Tuesday, July 26, 2011

The Gann circle explained

Gann related the circle (360 degrees) the the year.  He divided the circle by 2/3/4/8/12 etc to give you  180, 120, 90, 45, 30 degrees (days) etc.  

Businesses report quarterly.  90 calendar days is the 65-70TD cycle (I suppose to be perfectly accurate Gann should have used a circle plus 5 degrees for 365 days).  65TDs is 1/4 of 52 or 13 weeks or one quarter.  Now one would expect a cycle to track this quarterly event.  Realize though this cycle may invert (good reports give you tops, bad reports gives you bottoms). 

45 degrees or calendar days is (360/8) is 33TDs (half a quarter).  Another cycle we are familiar with. 30 degrees or calendar days is 22TDs.  15 degrees is 11TDs.

I hope you get the idea.  Now if we plot this information on a circle and associated days of the year we end up with something like this:

Assuming I chose a valid starting point this gives you the dates you should watch for pivot points over the next year (0, 90, 180, 270 is the quarterly earnings cycles; 0,45,90,135,180,225,270,315,360 is the 33+TD cycles, etc) .
Does it work? Get back to me in 1 year.

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