Action Reaction Course 3

Glossary and Abbreviations of Course

A/R Action Reaction Rule
Bears Persons expecting market to go down, or who are “short” the market. From the French Proverb about selling the bearskin before catching the bear.
Bulls Persons expecting a rise in prices
B Buy
Bottoms Low pivots on a price chart
CL
DL Daily limit for price fluctuations
D Down, usually as applied to trend, as in DT meaning down trend. DT is usually indicated by lines through top pivots, showing the slope of drop in prices.
EP Expanding pivots where price swings get wider toward tops of a trend.
IEP means inverted expanding pivot found near end of a DT.
SEP means skewed EP where swings get wider but not about a level line as in EP, IEP means swings get wider about a sloping CL.
ER Elliot’s Rule
FL Fan lines or radiating ribs as in the Courses exclusive “Horn of Plenty” study
FND First notice day, the day holders of positions are notified of delivery due under each terminating futures contract
GAP Denoted by G as in GU meaning gap up, or GD means gap down. Shown on bar charts when no price on today’s range is opposite any of Yesterday’s range. Technically and empirically the price at one extreme of a days range may be opposite the extreme of the next day’s range, and still have the properties of a true gap.
HR Hagopian’s rule found only in this Course
Hedge To take insurance of some kind against loss. E.g. sale of a future by a producer who thinks prices will be lower when he is able to deliver.
ITL Imaginary trend line used by Morton’s Rule found only in this Course
MA Moving average
MIT Market if touched means that your order is to be executed at market when a specified price has been reached even if only the prior orders to yours were executed at the specified price.
ML Median line, & MLH means median line parallel. Used to signal change in trend when price touches or pass past these lines, under specified conditions.
MPL Multi-pivot lines, lines that pass through 3 or more pivots. Used as CL about which to measure A/R
MMPL Maximum MPL, the line on any chart that passes through the greatest number of P. used as a CL it has the highest probability in measuring A/R
OI Open interest, the number of contracts open in a future at a given time.
P Pivot, a turning point. It is the extreme on a bar chart where a change in trend takes place. Knowing where Ps will occur is key to profit from fluctuations.
P-L A line from the Peak of a price swing to the Low. L-P from Low to Peak.
R Reaction line, the equidistant line from a CL that the Action (A) line is opposite. This law of physics stated by Newton that Action and Reaction are equal and opposite was first applied to prices by your Course Director’s friend the late Roger Babson, who attributed his earnings of over $50,000,000 to this law.
S Sell
SH Sliding parallel
W or WL Warning line parallel to MLH and same distance from MLH as MLH is from ML. Probability of pivot at or near WLs. There may be several WLs all equidistant, and several MLs and CLs such as RML, meaning reverse ML or MPL and (0-3) and (0-4) or (4) both minor through closes, or major through end of ranges.

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