Everyone is familiar with the legendary trader WD Gann, but there have been other master traders who's works should not go unstudied. One of these traders was George Bayer. The difference between him and Gann is that he comes right out and says he uses astrology instead of hiding it away in riddles. One of his the simplest techniques he discussed can be found in his book "'Money' or The Time Factors in the Stock Market".

Like Gann, Bayer spent a lot of time reading and interpreting the Bible. In his book he mentions the following passage:

And the woman were given two wings of a great eagle, that she might fly into the wilderness, into her place where she is nourished for a time, and times, and half a time, from the face of the serpent.
- Revelation 12:14

If you think about the last part of this passage, you'll see that it if one time = 10, then "time, and times, and half a time" comes out to be 35 (10 + 20 + 5). Bayer took this number to be a basic unit of measurement in calculating price movements for stocks and commodities. The basic idea is that price will move 35 points, or some important division thereof, before reversing direction. Bayer divided this into 8 parts, but for this showcase we can stick with a more basic approach and just use fourths which come out to be 8.75 points. Below is a chart of IBM:

Using Wave59's price counter tool, we can quickly measure off these important units from previous highs and lows. On the chart above, an important cluster of these levels is shown at point "E". This spot is 70 points (2 x 35) from A, 52.5 points (1.5 x 35) from B, 35 points from C, and 22.25 points (0.75 x 35) from D. So four of Bayer's levels are hitting right around 56.50.

As the market gets near to this support level, we can also use this number as a time counter to look for exactly when to expect our projected turning point. This is shown at the bottom of the chart with gray vertical lines from the static time count tool. We have strong hits at 35 bars back, and 105 bars back (35 x 3), plus minor hits at 17, 53, 70, and 175 bars back. So the low on October 10th was very easy to spot using Bayer's technique. The price target wasn't exact, but if you take a close look you'll see that the market really never could close below the bottom line in the price cluster (the red line from C). Needless to say, we got a nice bounce off of this one.

So hopefully that will not only add a technique to your trading arsenal, but will also inspire you to take a look at some of what Bayer has written. Gann wasn't the only one with magic numbers!

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