Jeff Cooper Square of 9 Ebook

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Table of Contents

3. Disclosures

4. About Jeff Cooper

5. The Light Bulb...

6. What Is the Square of 9?

10. FInding Moves on the Square of 9

14. Time and Price

17. Measuring Trends in GDXJ

19. Applying the Square of 9

23. Finding Major Turns with the Square of 9

27. Mastering Time/Price Relationships

31. Using the Square for Smaller Turning Points

34: Time and Price Examples

49. Square of 9 with IPOs

52. Using the Square with Low-Priced Stocks

55. Conclusion

56. Get More Hit and and Run Trading


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57. About T3 Live
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About Jeff Cooper

Jeff Cooper began his trading career at Drexel Burnham in 1981. In 1986, Cooper
went out on his own, choosing to trade exclusively for himself.

After establishing a successful career as a private trader, he went on to write two


best-selling books: Hit and Run Trading: The Short-Term Traders’ Bible and Hit and
Run Trading 2: Capturing Explosive Short-Term Moves in Stocks.

Today, Jeff trades from his home in Malibu, California, and authors Hit and Run
Trading for hundreds of professional traders, portfolio managers, and individual
investors across the globe.

Jeff has studied W.D. Gann's Square of 9 Wheel for decades. And it's become a
cornerstone of Jeff's arsenal of unconventional trading weapons.

And in this eBook, you’ll learn all about it. So turn the page and start learning!

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The Light Bulb...

“Gann can compound money faster than any man I have ever met.”
-Richard D. Wyckoff

The Square of 9 or Square of 9 Wheel is one of the most mysterious and popular
market tools of legendary trader W.D. Gann, a financial advisor and trader in the
stock and commodity markets during the first half of the 20th century.
My introduction to Gann’s methods started with a series of lectures in the late
1980’s given by a professor of physics at USC who had an avid interest in the
markets.
I was inspired to learn how to use the Square of 9 by this course where I first was
introduced to Gann’s concept that markets were proportional and symmetrical —
geometrical as opposed to random.
It was during my research for a course I created called Unlocking the Profits of the
New Swing Chart Method, where I analyzed every major swing in the SPX from 1941,
that a light bulb really went on. I could see the synchronicity between time and price
that repeated over and over again.
I could see unequivocally how time and price balanced out or squared-out creating
a change in trend that the Square of 9 could pinpoint.

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What is the Square of 9?

The Square of 9 is a spiral of numbers starting with the number one in the center.
The numbers spiral around the center in a clockwise manner to the number 9, which
completes the first cycle or square of numbers around the center. Hence, it is called
the Square of 9.

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Circumscribed around this spiral number grid are the dates of the year

The true origin of the Square of 9 is unknown, but we know for certain is that Gann
used the Square of 9 and considered it very valuable.
The concept behind the Square of 9 is that growth is not linear. Rather, it occurs in a
spiral fashion.
.

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Many traders are familiar with the use of the Fibonacci sequence of numbers as a
way to measure market moves.
A Fibonacci spiral is, in effect, a series of quarter-circles (90 degrees) drawn inside
an array of SQUARES representing the Golden Mean.

Notice the Fibonacci spiral itself forms a number 9, resembling the natural vortex
shape of a nautilus and the Milky Way.
So this is the basis for the concept of the Principle of Squares and the idea that
growth occurs in an expanding spiral as opposed to a linear fashion.
This is clearly depicted in the chart of a strongly trending market as it pulls back
before resuming its underlying trend.
The Square of 9 is very important because nine digits are used to measure
everything. We cannot go beyond 9 without starting to repeat and using 0.

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Gann believed the market was geometric, not happenstance. He said, “We use three
figures in geometry: the circle, the square, and the triangle.
We get the square and the triangle points of a circle to determine points of time,
price, and space resistance.
We use the circle of 360 degrees to measure time and price.
Gann’s methods revolved around measuring the natural divisions of the year —
particularly the 90, 180, and 270 ‘natural’ divisions of the 360 degree year.
The term ‘degrees’ is used by Gann interchangeably with ‘days’ (or when specified
with weeks, months, or years as in 90 weeks, months, or years) — an extension of
the concept that time is geometric in nature.
A year is a 360 degree movement of the Earth around the Sun and is measured by a
similar (though not exact) number of ‘days’.
A single day represents slightly less than a single degree (.9856) — but close
enough for our purpose.
The primary divisions of a circle are the 90 and 180 degrees, which equate to the
primary divisions of a year — 90 degree seasons and 180 degrees between
opposing solstices and/or equinoxes.

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Finding Moves on the Square
of 9
The term ‘square’ is used by Gann in many ways.
Squaring means time and/or price have balanced out or squared out, which we will
explain later.
Square-outs also refer to the Principle of Squares or square roots.
Legendary money manager John Templeton, one of the most successful investors
ever, stated, “The fluctuation of share prices is roughly proportional to the square root
of the price.”
Here is how the Square of 9 becomes a calculator to measure these fluctuations.
As we noted above, the number 9 ends the first cycle on the Square of 9 Wheel.
If you want to determine the next full price cycle of 360 degrees or one full square
higher, you take the square root of 9, which is 3, and add 2, getting 5, and then
re-square, which gives 25.
Hence, on the Square of 9, the number 25 is directly above the number 9. It is one
cycle of 360 degrees or 1 square higher.

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Notice in the Square of 9 above that the number 16 is 180 degrees straight across
and opposite the numbers 9 and 25.
In order to find a 180 degree move up from 9:
A) Take the square root of 9, which is 3
B) Add 1 to get 4
C) Resquare, getting 16.
16 is 180 degrees straight across and opposite 9.
The reason why adding 2 to the square root of a low and re-squaring calculates a
full 360 degree price projection is because all odd numbers are separated by units
of 2 and all even numbers are separated by units of 2.
This is why adding or subtracting 2 to the square root of a number, then re-squaring
the sum is the equivalent of a 360 degree cycle up or down on the Square of 9.
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Let’s use GDXJ in the last year (2018-2019) as an example.
GDXJ struck a low of 26 in late September 2018 and turned up.

Based on the number 26, what are the price objectives using the Square of 9 Wheel?
The square root of 26 is 5.10.
Let's find a 180 degree move:
A) Take the square root of 26, which is 5.10
B) Add 1 to get 6.10
C) Re-square 6.10, getting 37.21.
To find a 90 degree move, we take 5.10 and add .50 and re-square, getting 31.36.
A 360 degree price projection is determined by adding 2 to the square root of the
low, then re-squaring (5.10 +2 =7.10 with 7.10 squared giving 50.40).
This gives a potential target of 50.40 IF it is determined that an impulsive change in
trend is in playing out following the low.
Based on the powerful impulsive nature of GDXJ’s move off its May 2018 low, a 360
degree minimum move (ultimately) is the logical expectation.
However, we don’t know WHEN that projection will be satisfied.

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Consequently, we want to also look at the behavior at the 90, 180, and 270 degree
projections in order to gauge the move.
If you can’t measure a trend, you can’t manage risk.
Looking at how this is represented on a physical Square of 9 Wheel shows these
relationships immediately.
The first projection is 90 degrees up to 32.
180 degrees up is 38.
270 degrees up (3 squares of 90 degrees) is 44.
A full 360 degree price cycle up is 50.40, which is just above 26 on the number grid.

On the daily GDXJ above, we can see how things played out.
GDXJ cleared 32 but topped at 35, shy of the 37/38 projection.

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Time and Price
There must be something else going on.
There is.
It is the correlation between time and price.
I’ve never seen any traders use the Square of 9 Wheel the way I do — marrying time
and price.
While it is meaningful to look at price and time independently in their 90 degree
movements, in my experience, it is the marrying of TIME & PRICE that often
pinpoints turns.
In the example of GDXJ, the date of the September 11, 2018 low is 90 degrees
square the 35 price high.
September 11 is square 35.

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The next pullback struck a low of 28, which vectors/aligns with September 11 for a
balance-out or time/price square-out.
Opposite September 11 is a price of 41.

However, GDXJ hit 43.10 on August 7 and has been correcting ever since.
Why did GDXJ eclipse the theoretical resistance of 41?
Was there something ‘off’ on the Wheel?
Did not clearing 41 signal a price projection to the 50.40 region?
The answer is that August 7 is 180 degrees straight across and opposite 43, the
high on August 7.
So there was a time/price square-out at the August high.

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Green arrow is Aug 7
Red arrow is 43
You can see how important TIME is in determining turning points and defining the
trend.
While the vast majority of market participants use PRICE exclusively, as Gann
stated, “Time is the most important factor in determining market movements.”
It must also be said that while we are looking at geometric relationships, the
essential technique of the Square of 9 Wheel is as much art as science; the analysis
of the market being more of a Picasso than a Rembrandt.

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Measuring Trends in GDXJ

Additionally, in measuring the market, we must always look from below and from
above.
In other words, we must consider the low at which a trend started, as well as the
prior major swing high.
There are always multiple time and price relationships working out concurrently.
In the example of GDXJ, you want to measure from the primary low of 26, the
secondary low of 28 (May 22, 2019), as well as from the the prior major swing high,
which in the case of GDXJ was 52.50 on the WEEK of August 8, 2016.

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It is fascinating that the week of the 2016 top ties to the date of the high for the
move so far in 2019 on August 7.
Checking a Square of 9 shows that 52.50 “points” to September 30.
GDXJ was in a sharp pullback since August 7 until September 30, 2019.
Is it possible GDXJ struck an important low on September 30?

Green arrow points to Sept 30


Red arrow points to 52.50

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Applying the Square of 9
The answer to reconciling what seems to be the enigma of the Square of 9 is
actually very simple.
Every day, I take the ‘zero’ point on the clear overlay that spins around the Wheel,
allowing it to act as a dynamic calculator, and put ‘zero’ on that day.
Doing so on August 7 would have revealed that GDXJ may be striking a high at 43.
As shown above on August 7, GDXJ let a signal bar reversal day underscore the
notion of a time/price square-out — ‘proving’ the idea of a turning point.
Let’s look at a big picture example of the major 2007 October bull market high on
the SPX.
On October 11, 2007, the SPX topped at 1576.
Below is a weekly SPX showing the October 11, 2007 top at 1576 and the March 6,
2009 low at 666.

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On the Square of 9, the number 1576 is 90 degrees square October 8.
The high close was on October 7.
Remember, the market is not a fine Swiss watch.
Gann always said to key off the weekly chart, i.e., the WEEK OF.

Red arrow is 576 (for 1576)


Green arrow is Oct 8
Confirming the idea of a square-out at the Oct 2007 high was the Key Reversal Day
on October 11, 2007.

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Here’s how the bear market was calculated using the Principle of Squares.
The square root of 1576 is 39.7.
To determine 1 cycle of 360 degrees down in price, we subtract 2 from 39.70, giving
37.70, and re-square, getting 1421.
Notice that the pre-crash pivot high from May 2008 was 1425-1440.
The market crashed from this 1421 region.
W.D. Gann said 7 is the number of panic.
From 1576, the SPX tumbled SEVEN squares or cycles or 360 degrees.

Red arrow is 576 (for 1576)


Blue arrow is 660

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Here’s how we get 7 cycles down.
We take the 38.70 square root of the high (1576) and subtract 14 (remember we
need to use 2 units for each 360 degree move).
39.7 -14 = 25.7
25.7 squared = 660.49.
The bear market low on March 6, 2009 was 666.65.

Red arrow is March 6


Green arrow is 666/667

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Finding Major Turns with the
Square of 9
When looking for major turns using the Square of 9, it is good to have important
confirmation.
As offered above, every day I look at the possible time/price relationships by putting
“zero” on the current day.
Coming into early March in 2009, as you got to March 6, you would notice that
666/667 is 90 degrees square March 6 for a perfected square-out.
And near 7 cycles in price down from the top.
So, the March 2009 low was a square-out in the same manner as the October 2007
high with a 90 degree square-out.
The early October 2007 bull market top is square the price of the top.
The early March 2009 bear market bottom is square the price of the low.
Remarkably, the 1576 Oct 2007 top is 6 rungs or squares of 360 degrees up from
the 768 bear market low.
That was also a time/price square-out as 768 is 90 degrees square early October.

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Red arrow is 576 (for 1576)
Blue arrow is 768

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It is one thing to ride a trend, but it is quite another to be long and be able to exit
near a high, or be short and exit near a low.
This is the unparalleled value of the Square of 9 Wheel.
As hedge fund wizard Paul Tudor Jones says, “I believe the very best money is made
at market turns. Everyone says you will get killed trying to pick tops and bottoms and
you make all your money by playing the trend in the middle. Well, for twelve years I
have been missing the meat in the middle, but I have made a lot of money at tops and
bottoms.”
If there is a better tool than the Square of 9 for pinpointing major tops and bottoms
or swing tops and bottoms, I have yet to discover it.
Let’s look at some intriguing historic time and price harmonics revealed by Square
of 9.
The high before the 1987 crash was August 25 at 338 SPX.

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339 is 180 degrees opposite August 25 for a time/price square-out that nailed the
summer blow-off top in 1987.

Red arrow is Aug 25


Blue arrow is 339
The low of the crash occurred the day after Black Monday, on Tuesday, October 20,
at 216.46 SPX.
Notice how 215 is 90 degrees square October 19.
Even in the midst of the turmoil, the geometry of the Square of 9 held sway.

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Mastering Time/Price
Relationships
Once you work with the Square of 9, you will be amazed by the spectacular
time/price relationships it unlocks.
For example, the DJIA high in 1929 prior to the crash was 386.
It is well known that the pattern in 1987 mirrored the pattern in 1929.
What most market participants would be surprised to learn is that 386 is 90
degrees square October 19, the crash day in 1987.
In other words, the high day in 1929 points to/vibrates off Black Monday in 1987.

Red arrow is 386


Blue arrow is October 19

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It was 58 years between the 1929 crash and the 1987 crash.
Black Tuesday in 1929 was October 29.
Checking a Square of 9 shows that 58 is 90 degrees square October 29.

Red arrow is 58
Purple arrow is Oct 29

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So, 58 years from the October 1929 crash, another crash was triggered in October.
Think about this: the Great Financial Crisis in 2008-2009 was considered the worst
crisis since the Great Depression.
The low of the GFC occurred in the first week of March.
The high prior to the Great Depression occurred in the first week of September.
The first week of March is 180 degrees straight across and opposite the first week
of September.
So, the date of the high prior to the worst turndown in U.S. history is opposite the
date of the low of the 2nd worst turndown.

Green arrow is 1st week of March


Blue arrow is 1st week of September

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Additionally, the SPX high in 1929 was September 7.
September 7 is square 667 (the low in 2009) and opposite March 6 (the date of the
’09 low).
So the date of the high in 1929 is square the price of the low in 2009.

Red arrow is September 7


Purple arrow is 667

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Using the Square for Smaller
Turning Points
If the Square of 9 Wheel can reflect the time/price harmonics of two of the biggest
turning points of the last 100 years, certainly it can decipher turning points on a less
dramatic scale.
Let’s look at the market in 2019.
The SPX struck a momentum high in late January 2018 at 2872.
That high more or less capped the market for the next 20 months.

On July 26, 2019, the SPX struck a nominal new all-time high.
2872 aligns with July 26.
From July 26, 2019, the SPX fell 200 points (7%) in 6 days.

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Red arrow is 872 (for 2872)
Blue arrow is July 26
Interestingly, in keeping with the Principle of Squares, 55 squared is 3025, which
ties to the SPX ATH.
The takeaway is that the market is suspect until it clears the 3025 closing high from
July 26, 2019.

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On September 21, 2018, the SPX struck an all-time high of 2941 and tumbled to
2346 on December 26 (a period of roughly 90 days/degrees).
On the Square of 9, the number 2941 is 90 degrees square December 26.

Red is 2941
Green is December 26
This is a stunning example of how time points to price and price points to time.

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Time and Price Examples -
AAPL
Let’s look at some more examples of the concept that time is price and price is
time.
In late 2019, we got the December Massacre.
AAPL dropped from an all-time high of 233 on October 3, 2018, to 142 on January 2,
2019.
This was precisely 90 days/degrees later.

October 3 aligns with a price of 232 for a square-out.

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Red arrow is Oct 3
Blue arrow is 232
On January 3, 2019, AAPL saw a large gap down.
After its substantial slide, this had the potential to be an Exhaustion Gap.
Setting “zero” on January 3 shows that a price of 231 is square January 3.
The all-time high was 233. The all-time closing high was 232.
So the date of the low was square the price of the high. Price pointed to time, time
pointed to price.

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One year later, AAPL has struck a new all-time high of 237, which is 90 degrees
square the 142 low.
If AAPL can clear 237 on a sustained basis, the indication is a move to 253, a full
720 degrees or 2 full price cycles up from the January 142 low.

These examples flesh out the statement that Gann made: “Every top and every
bottom in the markets had a mathematical counterpart in both time and price.
When time and price coincide, change is imminent.”
Coincide is another way of saying “square-out.”

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Time and Price Examples -
SHOP
Let’s take a look at an example of time and price squaring out using SHOP, the
poster-child of the bull in 2019.
SHOP struck a high at 175 on June 20, 2018 and declined to 140 quickly — in 6
days.

June 20 is 90 degrees square 176 for a time/price square-out.

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Red arrow is 176
Blue arrow is June 20
SHOP recovered to make a nominal new high at 176.60 on July 24, 2018, where it
left a large range Key Reversal Day before plunging to 133 by the end of the month
90 degrees up from the initial break to 140 is 177.
So, the low of the first break pointed to the test failure high at 177.

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Green arrow is 140
Red arrow is 177
Armed with this knowledge, the reversal at 177 could be seen for the failure it was
destined to be.
The geometry of the Square of 9 was telegraphing that SHOP was in a weak
position.
It was — dropping 43 points in 3 days.
How much could you have banked with put options with the benefit of this
knowledge possessed by the Square of 9?
This is one of the great benefits of The Wheel. Options require timing. The Square of
9 does a good job pinpointing time frames.
39
Let’s look at some examples from the 3rd quarter of 2019.
Once again, let’s analyze SHOP.
SHOP struck a high of 409.60 on August 10, 2019.
From there it declined to 286 on September 25, where it left potentially bullish Train
Tracks — sometimes a signal of exhaustion.

What is interesting is that September 30 is 180 degrees straight across and


opposite the 410 high.

40
Red arrow is 410
Green arrow is Sept 30
Putting “zero” on the date of the high, August 27, reveals that 285 (1 point from the
low) is square August 27.

41
Blue arrow points to Aug 27
Red arrow points to 285
Could 286 have marked a Selling Climax?
8 trading days after the 286 low, SHOP struck 330, a rally of 44 points in 8 trading
days.
SHOP tagged a high of 330.45 on Friday, October 4, 2019.
331.50 is 180 degrees straight across and opposite Monday, October 7.
It will be interesting to see how things play out.

42
Time and Price Examples -
ROKU
ROKU’s big run from its December 24, 2018 low of 26 reversed decisively from
176.55 on September 9, 2019, dropping all the way to 98 on 9/29.

43
Checking a Square of 9 shows that 177 “points” to September 9.

Red arrow points to 177


Blue arrow is Sept 9
360 degrees down from 176 is 126. ROKU gave signs of trying to reverse from 126,
but when it failed from a quick 360 degree drop, it crashed.
That said, September 27 aligns with the 176 all-time high.
ROKU struck a low on September 27 at 98, running all the way to 124 in 10 days…
just below the 127 region which we flagged above as being 360 degrees down from
the 176 top.

44
Red arrow is 175
Blue arrow is Sept 27
Remarkably, the date of ROKU’s December 24, 2018 low is square its 176 record
high.

45
Green is Dec 24
Blue is 176

46
Time and Price Examples -
TSLA
Few stocks command the controversy TSLA ignites.
Can the Square of 9 tame TSLA’s wild swings?
TSLA struck a major high at 379.49 on December 7, 2018, falling to 177 on June 3,
2019, a period of 180 days/degrees.

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177 is 90 degrees square December 7 for a square-out.
From its 177 low on June 3, 2019 (180 degrees/days from the December 2018
peak) TSLA ran up nearly 90 points.
Remarkably, 266 is 360 + 180 (540) degrees in price up from 177.

Green arrow is Dec 7


Blue arrow is 177

48
Square of 9 with IPOs
Hot IPO’s are the heart and soul of speculative sentiment and respond quite well to
the synergistic psychology reflected by the Square of 9.
Let’s take a look at CRWD, a hot IPO from June 2019.

The IPO low of 56 aligns with the all-time high day of August 20.

49
Green arrow is Aug 20
Blue arrow is 56
On September 30, CRWD carved out a large range signal reversal bar from a low of
51.61.
September 30 “points” to/aligns with 52.

50
Green arrow is Sept 30
Purple arrow is 52
Subscribers bought CRWD off the setup, selling the balance of their shares near 63
on Friday, October 4.

51
Using the Square with
Low-Priced Stocks
I’m often asked whether the Square of 9 works with low-priced stocks.
The last example shows how we worked-out silver miner AG on the Wheel, allowing
subscribers to benefit from a big run in calls and the stock.
AG struck a low of 5.48 on May 24.
To work with low-priced stocks, we move the decimal point to get 54.8 and round to
get 55.

55 is square May 24.


360 degrees up from 55 is 89.
Moving the decimal point back, we get 8.90, which should act as support and
subscribers re-loaded.
In late September, AG pulled back to 8.90 after a more than 100% run to 11.60 over
in approximately 90 days (May 24 to early Sept — Notice that the big breakout day
was June 3, exactly 90 days prior to the high).
52
Red arrow is 55
Green arrow is Sept 3

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Interestingly, AG’s 11.60 top on September 3 was a square-out with September 3
straight across and opposite 55 (the 5.48 low).

Red arrow is 55
Green arrow is Sept 3

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Conclusion
The important thing to understand about the Square of 9 Wheel is that not all
square-outs are created equal.
While all significant tops and bottoms are square-outs of time and price, not all
square-outs are major tops or bottoms.
The key to speculation is observation of the behavior from a time and price
relationship.
Combining time/price square-outs with signal bar reversals and price action is a
superior way of capturing extraordinary swings and major trends.
The question I get asked the most is why does the Square of 9 work?
I can’t tell you unequivocally why it works — just that it works.
The best way I know to explain how it works is in the proof offered in these
examples.
The best way I know how to explain the value of the Square of 9 is that if you can’t
measure risk, you can’t manage risk.

55
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