HARNESSING EXPLOSIVE

MOVES USING GANN

JEFF GREENBLATT

MTA WEBINAR

MARCH 30, 2011

TECHNICAL ANALYSIS

• Is Pattern recognition

• Traders lose money because they are

emotional

• They get emotional because they don’t

understand the pattern

• Understand the pattern=greater

opportunities

• Dick Arms: all fear and greed in pattern

COMMON FIBONACCI

RETRACEMENTS

• Once the domain of elite traders

• Now popularized by media outlets

• Its good for them but…..

• Once the crowd learns it

• No longer cutting edge

• So that is only our foundation

• We go way beyond Fibonacci

What We Will Cover Today

• Pattern recognition

• Cycles and symmetry

• Price and time ratio squares

• Percentage change readings

• Median lines (pitchforks)

• Support and resistance

• Range squaring time

• Relevant current situations

• How to profit from this data (catching turns)

CYCLES ARE LEADING

INDICATORS

• Time dimension missing X factor to

most people

• Can be anticipated in advance

• Eliminates need for lagging indicators

• In my work 262 week pivot at bull top

was anticipated 6 months in advance

as ‘MOST IMPORTANT PIVOT OF

DECADE’

DOW 262 WEEK BULL MARKET

Pivot was anticipated 6 months in

advance

COMMON FIBONACCI

FORMATION

• A is .60 of the whole correction/first

summer 2007 bounce (DOW TOP)

This time according to calendar days

SAME SEQUENCE

TAKING IT ONE STEP BEYOND

• Calendar day cycles-90 days (RUT-Dow top)

• Time retracement- 55.5 (calendar days)up = .616%

• Clusters with Dow all time high at 262 weeks

• These calculations are the underlying structure

• Always dig one level deeper

MOST IMPORTANT RULE:

WHEN PRICE AND TIME

SQUARE THE TREND CHANGES

DIRECTION

MOST IMPORTANT INTERNAL

READINGS

• Price and time square to get a ratio

• Ratio dictates when we are close or at a

turn

• Cluster from various pivots

• Percentage change readings important

part of equation

NUMBERS ARE LANGUAGE OF

MARKETS

• Fibonacci – 5, 8, 13, 21, 34, 55, 89, 144,

233, 377, 610, 987 etc.

• Lucas – 7, 11, 18, 29, 47, 76, 123, 199,

322, 521, 843 etc.

• Golden spiral, sq roots – .618, 1.618,

2.618, 4.23, 6.84, .382, .786, 1.12, 1.27,

2.05, .236

• Important Gann 45, 90, 180, 270, 360

MORE IMPORTANT NUMBERS

• Geometric/Gann - 22.5, 67.5, 135, 225

• 315

• Sacred Geometry – 1.414, 2.236, 1.90,

1.1755, 3.14

• Multiples of 144 – 288, 432, 576, 720 etc.

• Astronomic 88, 182, 188, 241, 365, 414,

615, 687

WHAT TO DO WITH THESE

NUMBERS

• Divide number of points into number of bars

• Ratio is the squaring of price and time

• Most pivots have some combination of these ratios

• Feel free to move decimal point

• Percentage change low to high or high to low

• Important application of Fibonacci #’s

STUDY OF BEAR BOTTOM

• Best percentage change readings I’ve

ever seen

• Russell was Gold standard

• Was only part of the story

• Cycles and symmetry goes back 21

years

• Importance to understand strength of

the bottom pivot

KEY DAILY READINGS

• Cluster of price and time=1.23 sq and

60%

PERCENTAGE % AT BOTTOM

• Perfect symmetry from 3 pivots

DOW 87 CRASH RANGE

• Range is 1108 points

NDX BOTTOM SQUARES DOW

RANGE

• 1108 weeks; take note of parallels

INTRADAY TRADING

• Price and time squares

• Best situations cluster with

support/resistance

• Support/resistance could be

retracement

• Always be aware of larger daily cycles

• Percentage change less important on

intraday charting

MOST BASIC SQUARE

• Numbers of bars ratio to points (5 min)

• 1-1 relationships are powerful setups

GANN GEOMETRIC ON 15 MIN

• 10 pts/55.5 bars completes .180 square

MORE NUMBERS=MORE

OPPORTUNITIES

• I’ve always taught to look for

Fibonacci/Lucas cycle symmetries

• When combining price/time we open up

understanding to greater

possibilities/profit opportunities with

almost ANY SET OF NUMBERS

• Fibonacci/Lucas numbers are part of a

greater overall ratio

TESTS OF FIBONACCI

RETRACEMENTS

• How do you trust a retracement?

• Give it a great square reading

NEXT SEQUENCE

• Test of support (blue line) .260 reading

INTRADAY EXTENSION

• 2.618 extension last leg down/confirms

with .359 reading

PRICE POINT MAGNETS

• Action attracted to 610/618 price points

KEY PRICE/TIME SQUARE

• 360 bars off low @ .0061 pts per hour

KEY POINTS TO REMEMBER

• These readings are the underlying structure of all markets

• They are leading indicators as we no longer need RSI/Stochastic/MACD, etc.

• We always wait for change of direction (no front running)

• 3 components before trading (support/resistance + square reading)

• And candlestick formation

BE CREATIVE

• Nat Gas turned at .429 pts per day in 429cd

THE CALCULATIONS

• Based on continuation chart at the time

• High was 15.517/low at 2.409

• There was 305 td/429cd

• 15.517-2.409 = 13.108

• 13.108/305 = .0429

• Bottom was on 429th calendar day

• Don’t forget 61 weeks

NEXT TRADING SEQUENCE

• Topped on a .0619 daily square

MAJOR 2010 SUGAR TURN

• Nothing rare about 318 days up

UNLESS ITS UP 317 WEEKS• Cluster of 318 days/317 weeks caused turn

XAU HIGH @ 608TD

GOLD CASH TO 99 BOTTOM

July/Aug double bottom

TEXTBOOK SQUARE

• POT topped at 121.36 in 121 days

2009 BOTTOM IN CORN

• Price 302 in 302 trading days/262 from

secondary pivot/383pts=1.46sq

CORN PRICE/TIME SQUARE

• Price point 302 in 302 days=RALLY

GREAT DEPRESSION

PRICE/TIME SQUARE

• 2.326 and 89% drop makes this method

timeless

INITIAL LEG OFF 80 SILVER TOP

• 3956/88d=44.95sq @ 78.55% (Month

continuation)

SAME CASE STUDY

• 78.5/90%/127wks/35.89sq

LARGER DEGREE VIEW

• Led to decade long low to early 90s

SUMMARY

• Perfect price and time (Corn, Nat Gas

and POT) rare but very important

• Every leg has some combination of

price and time

• Markets spiral in all degrees of trend

• We take snapshots of these points in

time and look for opportunity

• We use underlying structure to identify

patterns

MEDIAN LINES

• Help keep us grounded

• Give us a good visual on the trend

• Act as magnets to the price action

• When channel lines hit sentiment also

changes

NOT VERY CLEAR

• 5 min Dow Emini

IS THIS MORE CLEAR?

• Median lines give us GPS to pattern

WHY DID DOLLAR TOP LAST

YEAR?

• AT BIG MID LINE

BKX BOTTOM TARGET

• Parallel warning lines excellent tool

FLASH CRASH THURSDAY

• NDX bottomed out at 2 pitchfork levels

lower

PARALLELS ON BOTH ENDS

• Caught oil top and bottom both ends

CONFLUENCE

READINGS/PITCHFORKS

• Readings tell us if lines will validate

WHEN CHANNEL AND READING HIT

HEADLINE MATERIALIZED

SUPPORT AND RESISTANCE

• Polarity where support becomes

resistance

• Resistance becomes support

• Important supply and demand points

• The ‘A’ wave tendency

FORMER SUPPORT

BECOMES RESISTANCE

POLARITY CONTINUATION

‘A’ WAVE POLARITY

SMALLER ‘A’ WAVE

ADD PITCHFORK TO ‘A’

WAVE

GARDNER STUDY

• Studied musical savants (1973)

• Later found young children with access

to elite training attained same levels as

musical prodigies (1983)

• Conclusion: Innate ‘gifts’ only

potential for achievement

CHILD PRODIGIES

• Never attain excellence as adults

• Studies according to Barlow (1952)

• Feldman (1986) and Scheinfeld (1939)

• Studies show most exceptional adult

performers got instruction early and

often

REQUIREMENTS

• Passion/motivation

• Time, equipment and training

• Access to money

• Yours or acquired funds

• Don’t give up

WHY STUDY UNDERLYING

STRUCTURE?

• Many traders have syndrome of win a

few lose a few

• Only way to win is understand why you

win

• Develop conviction with higher quality

setups

• Put yourself in a position to let winners

run

GANN’S MOST IMPORTANT

DISCOVERY

• History repeats

• Past best predictor of future

• Squaring price/range and time

• Equal number of points balances equal

number of periods

• Adapt universal principle to present

day applications

Modern Era Squares

• Gann didn’t have to deal with multiple

indices

• Modern markets more complex

• We must combine various indices to

make this work

• All indices related to each other in

some fashion

APPLICATIONS

• Catch important turning points in key

indices

• Buy and sell points in stocks

• Leverage information in important

sectors

• Use in any market

• Knowledge in one area allows us to

anticipate moves in related markets

DOW 87 CRASH RANGE

• Range is 1108 points

BKX SYMMETRY

AMGN SETUP

• 6.55 range at 65 trading days

AMGN/BTK CONNECTION

• AMGN Led whole sector up in Dec

RIMM CASE STUDY

• Found trading low at 55.49 @ 55 days

RIMM NEXT SEQUENCE

• High at 63.94 at 64 days

SYMMETRY ENDS CORRECTION

• Drop ends at 6.46 after 64 sequence

DUSA PENNY STOCK

• .42 correction in 41 days

SPECULATION GANN WINNER

• Everyone wants a bio spec winner

CELGENE CASE STUDY

• 60.90 in 61.5 days off high/ low at

64days (creative variation of concept)

BIG DOW AUTUMN RALLY

SPX LONG TERM CHANNEL

NIKKEI 233 CONDITION

TRAINING PROGRAM

• Cover materials from today in greater

detail (3 major components)

• One on one attention from me

• Email correspondence go at your own

pace

• Includes Gann square of 9 and

• Normally $747, 1 week special at $697

ULTIMATE GUIDE TO PATTERN

RECOGNITION ROUGH CUT

• We only had time for several chapters

• Adapted from the training program

• For the individual who doesn’t want

personal attention

• Covers Andrews, Gann ratio, Gann

calendar, range/price square, sq of 9,

support/resistance, trading strategies

and psychology

MORE INFORMATION

• www.Lucaswaveinternational.com

• fibonacciman@aol.com

• lucaswaveman@gmail.com