“God geometrizes” W.D Gann
“Wisdom starts by acknowledging what you don’t know.” Charlie Munger
“Oh telephone line, give me some time, I’m living in twilight” Telephone Line, ELO
I am a believer in the esteemed W.D. Gann’s techniques in analyzing and forecasting markets.
I have read everything W.D. Gann has written. One thing I have discovered is that Gann intentionally scattered profound insights under a variety of seemingly unrelated topics or withheld
Critical pieces of information such that his techniques only became understandable when these clues are collected and integrated.
Why?
Gann was selling courses to his private students in the 1930’s for $5,000, the equivalent of the price of a house at the time.
So he left clues, but he wasn’t going to ‘give’ anything away.
One of the most famous of Gann’s teachings was the use of geometrical angles in markets.
Markets play out in decrements of 90 degrees in time and in price.
Most traders would be surprised to learn that Gann intentionally left out a critical key without which all of his geometrical tools are inaccurate.
Talk about going down the rabbit hole.
Allow me to save you a decade of study. This missing link necessary to apply Gann’s work is the Principle of Squares or the squaring of price and time…and how to do it properly.
How did Gann do this? Well for starters he believed in cycles from his study of the Bible.
As a believer in cycles, you come to understand that markets are not linear but progress in a logarithmic spiral.
Gann went to Egypt and India where he discovered the Square of 9.
Square of 9 Wheel
Purchase your own Square of 9 Wheel. Shipping to US only. Contact Jeff for shipping outside the US.
The Square of 9 is a two dimensional representation of the Great Pyramid of Giza which solves the problem proposed by ancient geometers of squaring the circle.
It is the only tool that integrates Time & Price.
For example looking at the grid of numbers on the Wheel you will see that the number 25 is one full square up from the number 9.
It is also 360 degrees around from 9 to 25, squaring the circle.
The spiral progression of markets follow a sequence of logarithmic “squares” that mirror the Fibonacci sequence.
Note the significance of the number 55.
This is the NINTH number in the Fibonacci series:
1, 2, 3, 5, 8, 13, 21, 34, 55
The number 55 culminates Gann’s Panic Zone in days, weeks, months or years.
For example Selling Panics occurred from the highs in both 1929 and 1987 on the 55th calendar day from high.
Gann stated that 7 is the number of time…and panic.
Consequently 49 or 7 SQUARED (7 weeks) starts his Panic Zone and ends at the 8th week or day 55/56.
This ties to Selling Climaxes and Buying Climaxes.
However the market, as mathematical as it is, is not a Rolex.
While 55 days from the September 3rd, 1929 top saw a crash on October 24th, the DJIA went on to have even larger crashes on October 28th and 29th.
In 2000, counting from the Primary High on January 22nd, 55 days later gives March 18th,
The waterfall decline ended on March 23rd.
This is why it is called the Panic Zone and not the Panic Day.
Plus or Minus a week.
The low was forecastable using the Square of 9 Wheel.
How?
The high prior to the crash was 3393.
Notice that March 23rd points to 393. That is 3393 because the 4th ‘grid’ on the Wheel is the 3,000’s.
The high price pointed to the low day.
Time points to price, price points to time.
This is the essence of Gann methodology.
I get many questions on how to use the Wheel with the SPX trading in numbers that have surpassed the highest number on the Wheel.
You can move the decimal point and use the SPY.
Remarkably, using the SPY also produced a Time/Price square-out.
The SPY low was 218 on March 23rd, 2020.
218 squares-out with March 23.
Fast forward to 2024.
We had a Flash Crash on August 5th.
Pre-market the SPY was trading at 508.
508 is 180 degrees straight across and opposite August 5th.
Hit and Run members covered all their SPY puts on the open on August 5th for this reason.
The Gann Panic Window (Buying Panic) closes on September 26th (+ or -).
508 squares out with 578 or 5780.
The SPX closed at a record high of 5733 on Tuesday.
Will it rally to 5780 by the end of the week for a Time/Price square-out?
In sum there are three things I have come to believe after a generation of studying Gann:
- There is no Holy Grail, no secret formula that guarantees a 100% absolute turning point in markets, be it in time or price. W.D. Gann stated that all important highs and lows are square-outs or harmonics of a prior high(s) or low(s). What he left out is that not all square-outs are important highs or lows.
- As profound and as valid as Gann’s methods are in pointing out trend changes, they require the Square of 9 Time/Price Calculator to ‘seal the deal’. None of Gann’s tools rise to the level of the Square of 9.
- Gann’s predictive techniques must go hand in hand with money management rules and common sense to be successful.
Let’s take a look at silver to see how it is playing out using the square of 9 Wheel.
SALV broke out of a 4 month consolidation on Tuesday.
SLV triggered a Rule of 4 Breakout as it cleared a 3 point trend line.
The prior swing low was 24.25 on August 7th.
90 degrees up from 24.25 is 30.25
SLV closes at 29.38 and looks poised to attack 30 in coming hours/days.
Clearing 30 opens the door to the next 90 degree decrement higher at 36.
The next week squares out with 34.
As well, SLV shows an inverse Head and Shoulders that with Tuesday’s breakout over a Neckline projects to 32.75.
In sum, a trifecta of technical are set to magnetize silver higher.
To order a Square of 9 Wheel on sale thru the end of the month (normally $375 now $300) email
jeffreycooper@earthlink.net or go to cooperhitandruntrading.com.