How does the current Credit Crunch directed Stock Market crash compare with he 1929 one which brought the Great Depression? Have a look at not only the chart I made below, but also W.D. Gann's own analysis using his angles and time vs price method.
---- Excerpt from Gann's "The Basis of my forecasting method" -----
The 45 degree angle drawn from the extreme high point of a stock is most important and when it is crossed, a major move may be expected. For example:
On the weekly chart for the Dow-Jones Industrial Averages, note the 45 angle moving down from 386, the high of Sept 3, 1929. January 12, 1935 was 279 weeks from the top. Taking 279 from 386, we get 107, the price at which the angle of 45 would cross. These averages advanced to 106.5 in the week ending Jan 12, 1935 -- then reacted to 100 in the week ending Feb 9. This was the first time that they had held within one-half point of this angle and the first time that they had ever reached it since the top was made.
During the week ending Feb 16, 1935, the Averages crossed the 45 angle at 103 for the first time, and during the week ending Feb 23, 1935 advanced to 108, where they hit the angle of 45 moving up from the low of 85.5 in Sept 1934, and also hit the angle of 2x1 coming up from the low of July 8, 1932. This was a strong resistance point and the Averages reacted to 96 in the week ending March 18, 1935, where they rested on the 45 angle from the 1929 top and also where the 3x1 angle (a gain of 1/3 point per week) from Sept 1929 coming up from "O" crossed the angle of 45 coming down from the 1929 top. This was a strong support point for a change in trend. The advance started and the Averages moved up to new high levels. This proves the importance of angles, especially the 45 angle drawn from any extreme top, and the point at which any other angle crosses the 45 angle.
Watch the 45 angle from 1929 top when it reaches "o" or when it is 386 weeks down from the top. This will be in the latter part of January, 1937. Note what happens at that time.
------------------------------------------------------------------------
Posts
No comments:
Post a Comment