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This article is taken from the notes of my trading log for a closed and open trade in the platinum market. My trading plan is three-dimensional. I look for coincidences of time, price and pattern in market activity to indicate trades that promise maximum profit potential with minimum exposure and risk. Only when the market completes a reliable pattern, near a time period indicating a change in trend and at an important price level, do I enter or exit a trade. All three dimensions must coincide.

The time ratio analysis of the recent major cycles in the gold market indicated that the period near September 16-27, 1988 would likely result in an important change in trend.

Timing, as well as price activity, is often related to the important Fibonacci ratio of 61.8%. Most traders are well aware that price often retraces 61.8% of the prior swing. This important Fibonacci ratio is also very important in my timing analysis for the precious metals markets. A change in trend often results near a61.8% time ratio of a prior cycle extended from the completion of that cycle. Let me illustrate and explain why I was looking for an important change in trend near September 16-27.

The "death zone"

My timing analysis for platinum (Figure 1) is primarily keyed off the gold market cycles. The December 14, 1987 high to the June 2, 1988 high in gold equaled 171 calendar days. The Fibonacci ratio of 61.8% times 171 equals 106 and 106 calendar days from the June 2 high fell on September 16.

Much of my timing analysis is Gann-related. Gann taught that a 30-unit time period or 1/12 of the circle of 360 degrees is a period to look for change in trend. September 26 was exactly 30 weeks from the February 29 low. September 24 was 30 calendar days from the August 25 high. Studying the history of precious metals price activity has taught me to always look for a change in trend 30 weeks and 30 days from an important swing high or low.

September 27 was 49 calendar days or 7 weeks from the August 9 Wave 3 low, prior to the momentum move down from August 25. Gann calls the 49th period of time the "death zone" and a period to look for a change in trend. I also always look for indications of change in trend 49 calendar days from minor and major swing highs and lows.

Whenever my timing analysis results in such a cluster of probable change-in-trend dates, I am very alert to the price and pattern activity of the market as those dates approach. I became very alert for my price-and-pattern analysis to indicate a change in trend beginning the week of September 12.