gann's square of nine

Lambert-Gann Educators - W.D. Gann's Square of Nine Part 1

Vol. 1, No. 7 May 8, 2002Go to Newsletters Archive

W.D. Gann's Square of Nine- Part One

The last three issues of The New W. D. Gann Technical Review have dealt with seasonal time and 180-degree time. These articles introduced the concept of circular time that was so much a part of Mr. Gann's analysis. They also are the foundation of this series of articles relating to the mystical 'Square of Nine'.

Mr. Gann's combining of circular time and number progression charts was very evident in the many types of calculators that were in the Lambert-Gann Publishing Company materials Billy and Nikki Jones purchased in 1976.

The following is reprinted from an article Billy Jones wrote in Vol. 4, No. 1, of The W. D. Gann Technical Review dated January 1985 titled '0 to 360 degrees - March 21 to March 20 - A Cycle.' It shows clearly the importance Mr. Gann attached to the 'Square of Nine Calculator':

The Square of Nine and the Square of Four are two of the most interesting charts in the W. D. Gann course of study. I have spent a lot of time with these charts. I was first introduced to the Square of Nine in 1972 when Ed Lambert sent me one. It was the smaller one that covers squares 1 to 33 inclusive.

At the time I was just getting started in commodities and I did all kinds of crazy things with the chart in relation to my trading of wheat and cattle. Some of them worked and some of them didn't. I gradually moved away from the Square of Nine into other techniques that I had learned from the Gann course.

In 1976 I went to Miami, Florida to close the deal I had made with Mr. Lambert on the purchase of Lambert-Gann andGann's research, library, etc. While there, my interest was rekindled in the Square of Nine.

While there, I saw a picture of Mr. Gann sitting at his desk and upon his desk was a model of a pyramid with the numbers, exactly like those on the Square of Nine, painted on the model. I remembered that the first thing that came to me was that I was looking down at a pyramid with the number 1 on the top and spiraling outward to the end. This picture really stuck in my mind.

Gann also had a large Square of Nine printed upon a very old papyrus substance that was framed and hanging on the wall. Many of you that have been in my office have seen this large original chart.

When I got all the Gann charts home in Pomeroy and started going through them, I found that Gann had actually used the chart consistently. There was one for just about every commodity and stock that he traded. They were in all sizes and were constructed for many different reasons, it appears…

…The fact that there were so many different ones tells me that he was able to forecast with them.

The other important fact that I have learned from the ongoing study of them is that actual market movements coincide with the layout of the charts' TIME and DEGREE cycle of 360…

We will now take a look at the degree movement of price of one of Mr. Gann's most important calculators, the Square of

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Nine.

Under the section titled 'Time and Price Resistance Points According to Squares of Numbers' in the W. D. GannCommodity Course, Mr. Gann wrote that:

Stocks [and commodities] work out to the square of different numbers, triangle points of different numbers, the squares of their bottoms, the squares of their tops, or to a halfway point of the different squares according to the time period.

Therefore it is important for you to study the resistance levels according to these numbers. The squares of each number and the halfway point between the squares of one number and the next point are very important. For example:

● The square of 2 is 4; the square of 3 is 9. The halfway point between 4 and 9 is 6.5.● The square of 4 is 16; the square of 5 is 25. The halfway point between 16 and 25 is 20.5.● The square of 6 is 36; the square of 7 is 49. The halfway point between 36 and 49 is 42.5.● The square of 8 is 64; the square of 9 is 81. The halfway point between 64 and 81 is 72.5.● The square of 10 is 100; the square of 11 is 121. The halfway point between 100 and 121 is 110.5.● The square of 12 is 144; the square of 13 is169. The halfway point between 144 and 169 is 132.5.

If you examine closely the numbers of the 'square of nine' or the 'odds and evens chart' (see below), you find that these natural squares are aligned on the same angle from the center. The odd squares of 1, 9, 25, 49, 81, and so on, go from the center down to the lower left-hand corner. The even squares of 4, 16, 36, 64, 100, and so on, go from the center up to the top right-hand corner.

Since the distance from 16 (the square or four) to 25 (the square of five) is 180 degrees around the chart, it becomes clear why Mr. Gann expected changes in the trend of a market price at 180 degrees or 'on an angle of 180'. Similarly, he would expect changes at 90 degrees (one-half of one square) and 360 degrees (two squares).

The square progression seems to work better with three significant digits. If you are studying a market with four digits in a price, try dropping the last number to get to a number you can use on the chart. Similarly, if you are studying a low price stock, try adding a zero or move the decimal to get three significant digits.

The square of nine is without a doubt one of Mr. Gann's most powerful trading and analysis tools. It also can be a little complex. Re-read this article and we will examine this powerful tool further in the next issue of The New W. D. Gann Technical Review.



DISCLAIMER:

Every effort has been made to ensure that the content and conclusions presented in The New W. D. Gann TechnicalReview 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 RoadSABINA OH 45169

Phone: 800-613-8918 (From within the United States)1 937 584-2899 (International)

Fax: 937 584-4556 (From within the United States)1 937 584-4556 (International)

E-mail: [email protected]

Copyright © 2002, by Lambert-Gann Educators, Inc. All rights reserved.

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Vol. 1, No. 8 June 5, 2002Go to Newsletters Archive

W.D. Gann's Square of Nine-Part Two

In this issue of 'The New W. D. Gann Technical Review', we are going to examine the use of the Square of Nine in calculating price support and resistance.

Mr. Gann was clear in his instructions about where to expect this support and resistance to occur on the Square of Nine. If you are unclear about the angles that are important to price movement, please reread Vol. 1, No 7, which describes why the angles of 90, 180, and 360 degrees are so important.

These angles show up repeatedly in Mr. Gann's writings because they describe the geometry of the square (0, 90, 180, and 360 degrees) that can then be placed inside the circle (0 to 360 degrees). Thus the esoteric term of 'squaring the circle' becomes a reality.

By placing these angles on the natural squares chart from the center, one moves from one natural square to the next in180 degrees. The midpoint between squares is reached in 90 degrees and the full circle or cycle of 360 degrees moves two full squares from its starting point.

This first example is December Wheat 2002.

The contract high of 319 is made early in the contract in January. In early May, the market makes the low of the contract to the date of this article at 283 ½.

The square root calculation for this movement is as follows.

Square root of 319 = 17.86Square root of 283 ½ is 16.8417.86 - 16.84 = 1.02, which is within .02 of one full square

This is easily seen on the Square of Nine by finding 319 just right of the angle moving up from the center to the 12:00o'clock position. Then 180, degrees or directly across to the bottom left, is the bottom at 283 .



The next example is of the S&P Mini electronically traded contract. This contract is setting records every month in terms of volume of trades. It is the small version of the Standard and Poor's stock index.

The chart is continuous in that the four traded contract months (March, June, September, and December) are linked together when the volume in the new contract exceeds the old contract. In other words, the March contract is traded until early March when the volume in the June contract exceeds that of March.

The year to date high for 2002 is January 7th, at 1178.50. The intermediate low following that high came on February20th, at 1073.75. The market then rallied to the double top area of 1177.5 on March 19th. From there the market made a lower swing low on May 7th at 1045.75.

Following the square root mathematical formulas gives us the follow calculations:

Square Root of 1178.5 = 34.33Square Root of 1073.75 = 32.7734.33 - 32.77 = 1.56 or just .06 from moving 1.5 squares or 270 degrees

The next move back up to 1177.5 is obviously 270 degrees also.

Square Root of 1177.5 = 34.31Square Root of 1045.75 = 32.3434.31 - 32.34 = 1.97 or just .03 from moving 2 full squares or 360 degrees.

This is easily seen on the Square of Nine locating 1178 on the right side just below an angle moving from the center to the 3:00 o'clock position. The first low at located by moving 270 degrees counterclockwise to 1074. The second low of1045 is located adjacent to the 1177 and 1178 highs.



These examples are excellent exercises in the use of a different type of mathematics to explain market movements. There is nothing strange or unusual about these markets and they certainly represent some of the most highly traded market in the world. Thus one could conclude that many market movements can be understood if we just change the methods we use to calculate those movements.

In the next issue we will look at the stock market to see if Mr. Gann's writings and teachings about mathematical consistency holds true in the stock market as well.

ACKNOWLEDGEMENT:

The charts reproduced in this article were produced by Market Analyst II software.

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Lambert-Gann Educators - Practical Application of an Authentic Gann 'Square of Nine' Part 1

Vol. 1, No. 11 September 5, 2002Go to Newsletters Archive

Practical Application of an Authentic Gann 'Square of Nine' Part One

IntroductionOne of W. D. Gann's most important trading tools was The 'Square of Nine' or 'Pythagorean Cube' or 'Odd SquaresCalculator'. There is no doubt that he used it extensively.

There has been a shortage of clear and understandable material written about the 'Square of Nine' and its uses. Most Gann students are aware that Mr. Gann used these extensively in his trading and research. Until now, it has been almost impossible to apply the principles of the 'Square of Nine' to actual market conditions and trading situations.

This article is the result of the exciting ongoing research by the Lambert-Gann Educators Inc. team into the W. D. Gann archives owned by Nikki Jones and Lambert-Gann Publishing. It clearly shows that given the right tool to work with (the Natural Squares Calculator™), and the right instructions, one can understand how Mr. Gann was able to trade and call market turns so accurately. More importantly, it also shows that the information that can be gained from the 'Natural Squares Calculator', correctly aligned with current markets, is invaluable in making trading decisions.

Lambert-Gann Educators, Inc. seminars teach practical application of the 'Square of Nine' to trading as well as advanced Natural Squares Calculator lessons. In addition, the forecasting lessons taught in that seminar have never been taught anywhere in the world. This seminar truly teaches the trading and forecasting techniques of W. D. Gann in a logical, precise, understandable methodology that is breathtaking.

This article appeared in the Spring 2002 issue of the Traders World Magazine. It is reprinted with their permission.

Practical Application of an Authentic 'Square of Nine' Part One

Ken Gerber

The 'Square of Nine' or 'Pythagorean Cube' or 'Odd Squares Calculator' has been talked about as one of W. D. Gann's most important trading tools. There is no doubt that he used it extensively.

One of the most important discoveries made by Lambert-Gann Educators Inc. in the Lambert-Gann Publishing Co. archives is a 'Square of Nine' with a date ring on top revolving around a center pin. This revolving ring allowed the date to be moved over the top of the price of a major top or bottom.

We created the 'Natural Squares Calculator' to bring to the public a trading tool that teaches the basic principles that Mr. Gann used in trading with the 'Square of Nine'. Without a movable date ring, a 'Square of Nine' calculator cannot be

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synchronized with current market vibration. This visual synchronization clearly demonstrates how accurate this tool can be. It also shows that learning the basics of using a 'Square of Nine' in this manner is not difficult.

Part One of this article will deal with the price aspect of a synchronized 'Calculator'. Part Two will use the 'shifted time' to show how the synchronized 'Calculator' repeatedly creates changes in trend as harmonized time and price square.

The following chart is of continuous December Corn. According to Mr. Gann's writings, we should link together December Corn contracts forming one continuous contract of corn containing only the December contract. The major high shown in this chart is at the price of $2.62 on the date of December 28, 2000.

Mr. Gann repeatedly described the Cardinal Cross (90, 180, 270, and 360-degree angles) as the most important points of support and resistance. The second most important was the Ordinal Cross (45, 135, 225, and 315 degree angles).

By timing the calculator to the major high price of 262, we have shifted the Cardinal Cross and Ordinal Cross prices so they are in harmony with the market vibration. To do this on a 'Natural Squares Calculator' move the center ring (Square of the Circle) so that the Zero Degrees line is over the price of 262.

You have now created a new Cardinal Cross and Ordinal Cross. The Cardinal numbers have shifted from 249 to 245 1/2, from 233 to 229 ½, from 218 to 215, and from 204 to 201 ½. The Ordinal Cross numbers have shifted from 257 to 253, from 241 to 237, from 225 to 221, and from 211 to 207. From now on, any reference to the Cardinal and Ordinal Cross numbers will be to the 'shifted' numbers.

From the major high at 262 the market made the first move down to No. 2 at 243, holding within 2 ½ cents of the 90- degree Cardinal Cross support. It then made 2 more attempts at the same level, finally rallying from the 3rd bottom to the high marked No. 3. The price at No. 3 is 252 which is exactly one-half way back and also back to the 45 degree Ordinal Cross.

The next leg down goes to No. 4 at the price of 229 which is at the 180 degree Cardinal Cross. . Mr. Gann said the strongest angle was the 180-degree angle, making this a place for a potential rally. The rally to No. 5 stops at 241 ¼ which is at an unshifted Ordinal Cross providing resistance.

The next move down to No. 6 stops at 220 which is one cent from the 225 degree Ordinal Cross. From there the rally back up to No. 7 is to the old bottom of 230 which again is the 180 degree Cardinal Cross.

Again the market starts down through the old bottom of 220 and the 270 degree Cardinal Cross to the 315 Ordinal Cross support price of 206 ½ at No. 8. The rally back up to No. 9 is back again to the old bottom and the 225-degree Ordinal Cross.

The final move to the bottom at No. 10 goes to the price of 202 ½ which is within one cent of the 360 degree CardinalCross and next to the beginning at 262.

Of the 5 waves down 3 were almost exactly 135 degrees on the calculator. They were from No. 3 to No. 4 (45 degrees to180 degrees), No. 7 to No 8 (180 degrees to 315 degrees) and No. 9 to No. 10 (225 degrees to 360 degrees).

The 'shifted' Cardinal and Ordinal Crosses provided the resistance or support for 8 of the 9 changes in trend during this down move. The 9th resistance point came from the 'unshifted' Ordinal Cross.

There is no doubt that a synchronized 'Calculator' will provide superior harmony for a market. In Part Two, I will show how Mr. Gann would have known when the squaring of time and price is occurring simply by checking his 'Calculator' daily.



Ken Gerber writes and teaches for Lambert-Gann Educators Inc. The company creates practical trading tools and courses and gives seminars regularly to teach W. D. Gann's trading and forecasting methods. The source of all products is the original charts, writings, and calculators owned by Lambert-Gann Publishing Co. of Pomeroy, WA. Nikki Jones and her late husband, Billy, bought Lambert-Gann Publishing Co from Ed Lambert in 1976.

ACKNOWLEDGEMENT:


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Vol. 1, No. 12 September 25, 2002Go to Newsletters Archive

Practical Application of an Authentic Gann 'Square of Nine' Part Two

Ken Gerber

One of W. D. Gann's most important trading tools was The 'Square of Nine' or 'Pythagorean Cube' or 'Odd SquaresCalculator'. There is no doubt that he used it extensively.

When the Lambert-Gann Educators research team found a 'Square of Nine' in the Lambert-Gann Publishing Co archives with a revolving date ring and movable Cardinal and Ordinal crosses, we knew that a major key to the use of Mr. Gann's'Square of Nine' had been discovered.

In 'Practical Application of an Authentic Square of Nine' Part One, I showed how to set up the 'Natural Squares Calculator™' to be in harmony with the price of a market top or bottom. To do this I simply shift or rotate the Cardinal and Ordinal Crosses so that the Cardinal Cross angle from the center is aligned over the price of the high or low.

In this article I will show how to use the movable date ring on the 'Natural Squares Calculator' to shift time also so that it is in harmony with the date of a market high or low.

The chart included with this article is of continuous December Corn. According to Mr. Gann's teachings, we should link together all of the December Corn contracts forming one continuous file that gives us data back into the 1800's.

This particular section of the chart begins with the major high of 262 on December 28, 2000. Since the high occurred after the expiration of the December, 2000 contract, this section of the chart will cover data from the December, 2001 contract.

The 'Natural Squares Calculator' has separate rings which allows for moving the Cardinal and Ordinal Crosses (the degree ring which shows where the Crosses form) separately from the date ring.

To align the 'Natural Squares Calculator', we rotate the counter-clockwise date ring so that the red bear market date of December 28th (date of the 262 high) is on the same angle from the center as the zero degree angle. Correctly done, the zero degree angle or the right side of the Cardinal Cross should be over the price of 262 and extend to the red date of December 28 (see picture below).

We have now set up the Calculator in both price and time harmony (see picture) with this high and should expect both trend and countertrend movements to vibrate with this alignment if we have used the correct high or low as a starting point.

With the date of December 28th set over the high price of 262, we can now introduce the concept of Synchronized Solar Time™ (hereafter called SST). In this example, Mr. Gann's natural time divisions of the calendar year have been reset from equinox and solstice times to natural SST divisions with the beginning on December 28th. The table below shows the natural SST times and their corresponding price squaring.



One eighth SST February 10th 252½ One-quarter SST March 27th 246Three-eighths SST May 13th 236One-half June 29th 230Five-eighths August 14th 221Three-quarters September 29th 215Seven-eighths November 13th 207Full cycle December 28th 201 1/2

In addition to the natural SST divisions, each day after December 28th squares with the price that is on the same angle from the center as that date. In other words, each day forward from Dec 28th on the red bear market date ring creates a current SST angle squaring with a slightly different price. For example, January 20th would square in the upper right hand corner with the price of 257.

The first rally high marked No 3 on the chart peaked at 252 ¾. This rally is exactly one-half way back from the low at 243 to the high of 262 and up against the shifted ordinal cross. In addition, the rally top occurred on March 2nd, which squares with the price of 249 ½. The market rally carries 3 ¼ cents over, then immediately reverses and goes back below the current SST.

The market makes low No 4 at 229 on the 180-degree angle from 262. In addition, that low is on the date of March 30th, which is within 3 days of being on the 90-degree angle from December 28th. This is a common occurrence and shows how a natural SST is a great place to watch for price reversals.

The next rally high at No 5 occurs on April 16th. This is the first time since the March 2nd that price has been able to getback up toward current SST. The high of 241 ½ occurs on April 16th exactly on the current SST angle (see picture). From this high the market accelerates the decline and never is able to get back to current SST. This in itself is a great clue about the weakness of this market. Part One explained the continuing vibration of price on the shifted Cardinal and Ordinal Crosses for the rest of the decline.

The final low of 202 ½ marked No 10 occurs within one cent of the 360-degree angle in price. In addition, the low occurred on June 25th, which is within 4 days of the 180-degree angle from December 28th. Again we have an example of a major change in trend occurring on a natural SST and a Cardinal cross price.

The combination of natural and current 'Synchronized Solar Time™ (SST) and shifted Cardinal and Ordinal price divisions are extremely important in understanding market vibrations. This December corn example proves that by using the correct high or low in a market, we can harmonize the 'Natural Squares Calculator' to identify the vibration currently active in the market.

Ken Gerber is a full-time trader and writes and teaches for Lambert-Gann Educators, Inc. He can be contacted [email protected] (www.lambertganneducators.com).



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Gann's Square of Nine

Gann's Square of Nine is one of the more exotic tools he incorporated in his trading, and while this is a relatively daunting tool that requires a fare amount of practice to master, it can certainly add a whole new dimension to your analysis. Gann never claimed to be the inventor of this tool; however he certainly developed it and refined it to be used in conjunction with financial markets. The Square of Nine has origins that date back to early Egyptian days, and when looking at it one gets the impression your actually viewing a pyramid looking down from its very top or apex and then looking down further to its actual base. It is said Gann actually discovered the Square of Nine during his travels in India, which he saw being used as a calculator by traders in the region selling their goods. Gann being someone with a mathematical mind recognised its value and saw its potential to be used in conjunction with financial markets. He then refined it specifically for that purpose, and what great job he did! The Square of Nine is mainly used to confirm the significance of recent high and low points in whatever market you might be interested in. It should never be used to pick tops and bottoms; however it can provide additional evidence to help confirm the significance of a recent high or low point in the market when a break of trend is then later confirmed. The Square of Nine is similar to a wheel or a circle, it starts with the number one in the centre of the circle and then radiates out to the first square of nine. Starting with the number two to the left of the centre or the number one. It then spirals clockwise to the number nine, to form its first rotation around the Square of Nine. This rotation then continues by shifting one unit to the left of nine and will commence the next rotation at the number ten and then around to the number twenty. This spiralling expansion of numbers just continues out until you end up with a grid of numbers, relevant in price to the market your trading. The Square of Nine is essentially a time and price calculator, and calculates the square root of numbers, both odd and even numbers as well as their midpoints. It also looks for both time and price alignments from a specific starting point or price level E.g. a significant high or low point in a market. If you were to look at the numbers on the grid running down to the bottom left hand corner on the Square of Nine, you will find they are the square root of odd numbers E.g. 5x5 = 25. If you were to look at the numbers running up to the top right hand corner on the Square of Nine you will find they are the square root of even numbers e.g. 4x4 = 16. If you then look at the numbers running down to the bottom right hand corner on the Square of Nine you would find the midpoint between the squares of odd and even numbers. Using the numbers 16 and 25 as an example of our odd and even numbers you will find the number 21 representing their midpoint.

The numbers that fall on the blue lines form what's known as the "Cardinal Cross" and the numbers that fall on the red lines running into the corners of the square, form what's known as the "Ordinal Cross". Any numbers that fall on these lines are said to act as significant support and resistance levels. So the Square of nine is an interesting arrangement of numbers that have a specific order and can be used in many different ways. The interesting thing is that with the use of a simple Excel spreadsheet you can also change the value of the middle or centre number to represent the exact value of an actual high or low price for whatever market you're interested in. This number can be a positive number for lows which will spiral upwards in price or a negative number for highs which will spiral downwards in price. In this example I'm going to be using the all time high of the Australian SPI 200 as the middle number in the centre of the square which is 3500, and it occurred on the 7/3/2002. What I'm going to show you now is how we can use the square of nine to help qualify the significance of two of the major lows that occurred as part of this major bear market we have all been witnessing. The following chart is a weekly chart and the points of interest on this chart have been labelled with the relevant prices and dates marked on the chart, please make a note of these because I will be discussing them in more detail shortly.

The following chart is the Square of Nine using the all time high of the Australian SPI 200 as the middle number in the centre of the square which is 3500, and it occurred on the 7/3/2002. Because it's a high, this will be a negative number and will be entered as -3500 and will spiral down in value. What I have done here is colour the square where the first significant low occurred which was 2889 - 10/10/2002, and what we are looking for here is to see where the price of the low sits in relation to the Square of Nine. In this example we can see that the price of 2889 sits only one square away from the Cardinal Cross which are the numbers highlighted in blue. As mentioned previously all numbers that fall on the Ordinal Cross or the Cardinal Cross are considered to be important support and resistance levels. So the Square of Nine in this example is suggesting that the price of 2889 is likely to be an important support level and a reasonably important low.

But the Square of Nine can go even further to help qualify the significance of a high or low point. We have already established the price of 2889 as being reasonably significant as a possible support level. What we can do now is check to see if the "Date" of this low is also important using the Square of Nine. So in order to do that all we need to do is select the "Time" page on the Square of Nine spreadsheet and then simply enter the date of the high of 3500 which occurred on the 7/3/2002 into the centre, or middle of the Square of Nine. Now that we have done that, all we need to do is check to see if the date of the low of 2889 - 10/10/2002 sits anywhere interesting in relation to the square of nine. So, on the following Square of Nine "Time" chart we can see the date of 10/10/2002 is sitting rite on the Cardinal Cross and is therefore representing a significant time frame at our significant support level of 2889. This is known as an alignment in both time and price, and suggests a high probability turning point. If we were to now look at the most recent low that has occurred on the Australian SPI 200 you will find a reasonably significant low of 2679 ¨C 13/3/2003. Looking at the same Square of Nine "Time" chart we can see the date of this low occurring on the 13/3/2003 can also be found on the Cardinal Cross, and is only one square out! So the Square of Nine "Time" chart is suggesting the time frame in which this low occurred

is significant, and is therefore a low to watch for a potential change in trend.

Ideally always look for both a time and a price alignment to come together to produce a higher probability turning point as per the first example given. However individual price levels or time frames found occurring on the Ordinal Cross or Cardinal Cross should also be noted and watched for potential turning points. Learning to use the Square of Nine can get a whole lot more complicated than that, and I've really just given you a simple lesson on it here in this article. Some of the other, more advanced techniques you can apply to the Square of Nine may very well become the subject of a future lesson. Best Regards, Jason Sidney Managing Director Market Insight Pty Ltd http://www.marketinsight.com.au

DISCLAIMER:

Market Insight Pty Ltd believes the information provided within the Analyst Insight newsletter is reliable. While every care has been taken to ensure accuracy, the information is furnished to recipients, with no warranty as to the completeness and accuracy of its contents, and on the condition that any errors or omissions shall not be made the basis for any claim, demand or cause for action. All rights are reserved. No part of the text contained within Analyst Insight may be reproduced in any form or by any means without the permission of the author. All information provided by Market Insight Pty Ltd is for educational purposes only. Neither Market Insight Pty Ltd, or anyone else involved in the production of the information found within the Analyst Insight newsletter, will be liable for any liability, loss or damage directly or indirectly caused, or believed to be caused, by this information. It should also be noted that prior examples are not indicative of, and have no bearing or guarantee of the future performance of the techniques outlined within the Analyst Insight newsletter. The techniques outlined within Analyst Insight may result in large losses and no assurances are given that you will not incur such losses. No part of the Analyst Insight newsletter contains specific trading advice, stated or implied, nor is it an invitation to trade. Market Insight Pty Ltd is an organization designed to assist traders and investors to become more knowledgeable and independent. The giving of advice is therefore contrary to the objectives of the company. Traders requiring such advice should contact a licensed advisor. The directors and associates of Market Insight Pty Ltd are NOT licensed trading or investment advisors. By maintaining your subscription to Analyst Insight, you acknowledge that you understand and accept the contents of this disclaimer.

Gann angles & squaresBy Dave Green

W. D. Gann traded for over 50 years and reportedly made $50,000,000.00

trading from the early 1900’s through the early 1950’s. In his Trading Course published in the early 1950’s, he said Geometric Angles were “the basis to his forecasting

method”. Gann used many diverse complex and exotic techniques but angles and squaring seem to have been his primary methods. Therefore, this article concentrates mostly on the angles and squaring methods.

Most important & reliable concepts involving angles. ..Markets will usually go up or down, on average, at a percentage inclination or declination paralleling one of the geometric angles. Second most signi cant area, is the market will frequently nd support or meet resistance when the price hits an angle going in the opposite direction.

General concepts and observations. ..A market that is declining will frequently receive support and possibly rally as descending price hits an angle drawn up from an important swing low due to the angle squaring and gravitational ful llment taking place. If in fact, it is a bull market, the price will likely ascend to the next steepest angle above the advancing support angle as a result of gravitational attraction.

In a bear market, the price may only receive minor support from the below up sloping bull angle and not rally to the next greatest steeper bullish angle, instead it is more likely, due to gravitational attractions, to move to the least steep declining angle drawn down from a prior important swing high or crash through the underlying bull angle support without a rally taking place.

A market that is advancing will frequently receive resistance and possibly decline as advancing price hits an angle drawn down from an important swing high due to the angle squaring and gravitational ful llment taking place. If in fact, it is a bear market, the price will likely descend to the next steepest angle below the declining support angle as a result

of gravitational attraction.In a bull market, the price may only receive minor resistance from the down sloping bear

angle and not decline to the next greatest steeper bear angle, instead it is more likely, due to gravitational attractions, to move to the least steep advancing angle drawn up from a prior important low or smash through underlying bear angle without a decline occurring.

Points to originate the angles from.. .Gann talks at length about “swing highs and swing lows” and he refers to the geometric angles as “moving trend lines”. That is exactly what they are. The angles are the only way possible to draw a valid trend line with only one reference point (swing high/low) available or in use.

Correctly drawn angles on a square chart and drawn from important swing highs/lows will frequently be a strong area of support or resistance when the price intercepts angles. A swing high can be de ned as a high or high point with lower highs in front and behind the high point. Conversely, a swing low is a low or low point with higher lows in front of or behind the low point. One way to tell if angle support/resistance failed is price closing at 2% to 3% (of the current price) above or below an angle for two or more consecutive days, indicates a strong possibility that the current angle gravitational attraction is weak compared to price momentum and the next nearest angles gravity attraction. This is a warning of a price direction reversal.

Angles drawn from different points.. .Quite often, when angles radiating from separate swing high or lows meet, that marks a market turning point or change of trend. Sometimes, if not the exact day, within a few days of the crossing point. Also, price gets drawn to cross points, and angle crossing points sometimes will mark cycle high/low.

We will now analyze 3 charts. We will look at the charts like we were actually analyzing the markets from a realtime perspective for hands-on learning. It is important that you properly align the dates on the bottom of each chart to identify the day or time periods involved. The charts are courtesy of Omega Research.

March Tbonds chart.. .The TBond chart displays both a bull 45 degree angle and a bull lower angle, both coming up from the major low in August. Note how the market received strong support, and then moved up, after touching the 45 Angle in September and again in October. Note how the market received strong support, and then moved up, after touching the other angles in November, December and January.

Another valuable tool is the observation that once the market hits a support angle for the third or fourth time (4th time in particular), it will frequently penetrate the support angle and transform from a bull market to a bear market or vice versa. The sudden angle penetration that just occurred in February was the fourth attempt to penetrate the angle and indicates the start of a bear market. Also, the 45 angIe was hit 3 times prior to the signi cant November decline.

May Wheat chart This Wheat chart shows the Gann concept of buying and selling against both double and triple tops, expecting resistance at the double/triple top Zero Degree or near zero angle, and expecting support at the double/triple bottom Zero Degree or near zero angle.

The chart also re ects a longer term buy signal once a fourth attempt at the triple top is penetrated. Remember, at the third or fourth attempt to penetrate horizontal resistance, a penetration and strong continuation move, after the penetration, is a fairly common occurrence. Also, the chart uses short term angle penetrations to con rm ve of the miscellaneous buy/sell signals. Reason for picking this particular at looking chart was that it shows these techniques can also work in a sideways market or congested time period. Large moves or good trends are not mandatory to work with these techniques.

March sugar chart.. ..The Sugar chart presents some interesting but complex and sophisticated little known aspects to the angles, plus a never before revealed surprise technique involving measurements of the angle lengths.

From the major high of 1439 recorded on July 14th the market moved down to its major low at 869 on September 26th. As you may recall, since Sugar moves in 1 point increments, the square of 1 is important. Since the chart has a grid value of 5 we will multiply the squares by a factor of 5.

The multi-even square of 1 is 10, square of 10 is 100, and 5 times the chart grid value equals 500. Thus we can look for time running out about 500 points below the major high. As previously outlined, since the July high was a volatile period, we draw the bear angle from mid-point of the range, radiating from near the 14 cent level. That is also a preferred price to draw from, as it is a whole even number. We observe that the reverse square of 500 is 50. Therefore, 50 days from the high is a possible turning point, especially true due to the price itself being close to a 500 point drop from its high. (1439 - 500 = 939).

September 22 high was 948 and 931 low. Median price for this 50th day was in fact 939!

This day exactly squared out the range from the high based on the multitudes and derivatives of the square of 1 combined with the graph scaling! As a further con rmation of a trend change prediction we can look at the bear angle. On September 26, the price squared out but the price completed a 2 day pattern High Low Close (de nition, as previously outlined) and closed weak near its low.

That indicated the bear angle was still strong enough to in uence the price down in spite of time running out. Also, the price should square again by hitting the angle after time was squared. These items indicated the market could still move a little lower. On the day of the major low the price closed down and right at the bear angle. That con rmed a squaring of the angle taking place after the time ran out. Now that the angle had again been squared we can look for buy indications. Finally, in early October the price moved sideways to up, suf ciently far from the bear angle, to con rm a break away.

That is especially noticeable if viewed by a perpendicular measurement from the angle slope. We can draw a new bull 45 Angle from the September low and note the market followed the general trend of the 45 Angle up from September to December. On December 12th we should start looking for a top because of a new subject you are now going to learn about, which is Bull and Bear Angles crossing from different directions.

The bear upper angle from the July high crosses over the bull angle on the exact day of the highest closing price. Also, the next day, December 12th, the price itself ran out of time and closed weak after completing both a high-low-close pattern and a reversal down day during this2 day cross-over period. Also, the short term bull upper angle drawn up from the minor swing low of November also crosses over both major angles on the same date.

Lastly, I would like to tell you about a unique and unusual technique I have developed for measuring the angles to predict trend changes. As far as I can tell Gann or others were not or are not familiar with this technique, so it is unique!

Measure the Sugar bear lower angle from the July high day mid-point angle starting point, to the September low.

Then measure the bear upper angle from the same high and project the same distance to the angle. Where the measurement intersects the bull 45 angle from the major low marks the turning point! The exact turning point as far as time is concerned and fairly close to the actual price turning point! I have also observed this technique to work when applied to certain angles in miscellaneous markets.

Thus we have many different con rmations that a change of trend is imminent. In fact, we have so many powerful indications of a change of trend occurring about December 12th, that going short here would be about as close to a guaranteed successful trade as is possible! Finally, on December 15th a breakaway day occurred involving a signi cant percent drop under the bull45 angle and now con rming the market was following the bear upper Green angle from July high. That indicates the end of the bull move and start of a new bear move.

This article is based on selected condensed excerpts from our comprehensive Gann Techniques Trading Course, available for a special price of $75.00 to Traders World readers. In addition, a free Info Package on our #1 rated computerized Swing Catcher System is available: Trend Index Co - RRJO - Eau Claire WI 54701-9077. (715) 833-1234.

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