Action Reaction Course 2


Alan H. Andrews Trustee
5738 S.W. 53rd Terrace
South Miami FL 33155

You will find enclosed the first study of the Course concerning the ML (median line) Method. This enables you to know where the trend of anything that fluctuates at random is headed. What everyone wants to know is where the latest trend is headed, and where the next pivot (P) will be from which the reverse trend will start.

The probability of the next P being at the latest ML seems to be about 80%, and even without any additional rules that enable you to be constantly either long or short , the profit potential of this simple rule is tremendous for you.

Although Marechal never left us exactly how he was able to predict twenty years in advance what his copyrighted chart showed the Dow Jones Industrial Averages would do, you can draw in the MLs from each P bisecting the distance between the 2 latest alternate Ps, and see that nearly every time the new P occurred when prices met that latest ML. You’ll also see that on the right hand side of his chart prices were too strong to drop to the ML that started from the high in 1945, which always signals that a big rise is ahead unless the next trend fails to reach the new ML. This cancels out the prior signal and signals a big move contrary to the big move previously signaled. And as there was no contrary signal after prices failed to drop to reach the ML from the high in 1945, you could be confident of realizing a big gain from your long position taken as soon as prices crossed the parallel to the ML from the high of 1945. You draw this parallel from the third top that the ML was drawn half way below on the distance to Previous P.

You can now tell from the enclosed Glossary what the abbreviations mean, in the right hand column of each weekly letter. This enables you to understand the scientific reason for each new position taken based on simple geometry. When you change a position your new methods enable you to be one of the few persons who knows how to be constantly either long or short, in this way you make profits after each rise and fall that follows the rise. You may be whip-sawed a few times but if you get you order in before the market opens the next day, should prices move against the position you have just taken, your losses will be small and often show a small profit.

You will see all this after you’ve done some “paper trading” which you should start on right away showing on your chart where each position was taken. You should concentrate on the ML method applying that even if you have had experience with other methods. For we learn best by concentrating on one thing at a time. When you have a question mark where the question arose and send me a copy of your chart that should also list our profits from the two contracts you take each time you change position. When you write out your question leave a space where my answer can be written and mailed back to you.

After you see that your paper trading has made well over the 100% profit rate, it will indicate you are ready to learn the Action and Reaction Method to which my friend the late Roger Babson attributed his fortune of over $50,000,000. Then after that let us know and you will be sent the rest of the Course Studies.

Alan H. Andrews, Trustee FFES.