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Gann held that time is the most important element of trading. Time is the factor that determines the length of a commodity's price trend. When time dictates that trending prices should react, prices may stabilize for a short period, or they may fluctuate within a tight range, but eventually they will react by reversing direction. Time is the element that will determine WHEN prices should react.

Certain price reactions are found to occur during specific times. The actual TYPE of price reaction can be anticipated, and pre-determined, by using Gann time rules.

Gann time periods last not only days or weeks, but months and even years. Gann Angles (these are discussed in the section, "Gann Angles") that affect prices in December could very well have started in the previous January.

Gann's trading year is first divided in half, equivalent to 6 months or 26 weeks. The year is then divided into quarters, totalling 13 weeks or 90 days. The year is then still further divided by eighths, and then by sixteenths. And then, after you think you understand all of this, you find that Gann's year is also divided by thirds.

There are also important time PERIODS within the Gann year. For example, since a week is 7 days, and 7 times 7 is 49, Gann's work found that 49 is a significant number. Important tops or bottoms may occur between the 49th and 52nd day, although an intermediate change-in-trend may occur between the 42nd and 45th day, because 45 days is 1/8 of a year (Note: this is outlined in "How To Make Profits In Commodities" by W. D. Gann, on page 57).

Other time periods that were important to Gann, at which a price reaction could be expected, are:

• Anniversary dates of major tops and bottoms.

• 7 months after a major top or bottom for a minor reaction.

• 10 to 14 days is the length for a reaction in a normal market. If this period is exceeded, the next reaction should be expected after 28 to 30 days.

If you're not already confused, understand that Gann's year may not only be calendar, but "fiscal" as well; i.e., starting from major tops or bottoms. Gann's time rules consider many periods, including seasonality, Biblical references, and astronomical events.

Chart 3 is an example of astronomical correlations on a Gann chart. One of Gann's beliefs, stemming from his "natural order' concept, is the influence of planetary movements on earthly events, such as the moon's perceived effect on tides. This "cosmic perspective" of Gann is unlike conventional astrology, in that planetary influences, like units of price, are unique to each market.

Chart 3 was prepared by Genesis Capital's Director of Research, Gregory L. Meadors. Mr. Meadors is a technician with 20 years of experience in this highly specialized field of Gann analysis.

Chart 3



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