Aaron Lynch
Aaron Lynch		 There is no better place to focus on for ABC trading opportunities than the US equities market. Noel Campbell and I have just finished a round of seminars in the USA introducing the studies of Gann and Bowden to some very eager traders. When we train traders outside of Australia we always endeavour to focus on some local markets to ensure that the concepts are relevant.
This has never been easier than this recent round as opportunities are constantly presented and the problem revolves around too many choices, as opposed to not having enough. For example running an ABC scan in the software on the full US equites listing on the last day of training identified fifty nine long trades and forty four short trades.

One that was discussed at some length was an ABC long trade on EBAY listed on the NASDAQ. Most of the newsletter readers would be familiar with the concept of buying and selling items over the internet via EBAY. The chart below shows the recent price action and confirms with a number of Gann’s rules for a classic setup.

The movement of price since early August has shown a strong bullish move. The safest place to buy is the first higher swing bottom and this was confirmed on the 19th August. The trade went on to repeat in price with a safe exit triggered at the 100% pressure point for a move of $5.68.


Chart 1

click chart for more detail

Taking advantage of a move like this could have been achieved by various vehicles, the outright purchase of the physical stock, the use of options by buying calls or even a bull call spread. Then added to this is the Single Stock Futures market and finally even a Contract For Difference.

Watching this trade unfold on the back of a strong trend saw another long trade signalled. This occurred with an anticipated Point C flagged on 30th August. A number of things cement the idea that the run may continue, firstly the price action gave us the first signal to enter by providing a higher bottom. The second is that the price has moved away from a very solid pressure point, the 50%. In the chart below I have circled the strong areas of support you may note the double bottom pattern on this level.


Chart 2

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The final chart shows the potential ABC trade for the next few days, I have included the pressure points for a guide to the trade and also the volume indicator. The closing and opening pattern on this day is fairly neutral with the thermometer reading zero. The fact that volume on the anticipated C was lower than previous days also holds well for this trade.

Chart 2

click chart for more detail

The 50% pressure point is a concept that Gann could not stress enough in his trading, combined with a strong ABC trade and a reference range of over $7.00 these are the sort of trades that get the adrenalin rising for a profitable move.

Good Trading

Aaron Lynch