Thought I might fwd a bit on my notes for why April would bring highs.
As you can see, the forecast is half right so far from the class. 6th
and 7th new highs for the All ords, though importantly at this stage,
not for the SPI (futures market trading of the All Ords). Saying the
10th in class came from a process that I have not detailed in class yet
really - at least not fully to all of you. Of course the 10th was a
Saturday, the 9th a holiday, so we are not far off. May I claim a half
win so far ???
I did say we would then see a retracement from the 10th April to about
the 27th May.
The world is presently, and for the next 45 days, seeing an echo
(repeat) of the market action from October 2nd 1997 high, to October
28th 1997 low, a violent time. Asian crisis as I recall. If you look
at the US charts at this time, you will see a big drop in that month, of
the market. (554 points Oct 27th, and note the top about 90 days
prior), Dow chart attached. SPI chart also attached, so you can see how
it looked in Aust. 500 point drop in 4 days or so. (Note it was 120
months - ten years - from Oct 87) I won't forget that day in the
office, Oct 28, can still picture it as I tried to get long 5 contracts
on the spi at the open, (looks so simple in hind-sight) but in the
finish could not pull the trigger so to speak. My first (futures)
experience of a full blown market panic. There is no other way to learn
it. Only a trader could understand that.
Anyway, I am not forecasting another panic this time, merely that the
present market shape should resemble something similar, a reversal, (not
a panic however please note), accompanied by an upsurge in market
jitters around the world. So current upsurge in Iraq comes as no
surprise to me. In theory, I am suggesting one can forecast the
timeframe when one can expect heightened market emotions, but not what
the specific cause might be. I believe Gann may have worked out how do
do that, ascertain the specific cause in advance, but I certainly
haven't yet. But I am working on it.
The present time frame of increased market emotions (April 2004) was
forecastable as at Jan of 1998. At the next Gann class update, probably
sometime early next year, to which each of you are invited, and I hope
you attend, I will expand on this. I guess the proof is in the pudding
- the purpose of this email - so we might see what happens in coming
days. Important obviously, that i get this email to you beforehand.
Regardless of whether the market goes up or down from here, mid to end
May ought to be a highly emotional days somewhere in the world, which
will affect the US market.
Gann wrote if you are able to determine the correct start date of any
cycle, you can forecast way into the future, depending upon the size of
the cycle. I do now believe this to be true, and the above is why he
said it. 100 days, 100 years into the future, it is all the same. "A
day is but a year to the Lord".
Over the next 6 weeks we have the following happening - of course we get
these counts coming up regularly, but is more than usual this month (Do
always check me for errors)
180 weeks from nov 7 2000 high
150 weeks from june 29 2001 high
30 weeks from oct 22 2003 high (30 weeks = 210 days, or 7 months)
210 weeks from april 2000 low
240 weeks from oct 1999 low
60 weeks from march 2003 low
April 6th was 758 days, (108 weeks) from march 7 all time high.
These time cycles should theoretically stall the market from continuing
higher at this time. Note a bit of rythym, March 2003 low, 30 weeks
(and a small bit) to Oct 2003 top plus 30 weeks to mid May 2004.
27/5 will be 60 weeks from the toppling of that statue, and is 72 months
to the day from obl's declaration of war against the US specifically, of
May 98. March was 30 months from 9/11. Coming up to spi double top
too, usually it holds for a month or two so the market can build up a
bit of steam to move thru, though not always. Note the high on the SPI,
27th Jan, reversal bar, then two gaps down, 120 degrees prior to 27/5,
which is interesting.
Note the highs for the 6th and 7th SPI were exactly on the 1*1 up from
3463 high, and 2*1 up from 3428 high, plus the market came back up
underneath the 4*1 angle up from feb 5 low, (after having been held by
this angle), kissed it, and moved down - it's a certain top, at least
temporarily, but a new high, so the trend is still up at date of email.
Time, as always though, will tell the story. All markets have this sort
of stuff as above, but may I add, it is a very tough jigsaw to put
together, and then of course you have to add your psychology and
emotions to the mix in trading it. Tough to say the least. But then
life was not meant to be easy now was it...
In sum then:
there are no past obvious price highs or lows to square into time that
give a possible trend change date for April, however, the current April
high formed at the intersection of three strong angles, on April 6th, a
date on a degree count with the past all time high. A number of weekly
counts hit important numbers this month. And from Chapter 6 of Gann's
commodities course he notes a bit about matching calender and trading
As at today's date however, the trend is still up. We would need to see
a lower top form, which would need to occur on either April 14 or April
20, to conclude that the market will retrace. If we DO see a lower top
on one of these dates, we should see a retracement of at least 30 days,
counted from the high.
See what happens.
DOW - PDF
SPI - PDF