A Visual Inspection Of The Action Reaction Case Study Course Rules:
There is a high probability that:
2. Prices will either reverse on meeting the Median Line or gap through it.
Before I show you these charts, let me point out that the Action Reaction Course was written by Dr. Andrews at a time when the exchanges were only open during the day--there were no overnight or electronic sessions. And remember also that the only data readily available was end of day daily data. Gaps were much more common on charts in those days, because once any market closed in the afternoon, any news that came out after the close would not be reflected until the opening prices on the next day.
Because of the differences brought about by 24 hour Globex market sessions and the fact that real-time intraday data is now available to almost anyone, a few of these principles have been re-stated to better reflect the current state of today's average trader or chartist. You'll note in this example that I've added a third probability to Dr. Andrews' original two regarding what Price is likely to do when it approaches the Median Line:
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Let me point out again that when
Dr. Andrews writes "Median Line," he is also speaking about the Upper
and Lower Median Line Parallels.
