Gann Time Cycles

[Athina Dollison]

WhenI was 10 years old, I made my first trade in a bicycle factory. I had been reading the financial section of my local newspaper (see below image) and noticed a trend in the company's stock that was rapidly evolving day after day. With my father's permission, I decided to pool all my pocket money together and buy some shares in the company. Within a few months, the stock skyrocketed and I made a profit of 2600% by selling my shares at the peak of the trend. This experience sparked my interest in the stock market, and I became fascinated by what caused its fluctuations. I knew there was something out there that influenced the stock market, and this set me on a lifelong journey to understand its workings, a journey that continues to this day.

Throughout my journey, I have learned from respected traders and analysts such as Benjamin Graham, Stan Weinstein, Thomas N. Bulkowski, J.M. Hurst, Raymond Merriman, Robert Prechter, Bradley Cowan, M.S. Jenkins, Daniel T. Ferrera, and W.D. Gann. Through their teachings, I have learned about fundamental and technical analysis, cycle analysis, Elliott Wave analysis, financial astrology, and Gann analysis techniques.

It's important to note that there's no one-size-fits-all approach to trading or investing in the stock market. The experts I've learned from have used multiple methods to be successful in the markets. Although there's no holy grail when it comes to trading and investing, learning from and applying a variety of techniques can help traders and investors gain a better understanding of the market and improve their chances of success.

The ancient hunters had a rule that when they were searching to locate an animal in his den, they always followed his tracks backward, figuring that it was the shortest route to his lair. The quickest way for you to learn how to determine future market movements is to study the past."

This analysis is intended for general informational & educational purposes only. Hypothetical or simulated performance based on past cycles has many limitations. Cycles can contract, extend, and invert. Anomalies can occur. Hence, past performance is no guarantee for the future. No advice. Please take a look at our full disclaimer.

Cycle analysis has taught me that there are no fixed cycles that always come to a trough or crest in an exact, repetitive, and timely fashion. It\u2019s like our own daily cycle in life. I do not always exactly wake up at the same time, have lunch or dinner, or go to bed at the same time. Permanent cycles, like the 20-year or 60-year cycle I follow, have a specific range in which they peak or bottom out, but their actual length can vary by up to one-third of the total length. These cycles can sometimes expand, contract, or invert, and some cycles are more susceptible to these changes than others.

\u201CNow, by a study of the TIME PERIODS and TIME CYCLES, you will learn why tops and bottoms are formed at certain times and why Resistance Levels are so strong at certain times and bottoms and tops hold around them.\u201D

\u201CThe ancient hunters had a rule that when they were searching to locate an animal in his den, they always followed his tracks backward, figuring that it was the shortest route to his lair. The quickest way for you to learn how to determine future market movements is to study the past.\\\"

\u201C\u2026but remember you must always begin to count time in days, weeks and months from the extreme high and extreme low levels, and not from exact seasonal or calendar time periods\\\"

I strongly believe you need to truly understand the depth and width of the above quotes. This is also the key to understanding why Gann Mass Pressure charts (made popular by Daniel T. Ferrera in his book W.D. Gann\u2019s Mass Pressure Forecasting Charts), which plot a composite cycle of 80, 60, 40, 30, 20, and 10 years ago as a forecast, may only work at certain times and, at other times, are off track.

Over the years, I have found the 60-year, 3x the approximate 20-year synodic cycle of Jupiter-Saturn to be the most consistent, but it can be inverted from time to time, like last year. Recently, as you can see in today\u2019s update, this cycle has been catching up with time and price.

In today\u2019s update on the US Indices, I will show you some of W.D. Gann\u2019s nine mathematical points that could be used to understand today\u2019s market, such as looking at the monthly chart, using odd and even squares, time cycles, and time periods, and squaring out price with time from tops and bottoms.

Gann says that there can be nine mathematical proofs of any point of resistance

1. Angles from top and bottoms

2. Angles running horizontally i.e. the previous tops and bottoms

3. Time cycles (vertical angles) (Press a short sale if there are three or four days

of sideways movement after a high day and this is followed by a down day with

high volume where low is lower than the low of the sideways movement and

when this coincides with expiry of time cycles)

4. Crossing of important angles originating at zero

5. Crossing or coming together of angles from double or triple tops or bottoms

6. Crossing of double or triple tops or bottoms

7. Past resistance/ support

8. Volume of sales

9. Squaring of time and price.

Weak stocks will generally not rally until either a test of the first bottom or a higher bottom is made by the market. (That is why AD line is a lagging indicator and generally moves up in the third wave)The third move trying to break the consolidation top/bottom is the most important. If it fails, a fast move in the other direction may be expected.

False breakouts from consolidation result in very fast moves. False breakout occurs when a move outside the consolidation zone fails to sustain in the following week and where the price has not gone beyond three points above the top. These false moves start with high momentum.

The cycles derived from prices are based on High, Low and Range (i.e. difference between high and low). The most powerful is the square of the range. The absolute number at high, low or that of range is assumed to be forming a time cycle with so many days, weeks or months. In other words, a high at 60 means a time cycle of 60 days/weeks/months. All the division as mentioned earlier will be applicable to this

cycle.

If the price moves down one point each day the price will reach to the point 4, i.e. 0 on the 60th day. This action is called squaring off of the price. The angle of fall will be 45% on the square. This is also referred to as 11 angle i.e. fall of one unit in one day. In same fashion we can draw angle 21 i.e. fall of two units in one day and so on. The most significant angles are 21, 11 and 12. These angles are drawn from point 1, 3 and the mid-point between 1 and 3 and the mid-point on 2 and 4.

When the price breaks below 45% angle line it signifies a weak position and indicates a decline to the next angle. If it again crosses the 45% angle it is said to have regained its strength. At the crossover of these angles distance from the base i.e. the day of high/ low is important. Larger the distance, more powerful the trend is likely to be.

1/2 is the most important level. This is the centre of gravity. If the price falls below this level and bounces back to touch this level again, on the first such occasion it is good set up to shortsell. If the price comes to 50% of high and 50% in time, it may be a high probability buy which may result in 3 months fast move up on the weekly chart.

* The first year of a decade is the year to look for a bear campaign to end and ull market to begin.

* The second year, is a year of a minor bull market or a bear market rally.

* Year three is the start of bear year, but the rally from the second year may run into March or April, or if the second year is a decline, the decline from the second year may run down and make bottom in February or March of the third year.

* Year four is to be a bear year, but it ends the bear cycles and lays the foundation for a bull year.

* Year five is the bull year, the year of ascension.

* Year six is a bull year in which the bull campaign which started in the fourth year usually ends in the fall.

* Year seven is a bear year (but note that 1927 was at the end of a 60 year cycle and that there was no decline).

* Year eight is a bull year. Prices start advancing in the seventh year and reach the 90th month of the decade in the eighth year. This is very positive and a good advance usually takes place in this year.

* The ninth year of the decade is the strongest of all bull years for bull markets. The final bull campaign culminates in this year after an extreme advance, and the prices start to decline. The bear market usually starts in September to November.

* Year ten is a bear year. A rally often runs until March or April, then a severe decline takes place until November or December, when a new cycle begins and another rally starts. (Look for such cycles in the Indian indices).

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