The legendary trader WD Gann said:" In making my calculations in the stock market, or any future event, I get the past history, and find out what cycle we are in, and then predict the curve for the future, which is a repetition of past market movements..." ( Tunnel through The Air, page 76).
Taking the history of the XJO from April 2010 last year, the Gann vibration number was computed to find out where we are within the current cycle, and then the same cycle was used to predict the curve for the future, and the following chart is the result....
Observations ============
1. The green short horizontal lines mark the chord length or the turning point length ( approx. 3 days )for the tops and bottoms of each cycle from the vibration number. It is within this chord length that the XJO has been making a turning point as shown on the chart.
2. The red line connecting the tops and bottoms shows the nearest pivots corresponding to each cycle top or bottom. Sometimes they fall smack on the actual top or bottom (eg. between sept and Oct 2010), and sometimes they fall near to the tops and bottoms with some run-off ( eg. between Aug & Sept 2010), but by and large, they provide a good range that is tradeable and most important profitable. In other words, not really exact,but just approximate but accurate enough for profits:).
3. Looking at the current cycle corresponding to the last price bar at the close of today(Thursday), we can see that we are now within the chord length for a change in trend, and that change in trend is a bottom...in other words, we are most likely at or very near to a bottom at this time. ( It seems to agree with the Master Time Factor Forecast that I've posted earlier this (Thursday) morning.
3. With the XJO cycling on its vibration number, we can project the curve into the future as shown to estimate the next cycle top for XJO. This is NOT picking a top, but to make an educated estimate of the chord length to help in timing, and wouldn't this info be somewhat useful if we are traders..wouldn't this help in timing the short term exit?
Let's see how this will work out in the next few trading sessions:)
(20min delay)