Larger Picture with Gann

15. December 2008
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This is a post that I'm sure I will revisit in the next few years and say, "why didn't I just do ____!  It was so clear!"

Major market reversal points typically happen at a multiples of 90°.  Thus, all lines on the charts below are increments of 90° (unless noted).  Let's take a look at the past 20-30 years of the major indexes. (None of these lines were manually placed at support/resistance areas.  Instead, these lines are calculated using a single number at a major low pivot and the market followed them!)

Monthly Dow Jones chart, measured from the bottom of the '87 crash.  I wish I had more historical data to do a complete analysis.  

 

Monthly S&P chart, measured from the lowest low I have data for.  The pop up and fall back to the 90° line is the '87 crash.  Then a rally up to the tech bubble and financial bubble double tops.  Both right on the 540° level (360°+180°=540°).

 
 
Monthly Dow Jones Transportation Average.  I took the measurment from the '90 low, since it seemed to fit the data better. Since, the DJTA leads the Dow, perhaps if we see a bounce off 1959 area (90°) the overall market may be hitting a bottom.  Perhaps the Dow will hit 5158 and S&P will hit 610 soon after the DJTA hits that area and it will start giving us a nice bottom.
 

 
 
Monthly Nasdaq 100, measured from the lowest point I have data for.  I added the 300° line (270+30=300), since the 270 didn't seem to capture the reversal.  Otherwise, the major reversals seem to happen from multiples of 90°.
 
 
 
Monthly bond chart showing the crazy bull move we've had the last couple months.  We have never seen these highs before and never had this rate of ascent.

Lesson

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