The Foundation: Gann’s Master Time Factor
At the heart of all Gann analysis is the belief that time is the most critical factor in market movements. Gann’s “Master Time Factor” is the idea that the future is a repetition of the past, and market movements are cyclical, working out time in relation to previous cycles. The Gann Emblem is a symbolic and practical application of this principle. It is a tool for visualizing and measuring the passage of time against the movement of price, seeking to identify moments when a market has reached a state of harmony or “squaring” of time and price.
Deconstructing the Gann Emblem: Key Components
The Gann Emblem is a geometric representation, often depicted as a square within a circle, with lines and angles radiating from a central point. Each component has a specific meaning in the context of market analysis:
- The Central Point: The emblem is always anchored to a significant historical event on a stock chart, such as a major high or low. This pivot point is the “zero” from which all future time and price measurements are taken.
- The Circle: This represents a complete cycle of time, typically a year or 360 units (days, weeks, or months). The circle is divided into segments corresponding to astrological and seasonal cycles, with key divisions at 90, 180, and 270 degrees. These divisions correspond to the change of seasons (equinoxes and solstices) and are considered powerful turning points.
- The Square: The square is the key to Gann’s “squaring of price with time.” It represents a market’s geometric progression. The corners of the square correspond to key turning points (0, 90, 180, 270 degrees) within the cycle. When a stock’s price or range aligns with the geometric progression of this square, it is said to have “squared out,” and a reversal is highly probable.
- The Cardinal and Ordinal Crosses: These are the lines that run through the emblem. The Cardinal Cross (horizontal and vertical lines) points to the four main divisions (0°, 90°, 180°, 270°), representing the most powerful support and resistance. The Ordinal Cross (diagonal lines) points to the 45°, 135°, 225°, and 315° divisions, which are also significant but generally considered secondary.
- The Gann Angles: The emblem’s design is intrinsically linked to Gann Angles, which are lines drawn at specific slopes (e.g., 1×1, 2×1, 1×2) from a central high or low. The most important is the 1×1 angle (a 45-degree line), where one unit of price moves with one unit of time. When a stock’s price is above this angle, the trend is bullish; when it breaks below, a trend change is signaled.
Practical Application: Using the Gann Emblem for Timing
Using the Gann Emblem is a process of forecasting future turning points by projecting the geometric and time relationships from a past pivot. The goal is to find a confluence of price and time that signals a market reversal.
1. Identify a Significant Pivot: The first step is to identify a major high or low on a stock’s chart. This is the foundation of your analysis. It should be a point of historical significance, such as an all-time high or a multi-year low.
2. Measure the Price and Time: From this pivot, you measure both the price movement and the passage of time. The key is to find relationships between these two factors. For example, if a stock rallied 40 points, you would look for a time cycle of 40 days, weeks, or months.
3. Project the Time Cycles: Using the divisions of the Gann Emblem, you project key time periods from your pivot date. For example, if the low was on January 1st, you would mark your calendar for 90 days out (early April), 180 days out (late June/early July), and 360 days out (the next January 1st). These dates represent potential turning points due to the natural and seasonal cycles they represent.
4. Project the Price Levels: Simultaneously, you project key price levels from your pivot. This can be done by using the concept of squaring, where you identify price levels that are perfect squares or multiples of the original pivot’s price or range. For example, a major price swing from 50 to 100 could signal that the next major turning point will occur when the price reaches 150 or 200.
5. Look for Confluence: The most powerful signal from the Gann Emblem is a confluence of these two projections. A high-probability reversal is indicated when a key time cycle (e.g., 90 days from the pivot) coincides with a key price level (e.g., a perfect square of the initial price). A break of a key Gann Angle at this specific moment further strengthens the signal, suggesting that the balance between price and time has shifted.
The Role of Astro Studies
Your interest in astro studies is particularly relevant here, as Gann’s methods were heavily influenced by them. Gann believed that planetary movements and their geometric aspects (e.g., a 90-degree square or a 180-degree opposition between planets) had a profound influence on human behavior and, by extension, market cycles. The Gann Emblem’s 360-degree circle is a direct nod to the zodiac, and its divisions correspond to the positions of planets within that wheel. Advanced Gann traders often overlay planetary transits onto their charts to confirm turning points predicted by the emblem, looking for alignment between celestial events and the market’s own geometric cycles.