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    Gann, W D - New Stock Trend Detector PDF

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    fantikomed

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    MAREEL With New Rules and Charts for Detecting Trend of Stocks BY WILLIAM D. GANIN ‘MIAME, FLORINA FOREWORD ‘Acmian ‘writes the best and does the most good for others wher, his. object in wiiting is not to make money or gratily fon oF gain publicity, but to help others who anced hefp and appteciate lis efforts. ‘When T wrote TRUTH OF THE STOCK TAPE iv 1923, It wat because there was a demand for a book of that kind.’ People necdéd the help that T could give them, am the benefit of my experience and knowledge, Ini that I gave the best 1 had and received my reward. People ap- preciated my cflorts. They bought the book chen and they are still buying it. “They say it is a good book and more than worth the money. That is very gratifying to me ‘After the 1929 bull market culminated there was 8 de- mand for a new book to meet changed conditions under the so-called “New Tira," so I wrote WALL STREET STOCK SELECTOR in thie Spring af 1930. I gave freely of my knowledge anid the benefit of years of experience, This book helped others to protect their principal People who read the book pronowaced it Ie is still selling, antl again I have been rewarded. No man can learn all there is to know abyut forecasting the trend of stocks in 3, 5, 10, or 20 years, hut if he is deep student and hard worker, he leans more and know edge comes easicr after years of expericace, I knew more about determining the trend of stacka in 1923 than | in rgrt. Seven more years of expericnce gave m= more knowledge and cnabled me to write the WALL STREET STOCK SELECTOR in 1930 and give my readers the Benefit af my inerensed knowledge. Now, after fire more years have elapsed, my experience and practical test of acer rules have enabled me to lenrn mare of value since 1930. FOREWORD The 1929-1932 panic and what has followed since, guve me valuable experience tn id F have pained more knowledge tecting the right stocks to buy and sell. I cannot T pass this knowledge on to those who will appre- of people who have read my books have asked me to write anew book, Again, T answer the call and meet the popular demand with NEW STOCK TREND DE- ll help others to avoid of the pitfalls of reckless speculation, Tf T can lead a few more to the field of knowledge, [ shall agsin be amply repaid for my efforts, W. D. Gann January 5, 199%, 23 Wall Sineet; New Yorks csvset iabeaaF OSES san mean totter ined ttn NEW STOCK TREND DETECTOR CONTENTS Bel Hietory Repeats. i aaa dual Stocks v3. Averaues ‘ pene ¥. New Rules to Dect Trond of Stucke See ‘VIL Volume of Sales ; a eee ar YIT, A Practical Trading Method. Ses fer VIM. Future Trend of Stocks... a on i | i 4 } ‘cies eet cnet erect aliments a. Ujtited Fruit—Werlly High and Tar: je Cam Products—Weekly High and J 36. Com Producte--Weelly High and Law: 1934-1935 icing Monthly High and Low: 1924-1933... 5. National Distllere—Momthly High and Low: 1925-1939. 57 6. United Fruit and Chrysler Motors Comparison: 1935-..-. 62 NEW STOCK TREND DETECTOR CHAPTER I A NEW!DEAL IN WALL STREET Since writing TRUTH 0 THE STOCK TAPI ay23 and WAT,L STREET STOCK SI SLO in 1939, the greatest panic that the world has ever secit has tnker place, culminating with thé greatest stuck decline in history, reaching extreme low levels on July 8; 1932. €o ave changed since 1939 and riew laws have heen passed af- ‘The passing of the law ing stork ext de a great change in the a stock market and " late new rules to meet the The Bible 01d things pass away und new oncs come to tuke their places.'(EYA wise mat changcs his mind; a foul never."" The see the new way of doing things is doomed to failure. This is an age of progress. We move farward not back ward, We cam We must go ahead with progress or retrograde into the list of the “has beens. Henry Ford made hundreds ms of the Tt was a good car in its day and Ford with it, hut timie and conditions cl The changed ‘and demanded an up-to-dare, better car Ford, heing a wise man, saw the “han and changed his rm dst of greatest depression, Ford closes! and sper $10,000,000 to develop a new and better ear, or as the t a NEW STOCK TREND DETECTOR boys say, “He made a lady out of ‘Lizzie.’ He was not actuated hy the desire fot mpre roney when he developed this new car, It sas pride and ambition and not greed hat urged him to keep the public's ood will by giving them a better car at a lower price. The public reepunded quickly and the new Ford became s leader. Hach year Ford has the 1936 Madel is the best car yct produced, Politicians with scliish motives ave always preached way business is handled on the New York Stock Exchange and the type of men who handle it. “There is no business in the world whe er type of honor exists than among the men who are members of the New York Stock Exchange, No business men in the world live up to their contracts like the brokers on the flaor of the New York Stuck Fxchange, ines uf business-cuntracts are miade for future de- livery of different classes of gonds, lumber, textiles and mer. cantile products of various kinds. In cases of this kind, when prices advance, the buyer calls on the seller to. make delivery of the products, but whem prices decline he cancel: Jhis coutract and leaves the seller to get out the best way fhe can, L quote from a letter received from a prominent ‘After trading there ten eau it fz my aplolon there fs probably no place ‘be business an fre of repuintons et se a dlshonesy. Such a thing as a member of the New York Stock Ex. change ever attempting ta cancel his contract for a stuck * i } mie Sis rennaent irene eer ieeni es mee A NEW DEAL IN WALL STRELT 8 he buys or sells is waheard of. When a broker buys av sells stocks ofi the New York Stork Exchange by raising his hand or nodding: his head, he is bound by hi act and he does. No matter how much the stuck the logs is, be never welches, He not attempt to cancel his contract. He minkes his de The brokers and the managers of the New York Stock Exchange are honest and reliable men. ‘The public ‘has beew confused ay to the position of the New York Stock Exchange, which is but the means and the am ery for carrying un transactions between buyer and seller. The brokers on the Huur of the New, York Stock Exchange are in no way responsible for the actions of pools or outside deals, which at times have been handled by unscru manipulators in the pst, but the public has been isd to Believe that the Stock xchange and its imembers were work- jing against them. The brokers ly buy and sell for a mmission and give the beet service possible to their cuse tomers, The New York Stack Exchange serves a useful purpose, ‘The greater part of the manufacturers af this country have their stucks listed on’the New Yurk Stack Lis: change and every buyer and seller can know every day wh the prices are. Without Stock Exch: there would be no Cl who need money could ins cash. The fact that the New Yark Stock Tixchange has heen in existence site 1792 proves that It fills an economic acd, cr it would have long since'been ont af business, For years Wall Street and the New Yark Stock Ex change and its rules and way of doing business were com sidered the best and necded no changes, “Then en “New Deal’! and the Securities Exchange Lew which pelled changes in rules, Before these iaws were pr effect, the New York Stock Exchange saw the need now way of duing bus oughly inforn 4 NEW si10CK TREND DETECTOR Wor Brame Wat Sigexr ano 1H New Yous Srock CHANGE T Phe man who makes profits never ives credit to Wall Strest brokers oe any dne cise for his profits. He taker credit for makisig them himself. Then, why should he blame his Inesen on someone else? Tr you make a trade it storks and lose money, do not let politicians Iead you to believe that pool managers, manip laters, Il Street, or the Net York Stock Exchange are the cause ; therefore, don't play the if you lose. If you had carelessly ran ia automobile and were injured, would you blame the aulo- wr the driver far your carélessiesa? Just because ears is no reason why laws should iobiles off the roads and streets. mobile people have been killed 6 be passed to keep auto Politicians have (ried to pass laws for years to restrict the tiseful operations of the Stnck Exchange and Commodity Tixchanges just because peaple’ who Tost maney have com serve plaisied ty Congressmen against the Exchanges w' a uscful purpose. ‘Taw Law or Surrey anv Denman New York Stock Exchange, New York Cotton Exchange and the Chicago Board of Trade are governed by Supply and Demand, No matter whether the by the public, by pools, or by manipu- latorg, prices decline when there are more sellers than buy tre and prices advance when stocks are scarce and when there are more buyers than sellers, The members of these Tixcligniges do not make the markets; they only do.the buy- ing and selling for the public and large operators. | The fpovle and large operators in the past have manipulated pe prices ani the buying or EAI ee Shs tien nc onnarci ‘A NEW DEAL IN WALL STREET 5 prices, but no bhune-should be placed on the Exchanges which merely act as 4 ¢learing house for the transactions Li you could find out the rules the master market makers use tu make money, you would buy and sell when they do and make profits, woulda’t you? Tf you knew what che big operators were doing, you certainly would follow People ultei ‘How can | make some casy money?” or “Loe can L y quick?” There is no way ny way to make money Jedige yourself, You muse pay for whatever y paying for. Getting, Unan good, You can learn what the big operators are cl a guud Wall Street detective. You can detect wl , “wers that he’ are doing, by a study of Supp nand, ‘Lhe records of the total sales and low prices of every stock are published daily in the news: papers throughout the country. ‘There is no soeret alt it. Te is just up t0 you to Collow rules. ty and Demand and apply n trend and make money. changed stork trading so far ag the public is concerned Washed sales under the Securities Exchange Law are m longer permitted. The specialist Is restricted on lrarles that self. Short selling bas been cureailed. fn reyuired lo carey xes have been 1 the amount of , both income t raders and investors to hold on longer and not sell out t! stacks because they would have ta pay such a large amount This changes the tech. times but tite ye RGN See ete. on Me RR 6 NEW STOCK TREND DETECTOR uch weaker and stocks will decline short interest in the future will be be smaller, and the support wach smaller than it eventually will mak muck faster because limited, pool operations in the marker by che specialist will be has been in the past. Pheee will come a timc when the tnatket.will rum into vy selling; bids and offers will bo far apart. It h everybody wants to sell and ‘Another thing, heavy margins will work against the market and cause a greater decline, because when people put up 40 to 60% margin, they fonger, or until the nearly exhausted, bouy will want to sell at the same time and there will be few s It is my opinion that the lars passed to regulate the Stack Exchange will not prove beneficial tw the public in the future, just as many laves already passed by the Administra- thon under President Roosevelt have already proved ta be dletrimental und the Supreme Court has found it necessary constitutional to declare them CHAPTER IL Have you ever stopped to thine and make a careful analysis why you have lust money in stocks or why you heen wrong when you made a trade? If you have, you have probably found that you traded on hope, bankers’ opinions, brokers’ upinions, or relied on tips, ar you guessed yourself Another reason, because you did uot admit to yourself thet you could he wrong and did not protect yourself when you made the trade, But regardless of how you made the mis: take and had the loss, the fault was your own, because you had no definite rule or plan or way to know just when tu buy and sell. You should learn to trade on knowledge, which will climinate fear and hope. Then, when hope or fear no longer influence you, knowledge will give you nerve ta trade and make profits. You should learn the truth about « stock, then learn hove to- apply: all the rules that I have given in my books T RUTH OF THE STOCK TAPE, WALL STREET STOCK SELECTOR and in this book, NEW STOCK TREND DETECTOR. Then you will have 2 knowledge of trading and an education that you never had Before, and when you make a trade, it will be for a and aufficiefit reason and on definite rules. You w’ hope nor fear then. You will trade on facts. You tece your capital and profits by the use of stop loss orders and will make profits “There isonc way to alyrays correct a mistake if you buy or 7 WGK TREND DETECTOR sell a stuck against the trend, and that is to place a sup loss ander, A stop loss order protects you in many ways. When you buy a stock, place a stop lust order 1, 2 of 3 polis away, you are out af rown or out of reach of your broker and sore sudden, unexpected event happens to cause a sharp decline and the stack reaches your stop tuss arcer, you att automatically sald ont.. “The stock might go 19 points lower the same day before they could reach you. Yet, you are pro tected because you! had your order with the broker to sell You did not have to he there to watch it and did not have tu be where the broker could reach yo “There is nothing that will give you more valuable in- formation ve enable you to (ell more what a stock is going to do than to study itg past actions and apply the rules that 1 i Tf you know what a stock hs done in the ¢ what it will do in che ig recorded. und reuis- fluenced by Supply studied correctly, will tell you more about the stock than papers or any other kind of so-called Learn To Be IyperenDENT The greatest helps that one man can give another is to show him haw to help himself, “The man or woman who depends on others for advice, for inside information or whut others think rbout the stock market, will never, make 2 suc. cess of speculation ar anything else. You must lenrn to be pendent. Learn to do hy doing end to know by study and application. ‘Then you will have eonfidence and courage na one else can give you. not fallow blindly the opinion of what their opinion is based on, but when he himself sees understands and knows the rules that sreeast stock market trends, then he becomes a good Wall Street detective, He detects the future trends and follow FOUNDATION FOR SUCCESSFUL TRADING 9 polongersays, “LE Lkwesr the infor mation T get on Chrysler was right, I would buy 5e0 shares instead of 109.” When he sees and. unde Chrysler gives a definite indication of an advan has no fear and no hope, but has co buy s00 shares. No matter what business you are you cia about it, The mast important t your health, for yon to protect is your take time to study and prepare y money yourself and do not depend forever and entirely upon others. lence and ug outside of Therefore, A Drristre Pras Make up your mind now tu have a definite plan or the future, Decide to [ollow rules when you buy or sell stocks, but first 3 are good hey will work. ales given ini my books are good practical rules. You can prove them to your, own satisfaction in a short peried of rime. Many men and women who ny books, TRUTH OF THE STOCK TAPE and WALL STREET STOCK SELECTOR, have learned the rules, followed them and made a success, and you can do the samme if you will werk and study hard. Lhave studied and improved my Methods every for the past thirty-ive years. Tam still learning. Some of ny greatest discuveries-were made between 1932 After Jong years of study and research, I have si and made my 1 al so that others ean a as easily as I can. have cut down the work eo you can get re: have made profits by following strictly the samc rules. Kwowsebor BriNes Success The door that opens to big profits has but une key to unlock it and that key is Knowledge, You cannot get that 0 NEW STOCK TREND DETECTOR knowledge without work. have made a success by hard work and you, toa, can make plenty of money out of the stock market if you study and work hard enough. Work is the sin Wall Street. il not go for his hank-roll or jewelry. at she sought, and his great wisdom won her. luye, so Arthur Brisbane says, and T have a great respect for Mr Brisbane's opinion. TV you yet practical knowledge on stocks and commodities you will have no trouble in getting capi to make nore money with. Money always cymes to know Knowledge money is worthless. You can in- money and make wise investments when you red knowledge, Quatarications ror Success 15 First and most important —You must get Knowledge. Jed co spend thirty minutes ta one hau studying stack market movements for the next five Then you will ger knowledge of how to detect stack ends and will make money, You will not be look« 4 quick and easy way to make money, You will in advance swith time and stndy. The more ti getting knowledge, the more Maney you KNOWLEDGE make later. END; PATIENCE cations for suc ‘his is one of the very important qual cess. When you buy or sell you must have the patience ta wait for oppor bt. Then, you must have the patience to wait untilthere is a change in trend hefore ‘you close a trade vt take profits | FOUNDATION FOR SUCCESSFUL TRADING 11 gape NERVE 1 can give @ man tl hasn't the necve to pull the trigger, he wi game, You can have all the knowledge in the world and if you haven't the nerve to t make any money, b makes him bold and enables him to act at the right time, 41H; Coop HEAL ‘Alter you have gained knowledge, acquired patience and developed nerve, the next important quality is good healt! No man can have patience and nerve und do his best unless his health is goud, If you are ia bad health, you becomte desponilent, you lose hope, you have too much fear, and you will be unable to act. I have been through the game for all these years; have tried to trade when T have been in bad health and have scen others try to trade, but I never saw 9 rman yet make a success speculating when his health was bad. 7 _The thing to do if your health gets bad is ta quit business, quit speculating and get your health back, for health wealth, STW; CAPITAL With all of these qualifications fur acess, you must bave capital, but ave knowledge and id make a fot patience, you can start with a small capital GE money, provided. you usé stop Foss orders, take small and do not overtrade, ick the trend: after you detect the trend, go with it regardless of what you think, bope or fear aid you will make « success. Read and follow the "twenty: four Never-failing Rules” om pages 18-19 of WALT: STREET STOCK SELECTOR losses Remember, never CHAPTER III HISTORY REPEATS le market moveinents can be study of past history and past movements. By knowing t preateot advances Bave taken place and the rimes whion the greatest panies and ue afd the time periods'to watch for major and jn Wend, you can detect what to expect vemember une thing, whatever bas happened in the stock matket and Wall Street will vances and bnil markets will come in the ft rey Just as they have in the past. st of a hatural law and the balanc nc with price, [Tt is medion In one dircorion sind reacti the opposite direction. Tn order to make profits, you must learn to fallave the trend and change when the trend changes: War in the past has always had a great ellect upan stocks ices. ‘The starting of wars often has pro- harp decline’ followed by booms, and after as another sharp decline «ar : boom with probably higher levels than ng the war days, Tt is important, therefor, to study the action of stucks and commoditics around the he- inning of war periods and after the ending of wars to detect what may happen in the future when these repeat. It is important to study the time that has elapsed between bottoms and tops and the greatest duration of any bull « ag the greatest duration of any panic or decline. rH me cae et HISTORY REPEATS 18 W. D. Ganw Avaraces 1856-3874 1fs6—If you will refer to my averages SIREET STOCK SELECTOR, you wi n February, 1856, storks reached a high of 93 14- Then followed 9 period of distribution, 4857—In January, the last high was reached at 92, fi which a panicky de 1 was the 1857 panic, which culminated in October, 1857, with rhe ‘Averages down 58 points in a period of six m 1858—A rally followed to March, 18,8, lasting ive mos wed andl miade Ie je market dec Juné, down 15 montl 1860°—Tn September, the high was made ugain, 15 months up. 1861—Last low on the Averages at a8 in March the last low before to compare with other war booms. 1864—In April the Averages reach: 46 tconths {rom the last battor they decline mute than two consecutive 1 1865-—-March, low #8, dow hier, high 121; time, 7 months: 1866—February, low roo; ti 12g, 8 months 8. From 186g—July, high 181; time, 27 months from Ap! ‘50 months from March, 1865 low; and 99 from March, 1861 ch wes the most impoc- tant time periadl to 3 months, ‘The 1a Nrw STock TEEND DETECTOR months. This ended the great after-war boom, and a panic followed 1873—November, low 84, 2 decline of 96 points from the of 1869. ‘Time of bear calapaign, 52 months, it from August, 170 to May, ©871, there was a rally of 9 months and from January to June, 1872, a ally of 6 ma ind from November, 1872 law, a rally to January, 1873, a two months! rally, which cated & weak market, just as we hed in 1931 and 1932 riyq--Fabrunry, h In June and October 4 months and 8 May, 1875. 12 Inpusteis. Stock AVERAGES 175-1896 Here we begin with 12 Industrial Stocks which were ahout the same as the Day-Jones Averages, which started in t8yy. 1875—March, high §33 October, low 48. 1876 February, high 52. 1877—October, lay 36, a decline of 16 munths witho in August, 1879 and tasted of a2. months. 1881, a pel 72, an advance of 47 months with « notion in 1978 and 1879,-und 2 t 3 reaction several times. : 1881—June, G-amonth 0 re) From June, 1881 to June, 884, there was an cx: rome bear exinpaign with the Averages down from 72 to 42. The Bear Campaign lasted 36 months trith only & 2 months’ eally, like the rally from July to September, 1942, Then, from the top of a rally in August, 1884, there was a decline to pees eee FUSTORY REFEATS: 7 1885, inaking a double hattom at 42 ax cof Tune, 188 1885--Noveinber, high 57, up 10 months. 1886—Mj 1887—End uf bull + tiene, 34 months from 1884 low and 27 months from the secondary bots tom of January, 1885. 1888—April, low of hear market at 51. Time, 11 2 1890—A third top at 63 was Fi January, 189, snaking this almost 2 triple top and selling level 41888—1890—The time from April, 1888 to January, 190 was 2 months, 18go-—Detember, Low of decline from last high of January, 1899. 189a-—January, high of bull marker. at months from 18g, “Then ful 1893. August, 1893, hoteom of bear market at 4% down 32 points in 7 months. % ring —t camipai mantis. was really 2 ral far the rain trond was still dor. 1896-—Bryn Silver Panic: ‘August, 196, low of the Dow-Jones Averages at 29 ‘Time, 14 months from: the top of 1895, and 43 snonths from January, 1993 top, After this panicky ne was over, the McKinley boom started, lasted for seweral years. Dow.Jones IspusreiaL AVERA £B97-1935 1897—September, high: 55-1 1898—March, low 42. ‘Time, 6 top. rfigg——April, high 78. ‘Time, 13 mor 12 month jonths frov A sharp de 16 NEW STOCK TREND DETECTOR followed in May; then a slow advance, Sept high 78, same ag the April inne, from 1396, 37 months and from March, 1898, 18 mor Eoprember, low 53, Time, 12 months. the end of the bull market. December, low 62. Time, 6 ioonthe. tge2 April, high 69. Time, 4 month t9og—Octoher ant Navember, low 4214. Time, 28 to 29 m from 1go1 top; 8 months from top of last rally in February, 1903. After 1903, the Indust Averages “became more active and were leaders, whereas previous to this time the railroads were the ctive and leading stocks. The rails did 18y6 tm 1906, which was the Last continue wi 1906 h 103, Time, 27 months from 1903 ted more than’? months, an ation of a strong bull market. Low of reaction xt 86 in August. ‘Time, 6 8. October, high 97. 1goj—January, high 97, from which a big decline started, ‘March 14, 1g07, 9 panicky decline known as t Ssilerit pa Stocks deelined 20 points that day. Low of the Averages was 76. Rallied eo 85 in Ma then declined to 43 in November. ‘Time, 22 months from January, 1996 high, Accumulation took place and a bull market started fram Noverber. }—October, high rox, top of bull campaign. Time, 23 months, Never reaeted more then 3 months. 1910 July, low 73, bottom of dei Time, 9 1 1gt1—June, high 87. Time, r1 months followed. September, law 73, 1910. Jow and never rei HISTORY REPEATS " high 94, top of bull wave, ‘Time, 13 the third tire ‘ways indicates that an advance shou! as the third bottom is not liroke, September, high 83. ‘Time, 3 months, December, low 76. agiq—March, high 83, same as September, 191g. War was declared in Europe in the early part of July and the Stock Exchange dlosed at the end of July and remained closed until December, Alter the Exchange opened id December, 1914, the 1 trial Averages declined tu $374; the sine low level reached in 1907. ‘Time from October, 1912, 26 month 191s —December, high 9974, just under the tup uf 1909. 12 months from 1914 low. 1916—Aprily low 85. ‘Time of reaction, 4 months. No- vember, high 119, top of bull campaign. a new high level for the Dow-Jones Indu: ages, ‘Time, 23 months from December, 194 1gt7—Hebruary, low By. June; Then a big panicky decline followed. December, low 66, hottam of bear campaign. ‘Time, 13 month 1919—November, high r1g 4, top of bull. eaenpa 24 months from December, 1917 low. No reset lasted more than 3 months. 1g20-—Deceimher, low 66, same low as 1917. top, 13 mon! ige1—May, high 79. August, low 64, not 3 points under the rr7 and 1920 lows, which was a sig of good support and indicated that 2 bull market wauld fol- low. ‘Time from 4919 top, 21 months. 1 NEW STOCK TREND DETECTOR 192 1—t9ay Buit Camraicn followed the preatest ninatimg m. the low in August, 192 bull market in the history of the ‘United States, 1923—Top ached in March, 1923, ne, 1g anonths, Low of reaction at 86 in Oxto- ‘Time, 7 months. fy, 105, From which a 3 menths May, low 89. May, 1924 was je real beginning of the Coolidge Bull Market. 1gag—In January the Dow-Jones Averages crossed 120, 1c high of t9x9, which indicated much higher prices hecause the valuite of trading was heavy and stocks were very active. rozh—February, high 162 from last low, 20 jonths, March, bettom of a sharp decline, the Averages declining to 136 and some stocks declining 100 points in this short period. “The Averages held for a few months in a.narrow trading cange and then started up again. After that no reaction fasted more than x months until 1929. 1929--On September 3, 1929, when final top was reached the Indust wrages made 386, up 322 points fram the 1g low and 300 points from the 1923 low ow to 1g20 high, 97 months. (Refer to 1861-1869 and you will see how this com- pares. The Tull Campaign at that time lasted 99 ‘unl was one af-the greatest in history until 1929.) The time [rom the 1923 low to 1929 high was n the 1924 low, 64 months: from cd Fron the Inst low of October, r926, 35 months. Te is before and after wars that you cam determine the greatest Jength of time a bull market may run and the great: HISTORY REPEATS w icky decline may run. September, 1929 was ch began tion of the bull market regule of a longetrend business cycle: w 1lig6 and continued for 33 years, with each ca market making higher prices, which showed that the long hat after the greatest in histos was up, Tt was only, natural I market in history, the greatest must follow, and ce deterrvine how long jght run, you would Look mack te sce after previaus war booms! 1869-18 1 1Big to 1873 We period was 53 months and chat the market id 4 9 ear mat bear campail rally, a @ months" rally and a 2 rally dh period. 1871-1873: May, 1871 top to November, 1873 low, imc, go: months. S 3881-1884; ‘Then we refer tu 1881 to 1884 and find at the bear market lasted 36 months. 1893-1896: Then we refer to 1893 to August, 1896 and find that the bear market !nsted 43 months. Going hack over all the cecords, we find that th est bear market bad lasted not more than 43 mont the smallest had been as short as 12 months of th had culminated around 27 and in extreme declines, anywhere from 36 t 43 7 Therefore, fram 1929, based on past records, wre would begim to watch for bottom around the goth tm the 36th ronth aid then again around the 4oth to 43rd month. 1929-1932 BEAR MARKET First Section of The Great Fear Market Sept 1929 to November 13. 1929- The Dow-Jones 30 Industrial Averages declined from # 1 of $86 an September 3, 1929 to n low of 198 on No nber 13, 1929, 4 decline af 188 days the Be 20 NEW STOCK TREND DETECLOR jiecatest decline in the history of the New York Stock Fx- ‘change in the shortest périod uf time, ‘A sceondaty rally ‘culminated on April v7, 1930 with the averages al 297, ub.a§ points in 155 days. of sales decreased in April. “The top of a secondary rally is always an important point ro watch. Second Section of ‘The Great eat Market— Ap to December 17, 1930: Fram the top on Ap tw December 19, t93a, The averages declined from 297 nc of 142 po age days or § 1d rally carried prices to top on February 24, 93 @ averages af 196, up 41 points in 69 days. Th .¢ period and smaller number of points indi cated weakness and showed main trend dorm. ‘Third Section of ‘The Great Bear Market—February 24, Logi to January 5) 19925 After wp in started and i f December, 1930. ued to 120, the top of November, 1gtg. My rule is. thar old tops became buttons and old tums later become tops; therefore, from the old tap level iy coll be expected. From June and to June 27th the in ag days. 7 was a quick rally in a bear market and showed weakness since stocks could not rally oi full month. After this rally ere was a decline to October §, ty31, with the Averages rat 8554, clowa 72 points in too days, A quiek rally followed to November 9, 1941, with the price at 119, up to the bot- 2, 1931. Here we would expect selling under according te my rule of old bottoms beeam- "Chia was a rally-of 35 points in 35 days. The id down was resumed and on December 17, 193%, just one year fram the low of December, 1930, the Averages Ap Qa June'2, 1938 de | j \ | \Satseprelpartmnsynntenerttsiernnl thet eer HISTORY REPEATS 2 reached 72; had a quick rally ta 83 on Dece! rgth and. declined to 7a on January §, 1932, down 4yJ4 from the last high of November g, 1931. This decline lasted 57 days, but was 192 days frorti June 27, 1931 end was really the end of the Third Scetion of the Great Bear Market because altar the low of Jamary 5, 1932, the market rallied to March 9, 1932. 1c Averages reached 8934, up 1944 points in 64, very frehle rally for the time required, ich showed that Iiquidation had not run its course. Fourth Section of The Great Bear Market—March 9 tw July 3 1932 The fourth and last section of the great Hear Market lasted four months, from March g, 1932 to July 8, 1932, 49. points 1c from Nowe g to July 8, 1932, quidati the greatest rally « ages was ‘7 points, and each deci gat shorter and the volume of s#les Tess, which showed im was about over. ‘The last decline from June 16th y 8th was 11 points, Then the Great Bear Market ended and the trend turned up. On July 8, 1932, the Dow Jones Averages 4034, down 34 months from the 1929 top and 27 mu from April, 1939 top, which were time peciods when we would expeet a sharp, panicky decline to end, espee! decline which had carried the Averages down 345 pi 34. months and wiped ont the gains of 33 ye stocks, Note thar in April, 1897, the lust low wa which the real bull Averages reached this.same level, 4034. a a diferent number af stacks. Previous to the bottom ia July, 1932, the volume of sales sinn 4078, [ro ret started, and in July, 1932 the jagh there waa CK TREND DRTECYOR 8 NEW and time periods all indicated that the market was near the eid of the bear campaign. 1932-1935 BULL MARKET First Section of Bull Market—July 8 to September 8 1932: From the low of 4034 on July 8, 1932 the Dow-Jones 30 Averages rallied to 81 on Seprember 8 ‘This was a fast advance but when stocks could not hold and go higher in the third mond indication of lower prices. The large voltine also made this was only the first rally in the bull campaign, decline must follow. the Bear Marker had a sec an November, 1929 to April, 1930, s0 after the market had given a signal that the Bear Market was aver, there was a secondary decline, whieh lasted until Feb- ruary 274 1933. with the Averages at 4934, down 31 points from the top of September 8, 1932 in 172 days, but g points above the 1932 lows, Ac this time President Roosevelt was inaugurated and banks closed. The New Yorke Stuck The change closed for one week. The valume of sales was very small, which indicated liquidation was over. When news is the worst, itis time to buy stocks, as a Bull Market bepins ia gloom and ends ie glory weich mothing but good news. it was an Secund Section of Bull Market—Feb: July 17, 1933 The averages advanced from the low at 4934 in Rebru- ary, 1923 to a high of 10% on July 17, 1933, up 6 points in 141 days, ‘Time, 12 moaths trom July, 1932 low and 5 months from February, 1933 low. My rule tells you to always watch for a change in trend-one year, two years, etc. fi nportant top and bottom. ‘The sales during Ma: June, and July were larger than at the end of the Bull Ma ry 27, 1933 to HISTORY REPEALS 28 ket in 1929. This enormous ¥ the mazket-was reaching a culmination and a sign of top. Arreaction followed. The Averages reached bottom at 425 on October atat, 1933, down 28 points in 96 The volume of sales was small.” In view of the fuct that the: Avetageedeclined only » paints under the Inw puint af July 21, 1933 and did.not decline to the top of B1}4 made con September 8, 1932, indicated that the main trend was still up. Third Section of Bull Market—Oetober 21, 1939 to Feb- wary 5, 19942 Fram the low at $244 on etuber 21, 1943s the Aver- ages worked up to 11134 on February 5, 1934, ove the top of July r7, 1933. « double top on large volume of s million shares per day. This was an advance of 29 points in roy'daya. Tit, 1 months from July, 1932 low and 4: months from October, 193, nce the Avers dito go through t12, the market indicated ap. a renction to July 26, 1934, wil Averages declining to 8435, 4 de i days, the same length of time us the reaction from Septetnber .8, 1932 to February 27, 1933. ‘Time, from February, 1934 top, § months. The volume of sales om July 26 was 3 mil shares and the Averages were 2 points above the low This Inege volume and jon of hottorn. Fourth Section of Bull Market—July 26, 1934 Mov her 20, 193! The 30 July 26, 1934 to 14934 on Navember 20, 1935, of 6s paints in nearly 16 months. Time, 40 months from July, 1932 low; 39 months from February, 1933 low; 25 months from October, 1933 low. ‘The greatest reactions were from August a5, 1934 to September 17, 1934, a decline of 12 points, and from the trial Averages advanced from 8434 on advance a8 NEW STOCK TREND DETECTOR Kebruary 18, 1945 to March 18,1935, 2 of 12 points on the averages, and as this ly one month, it showed as still up. Alter March 18, 1935 ‘here was no reaction of over 8 puints aftd none lasted more than 9 weeks until top was-reached on November 20, 1935. ‘Then a roaction followed to December r9, lasting cone month, a decline of 11 paints, The volume-of seles Octaber and Nuvember were 104,000,000 shares, whieh: in (Feast temporary top, with the Averages up 109 om 193 low, and np 5334 paints (rom March 16, period of 247 days, ossibly 112, the old top of 1933 before, follow the trend of ine I go op vysq, but as | have § dividual stocks when you trade as many of them » trend of the ¥ az Penrous To Waren rox Furyxe Cuawcrsin Trane il be 42 months from 1932. low; Mareh, mnths from February, 1933 low; July, vn the 1933 top and 48 months herefore, these months will be very ie f 1932 low. importentin 1936 to wateh for chaages in t Cause oF THE 1929-1932 Panic « from 1929 to ayj2 was so drastic becauge people wh bought at high levels held on anil hoped and bought more to average on the way down. They were wrong at the ey bought the first stock and continued ta be wrong by bucklng the trend and buying more ta aver age, the worst thing that any trader can do. Remember, average your profits, but never average a los ‘Alter stocks hacl declined too points or more, other peo: ple began to buy stocks, because they thought they were cheap--and the only reason they thought they were cheap HISTORY REPEATS 25 was because they were down r00 points compared with high levels, ‘his was the worst reason of all for buying, stocks Later, when-stocks were down around 150, 250 and 4 points from 1929 top levels, wiher people baught for the same reason, that they were a long distance dows fram top and looked cheap. They were wrong beeause there I been no change in trend. ‘The time pe ad hiad not ren out and the macket had not given buying signals If these buyers had only waited, and had known how to follow the rules laid down in my books, WALI. SYTRETET STOCK SELECTOR and TRUTH OF THE STOCK TAPE, they could have determined when the trend chenged and could have ought stocks at low levels and made profits, but mast of them were buying on guesswork and ho) fg thar the stocks would go wp. Many of chese people, no doubt, made up their minds to sell out when a rally came, but fixed a price wt which stocks never rallied to. hoped for a it the hope was nut based on any sound reasons and there was ao sound reason for expecting a rally ur an advance thet would Let themout. Hope Gives Way to Despai Finally, in the Spring and Summer of 1932, when stocks bad declined (o what lonked like ridiculously low levels, they continued to decline from2g te $0 points more. This caused ers and investors to lose hope, Their ‘They saw things in grew’ sick. the very worst way and all sok ‘were forced to sell, because they could nor put up mar gins to carry theie stocks; others sold berause they fea stocks would go lower, which was no reason for selling more than when they bought because they hoped they w go up, which was no reason for Id “wn Boucirr Stocks 1 THs PaNic?” Many people ask this question. The people whd bought: stocks at low levels were those wise oncs who sold out in Pe ee ere nn a6 NEW STOCK TREND DETECTOR 1928 or early 1929, or sold after the first hreak in Sep tember, 1929, when the signs wert plain that the trend had turned down. These people kept their moncy and waited, until conditions Iooked the worst; then bought stocks when they were far below their actual value. They received 2 rich reward for their patience, knowledge and nerve, for it took nerve to buy when everything looked the worse, just as it took nerve to sell in-1y2g when everything looked the at ancl one could hear nothing but «optimistic talk WiLL Stocks Go Back re 1929 Hhons?” anuther question that 1 haye. hee asked from ne to time, Why do people. ask this question? Because ity of them held stocks bought at very high levels and hope that they will go up sv they-can get out without « loss, Tam ial Averages will ver sell at 380 again. [am also confident that the Rail- road Averages will never sell at 189, the high uf 1929, and hat many of the pe tgzo levels again. W at ¢ utility stocks will never reach the 7 Riecause at the time they sold abnormally high levela, their selling price was nut 2 power. Prives were forced to reason that everybody wa gambling mad end buying regardless of price or valuc. They will not buy stocks again like that for @ Jong time to come operations. ‘While 1 do not expect the Averages and old-time Te 1935 Bull’ Market new leaders developed that went [ur ove the 1929 lhighs. In another chapter we give you ex amples of stocks that crossed 1929 highs and show you their position and hove plain the Indications were that they were i higher and the omes-to buy. Other stocks, later on, ge above their 199 highs, as will be explained in the ring chapters. CHAPTER IV INDIVIDUAL STOCKS vs. AVERAGTS For years the Dow Jones Industrial Averages, Uailraad Ltiliey Averages have been # reliable market. Years ago when there were representative, they ial stocks, When Rail- road Averages 91200 Averages, and Pul guide the trend of tt were 12 Industrial Stocks were a guid’ to the trend 0 roads were the Headers dnd active, the 20 It were a good trend ator, Bit now. rere ave listed on the New York Stods Exchange, the 20 Railroad Averages and the 30 Industrial Averages are no Jonger representative or a guide to the average te! dl of the entire market. Various industr changing conditions and. tions im forcign countries. One i pering and making money while another one is oink Fito bankruptey and out of business. Cross-curtents the stack market, due to various flu cause some stocks to decline while others advance. These chat gaan in 1928 and 1929, but bave been more pron! storks made low in July, 1932- “Therefore, in wroney trading ithe stock market, you rmust study and apply ules to individual stocks and not depead on iAverages We do not have « universal bull market any more, when we time. We have a mixed trend, ly down pw levels are affected b a throughout the coun algo affected the rain tvend being up on sume stocks andl dist ‘ward on others, ‘The majority of stocks reached mn July, 1932, and started working higher. ge Industrials made Yow in July, +932- 2 28 NEW STOCK TREND DETECTOR Averages made lows in June and July, 1932. In 1935, at the time the Dow-Jones 30 Industrial Averages were up 80 points, the Public Utility Averages reached a new low level. ‘This was brought about by adverse legislation Ry studying and applying the rules to the individual stacks, you would have found that the Public Utility stocks nuvend while other stocks advanced. A. study {of American ‘Telephone & Telegraph, which held up becter thin the other Public Ui wan in a stronger positi $9 a share per year, while ather Public Utility stocks passed their di Du 1@ boom, whieh culminated in 1929, the Public Utility stacks had been watered; stack divi- dlends had heen dtclared; there had been numerous splitups. e beat atock to buy by fullowing the averages of any group of stocks. Soime. of the stocks in p vill make new highs every year in bull markers while warkets or go into-receive ur be tuken off the Exchange. For example: In 1932 when the average of all airplane stocks showed uptrend, you had arlveted Curtiss Wright “A" as the Best ait stock just because it had been a leader ina previous campaign, you wold have made a mistake. In August, 1932, Curtiss Wright “A suld as low as 134, i 1934, made a high of 12. Now compare Douglas “Airerait and make a smdy of its position. In r932, Douglas made a low of 54 in February, 1934 reached a high of 2836+ ber, 1934 declined to 1434, a decline of abaut sof ctop. In July, 1935, when Curtiss Wright “A” was : 4 points under the 1934 high, Douglas crossed its 1934 top, which showed that it was in a strong position and much hetter to buy, even at 2834, than Curtiss Wright INDIVIDUAL, STOGRS vs, AVERAGES Ey A” In December, 1935, Déuglas crossed 4534, the ry29 high, and advanced to 58 while Curtiss Wright “AA” only advanced to 1234. Curtiss Wright "A" never showed the or power to advance 24 Douglas and sume other ait- plane stocks. Douglas was making higher bottoms snd higher tops right along while Curtiss Wright "A" wa ing in a narrow trading range, 8> Dougla was the stack this group ta buj.. This is proof that you must study each individual stoxk in a group in order to detect its (rane! Tw ‘To make a success, you old theories and old ideas when they become obsolete and follow new ling in the stock market. Daring recent years the Dow Theory has speead the country. People Inve hegun to regard it as very value able and infallible, but in fact, it is'now practically of ne ie ta.a trader. With sa many stucks listed ow the New York Stock Exchange, 30 stocks or 20 stocks are no lunger fn representative of the trend. Tiesides, you cannot trade averages. You m the trend of arder to make Dow Tron ORSOLETE must disca fl les and new stocks in urder ta make x success ever the World War cha changed from an ne country, In 1916, when the Dow-Jones 30 Induste ages advanced! to new high levels, wich was 7 p the highs of rg06, the Railroad Averages at that & ints under the 1906 record high. ‘TI 4 to confirm the upward trend in. ndustrials cer es ant probably vere waite money. Tn 1917 the Government tau! in December, 1917. the Dow-Jones 20 Railroad Averages over the Raifreads, and i made a declined to 69. ‘The Industrials at the sume ee ee i See. ee ECTOR a NEW STOCK TREND DE is was the first time that the Rails were as low us they were in 1897, while the Industrials were 13 points abyve the 1907 panic lows. In 1918 and:1919 the Rails failed to follow the Indus- Is and were no good as a ghide or confirmation according, ¢ Dow Theory July, t919, the Industrials made a new high record while ‘the Rails were-making new low Jevels. Tn Noveihber, 1919. the Industzinls reached a now high at 11934. In the same month’ the Railroad Averages ached low of che year, only 3 points above the 1907 lows. Rails were going exactly opposite (9 the trend of In- «the Dow Theory was not worl Jone, 1921, the Railroad Averapes reached a low of In August, cg2, the Industrial Averages reached the of 64 ‘The Industrial Averages were only 2 points under the 1907 lows. Then followed a big ball mar- ket in Industrial stocks andl the Rails were laggards. In Jamuary, 1925, the Industrial Averages crossed 120, ¢ record high of 1919 and the Rails were still 38 p below the 1908 Tf you had waited for the Rails to confirm the Indus low of 665 “L dissed big opporn 1927 when the Rails crassed al Averages, at that time, were 63 s and 80 points above the 1906 nil Ju in 1yo6.. “The Indus! ts above the 1909 Averages dl a high of 189. After the panicky decline to No. vember, 1929, the Industrial Averages rallied points. ‘The Rails rallied on ints, After April, 1930, Is were weaker th: In November, 193 the Rails brake 42, the low made in August, 1896. In June, 1932, the Rails declined to 138, | i t i | i i ( i t { t i | t | t INDIVIDUAL STOCKS vs. AVERAGES aL while the 3@ Industrial Averages declined te 40% dustrials were 12 points above the 1896 lows, while 1 were 29 points 1896 lows. : In July, 1983, th js rallied to x10 and the Rails rallied to 58. w In October, 1933, the Industrial Averages react 8234 and the Rails ta 43. The Industrials never broke the 1933 lows until they advanced to 149% in November, 1935 ‘in March, 1935, the Rolls sold at 27 while the Industrials were at 96. ‘The Industrials were 13 points above the lows of Oetaber, 1933, while che Rail ain proved that you could Theory, From March, 1935 to Movember, 1935 the I the Rails rallied only 12 pointe. were 6 points below. ‘This jot depend upon the Do} Rails made new highs ‘This is plenty of proof that obsolete and that you cannot depend upon i€ ti wark the future Cuaxee wrrn THR Times In order to make money under the changed cane! you must study individual stocks and follow theic Don't let the Averages fool you. Whan ane stock shows change in trend, go with it regardless of the action of in the game yroup and régardless of the action of the Averages. ‘Years ago Stage Coach Stacks advanced have made:money buying them, but stage cs of husiness and so didl the stocks. ‘Then there were Canal Stocks that advanced and you could have imade money buy: ing thera, hut other modes of transportation reduced the business on canals, The automobiles came along and to business away from the railroads. Now the airplane is co ae NEW STOCK TREND DETECTOR ug business from the railroads and wil we automobiles and trucks, The lane ode of transportation, You will havé ta swatch airplanes in fulure for a puide, the same as you watched automobile stocks a few years ago, because the money will be made trading iv alrplane stocks rather than Is ur automobiles Keep up to-date; be progressive. Do nut cling eo theories or ideas: Learn tof stocks and you will make profits. ing along and ex take it ft CHAPTER V NEW RULES-TO DETECT TREND OF. STOCKS hich I give in my books, TRUTH OF THE STOCK TAPE and WALT. STREET STOCK SELEC- TOR, are all good. They will work in future market moves for 100 years -but under the changed conditions stocks will moye up slower the greater part of the (ime and on a smaller volume. "(Compare present volume of U.S, Stecl and Gen- eral Motors.with volume of former years.) ‘The rules in my ks aré based upon Supply and Demand; have been tried and tested. Whether stotks advance on buying by the public, pools or investurs, it is after all the result of Supply and Demand. When buying pawer is greater than selling power, it forces stocks highier right along. ‘Then when the reverse takes place anil the selling pressiire is greater thon the buy- ing, sticks work lower. ‘The new rules that I give you in this hook, if used wi the rules in my other books, will help you to make 2 success st dy detectives learn the habils of a contain gang nf ale from the clues that they leave behind them, sa can Strect detective find a clue to what the “powers that he" or master market manipulators intend.to d stocks. The movement.of a.stock, up or do ds who buy. or sell it with th later at profit, What ane mi vise, another mind can figure out, for after all, human nature never changes. By studying indi stocks and fallovwing the rules for deteeting and determining the trend, you will be able ro make large amourits of inoney. = a NEW STOCK TREND Di'TECTOR Besr Way to Derecr TREND Years of experience have convinced me that the trend canbe detceted by a study of charts. Monthly Chart: The best chart tv use for detecting the main trend of a stuck is thé Moptlily high and low Chart. h and low Chart is the _nest best guide te the real trend Daily Chart: When « market is moving very fast and is very active on large volume, the Daily high and low Chart is a good guide and trend detector To detect when a stock is getting into a strong position and ready to advance, look ‘up the Monthly Chart, TF there is good support and go ng, then the stuck will gradu- ally be absorbed and as it grows scarcer and the demand increases, it will work highsr and feceive support at a highet evel, tnaking higher battoms and higher tops. ‘When a stock is getting ready to change trend to the sill start making lower tops and luwer botea hen when it breaks below the point fro fast run up to the-fop, it-will be an indication that che mm trend has turned down. Kinw or Socks To Trane my ¢ kind of stocks to trade ia arc those that, are active and those that Follow the rules and a definite trend. There cc always queer acting storks and some stocks that don't fullow the rules, ‘These stocks should be left alone. Stocks that hold ja a nartow trading range for a long time should not he traded in until they break out on the upside or break. the downside and show increased volume of sales. and activity, Wuers 10 Bur arp Sexe You should buy a stock near a single bottom, a double ution, or & triple bottom and place a stup loss order not more (han 3 points away. By buying near a single battom, T jean that after a reacts it until @ stock holds ‘ns ee mand NEW RULES TO DETKCT TREND OF STOCKS 85 around a level for 2 to 3 weeks, then buy and protect with 1 stap loss order 3 points under the lowest week, or in active markets if a stack reacts and then holds around a level Lor 2 ta days, buy and protect with a atop lust order not more than 3 points under the lowest day. When a stock sells around the same price level several weeks, several months or a yenr or more apart, it forms x dauble bottom and is a boy. If it sclis around the same lewel the third time, it Is a triple bottom, When a stock advances to a new high le former old top by 4 points then if it is going h not react back 3 points below the former eld! hi ‘you should buy on a slight reaction of 1 to 3 ps place a stop loss order g polnts under the old top. ‘After a bull anarket gets started, buy action place a stop loss order 3 points under the pr level. "After 4 stuck crosses the top af a previous year by 3 points, itis a buy an any little réaction, “For ext Douglas Aircraft: 1932 high 1958-1939 h In 1934 when, it erussed. this double top, accor rule you would buy: Refer ta Chart No. 1 on page 36. The stock advanced to 28 4 in r9ga. Thenin 1935 after Douglas ‘Aircraft erossed 2634, it never renicted lower than 26%5 Therefore, when it reacted hack below 28, it was a buy a stop at 2533. Itis Dow crossed the old high of a8 44, it never reacted! 3 days (the re actions only lasting about 2 days) before the stock resumed ils upward trend, When it crossed the 1925 you would buy agaia and cuntinue eo pyramid as Tong as showed uptrand. The stock advanced to 5844 1935. Reverse the above rules on the sell sell against single tops, double tops, or triple tops, er at sume point where you can place a stop loss order nut more than. 3 poi ‘or wait until a stock shows crosses LL CHART fo. 1 DOUGIAS ATRCRANT Moznir Elias ane Lom: 1920-1935 38 NEW STOCK TREND DETECTOR and breaks the last important bottom by 3 points, then sell short on a small rally_and.place a stop loss order 3. poines above the yl bottoni. After a stnck breaks the bottom of « nis yeat by 3 points, itis a short sale fa bear market when a stock deelines and breaks am ts or more, then if it is going lowery rally 3 Points shove the bottom before it goes atock iniade a low of 8436. in May, 1935 and a low of 8434 in June, 1935% vallled to go34 in Joly, and after it brake 81 or 3 previous never rallied 3 points above then untilit declined 6054 in Octuber, 1935. Refer to Chart Na. 2 on page 37 Whatever you do, it should be according to a definite rule and after the market shows a defi ag sure an indication to sell as Don't get imputione and jump into # you want to make a trade, Remember, a stock is never tov trend is up, provided you place jer {ur protection in case the trentl reverses A gtock fs a short sale at any tine and at any price so: long as the trend is down, regatdlleds af how high it bas been previously. Paice ax Wancn Fast Moves Sraet The highcr the price, the faster a stock moves and the wider the ductuations, Stucks'move-up. faster alter they sell above so and even faster after they sell above 100, a when they get above 150 and 200 per share the finctuations dare very wide and rapid. You can prove this to yourself by ‘going ayer any of the stocks that have been active and had big advances and see what happened aftér they

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