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This forwarded chart might be of interest to those traders using the
pitchfork and or DGL tool.
bobr
----- Original Message -----
From: <ganntrader@xxxxxxx>
To: <dgl@xxxxxxxxxxxxxxx>
Sent: Wednesday, May 30, 2001 7:32 PM
Subject: [DGL] Group update - May 30
> JUNE S&P was selected 2 updates ago (May 22) as ready for a pullback; the
> high on the 22nd held, and prices have come lower. Today's low of 1247 is
> bringing price closer to the price/time point which was 1243.72 today [L2
> 4/19-4/25-5/22]. This DGL is decreasing by ~.55 per session.
>
>
> ON ANOTHER NOTE . . .
> It was 60 years ago that W.D. Gann wrote his book "How to Make Profits
> Trading in Commodities". I have recently been challenged to show how even
one
> of Gann's idea could actually be used in today's markets. So, apart from
> DGLs, I'm going to respond by giving 2 example in totally unrelated
futures
> markets. The first example comes tonight, and the second one will be
tomorrow
> or Friday night, depending on my schedule.
>
> In his book, page 32, Gann wrote: "Mathematics is the one exact science. .
.
> any method to make money trading in commodities must be based upon the
exact
> law of mathematics. Each top or bottom in Wheat, or other commodities,
comes
> out in accordance with an exact mathematical proportion to some other top
or
> bottom".
>
> I think I can show you an example of this especially with the example I'll
> use tomorrow night, but let's take a look at a simpler illustration
tonight.
>
> Take a look at a chart of May Soybeans. After bottoming in late October
> 2000, prices made one more run up prior to the major downward move which
took
> them to new contract lows in late April. The high prior to the beginning
of
> that major downtrend came on Dec 18, 2000 at a price of 529-1/2.
> Now let's use one of the simplest of Gann's methods: the Square of Nine.
We
> want to project potentially important price and time levels based on the
> Square. Squaring of Price and Time. The Square of Nine. I'm repeating
myself
> because sometimes Gann's most common expressions are given very esoteric
> meanings. Most of us have heard of "squaring" price and time; indeed, I
> maintain that DGLs are one way to accomplish that -- a sort of "quick and
> dirty" way for those who don't have the time or the inclination to do the
> math on various markets.
> But as I've discussed before, the Square of Nine, whatever else it may be,
is
> at the most basic level a calculator of price squares, and therefore of
> square roots as well.
>
> So let's take that high price of 529.5 and call it 530 (we want to
> standardize the value to a 3-digit number). The sq. root of 530 = 23.02.
> Now, since prices began moving down from this Dec 18 date, confirming it
was
> a top, we would want to find areas where important support might be found.
> We'll do that by finding the values which are in 90-degree increments
below
> 530 on the Square of Nine. We subtract .5 from the square root of price to
> find the next number. 23.02 - .5 = 22.52, squared = 507.15. That price
level
> really didn't stop the move. So now we move to the next level 90 degrees
> lower: 22.52 - .5 = 22.02, squared = 484.88. Nothing happened there,
either.
> So now we move another 90 degrees: 22.02 - .5 = 21.52, squared = 463.11.
On
> Jan 29, 2001 the low hit 463.50 and moved higher for a few sessions.
>
> You can do the math to find the next support price, which was 441.84.
Prices
> made a low of 444.75 on Feb 26, which was also the end of the time square
> (which we're not getting into for now) and move higher for several days
> before resuming the downtrend.
> But take a look at where strong support was encountered beginning on April
> 24. Four tests of support over 5 days, with the lows at 421.50, and the
> Square of Nine value at 421.07, 2 ticks off, and 2 days away from the end
of
> the time square prices were then in.
>
> This is math that can be done using an ordinary calculator, finding square
> roots of prices and then adding or subtracting increments of .5 and
> resquaring. Remember that Gann didn't even have a calculator, but he did
have
> his Square of Nine.
>
> Tomorrow or Friday I want to touch on another Gann idea, which I think is
> sometimes given all kinds of mysterious significance: Time by Degrees.
We'll
> take a look at what seemed like a totally random move recently in the Gold
> market, and discover that there is indeed a balancing of time with price
> behind even such apparently inexplicable moves.
>
>
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
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