My Method of operating in the Stock Market is all based on mathematical points or geometrical angles. The Resistance Levels are all geometrical angles because they are 1/8, ¼, ½, ¾, 1/3, 2/3, etc., which are proportional parts of a circle whether large or small and, therefore, represent geometrical angles.
There are three important factors to consider, price, time and space movements. For example, when the price reaches 45, it meets resistance because it is equal to a 45° angle. Then when the price breaks a 45° angle, regardless of whether the price is at 45, 67, 90, 135, 180 or anywhere else, it weakens the position and equals a resistance angle, but is more important when a long ways from the base. The distance the stock breaks the angle of 45° or any other angle from the base is the most important. For example, many times a stock will rest on the angle of 45° in its early stages when advancing, then later in reaction rests on it again, then have a prolonged advance, react and rest on the 45° angle again, and the hit a higher level, break the 45° angle the fourth time, which places it in an extremely weak position because it is so far away from the base and so much time has elapsed since the stock made low level. Reverse this rule in a bear market or a decline and don’t forget to consider that the Monthly and Weekly high and low charts are the most important when angles are broken. Daily charts can break angles and recover them and it is impossible for a daily high and low chart to maintain an angle of 45° for a very long period of time except when the final grand rush comes at the end of big bull campaigns.
Suppose at the time a stock breaks a 45° angle that it is at 135, and on the 135th month. This would be at a strong resistance level, breaking a strong angle, and striking and breaking a strong angle according to time. This would be time and space balancing at resistance levels, or geometrical angles, and would indicate a big decline to follow. Reverse the same rule at the end of a bear campaign.
After considering the three important factors, resistance levels, time and geometrical angles, the fourth and next very important factor is the volume of sales at tops or bottoms. Sales increase near the top and decrease near the bottom, that is, when a bear campaign has run for a long time and liquidation has about run its course, the volume of sales decrease, which is an indication that the market is getting ready to make a change in trend.