Trade Setup Number 1

Dave's Set Up Examples

Trade Setup Number 2

Newmont Mining Corp (NEW)

In July 2005, I was paging through my stock lists when I came upon NEM. Below is Chart 1 that I saw that day.

Chart 1

When I begin analysis of any stock, I always use the above template on the daily chart. It has the Monthly Boxes in Blue and the Quarterly Boxes in Red. It also has the Woods Float Channel in the template along with 21/50 and 200 SMA's. I then look back in time to find the last Quarterly Swing Chart High or Low, in this case a High, and then add the Principle of Squares from that high. I look in the past to see which separation gets the most hits and then expect that separation to work on into the future. In this case, NEM's separation is set at 22.5 degrees. I then set the Gann Square Time Indicator on the date of that high with a separation of 22.5 degrees. As you can see in Chart 1, the price hit a low at the 202.5 degree price line near the 180 degree time line in mid May.

A. Points out the price of the Quarterly High.
B. Points out the nice bounce that started after the price hit the -135 degree angle down from high.
C. Points out the bounce up 90 degrees to hit the -45 degree angle from high right near the 112.5 degree time angle.
D. Points out the low was on a 22.5 degree overthrow from the key 180 degrees down from high. (many times the price will exceed the perfect target by one square before bottoming or topping) In this case the stock hit the -202.5 angle in the area of 180 degrees in time, an important time and price Square and we should expect a change in trend.
E. The stock bounced back up 3 squares to key resistance in June. (old lows are now resistance)
F. This is the time frame that I began my analysis. In July the stock was holding at the -180 degree angle in price.

Chart 2

The next template I look at is the price with volume and my Reif AVX Indicator. As you can see there were Two Reif Accumulation Days in June as well as one in August. I resolved to buy the stock on a breakout over Trendline A.

Chart 3

I also take a look at the daily chart with weekly boxes so that I can see how the weekly swing chart is behaving. As you can see on Chart 3, the weekly chart is in the down inside position [A] the last week of July after doing and ABC off of the June high. A turn up in the weekly chart at 38.58 would also accomplish a trade above Trendline A in Chart 2, a bullish event.

Chart 4

I decided to buy NEM for my MMM clients when the Weekly Chart turned up on 9/2/05 as shown in the chart above. On 9/14/05, the Quarterly Chart turned up when it exceeded the prior quarter's high of 42.61. At this time I reset my Principle of Squares Indicator to the last Quarterly Swing Chart Low of 34.90. I also reset the Gann Square time Indicator to the date of that low. We sold the stock on
9/29/05 at 47.72 for a gain of 23.99% in 9 weeks. The stock ran right up to the +180 degree price angle and I expected a steep pullback. This pullback developed as expected. I continued to track the stock looking for a buy near the 90 degree price angle.

Chart 5

The stock continued it's pullback into early November at A in Chart 5, bounced and then set up Trendline B. I decided to buy the stock again when the prior weeks high was penetrated and this happened on 11/16/05 at 44.61. The day prior to this entry was 180 degrees in time from the last Quarterly Chart low. Please note that another positive bit of information on this setup was that the low at A was very near the Wood's 50% Float line. (The grey dotted line on the chart). As it turned out, the stock closed well that day with a Reif Accumulation Day. The stock rallied to the prior high at C, pulled back for a few days then blasted out to new highs on another Reif Accumulation day at B. I sold the stock at 62.50 when it hit the 360 degree price angle from the last Quarterly low, a gain of 40% in two and a half months. This shows clearly that Gann was correct when he said the last section of a move up gives you the greatest gain in the shorted period of time. It is now April 2007 and the stock still has not exceeded that high.