Soybean Market Follow-up

This is a great opportunity to follow up on the last three articles in ‘The New W. D. Gann Technical Review’. We can now expand on how the different Gann mathematical principles discussed in these articles all came together at the recent top in the soybean market.

At our ‘W. D. Gann Experience’ seminars held in Coeur d’Alene, Idaho, seminar attendees were taught how to identify and use these and other key principles. They were also taught how to create a forecast for the soybean market. That forecast showed clearly that the top for this move should have most likely been in mid-May, 2003, with May 16^th being the key date for the top. During the May 2003 seminar, attendees updated that forecast through to the end of 2003.

The following chart is a current chart of continuous daily July soybeans. The most recent top at 658 was made on May 20, 2003, within two trading days of the date that had been forecasted using the methods learned from the hours spent researching Mr. Gann’s original charts and writings.

The chart also shows the gap lines that were discussed in the Billy Jones’ article reproduced in Vol. 2, No 2. In the first case, the line from the low preceding the gap down was drawn through the high on the day of the gap creating a resistance line that stopped the market in late January, 2003 and again at the late March high. The second gap line was drawn from the high preceding the gap up creating a resistance line that stopped both reactions in May and again stopped the market on the way down after the May 20 high.

The chart shown below is a weekly chart of July continuous soybeans covering the period from the major low on January 2, 2002 to the current time. It shows several of the W. D. Gann mathematical principles discussed in the previous articles.

The move up is from January 2, 2002 to the last significant high on May 20, 2003. The time span of this run is 503 calendar days. One of the things Mr. Gann spoke often about was the 50 percent point, or half of the time period. This is one of the principles referred to in the Vol. 2. No. 4 article on ‘synergy’.

503 calendar days divided by 2 = 251.5

If we add 251 calendar days to January 2, 2002 we get September 10, 2002. September 9 was the day of the lower top shown on the chart, alerting us to the fact that the roadmap leading to the forecasted top in mid-May had important signs for us to read if we knew what to look for.

Another one of the principles discussed both in the article on synergy and Vol. 2, No. 3, is the tendency of the soybean market to follow natural squares. The Natural Squares Calculator was designed just to be able to understand and follow these natural square progressions.

In Vol. 2, No. 3 it was written that because the low on January 2, 2002 was at 425, we would expect that the forecasted high would be very close to 90 or 180 degrees on the Square of Nine to this price. If we set 0 degrees on the Natural Squares Calculator to the price of 425, we find the final high price of 658 on May 20 just two cents past the 180 degree angle

The time from the last major low of 425 on January 2, 2002 until the high of 658 on May 20, 2003 was 503 calendar days and 346 trading days. The number 347 is just one revolution on the Square of Nine from 425 making the low of 425, the high of 658, and the trading day time of 346, all very close to being on the same angle on the Natural Squares Chart or Square of Nine.

One final mathematical point of interest is that the price of 658 on May 20th, 2003 has moved just over 2 ½ revolutions on the Square of Nine from the 425 low. Since each revolution is 360 degrees, price has moved just over 900 degrees.

2.5 times 360 = 900

Thus price has moved almost exactly the same amount of degrees as the high price of this current major cycle, the 902 top on May 7, 1997.

Most people study the W. D. Gann mathematical principles separately and are quite often frustrated when the market doesn’t react or change trend at the times indicated. The least understood part of Mr. Gann’s work is the forecasting section. When one has a correctly constructed forecast for the major turns in conjunction with a forecast for the coming year, understanding the mathematical principles is a great help in confirming the forecast.