Timing the grain markets through the understanding of cycles.
Identifying the major trends that bring you the most profitable opportunities.
making the complex understandable
Grain Market Timing
This phrase "Law of Vibration" is referring to sound waves. Specifically it is in reference to the sound vibrations correlated with the musical scale. Before we jump into the nuts and bolts of market behavior let us first lay out what the musical scale looks like mathematically. The strings inside a piano that correspond to the notes have differing lengths that are responsible for producing their individual tones. In musical terms the fundamental tone is "C". The successive notes on a piano are C D E F G A B C. You will notice that the succession begins and ends with a "C". This is because there are 7 different notes with the eighth being the "octave" which is simply a doubling of the original "C" and starts the cycle over in the next octave. Below is a diagram showing the notes with their corresponding mathematical ratios.
C D E F G A B C
1 9/8 5/4 4/3 3/2 5/6 15/8 2
A quick introduction to the relationship between the notes would show that the original "C" is multiplied by 3/2 to create "G". The average of C and G is exactly E. We can prove this mathematically simply by noting that 1 + 1.5 = 2.5. Dividing 2.5 in half to get the average = 1.25 or 5/4. Furthermore notice that D is exactly the average of C and E. Another set of notes that are perfectly spaced mathematically would be C, F, A, and the octave C. These 4 notes are all separated by exactly 1/3. As you can see there is equal spacing all over the musical scale. Being familiar with these relationships is required to understand Gann's "Law of Vibration".
Let us now go directly to the recorded history of the market to see what value this scale provides. The following analysis begins at the MAJOR low of September 13, 1977. The price here is $5.06. This price represents the fundamental tone "C". However, you will see that the ideal measurement often uses the value of 516 which is where Soybeans made MAJOR lows all during the decades of the '70's, '80's and '90's. If we divide $5.06 by 2 the result is 253. Adding this half onto 506 produces 759. In other words we are multiplying 506 by 3/2 to get 759. Notice the top of 5-30-78 in the chart below. This date was 259 (half of 516) days after the 9-13-77 low and it was 253 (half of 506) cents up. Notice how the time and price measurements BOTH show $5.06 dividing in half to reach this $7.58 top. This was the creation or division of the note "G".
Now, as was pointed out earlier, the tone E is the average of C and G. This is the next "note" to be created. From the 5-30-78 top beans drop into the August 8, 1978 low. From this date, price rallies to the June 22, 1979 high of $8.59. This top is 647 days from the $5.06 low. 647 is 5/4 of 516 which creates the note E and the August 1978 low is half way to the June 1979 top. Notice how accurately the $8.59 price matches the note A, and how accurately the 647 days matches the note E.
From this $8.59 top, price is divided by the all important 3/2 ratio. Both time and price are equal in this 3/2 decline as it was in the 3/2 rally off the $5.06 low. Price then rallies by 5/3 of the $5.70 low to reach $9.56. This was the same ratio that 516 increased by to reach $8.59. Notice also that $9.56 represents the last note in the scale, namely the note B. From here the only other 2 notes not discussed are 688 (F) and 1032 (C octave). These 2 measurements are seen in the next 2 major turns which are not included in the chart. The low of $5.18 on October 4, 1982 is 683 days down from the 1980 top. This distance is divided almost exactly in half with 344 days up to the September 13, 1983 top of $9.57. This double top is separated by 1027 days which is very close to being exactly 516 x 2.
"THE LAW OF VIBRATION"
The resulting decline ends on August 8, 1978 at $6.01. This date is the creation of "E" denoted mathematically by the 5/4 ratio. The fundamental tone of 506
The market divides in proportions that are identical to the musical scale. What's most amazing is that all these points were the extremes reached in price where the trends changed. We did not cherry pick insignificant points to try and prove the theory. The law of vibration defines exactly where in price the market will go, and WHEN it will get there!
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From the $5.14 low of 8-20-91, soybeans vibrate up to the $6.40 mark which is the 5/4 or 1.25 ratio. The next harmonic ratio would be 9/8 or 5.78. This is represented at the low of 6-16-93. The 5/3 ratio = $8.56 top in '96
W.D. Gann once stated "the law of vibration explains every possible phase and condition of the market". This statement is intriguing to say the least. It implies a knowledge of the market that nearly everyone assumes is impossible. In the following examples, I would like to illustrate how accurately time and price conform to this "law of vibration". The discussion of this topic is somewhat more complicated because this concept involves several numerical ratios. If you are serious about studying the markets, I strongly advise that you investigate this material for yourself. Working with the actual measurements of time and price has a way of impressing upon the analyst the remarkably accurate nature of market behavior.
C D E F G A B C
1 9/8 5/4 4/3 3/2 5/3 15/8 2
516 580 645 688 774 859 967 1032
1977 - 1980