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inward should first be assumed to be cycles that will bring about change in direction. Another way of viewing these cycles is, as resistance in time to the trend in force.
These cycles present strong probabilities as high or lows when combined with analysis of the pattern of movement and price resistance levels. This probability can present an excellent trading opportunity.
The 45day cycle can reverse a trend. It is a cycle that ends "blew offs" or very fast movements. Moving low to higher lew in 45 days can, also, set up a 45 day movement straight up which would then be 45 days from low and 90 days from low. This would then be a high probability for a market to reverse trend. The same is true with down trending markets. Forty-five days high to lower high can result in a 45 day acceleration downward or "blow off" of a 45 and 90 day cycles from high to low. Gann referred to the 45 to 49 day cycle as a death zone due to the many "blow off" movements terminating on that cycle.
The 90 day cycle is the most powerful division of the one year cycle and has a very high probability of support or resistance. Ninety days straight up or down will usually start a countertrend movement or reverse the trend. Ninety days from all significant highs or lows must be watched for a change in trend. Again analysis of support and resistance in price and knowledge of price movement will enhance the probabilities from this cycle. Against extreme pitch or momentum, this terminal cycle can run 99 days. This eeldom occurs in stocks or indices, but is a probability in commodities. Price then becomes a confirming and important aspect of the analysis.
The 120 day cycle is one that usually occurs with the trend. As in an upward trending market, this should be watched as a low to a countertrend movement. This is especially true if a high was found on a 90 day cycle. But you must study the historic movement of the market being analyzed. Some stocks and commodities do have 120 and 240 day low to high cycles. These same items will vibrate from 30, 60, 120, 150, and so on.
The 135 day cycle can be the last high or, more typically, a lower high which ends a topping pattern. If a high was found at 90 days, then 135 would also be 45 from high, and visa-versa in a down trending market. It is a cycle always to be watched for change in trend, as well as, price resistance and how the market is moving will qualify the probabilities- Fast moves can start from this cycle expiration. This cycle can run low to lew but other cycles need to be coming out at the time, plus or minus a day.
The 144 day cycle can terminate movements and is generally misapplied by students of Gann. The square of 144 overlay was designed to be used primarily with monthly charts and occasionally weekly charts. Its use as a daily cycle sometimes has validity, and should be monitored for aspecting or squaring, with important p rice d iv is ion s of 144 as 36, 72 or 108. If 144 is a valid vibration, a 9 day cycle will be obvious- as in vibrations
from 9j 18, 27 and 36. This cycle as a dominant, daily cycle is much more prevalent in currencies and commodities. I have seldom seen it in stocks.
After 90 days, the 180 day cycle is the next most powarful cycle and is fifty percent of one year. It can be viewed the same as a 90 day cycle. Its importance is enhanced with other cycles coming out at the same time. After its expiration, this cycle can produce movements of a full 90 day up or down. Moving from the highest high to a new low, or vice-versa, has a higher probability of changing the trend. Either way it is a powerful cycle for change.
The 216 day cycle is one and one half the 144 day cycle and just like 144, should be monitored for aspecting.
The 225 day cycle creates possibilities which are similar to the 135 day cycle, and can be the next vibration point if 180 produces a significant high or low.
The 240 day cycle like the 120 day cycle tends to be a low if
the market is trending upward. Both 120 and 240 are considered positive cycle or "run" with the trend.
The 270 day cycle is the next important (after 180), as it could start a 90 day cycle which would end a one-year cycle. In other words you should be counting backwards from important dates in the future. Since it is a very high probability that a 45 or 90 day cycle will end an important one-year cycle, looking backward 90 and 45 days will give the high or low prior to the "blow-off" of the larger cycle.
The 3l5day cycle is 45 days less than the one-year cycle and oan start a fast "blow-off" movement of the one-year cycle and ehould always be watched for a change in trend and a etart of fast movement.
The one-year cycle can terminate trends. It will usually mark important turning points during strong up trending markets. Price will tend to go low-to-low and high-to-low. When the vibrations start to move low-to-high, the trend is usually changing to down. In down trends the cycles will run high-to-high or low-to-high. But when the vibrations start to produce low-to-low or high-to-low the trend may be changing. Again, a basic understanding of price movement, as well as, support and resistance levels are critical.
Notice, on the price/time calculator are "fixed" da tea starting with March 21st. This is the first day of Spring and for many cultures is the start of the new year. This year is then broken into equal divisions of 15 days or degrees. The results are the natural turning points within a year which could be viewed as a natural seasonal time to look for change. These dates are helpful and serve to reinforce or act as an "exclamation point" to the cycles that are produced from the movement of the market itself. The first two divisions of 15 and 30 days should always be watched when the market is moving in a sideways manner, as they will usually produce change in direction.
ASPECTING PRICE AND TIME
Price is aspecting time when price is at an angle from the current date. For instance, with zero, again, placed on December 21st, the price of 116 is conjunct or on the same side of the square as time. At the price of 139 it is in opposition tc December 21st (opposite side of the square). Very important highs and Iowa occur when price and time are in conjunction or opposition. Put zero on December 4th, notice 221 is conjunction. Now look at December 4th on the S&P daily chart. Put zero on August 25th and you will find 338 is in opposition. Now look on the S&P daily chart at the high on August 25th, 1987. Price and time can, also, aapected at the other angles of 45 degrees and 90 degrees,
ANALYZING PRICE MOVEMENT
Throughout this chapter, I will be analyzing the price movement on the charts, along with applying the square of nine analysis. The purpose of this analysis is to be able to, at all times, anticipate what the market might do. If you are not prepared, then you will likely react to price movement emotionally. This can cause traders to sell at lows and buy at highs. I will always attempt to determine if the situations is trending, consolidating, or in a counter trend movement. I know what the extent of that counter trend movement could be in both price and time, and always looking for the start or end of "blow-off (fast movements).
As a trader (especially if you trade options) the ideal time to buy or sell is at the very beginning of fast moves. I will be concentrating on qualifying those trade situations.
In order to analyze price movement, you roust look at all time series of charts daily for the short term trend, weekly for the intermediate trend, and monthly for the long term trend. Also, view intraday, preferably 1/2 hour charts, for the very short term trend and to facilitate your entry.
We are going to make some observations regarding strong trending situations. Within a strong up trend, the lows of countertrend moves bottom above the previous highs of the last reaction point. Usually after three of four drives on a daily chart, price will consolidate on the weekly charts. Weekly chart price action resembles daily when trending. After the daily charts consolidate three or four times, which will seldom be noticeable on weekly charts, then the weekly charts will consolidate. So we qualify the trend as very strong, if the countertrend move bottoms above the previous high. This is very helpful knowledge, as you will see. The time for these quick countertrend moves will be on an average of three to four days with the major indices and three to five days with stocks. Also, with stocks and indices, the countertrend movement will usually come very close to matching in price, the previous movement.
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