By studying the relationships between these upward
and downward waves, their
duration,
speed and
extent, and comparing them with
each other, we are able to judge the relative strength of the bulls and bears as the
price movement progresses.
...
...
The waves of the market furnish a clear insight into changes in supply and
demand. By learning to judge all sizes of market waves, you will gradually learn to
spot the time when a rising market or a rally, and the time when a declining
market or a reaction has halted and is about to reverse. These are the turning
points.
To be able to say when these turning points are occurring — at the bottom
of a bear market, or at any important rallying point on the way down to the
bottom, or at the top of a bull market, or at any important reactionary point on
the way up, — is a mark of ability in an investor as well as a trader.
...
...
Of all the things that are most desirable to know about the stock market,
these two are the most important:
(1) First, to be able to determine the final top of a bull market; and
second, to determine the top of the intermediate swings, and finally
the top of the minor moves.
(2) To be able to determine the final low in a bear market; the bottom of
the intermediate swings, and the end of the minor moves.
...
...
In short, the quality of the buying or the selling at and around the point
of penetration determines whether the violation of an established stride may be
regarded as evidence of a further movement in the direction of the breakthrough,
or whether it means only temporary change. This admonition applies equally to
the violation of former tops and bottoms and old levels of resistance and support.
...
...
Thus you will have a continuous,
zig-zag line which portrays the market's price action from one session to
another, minute by minute and from hour to hour; and from this chart you are
enabled to judge the factors of:
(1) Price movement — number of points advance or decline.
(2) Time elapsed in each movement — up or down.
(3) Comparative lifting power or pressure on each up and down swing.
