T3 Live

The Gann Panic Cycle


The study of cycles is not easy – if it were, everybody would be phoning in their trades from the beach.

They are illusive because just when you think you’ve found the key, someone changes the lock.

What I think is true about cycles is:

They can point to a time frame in which to expect a turning point but and the length of a move.

But it can be treacherous to infer the amplitude from a cycle will be similar to the prior instance.

Cycles invert. Lows become highs; highs become lows.

Keep in mind that long term cycles are not specific timing tools but are meant to provide the general complexion of the market:

Rule 1: Trend is the key to profits.

Rule 2: Trend is a function of time.

As W. D. Gann wrote, “Time turns trend.” He didn’t say Price turns trend.

Keep in mind also that if the market doesn’t respond to a long term cycle, it is often a warning sign.

In that context, we are in the Gann Master 60 Year Cycle from 1962, when there were two crash phases.

Tomorrow we will show how this year vibrates or is synchronous with the panic selling in 1929 and 1987.

Today/tomorrow tie to the end of the Gann Panic Zone of 49-55/56 days counting from the November 22 Key Reversal Day.

This was the NAZ high, which is the leader.

Interestingly, the Lehman Crash in 2008 bottomed on November 21.

This was 13 Fibonacci years ago.

That was the bottom for the NAZ and markets around the world.

The SPX went on to undercut its November low in March 2009.

In the first few days of Jan 2009, the SPX struck a pivot high prior to plunging into March.

The first few days of Jan 2022 saw the SPX strike an ATH.

There is a strong likelihood we will plunge into March.

While the Gann Panic Zone culminates today/tomorrow, it warrants considering the cycle for the entire week.

Gann said to key off the weekly swing chart.

Consequently, despite Friday’s late rebound leaving a “tail” on markets, this morning markets are gapping down with authority.

This is a change in character where players could expect a gap up given Friday’s “reversal.”

This may finally drum up a whiff of panic versus the orderly declines we have seen so far — as the buy the dip mantra hits a sour note.

In sum, we may get a selling climax this week prior to a weekly bounce before lower.

Conclusion. Today the SPX may snap the 3 point trendline at 4600, triggering a Rule of 4 Sell signal.

This often is followed by powerful downdrafts.

I can’t help but wonder if the SPX has a date with its 200 day moving average as soon as this week.

The 200 day is presently at 4420, near our projected 4400 region.

Leave a Comment: