Yesterday’s report talked about how indicators are more descriptive than predictive.
About how they tell you the what but not the When.
We know from W D Gann that markets trade in decrements of 90 degrees in Time and Price.
These are his “squares”. A 90 degrees is the right angle of a square.
Let’s look at Time.
The SPX broke out above its prior 4818 January 4th 2022 all-time high on January 19th, 2024.
It took roughly 2 years or 720 degrees/days to eclipse the top from January 2022.
Two cycles of 360 degrees.
90 days degrees from this January 19, 2024’s breakout is April 19th, 2024.
It was a significant low. It was 90 days/degrees later.
Most traders won’t see this relationship because the will only measure from highs or lows.
but measuring from a breakout of a prior historic high or low is very revealing as you can see.
Essentially the market has been in a Runaway Move since April 19th.
July 19th is a decrement of 90 degrees from the April 19th low. It is 180 degrees from the January 19th, 2024 breakout.
July 19th ties to the 1 year/360 degree cycle from the July 27th 2023 top.
That day was a large range Key Reversal Day.
It signaled a significant decline…503 points or 11% in precisely 90 days as the low was October 27th, 2023
Does that mean the market is on the A Train until the July 19th time frame?
Maybe.
But it could mark a secondary peak. Or it could mark a low.
If it’s a low it could define an impulse (January 19th,) to low, to low cycle.
Why do these 90 day (+ or -) geometric turning points of the year occur?
W D Gann is considered one of the most successful stock and commodity operators to have ever lived.
His forecasting methods are based on geometry, astronomy/astrology and ancient mathematics.
Gann found that there were often trend changes when the Sun is at 90 degrees with the earth.
By identifying and analyzing these ‘natural’ geometric, Gann aimed to gain insights into the cyclical nature of markets.
Gann’s precise timing based on solar dates was an important part of his trading strategies that contributed to his legendary status in the financial world.
The trick of time is that there are two types of Solar dates: Static and Dynamic.
Natural cycles and market cycles.
Above we are looking at dynamic market cycles versus static natural cycles such as the seasonal points of March 21st, June 21st, September 21st and December 21st…the Spring and Fall Equinoxes and the Summer and Winter Solstices.
Gann taught that anniversary dates could predict market highs and lows.
His basic premise being that the future is just a prepetition of the past.
July 19th is an important anniversary date. It is the Primary High (close) in 2007.
That high led to a one month plunge of 12% into August 16th.
From there the market ran up to make a nominal new high on October 11th where it produced a large range Key Reversal Day. It was the start of a vicious bear market tangent to the Great Financial Crisis of 2008.
Anniversary dates? October 10th was the major bear market low in 2002.
This was one of the factors allowing me to call to the day the bear low that year.
Interestingly, that low was a double bottom/undercut low of the July 24th, 2002 low.
So this July 19th (+ or 1) is important. It is the 17th anniversary of the 2007 primary high and the 22nd anniversary of the primary low in 2002.
On the Square of 9 Wheel, the number 22 is opposite July 19th.
This magnifies the potential significance of this 3rd week in July.
Additionally, we have walked through the synergy of 2024 and 1929 over the past few months.
July 19th “vibrates” or points to 386. This is the pre-crash all-time DJIA high in 1929.
I have been studying the Square of 9 Wheel for over 30 years.
I have proved to my entire satisfaction that when Time and Price square-out or balance out that a trend change is on the table.
It is a phenomena of markets unlike any other.
In addition to July 19th being a major turning point in 2007, July 16 was a major high in 1990.
It produced a 20% drop in NINETY DAYS/DEGREES into October 11th, 1990.
There’s that October 11th date again.
Happenstance?
I don’t think so.
As you can see the mid-July 1990 top, was a secondary high. It was a test failure of a high struck on June 5th.
While it is possible we get a continued Runaway Move into July this year, I think we have to be mindful that mid-July could be a secondary high or a plunge panic low.
In sum, A turn down of the SPX 3 Day Chart on Monday once again found a low.
Yesterday we bounced, this morning as I write the futes are extending
Is the coast clear?
Since last Thursday’s Key Reversal Day the SPX has carved out two outside down days.
This morning we will trade above Tuesday’s highs.
The ensuing price action will be telling.
Yesterday, the number of declining issues on the NYSE exceeded advances by 775. On the NAZ declines exceeded advances by 964.
In sum, the market is on the longest divergence of Advances and Declines versus the SPX in 100 years.
It is a warning that when a turning point is on deck and that when the turn comes it will be ferocious.