W. D. GANN CYCLES FORECASTING HIGHS AND LOWS
Renown cycle trader W. D. Gann used several types of cycles in his trading and analysis. In his writings, Gann uses 'cycle' to refer to up-and-down market legs, trend changes, regular periodic cycles, and return cycles, and volume exhaustion cycles. Each has their own specific market application, and each behaves in a different manner. W. D. Gann's "up & down" alternating cycles from 'The Tunnel Thru The Air get the most press as the "unicorns" or Holy Grails of cycles. This page was created to explain and showcase Gann's alternating cycle technique, using Gann's Law Of Vibration. Scroll down the page to see these cycles mapped out. First, let's be clear- Gann discovered two types of alternating (up/down) cycles. The first is "Cycles of Repetition," and the second is called "Cycles of Progression." These Cycles of Progression are included and taught in our "W. D. GANN: MAGIC IN THE MARKETS" Training, because we find them superior in many ways that we explain below. Cycles of Progression alternate in legs that sequentially go up-down-up-down, etc. UP always follows DOWN, and DOWN always follows UP. The green-colored cycle lengths in the examples below are 'up' cycle legs, and the red denote 'down' legs. After the cycle turns up, there should be a move of magnitude to the upside and the cycle leg should finish higher than when it opened or even. After the cycle turns down, the opposite is predicted to be true. The cycles rarely mark the exact high or low of the period. Click the graph to the right to expand 1/1/2021 - 9/30/2022 trading strategy performance of Gann's Tokyo J-1 Cycle. Per Gann's directions, we simply combined the cycles with Arcana long/short trend filters and used a 1.5/1 reward risk of the last pivot. To integrate technical analysis, we also threw in some institutional moving averages for the filtering. The cycle changes served as triggers. We apply a simple but overly-strict test for these cycle legs. For "up" cycle lengths, we demand that the price at the very end of the cycle leg be higher than price at the very beginning. And the opposite for down-cycle lengths. The yellow cycle lengths marked in the annual examples below denote cycle lengths where the particular cycle leg failed that test. Failures are few and far between, and the majority occur during off market hours for the monthly cycles. Even in legs that fail our test, price often makes a significant moves in the desired direction during the cycle in the majority of cases. So even cycle legs that we deem 'failures' have trading value. When you have an accurate Cycle of Progression, the sequential alternation of the cycle lengths remains constant, even when a cycle leg fails our test. The alternating sequence of the cycle remains the same despite a price failure in the previous leg. If this condition does not exist, the prediction value for futures legs of the cycles is worthless. "Cycles of Repetition" (we don't use or teach these) suggest a failed cycle leg shows that the cycle sequence (up/down sequence) has "inverted," or changed. These inversions are extremely difficult to predict, and often lack a cohesive formula. That is why we focus solely on "Cycles of Progression," and consider them superior. As Luther Jensen points out in his ACSM book, unforeseen news has the power to cause market action to fail a cyclical move. This observation supports the thesis that the sequence in "Cycles of Progression" always remains constant, and that external news caused the failure instead of the cycle. Therefore, the sequence of these cycles is always constant and predictable. Our back-testing shows true "up/down" RG7 and Annual Cycles of Progression have a consistent success rate for the direction and duration of cycles legs over 84 - 93%. On the next page are examples of Intra-month lunar cycles. DISCLAIMER: Our legal counsel forbids us from posting future predictions. All charts copyright Arcanum Market Research, all rights reserved. Below you will find over 7 years of the “RG7,” and Annual Cycles for the last few years. W. D. Gann encoded the RG7 cycle in the “Robert Gordon’s 7 Days” chapter in “The Tunnel Thru The Air.” He alludes to it in a period of retrograde in the war narratives as the "Tokyo-J-1" airship. It is a bigger cycle. Scroll through the gallery below to get from 2015 to 2022. All the cycles below were drawn out in advance from an objective formula. The 2022 Annual Cycle on the SP 500 is almost complete. So far 84% of the cycle legs, predicted in advance, are successful!
INTRA-MONTH LUNAR CYCLE PAGE
W. D. GANN'S RG7 CYCLE (Tokyo J-1)
2022 ANNUAL ALTERNATING CYCLES
2021 ANNUAL ALTERNATING CYCLES
The 2021 annual W. D. Gann cycle is now complete. 92% of the cycle legs succeeded in predicting direction and duration ahead of the market.
2020 ANNUAL ALTERNATING CYCLES
The 2020 annual W. D. Gann cycle is now complete. 92% of the cycle legs succeeded in predicting direction and duration ahead of the market. The cycle also endured the bounce from the most volatile time in US Index history.
2019 ANNUAL ALTERNATING CYCLES
The 2019 annual W. D. Gann cycle is now complete. Not bad, 89% of the cycle legs succeeded in predicting direction and duration ahead of the market. The cycle also held up pretty well during the black swan.
2018 & 2017 ANNUAL ALTERNATING CYCLES
The 2018 annual W. D. Gann cycle is now complete. Of note was the "message to the Fed" pattern that began October 3rdish. This was the same "fall for no apparent reason" that we ran into in August 2015. Same environment- the FED threatening to raise and the market yelling at them, "Don't you dare or we'll do this!" Suring this pattern the annual cycles saw the failure of two legs in a row. Very rare, but it denotes market manipulation against natural law. Once again, 89% of the cycle legs succeeded in predicting direction and duration ahead of the market.
