Median Line Analytics – Education (Part 0)

Brief History of the Median Line

The Andrews pitchfork (also referred to as a Median Line) is an extremely powerful drawing tool. It is available on most charting software packages. The uncanny effectiveness and full potential of this simple tool is not widely known. This is  partly because of the lack of publicly available documentation about Dr. Andrews work. Dr. Andrews developed his pitchfork drawing tool as an evolution of the earlier work of George Marechal and Roger Babson.

Roger Babson was an entrepreneur. He had the unfortunate experience of losing an elder sister in a drowning accident in the 1880’s. He viewed the accident as though his sister was unable to fight gravity. She was dragged to the bottom of the river as a result. This lead to his obsession with gravity which he viewed as an enemy. Babson studied the work of Sir Isaac Newton. Newton’s third law of motion “and to every action, there is always an equal and opposite or contrary reaction“. Babson applied this third law to the analysis of financial markets.

Babson Normal Line

In the early 1900’s, Babson and his wife founded the Babson Statistics Organization. He had developed a method of market analysis using what he referred to as a “Normal Line“. He started producing a market report for banks and this was known as “Babson’s Reports”. These reports covered his analysis of stocks and bonds using “Normal Line” analysis (applied Newton’s third law to the markets). Babson predicted market turns using the “Normal Line” which utilized the concept of a natural balance to the markets. For any price action above the line, there would be and equal and opposite reaction below the line.

Babson continued this analysis for many years. He was one of the first analysts to predict the 1929 stock market crash with uncanny accuracy. In 1933, he was commissioned by President Roosevelt to prepare a forecast for the US stock markets. To help with this, Babson engaged the help of a chartist, George Marechal. They prepared a forecast from 1933 to 1948. The chart they produced can be viewed with a simple google search “Marechal chart”. This shows their forecast with a comparison of actual market performance over that period. The forecast turned out to be very accurate even considering that there was a world war from 1939 to 1945.

Dr Andrews – Evolution – Normal Line > Median Line > Andrews’ Pitchfork

Dr. Andrews was acquainted with Babson and Marechal. He credited the development of his Andrews’ Pitchfork and methodologies for using it on the earlier work of Babson and Marechal. The “Normal Line” evolved into the “Median Line”, which evolved into the Andrews Pitchfork. The Marechal chart was included as the introductory page of Dr. Andrews “Case Studies for Investors” course. The Median Line is the central fork and Dr. Andrews added equidistant parallel lines on either side of the Median Line (ML). These are called Median Line Parallels (MLH’s), or upper and lower parallels. An Andrews’ Pitchfork is commonly referred to as a Median Line because this is the most important element of the pitchfork.

What is Median Line Analytics?

The “Median Line” used in TradingMotives analysis evolved from Babson’s “Normal Line” through the work of Dr. Alan H. Andrews. TradingMotives’ Graham Corbishley was mentored by Gordon DeRoos, a former student and friend of Dr. Alan Andrews. Gordon passed away in 2015. Graham is truly indebted to the knowledge that Gordon passed on. Graham uses many of the methods that were developed by Dr. Andrews and has developed enhancements of some of the methods by applying median lines to RSI to interpret momentum. Graham has also developed methods for applying median lines to the Elliott Wave Principle.

Gordon DeRoos’s daughter is now maintaining his website. You can obtain copies of some of Gordon’s course material and publications there: pitchforkprimer.com