| Vol. 3, No. 2 |
April 21, 2004
|
|
|
 |
|
Gann Study
Ken Gerber
In Volume 3, No. 1, of ‘The New
W. D. Gann Technical Review’, we reprinted one of Billy Jones’ newsletters concerning
a unique mathematical property of markets that appears fairly regularly. This
mathematical property concerns measuring a base-building period of a market
in both time and price and multiplying those numbers by 7. Finally we project
a future time and price for a trend change by adding the calculated time and
price to the base-building period.
In the issue, we will show some
examples of this mathematical property at work in some current markets.
The first chart is a current chart of continuous
December Corn. Mr. Gann gave us specific instructions on how to create continuous
charts. The data consists of December contracts linked together at the expiration
of each December contract. In other words, the data is December 2003 corn from
the expiration of December 2002 Corn until the expiration of December 2003.
Then the data continues with December 2004 Corn.
This is a pretty straightforward
example of how an accumulation period might be used as a forecasting technique.
The area marked on this chart is
an accumulation period beginning with a gap and ending with a gap away. It began
on November 4, 2003 and ended on November 25, 2003. The range during the accumulation
was 14 cents.
21 calendar days times 7 = 147
calendar days
14 cents range times 7 = 98 cents
projected range.
Adding 147 calendar days to the
middle of the base period gives us a target date of April 9, 2004
Adding 98 cents to the high of
the range of 244 = 342.
The high as of the date of this article is on April
8th at 341.5. As you can see, the market has had the greatest pullback
in price since the upmove began, giving us at least an indication that the trend
has changed.
The next chart is a current chart
of continuous July wheat.
The first area marked with a box
is the consolidation period from March 17 to May 6, 2003. The price high is
296.5 and the low is 279.
Thus we have a base of 50 calendar
days and 17.5 cents price movement.
50 days times 7 = 350 calendar
days.
17.5 cents times 7 = 122.5 cents
projected range.
Adding 350 calendar days to the
middle of the base time = April 11, 2004
Adding 122.5 cents to the high
of the base of 296.5 = 419
The high of the current July wheat
market is 430 on April 5.
The second box on the chart was
interesting because it was another accumulation or base period covering 14 cents
and 15 days.
15 days times 7 = 105 days which
was not important.
14 cents times 7 = 98 cents, plus the top of the
base at 333, = 431. This was within one cent of the actual high that has occurred
at this time.
It would be a logical conclusion
that the market sometimes gives us more than one indication of where it is going.
Please remember that this technique
is just an indication of mathematical forces in the market at work. Just as
a carpenter cannot build a house with a hammer alone, we cannot forecast accurately
without using all of the tools that Mr. Gann left us.
Once we have created an accurate
forecast, we then must use all the trading tools we have in our toolbox. The
combination of accurate forecasts and correct trading techniques is what teaches
us how to duplicate Mr. Gann’s incredible trading records.
ACKNOWLEDGEMENT:
The charts reproduced in this article were produced by Market Analyst II software.
DISCLAIMER:
Every effort has been made to ensure that the content and conclusions presented in The New W. D. Gann Technical Review are complete and accurate.
No part of The New W. D. Gann Technical Review contains trading advice - stated or implied, nor is an invitation to trade. The directors and associates of Lambert-Gann Educators, Inc. are NOT licensed trading or investment advisors. Lambert-Gann Educators, Inc. is an organization designed to assist traders and investors to become more knowledgeable and independent.
The giving of advice is therefore contrary to the very objectives of Lambert-Gann Educators, Inc.
Traders requiring trading or investment advice should contact a licensed advisor.
Stockbrokers and futures brokers are licensed advisors.
Neither Lambert-Gann Educators, Inc., nor anyone else involved in the production of The New W. D. Gann Technical Review, will be liable for any liability, loss or damage directly or indirectly caused, or believed to be caused, by The New W. D. Gann Technical Review.
Traders, to be successful, must take full responsibility for their own actions.
With respect to trading results, past performance is not necessarily an indication of future performance.
By maintaining your subscription to The New W. D. Gann Technical Review, you acknowledge that you understand and accept the contents of this disclaimer.
Lambert-Gann Educators, Inc.
1040 Spencer Road
SABINA OH 45169
| Phone: |
800-613-8918 (From within the United States)
1 937 584-2899 (International) |
| Fax: |
937 584-4556 (From within the United States)
1 937 584-4556 (International) |
| E-mail: |
info@lambertganneducators.com |
Copyright © 2002, by Lambert-Gann Educators, Inc. All rights reserved.
All of Mr. Gann's books and courses are available from the Lambert-Gann Publishing, Inc.
www.wdgann.com
