\ d"'" a I-~.- ~ a - ~ ,,",.:fo~ .~ \00"3;(1 ?'} a- ~ f I ,,~ ~ Ui 'j , , L- '3 o - O- '3~ ~.) ~ > \ () Ù ~ () >-.~, \) ! tJ ~ ~~ ~~ ~ + ; ' ~ ~ ~ ~ t }L ~ ,'-1 .", )0I ' ' ~ , :: , -4 00 ~ - - -~ 00 ~ ~~ ~ w ~ ~ ~ \.'- ~ w T ~ ~ "t\J he , ~ ~ u ~~ ~ ~ ~ I '"' "'- ~\ o~ '5 ~ ~ " ck Cycles Forecast ~ publis~ed approximately every three weeks depending on market activity Annual subscriptions are $300 Trial subscriptions (4 I.SSU.eS~ afe $SO ~e Informatlon and statistics as well as the originaI theoretical concepts utilizecf in this report are presented solely on the basis of the ",:nter Interpretatlon ~f such factors and may noi reflect specific knowledge or fundamental analysis of any of the companies mentioned Any opi";Ions expressed afe subJect to change wit~out notic~ Neith«;,r the inform.ation n~r any opinion expressed herein constitutes a repr«;,~nt.ation or solic;i~atlon f.or tne purc~ase or sale of any secunty From tlme to tlme the publlsher, hls assoclates or members of his family have a posltìon In the secuntles mentloned In th!5 reparto " ~~A""'",-;;1\~~'if - ~~ ~ ~ ~~ WIitten-.and-P.l1blishedJ Michael S Jenkins -~ - - - - 81 8IW - ~- ~ _-"":::~dvis 160Broadway, East BIdg" 7th FIoor, New York, N, Y, 10038,TeIephone: (212)285-0050Volume 3, Issue - October 15, 1987 Dow 2355- A major stage L3~~ I ~~O crossroads is now at hand If the market cannot a significant rally of at least 150 Dow points within the next two weeks, the Bull ~~ market continue to immediate crash to 1850 pOSS1 Y go market will and break o be aver 2290 watch f the Dow regains high into Should the far an 2520 it will the second weck he final a maJor t1me cyc e ow 15 pOSS1 Y near, to believe that the recent drop could have 1n d happened if the underlying technicals were really strong enough to suppor t a rally to new highs later this year It seems much more likely that the 50 year cycle mentioned in previous issues has hit and we will now enter a one year Bear Market prior to any further major advance I think it will be easy to know the outcome anvtime after October 20th as the enclosed activity calendar seems extraordinarily bullish, but could al so be a bearish cycle inversion with every day down if further lows are made after the 20th In terms of cash available the market is very liquid; in terms ofpsy~holo~.I~ it is totally illiquid and quite dangerous As of today the Transports and Industrials have both broken to new lows and thus render ed a "Dow Theory" Bear Market seI l signal This should give one concern, however, I aro stilI skeptical because we have just reached the 200 day moving average which almost always gives rise to a good rally, and additionally the market was so high above this average during this tremendous move and the violation of prior lows in the averages may not be as significant as experienced in prior less parabolic Bull mar~ets since it is stilI thcoretically possible far the market to yet go to new highs starting next week, the jury is out unti l we either break 2300 downside or 2500 topside I would _suqqest sellinq out and only buying again if the market holds far three fuI l days without making a new low, and we get a rally with breadth of at least 1100 stocks up on the day lmEor!:ant cvcle turns seem to be near October 19-2Qth 22nd,/ he Ge tA ll O~ Although difficul t co ~ tV\"i%~t~!:l- It m 5'0r;:; /J of November Ln ~_~~~, alI cycles point down hardafter -e~pej""ill mid-Novemberand won't even remotelv rallv-a-:falT-until eadv~(ofJ March1988 , I f ' l l , ' bl w w w T - ;;'7th, and' November and a major favor a good top by November but 5th Odds certainly low October no later 19thY than ; the" -?-.~~~~ Stock Cycles Forecast is published approximately every three weeks depending on market activity Annual subscriptions afe $300 Trial subsc:iptions (4 issues) afe $50 The information and statistics as well as the originaI theoreticaI concepts utilized in this report afe presented solely on the baslSof the writer's interpretation of such factors and may not reflect specific knowledge or fundamental analysis of any of the companies mentioned Any o,pinions expressed afe subject to change without notice Neither the information nor any opinion expressed herein constitutes a representation or soli