How To Identify A Move Before It Happens: Breaking Down WPM Using the Hit & Run Methodology & the Square of 9

Technicians know well that price chart analysis is not an exact science. No single technique is infallible.

Despite this lack of perfection, price chart analysis can very often give reliable forecasts of trend direction.

One way of improving on price forecasts base on a chart signal is the Rule of Multiples… i.e., when multiple pieces of the puzzle come together.

The three principles of my forecasting methodology are:

1) The 3 Day Chart and the 3 Week Chart

2) Moving Average Pinball technique

3) The Principle of Squares as fleshed out by the Square of 9 Wheel

Let’s take a look at how these factors came together in silver streamer WPM on Wednesday morning.

The following daily WPM shows it bottomed in early March (notice the low day was a Lizard buy signal… a 10 day Bottoming Tail), turning its 3 Day Chart up with 3 consecutive higher daily highs shortly off the low.

Notice the impulsive upthrust recapturing the 20 day moving average that elicited a test of the 50 day moving average in a few days.

This is Moving Average Pinball. When the 20 day m.a. is violated with authority, it often sees price quickly push to the 50 day m.a… if the change in trend is genuine.

Following the first test of its 50 day off the low, WPM inhaled, turning its 3 Day Chart back down, testing/undercutting its 20 day moving average in the process.

WPM came back off this Holy Grail buy setup (test of rising 20 day m.a.) with authority, eclipsing its 50 day line and turning the 3 Day Chart back up decisively.

Now WPM had blue sky: it had reclaimed its 50 day line and bullishly was pushing higher after turning its 3 Day Chart back up.

Using the Square of 9 Wheel shows that the early March low was a square-out.

March 5 is 90 degrees square 35 for a Time/Price square-out.

Red is 35
Blue is March 5

A 90 degree advance from 35 ties to 41.

Bullishly, WPM cleared 41 indicating that a pullback to 41 should define support.

This is why on Wednesday morning with WPM testing 41 and its 20 day for a Holy Grail buy setup, we alerted members on the Hit & Run private Twitter feed to add to our long position in WPM.

In sum, WPM carved out a Lightning Rod (LROD) or Large Range Outside Up Day on Wednesday.

Range precedes price. The presumption is WPM is on a trajectory to 47, which is 90 degrees up from 31 and 180 degrees up from the 35 low.

Red is 35
Purple is 41
Green is 47

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