Tape

Division

A COURSE OF INSTRUCTION IN

TAPE READING AND ACTIVE TRADING

di

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TABLEOF TABLEOF CONTE CONTENTS NTS

~.

INTRODUCTION

4-A

JUDGINGTHE IMMEDIATETRl#fD Buyingand SellingWaves SellingWaves Wave Wave Char Char of th Lead Leader er BUYIN BUYINGAN GAN

2-A

SELLI SELLING NGWAV WAVES ES

PAR II

1-A

HO TO LINK LINK TH WAVE WAVE CHAR CHARTWIT TWIT TH STOC STOC IN ‘WHI ‘WHICH CH YO iWE TRADING VerticalLine Chart and Continuous ContinuousLine Chart

3-A

TRM) TRM)IN IN AREA AREASAND SAND HO TO PROF PROFIT ITBY BY THNM THNM Trading TradingArea Area of AuburnMoto AuburnMotors rs

8-A

THE TAPE READING READINGCHAR CHAR TapeRe TapeRead adin ingC gCha hartof rtof J. 1. Case Case TH

U YI YI NG NG A N

S E L IN IN G P OI OI N

FRACTION JUDGINGSTR$NGTHOR.W3AKNESS H O WT WT O K E E P P E RC R C E NT N T i G EI N

O U R FAVOR

I TH TH I

SM

TABLEOF TABLEOF CONTE CONTENTS NTS

~.

INTRODUCTION

4-A

JUDGINGTHE IMMEDIATETRl#fD Buyingand SellingWaves SellingWaves Wave Wave Char Char of th Lead Leader er BUYIN BUYINGAN GAN

2-A

SELLI SELLING NGWAV WAVES ES

PAR II

1-A

HO TO LINK LINK TH WAVE WAVE CHAR CHARTWIT TWIT TH STOC STOC IN ‘WHI ‘WHICH CH YO iWE TRADING VerticalLine Chart and Continuous ContinuousLine Chart

3-A

TRM) TRM)IN IN AREA AREASAND SAND HO TO PROF PROFIT ITBY BY THNM THNM Trading TradingArea Area of AuburnMoto AuburnMotors rs

8-A

THE TAPE READING READINGCHAR CHAR TapeRe TapeRead adin ingC gCha hartof rtof J. 1. Case Case TH

U YI YI NG NG A N

S E L IN IN G P OI OI N

FRACTION JUDGINGSTR$NGTHOR.W3AKNESS H O WT WT O K E E P P E RC R C E NT N T i G EI N

O U R FAVOR

I TH TH I

SM

SEC.

P. PractiaePersistently CHARTSTUDIES

Cs Cs Cs Cs

Telephon Telephon at Bottomof Bottomof Reaction Reaction American AmericanTele Telephon phon at Top of Rall Alli Al liedCh edChmi mica ca at Bo Bott ttomo omo Re Reac acti tion on dC J. 1. (l (las as at Bo Bott ttomo omo Re Reac acti tion on AmericanCan AmericanCan Combinedwith Five Leaders

Amwriad

D. WUXOFF 00URSEIOFINSTRUCTIONIN TAPE READINGAN ACTIV SUMMARYOFTHE RICHARD

section1.

TRADING.

Generalprimiple involve in tradingto take advantageof the mino fluctuations. Basingjudgmenton impartialanalysisof avai.lab~eactg insteadof ill advisedimDUJPeSa actio~an lear to make YO1. OWll &Q&3mn cknt d%$cidon~ with high degreeof accuracy Ho

to internre ta

Ho

to construc

The selectionof’stocksthat refli]ctloadorshinnd have tYL CIIWAI. o=Q~~~~ Ho to detectth minor price surgesand estimatetheir significance. Ho #Mlrt section3.

to recogniz th

symptomsof

reversalof th

trend.

quality of th Wave Chartin Ho to employthe barometric judgingthe tren of the individualstockwhordnyo ar trading.

-. and EQJFJdU Section6.

so~.the buyingan fraction. who COIl Ho

sellin levelswithina small to th se

ti

to avoidover$tx

the market. what

do at

ur in poin s.

Recognizingthe evidencesof technicalstrengthor weakness.

iiwmiml or

Section7.

Whet constitutes normalrallyor rco.ction,nd why. Ho yo ma @NelQn Your UMment so thnt accumulating symptoms of strengthor weaknessbecomerecordsof subconscious memory rad resultin d~ciaons are V’htud.l intuitivcl, Ho

to ld.mi~,oducqan Lnsu

elhi at

th risk

Your PM’ its,

How to develop tradin policywhereinrisk are consisten with probableprofits. The generalsignificance of incrensedLctivitY. How to interpretchange in th degreeof activity. S63ction

The imnortan

of volumewxze

in tradingzonesand

-3-

Stop Orders Sectio 12

Th of

advantag of familio.ritywith th eading acti ssues.

Th

scientific location an

Substitute Miscellaneous Vita Points Sectio 12

Judgin

fo

chie

characteristic

road.jus+,ment stop orders

stop orders.

your efficiency

h’lh?rr)r~t~t~on

Testin

your tradin

~b~arketrder

vs

abilit

limite

withou

monetary risk

orders

ti Dangerou

Chart Studies.

pitfalls an

interpretation.

kiov~

AP

EA IN

AN

ACTI

RA TN

one-half to one-poin

day,

co ti uo sl

ei he

he

brok rs

ff ce

or

ri at

office Fr

trad rs

ha

eceive

ma

equest

fo

furthe

thes

de ai ed in ormati

th immediat *rendof th

smallmovesin th murket

This tren ca be

detecte by thisMethod soona.i%er ~hc openingof the Stoc Exchang at

and reverseitselffrom one to threetimesduringe.whday’ session. We instructsuch tradershow to followthes trends,changing or reversingtheirpositionsas

often as the marketaffordstradingoppor-

tunities. In most instance tradesar

closedou th

sameday they ar

made but i??thereare strongreasonsfor carryingany stockovernight thisma

be done Detailedinstruction are givenas to the bes stocksto choose

and the exac tim to make commitmentsbase on methodsformulatedand successfully employedfor over twentyyears of tradingand advisorywork. Stop ordersare placed away fro th buyingor sellin price

trade,fro one-halfto one poin These stopsmust be constantl

gettin in when they beginand gettin ou

when they culminate. It requiresactivityand flexibilit of mind;readines to chang

or reverseone’sopinionquickly;slso nerve,poise,decision,promptness, courageand absoluteindependence of judgment. It By keepin

purpos is to derivea the

ris dow t~

averag profitfro

minimuman

by clevermsmipul.ation stoporders, an

seriesof trades

constantl strivingto reduceit; net profitover comiwission~, axes

lossesca be realized All commitments are temporary-- theirdurntionis usuallylimsmall,imm@i-

ate fluctuations.

wit thi

opportunit.ies

(and work for your prefert

home with

sy

th no

mm tm nt

rI

th

itiesin thes smallswingsw importantswingso tr

edo

ke ll

skmu will

be

ep do

fr

odat Yo

wz~itefo

,yo

th more

Yo

ti

ei

t,whet

will neve tradewithou

in

neve be tiedup

st yaw

This

woul have if yo

ten to thirtypoints.

it standseven yo

yo

um

ca

ra

Yo

stop

llne ertakea

ig

claanhousein an instant. te ta

on

ou wish.

form of tradingis entirel distinc and dlffcren from

thatdescribedin the otherMvi.sionof our Method,whichaims to secur profit from th

ten, twentyan

thirtypoin swings

quirementsof thosewho wis to trademore Includedin this Divisionof th

by

re

constantly.

Courseis

the detailedtransactionin certainstocksa

It meet th

plan fo

charting

the appearon the tape,

the immediat trend;figurethe exactpointsfor

placin your stopordersan wher ta move them to reduceriskwhe

th

thre tc five pointsi

certai direction. Yo

appl th

Tape Readin

Methodin makingyour trad :ltthe most favorabl noment,and the poGi tionyo

then takewith

develo into Position side,an

in{dicut

By thus tradin with

smallrisk of one-halfto on pointmay late on th

long side,or Position

ru of ten, twentyor thirtypointsin your favor. fractionor

poin originalrisk an

lettin

your profitrun into the many pointsindicatedin your forecastof th probabled3.stanc

points,you will greatlywide your marginof profit.

For this reason,theseTape Readinginstructions, combinedwith our lcmgerswingplan wil materiallyenhancethe profitpossibilitiesn both Divi sionsof th

Course

or thispurpos we

Wave hart,mad up

he riceof

fiv of the mos activeleadingstocks. Th priceso

theseare adde

togd+her,and plotte on

sheetof crosssectionpaper,with the tim

scaleat th bottomof th verticalline

ea

left correspondingith the horizontallines. Specimensheetfollows All movementsin the marketar mad up of alternating buyin an

sellin waves. We judgethe strengthor weaknessof th market

by the distancein pointsand fraction recordedby thesewaves;w combin thi distancewit the lengthof tim eac wav takesto run its course

ticalline

Next wretch fo

eithern upwardor downwardswin to ex

ti

,p

ta

propertime and price leval. Xf th marketthen prows

on in th sa@@ direction,chmmgeth do unti th movementagai hesi tatesan

sh~w siguoof

reversal lit

the dot

st

TM marketwill confir cm contradictyour estimateof that

turningpoint. An

so on unti yo

ar thoroughlyfomilinrwith judg

ing and recordingthe start,durationand finishof each successivewave. Th ~mmediat tramdis Lndicato as soan as on buyingan on sellin wave havo been complwtmd. most powe -.

nkn

eis

go

Bu yo must alwayshe on th lookou fo yt

changein thisimmedi eti

but

havh$

g2 v$e 1’ km mmdag

tl’m

or

certai day to carry th marketin sdo

WLWQB &ay

$nmic$snt

on

certai directio until th close,

tit

do%nnot fnmn thatyOU $hotidWLmy any trendwill d o f i m to go into tommrow~ reason

extrmrdintqf

fo example,

tmdtxi

overnightfor this

its~f

it is bestno

W~.

ses$io with an stockson hand unle

in

the

action

strongdmmkapmn

like an %mportAn bull or km

rmwn.

threeis acme

of th market of powerMar th beginnin of what look

swing,$mlicate

increasingactivityand so

be. In suc instonces fo

exmpla

migh be allow$xi ru with

lon pmition

frequentraisin of stopsso

the

wave

you have

CM&t to lo

quickl an do no pm

nc

mpoc

an mu

intuitio to comeunti

ct ce

***

Tho five leaders$hculdalwaysb leading

cluded.

repr~sentative

rail hu~ considerable effecti

market.

shouldb

in-

At othertimesa ut$ll,ty ik ConsolidateGas might coae

to th front;it shouldtak~ th plac of somootherleaderso this ColditicmLmate.

Selwtion

sm’win th pullin powerof

leadersmay btilikenedto ob-

&oup of fivehorses

If yo ware drivin

BUYINGAN

SELLIN WAVES

(’IhelVav hart-PartII

In the First Divisionof our Courseof Instruction, Sectio

Part

di~cussasin somowhatgreate detailthe instruction set forth

Second Division;therefore,it may be substi tutedfor this last-namedSection. Or Part

an

if yo

11 from theirpresentbindersan

loose-leaffolder

Yo

of th Wave Clur as

will then have have develope an

prefer yo ma plac thor in

remove separate

completetext book on th expandedit

theory

In this illustration(Figure1), it will be seentha volumean activity both shrinkto very smallproportion on the littlebuyingand sellingwave from 10 olclockt wit

1:40 P.M. Th da

starts

smallrallywhic is promptlyfol

wedby

ma ld

Bu lsa

rsa

evidentlywell matchedat this point. Afte th

firstdip (Perio 2) th bull

pu

ri esup

bu

eyfa

tracta following,as shownby th

to failur

of activityto increase. Demandpeters ut ar

Fl FIG.1

di

ndth 11 00A M.

ma

in th fourthperiodbringsou very

littlestock on the downside,however,and thisencourage the bullsto tryagain.

it is th

bulls~tur to tr

theirstrengt again, Th

littl stronger. Price ris activityincrease If we ar pare fo

action

om le

trifleas they advance. tradin fo

th

shor swings this is ou

If activityfall of

th

ly

is

littlebit abovethe previoushighsand

ip

next fiftee minutw bu hi

th cu we

tellsus that the supplywhichheld th

cu to pre-

on th next sellin wave,we ma

expectthe bull to becomeaggressive.We do no Pricessa

e,dex

have long to wait th

av be

activitydies ou wa ti

r. It

bullsback on previousrallie

has been absorbedon the smal earlierreactions. Therefore,T7e ste in with confidenceand buy. We are promptlyrewardedby

sharpris in

Period9. An

questionas to th validityof thisupwardmove is settle

by the sharpincreasein activityas pricesrise throug th tops

Shortlyafter

previous

o~clock,the bulls rest momentarilybecause,at

thi point,th averagehas risento

levelwher stocksencountered

point figurechartfro the Tap Readings. This will permityo

to brin al

of th principlesse fort

in Sections10-12-14-1 an 17 of th Main Divisionof ou upon your analyses

of th

av Char

Th

ch rts, ages

Courseto bear to 8, with ex

planatorynotes,make clearhow thi is done. Th

additionalillustrationsn page

th dail Wave Chartst actionda by day wit figurechart.

form

an

continuous records

10 showho yo

ma

to moun

compar th

[email protected] indications developin on the one-point

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On

--’-711M

HO TO LINK TH WAVE CHARTWITH TH STOC IN WHICHYOU AR

Th

Wave Chartbeingbase on th

activestocksi at

once

an

be

completein itselfi

whenever ra ein

TRADING.

actionof th yo

wi

turn is indicated. Bu

nl

five leadin

ra in th

fi beginnin it

oc

Observewhic of thesefive leadersappearsto followmost closel th

ming

on th Wave Chart;or perhap theremay be some

othe stocknot includedin your five leaderswhich,b an

experiment, yo

fin is bette fo

observation

thi purpose. This will de-

pendupon th kind of stocksthatmakeup your five leaders. Yo might,for example,includeAuburn,whic woul give the groupa

E RT I

L IN E

HA

C ON T I N U OU SL I N E C H AR T

yo pric scaleQf this #rtmkshoul be entmed on th eaf 141MMMPB. Mo

studytk action imwlievte

das

find that$t is d$##@@m~it averagm ckwqe. an

add.it

tren -Ctly

If this colMJl%MM,you will! know $lst whezlto buy

Bu yo

ma

f’iu it is workin

wham th Wave Char turnsupwardyour stookm Trti@ acmmdimlgky. sb ew) the int profits

when ti

ty

exactl

tha @ppo@it@:

begi to ge weak kr

eo sa

TRADINGAREASAND MOWTO FROFZTB From observation of mu’ro rangesof

or Mg

ro

ts

ofton stocksget into periods points.

msnt fo most peGple

um

THEN

Theseare timesof discourage-

on th wron side,or wh

ar

lookin

th marketaffordsonly mall profits. Ther ar

many shor swingst on long one. profitsfrom the Kee

pointmoves.

verticalline chart showingthe dailymovementsof any

of the well-khownaveragws,such as Dow-Jones,SthndardStatistics, ?kw

Iork l!ime$,ew Yor Herald-Tribune

ycmr localdailynewspaper. Us

in

tradin @e

whicheveris publishedin

thoseto indiczt when th marketis

or whethe it is movingt

anothe level,upwardo

swve

yo

to [email protected] the bullishnessor bearishness Decreaseswar

of

probablereversal >i

jh

direction, ei

couldelnborateon thi -nutshell.

brevitydisguim it value. When yo

se th runn?agcw! orkingback an

forthove

trad

ing area,you til genmnlly fin your individualstockdoin th Not always,however. zavarage ay be in

to ks

ot

al ke,s

ou

same.

w. Yo

tradin zone un othe stocksma have small,medium

or wid wings withoutaffectingthese

Your stockmay no

be included

in the averaga$ whethe it is or not rememberyouare tradingin dn The uppe and lowe boundariesof thesetradingswingsrepresen th points(at th tops)where supplyovercomw demandand (a th bottoms) where demandexceedssupply. Unlessthe actionof you

stockindicates

(bymethod$we shall. e xplain)tha it is goingout of it

presenttrad-

in

it#3

trading

n cm cu !k % a t m t 30,

Sh C@

35

area.

to ts

mg

r ta wa it i

a$

d i

a p r oa ch e

nt

atmk

k n ow , w h e

h ar t a n

yd

ur

ap

ad ng

h ar t

TRADINGARE OF AUBURNMOTORS DURINGMAY AND EARLYJUNE,1952 ILLUSTRATED LINE CHARTFORM SHOWINGACCUMULATION IN PRWARATIONFOR AN ADVANCE. CONFIRMATION TREND INDICATEDY TH CORRESPONDIN TAPEREADINGCHAR

THE TAPE REAl)U WART.

It iEltwanty-fivayears since wi

ve mt

mr et kti

as notm im

tb

nto

ro it ow ac iona

it

pe re on

M&ny mmorendawere mcessary at th

developedef’f’ioimc

nd hartst

nim,

thi art

hene er

graduallyre

ou

im if ca

os ible gto

th re ro

nors$@ nt

peopleho

do it

nto in uiti n,an

an

he

to

teachother

makingeverythingperfeotl clearand practical. ha

lear Tape R8adingis

ns of th Ta

ad ng

artwhic is

single

stick--

,s

pictur of th marketma be ha in co

it

Chart. If severalindividualstocksare charted

on separatesheets

in thisform th WavQ Char

recordedon

tho Tap Readin

sheetof transparen

paper,half this sire so thatIt ca be laid over an individualstoc charti

oral to se ho

that stockis actingin comparison with th

haders.

five

Let UEIstudythe Canstrnction of thi Tap ReadingChart from the specimen~heetwhich follows. binderand ki

in

the

pric

takenou of th

besidethi textin orderfullyto understandthe ex-

placations. re in n e

This

tha mn

ea

the fractionsin the next. The figuresrecorde

chartare the totalnumberof sharesdeslt in When th

pric chsnges,th volumea lo

at

each fractional

th newprioe is filb

thaywere addedtogetheran recordedal at onceme No unti tnendo yo

~ed, th mice than

know thattharewill be no uore salesat thatpric

fo th moment Th ne$c saleis 10 at 40-1/4

As thcxwwer no salesat 40-1/8

cipheris entere at th 40-1/8level,and th figure efi

tha 40-1/4I.inB. the 40

;O

is entere on

lan

Th nsdc saleis 40-1/8,onl 10

shares next 20

tw figuresmus go in the secondcolumna

at 40

Thes

th first column5.sfille

on thosetwo levels next sale40-1/ (100);then200 at 40-3/8(O on th 40-1./4evel);then 10 at 1/2;no salesat none at

totnlof 2100at 40-3/4

41-1/8;200 at 41-1/4;200 at 41.-3/8.

All theseitem were recordedin the third columnbecausethe advanc continuedstre4.ght to 4.3.-3/8 ithouta singlefractionalreaction. hc

Let

the

promise worthwhile swing. We allow1/ it

is

poin fo that

dots no

commissionen

taxes,s

promisethreeto five

backgroundof the previousdsylstrading,we wouldknow be~terjus whare thi stockstands;but startingfrom scratch, We

wait ~til th

forewe make

stocktel

US

probablygoin to do be

commitment

In learningto read thes charts it is best to cQverwit sheetof pape most of th chart,sxposin on drawin th

columnat

time

sheet“t th right. In

form judgmqpt on th basi of what alread ap~)ears

th chart.

Next th .; 00

&l-1/8; 41

/8 10 at 41 1/

41-1/8 100 at 41-1/4

The tradingrangehas narrowedto 1/4 of Next saleis 3000at 40-3/4--

sign

in doubt. a kn e

becausetherewere

no salesbetwaen43.-1/4 and 40-3/4;this indicates thin market. Next 90 at 40-5/8;800 at 40-1/2;50 at 40-3/8 30 at 40-1/4 total

35O shaxes,al

ho

al

takenwithinthe rangeof 40-3/4dow to @-1/4

Here is same a%rength bu it ma mean only temporar support. Th must tellus what th insidersar tryingt

char

do with thei stock. Are

the supportingit becausethey wan to sel at higherprices,or do the r@wXlywant to acquir tle

lo of th ;t

stock? They take 90 at 40-1/2 mak-

n30

Om os no

okMk

nq

4a fo

sa eof

um la

wantedthis stockthe wcWd no have bi up fo it

on

he re

ly

theywoul haveput

ch ck cked ed

oo

,f 40 at 40 40-7 -7/8 /8

n10

This Th isis is

40-1/4 to 41 41-1 -1/2 /2

om on

half-wayreactiorIollowingthe bulge from

Thik reaction reactionconfirms confirmsthe checking checkingof the rise and

narr na rrow owsth sth tr trad adin in ra rang ngeto eto 5/ -- be betw twee ee 40 40-7 -7/8a /8and nd 41 41-1 -1/2 /2 shou sh ould ldgo go wi with th th shou sh ou ds lli os ib ible le

stoc st ockw kwha ha it go goesou esou

ho ton as

ke

of th that at ra rang nge;t e;tha ha is we

bulg bu lg ,a ,and nd wo wori ri ou ri

ow to

ge

e$

ic that th at

dbe

los op oppor portun tunit ities ies,e ,ecau cause sethe thereare reare plentyo plentyo risk

gha

Remm mmbe be inim in im m. Re

tst

eth

We

rt

them,than them,than to be so eager

largert largerthan han th do dove. ve.

yo

sl

eMy ki yo

al

00 at i& /4

ht ichis ic his

This Th is is co conf nfir irme me by th ne next xt

J8 un erth

re io ioue uelo

enMO

at

130 sharesc shareschan hangeh gehand and at 41-1/4. It looks artificial,particul.mly when wh en

quic qu ic sl slum um to 40 40-5 -5/8fo /8foll llow ows. s. No

4&3/4j

nt

obse ob serv rv 1/ po poin in ra rall ll to

100; 0; an anot ot erwe weak ak ra rall llyu yu 40.5/8lo on 10

to

(n lo lowe wertop) rtop) th then en t! re real al sl slum umpbeg pbegin ins. s. When Wh en th

stoc st ockrea kreach ches es40 40-1 -1/2we /2we re redu duceo ceour ur st stop op to 41 41-1 -1/2/2tno

eis

yof

).OW ). OWat 39 39-3 -3/4 /4 an anot oth~ h~ ra rall ll of 1/ on 400

ne

then

39-7/8;

39.1/2. Not tha the volume volumeinc increa reased sed ewe

din

down

r40

stantial stantiallots were sold mound 40 and under. under. Ad th sa sale lesat sat 39 39-3 -3/4 /4 acrossth acrossth pag horizo horizonta ntally lly and you fin the ar 44 4400 00 sh shar ares es

Bu

these these taking taking are not suffic sufficien ien to absorbth absorbth su supp pply ly as pr prov oven enby by Ocxmrs~-QJ& to 40-1/$. The declin declineco econti ntinue nue anothe anothe 3/4poi 3/4point nt wit

totalof totalof 230

‘d we were re ab able le to re redu ducet cetha ha ri risk sk to 1/ po poin int,t t,the he re redu duce ceit it to no noth thin in -th fl flatprid atprid (m (mea eani ning ngth pr pric ic at wh whic ichi hi which assured

wa

sold so ld); );th then en to 40 40-1 -1,/ ,/

ptof pt ofit it;t ;the he to 39 wh whic ic wa 3/ fr from om th

day’ da y’ lo low, w, at wh whic ichpri hpricethe cethe tr trad adewas ewas cl clos osod odwi with th

ne

prof pr ofitof itof

1-1/2points. Ther Th ereis eis it

rath ra ther erno no

litt li ttles lesto tock ckfo fo

saleon sa leon th cl clos osin in ra rall llybu ybu we

fo th ne next xt da dayl yl sa sass ssio ion; n;

fnct fn ctjwe jwe wo woul ul

carr ca rryany yany im impr pres essi sion on ho hone ne wi with th us as we pr pref efert ert

have ha ve

am unbias unbiased edopi opinio nio whe the marketop marketopensin ensin the mo morni rning ng

***

Note No te

numberof numb erof ot othe he ch char arts tsan an in inte terp rpre reta tati tion on thiskin th iskin wi will ll be foundin the Chart Studies,followingSection1.2. Section1.2. Additional be ad adde dedlat dlateron. eron. Ma Many ny de deta taih ih in inst stru ruct ctio ions ns in in Char Ch artRe tRead adin inga gare re in incl clud uded edin in Mv Mvis isio io of th thisCou isCours rse. e.

—.

TAPE READINGCHAR JAN. 19, 1932 In FigureChartForm ShowingEach l/8 Poin Mow ‘With Volumeat Each Price UNITOF VOLUME

10

ARli

HO

PO

UY NGAND SELLINGPOINTS

WITHIN

SMALL

Numerousexampleeas to ho

RA TI

this shouldbe done ar

foundin

the explanations of the Tape ReadingC!harts.But ther are some fine pointswhichmay be made

littlenior clear.

this: V/emust learn to anticipat the high

One

ow sp ts

dayismovesby assemblingin ou minds,and from th factorsthat point to

chart,al

th

certai conclusion, an if this conclusion

is justifie at what we believet comman to lx%de.

of theseis

hu

will

be th rightmoment,it become seen tha thereare two important

steps: makingth diagnoaisand actingupo it. The marketis cdnt$nuallygivinginformationas to its tech

eon ti

your position th chance favo

profit

Al

suchtechnique

must be takeninto consideration. increasethe percantagoin your favor. On your

of

buyingo

he es import ntways of doin thisi what

to learnto do

call th drivedown;tha is duringa sellin

wave en at ju$t abou

minutebeforethi wave ands-- whil th

pressureis on no wh

yo

ee it

esito.to ut

minutebefo

that,beccus it takesa minutefor your orderto ge into th crow an be executed

(I it ttakosore than th:.~t th average,your

brokeris slowor he ha

to much bu ines on hand to gi eyo

th

rightexecutions.) Sellin on th driveup is justas import nt Mo bulgesin

of th

stackare made by pools,specialists, manipulator and

floo trader to induceoutsider to buy. If yo

lenr to spotthese

conclusion, an whe you hmve mad it, tim you stroke;that is, the momentwhe yo it

go

give th

order,jus as yo

ll co re tl

Watc fo

th pausestha mark th indicatethat the forces

ing

cmhaustodthemselves market,th

time your strokein orde

tiokeri

ou ntor

en of th buyingand sell that

producedthe wave have

o,eveni

ai

ya ti

quiet. Theseare likeperiodsat th

en of

paragraphs; naw phas of the tapetsstoryusuallyfollows. V?hen stockhesitatesit notifiesyo momentumin th

tha it ha

directio in whichit has bee traveling.

lost it YOU

should

the quicklymnk up you ruind whethe it is advisabl to buy or sel or moveyou thatmove know ho

stoporder If yo

An

halt ma

be th

fina turnin poin in

have studie th Firs Mvisio

to judgethe distancewhic

of this Courseand

stockshoul move yo

fortified you can more easilydi6tin@sh

ar well

the haltin placesfrom the

When am upwardo will

indicate by

shownon th T@

dawnww

move is losingaora of it

forceit

shorteningof the upwardor downwar thrustsas

Readin Chart.

Never Xes,c fo midingand hav

stock axcep in some caseswhereyou are pyra-

substantial profiton paper.

Even at such timesthere

is frequentlyan opportunityto buy on CLreactio afte or

brea through

rallyfollowing break throughon th

dow

side.

WAY oINTS.

JUDOXNGSl%WWTHORWSAKWWSBY

We

subscrib to the thf30~ that actionand reactio

equalin the Stockmarketbecausev#Jhave rarelyfoundit to work out in the stockmarket we se ho

on

couldmake an

mone there~

Bu

thereis advsntag

gainedby watchingthe half-waypointson rallies

reaction as

basis

for judgingst#engthor weakness. When

stockadvancestw pointsand then reactson point,it

ma be calleda normalreaction bu if it reactsless than ic ti

re gt

it re

tsmore than

thereis sn indicationof weakness Used in this

point,it pointP

ways with th half

Th

saxwillustration ma

be applie to

of sa threepo$ntsmor or less folhws ti

sameamount. This iB ewa

or

raid or drivedow recoveryof practicall

sign of strengthbeoausethe reboundshowe

am

kn

than bearishbeqauseth sellers,hmin

si nis

or

li

spentthei force,are me

and

ovwx%xneby the buyars,who at the momentof completionof the recovery ,., are in

comparatively strongpodtion. wa

do

nd ha

They hav takenal

er to di

eirwa

ad

offerings

nc

floatingsupply~s thus reduced;unless furtherofferingsappearhigher ,t further

advance. Stud and lear all thes technicalpoints. Considereve~-

thhg that appear on th tape as an evidencaof suppor an I.Mtin power,or pressur and sellingpower. Continuallycomparethe strength of theseforces

Us

al th judgmentan reasonin powe at your

EEP

P E WE M

IN

URF

This is accomplished chieflythroughthe IMtation tic and d.iillh~tiOtl af risk ea

por

ra

ha

wum:

hn

1)

ou

reduc-

stimmediatel

ei

mast move thie stopto reduceyour risk as soonas th marketwill permitwithoutendangering the life of your furthe move th wa made en

trade.

(3)

Yo

must

stopso as to covorthe pric at whic th trad mus mo

havea chanceto insure

u r stop still furtherwheneveryou

ar or

os

ou profit

four stepsare vita to this form of trading. Unlessyo

Thes

carr them

out cold-bloodedly withou hope or fea -- and persistentl and

woul be 1/ pointon th threetrade On yo

W30ratical

ar wron twicefo

poin risk with

poin each time thatwoul be

Ii’you profiton the thirdtradewer duct th

point objective if pointslost

points yo woul have to d+

tw losses(2 points an th overheadon threetrades,which

would total14/2 points,making3.1/2pointsdebit an

pointscredit

ne of 1-1/ pointson th threetrades;or an averag of l/2-poin on eachtrade We do no

clai thatyou ce make cu an drie transactions

like this bu we emphasiz th poin thatyou must keep your los~es plu overheadin suc proportio to you profitsthatyo [email protected] the good

wil hav

This whc)le plan for activetradinginvolvosbuy-

ing right an sellingright,and lettin tradesrun in your favorunti yo

observetechnicalindicationstha the have gone as far as yo

reasonabl expecton the strengthof your diagnosis.

Thusma

can

tr de

TRADINGON INITIAL

Deciding ne tQ ad

upon th

n ta g

stock

letting

ACTIVITY.

in which to trademay sometime be

the marketitselftel yo

thathere is

an opportuni~. Yo

watc th tqpe

he iv le

er

Yo

have no commitments.You Wsv Chart

be or

sh etof

rtpa

r. Yo

ak

mentalnote of th pricesthat are flowingacrossthe Tap or Translux You

wai fo impressions Suddenl you noticea certainstockgettingactiveon the up

or down side

it

vi gi

leaders,you immediatelytake stop

rm nywi

th

endof

ve

positionin it, long or short,with nyo

and make

M’lLwrm

sup$dy

theyWllev

dumm

or thatits t$dkmiml positionis suchthat

theyc-an moveAt to aao4#m Mval ad realis

profit

km ‘l!hw

hm

im

rk ngfo

ou

Yo

re

k-

,M

nc

Your Mp

Readin Ghartwill giveyo al ti details. Yo mu

en uu

$h

first

re mu $m

ee th

y be p

po$mtor tw in orde to attrac

no

first

ki ga fa semov

id

he

followin of buyerst

13ell largerquantit --

ocku whomhe ca at

th to eit

dawn firs so stockhc ca find aroundthe

won

again MIMW ws

Y@lM!” Im3aom

thwl

to

Cmb

on the

a~

buy

will probably

tha!

Reading

d@Nrmry,ho wi2A

justwhat

ms

c on -

am tailin ym

lhe Carl80 86 to

line an thusprovidepurohm ng poworaroundthe low point

omin dip.

Cha?t

You

follow

Ml

bW

These paintai

-per

not

faaao indlomt$on hatthemarke is aboutto sell

@W

W3UW Ms

of

ttw

th

wa thepubli

IM3W8

closdy an w h

th#

tradin ar

floo t@@Qrs pm

knowthe game

hi$

ybwed on standardpracticeamon

and otherimportan operaknwwho managers

ou expectt make money, you mustnot trad the ;y

yb

hope,

You must

JUDGINGTH

WIKE1’BY TEGTSAN

RESPONSES.

Next gat~

he

Steel,

tmtw

som foULowingin Cam

Tdepbne

or

Can

littlein Telephoneand nothiiiguch in

so

pan

m or e e m

courqp#m@lt OP the bul side, From $his seriesd? teatshe no know

sometime r~spondt

the

l?

maxwe the marlmtby bullin Can th loadarshipof Ca

that

so as to ge help or at

laaa suppor from otho Bectionsof th market mbre rmpons

in otherindustrialsen wlwm he ha

gcml

aheadand bullsth ones that sh

most

to inflw$nc th rest of th Olwwre

that

He f2nd

little

thesesizedup he

th N3st wqxmse -- Want seem

Lh3t.

tha he follow the Un

of

eastr sistance.He

avoids bullingthe rail Mcauao he woul th rehAv to play hand.

~OCk8

Sonmlne

elm

am

40

that.

Of

luno

standin

He advamcss$h ones that ar easi

now Wa

Supptase th after d.%ingup

the

si

at

runnin fo tests,h

severa days an findstha th

buyingpower has temporarily become somewhatexhaustmd;that is, most of th peoplewh

couldbo influcmcedto go in an bu

imvedon so

they csnnotwen

that samemoneytwicenn

scarcityof

other buyers Ho

thereis

take theirplaces. Demandhas shrunk. r lO Q S U@ i$ ?

marketwill take;hc

W i W tW cX ’

ga a~ it ha no

as am

declined

points;then he

by biddin up thas stocksbu

of 1,000 share offereda

in

te to 10

in be

ma

ee

bu

el

un

at he

takingthe as theynre offered. Ou

,atort.ninri,ce h e ma

take 60

or ’700

~i~v-

300 stillofferedsnd the marketunchanged His reaccumulation

not apparent. Th reaction.

marketis stillhecvy althoug he is buyingback on

fo

12

time being. AU

from th th

to ar no

offerings

of

ho ew

absorbed h@nce,for th n~

ba five pointsup -- on

averages-- thereis littleoppositionto an advance. Th

C. 0,

,b to advanc

pl?iCfi?S.

After th theylost,ha ha

averageshave recoveredabout3 pointsout of the replacedaboutQIl th

stockh

rapidbiddingup of pricesal aroundthe room to th

levelof th previoustop.

re

lo of

want an

beginsa

The marketadvances ho ew

ou

ta

that time ,nnd who held throughthe reactio place sellingordersso lp it

an narrowswingsaro~ et

that th

th ol

;we

to an

chartobserver say: Here

to

lon sellingcombhed with the shortsellingis no

to stopthe advanc of th market

Thereis

sufficient

latentbuyingpower that

lusted

SO

long

stocksan

and atendmd to

buyerstha the

is

able

no

to unloadeverylus shareof

ti

suc

th

large 9upplyovercomf3

st

r em a n in g demand,

keep on sellin unti al

through

satisfied. The marketi

high

brough in so many

of th aemanda

th

now saturatedwit stocksend

thareis no buyingpowm left to lift that tremendousload whi.chwoul have

di Th

st

C. O. sees this situatio an know thattho timeis ripe

bids

up severalleadinghigh-pricedstocksto

levc+ls,hia causesthe publicto say

Th

new

high

nv rugc ar up into

ew

high. We shouldbu xnora. e a n wh i

prices

he ha

been sellin so many othe ntocksthat thei He keeps on selling,gettin out

are sho

everyhou

to th

supplyof stocks

of thornalso. No~j

is adding

The reactionhas brough the public

go

Thereis no

sm ket

Compos$t Operator,but tha effectof the cmdxknedoperations ers$pools,la#$eopm’ators,floor

trader an

bc hd

meeffe

wn

he ta

,of

he

as

th pub~

is when

re

od

edby

one men’ Opar’htiowl$. is importen that you observethe marketfrom this standpoint, end thatyour tradingoperationsare based,not on what you formerlyNgarde meuatala

as t~ marketlscharacteristicsut on the ftuxk

of @upplyan dmemd$ whichis at th bottomof everymove

ti

in

th marketa

al times. Tlxi la is

workingand will continu to work alwaysand forever Ther ca bQ no gettin aws fto it. It doe rio matterwhetherth bufingand th WLling$ or both,are gmuine or artificial;thatis, manipulative designedfo

purpose. ym

yth

,b

tlw Wav Chartwhich showsthe comparativestrengthof the Supplyand

bot AlliedChemica and AmericanCm wouldpass theirdividends 30@ stockswere heavy.

Allied

baforeth divid~

wa

r&piLa divi~m

th reportcam that th

had been declared,therewas

dpm timpero

announced,an wh

half-hearted rallyto

hw

the market,whic

effect

kan

WLM

bearish. Bullis news ha only

momentar

eo

tapereaderl cu wmld have been to sell eitherthis stock,or others tha respondedpoorlywhUe the strengthstillappeared in AlliedChlemical On morewor abmt thesetests$ No matterwh me.kmithem -the Composite th resulto th

pool manager,large operator,or

th tewt showimmediatel on th tape

big floor trader You, sittin at

ticker @n observ at onca whetherthesetestsbrin

lmzrishrespanse; nd yo

ar just as fr

to

ct po th

bullishor if yo

Therefore,neverfail to observetheseand othardetaildin Tap Reading. ou

BES STOCKSFOR ACTIVETRADING.

For

t h

purpos thereare two chiefrequirements:(1) Wid&

dail swings {2 nd

closemarket-

lo eto th

is in

thirdmd

as

larg#volumeo

rt

shareslistedin

less importan advantag

stock;thisis sortcd

guarante ‘tMt wham activit beginsa largenumberof investorsand traderswill participate in the campaignand thus aid in maintoAning C1OW

market. Wide daily swingsare vital,for withoutthem therei

chancet

buy end sell,pay overhea tand ealize

il av

ge

ingo

ly

intwo

dbe

littl

profit. stockwith or

pu

prinaipa,l

he

dailypaperc throughoutthe countrycarry

completelist of transnctlons for tho prevf.ouo

mx!k. Suc

tableshowsquicklywhic!h stockhad tha widestSWin&l

and

th grwatestvolumeof trading$ Thesewer th loadersfor tho pretious mwk.

This flheet c u be premrved as your wdcl

ton leader n$arkedith

recordan th f’iv or

blackor coloredpencil

Leadershipis constantlychanging Past rtico~dsro no guar sn eef

th fu ur

keof

week in orde to hmne thembeforeyo onlyyour background.Th

li

of th

ea er

ac

fo th comingweek bu thisis

tap will constantlyt~l you which stocks

are affordin the best tradingopportunities.Of coursethereare many stocksout$iduthe lo:~derahichhave closenarkets Belov#is

Wxil@ion of th

Watc for these.

averag dail rang (differenc

betweenhigh and low) of five l~adingactivestockshatingclosemarkets duringfour mnnthsin 1932:

of these,Tclaphone,quiete down to

poin an

sa eis tr

at

af

he othe $t cks;so

im sweredov to le

pointbetweanhigh an lo fo th day. Bu gavepbnt

of activity-- enought

smallfraction The th

on th averagethesefiv

enabletradersto ge in an out,

oftenmor thq onc on tha sam dtny, wit

profitaboveovdmad.

Auburnhas no been includedin this groupbecauseit is in clast3y it~ekt

At

imesi

as

fa rlyclosem rkut-- in

iod of preparationfor importantmoves,o on neve ca tellwhan th next saleis pointsawa fron th last sale ou

stockto tradein

It ha

ts er

in its restingBpells. But be

th reputationof bein

dang@r

considerit no more d.nngerousha an othe

if you Understandits peculiarities and regul.atoour tradingto fit them The stockmerelyrequire Everyone

no

differmt techniquefro the other leaders.

qualifie to tradein it

We cannotadviseanyonet

so withou muc practiceon paper. He will thus bwom the errati change in tkd

stock.

to it

do

accu~tomedto smallcapit<3li-

ationand extr~melylimitedfloatingsupply. Thosewho are manipulating

tradewith th assuranc thatit woul go fa even thoughthi we permmtig

of

to

no

accomplished in

enoughto

singlesession,

poin swingsis worthwh?l.le.fter

position if he estimate tha Wly SwingshouldfJO

the tinder

fartherhe ladonl to movo hi

stopan

le

him

profitrun.

m1 consecutivepoints cm the ful figures,withouta poin revwmil. May and June, 1932.

Qi$t 2!#QuEMEaikE EMQiwl ik3L!3u Ei&hli MJaQXwAadaku Auburn

I&)

111

Al.

Chin.

6642

Am.

can

59

Am. Tel. con.

2912

-

1

-

1 U3

(MM

~Ji4k Totah

to 10 poin movesAuburntravelledaboutnine timesas many points

and thre ti#wsas many as Telmphon and AlliedChemicalduringthe pwio

mmtibmd.

markedone

This cmnot alwaysb

expected,forhhi and Jun

it~ charactml,sticall ide swings

STOP OIUERSAND OTHE VITA POINTS.

QQ$m

of

ImQQJ@3xsa

inmuranc againstlarge10s80s.

Stop ordersshouldbe regardedas They shouldbe placedimmediately

aftera tradeis made We amnnotemphasi~ too stronglythe absolutenecessityof stoporde in wary caseJfo

thiswholemethodof activetradin de

pmds more om th limitationof risk an

th contro of lossestha on

an otheronm factor to

ca be

1)plac do

th

loor;(2

ef with th

rder

clerk,or (3 kapt in your ow hands. stre on th

n w m s that it wil be executedthe instan

tmnsactio~is made by anothe buyerand sellcu’t your stopprice;

ywr

act

mqtal

atop MWwr

ao@ CMn@y. de

ma

eh

nou

percentag of u r judgmentso that thsi

and continuallytry to m pr m ne

best judgment

profitincraams atwlily. Th

mw

ng

ckby wh

odre ul

to

i!!!

ad

dg

ne

ro

de to

th

et

ss

5,your percentag of profit

th profitto th loss,makin $100 and three-quarters

of your tota is pro~aming.

ad

ho yo ma

nd lw th rwi

or

Wheneveryo

of ts de

isme

syou

dgoh

fin your percentag of profiton clomd trades

runningdowns or runnin low, go back to pape tradin an

studyyou

lossestill your judgmentimproves ***

All you commitmentsshouldb

for th

is interrupted.The hnlt’-huurlyrioeswill.not, of course,correspond with th hngt

of th buyingand sellin waves, Thorof&e

thas e,vwrag@ re no

substitutefo th latter bu th~yhave

cmtain advambge whio it woul bo WCLI to test ***

,,

tbe

nt

go

sMe

Trade on paperumtil.ou thoroughlyunderstand it*

it

reoordjus a$ if ~o fair prim @outWI

ware givinga

orderto your broker

aooordin to th tqe$ at.whichth

ordo shoul~be ox

Give yourselfth wors of thes trmsactians,in 03s0 of

any doubt,so tha you racordwil be conservative and youwi.11not be foolimgyaqrself’.Rememberit is no importanthatyo md

at first;bu it is very importan to make yo

Onoe lwmi

how

mone

good baginnin so that when

to txvuhand realiz ne prof’itn

on

and

i a m d owhich

stay

shtmld

am

po@iti9nw

tdwm

does

not

ct

on WM$$tratlgth

right or gotw std.e. n4

ti

Your

nd

giva them

tdmld ?30t

mtkh

Skdd

fmwd Y*

stops

p4 nf

m or e p r

Do

up alme

to

the market

t.

$hmw end hop#B* OIM,y th rt

im tect

$Oidiifh??zjay.

Xtx? mM’d trodoandwlOyby

market,

either

t s

tape

skuld

Never ask advice

The information you wil durivcfro the

tapeand from your chartsis fa ge from an

more

v.?dLu3ble thanany

ha

ou ca

othe source ene

You judgmentshouldbe basedon sound the factsbeforeyou; assemblethesecnd mak you diagnosis Decide wha the sitw.ti.o il.lsor; the USQ cour:~ge decision ur

actingupo you

Be courageous, and somewhatbold but with

certainmeas

of prudence-- alertnessand watchfulnesscombinodwith caution,

Allowfor the Unforeseenand the incalculable Learn to thinkan

act promptly You decisionbecomesa

comman to trade. Havingplacedyour order,neverfear to reviso your opinion. Yo must have flexibility; th mere holdin of tainpositio is no ruas

fo

bearis just becaus yo ar Th

~rke

your holdin it

in

ilev~~

cer-

be bullis or

trade.

tellsyou what to do

it continuall confim

or

When th pric of your bi dqmma

ffora

th

stockis in approximat equilibrium, arketw ll av

eam

tendmc

to

iseor

tor

ri

tle

eo

,y uK

order

8p

This vazztmtion priceis (Wled the ‘%nvi albleE&gbth. ~~

ki 1/4.

,yo

uswally

Your profitd~es ne dopkticm an on

trade,bu on th ne

aVEWag

of trades

Suqwmim

***

UnlQssyou hav

steadyincomefrom your

busirmss pruf%ssionor your investxwnts, it is best to providein advamo and qot asideyou

livingexpense so tha in trdingyouwll

no be ccmcenne(iit thio vitalmutterand your jud~en impaired it or

It is

ve

mistakot

haveit

your judgmentis nwar

or

thereb

attemp to make mone bocaus yo

om

pecialpurpos

03ways@ bium

or

need

ch case

by your necessit thatyo

do th wron thing. It

be terto tradeon

conditio tJ

aperu

ily

your mind 2s properlypoised

re

su

Itis bettert

ftnencia test

your judgmentwit 10 $harelot of actualstocksratherthan larger lotsif yo

have to us

mqm+ requiredelwxdwre

Allo fo

th

QC9W

mm’

of $5 on 10

ts

aharcmpe

If yo

realiz an averag profit

rdert

show that when yo

continuously,o do no need to secureve

orderto mak you eftort pay comeou

Eu

therei

with wucha smallaverag profita

tinueto study,practice,Wai on

ca

d~y, th totalwill amountto $1,000in 20

ment on hisin

tradingdays. in

wa~

hi ?&Mo

ge

wq

you

wa

no

easo

hy yo

1/ pe da if yo

ho ld con-

judgwentend dewlop you intuit

ro th bi profitidea nd

each

yo

larg sum.

to increasoth averagesis of your profit will be

foundin tha par of our Courseo to tradefo

trad

largeprofitsin

to rollup snwllnet profit unti they aggregat Th

ar

he 0P

nd

Instructionwhich explainshow

oi tmo es

it

ha includedin

your tradingMnowledge~you can use the presentinstructions in tuki.ng your positional.md, whom indicationsfavor,hold those positionsfor the ilnportuntwings. Your originalrisk of 1/

to

poin takenon

the basis of Tap Wading Ohartindication may thu resultin profit

tdephane to your brokerl~ordo clerk. It is bestno friend know wher they ca findyou so theywil no th da

nd

co

en ra on

pein

to le your

botheryo

de

dur$ng

he be

results. If yQ

ccnnotdev~teall your time to th tapeduringmarket

hours,perhnpsyo chartsfo ya

ca hav

youngman or woman assistan kee you

so thatyou ca go in at convenienttimesduringth da

an find Wf@@lin~

up to date

Yo will find this nrr,nmgement er

helpfulin gattingthe bes results. If tl&eamountof your tradingwarrantsit, your brokerwill probablybe gla to provid you wit and telephonq. end, as yo

WJ

able to ge into

t,yo

ak

smallprivateoffice ticke ta ti

hi

st me

roo

up your accoun yo willundoubtedl findit profit sacludodplac whereyo

room gossipand will no

will no

hear th boar

he botheredby peoplewho want to giveyo

promptand satisi!a&rymecu~on halfminutesfro th

wLre

or

one

tisw yo plac the8eorders. Execution taking

longerthan thi mmtimo$ or

of orciem,withinon

telemo

xwsul.trom congestedconditionof the floor, uringv ry active

rket when veryon wh

si however,

mimt

or ao ix time enoughunleusyo

huve sufficientcon-

rb eh

standyou raquimmmts. th refore orthmor

Yo

dp

trad activdy, p&

mauy cmmismions an

thansevmal client

out only occqlli#nally*

in an

you specialattengt

ordain clerkmmtion your wame when ho plmm

eS run.

th orde to th floor. your prcfit in th long

ra

the

et

u r well-trie practices

You

Practice Persistently.

ments.

nd

CHART STWIHS.

Amer&m At

Tdephone ‘Ie@raph ReactionJun 2, 1932

Note: In theso@x@Q@es wa will $14u@rat what CS31 be donewith avera~eJudgmwmt,Qmo wit 6wuxUleatjudgmant No one can tell justwha we woul have donq~und th ciroums$sncss~ bu damonstrat,i~g b t migh havebee done,we ca lear

This

with th

Tape RqadingChsrtbeginsabout2:30 P. M. %-

StOfJk

prewiou~day. Th stock. ht

US

th do

ar

ingf

-3 8o

ahart@Iowsthat thereis littlesupportfor this

assumethatwe have closether$is

shortpofiitio nd carryit over

rallyof only l/4point at &5-1/8

stoc (i any) shouldno

be brough

83-3/8

takenif th pric touche that figure 83-3/8. The price touche 83-3/$ long at

83-1/4and only smalllots come

the stockbreaksthroughon th up

raiseour stop to 83--1/8. Soilin is clearto

er

tab

strongertha pressure. The sellin driesup again up to 85-1/4

Meantimewe have raisedou

yof

the

reaction

stock

pops

si

8d

85-5/8. This formation

above 85 does not indicateany seriousdecline.

recoveryof nwu’ly

pointscallsfor about1-31 reaction bu it fall 1/ ends at 84.-1/2.Pressm

eQ

stopto 83-3/4.

At 85-3/4therois littledemandan

th di

82-5/8.

1/4 point rangein smalllot Cxcopt

FollowingUXL83-1/2 -. W3

doublebuyingstop at

Thatmums

Thi coversour short stockan put us

1,400.83-l/2.he suppor line is no

side en make 8A

on positi

stop1/4 nderth lo of 82-7/8;

ha pr cewit

Telephon now workfl in

in

an

shortof this an

on th decl&e is neithe lightno

heavy;

Amrkca At ~O

This

Tel@phone Telegraph 1932*

86-1/4on the upwardswin from 81 On

@hartbeginsa tat

of suppor under the light pressureat $&5/

an

w# he

ri

tock

loset

it

low,we

obably ouldpay

or

8kw

eo

ean

raactionto 87-1/2meets mppart amouutingto 250 shares furthe 1/2 p~int bulge to 88, observe 1400.8793/4300:7/8 1700,88. 87-3/4iB

he

the increasein supply-a$

ve th prev ou

,@

1000.87-5/8at the bottomo

that dip

ru

the 8tOp 88-5/$

Ne

profiton long trade,5/8.

The volmmei,snow very light,and

is

tebnical

indicated. eis

have

sharesat th

&ose

opto 88 am mr

th

stockat 87-3/8with 80

an as th indication ar bearish,we lowe ou th

deove ni

t.

Next dqgl opening,June 16th is at 87-1/2and th imdiatel

stoc

redumm it decline. Th verylightvolumemakesu ya

lo

rt 6- /4

llyof

/8

on

ll

suspicious

1/2 point rallyfro an

s;th

te

en

3/

catchemour S*. Al at first

bu l/ of thisrallyis soonlost bu highersupportappecr --

1/ atmv th previouslow, then at 3/ ke

fu

he

Uy

above. l?ohm! be au

nd

light. at on

!!

Open

close

‘-”-w D ow n

Allied

Chmical

At Bottomof’

Ju

ockh

1932,

fr wth

P. ,a

s7

un ton

of 1200.48-1/2.‘hen some1/4 pointWriggle bet~eexl/2 ~d 3/4~ di to 600.4.#-l/8, nd

rallyon smalllot to 48-7/8whereit closes

The opening,June 2nd,is 1-1/ wint

down ~t

1300at 4’7-5/$; yo

sa

way

ockw

ou

hi

ng

The firstsignalis bullish--

100.47-1/2,3/3 higher. Next supportat 47-3/8;anothergain of 1/8; stillbullish. l/ poin range3/8-5/8Sthena l/ poin ~P be~.~~ that to 47-1/8 highersupportthan th formerlow. If it doesnot

cemt decline3Mic,nte 47-3/4the n= No

lightening

pressure. ‘l%i is bullish. From

saleis 500.48-7/8 then400.1/4 100.1/2.

look back over th past fe swingsan note that th last

bottomwas rntade 100 shares3/4 poin en th followin di wu 40

from the previoussale

down

at 5/ down

Then after1/ poin rall

lots tharoiH anothe di of 20

share

th last sole

S om eo n

is

$haresat 3/4 dow fro

evidentlytryingto mark this stockdown

in orde to bringout fres selling. This means tha~ t!aey want the stock. Buyingi

betterthanthe selling.

eis

eto

4a

e13

share~are taken. Than th price snapsstraightup to 50-1/4 then 50-3/8.

we

raiseour stop to 48-3/4o

ga

reaction

within1/ of it to carryth

to 49-5/$bu

both lots

Volumeenoughcomes

th stockclosesstrongat 50-1/4

top. Inoreadxqjindicationsof strengthhave led us

trad overnight Our sto is raisedt 49-3/8assurin

Allied

A-L

Bottom

Ghernicu7 Of

ea

tion

—.

50

AlliedChmical ,1

On June 10th this stockmade

lo

of 4“/,then rallie to

54-1/2cm

on

June I-4th.It opensJune 15th at Th

ir tMy ng wa

in

hi st

positionis neutral. kamou tsto

8. Th

xt do

ve

wipe this al out. 3/

‘l!h ictureis bulli~hs tra

far, becausethe stockhas worked

eon

order

53-1/2. Ne It is

al yto

5/

Th upwardwing is no very vigorous

driftingupward littlepowerunderit

Th

gainsare slightan

th volumei

small. Above 55, the formationbecomeshorizontal.

1/2 point CU

to 54F3/4bringsi

littl support;it indicate auaother

of 1/4 point 55-1/8level wile

that

shows

ral. of only 1/ abovethat. Thisdelicat lo

the

ur he di sdd.fi

belmwthe critical

4-3~8and l/ po

lly;

en he to k.

at !$4

rtmgo

gw

pdo

in price)amd carryth $mde ovmxlght

Havingrd.lie from47 on

200.54the formatio lmxmes wmdgs-$haped,ith the poin around54.,We bringour @tipdown to ~-X/ is oxeoutedat 54-1/2

as protectionagaimt

rall an this stop

to

buildup en we wato to se whetherthe up swingha powe enoughto go in%onew high ground abov 55-1/2

Tw

56

##17ied

~hemicu? /932

32

Per 4! ct37 line

Chart

,.4 ‘.

Reactionof!darc JJ$ 1932.

This stockopen at 37-1/2 declinesto 37 an immedhtely recoversal bu

1/ of th decline.

he

ip to

7-1/8a

th

sis

next salei~ 37-1/2 tbo abilit to recover;n e x t , the openingprice.

ei pa

37-1/2

3/ is @stabli#h@d, an

aftera di

of 1/3, th pricemove

up to 37-7/@ 1500bein takenthere. Another1/8 di ar takenat 37-7/8 followedby to

38-3/4

reacti

of

an 1300 mc

straightru up on

8, hanon

/4 1/

ra lya

noth

di of 1/4,makinga tradin acme38-3/8to 3/4. Note th dullnessbe

rt

eg

1-3/4

th pricetouthos37 th lo poin of th qmning clip This iS nfr

rd.ly;

shortOf half wqy.

pi

t-

mowa dow to 38-1/&,axM3 When the r a l l y it 3’?-7/8.F~

bu th rall fallsl/8

beginst

thmt timelon,thereis

fadeout we make

succ~ssionof na lows an

weak rallie~, We keepmovingour stopdown-- firstto 37-3/8 then to and finallyto 354/4. has

en

fa ha cmum

Nothin

that

us an uneasinesson this shortsale.

Afte the 3/4 rall fro 3’7, not~ thut th subseqwn rallie ar as 1/$ 1/8, 1/2 l/4,

follows:l/4P th stookis paper,with

at

thatpricew

ar

1/411/8.

pointst

NO

th goodon

stopat 35-1/4 so at least3 pointsare assured. ts

our Htopdown within l/4

ro of the bottom$becausewe can’t

A ME ME R C A CAN

Juw@ 3.4-15-16 3.4- 15-16-17, -17,932. ThisITape ThisIT apeReading Read ingC h m t of Am Amcm cmtc tccn cnCa is co comb mbin ined edwi with th Char of’fivo Ieaders@ of

hi

Ca

me

th ot otlm lm fo four ur am Anncon&,

Motor Motoroand oand Steel. Steel. Ca

the

f!ctlbws

more do doWm Wmnt nt sis

lead le adms ms

five

Viav Vi av

Pmdl Pm dlap apet ethi hi

mkab mk ab

ho

ca se seit it wa

os ly that th at

in it ma mark rket etmo mova vawa wats ts th than an th ot othe hers rsam amon on th ti tivu vu

twh

bo

ht

sw

& Vf 5

Rmd$ng Rmd$ng Gharlj Gharlj.‘ .‘Phu Phu WQ cm antka antkaipa ipate tethe moves moves

,i st

plotted

trudewith trudewith profit profit

.Th 2p tm

thro th roug ug to

mm

high hi gh wi with th co cons nsid ider erab able le v oluue volu ue

SItOpS pS Can SItO

with

agdn agdn

brin br in our sto tightUP tightUP

ri ce ar

,& ga nm@

ur

shor sh ortat tat 3$ wi with th

ngwi

twh os~p os ~pro ro

to

oi

an

stopat st opat 39 39-1 -1/2 /2

After touchin

yto

the previou previou top, and the Wmo Char records records whic wh ichis his

~r

rth

fmcticmn fmcticmnll, ll,lo~7 lo~7er er top top

coti co tiim imat atio iontha ntha th sh shor or si sidois dois th ri righ ghton tone. e.

(M d$ d$cl clin in moved

to 38 38.1 .1/2 /2 ra rall llie ie 39.

ci

The Viave ViaveCharthas Charthas be been en be bemi mish, sh, bu

th

foll fo llow owin in ra ral~ l~ in th Wa Wave ve Ch Char artis tis lo long ngert erth. h. th pr prev evio ious uson one, e, an th di wh whim im fo foll llow ow is sh shor orte te th than an th pr prev evio ious usom warning warningthat that

ralil.y ralil.y coming. coming. We co cove verou rou

ge it at 38 38-~ -~/1 /13, 3,hi hichis chis prof pr ofit itof of

paht

os ,O

Thisis Th isis ou

shor sh ortat tat th ma mark rketa etand nd t.

l/

et

hs

he re fitfo fi tfo

da

us

\/