James Smithson - The Time Factor of Gann
James Smithson - The Time Factor of Gann
GANN
By James Smithson
SUMMARY
INTRODUCTION
"The most important thing of all is the Time factor, which I use
in
making up my annual forecasts. It is not my object here to give away
that secret, but I am showing you plain enough and giving you rules
enough that, if you follow them, you will be able to make a success
in the stock market" ("Truth Of The Stock Tape", 1923,
page 116).
"Robert had gone deeply into the Bible study in order to learn
more
about the great science of Astrology" (page 213).
"He read all the books he could get on astrology and began to
understand why thing had happened as they had" (page 215).
THE FRONT COVER OF GANN'S NOVEL ENTITLED "THE TUNNEL THRU THE
AIR"
THE BACK COVER OF GANN'S NOVEL ENTITLED "THE TUNNEL THRU THE
AIR"
Since Gann's book "The Tunnel Thru The Air" reveals the
"valuable
secret" that astrology really works and, by implication,
astrology is
the basis of Gann's stock and commodity market forecasts, one
should
look for evidence of the use of astrology by Gann in his other
writings.
Gann produced and sold separate courses for trading the stock and
commodity markets. These courses overlapped to some significant
extent. One chapter common to both courses is entitled "The Basis
Of
My Forecasting Method: Geometrical Angles". An important
quotation
from this chapter is as follows:
"We use three figures in geometry, the circle, the square and the
triangle. We get the square and triangle points of a circle to
determine points of time, price and space resistance. We use the
circle of 360 degrees to measure time and price.
There are 360 degrees in a circle, no matter how large or small the
circle may be. Certain numbers of these degrees and angles are of
vast importance and indicate when important tops and bottoms occur on
stocks and commodities, as well as denote important resistance
levels.
Every movement in the market is the result of a natural law and of a
cause which exists long before the effect takes place and can be
determined years in advance" (Stockmarket Course and Commodities
Course).
There are 360 degrees in any circle, the largest of which is the
great circle of the heavens, or the zodiac. Certain points on this
zodiac (identified by a precise number of degrees) are very important
because they relate to specific stocks and to specific commodity
markets. Consequently the angles between a planet and these specific
points on the zodiac and also the angles between two planets are very
important because they signify tops and bottoms in the stock and
commodity markets. Two important angles (or "aspects", as
they are
called in astrology) are the square (or 90 degrees) and the triune
(or 120 degrees). Since the angles between a planet and a particular
point on the zodiac or between two planets can be calculated years in
advance, stock and commodity markets can in principle be forecast
years in advance.
The important point to note here is that Gann emphasised the seasonal
tendencies in the stock and commodity markets to encourage his
students to think about and to identify the cause. The cause is the
position of the planets, and in particular their angles to a specific
point on the zodiac (which is of course astrology).
Gann died in June 1955 and therefore these astrology letters are some
of his last teachings. However, it is notable that in these two short
letters Gann does not reveal any clear and specific method of
astrological forecasting of the commodity markets. Instead, Gann
encouraged his student to observe, experiment and learn for himself
how the angles between the planets and their angles to specific
points on the zodiac forecast the changes in price trends. Indeed, it
appears that Gann had for over fifty years kept secret his method of
market forecasting and at the age of 76 he was not simply going to
reveal it to a student. Nevertheless Gann was continuing his lifelong
practice of helping his students to make speculation a profitable
profession by giving them guidance and letting them learn for
themselves.
"I soon began to note the periodical recurrence of the rise and
fall
in stocks and commodities. This led me to conclude that natural law
was the basis of market movements. I then decided to devote ten years
of my life to the study of natural law as applicable to the
speculative markets and to devote my best energies toward making
speculation a profitable profession" ("Ticker & Investment
Digest"
interview, December 1909).
i) The angles between the planets (the most important of which is the
90 degrees, or "square", angle);
ii) The angles (especially the 90 degrees angle) between the planets
and particular points on the zodiac;
iii) The longitudinal position of the sun and especially its 90
degrees angle to particular points on the zodiac (because this causes
the seasonal tendency in a particular market).
3. Although there are many individuals and companies around the world
claiming to teach "Gann analysis" through books, courses,
videotapes
and computer programs, they should certainly be avoided. This is
because, since none of these individuals or companies can produce an
accurate annual forecast of the stock or commodity markets, they do
not in fact teach Gann's real method.