A lot of the tools in Wave59 are designed to pick tops and bottoms in the market. Many well known authors tell you that this can't be done, and that trend following is the only way to successfully trade the markets. I'd probably tell you the same thing if the only tools I had at my disposal were moving averages.

The fact of the matter is that, everything else being equal, most traders would rather shoot for trading the turns rather than taking a chunk out of the middle. If you had the holy grail, it would be a top and bottom picker, not a trend-follower. This is why some of the most interesting tools are based on finding those turns.

If you take a look at Fibonacci retracement levels, one of the most widely used and discussed indicators around, you'll see that it's designed to find the turns. Price is supposed to bounce at one of those levels. Most of the Gann tools are the same - those Angles are meant to catch the turning points.

The interesting thing is that every single turning point tool is based on one particular assumption. The assumption is that the end of a move can be foreseen from the beginning. Fibonacci retracements are measured from the beginning of the swing - once that beginning point is locked in, those ratios won't change. Elliot Waves have almost infinite variety, but each count begins at the beginning of the wave form, not somewhere in the middle. When you get to the 5th wave, that's the 5th wave since the beginning.

The same can be said of the entire science of astrology. You get your birthday chart and the astrologers make predictions on that. Once you're born, that chart is fixed and all the influences are read from that point. You're supposed to be able to see the end from the beginning.

This idea is very important to trading, but most people don't ever consciously grasp it. If you think about it, you'll realize that this has to be true for any part of technical analysis to be valid. If it wasn't, then wildly successful traders like WD Gann didn't have any edge besides really good luck. In this showcase, we'll take a look a look at how this law works and how we can use it to our advantage in the markets.

Earlier in the week, we had a sudden, violent drop in the S&P:

If we look at when this decline started, we can see that it was at 8:00 (Mountain Time) on Jan 29. This is point 3 on the chart. According to our law of being able to see the end from the beginning, we should be able to sit down right now and figure out where this thing is going to bottom.

First, let's take a look at our Ephemeris for 1/29/02 at 8:00 and see if we can get any clues as to what's behind this move:

All this chart shows is a picture of the planets in a very particular way. Each line coming from the center of the circle represents the position of one planet. At the top of the chart, there's a pink line with a "J" - that's Jupiter. The maroon line marked with an "R" at the right side is Mars. Notice that Mars and Jupiter are squaring each other - the green square shows this relationship. This aspect is very important. Now look at the bottom of the green square. There's a red line with an "X" - that's the position of the New York Stock Exchange, plotted as if it were a planet. Notice that it is exactly opposed to Jupiter and square to Mars at 8:00, filling in the bottom half of our green square.

There is also a blue hexagon on this chart, locked into position with the square. This connects Mars(R), Saturn(S), and the planetary cluster at the lower right at around 310 degrees. I've noticed that the square aspects seem to be more powerful in markets, but the sextiles (60 degrees) also can have an effect. In this case, we've got both of them connected through the planet Mars, which shares a spot on each geometric shape.

The most important thing to note if you've never looked at this kind of thing before is the position of the Exchange (the red line with the "X"). You've always got to have a fast moving body that acts as a trigger to the larger picture if you're going to find a turn in the markets related to planetary positions. On a daily chart, the Moon and Mercury often fill this role. But on an intraday chart, even these bodies are too slow to make a top exactly at 8:00. Only the Exchange and the Ascendant (not shown) move fast enough during the day to act as triggers. In this case, it's the Exchange that rotated into position that made the slide happen. So Mars and Jupiter formed their square, but the Exchange lit the match.

So let's put this information to use:

This chart contains three indicators. The red line is our inverted Natal Forecast, set to "gapless" to eliminate noise. The market has actually been following this very closely although it doesn't quite look that way on the chart. But if you slid the forecast up, you'd see that only recently (actually at our last turn) has the market begun to go against this forecast.

The maroon lines across the chart are the planetary flux lines for Mars. As Mars was the planet that tied both the square and hexagon patterns together, it seems to be the primary mover for this particular swing. As it was important at the beginning of the price swing, it ought to be important at the end as well. The last Mars signal was in time, so the next could be in price. The market is tricky that way - but we can watch both.

Finally, we've got our Fibonacci Vortex up, sized using the blue spiral on turns 1, 2, and 3 marked on the first chart. If you just look at these three indicators together, you'll see that there's really only one place where they all come together. That's around noon on the 30th. The blue vortex spiral crosses a Mars flux line there, right as the forecast makes a bottom. Make sure you see it! The vortex always has two solutions, but the other fit gave us nothing to work with as far as confluence of the indicators, so this is the only thing we've got going with these tools at this point.

Let's move ahead to the 30th:

This was a huge drop, but we're at a very interesting spot right now. It's not noon, but look what the indicators are saying:

So it's not 12:00, but we're pretty close. If we go back to our Ephemeris, we see that the Exchange is right on the planetary cluster in the corner, sixty degrees from Mars. So at this exact bar in time, we've got a trigger on the same planetary pattern that we found to cause the drop in the first place. Remember seeing the end from the beginning? It looks like Mars is active both in time and price at this bottom.

Here's what happened next:

Nice bounce! It continued into Feb 1 before it lost strength.

Hopefully this showcase has demonstrated the power of looking ahead and hunting for future pressure points in the market. You won't always be able to zero in on them, and sometimes the market will never reach your target area, but if you're patient you'll find plenty of opportunities to repeat this exercise again and again. I especially hope that this showcase has inspired many of you to take a closer look at those astro-tools. I know many people just don't like Astrology, but I promise that you'll like it well enough after a few trades like this one.

Stay tuned!

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