Andrews/Babson Lines are a cornerstone of our method

A component of our methodology is mathematically defining support and resistance, citing market channels and angles, potential inflexion points, and regressions from these points. We use Andrews Median Lines and Babson Action/Reaction Lines as their simplicity suits our ideals of minimizing stress and secondly to search for points of confluence around key points of inflection.

Drawing Median Lines

The Median lines (MLs) are simple to draw. Simply choose a high, low and high point of inflexion (usually referred to as a pivot) or choose a low, high and low point of inflexion. We look for swing highs and lows. Basically we find three points of inflexion, (a high, a low and a high), connect the last two pivots with a line (B-C). Find the mid-point of this line connecting the two (B-C) points of inflexion. Then we draw a line from the first (A) point of inflexion through the mid-point of the connecting line between the two (B-C) pivots. We call this our Median Line and extend it as we do our Gann Fans. From here we are able to draw parallel to the Median Line that begin at the (B) point of inflexion and then the (C) point of inflexion. Voila! We arrive at a pitchfork. As you can see very straight forward.

The line that starts at the upper point of inflexion and runs parallel to the Median Line is called the Upper Median Line or Upper ML; the line that starts at the lower point of inflexion is called the Lower ML.

We then have a series of ML or Upper or Lower MLs. We look for the intersection of any other Upper or Lower ML or ML that intersects a ML Any intersection is important and may have much more support or resistance than a simple trend line or Median Line. Again we are looking for points of confluence.

We then visualize confluence of other indicators like Gann lines, Murrey Math Lines, Fibonacci projections and retracements, chart patterns all adding to more confidence in what we are seeing in Wave and Gann objectivity. The Upper and Lower Median and Center Median lines add that extra dimension.