Is This Week A Major Turning Point?

“When Time and Price square-out expect a change in trend.” -W.D. Gann

Wall Street perpetually pursues how to find out how and why the market turns.

Bull and bear markets  trend seemingly relentlessly along their path until one day they seemingly reverse course out of the blue.

It’s not out of the blue.

Markets are not as chaotic as they appear.

This piece opens the door a crack to show that in truth markets are geometric and ordered.

Don’t believe me, take it from legendary fundamentalist John Templeton:

“The fluctuation of share prices is roughly proportional to the SQUARE root of the price.”
-John Templeton

So what did W.D. Gann mean by “square-outs”?

A square-out simply means a balancing out of Time and Price.

The Square of 9 Wheel or Time Price Calculator pictured below is a physical wheel that integrates Time and Price.

“There is a definite relation between price and time. By studying time cycles and time periods you will learn why market tops and bottoms are found at certain times, and why resistance levels are so strong at certain times, and prices hold around them.”
-W. D. Gann

Fundamental valuations play their part in determining where we might me in the cycle.

A price/earnings ratio for example may tell us whether the market or particular stock is expensive, but it has zero ability to tell us when the turn will come.

To solve this enigma market participants turn to technical analysis.

However, most technical analysis focuses on price without integrating time into the picture.

It is TIME that turns trend.

Many traders will tell you that “only price pays”.

Inn truth it is time that pays.

As well, most all technical analysis is based on indicators using price and price and volume (again, giving time (cycles) short shrift.

In other words these indicators are of second degree magnitude.

I believe in going to horse’s mouth so to speak: Price and Time itself and the natural relationships they form: squares.

Most all technical indicators fail at some point (usually when you need them most) because they are descriptive not predictive.

In sum, the best of indicators will leave you in the lurch because markets always go to extremes overshooting their “traditional” technical target.

The Square of 9 Wheel does a great job of predicting where time and price turn.

So if fundamental and traditional technical analysis can’t nail a turning point consistently, what can?

A legendary master trader sought to solve the enigma of the market with different methods.

One of these techniques is the squaring of time and price.

Gann’s methods have proven themselves in pinpointing major and minor tops and bottoms.

Let me give you  a few examples involving the biggest turns of this century.

The Bubble Top in 2000 saw the SPX top on March 24^th, 2000. The NAZ topped on March 10, 2000.

In my experience the bigger turn, you want to pullback the lens and look at the monthly high low or close as well as the daily and weekly.

While most all major square-outs will nail a turn to the day and the price, checking the larger weekly and monthly time frames can provide valuable validation.

The SPY monthly high close in March 2000 was 150.38.

The square of 9 shows 150/151 points to March 21^st.

March 21^st was what W.D. Gann called his Zero Point, as it is the natural beginning of the year.

Many major highs and lows have occurred in March this century.

We have the March 2000 top.

The March 2003 secondary low.

The March 2009 bear market bottom.

The March 23, 2000 Covid Crash low.

On March 6, 2009 the market struck its bear market bottom at 666 SPX.

The Square of 9 Wheel shows 666 squares March 6^th.

On October 11, 2007 the SPX struck a bull market top at 1576.

1576 squares October 11 (+ or – a few days).

On October 10, 2002 the SPX struck a bear market low at 768.

768 squares October 10 (+ or- a few days).

Remarkably notice that 1576 is precisely 6 revs of 360 degrees or 6 “squares” up from 768.

You can’t make this stuff up.

The Covid Crash low was March 23, 2020.

The high before the crash was SPX 3393.

3393 squares March 23^rd.

So the Price of the High squared out with the TIME of the low.

There are various inter-relationships between time and price.

You have to look at prior major highs and lows in time and price to see where they point to make a forecast.

The SPX scored a major high at 4818 on January 4, 2022.

The index collapsed to 3491 on October 13, 2022,

Jan 4 points to 349 (3490)

In the next image notice how 349 (3491) squares October 13 and ties to early January…the 2022 top.

The above turning points were all identified in the Hit and Run reports beforehand.

Something impossible without the help of the Square of 9 Wheel

Fast forward to today.

Today, February 16, squares out with 481 (4818) the prior SPX all-time high from January 2022.

Today is also important as the SPX is testing the 502-505 region, Monday’s high, which we’ve been forecasting should be an important turn.

The SPX reversed from 5048 target region on Monday followed by Airpocketism on Tuesday.

Is this a return rally test of the high, a secondary high?

Is time catching up to price today?

It must be said that 5048 is also the NAZ closing all-time high from March 10^th, 2000.

As Gann wrote there is a significance to anniversary dates and anniversary prices.

So today is important because the more synchronicity, congruity you have, the stronger the likelihood there is of a turning point.

As unusual as this analytical sleuthing may appear, it is really quite simple once you play with it a bit.

The rewards are worth the effort.

All a trader needs is to find one key calculation, one major anchor in time and price and leverage that out backwards and forwards on the chart like the spokes tying a Wheel together.

The next report we’ll walk through how Hit and Run members hit homeruns this month in ARM (long and short), and Earnings Plays in NET long and DASH short prior to Thursday’s earning’s print.