Mid points with the date - emailed to subscribers - April 13th, 2003

The dates are working as fine as ever (April 7). I hope you are getting to see how the market tells you in advance which times in the future are going to be highly emotional. By default then, as professional market traders, this also happens to tell you which times to be in the office. Some weeks will be busier than others. This is where one needs to adjust from the other pattern of regular wages week in week out. The market is a little different; there are weeks that have to be spent setting yourself up for payday, When it arrives, cash in.

(Editing done here - some paragraphs not available for non subscribers)

See the Dow chart. What I want you to note particularly, is how on the 7th, 90 degrees off Jan 7, and 180 degrees off Oct 10, the Dow opened at exactly half of the previous range up, i.e. a mid point. (subsequent double top in the making too.) That's as good as it gets for the market showing it will change trend here; especially when the market cannot hold the opening price. The problem is psychology. Absolutely everyone else is long here - celebrating victory. It is only at these times that it is appropriate to take a trade against the trend, usually ends up being a good one. One of the problems with Gann is, it becomes seductive to try and pick tops and bottoms - very dangerous unless you have a set up, and this must in my view involve some sort of mid point or clear repeat range, on a very good date and time reason. But especially a mid point. In this case, on the 7th, we had a likely repeat run failing at half of the repeat range. Go back on any market, do your price work, and it will astound you how often you get such mid points, on those important Gann dates. Works on weekly monthly and yearly as well.

Now to the SPI. For those interested, it would be extremely useful for you to follow this on the SPI, since this is one market I trade. Therefor, if you are interested to follow this with me, I reckon you ought to set up a chart for yourself. (On the 7th for the spi, it repeated its previous range, just short of the 1*1 line down off Jan 7th. Gann would call that square, i.e. 90 days and 90 points. Drawing those angles picks that up for you. )

We will keep our chart simple, you only need to do the following; start a DAILY chart from around Sept of last year. I would do a scale of 2 points per small line, i.e. 8 points per bold line. You do not need to start the price at zero from the bottom of the chart paper, simply give yourself enough area to be able to fit all of the last half-year's action on the one page. And leave spaces for weekends and holidays; it is a 7 day chart. (The angles work better.) I want you to keep the chart utterly simple - and believe me you will learn heaps this year as we chart the year together. (This does not make redundant wheat or cotton, but they are not doing much at present, - except if you were short wheat, which I was not - and we gotta be where the action is) It is a mistake however, to try and trade the SPI every day; just watch the time and price set ups.

To highlight just what this can mean, measure the light crude chart for yourselves. Note how the recent range down could not go further than half the previous, the half point occurring April 7 - great date. Actually it fell short, 26.88 was the exact figure, perhaps it may still get there, but with all the emotion in the markets yesterday (7th), it has all the hallmarks of a probable change in trend, at least temporarily. That was enough for me anyway - payday - who's a happy chappy ?

To set this up in advance on another market, i.e. the market telling you in advance of important dates, refer sugar; recent top, island reversal, Feb 20. So count 30 60 90 deg etc off that date, do it on your circular planting guide thing like I showed you if you follow sugar, and see what happens. Watch esp 7 months from any major high or low, as Gann says, which brings sugar to Sept 22 and you know what date that is, which for sugar has been very important in the past. The dates I have given you work well on sugar.

Oil, ifs about the rent, so perhaps this chart and I have much in common. Start of a beautiful relationship? I have been re-reading part of Yergin's book The Prize. It really is a good book. If you have it, take a look at pages 685/686 talking about the 1978 Iranian revolution; pushed prices from 13 to 34 dollars a barrel (prior to trading in futures - but relevant numbers), and afterwards, "after the fact, when all the numbers were sorted out, such emotions seemed irrational; they didn't make sense"

Mmmm...emotional behavior in history. Worth studying, because otherwise we quickly forget it. By the way, the revolutionary spike in prices was over Christmas 1978. 12, there's that number again. 1978/79 - 1990/91 - 2002/3. You pick up historical dates by reading history. In addition to that, oil futures commenced trading, i.e. its birth date, 30/3/83, that's 20 years ago last month, or 240 months, that end March date gave a magnificent mid point.

Oil is traded on NYMEX. In Gann's day this exchange traded egg futures, as well as butter and cheese; known then as the butter cheese and egg exchange. (What else) (Yergin p 724) Apparently Gann's egg commodities course is believed to be a good one, so that is next on the agenda - I am hoping we might get some synergy there to unlock a few more 'secrets'. Eggs however are no longer traded, and is proving impossible to get the data so far.

A few more interesting dates I noted over reading Yergin, p 710 (yes it's a big book); - Baghdad attacked Iran to start the Iraq Iran war, 22/9/1980, an equinox. Conflict between these two nations goes back thousands of years, in biblical names, Mesopotamia - now modern day Iraq, and Elam - modern day Iran.

One apparently famous battle, "the Arabs defeated the Persians in 636/637 AD near Najaf in Iraq, and then another triumph by the Arabs in 642 AD celebrated today by the Arabs as the 'Victory of Victories'. Baghdad was founded one century later."

Now if the dates are okay, that makes the founding 742 AD, or thereabouts say, which is 1260 years from today, or 42 times 30. (3.5 times 360, half of 2520, or 7*360. And do remember 1260 days = 180 weeks, one reason this number is important.) So we were around important time frames for this area.

Just a few things that came up on the calculator anyway upon reading dates. I read history thru new eyes now after Gann. You should too. Pass them on if you see anything else of note.

The vested interests are alive and well still; the US house of Reps this week 'rejected an effort to raise automobile gas mileage standards' and 'endorsed oil drilling in the Arctic National Wildlife Refuge', (IHT April 12). Meanwhile the first Iraqi contract given to Halliburton subsidiary Kellogg Brown and Root (same coy that built the detainee cells in Guantanamo bay, and that is the exclusive, i.e. only, logistics supplier - cooking power fuel etc - for both the Navy and the Army) is worth some $7 billion, upon which the contract allows a 7% profit. Though which accounting entry this will be is anyone's guess. The defense dept noted "it could not follow public procedures for awarding the contract, because the war plans and the need to fight oil fires in Iraq were then classified information." Of course.

The old ex President Carter once famously said, (became known as the Carter doctrine), "Let our position be absolutely clear. An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." And Carter was a peanut farmer! Perhaps it is not about the oil after all ???

Wim Duisenberg, the top European central banker has been asked to stay on in the post for another term - he is not really that popular - but his anticipated replacement this year (can't recall his name) has just been found guilty in a French court for falsifying the accounts of the bank where he worked as the boss. Why was Duisenberg asked to stay on ?

So that this guy can be given time to clear his name.

The more things change...


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