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
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The Movement of TIME and its relationship to PRICE
We have just seen at the end of the previous example that the POSITION of Time will, at times, meet the POSITION of Price. This next example will now illustrate how the MOTION of time is related to the MOTION of price.
If this is the first time the you have been introduced to studying the markets in this manner it is likely you are somewhat taken aback. Imagine W.D. Gann trying to explain these type of concepts to the public in the 1920's. It was not easy!
It was shown that the major low of December 1975 "squared out" with the position of the earth. In other words PRICE supported at $4.40 when the position of TIME (earth) was at 440. From this major low an enormous advance carries price to $10.76 on April 22, 1977. This is a rally of 636 cents. Nearby soybeans then dropped until September 13, 1977 where it finally bottomed at $5.06 To begin the analysis of this complete move, first notice that there are 637 days between these 2 major lows. 636 cents in price movement is nearly identical to the 637 days of time during this period. Time equals Price. Secondly, the $10.76 price has a relation to time that is more subtle. If the movement of price is plotted around the circle, you can see that price moved 276 degrees. This is simply seen as removing the extra 360 degrees around the circle or understanding that 636 = 276 + 360. Removing the extra 360 and reducing the movement to 276 degrees allows one to notice a balancing. The midpoint of 440 and 716 is 578. Earth reaches this position of 578 at the end of April. This means that when the $10.76 top is made on April 22nd, the earth is at the midpoint of $10.76 (716) and $4.40. These two prices of $10.76 and $4.40 have a balancing point (midpoint). The earth reaches that midpoint at the end of April, the day that the $10.76 top occurs in 1977! Thirdly, notice where the resulting bear move finally ends. The market drops and reaches the extreme low WHEN the earth reaches 716 (1076) which is September 13th! To restate what took place, the dates (time) that the market turned are the same locations on the circle where price turned. The action contained in this chart is a great illustration of the relation between time and price. Hopefully, you are beginning to grasp why W.D. Gann made the assertion that "Time equals Price".
Another wonderful example of time and price being essentially the same thing can be seen in the chart below in a move starting in 1987. The major low of 2-27-87 occurred at the price of $4.78. From this low, price rallies for 480 days (same number as seen in price). The resulting decline also lasts 480 days. The market bottoms on October 13, 1989 at $5.40. It is interesting that the rally and the decline both lasted 480 days (which is the price low in '87). But much more importantly, notice the location of the earth when these turning points were made. On June 22, 1988 the earth would be equal to 630. The price of $10.99 would be equal to 739 (1099-360 = 739). As you can see on the illustration, 630 is the balancing point between 739 and 517. Please notice that the end of this move occurs on October 13 where the earth reaches the position of 1099. This is identical to the 1977 low, where the earth reached the position equal to the $10.76 high.
The midpoint of this motion occurs at the number 578, the position of the earth at the end of April!
This analysis began at the October 30, 1973 low and has progressed along a continuous time line. However to further illustrate this principle of Time moving thru Price, I would like to skip ahead to the year 1987 which contains a very similar example. After the 1987 example is presented we will return to this September 1977 low to resume the analysis.
An important lesson to learn from all these examples is how time and price form equal spacing on the circle. The first example showed how the 3 PRICES of 440, 518, and 956 (596) were equally spaced when plotted on the circle of 360 degrees. Then in these last two examples it was shown how TIME moves thru equally spaced points on the circle that also happen to be the places that were reached in PRICE.
The analysis will now return to the 1977 low to further illustrate how TIME creates equal spacing in the markets.
Continue to next concept - Equal Spacing on the Circle
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