GANN’S GREATEST SECRET Dr. Hans Hannula, PhD, RSA, CTA copyright 1993, MicroMedia all rights reserved MicroMedia Box 33071 Northglenn, CO 80233 (303) 452-5566GANN’S GREATEST SECRET Dr. Hans Hannula, PhD, RSA, CTA prepared Feb. 6, 1992 No one person has spawned more market folklore than W. D. Gann. Every issue of every market magazine has ads for courses that in one way or another reveal a GANN SECRET. Most of these courses are standard Gann material, based on one of Gann’s courses or some letters, or someone who knew Gann, etc. With everyone out selling all these secrets, how can there be any left? Well, there is. Most people who are out selling Gann material (1) don't really understand it, and (2) haven't done their own homework on it. What you are about to read not only shows you one of Gann’s Greatest Secrets, but tracks it to its source, analyses it, applies it, and extends it When you are finished, you will have a whole new appreciation for Bill Gann, if not as a trader, as a student of the forces that move the markets. | assume that by now you have read every book written by Gann, and maybe taken a Gann course or so. | will not cover any of Gann’s work available elsewhere, such as Gann angles, squares, etc. | prefer to provide you something totally unique. That's how | add value. This is a journey more than a report. You are to be involved, think, and participate. | will lead you down the path, show you a few things, and challenge your mind. | expect you to study carefully, think about what you read, and figure out how to integrate it into you own market activities. Now let us begin. Gann’s Master 20 Year Forecast Chart Figure 1 is an admittedly poor copy of Gann's 20 Year Forecasting Chart. If you study it very carefully, you will see that it is a plot of the Dow Industrials, repeated every 20 years. It starts at 1901 and plots prices to 1920, then starts again at 1921 and plots to 1940, etc. So what was Gann doing? He was simply looking for the Jupiter/Saturn cycle in stocks. Throughout his life, this is the one chart that Bill Gann always kept up to date. If you haven't learned yet that Bill Gann was an astrologer, you now know. Financial astrology has for scores of years, long before Gann’s time, held that Jupiter was the Bull of Business, and Saturn the Bear. So itis very logical for Mr. Gann to be trying to find the JS (Jupiter/Saturn) cycle in stocks. fone starts a chart when J and S are in a line on the same side of the Sun (called a conjunction), as they were in 1901, and plots prices as Jupiter moves around and again catches up with the slower moving Saturn, you have plotted price versus one JS "synodic" (coming together) cycle. If you repeat this for five or more cycles, and then "stack" thepreure 1. agcharts, or overlay them on the same piece of paper, any consistant pattern should be visible. If you are mathematically inclined, you could average the prices for each corresponding month in each cycle, and use that to predict the next cycle. This is a very ancient cycle extraction technique. It relies on the assumption that effects due to causes other than the cycle under study will fall above and below the average value of the cycle and thus cancel out. Why 20 years? The average JS synodic cycle is 7253.4668 days long, or 19.858564 years. But because of the eccentricity of the planetary orbits, the value can be approximated as exactly 20 years.Gann's Astrological Wheels If you've searched far enough in your pursuit of Gann knowledge, you have probably come across either Figure 1 or Figure 2. Both are Gann astrological wheels. They start on the right at zero degrees on March 21st, the spring equinox, and move counter clockwise around through the "circle of the year" of 360 degrees. Note that the top is the summer solstice, the left the fall equinox, and the bottom the winter solstice. Every 15 degrees is marked. This is based on the naturally occurring harmonic divisions of the circle into halves, quarters, thirds, sixths, eights, twelveths, and twenty-fourths. Gann observed from any years of study that tops and bottoms in stock and commodity prices fell on one of these multiple of fifteen degree lines. He further observed that at the same times, certain planets were making major configurations, These are marked with the astrological symbols and the year. If you use a magnifying glass, you can read many of these notes. You can also read in the center of the chart, the astrological symbols for the twelve divisions of the zodiac, Take a few minutes now to study these charts with a magnifying glass, and see if you can identify some of the planetary configurations shown. A reference set of astrological symbols is on the next page.© sun 2 Noon Mercu : y 2% Uranus Y Noptune E Pluto @ Moon's Node T Atios 8 Taurus 3 Gemini & Cancer ® Leo WF Virgo & Libra TH, Scorpio £ Sagittarius 8 Capricorn = Aquarius i Pisces conjunction 30° semisoxtile 45° semisquare 60° soxtile 90° square 120" trine 195° sosquisquare 150° quincunx 180° opposition SOP OeNKANow that you've looked a little at Gann’s wheels, you should at least believe that Gann used astrology in his trading. If you looked very carefully, you also noted a lot of JS configurations marked. These are usually the opposition ( same side of sun) or conjunction (opposite side of the sun). You also may have noted that there are five concentric circles. These are representative of Mercury, Venus, Earth, Jupiter, and Saturn. At this point it's time to do your own investigation of the JS cycle. Figures 4 throuh 8 are twenty year plots of the Dow industrials. Along the top are the heliocentric (sun centered) Positions of the Juptiter/Saturn cycle. The numbers are the number of degrees from Conjunction, starting at 0, through the opposition at 180 degrees, back to the conjunction at 360 degrees. Of course, 360 degrees is then end of one cycle, and is the zero degree point of the next cycle. Natural cycles tend to break into subparts of the cycle. For example, if a cycle divides into four swings and starts at a low, it would have a low at 0 degrees, a high at 90 degrees, a low at 180 degrees, a high at 270 degrees, and a low back at 360 or 0 degrees. A division into twelve swings, the tums are every 30 degrees. In a division by eight, the turns ara every 45 degrees. Now take a pencil and lightly sketch in your version of the JS cycle in Figures 4 through 8. Put a dot below the Dow for a low at that degree, and a dot above the Dow for a high. Then sketch lines to connect the dots to see if you can visualize the JS cycle. Figure 4 has started an example.m0 0018 _riss,z25 200 20 _195,,44180 =~s on » az-< ertorsrarn er orsrore ortortrorn er ~er~rore erversrarn ortortrorn er~orsrore er ~ersrore 0 1 I 0 1 1 1 9 0 8 0 1 1 0 1 I 1 9 0 6 0 1 L 0 1 1 1 9 0 5 or er root or~er~raonm er~or~raon er~or~raor er er~race 2/ 3/1992 DOW WITH JUPITER/SATURN (alpsplot yojdsdje) NUNLVS/HALIdN? HLIM MOG erter~rone er~er~ronr er or rane ertersrace er~or~rave er~ertroen 9 er~ortroe ertor~roen er~or~rose er or race ertor~rosn er~or~ravo ann ere"er-or~rowo or ~or~rone or~or~rone Or~or~ronn or~or~rone oo eor~or~roneS zwei 225 20 orter~rone 0 ° 1 1 0 1 ! 1 9 7 1 er er~rane er er~rawo $95,150 0 1 1 0 1 ! 1 9 6 8 er~or~raon er~er~roce 0 1 1 0 1 I 1 9 6 5 IUPITER/SATURN (alpsplot