Saturday, March 6, 2010
Anonymous Monetarist Mailbag : Viewer Mail
(An exchange with a reader is detailed below. Am interested in any Gann adherents offering further commentary - most especially any folks that might wish to delve into the esoteric and cosmological aspects of the following Gann quote when referencing the United States Steel Name Chart:
'The basic number or low point, for example 9, the lowest digit on U.S. Steel, and its vibrations according to its name, all cause slight variations at times from other stocks, because each stock works according to its own base, beginning point, numbers and name.' )
Anonymous said @ March 6, 2010 5:53 AM
Needham has stated Mr Gann was a fraud...He also recently stated JCN (Webmaster) Mar 06, 2010 - 1:22am GMT
10 hours ago - Don't get hung up on Gann. It's mostly bunkum and the good stuff comes from Sepharial in any event.
But just to clarify. Gann worked on both stocks and commodities. His base was what he called the 1X1 line. Gann charts have some very particular properties, most notable of which is that time and price were measured on an equal scale. So if price went up 1 point (or $) in one day it would be holding the 1X1 line. He also used 1X3 (the angle on the triangle), 1X2; 1X4 and 1X8 lines.
The original meaning of "Time and Price" squared meant an equal move on both chart axis. So a market that moved 150 points in 150 days was said to "square" time and price.
Almost all charting programs have some form of Gann lines or Gann "fans" that create these lines, but as programmers and traders almost entirely fail to understand Gann's methodology; all but 1 of the Gann tools are wrong (including Genesis). Check out his website forum and view for yourself the hypocrite who looks to fool all.
Anonymous Monetarist said @ March 6, 2010 9:17 AM
Very familiar with John's analysis.
To expand upon your point using Mr. Needham's prescient observations:
'Gann's simplest teachings held that these angles would measure markets in a predetermined ratio such as 1X1 where price would move 1 'unit' for every 'unit' of time. Other popular Gann angles were 1X4 and 1X8 being angles on the square and the special 1X3 lines, angles on the triangles.
Gann's background in freemasonry and Sepharial's books 'The Silver Key' and 'Kabala of Numbers' are essential reading for a deeper understanding of Gann's work.
Gann's opinion of market turns occurring when 'time and price are squared' is referring to the point on an angle where market price coincides with 1X1 or other angle.
This 'point on an angle' could be an important numerological sequence from Sepharial.
It could also be a time fractal from the astrological chart ruling the market in question.
Gann's discovery 'that markets move in fractals of 1/8th of the previous price range' should be a dominant plank of his claim to fame.
Markets still use 1/8th fractals of previous ranges as their boundaries (and 1/3rds).
For Gann these ratios were as far as he developed his price sequencing. For the Danielcode they are the base ratios.
The most common of Gann's time cycles were astrological cycles.
Gann's teachings hold that the high before the high and the low before the low were paramount chart points.
Danielcode market time can be measured from two points, the high and the high after the high. If we are seeking a high we usually measure from the low or the low after the low.
All markets have their own "vibration", what WD Gann called the "Law of Vibrations". So each market has an identifiable signature or vibration. Gann, who was much dependant on Sepharial for his market insights, thought that vibration came from each market's birth number ie its horoscope. In Sepharial's "Silver Key" he shows a horoscope of the “birth” date and time of the New York Stock Exchange and the first trade of a number of stocks on that exchange. He ascribes the NYSE signature vibration to those calculations.
Of course, most of that is nonsense and the true number or vibration for NYSE is the sum of its parts. If you run a best fit regression for every stock on NYSE and give them an exponential weighting, then take the mean of that rating, you will have the true vibration of NYSE.
Strangely it is not far from what Sepharial calculated 90 years ago with his birth charts!
Many have dedicated large parts of their life in the search for the twin Grails of trading: price and time. That they are the same thing juxtaposed on different axis is not a new concept. WD Gann, under the tutelage of his mentor, the British astrologer and numerologist “Sepharial” advanced this proposition in 1935. But Sepharial camouflaged his observations by claiming that they were related to astrological cycles. Indeed they are, but he scrupulously avoided saying that all of these cycles are of Biblical origin. What do you think the wise men, sages and prophets of Biblical time were looking at on those myriad of long nights as they sat outside their tents? They observed the stars and the heavens. And they wrote down, sometimes in code and sometimes openly, the great cycles of the heavenly orbs. Sepharial used that knowledge but fudged naming the source because it wasn’t cool'
Anonymous Monetarist said @ March 6, 2010 9:18 AM
Pretty sure you know all of this given your familiarity with Needham however other readers might be curious enough to continue their exploration on this subject and I would urge them to do so...
To be mindful is a discontinuous process, our senses allow us a glimpse at the perfect form (truth) but that view can often be distorted by the flickering fire of perception that illuminates the shapes we perceive to believe...
Or to quote the venerable Gann expert and Swing trader Jeff Cooper, 'Is there a sacred geometry weaving through time and price or is the market a random walk? It seems to me if there is any threshold of geometry which runs through the market then all math leads to Rome. Number is as number does.'
As a last bit, continuing Jeff's ' Number is as number does' comment...
Gann did a Col. Jessup saying we couldn't handle the truth... and as such he never directly articulated his beliefs...in that sense, yes he was a fraud, albeit a clever one relying on the insight of some clever folks.