The Directional (< >) The Directional is the crux of the system. Its primary function is to offer an initial bias for the trading session, gauging the markets first move. In our price map example (Table A) 1295 is the Directional. A print of 1294 would show a negative bias and the expectations of the market breaking down to the 1290 Downside Pivot (DP).

Pivots and the Critical Range (UP, DP) The Upside Pivot (UP) and the Downside Pivot (DP) are the directional momentum levels of the Price Map. A violation of a pivot signals a move in the direction of the violation to specified targets designated by the numbers 1, 2,and 3 following the ***star weight. These pivots set the parameters for the Critical Range and represent the lowest risk sell and buy for the trading period. Markets have the tendency to consolidate for significantly longer periods of time than when they are trending. The pivots represent the markets maximum stress tolerance parameters before snapping and moving to a new level. Even after a pivot has been violated it will remain a key level as its converse. The UP should be considered the best resistance level for the trading session and the DP the strongest support. A trader should not buy or sell into either pivot hoping for a breakout. Note: An important element to watch on all levels of the price map, especially the pivots, is that the market must sustain each successive level violated to continue a trend move. Sustain meaning hold above an upside violation and continue to trade below a downside failure.

R-Reversal Number The Reversal Number aids traders in quickly highlighting the session’s trend bias. Trading above the R signals a positive buy break bias and below the R signals a negative sell rally bias. Traders should look to sell rallies below the R and buy breaks above the R. Traders should 132450 ***2 131750 * 131030 ***1 R 130400 ** 130000 UP < 129500 > 129000 DP 128750 * 128150 ***1 127150 ** note the R position for an indication of the sessions underlying trend. Is the market trading with or against the bias? Is the current price action corrective or trending? Corrective movements against the trend should be viewed as temporary with profit potential limited to the R level. When Price Map levels are violated in the direction of the trend they will have greater probability of follow through to the next Price Map level. For example: The131030***1 R initial resistance target is also the Reversal number. A market open at the < 1295 > Directional would indicate underlying negative trending tendencies below 131030***1 R. A breakout above 1300 UP up to the 131030 R level, in this example, should be viewed as corrective with additional sellers expected to come in below 131030 to resume the negative trend. A failure from the 1290 DP would reinforce the negative bias, as it is a continuation of the current intra-day trend. A violation of 131030***1 R however would signal a shift in sentiment reversing the underlying bias. So instead of selling rallies the system would be buying breaks. Moves with the trend will be reinforced and moves against more laborious and not sustained.

Momentum Continuation Numbers (+c , –c) To aid in value at risk considerations and overnight position exposure the Price Map provides a market momentum indicator represented by +c and –c. These are the levels on the Price Map that the market must close above (+c) and below (-c) to present a high probability of further price movement of at least 1 APMD in the direction of the signal. APMD is the average distance between two levels on the Price Map (refer to Appendix A for individual market breakdowns). In the Price Map example a close below 1265 ***2 -c would signal downside follow through of at least 600-1200 points (1 APMD increment). Note: In 24hr markets the momentum signal may present itself in the electronic after hours session instead of the RTS (regular trading session). Markets tend to press extremes and, like a rubber band that gets pulled to its limit will quickly snap back. The +c and -c pinpoints the extreme "limit" or breaking point at which a close beyond that price would "break the rubber band" and produce follow through to a new trading level in the next session. Profits made in a session are at greater risk in markets where the closing price is not beyond the continuation momentum level. A short term position that is neutral or at a loss should give up "hope" for a break-even pull-back after a close beyond these parameters. Note: A closing price of 2 or more standard deviations of the APMD beyond the momentum continuation number will negate the value of this indicator. The market has "made its move" and although follow through is likely the reliability is not as great.

TRENDS APMD 15-20tics TRENDS MIN UP 7548 INT DN 7688 MAJ DN 7731 The system highlights three trends: Minor, Intermediate, and Major. UP and DN signify if the trend is up or down, respectively. NEU signals that the trend is in a neutral position. The price following the trend indicates the point at which the trend will reverse. For example, a Minor UP 128150 means the Minor trend will change to DN or NEU when the market closes below the 128150 level.

Minor Trend The Minor trend is a short-term trend encompassing a 1-day to 2-week period. For active day traders this is the most important trend for the system. The Minor trend helps to identify corrections of the Intermediate trend. It should be noted that when the Minor trend is correcting the Intermediate trend the trading conditions will typically be choppy. A Minor trend that coincides with the Intermediate trend would be expected to be smoother and less volatile.

Intermediate Trend The Intermediate trend is the underlying market trend encompassing a 2-8 week period. Any long-term position should be with this trend. In the Price Map example the Minor and Intermediate trend are in sync signaling a strong underlying positive bias.

Major Trend The Major Trend is the extended underlying market trend with a 2-6 month outlook. An agreement of all three trends is a strong trend move that should not be faded. A gap opening or major pivot breakout against a strong trend position provides the trader with an opportunity to fade the move. Note: A change of trend is only confirmed on a closing price.

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