This Sunday, let's take a look at some attempts to do a bit of geometric drawing of squares on the XJO chart. The objective being this - would squares be any good to tell us something about the XJO, and to see whether we can find a particular date that has some convergence from the squares.
Let's go back in time and take a look at the XJO sometime in August 2011 as shown in the chart below. On a chart of XJO drawn to squared, we will identify a top at point A, and a low at point X, we then proceed to draw the square box ABCD, to get the end of the square at point D. Let's take a good look at point D, where we find the green arrow from point D was only 1 day before the lowest of the XJO where there was a short term change in trend from the low the next day(the biggest drop ). We see that the end of square box D marked the change in trend, just one day earlier than the actual.
Ok, let's move further ahead, and take a look again at the next part of the XJO where again the square box ABCD is drawn, high at A and low at X.
Again, we see the arrow from point D where the square was completed, showed a minor change in trend in the XJO as marked, showing a short term top.
Ok, let's move along, to yet another part of the XJO and draw the square box ABCD again, with A being the high and X being the low, and let's observe what happened to point D. We draw the arrow from point D, and we can see that point D, the end of the square box, showed a change in trend again, which indicated a short term top.
So far, we have just drawn 3 square boxes and discovered that the end of the square box D would indicate a short term change in trend on the same day or just a day earlier. If we keep on drawing these square boxes, we can find that they indicate this propensity to show the change in trend date, plus minus a day in most cases.
So, knowing this, we can draw square boxes where the point D will move into the future, to indicate the possible change in trend dates. If we can find a convergence of point Ds' all pointing towards a single date, we have a bit more confidence that the date with the convergence carries a bit more weight than usual as a possible change in trend date.
So with this in mind, let's take a look at two more square boxes drawn ont he XJO chart, with the squares as ABCDs and the high being at A, and the low point X as marked on the chart.
What we find is that point D from these two square boxes are now pointing at a time in the future, which we can read off the squared chart as 25th October.
Let's keep a watch on that date.
Drawing squares does tell a story or two, and is not just for the kiddies:)
(20min delay)