So, how do we measure the stock market in 3-dimensional space?
By using simple math. However, before I go any further I would like to give credit where the credit is due. The technique below was first developed by a brilliant market analyst by the name of Bradley Cowan. If you are serious about performing stock market analysis I encourage you to seek out his work.
In order to measure the stock market in 3-dimensional space, we must unify price and time values into a one joined value. How do we do that? By using simple geometry and Pythagorean Theorem. For our purposes here is all you need to know. We call the outcome 3-Dimensional Value (3DV)
As such and in order to properly calculate the value we need two numbers. Time and value over a studied period of time. As a reference point, we typically measure these values between bottom-to-top -OR- top-to-bottom moves. Let’s take a quick look at the real life examples for a quick reference point. There was a strong bull market between November 1994 and January of 2000(a 5-year cycle).
More precisely, the market moved exactly 8,296 points in exactly 8,437 trading hours. The move occurred between BOTTOM on 11/24/1994 and TOP on 1/14/2000. There are 6.5 trading hours each day the market is open. I highly recommend you verify these numbers and perform sample calculations on your accord for better understanding.
Now, to calculate 3DV according to the formula above
SQRT(8296^2+8437^2)= 11,832.75
*SQRT= Square Root
The 11,832.75 value is the 3-Dimensional Value we are seeking. It is the first step in our Timing financial analysis. An analyst who is willing to put in the work, will soon start seeing periodicity and recurring patterns of the same size movements on multiple time frames. Once the sequence of such moves is understood, exact forecasts into the future could be made. For example, let’s take a look at our 3DV of 11,832.72. Do you know that the stock market topped out on January 14th, 2000 at the price of 11,866.55 or just 33 points away from our 3DV.
Do you believe that is a coincidence? No, not at all. As I have told you before, there is a mathematically exact structure within the stock market and once that structure is understood, the stock market(and individual stocks) can be timed and predicted with great precision.
To Be Continued…..
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