Warning Line (WL or W) of nearby shift of major trend: When you draw the MPL from P1 in Sep ’65 your CL to measure Action and Reaction distances from, you see that this MPL line is also the ML. So 1ML2-3 is also the MPL. So by measuring the distance (A or Alan marked on chart) that P2 is from that CL, you know that P3 will be where prices meet the R1 line. And if you draw another H line the same distance that A1 and R1 were from the CL, that line will be your warning line, that indicates that the decline signaled when prices falling from P4 crossed the MLH of 1ML2-3, was about to end. Similarly with P2MLP3-P4, you draw the “dot dash” warning lines that signal you to look for another P from which reversals occur. Since a Gap is 2Ps you see Gs at P6 and where prices rise for a fast move up in Apr ’68 as they cross the P6ML7-8. You’ll also see that even where prices pass the W lines they usually double back to it at least even if the original trend toward that W line is resumed. But usually there is a worthwhile reversal as shown by the W for the PrML6-7 where prices reversed from the 370 area on signal at 360 in AP ’68 to the 320 area the next week.
Median Line #2: From a P3 after a change in Trend draw a line bisecting the distance between P2 and P1. Then using this ML#2 as a CL draw the usual A and R lines in order to see the strength as indicated by the ability for prices to recover back to each R line that was past. Relative strength is also indicated by recovery to the latest minor ML after each drop or nearness to the latest ML.
Below is a modified Schiff ML. As you can see the starting point is not under the top close of 12th September, but at the half way mark of the line sloping from that high to the low close on Oct. 23. And it bisects the distance between the close of that date and that of the next P of high close on Nov 13th. You notice that the low on Dec. 16 reversed the trend when it nearly touched the modified Schiff ML. Next you see that there is always a reversal or gap when prices reach any of the WLs. Note that the usual Schiff ML calls the first low P on Nov 28 and the modified ML indicates the low area on Dec 16th. But prices tend to Pivot when meeting any of these ML. But doesn’t the slope of coming trends more closely follow or H that of the mod.ML.
Where only Schiff MLs were used on the July Lumber 1982 weekly range chart you see some profit making signals by drawing the H and the WLs from the usual Pivots of the Schiff MLs. And as Mr. Schiff told members “use the weekly charts for overall picture but zero in with the daily charts”.
Notice the probability that there will be a good profit from the reversal each time prices reach an H or a WL as well as when prices again reach the original ML. For example prices climbed back to the 7 in 2 weeks to the Schiff 5-6ML whereas if the ordinary ML had been used there would not have been any sell signal due to prices reaching the ML as they did at 7. The dotted line is for the H or the WL, and the dash line for the ML. Notice how prices dropped back to the parallel of that nearly horizontal H from 7 for a one week rise signaling a big drop ahead which carried prices below WL#1 almost to WL#2 and then a made a 5 P Elliot rise to above the horizontal H of Schiff ML5-6 and then started a new ST of 5Ps from 9 to 10 reversing at the WLs repeatedly, for good profits each time.
Lack of faith, inability of unwillingness to believe, a search for reasons why to avoid taking action seems to be the reason that more people failed to avail themselves of the hundreds of percent profits they should have been making since December 1972. Below are a few of the charts showing the exact dates and prices where purchase or sales were indicated by the methods presented to you only in this course. Remember what Mr. J. P. Morgan said, “prices will fluctuate”. There are even quicker profits ahead for you on the “down” side after these rises are over.
And those of you who haven’t the time available to give to commodity trading can use the principles just as successfully to make 100% plus yearly from your stocks. Or you can follow the “orders indicated” and positions of the weekly Course letters and just phone your broker. But be sure you give the orders, and “don’t let him advise you” is the advice given by nearly every successful trader.