The Circumscribed Objective

Written by Ross Beck

Thursday, 14 July 2011 00:00


"The principle of all things is the monad or unit; arising from this monad, the undefined dyad or two serves
as material substratum to the monad, which is cause; from the monad and undefined dyad spring numbers;
from numbers points; from points, lines; from line plane figures; from plane figures, solid figures; from solid
figures, sensible bodies, the elements which are four, fire, water, earth and air; these elements interchange
and turn into one another completely, and combine to create a universe animate, intelligent, spherical"
- Diogenes Laertius, Lives VIII. 25
The Monad, according to the Greek philosophers, was the beginning of all things. It was often represented
as a dimensionless point in time and space. As traders, we can think of the Monad as the beginning of a
series of events that unfold at the start of an impulsive phase. It is only when the Monad moves that a
dimension is created. When the Monad moves from its original position to another position, then a line is
created. Note that this initial movement could represent vibration as the Monad can appear at any position
on the newly created line, and the dimensions of the line will remain the same. Now with two data points we
are able to create an endless array of additional geometric forms. In this article we are going to use the two
points of the line or Dyad as the radius of a circle as part of a trading method referred to as the
Circumscribed Objective.

The Circumscribed Objective was first mentioned in 1934 in the Pickell-Daniel Extension Course of Grain
Market Analysis. This material was often quoted by Gann expert, the late dr. Jerome Baumring. In this
article we will look at how to use the Circumscribed Objective to identify the end of an Elliott Wave ABC
correction or the D point of a Gartley Pattern. In the following example we will use the traditional labels of
the Gartley Pattern to help us find the completion of the CD leg of a bearish Gartley Pattern.

The first thing we need to identify is the BC leg. If using Market Analyst with Geometric Tools enabled, go to
tools>geometric tools and select geometric circle. Then click the B high and the C low to identify the radius
of the circle. The software should now display a circle based on your selected radius. This can be seen
below in figure 1.


Figure 1. Geometric Circle based on the BC leg of a bearish Gartley Pattern.
This technique has value in itself as you can see that the D high found resistance at the one oclock position
of the geometric circle. However, the Circumscribed Objective technique takes it one step further by using
an additional angle to intersect with the circle to give us a high probability time and price projection.

To add the angle we need to calculate the time from the B high to the C low. To measure this timeframe we
can simply draw a horizontal line from the B high to the point above the C low as seen below in figure 2.
This can be done with a simple trend line using the crosshairs to line up with C to ensure that the line is truly
horizontal.

Figure 2. Horizontal time line from B to C
Now we need to copy this existing line segment and drop it beside the one we just finished drawing at the
same price and just to the right of the line as seen in figure 3. This can be done in Market Analyst by right
clicking the first line segment and selecting actions>copy and then clicking on the chart, just to the right of
the existing line.

Figure 3. Additional line segment added to the right of previous segment.
These last two steps have now given us the ability to draw the final angle that will intersect with the circle to
give us our time and price projection. To draw the angle, select the trend line tool and draw a line segment
that begins at the C point low and draw it up to interest with the extreme right end of the last horizontal line
that we plotted. Extend the end of the final line segment anywhere above the circle. The angle created can
be seen below in figure 4.

Figure 4. Final line completes the Circumscribed Objective technique.
As you can see above, the intersection of the line with the circle has given us a price and time target for the
D point of the Gartley Pattern. If you were to draw a horizontal line at this intersection, you will see that the
price target was exact. The reversal in time was a little early. Some of you may be wondering about chart
scaling when using techniques such as the Circumscribed Objective. Lets just say that there is a clue
apparent on the chart already.