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It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford


Those who surrender freedom for security will not have, nor do they deserve, either one. Benjamin Franklin
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The idea that you know what is true is dangerous, for it keeps you imprisoned in the mind. It is when you do not know, that you are free to investigate. ~ Nisargadatta Maharaj


Thursday, 24 December 2009

Amazon


Description of Amazon as "the river of no return" in the excellent Daily Reckoning have proved wide of the mark as Amazon looks to be one of the success stories from the dotcom era.Nevertheless after stellar performance in 2009 the stock has reached significant resistance,with time cycles aligning with price targets on the square of nine chart.This is one of Gann's more esoteric tools.Square of nine levels can be derived from a table or calculated.The low of 36 and the high of 144 are both significant Gann numbers,36 is the square of 6 and 144 is the square of 12.Effectively the square of 9 is a calculator that relates numbers to each other by taking their square root,incrementing by 1,2,3,4 etc and re-squaring.Some traders use increments of 0.5,0.618,1.618 etc.When price targets align with cycles such as 3 months (90 degrees in time ) 4 months,6 months ,1 year (360 degrees) and other natural divisions of the year,resistance is indicated.

Squares are significant resistance (or support)in their own right - witness the recent high in gold at 1225,which is the square of 35. This can be applied to time as well eg 25 weeks,144 weeks etc.

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