| Vol. 2, No. 7 |
August 27, 2003
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The Power of a Weekly Chart
We are always amazed by the number of traders we
speak to who do not keep a weekly chart, or look
at one only occasionally on a computer screen. The
value of keeping a weekly chart updated by hand
tremendously outweighs the small amount of work
it takes to create one. Let’s take a look at some
simple analysis techniques that return volumes of
information about a market.
The following chart
is a monthly chart of July soybeans, just to show
the position of the market relative to the weekly
chart we are going to discuss. As you can see, the
major high on May 7, 1997 was the highest high in
the decade of the nineties. I prefer to start my
weekly chart from the last major high and see at
least three years of data.
This next chart is the
weekly chart from late November 1998 until the present
time.
One of the first things
you should always look at on a weekly chart is circular
time in weeks. Circular time is a key concept in
Gann forecasting and is the basis of major lessons
at ‘The W. D. Gann Experience’ Seminar.
Mr. Gann often spoke
of the divisions of circular time as being extremely
important for changes in trend. He referred many
times to the use of the three main architectural
structures in market analysis. They are the circle,
which describes a complete cycle of 360 degrees,
and the square and the triangle that are placed
inside the circle (the Gann symbol).
Generally speaking,
the 90-degree divisions of the square should create
highs in the market, and the 120-degree divisions
of the triangle should create lows. Let’s calculate
these divisions in time from the May 7, 1997 high
to see how the market responds:
May 7, 1997
plus 90 weeks equals January 27, 1999.
The low
of February 22, 1999 was at 93 weeks or degrees.
May 7, 1997
plus 120 weeks equals August 25, 1999.
The major
low of July 9, 1999 was at 114 weeks or degrees.
May 7, 1997
plus 180 weeks equals October 18, 2000.
The high
of December 18, 2000 was at 188 weeks or degrees.
May 7, 1997
plus 240 weeks equals December 12, 2001.
The low
of January 2, 2002 was at 243 weeks or degrees.
May 7, 1997
plus 270 weeks equals July 10, 2002.
The high
of July 10, 2002 was on 270 weeks or degrees.
May 7, 1997
plus 360 weeks equals March 31, 2004.
We will
be looking for a significant change in trend at
that time.
Another interesting
thing about these ‘Gann Symbol’ divisions is the
prices of the market at those trend change dates.
They all have something in common, that being their
position on the Natural Squares Calculator base,
the Square of Nine.
They are all located
on or very close to the Ordinal Cross, which marks
the squares and the half squares of odd and even
numbers. In other words, if we were to calculate
the square root of these prices, we would find that
the fractional part of the square roots is very
close to .00 or .50, simply meaning that they are
very close to the Ordinal Cross.
The beginning price
of the cycle on May 7, 1997 was 902
Square
root of 902 = 30.03.
Square
root of 465 = 21.56.
Square
root of 401 = 20.02.
Square
root of 534 = 31.10.
Square
root of 425 = 20.61.
Square
root of 600 = 24.49.
These numbers and cycle
times repeat over and over in all markets, demonstrating
again the value of Mr. Gann’s mathematical principles
almost 100 years after he discovered them.
If you do not have access
to a printed weekly chart, simply get some chart
paper (preferably GridStrips™ for ease of counting
and ease of adding paper) and go back a few weeks
and get one started. You can always go backward
in time and add back data on to this when you have
time in the future. You will soon begin to realize
how much return the small investment in time pays.
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
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Copyright © 2002, by Lambert-Gann Educators, Inc. All rights reserved.
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