Technical Analysis - Dow and All Ords with Gann Angles

It's more than half a year since the last Gann Analysis. Things have certainly taken a turn for the worse. The doomsayers say that the bottom is still far away. The optimist are trying to find any shred of evidence to the contrary. So what does the Gann Angles tell us? Below are the weekly Dow and All Ords with their updated angles.

The Dow is very interesting in that it had stuck to the line of Gann +10 for about a year and showed signs of coming off this March. Now it has definitely broken off the Gann +10 angle. Question is how far will it drop. According to Gann, it would tend to drop to the next support angle. However the Gann +5 angle is still quite far from reach. If this is simply projected, the Dow may fall to 8000 by March 2012.

The All Ords has clearly broken the Gann 1x1 drawn from the low of 2003. The Gann 1x1 is the strongest or most stable angle. The other closest angle is the Gann +2.5 (Pink) from the low of 1991. This angle is significant in that it was the support for the 2009 low from which the market made a strong recovery. Will the same angle provide a resistance for the current trend? If yes, then the bottom of the current market will be about 3750-3800 in mid October 2011. Looks like we are almost there! If it does not support, then it will fall a long way more.

Interestingly, if Oct 2011 is to be the bottom, this would break the trend that the market crashes in October. In addition the Dow Graph would be resting on the Gann +7.5 angle (not drawn, but imagine between the +5 and +10 angles) in Oct 2011 at about 10,100-10,200.