# Action Reaction Course 39

“BELIEVE IT OR NOT”

You can learn here in this page of our Case Study Course, how to anticipate, for the months ahead, when to take profitable action in the stock market. You can do this be simple graphic mathematics. At the end of March, this chart gave you all the information you needed to make money in the stock market during the next seven months, by buying near the lows and selling near the high pivots. “here’s How”, so drink deep of the new revelations from this Fount of Wisdom.

You draw a Median Line (ML) as shown from 1 bisecting the distance between 2 and 3. Then draw another ML from b, bisecting the distance between these same pivots 2 and 3 again. One of our discoveries is that when prices meet one of these ML lines, the probability of a countermove starting at or near the meeting point is high. So whenever prices drop to meet the ML from b on the chart, and stop, you can buy with “impunity and abandon”, figuratively. And when they rise to meet the ML from 1, you can sell.

Our next step is to use our Action-Reaction Method in combination with the above Median Line (ML) Method. So draw a Down Trend line (DTL) from the bottom of the range each week that a low pivot shows. We call these lines Action or A lines. And to the right of the SRL you draw other parallel lines, each equidistant from the DTL to its corresponding A line. We call these new lines Reaction Lines (RL), for when pries meet these lines in the future, they react downward, whereas the price rose from each of the corresponding Action or A lines in the past history as shown by our chart. So you Sell when in the future prices rise to meet these lines.

Now to see how these lines we drew actually work, loosen the rest of the chart from the back of this sheet and fold it over so you can see it from this side. You see that the ML from b told you to buy at 3, 5 and 7,& 9 and that the DTLs enabled you to sell at 4, 6, 8 pivots. This was always before a drop of enough percentage to give you a nice profit.

Next week our Case Study will enable you to apply our A-R lines so you will have still another method for knowing the right times to buy in contract to this weeks use of A-R lines showing when to sell.