You'll need a sunny spot and level ground for this method.  It is more accurate than the Directions by Day - Shadow Stick method, however, it takes much longer.  

In the morning sometime before 10 am:

• Mark the spot that the tip of the sticks shadow meets the ground by either marking the soil or placing a rock on top of it. This marking will represent your West heading.
• Using a piece of string or other cordage, measure the distance from this point to the base of the stick.
• Use this same distance to draw an arch or circle around the stick.

The shadow from the stick will start to shrink throughout the day close to noon and then begin to extend once again later in the afternoon.  At some point in the afternoon the tip of the sticks shadow will intersect the arch you drew earlier.

• Mark this spot in the afternoon arch as your East heading.
• Connect both marks and you will have your line of direction pointing from East to West.
• You can then draw your North and South lines perpendicular to the East and West line markings.

It is also helpful to make a semi-permanent structure to depict your directions afterward if you are not departing right away so that a flash rain, snow, high winds, or any other of the elements do not disturb your findings.

Sources:

• http://texassurvivaltraining.blogspot.com/2011/07/how-to-use-shadows-to-find-your.html
• http://earthsci.org/education/fieldsk/comp2/comp2.html