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One of the advantages of studying the charts and papers of W.D.Gann has been the ability to study the many different ways that Mr. Gann used the Square of Nine and the movable date rings he attached to it.
When Nikki Jones and I created the Natural Squares Calculator, we tried to incorporate many of the different styles of date rings that Mr. Gann used. In combining the clockwise and counter-clockwise date rings, we uncovered another of the exciting mysteries that make Gann research so richly rewarding.
Since Mr. Gann used both date rings in his applications, we created both on the same ring. March 21 on the clockwise date ring aligns with September 23 on the counter-clockwise ring. This aligns the 2 equinox dates 180 degrees apart in the calendar year with each other.
The chart below is a continuous daily July Soybean chart put together, or concatenated, as Mr. Gann did on all of his commodity charts. It consists of the July 2008 contract of soybeans until its expiration, immediately followed by July 2009 soybeans until its expiration, then July 2010 soybeans.
The first high shown in the chart occurred on July 3, 2008. That is now the all-time high for July soybeans with a price of 1663.
If one locates the date of July 3 on either date ring of the Natural Squares Calculator, the corresponding date or inverse date on the other ring (progressing in the opposite direction), is June 11 (see Fig. 1 below). What we have discovered is that the probability of another change in trend on the inverse date is extremely high. In addition, the odds are very good that it will be the same trend change (significant high or low). Notice then on the chart that the high of the 2009 year comes on June 11 – exactly on the inverse date to July 3.
Figure 1
The next significant change in trend is the low on Dec 5, 2008. Using the same procedure as before, locate the Dec 5 on either date ring of the Natural Squares Calculator. The date next to it or inverse date (progressing in the opposite direction) is Jan 7 (see Fig. 2). Looking at the chart again shows that the next significant high is on Jan 12, just 3 trading days off. This example is the only one on the chart that switched from a low to a high.
Figure 2
The first higher bottom after the Jan 12 high is on Mar 3. Locating Mar 3 on the Natural Squares Calculator date ring gives us a corresponding or inverse date of Oct 11 on the date ring which moves in the opposite direction (see Fig.3). Referring again to the July soybean chart finds the next significant low on Oct 6, just 5 days from the projected date.
Figure 3
Using the Jan 12 high as a date to project another high from, we find that the date next to Jan 12 on the Natural Squares Calculator date ring is Nov 30 (see Fig. 4 below). Looking at the July soybean chart above, we can see that the last significant high on that chart occurred on Dec 1, just 1 day from our projected turning point.
Figure 4
Finally, we would use the next significant change in trend to project into the future the next turning points. The low of Oct 6 would project a significant low to occur on or about Mar 8. I have just briefly touched on this subject in this article and would invite anyone interested in pursuing this analysis as well as forecasting future direction and trend to contact W.D.Gann Inc. of Pomeroy, WA (see advertisement in this publication). They hold periodic seminars where I fully explain how to use this methodology in many markets as well as detailed forecasting lessons.
Ken
Gerber is an active professional commodity trader and teacher of technical
trading. Ken's background is in agriculture. After attending Ohio State
University, he began a career in livestock and grain farming. The wild
gyrations in the commodity markets of the 1970's led to an intense interest in
cycles and how they affected grain markets.