Thursday, May 8, 2014

Belaboring QQQs' price time area and the current March 7, 2014 high

The current high in QQQs is 91.36 registered on March 7, 2014.  At 5 cents per day (a ‘natural’ currency division, the nickel), it falls wonderfully on a Gann zero line 5 cents X 1 from QQQs low close on March 9, 2014:
Over the time period from the 3/9/2009 low close to the current March 7, 2014 high, QQQs exceeded the 5 cents X 1 by $.16.  And, as we know, was sounded rejected, bottoming on April 14, 2014.
But Gann angles are only "moving averages" and, while they are excellent points of balance at which price might form meaningful pivots, they do not, by themselves, signal the final high in a large trend.
I’ve proposed this before but believe the presentation was as confusing as the thought process at the time.  Price time areas compute the area of a bull or bear based on time and price.  A Gann angle evaluates a single vector and, by itself, does not provide a means to compare an ongoing market to a previous market to find relative proportions.  Bradley Cowan’s “Price Time Vectors” use price and time to create vectors based on the Pythagorean squares formulation of a right triangle and comparing PTVs between trends might signal the completion of trends in process.  Price time areas are similar to PTVs because, I believe, you can compare the ongoing market to previous markets to find proportions. 
Using an arbitrary end point of 5/14/2014 and $94.60, following are the price time areas of two markets; the 2007-09 bear and the ongoing 2009-14 bull:
The markets are related by one of the first iterations of Phi; 1.600 (fib 8 / fib 5).  Four growth cycles of Phi between the two markets.
What would the areas look like for the March 7, 2014 top at 91.36?
I can’t think of a notable number that works with 6.113 or roots of it.  In this methodology, March 7 looks pretty bad.
One last thought.  You can vary the arbitrary 5/14/2014 date and price of 94.60 and, of course the price time area varies from 1.600.  The 94.60 is a point found on the 5 cents X 1 line, so it has some attractiveness as does the 5/14/2014 date for other reasons.  Another attractive price might be 97.05 which is the 3/9/2009 low at 25.05 plus what I call QQQs initial vibration of 72.  The then all time low of QQQs on 3/24/1999 was 48.50 and exactly one year later on 3/24/2000 QQQs recorded the all time high of 120.50, a difference of 72.  You might also notice the 97.05 price is nearly twice the 3/24/1999 low of 48.50.  Hmmm  Here’s what that price on 5/14/2014 would look like in price time areas:
Closer to the ideal of Phi, 1.6118.  In my experience with looking at advances and declines within large bull or bear markets, I find the 1.600 more often than values closer to the ideal value.
Only a week left before 5/14/2014 and QQQs are way away from either 94.60 or 97.05.  If this methodology has validity, it could be presently used with leverage to create a large gain in a single week.  As it stands today (QQQs in the 86 range), that certainly does not appear to be the case.
Jim

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.