Tuesday, September 30, 2014

Harmonic Vibrations

W.D. Gann used sacred geometry, harmonic ratios and other esoteric methods in his analysis of markets. One such study was known as the 'squaring of price and time'. A squaring of price and time was an important harmonic since changes of trend, accelerations or major highs and lows could be expected on these harmonics. Other harmonics such as 30*, 36* 60* & 72* (triangle and pentagon) should be calculated as well.
On Friday September 19th the S&P 500 Index made a high of 2019.26. September 19th was 2020 days from the March 9 2009 low.
Gann would extend a ONE DAY/ONE POINT angle (45*) from the zero line and looked for points where price equalled or 'squared' time. Such a square occurred on the 19th. Another square occurred at the November 16 2012 low. (1343 price low & 1348 days.)
Yet another harmonic--this time 60 degrees or 1.73:1--occurred on the April 26, 2011 high. Note how the 2012 low at 45* was at the same price level as the April 26th (60*) High at 1343-1347. ( see chart in comments). This is a "harmonic high and low" and represents a very important level in the future. The March 9 2009 low was 667. 667 x 2 = 1334. 3 times the March 2009 low is 2001...close to the 2020 harmonic. Therefore 1325-1350 represents a major support level for the S&P 500. Breaking below that MAJOR HARMONIC means big trouble. Likewise, 2000-2025 represents a strong point of resistance to any sustained price advance.

It is just like a symphony!!!!!