This is a VERY long post of mumbo jumbo, so please skip if you are not interested in mathematical charting or if you are short of time, thanks.
The legendary trader WD Gann said, " Mathematics is the only exact science. All power under heaven and earth is given to the man who masters the simple science of mathematics. Emerson said, " God indeed geometricize." Faraday, another wise man said." There is nothing in the universe but mathematical points." ( The basis of my forecasting method...WD Gann ).
Are there any element of mathematics that we can discern from the XJO that can help us locate possible turning points in the markets?
To do this, I have drawn a chart of the XJO since June 2010 as follows:
The market shown is divided into 5 separate sections, comprising alternating trepezoidals as marked with unmarked sections of uptrends. Thus for example, the first section is formed by AB-CD forming a trapeziodal pattern where legs AB and CD are downtrends or retracements downwards. The second section is an uptrend section which starts from D to E. You can see that the pattern alternates between a trapezoidal section and then an uptrend section, so that the 3rd section is a trapezoidal pattern EFGH and the 4th is an uptrend H to I and the 5th section ( the last section ) is a trapezoidal IJKL section again.
The Balance Points between the top and bottom of the ranges eg AB, CD , EF, GH, IJ and KL are drawn as shown and a red vertical line is drawn through each Balance Point and marked 1,2,3,4,5 and 6.
Let's consider the various retracement sections
SECTION 1 ===========
1. The peak A to the vertical line is 7 days and the bottom B to the vertical line is also 7 days since the vertical line is the Balance Point.
2.When this Balance Point is achieved, the point B becomes the turning point from which an uptrend follows.
3. Similarly, this applies to range C D ( 8 days peak to vertical line 2, and 8 days bottom to vertical line 2).
4. If the pattern is balanced and geometric proportion is achieved, the top of the trapezium AC ( peak to peak ) is measured as 49 days, while that of low to low BD is 50 days, just one day off from the 49 days of AC. At the same time condition (3) above must exist as well.
4. Once the trapezium is formed with the low to low in identical measurement ( or a run off of one day ) to the top to top of the trapezium, point D becomes a turning point.
Lets look at section 3 formed by EFGH- since that is also a retracement section.
Section 3 =============
We find again point E to vertical line 3 measures 10 days and F to vertical line 3 measures 9 days ( the difference of 1 day occurred because the Balance Point fell on a holiday). Also once the 9 days was achieved, point F became a turning point. Similarly, when length of trapezium FH reached 47 days while EG reached 48 days ( one day run off), the trapezium was completed and point H became a turning point. Similarly, G to vertical line 4 reached 9 days and point H to vertical line 4 reached a count of 9 days as well.
We now come to the last section- the 5th section.
Section 5 ============
Here again, we found the low point "J" formed the turning point when it achieved 13 days- exactly the same count of 13 days of the peak "I" to the Balance Point vertical line 5.
Since IK= 53 days and JK=52 days and K to vertical line 6 measures 12 days and the low point L to vertical line 6 also measures 12 days, we are entitled to ask whether vertical line 6 is indeed the Balance Point vertical line since this geometry has been achieved. Similarly, we find the lengths of trapezium IK and JL are almost identical at 53 and 52 days respectively. With all conditions fulfilled, is L which occurred on the 5th May the turning point from these mathematical findings?
The short term cycle low which fell on 5th May is also pointing to the point L - is this a mathematical coincidence or is point L a CIT?
Another point of interest to all those keen on mathematics is that a straight line drawn through the pairs of median lines EF and GH, and IJ and KL both converge at the point circled in green which falls within the time window of the next projected short term high.
Finally, from the short term cycle chart, we can see that we will move out of the time window or chord length of the low after the 9th- so that it becomes clearer whether we are actually going to have the short term swing up or a pattern failure so that we continue to fall off after the 9th May.
If you look at the deviation bands drawn through the price bars, you can see that we are close to the lower deviation bands, suggesting we are close to a bottom if we are not already at the bottom.( We can still drop down to below the lower deviation band). However, and as a lot of posters and gurus in this forum have pointed out, there are a lot more signs that the market is poised to fall much further than having a CIT on the 5th May - and so the answer is still out there and we can watch to see how things developed. Sharktrader said it takes courage for someone to share the view of a low or CIT when almost every guru is saying the market will fall...and how true. However, I'm only sharing what the chart patterns show, and I may be utterly wrong, so please note the above post is only suitable for weekned entertainment and nothing else. Cheers!
dascore
Note: Also the distance of the vertical line to peak or bottom of the left leg of the trapezium is almost the same as that of the right leg eg for section 1, left leg AB is 7 days and right leg CD is 8 days ( just difference by a day ), EF is 10 days and right leg GH 9 days( difference of 1 day ) and so on. This means we can have an estimate of the turning point low as well with this information for every retracement section:) For example, left leg IJ is 13 days, so we can estimate that the right leg KL will be something like 13 days ( similar) or a difference of a day ie 12 days...Mathematically interesting or not?
(20min delay)