The New W. D. Gann Technical Review

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.

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