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Chart 8 Range 3

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Point I - High of 1/5/88 at 26560 Point L - Low of 1/21/88 at 24120

Total number of points in Range 4

2440 25340 25657 25950 26560

50% Retracement Target 63% Retracement Target 75% Retracement Target 100% Re tracement Target

Point J - A group of 4 consecutive lows ALL WITHIN 10 POINTS:

Gann stated that when 2 or more 50% Retracement Zones occur at the same price level, congestion occurs. Prices don't know whether to react to the "bearishness" of Range 2 or the "bullishness" of Range 3. Therefore - congestion. (Another example of this can be seen in a T-Bond chart in the section, "Fine Tuning the 50% Rule.")

Point K - Price range of 1/15/89; 50% Retracement of the previous 50% retracement.

Prices met with very strong resistance in the 10-point zone of24190 to 24200. After 3 attempts, prices rebounded to the upside, but only to approximately 50% of the previous move from Point I to Point J.

Therefore, the NEW limits for Range 4 should be:

High of 1/5/88 at 26560 Low of 1/10/88 at 24190

New 50% Retracement Target = 25370

Open = 26000 Daily Midpoint: 26000 - 25280 = 720

Close = 25300

50% Retracement Target of Range 4 50% Midpoint of 1/15/88 Difference

265 Pts.

Point L - Price range of 1/21/88; 100% Retracement

Open = 24555

High = 24600

Low = 24120

Close = 24605

Daily Midpoint: 24600-24120 = 480

100% Retracement Target of Range 4 50% Midpoint of 1/21/88 Difference

24190 24360 170 Pts.

Point M - Price range of 2/1/88; 50% Retracement

Open = 26020

High = 26060

Low = 25680

Close = 25780

Daily Midpoint: 26060-25680 = 380

380x50% = 190 26060-190 = 25870

50% Retracement Target of Range 4 50% Midpoint of 2/1/88 Difference

25370 25870 500 Pts.

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