By: Jeff Cooper
Hit and Run Morning Stock Report: December 8th, 2022
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How The Wheel Of Time & Price Forecasts Markets
A cube has 6 sides. This means that the market will repeat itself every 6 intervals. That means you should check back every 6 days, 6 months, 6 years of (6 X 10) 60 years and the market will repeat itself.
Be careful as the market has inversions in those repeat time cycles.
That means, for example, 6 months ago if the market made a low, today it might invert and make a high instead. You should be watching for price patterns so you don’t get caught in an inversion.
In geometry there are 3 basic shapes: the square, the circle and the triangle.
The square represents time and price. The horizontal is time and the vertical is price.
From the square we determine everything, both timing and price projection.
If we put the 360 degree circle inside of the square and the three sided triangle inside of the circle and the square this will give us the means to determine4 time and price points for forecasting the markets.
The Square of 9 Wheel is constructed from the square, the circle and the triangle.
We can use 3 different basic angles to determine time and price within the markets: the vertical, the horizontal and the diagonal line.
The vertical is price, the horizontal is time and the diagonal is a combination of the two.
The horizontal and vertical lines divide the circle into the important 90 degree points.
The triangle can then be used to divide the 90 degree points into 45 degree points.
From these three geometric shapes, we get all the calculations in mathematics for time and price projections in the markets.
In combination with the angles, we use the squares of both odd and even numbers to get the cause behind market movements.
These numbers are actually part of the square when they are laid out according to the Square of 9 Wheel.
If a stock makes a low for example at 36, it has three dimensions of time and price. It can move sideways for 36 units of time, it can move up for 36 price units, and it can move diagonally 36 time and price points from which it began.
Measurements can be taken from previous highs, lows and the ranges in between.
There is always proportion between previous highs, lows, and the swings of the market.
For example, the low in 2022 is 50% of the 2020 to 2022 range.
A 50% retrace of the October low of the year to the December 1st high is 3795.
Breakage below 3795 opens the door for new lows.
While W D Gann wrote that when time and price square-out to expect a change in trend, it must be said that while all important highs and lows are square-outs, not all square-outs are important highs or lows.
This is why so many people who presumably “know” Gann lose money in the market. They do not know what they are doing.
It is not a square-out in and of itself that tells the tale of the tape.
Rather it is the behavior when a square-out presents:
Speculation is observation, pure, and experiential. Thinking isn’t necessary and often just gets us into trouble.
Math is the mind of the market.
This is one of Gann’s secrets which he did not reveal in his courses: it is not enough to know the square-outs, you must know the cycle you are in. This tells you the direction of the market.
Bear markets are meant to break support. Bull markets are meant to break resistance.
That is the nature of markets.
A cycle is Time. The most important factor in determining market movements is time.
Gann wrote that Time is more important than Price.
Time tells a trader when the market stops its trend and goes in the other direction.
If you know the time periods in markets, you chance of success will be great.
The most important thing you can do is to watch how the cycles are working.
Compare the current cycles with those of the past.
Go back to each of the cycle years and compare them to the current ones.
Another way to use Time is interpolating it as Price.
For example this years high (and all-time high) was on January 4th.
January 4th vectors 350 (3500).
The low of the year is 3492…basically 3500 SPX.
This is what Gann meant by Law of Vibration.
Time points to price, price points to time.
Said another way time and price are interchangeable.
They are one and the same. When they “meet”, expect a change in trend.