Bitcoin, Ethereum, Litecoin and… the moon and Neptune?
“Millionaires don’t use astrology, billionaires do.” – J.P. Morgan
Prepare thy tin-foil hats and late night circa 2003 1-800 fortune telling commercials. This post is about to get all sorts of… weird.
People who know about W.D. Gann’s approach to the market understand how logical and precise his methods are. His application of Geometry into forecasting and identifying human behavior at certain price levels is nothing short of astonishing. His ability and discovery of applying time, price and momentum into a perfectly squared chart have shown consistent results as well as abnormally high positive expectancy wins. However, there is one part of this Founding Father of Technical Analysis that has been misunderstood. It’s a part of his analysis where, for whatever reason, people look at Gann’s work in amazement at one moment and then conclude that he was some kind of insane, mad hatter, wack job in a suit. It’s a part of his analysis that gets disregarded and dismissed as silly. I’ve heard people say, “Oh, Gann, that man was a genius, I use his methods all the time. He was light years ahead of anyone else and still is.” Then when you discuss Gann’s application of numerology in the Bible and the use of celestial movements (planets, think astrology) people regard Gann as a lunatic. It’s like the guy was a genius up until he started talking crazy about planets, astrology and the Bible.
Gann knew time was the cause of price action. Another thing he knew was that the moon and the planets have a strong effect on human behavior. Afterall, a technical chart is just a visual representation of the psychology of the participants. Gann also believed in a God that created structure and order in everything. Where some think Gann is a bit nutty, Gann would probably regard those who dismiss as illogical and shortsighted. In a lot of ways, Gann was probably more logical than anyone else who has studied the market and its mechanics. Regarding planets and cycles and formations, etc, let’s just go over three things regarding planets.
- Planets themselves do nothing but looks pretty in a telescope, if you have a telescope.
- Planets that form conjunctions with the Earth and Sun on a time cycle DO cause large moves.
- Every instrument is sensitive to certain planets.
Let’s look at some examples outside of cryptocurrencies (because cryptocurrencies are still so new).
This is the EURUSD forex pair. The two vertical lines represent two planetary events in the week of April 4th, 2015. These were the conditions for a buy:
- End of a 30 day Gann time cycle.
- Full Moon. (grey vertical line)
- Uranus conjunct with Earth and the Sun. (blue vertical line)
Result = 849.81 pip move. On a full lot, that’s almost $9,000 in one swing move.
This is the SPY (S&P 500 ETF) for the week of Jan 9th, 2013.
- End of a 90 day Gann time cycle.
- New Moon.
- Pluto conjunct with Earth and Sun (orange vertical line).
- End of a Fibonacci time cycle.
Result = SPY dropped from 184.09 to 173.66
This is Bitcoin’s chart and I don’t think we need to say much about what happened in this area. The all-time high was on a New Moon phase and Mercury was conjunct with the Earth and the Sun. Big sell-off.
Ethereum shows another example. This is in November of 2017 and the end of a 45-day cycle. The purple line represents Jupiter conjunct with Earth and the Sun. The black line is a Full Moon. Notice the rise.
What does this all mean?
These are just some examples of a confluence of time cycles and planet formations. They are extremely powerful signals that you dismiss at your accounts peril. It is an essential tool in my own trading toolbox and something that has given me the biggest wins and gains in my trading career.