Cycles are part of human nature and part of the market. We see the same things happen over and over in human history and we see the same things happen over and over in the market. Today we are looking at one of those cycles.

 

Forecasting prices is a very difficult and very emotionally intensive component of technical analysis. As a trader and analyst, I do it every day, updating projections as changes happen. It’s easy to keep these forecasts to yourself because if they don’t work out, no big deal! If you post or share your forecasts? You are setting yourself up for Interweb trollz.

 

A common piece that people neglect when forecasting

Too many new technical analyst enthusiasts and too many new traders limit themselves to only price as a factor of future trends and price direction. Time is the most important factor in the market and it is mostly unknown or avoided. Time cycles, especially if you don’t use them, are one of the most powerful tools in your toolbox – let’s see why.

 

Square of 9 Dates.

 

In Gann’s Square of 9, calendar dates are also angles. 365 days = 360-degrees in a circle. One of the methods Gann used is finding an important high or low and then plot off that date. As an example, I used the 2018 high of 17234.99 on January 6th. Every 45 days (which is also 45-degrees) I plotted out a horizontal line and labeled with the degree. Look at how often swing highs and lows are found.

 

The ‘Death Zone’ cycle

One of my favorite cycles is the 49-day cycle (Gann said it can go up to 52 days). It’s stupid how often this works. Like any of Gann’s cycles, you start from any important swing high or low and look out 49-days from that date. 7 is a very important number of Gann analysis. Gann reference The Bible frequently – 7 days in Creation, animals at least 7 years old for sacrifice in Exodus, Joshua marching around the city of Jericho for 7 days and the seven trumpets that were blown outside the walls, 7 pairs of animal on Noah’s Ark, 70 years of Babylonian captivity, etc etc etc. The number 7 in the Bible is associated with something being ‘complete’. In Gann analysis, 7 and its multiples (7×7=49) are extremely important to watch, especially 7 and 49. Let’s observe some of those:

 

In the image above, we see the first major swing low of 2018 being found 49-days after the all-time high – that low has been the same low-value zone for the entire year. And we see consistent changes to major and minor trends with the 49-day cycle.

 

144-days

 

144 days and degrees is an important cycle. One of the swing lows prior to the all-time high came near a 144-day cycle. 144-days from the first yearly low on Feb 6th was the same low. Which, coincidently. Also, in Gann’s Square of 9, the low of the year, 5780, is 144-degrees from the all-time high! (Square root of 19898 = 141.06, rounded to 141. 144-degrees from that in the square of 9 is 76, when squared is 5776.)