Diagram The Measured Move and ‘Unwinding And More.

Diagram  The Measured Move and ‘Unwinding’
As we have alluded to examples of THE RULE occur at ALL price levels or matrices
and many are being ‘worked’ simultaneously in any given ongoing market. This is a
critical point. In modern terminology it would be said that price movements are
‘recursive’. Simply stated this means that without labeling you could not really tell
the difference between a 10-minute chart and a daily or weekly chart - they all exhibit
the same behavior and operate under the same principles of Parameter and Matrix.
The bar graphs below were taken from actual market data. It is functionally
impossible to tell apart the time units, with respect to the chart action. 

Diagram  The Markets are Recursive
Now we can begin to informally define SIX of the SEVEN CONCEPTS in THE
RULE that Mr. Goodman used to construct GCSC. What had been neglected by
previous theorists, users, writers and purveyors of THE RULE was this:
The 50% point is indeed an equilibrium point. As such, the equilibrium must ‘give
way’ BUT EITHER SIDE (buyers or sellers) in either a downtrend or an uptrend may
prevail at any given matrix or price level.
Goodman realized both the possibilities for a REVERSAL (as in the case of the
completed measured move) and a PRICE SURGE. A price surge would be the
equivalent to the sellers (in an uptrend) and the buyers (in a downtrend) winning the
tug of war within a matrix. In price action this means prices would fall or rise to at
least the beginning point of the initial swing! 

Diagram  Price Surge - The FIRST Concept
In other words - the measured move is not a done deal - the 50% retracement
(Diagram 1-1a) could also become a ‘V’ or inverted ‘V’ as in the next diagram. The
50% retracement is not a reversal point (necessarily) but should be considered as a
‘point of interest’ where prices may be more likely than randomly to decide whether
to continue or reverse.
It may not sound like much, but it is a major discovery.
Clearly price surges are implicit in THE RULE. But they are not visible on a chart
unless you are looking for them and unless you are considering the 50% retracement
as a ‘point of interest’ and not necessarily a reversal. In fact, most practitioners
perceive a price surge as a failure of THE RULE!
Even more importantly, Goodman discovered the implications of THE RULE
occurring simultaneously at all price levels. I remember EXACTLY the day and place
when Charlie showed me this one - it hit me as truly a grand revelation on the
markets! 

Diagram  THE RULE at Multiple Levels (Matrices) of Operation - The
SECOND Concept
Here you are: The initial (primary) trend and secondary (reaction trend) as well as
reversals (measured moves) and surges are relative to price matrix context. What is
one thing in one price matrix may well be its opposite in a higher (or lower) matrix.
(It’s true - Elliot Wave Theory contains the same concept. But with GCSC you can
tell BEFORE (in many instances) which it is. In Elliot you can only tell AFTER.
GCSC is a predictive system, while Elliot - grand and elegant as it is - is primarily a
descriptive system.)
All Price Matrices (levels) - in theory - are part of a larger price matrix,
All Price Matrices composed of smaller price matrices
Of course there is the practical limitation of the smallest possible fluctuation.
Besides Reversals and Surges GCSC matrix concepts include Domination and
Generation.
Clearly prices do not always seem to find any kind of equilibrium at the 50%
retracement price area. Or, so it may seem. This leads to the third Grand discovery:
The extent a price swing overshoots or undershoots its ideal 50% retracement that
price value will be ‘made up’ on the next price swing within the matrix. 
Now THIS is the trading rule that can make you rich!
For example, if prices fall only 40% of the initial trend and reverse, the measured
move will actually be either 90% or 110% of the measured move point and value of
the primary (initial swing in the matrix. The 10% difference - GCSC holds - MUST
be made up eventually. This is the concept of Compensation. 

Diagram  Examples of Compensation within a Matrix - The THIRD Concept
Furthermore: If the difference is not fully made up in the final price swing of a matrix
the cumulative ‘miss’ value will carry over through each price subsequent price
matrix until it does. This is the concept of Carry Over. A ‘carryover’ table is used to
add and subtract cumulative carry over values until they cancel. 

Diagram  Carry Over - The FOURTH Concept
When no Carry Over remains, the price matrix is said to have ‘cleared’ or ‘cancelled’.
This is the GCSC concept of Cancellation. Cancellation is critical to finding GCSC
support and resistance points and other chart ‘hot spots’ where something much less
than random is likely to occur. 

Diagram  Cancellation - The FIFTH Concept
The exact method for these important concepts is more fully described in this article,
Part 2.
We can now get an early glimpse of what the strange brackets on Charlie’s charts
were all about. 

Diagram  Meaning of the Brackets Revealed
Charlie had even more ideas:
The importance of a ‘hot spot’ in relationship to its likelihood of being an important
point of support or resistance, reversal or continuation, increased when two or more
price matrices cancel at the same price or same price area. This is the key concept of
Intersection. There is no analogous concept in Elliot, the most common ‘competitor’
to GSCS. Intersection makes GSCS much more objective and testable than other
swing systems.

Diagram  Intersections - The SIXTH Concept
This article has covered micro formations. Charlie also had compiled a dozen or so
extremely valuable macro formations - combinations of micros.
I encourage the reader to examine some charts and find simple areas of the
intersection of two (or three) matrices. You will see at once that these points are
GOLDEN to the trader. If I had, after 30 years of studying the markets one idea to
impart it would be to show you an example of a GSCS intersection in 2 or 3
matrices.
Remember, Carry Over is to the same or NEXT larger price matrix. The above are
examples of Independent Intersections. That is, each price level Carry Over
calculation is kept separate from the others and ‘tallied’ at the end of each matrix.
Charlie had also developed (much less precisely) a concept of Dependent
Intersections but it is quite complex, beyond the scope of this article and worth of
further codification into software at a future date.
If you would like more information on Parts II and III, comprising a complete tutorial
on GSCS, or if you have questions, I would be happy to hear from you.