By: Jeff Cooper
Hit and Run Morning Stock Report: December 30, 2022
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In the TSLA Wheelhouse
“When time and price square out, expect a change in trend.”
But what is a square-out?
While W.D. Gann did not specifically define what he meant by a “square-out,” examining the many examples he gives in his writings makes it clear that he is pointing to a balancing out or meeting of time and price.
One way to look at this balancing out of time and price is when the duration of a move equates to the extent of a move.
Let’s take a look using TSLA as an example.
TSLA’s all-time high was November 4, 2021 at a price of 414.49.
414 calendar days later is December 23, 2022.
Two trading days later, on December 28, TSLA stopped diving… at least for the moment.
One trading day after December 23, TSLA struck its closing low for its waterfall decline where it crashed from 198.92 on December 1, 2022 to 108.24 on December 24.
So the price of the high virtually represents the extent of the decline in days.
Price points to time; time points to price.
On that level it’s pretty simple.
However, another aspect of Gann analysis is more complex.
Notice on the Square of 9 image below that 414 aligns with/vectors 108.
TSLA traded down to 106/107 pre-market on December 28.
So now we have two ‘vibrations’ of time with price.
Notice on the following Square of 9 Wheel image that 106 is “square” (90 degrees) December 28.
Now we have three workouts or vibrations of time and price
Markets are enigmas but they seek symmetry and equilibrium.
However, mathematical though they may be, they are enigmas which demand flexibility and creative thinking.
Let’s take a look at what I mean.
The following weekly TSLA shows that this year’s plunge started in October 2022 on a backtest of a broken trend line at a price of 237.
Checking my Square of 9 Wheel shows that 237 is straight across and opposite our key 108 region.
In other words, the “crash point” of accelerated downside momentum points to 108.
Only time will tell how significant this week's 108 low will be. But in the meantime, there is a setup on the table.
As you analyze charts in this manner, you will find many mind-blowing time and price relationships waiting to be capitalized upon.
The opportunities are out there.
Analysis using the Square of 9 Time/Price Calculator can get you there.