30 1 300 1 330 1 400
. ..,•." .,." ." " ,_,i.,_
.
,
1I
' 1 044.00_.L_�i -::---:-:,,::i =-----..l�:'_:_c_ 1430 1 500 1 5301 8301 1 �2 Sun
�._..�_...
·
..._,_...
-
�' ( ) ( I . ()llll[\.. I I (\ I I I I ' Ill" h. "l I \ I. d t )( II I I I " I 1 1 1 1 ) I " I 1 1 1 \I� III I I I, \ d ( h II l( I. I I (I I \ l \ h ,, \,. ( \\ \ I I k ( (II nl' III \\I I \ i l i l l I I Lldl..1ll.1tk .... "LI[ lll l l , Ill l l l ll I I I il\\ tl\d I�\ I lh . 1 1 1 " "' I'll l l \ , ' \\ ll l l " ! III (1 1 1 1 "lhl\\ 11 III 1 1 1 1 " . . Il i i t 1 -.. 1 1 1 -,1 \ 1 1 1 1. I I 1I I I I 1 1 1 1 1 1 1 1 1 \ l ll l l lill 1 1 1 1 1 1 ] 1 1 1 ,1 1 1 \111
CHART 2 1
COUNTING BARS
The PIT concept states "A regular cycle will follow an inverted cycle and/or an inverted cycle willfollow a regular cycle and each cycle unit will have approximately the same number ofbars.In the above chart of October 3 1 , 2003, the RC lengths are shown across the bottom and the IClengths are shown across the top.Whether you start counting with a RC or an IC, the UNIT will have approximately the same number ofbars. The longer 26 bar cycle and the 42 bar cycle also illustrate the validity ofthe concept statement.When there are several bars forming a single point, including all the bars will in most cases be thecorrect count.Notice that the TIME targets are often even more accurate than the PRICE targets.Adding a price pattern requirement to the time targets might provide a timely way to enter the marketat the PTT or CTL and with trend consideration.It is suggested that the bars be counted each day for a while to confIrm that RC and IC have approxi­mately the same number ofbars and that the market is not random!47
J.R. STEVENSON
1 0 / 4 /0 3 1 6 : 27 : 5 5
1 02 8 . 00
1 02 6 . 00
. "
. ;
1 02 4 . 00
, 1 022 . 00
: 1, ; , , 1 02 0 . 0 0
- No 4 fell short,subgesting higher n\kt · .,
,
"
rPTT"� [6] hit their targets
all 0
, '
1 0 1 8 . 00
' "
1 0 1 6 . 00
.
1 0 1 4 . 00
16
( nl'\ I I " 1 I 1 (
I
1011 0-2 4 Fridav
)(111 1 ' 1111" ,,- I I (
11
12
13
14
15
16
\ 1 1 I I , h i , I � , .. I \ ,,-d
( I( 11.11 1'-.
1 1 1 1 111 1 h.. 1 1. 1 1 1 , I l l �)\\ Ikd \1\ 1 110._ 1 1 1 "-"' 1'1.1.1 1 \ 1,. \1\\ 1 1\,.[ ,
-I
--
1 0 -27
MoncU1
\ J ! \lllll[ I r ,ld ... lll l r k , "I..!I I \ � (h ',\.. 1 \\ 1 11 1, t (lilli' ttl\1 1 111 1 I" ,I tl.hlllll ll k , I ( 1III'l\. I I (I ll... d,ILI ,11\1\\ 1 1 I II till" \. 1 1 , 1 1 1 h h I - ttl!!>.. . !! \1.11.1 ,!lId Ililt ... 1l ! l llll ! ! 1 I 1 ) I IIt.lt l,1I1
CHART 22
GUIDANCE THROUGH THE DAY
At the 1 0: 3 5 bar, the first PTT could have been drawn as shown at the end of the TL I e. From thatpoint on, the PIT's were drawn as the chart unfolded during the trading day. Notice the trend changing as youfollow the slope ofthe TL on the regular cycles. Since every PIT is expected to be accurate, the "falling short"at #4 was very important in analyzing the future direction ofthe market.
48
PRECISION TRADING WITH STEVENSON PRICE AND TIME TARGETS
.
,! . .
.
,� . .
, , , , , 1 1 32.00
1 1 30.00
' 1 1 28.00
i
, , , 1 1 26.00
, , , 1 124.00
. . i · · ·
, , ' 1 1 22.00
I
, 1 1 20.001 500
<- 1I 1H I l !...dll ( �()(14 ()llll!l.. 1 (
1 530
\ 1 1 I I :....' h h 1 1..· .... L·! \ \... d ()( 1l.1 I t--. 0111 ) I .... d I t .l dl..'lll.ll k \11 ()WI!L I I (
I,n t h 111.. 1 1.. 111 ,Il l 11\\ lh.d h \ II1l11 1 1..' .... 1'1..·1.. 1 1 \ \.: \1\\ 111.. 1 ....
d I \ L \I .... '\1..l\\ \II 1-. ( \lllIp.lll\\ 1 1 nlIJl' ! 1 1 .ldl..· Ill.lI k .... "1..'1I h I..' d.l!.l ...IH1\\ ll 111 t h , .... L h .l l ! , .... 11' .... hll ll.. , 11 d,ri.t ,llld thi( L l I l l l'lll 1 1l 1 111 11l.llhlll ··
CHART 23CURRENT UPDATE
Since it is over a year that this manual was written, an update just before publication should be interest­ing, in order to confirm the concepts presented. The last completed 5 minute chart was on 1 0/ 1 /04. Thefollowing points were observed:1.
All the numberd TL's are cloned lines and the end points are the PTT's that developed as thetrading day progressed.
2.
Please note the small "misses" ofthe PIT on lines 1 , 2 and 4 which suggests a trading rangedeveloping. In fact the total range after the fast run up was only 6 points for the rest ofthe day.
3.
The PTT's 3 , 5 , 6, 7 , 8 and 9 , were nearly perfect as the result of concept 1 .
4.
The ' Basic" TL for concept 2 was drawn at 1 4: 1 0 ET, then cloned for a CTL and a buy signalwas given at 1 4:20 for a PTT at 1 l 32.75 to be reached at 1 6:05. This was hit perfectly at1 6:05 and was also confirmed by the 9 PTT.
5.
Nearly every important point made in the manual over a year ago can be confirmed by theanalysis of this chart. This fact should add confidence to the validity of the concepts as pres­ented.49
J.R.
STEVENSON
CYCLESB
A
A
c
REGULAR CYCLE IN AN UP TREND
REGULAR CYCLE IN A SIDE TREND
B
B
c
cREGULAR CYCLE IN A DOWN TREND
INVERTED CYCLE IN A SIDE TREND
B
T
T
c
cINVERTED CYCLE IN AN UP TREND
INVERTED CYCLE IN A DOWN TREND
50
PRECISION TRADING WITH STEVENSON PRICE AND TIME TARGETS
CYCLE UNITST
A
c
A
REGULAR CYCLE UNIT
REGULAR CYCLE UNIT
FLAT TREND
UP TREND
B
T1
cINVERTED CYCLE UNIT
INVERTED CYCLE UNIT
UP TREND
DOWN TREND
B
B
T
c
C
T1
REGULAR CYCLE UNIT
INVERTED CYCLE UNIT
DOWN TREND
SIDE TREND
51
TRADING TIPSIfyou want to trade with the trend ofthe cycle you selected:Ifthe RC trend is up--Buy a CTL breakIfthe RC trend is down-sell the PTTIfthe IC trend is up--buy the PTTIfthe IC trend is down-sell the CTL breakIf you want to counter trend trade the cycle you selected:Ifthe RC trend is up--sell the PTTIfthe RC trend is down-buy the CTL breakIf the IC trend is up--sell the CTL breakIfthe IC trend is down-buy the PTT
Remember, the trend ofthe cycle you selected to trade is determined by the slope of the A-C line ofan RC or the slope of the B-D line of an Ie.Many traders counter trend the markets. Ifyou are so inclined, following the above listed tips shouldbe of value as you will know the cycle that is being traded and when the move might be over.
53
POINTS OF EMPHASIS IN THIS MANUAL1.
A market truth. Derived from price bars only. No calculations, no formula, no indicators, noopinions, no bias.
2.
Simplicity-<irawing oftwo trend lines and picking the length ofthe cycle to trade.
3.
Accuracy-Ifthe market was a perfect sine wave, the PTT would always b e correct. Ofcourse this is not the case in real time trading. The odds ofguessing where the market will tradeat a time in the future would be enormous. However, the concepts produce several price andtime targets through out the day that are accurate, sometimes to the very tic.
4.
You must always expect a regular cycle (RC) to follow an inverted cycle (lC) or an invertedcycle (lC) to follow a regular cycle (RC) and each cycle will have approximately the samenumber ofbars.
5.
Always EXPECT the PIT's to be accurate EVERY TIME! Every miss will give analysis help.
55
SUMMARYMany trading methods do not seem to work after they are sold. The PIT concepts should always bevalid as long as the markets stay liquid with enough traders that form habits. The PIT's have served me well for30 years and they continue to be valid. (See updated chart 23.)There is no "track" record for percent right or wrong. The PIT's are derived only from the price barsand cannot be changed ifthe same procedure is used every time. Every PTT constructed should aid in theanalysis offuture market action. By plotting the PIT's on the chart as the day progresses, this should provideinsight on how cycles affect the market and that the market is not random.Good trading to all ofyou. Ifyou have questions, e-mail me atjstevens@midsouth.rr.com.J.R. Stevenson
57
TESTIMONIALS
"I first met J R. Stevenson in 1 981 . . he was my boss at my first job out of college, withContiCommodity. I was lucky to be in a situation where I spent th.e first couple ofyears on the joblearning technical and cyclical analysisfrom a man who, I quickly realized, had a very unique insightinto market behavior. Among the techniques he taught me then was one he called cyclic projection orvectors, the Price Time Targets that this book is based on. This is the single most effective trading andanalysis tool I have ever encountered, and I have never looked at a price chart since without plottingout afew of these PTT's to see where that market should go. For wirious reasons, I drifted awayfromthe futures markets for a number ofyears, but the PIT's worked equally well in helping me with mystock purchases and sales. Recently I resumedfutures trading, and immediately saw that these PIT'sarejust as effective an,d accurate on 2, 5, or 15 minute bar charts as they are on daily or weekly charts.As a reader ofthis b09k, consider yourselfveryfortunate that J R. decided to share this technique withyou. So enjoy this book, take the time to learn the material here, practice and get comfortable withusing PIT's, and you will learn to trust them. Good trading! ".
-Reid Hampton
"Buy this manual. It is a guide to the cyclical behavior ofmarkets and is elegant in its simplicityand accuracy It is a method of depicting the collective behavior of market participants in both timeandprice andprovides an invaluable complement to your current trading methodology. It is not aboutthe psychological and money management aspects of trading. Nor is it a self-contained method oftrading, although some of its principles couldform the basis of a trading system. It will sharpen yourtrading skills and add an element ofjoy to your day. Happyfishing. "-M. P.
" Thanksfor your PIT manual and your assistance in applying the principles it teaches. I havebeen tradingfor more than sixyears and this is the most powerful tool I have ever used. I enter with myown system; however ruse the PTT's as a guide to manage my trade. l am a strong believer in manag­ing a trade in order to be a successful trader. This has increased my winnings substantially by reducingmy losses and increasing my winnings. This is a must-have manualfor all traders. I certainly wouldrecommend it to anyone. "-John Boese
" This unique method oftrading is simple and easy to use. Yet it gives me valuable insights intomarket cycles. I am amazed that I can draw lines to precise price and time targets (PTT's) and then sitback and watch it hit precisely on that target. The PIT's coupled with the entry methods described inthe manual are the most effective trading method I 've found! "-Walt Whittington
"Just wanted to say, " Thank you, thank you, thank you! " I can 't believe how simple it is! Theycan keep all the "fluff and stuff" market indicators. I like this simple method and will keep yours ... "-Jo Ann Kitagawa
"Please take your crystal ball home with you over the weekend so it will be safe. Boy, you havebeen calling these markets great! A !'pecial thank youfor the individual help you continue to give me.
"
-Kathy Farrer59
"Just wanted to drop you a line and tell you L for some time now, have found your cyclicprojections and analysis to be of tremendous value in my trading. I keep bar charts together with amomentum chart on seven commodities and T-Bonds. These combined with your cyclic letter are all ofthe inputs I want or need. Keep up the good work. "-Ed Detrixhe
"JR., concerning your cyclic projections, I have followed Hal Cycles, MB&H, McMasters,Morgan Maxfield, James Sinclair, Bruce Gould, etc. etc. for a long time and I havefound your work tobe as good as any in the industry for my existing clients, as well as for soliciting new prospects . . ".
-John T.
"Thanks to JR. Stevenson for his fabulous comments on the grains. A ll our customers appreci­ate his comments and this is echoed from the entire 49th trading floor in Continental Grain. As far aswe 're concerned, J R. is the BEST So if that isn 't a compliment, I don 't know what is. IfJR. would liketo start handling some business on grains only, L believe I couldfind him quite afew accounts which hecould manage. Many thanks for a job well done. "-Miles (fonner broker at Continental Grain Company)
"I 'd like to take this opportunity to tell you what afabulous job JR. Stevenson and Reid Hamp­ton, the Commodity Division s Technical Analysts, are doing. In my opinion they are the best thing thathas happened in thefirm in the 11 years that I have been here. "-Fonner Prudential broker
"This work is concise, well-prepared, and very understandable. The discipline they carry intotheir trading keeps any losses small and allows profits to run. This probably is the most difficult thing todo in futures trading. Besides having a fine grasp of the daily fluctuations in the markets, their stron­gest point is the ability to do an excellent job of long-term forecasting... a rather difficult task. "-Joseph A. Fineman
60
J.R. StevensonAt the early age of 12, lR. Stevenson became interested in electricity and fascinatedwith "sine" waves. This interest led to his pursuit of a major in Electrical Engineeringat the University of Kansas, where he graduated in 1941. While there he had theprivilege of studying under Professor Raymond H. Wheeler, one of the earliest andbest known proponents of cycle analysis.In 1970 lM. Hurst authored a book, The Profit Magic of Stock Transaction Timing,�
in which the "sine" wave was used to explain cycles in the stock market. This book
had a profound influence on lR.'s thinking and on the way in which he analyzedmarkets. After reading Hurst's book, taking his college level study course on cycles,and attending several seminars which Hurst presented, he thought the "Holy Grail"was in sight. (This course has recently been reproduced by Traders Press in
Greenville, SC, and is still available through them. It is now called the Hurst Cycles
Trading Course. Full details on this course may be read at http://www.traderspress.
com). Even thought he believed in all the cycle theory presented (and still does to thisday), finding a simple, yet accurate trading method eluded him.
concepts
are
manual are original and they were developed entirely by Stevenson after much thinking,
observation of market behavior, and checking the validity of his concepts in real time analysis and trading. He has used theseconcepts to project PIT'S (Price and Time Targets) on most futures markets since 1974. They were the basis of a market letterthat he wrote in the 1970's and 1980's while a senior technical analyst with ContiCommodity Technical Research Center. AtContiCommodity, Stevenson developed and managed "Cycle Logic," a registered managed futures fund.From 1983 until his retirement in 1988, Stevenson was Vice President and manager of the Technical Research Department of theCommodity Division of Prudential Securities in New York. During this time period he used the concepts presented in this bookto analyze all futures markets and give daily trading recommendations to all foreign and US offices of Prudential. Afterretirement, he worked for a CTA (Commodity Trading Advisor) for two years as a technical analyst and was a consultant forother firms until 2001. lR. has traded most futures markets since 1958 and has been a speaker on cycles at trading seminars in anumber of Canadian and U.S. cities. lR. still actively trades his own account, concentrating on the intra-day action in the S&PE-mini futures.
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