(A) OVER his 50+ years as a major wall street speculator, and innovative developer of trading tools and methods, W.D. Gann discussed or out right invented "around" forty-one different THINGS TO DO in order to determine key support, resistance, and according to his own words: "places to watch for a change in trend."  Unfortunately, since his death, in 1955, it is now clear that nearly all of those methods have failed the test of time.

However, there are a few, a very few, of HIS METHODS that actually show "exceptional" support and confirmation on some, or nearly all, historical real world Stock Market Index Charts...and many individual stock, commodity, and bond charts. 

IF you already know "exactly" which of Mr. Gann's methods are supported, then good for you, and good luck.  IF, on the other hand, you do not know exactly what works--most of the time or at least far more often than random--then that is one of the "things" we are here for.

(B) While all of Mr. Gann's work is open to on-going interpretation, subjectivity, and outright speculation, there are a few old hands that have spent the massive time necessary to dig deep into the bowels of Mr. Gann's dirty details and come up with his key methods; as well as, the logical and historical evidence to support them.  

Needless to say, we are one of those "old hands," and our evidence is presented--nearly every week--in our many "real world" Gann charts, for all to see and confirm for themselves...or at least which can be confirmed or refuted by those traders capable of rational thought and logical reasoning.   
 
(C) Just remember that the main OBJECTIVE of any and all TECHNICAL or PATTERN ANALYSIS METHODS, including Mr. Gann's, IS: to locate support, resistance, and ONE PLACE--or at least only a few places--where a change in trend is MORE LIKELY THAN RANDOM.

IT IS NOT to spot dozens to hundreds of "places" that will most likely be at-- OR NEAR--any and all changes in a trend JUST BECAUSE of the shear number of "places" being identified...which is EXACTLY what is being hyped for many of Mr. Gann's FAILED METHODS .

(D) While it is clear that few people would take a college course that didn't included an instructor or professor of some kind, it appears as though many traders who fail to understand Mr. Gann's work are those willing to "go it alone."

Like most things in life that people say are "too complex," Mr. Gann's KEY METHODS (our words and not his) are easy to learn and apply IF you are at least reasonably intelligent and willing to spend the massive amount of time necessary to read and study every little detail of them...or you find the right professor to help you through it.  

WHETHER you plan to "go it alone" or locate that professor...you are in the right place to start.

--THREE "KEY" and current EXAMPLES of PTR'S weekly GANN CHARTS are at the URL links below --

<KEY CHART #1:  NASDAQ Proxy (QQQQ) Bear Rally?>

<KEY CHART #2:  DOW, bullish Tunnel thru Air but to Where? >

<KEY CHART #3: SPX, "ahead of time" & above the key 1:1 angle up >

(1) W.D. GANN "invented" about 41 different "tools," or "methods," to trade with...MOST OF THEM "DO NOT WORK"!

(2) Mr. Gann's few "valid methods ," that do work, are "only" ONE of the MANY technical, economic, AND fundamental trading methods that do "INFLUENCE" stock prices...and, maybe, prices of commodities and currencies too.  

Therefore, NO TRADER should "EXPECT" that his methods ALONE, or even all of the few valid ones combined, to determine the trend--or the changes in that trend (CIT)--BY ITSELF.  "End of story"! 

(3) There is NO GANN MAGIC BULLET or any GANN MAGIC FORMULA that will directly equate ANY STOCK METRIC--as in price and/or time--DIRECTLY into any FUTURE SINGLE "POINT" that "WILL" forecast an "absolute turn" in a trend.  "Another end of story"! 

However, Mr. Gann's few "valid methods" WILL IDENTIFY "lines" of support and resistance (S/R) THAT CAN "THEN" BE used in conjunction with the S/R lines and points identified by OTHER TECHNICAL METHODS--like the Fibonacci , Cycles , Candle Patterns , and Elliott Wave Theory --to LOCATE "CLUSTERS" of S/R where a CIT is "MORE LIKELY" to occur--or even FAR MORE LIKELY to occur--THAN RANDOM...when "roughly coinciding with the fundamentals and/or traders "sentiment."

(4) There is "absolutely NO DOUBT" that Mr. Gann constructed ALL of his charts to one of, or all of, five (5) CLEARLY DEFINED "CHART SCALES."

Therefore, in order to duplicate his trading methods for using the GEOMETRIC ANGLES and/or the GEOMETRIC SQUARES "then" a trader "ABSOLUTELY MUST" use one of those five CHART SCALES...or a direct derivative of them (using what is called a "frame.") 

While this could be done "exactly like" Mr. Gann did, as in drawing and labeling the background grid BEFORE placing any open-high-low-close DATA on it, by hand in his case, there is no need to do that here in modern times.  

The reason I say that is because it is now fairly easy to apply one of two methods to EITHER: 1) "Adjust" an existing chart on any given computer screen to FIT the correct GANN SCALE, "OR" 2) To construct an OVERLAY or BACKGROUND "over the top" of an existing chart so as to CORRECTLY FIT the Gann angles to it.  

Needless to say, once the Gann Geometric Angles are "correctly" placed on, or drawn on, "any financial price verse time chart" THEN the Gann Geometric Squares can also be "correctly" drawn.

While a few trading and charting software programs give users the ability to either DRAW ON "or" ADJUST their charts to the CORRECT GANN CHART SCALE, if that is feature is not available then the chart can be easily exported to any cheap drawing program (using a screen capture program or the Print Screen Key), where those Gann Angles and Squares can then be easily drawn over the existing chart...of "whatever it is."

While Mr. Gann CLEARLY defined the five CHART SCALES that he used for his GEOMETRIC ANGLES AND SQUARES, he DID NOT tell anyone which chart scale to use for any given stock or commodity chart. 

The reason for that is simple and logical:  he didn't know which one to use UNTIL he visually determined which scale was ACTIVE--as in "important-- to the stock, index, or commodity being traded.  

In addition, we also note from our own back testing, visual confirmation, and statistical analysis that there are many cases where these Gann Angles and Squares just plain DO NOT WORK.  Needless to say, those are the charts to avoid when using Mr. Gann's methods.

While I can't give anyone any first hand and practical advise on which charts do work in the area of commodities or currencies, I can say that there is "virtually no doubt" that these Gann Angles and Squares do "INFLUENCE" the trends, and changes to them (CIT), for "NEARLY ALL" the major U.S. stock indexes, and many, many, U.S. individual stocks...especially the big boyz in Dow, Spx, Ndx, and Cmpx.   

(5) Mr. Gann's "infamous" SPIRAL CHART, which is now being called the SQUARE OF NINE(9), is "based on" a complete fallacy, and it is CLEARLY NOT the "basis of his whole trading thesis." Therefore, anyone who says so is either "grossly mistaken, an outright liar, a complete idiot, or all of the above.

(6) The last, and MOST IMPORTANT "thing" about Mr. Gann's methods that I will share with you, FOR FREE, IS THIS:  The ABSOLUTE BASIC and MINIMUM "KEY" to working his methods is to DRAW IN --or otherwise position-- THE KEY 1:1 angle, OR "angles," on YOUR CHART.

Please READ THAT PARAGRAPH as many times as needed until it "fully sinks in," as this is the KEY to learning and using what Mr. Gann himself described as: "The Basis of my Forecasting Methods."

After that, YOU CAN DETERMINE for yourself WHICH, if any, of the KEY 1:1 angles are active --as in one per day, one per week, or one per month--OR one per (period) "inside" a frame multiplier (x) OR divisor (/)...like one point per month could be one hundred points PER month for a certain index, and one per day could be one/8, or 1/8, per day for a certain commodity or currency.  

Needless to say, IF that 1:1 angle (also 45 "degrees" IN THE CORRECT GANN CHART SCALE) IS NOT placed correctly THEN none of the angles --OR squares-- will be correct.  

In that case, you are a heck of lot better off NOT USING Mr. Gann's methods then attempting to use something that is: GANN MADE EASY AND WRONG! 
  
THIS IS the ABSOLUTE "BOTTOM LINE" for using Mr. Gann's METHODS, and anyone who speculates otherwise will "very likely" pay a dear price for their misguided assumptions ...or outright "denial."

After all, NO technical method is BASED ON any "exacting" LAW OF SCIENCE --or any Voodoo Magic--and they only WORK because enough traders read about them, believe in them, and back them with real world money.  And, SINCE true GANN TRADERS, especially those who actually know what their doing, are only a small portion of the world wide trading community then only a pure novice would "expect" otherwise.

Based on our own "extensive" back testing,  AND real world trading, listed below are the GANN "KEY," or "valid," METHODS that actually do work MOST OF THE TIME...or AT LEAST  "far more often than random": 

(a) The Visual GEOMETRIC ANGLES are what Mr. Gann himself called: "The basis of my forecasting methods." (Ref: The Angle Course inside his  Master Stock and/or Master Commodities Course ).

(b) Once the KEY GANN ANGLES of 1:1 (1x1 or 45 degrees in the correct
Gann Scale) are "correctly placed" on any chart, THEN a trader can apply Mr. Gann's VISUAL GEOMETRIC "SQUARES" OF: Price, Time, and/or Price "to" Time.

Note that there MAY BE only one 1:1 angle that is "active," or "clearly most important," in a given stock or index--like the one placed on a one per month scaled chart--BUT sometimes a trader may have to "apply" and "test" all the 1:1 angles to VISUALLY SEE which one -- "IF ANY"--is ACTIVE or MOST IMPORTANT to that stock or particular index...like the 1:1 angles on the one "something" per day, or one "something" per week, charts.

While Mr. Gann identified two different types of VISUAL-GEOMETRIC SQUARES, of price, time, OR price to time, he DID NOT "clearly" name them...so WE DID!.

AT PTR we separated the two types into:

    (1) Mr. Gann's FIXED GEOMETRIC SQUARES--like the Square of 52 (clearly meant to be used for 52 points, of "something," over 52 weeks but which could also be 52 points, of "something," over 52 hours, days or months too), OR his self identified MASTER SQUARE of 12 ...which was clearly meant to be for 12 points, of "something," over 12 months but which could also be 12 points over 12 hours, days, or weeks too.

    (2) Mr. Gann's VARIABLE GEOMETRIC SQUARES, which HE CALLED: a) the " Square of the Price Range to Time ," b) " Squaring Time with Bottom or Extreme Low Price ," and c) " Squaring Time with Top or Extreme High Price ."

These "squares" are, as you would expect, NOT FIXED, and are determined by the PRICE OR TIME "gained"--OR ""lost"--by a "PRIOR" RALLY OR CORRECTION, for the "RANGE," OR by the square of the "absolute" price of a PRIOR TREND HIGH --or a PRIOR TREND LOW --for the square of the HIGH or the square of the LOW   (in "price only" TO future "price and time.") .  

TAKE SPECIAL NOTE HERE that this RANGE "AWAYS" starts from a "serious" HIGH or LOW in a trend, and NEVER from any fixed or predetermined TIME of the day, week, month, or year...END of STORY! 

While this MAY SEEM "too complex," IT IS NOT.  In reality, the FIXED SQUARES are "rarely active," and for the VARIABLE SQUARES we "usually" end up with only the SQUARE OF THE RANGE--of a PRIOR rally or correction--AND only in ONE KEY GANN SCALE...more often than not the one HE IDENTIFIED as "most important":  the MONTHLY SCALE of one "something" PER MONTH.

By the way, when I say ONE "something," per hour, per day, per week, or per month, that "something" is: price per share--like in $1.00 per share per time--or price per volume--like in $1.00 per barrel per time for crude oil, OR any other VALUE PER UNIT per TIME (h-d-w-m-y) that can CLEARLY DEMONSTRATE a real world "strong tendency" to "roughly follow" a LINEAR PRICE to TIME "progression"...at least MOST OF THE TIME! 

ALSO take "SPECIAL NOTE" here that MANY, or actually most, stock or "other" INDEXES (indices or ETF's) require a FRAME of REFERENCE.

This FRAME of reference was something that Mr. Gann was "very vague" about, and somewhat "confused about" too in my opinion, but which is an absolute necessity as based on real world, and modern day, index charts.

The FRAME of REFERENCE is actually just a SIMPLE MATHEMATICAL DIVISOR, like /10, /40, /100, or other /?? values that will TRANSFER a real world index, like the U.S. S&P 500 index (SPX), "back into" the range where Mr. Gann's ANGLES, SQUARES, and CALCULATORS can be applied EASILY and more ACCURATELY.

Fortunately for us, someone at one of the major trading agencies (Dow Jones and/or Standard and Poors for example) has already identified and applied these fixed divisors for us...in MANY "but" NOT ALL cases.

For example, the U.S. S&P 500 INDEX ( SPX ), has its own PROXY (SPY) and already has a fixed divisor of "/10" (10:1) that "transfers" the current SPX index range, of 0-1500, back into the SPY range of 0-150...where Mr. Gann's angles and squares can be "more accurately" calculated and "tested."

Needless to say, the DIA proxy (/100) is to the DOW , and the QQQQ proxy   (/40) to the Nasdaq 100, what the SPY proxy (/10) is to the S&P 500 index ( SPX ).

However, also note that many of the OTHER INDEXES--that are clearly outside of the 0-100 or 0-1000 range where Mr. Gann' s angles and squares "should be worked"--do not have a DIVISORS (a frame) already "in place" for us.  

For example, there is no proxy for the Amex Semi-Conductor index, SOX, or for the AMEX Internet Index (IIX).  While a "frame" or "divisor" MAY be located by individual traders, IN GENERAL it is better to just stay away from applying Mr. Gann's methods to these indexes...and then just "assume" they will "roughly follow" along with their big brothers, like the Nasdaq 100 index (NDX), and/or the Nasdaq Composite index (CMPX).

(5) The fifth GANN TOOL that we do apply to our charts, although we note here and now that we currently consider it to be "highly skeptical" and "not statistically verified" at this time--to say the least--is what Mr. Gann "loosely" called the SPIRAL CHART , but which has somehow become known as his "infamous" SQUARE OF NINE .

This CALCULATOR, or "simple look up table," is COMPLETELY DIFFERENT  than his Visual-Geometric-Squares and Angles, AND this method does use some simple mathematical "squaring"--AS in #^2--and the finding of ROOTS--AS in Square Root #--for a chart's PRICE VALUES.

These CHART PRICE VALUES for "calculating" FUTURE PLACES for support, and/or resistance (S/R), and a "possible" change in trend (CIT), are "projected" values based on current price--or index values--taken at the major LOWS and/or HIGHS for an individual stock, an index, or--maybe--a commodity or currency.

While it is ABSOLUTELY CLEAR that the UNDERLYING BASIS, or thesis, for this method WAS to locate "future points" along a "POSSIBLE" trend that is following a " Parabolic Curve ," a Parabola, and not following a linear "straight line"--as most traders INCORRECTLY "assume"--WE, at PTR, have "absolutely no doubt" that this underlying basis, or thesis, is a FALLACY .

That is to say, we are ABSOLUTELY CONVINCED that the LONG TERM trends for STOCKS, or stock indices especially, have a STRONG TENDENCY to follow an EXPONENTIAL GROWTH CURVE , and NOT, any Parabolic Curve OR linear, "straight," line.

AS for the intermediate and short term trends--as in hours, days, many weeks, many months, and even a few years--we see where these do, many times or even most of the time, "roughly follow" a linear straight line...even when  viewed in LINEAR (not semi-log ) SCALE.

This MATHEMATICAL CALCULATOR METHOD, be it called the Natural  Squares Calculator, the Spiral Chart, or the Square of Nine (9), is explained in deep detail for this Free Gann Section , the Subscriber's Side Gann Introduction, and the Professional Pattern Trader's Ebook .

In addition, you can view the SIMPLE METHOD that we use to identify ONLY the "future" PRICE LINES of support and resistance (S/R) located by this GANN CALCULATOR METHOD.   

(6) At the Price-time Review we make extensive use of the GANN SWINGS CHARTS, BUT we DO NOT use them to SWING TRADE as defined by Mr. Gann.  His full method is defined  <here> , and our use of the SWING CHARTS to filter out some short term "noise," AND to provide a background for placing our manual Elliott Wave counts to help confirm or refute those wave counts determined from other style charts, is illustrated <here> .

---

  " Charts are records of past market movements. The future is but a repetition of the past. There is nothing new. As the Bible says 'The thing that hath been, it is that which shall be.' History repeats and with charts and rules we determine when and how it is going to repeat.  Therefore, the first and most important point to learn is how to make charts correctly because if you make an error in the chart, you will make an error in applying the rules in your trading."

The Basis of My Forecasting Method
The Gann Angles Course...2nd edition (1934)   W.D.Gann (1955)

GANN BASIC AXIOM #2

Below, is a "key" FREE EXAMPLE of a MAJOR GANN CHART we recently posted to our Stock and Bond Market Analysis and Forecasting Service:  The Price-Time Review  

This is typical of the hundreds of professional Gann analysis charts we have made over the years.  The PROOF that we promote the correct Gann Angle and Geometric Squaring method is in those hundreds of charts where price sticks to them like glue...and/or bounces from them at the major CITS.  

In addition to the action of price to the angles we place, the main trend for the vast majority of those "hundreds of charts" had an eventual outcome, in line with the "character" predicted by Mr. Gann, at our Gann Angles...when viewed in retrospect from some time in the future.  

That is to say, for example, if price run to the 1:1 angle, going up from below it, and then bounced hard off it, once or twice, and then drifted back away from below, it was then very likely to run back "down" and "test" the 1:2 angle coming up, from above it...per the correct Gann method we define.
 
While this "character," as in being considered bullish or bearish when based on a current chart position in relation to it's Gann angles, was only "'vaguely" described by Mr. Gann in his Master Courses, we do go over this in more detail for the Ebook.    

GANN AXIOM #2

LIKE WE HAVE SAID A THOUSAND TIMES before, to those who do not see or refuse to "see," YOU CANNOT just "square the range" of a prior rally or decline to get the Gann Squares, or place the Gann Angles, UNLESS that range actually did "naturally square" its price with its time...in "ONLY" index points, or $/share, TO:  one "something" per hour, per day, per week, per month, or per year.  As should be expected: THAT is "exactly" what W.D. Gann DID SAY!   Read KEY QUOTE below!

MAJOR GANN QUOTE and our key comments to it:  posted 3/2007.
1
FOR a very "clear and simple example" of this common trouble point for many Gann students,  you can LOOK at that Nasdaq 100 "Proxy" chart (QQQQ)...below .  On it, the "range" of the big decline down, from 3/10/2000 down to 10/10/2002 was  -100 "proxy points" (120 down to 20) over "exactly" 31 "months."  That 31 month time period is also "about" 600 trading days, 930 calendar days, 130 weeks and 2.6  years.  

Therefore, the price (index value in this case) DID NOT "square" its price range to its time of the range for ANY of those SCALES above (600 TD,  930 CD, 130 WKS, or 31 months).  THAT MEANS "the range" IS NOT "square" with respect to it's own price of the range TO it's own time of the range.

THEREFORE, a Gann trader CANNOT just make a so-called "mirror imag"  of that decline, or just flip over the angles made coming down, for the NEW GANN squares and angles that will be placed to "look back up into the future space for a change in trend."

WHILE this is CLEARLY THE WRONG WAY to place Mr. Gann's angles, and check for his squares, the VAST MAJORITY of all Gann made "something" books instruct their readers to use that INCORRECT "mirror image method."  In addition, nearly every software program we have seen charts from, since we did not buy them "all" ourselves to waste money, also used this WRONG WAY to place the Gann Angles...or some totally bogus "NON-ADJUSTABLE" GANN FANS. 

In addition, I have actually had one self proclaimed "Gann Guru's" call me, not just e-mail me, and "get hot" about how: "he doesn't have to measure anything because he can see where the angles go...most of the time."  I also had a second "self proclaimed" blogger Guru write me a long and nasty e-mail proclaiming the "exact same" thesis.  HUM?  

Well, I immediately ASKed them, in a return e-mail in one case and via a telephone conversation in another case: "how do you SEE where the angle should be placed when a trend first starts out from a 'possible' CIT"?

OOOPS!

From the guy on the phone I got dead silence, and then lots of mumbo jumbo and double speak followed.  The second Guru, who emailed me, and who surly must be an colleague or fellow blogger of that first "person," since he essentially recanted the same old story again, hammered out the same bogus thesis, and SO I ASKed him in my e-mail reply:

Even IF you could "visually see" where "an ANGLE" goes on any given  chart,  HOW do "you" know which Gann angle it is?   AND, since you can't know which angle it is by just looking at a chart without having an ABSOLUTE SCALE for reference, then I suspect you don't even know how to use Mr. Gann's 1:1 angle to determine "implied direction and strength of a trend."   RIGHT?  

The first want-a-bee blogger Guru hung up and has never called back, and the second one replied with an even nastier email that triggered a full page DIATRIBE from my wife, as I was in the hospital at the time.  While we have never heard from "him" again, we see that he continues to spit out his bogus method on a popular Gann based blog.  Go figure?  Evidently W.C. Fields was wrong...in that you can fool most of the people most of the time!

While these two clowns are a worse case example, we also did a web search just the other day and found one "old Gann program," that had been updated to a Graphical Windows style screen from the old style text screens of the late 80's and early 90's, now being "hyped" and sold under a new "updated" name, that clearly uses that same old "squaring the range regardless method" to "incorrectly" locate its "somebody's" angles.  

Additionally, we located another, but totally new, "TRADER" program that after checking the sample charts carefully we found that it's so far out to lunch that the developer, and/or programmer, had to be a complete moron when it comes to Gann.  

Ok, so much for this mini rant, lets move right along here.

For the QQQQ chart below, IF the 2000 to 2002 decline "HAD taken" 100 months THEN the range in price,  of -100 points LOST, "would have" squared to 100 months down...from the start of that range back at 120 and the all time high in 3/2000.   THEN, and ONLY THEN, could have a Gann trader simply just "square the range" and use it to "correctly" place the Gann key angles looking back up.  

GET IT NOW?  HUM!  I think "ya all" are "fun-in me"...as "we ons" say in the South...south of somewhere anyway!

Ok, lets take it from the top.

The "ONLY" CORRECT Gann square for this NDX proxy, QQQQ, which is the same as NDX but does not need a "frame" (divisor) to be valid for a Gann Analysis, is shown by our graphic below.  NOTE THAT, our squares are the same as what Mr. Gann described and pictured in his ANGLE COURSE.

THAT IS TO SAY, our new example Gann square--for this theoretical case of QQQQ -100 points over 100 months only--would have "squared" price with time BECAUSE that -100 points lost in the range of the prior decline (3/2000 down to 10/2002) "would now be" equal to a +100 months OUT from the TIME of that "same top"...where the prior range began in 3/2000.  

THIS square is what "we call" the "BEAR SQUARE," a name that WE have bestowed upon it since Mr. Gann did not clearly identify it with a name, is called this because "IT SEEMS LIKE," for now only, that the majority of major down trends--corrections or bear markets--END within the "time span," and/or "price span," of this square.  I say "seems like" here because this is still one area that we feel needs more statistical analysis to confirm or refute.

Remember, that in his Angle Course, Mr. Gann said:  "when time runs out expect a change in trend."  Needless to say, IF QQQQ has not already turned down toward that lower right hand corner of the Bear Square, which we highly doubt, at 20 again in 2008, THEN we should "expect," but are not guaranteed, that this proxy, and all of the NASDAQ based indexes (like IIX and SOX) by direct association to it, will "most likley" make a change in trend...from up to down or down to up.  

FOR QQQQ, we "think" the trend CIT will be from up, as it has been since the major low in 10/2002, to down, but we can only "observe and react" to the actual re-action that DOES OCCUR on, or near, 7/2008 (+100 months or 8y+4m "out" from 3/2000).  

By the way, just keep in mind here --once again-- that while the Gann angles are a serious technical line of support-resistance when it comes to "influencing" the CIT's of stocks and stock indices, they are still only ONE OF the five major technical forces acting on those stock and indices --in addition to the economic fundamentals-- at any given time, and they, by themselves, provide no "guarentee" to FORCE a CIT anywhere. 

While I can't go into it here in any detail, also NOTE that the Gann Square that we call the "Bull Square," and what Mr. Gann "vaguely" called the "square of the range," is the same "size" as the 100x100 "Bear Square," EXCEPT that we place it to start at the LOW OF THE RANGE, and with the 1:1 angle--and the  "diagonal of the square"--looking back up.  In this real world case of the Nasdaq 100 Trust (QQQQ), that low was made on 10/9/2002.

IN addition, and finally, Mr. Gann did "separately identify" the "square of the of the high"--where he meant a HIGH price TO ZERO...which we label as SQ.-HIGH.  In this case, for QQQQ, that means there "could be" a Gann Square of 120 points (the high in 2000) by 120 months, days, weeks, or years, "placed at the high in 2000.  

While we do not show this "square" in our work, or at least not very often, we do keep mental track of it, and we will place it on the analysis chart IF it looks like the square itself, or one of its angles, become important.

In general, this square is only valid "DURING" the decline down from a high to form the "range"...at a "major" long term low.  After the "range" has been determined, it is unlikely that this square, or its angles, will be relevant again UNLESS the new up trend fails and the chart price trend comes back down to take out that prior, "and major," low for the range.  

That is to say, even after a clear up turn in trend we still can't just forget about this SQ-HIGH entirely, since any "retest" and "failure" of the prior major low in price--from the all time high--brings this square, AND it's angles, back onto our radar screen...so to speak.  

By the way, and needless to say, for the QQQQ's that would mean that SHOULD the index break back down and take out the 10/2002 low at 20, AS WE EXPECT IT WILL sometime well into future, THEN a key "target' for a CIT back up would become 120 months, or 10 years, from the 3/2000 HIGH...or "about" 3/2010. SEE "IT" now?  

BOY, I can almost hear the lights clicking on!

In the same fold as the "square of the high (to zero), Mr. Gann also identified the "square of the low," which we label SQ.-LOW.  Which is to say, the "price low to zero."  In this example of QQQQ, which made a low for the range of that decline at "about" 20, this is a "square of" 20x20 where we have 20 points "by" 20 days, weeks, months, or years...and usually months!

Needless to say, this 20x20 "square" would start at the major low and "look back up" into what Mr. Gann called "space," and which is, of course, just the chart "area" where FUTURE chart data will appear...eventually!  

However, note that for this square, which is "seldom" of any value, or "active," that 20x20 square starting at the low of the range, at 20 on 10/10/2002 for QQQQ, and looking "up" into the "empty space" of the future (from 10/2002 forward to "whenever")...essentially places it "inside" the BULL SQUARE.  As many students and traders may recall, Mr. Gann referred to that empty space of the future as just "space," and the SQ-LOW inside the BULL-SQ. as the "square within the square." 

While the term "square within the square" (SWS) was used by Mr. Gann to identify the SQ.-LOW, he also, unfortunately, used the same term to define an "area" of high support or resistance that lies "near" the center of all his "Geometric Squares."  This SWS, and Mr. Gann's "pivot point"--the so-called Center of Gravity (COG),  are identified and fully detailed in our Pattern Trader's Ebook.

OK, let me repeat that again too, as there seems to be some major "mystery" about Mr. Gann's use of the word "space."  After studying this stuff for who knows how long, to long, I'm nearly certain that all Mr. Gann meant by "space" was the "OPEN SPACE" on a graph or chart where one of his squares extended from an "existing" low, or a high, and "looked out into" the "blank" chart area where future data would be recorded.

AS A FINAL NOTE HERE LET ME SAY, that the key to "fully understanding" Mr. Gann's angles--not that you have to "understand it" to use it--is that HE STARTED with a chart GRID and a SCALE, on paper for him but which can just as easily be on a monitor for us, AND THEN he applied the chart data (open-high-low-close) to CORRECTLY FIT that grid.  

Therefore, it is false, and nearly insane, to "EXPECT" or "ASSUME" that  many different software programs that all "fit" their charts to FILL the "form," the background, or the screen--that each software designer selects on their own and which almost never is the same as someone else's--can all be setting the correct GRID at the same time...AND the GRID and SCALE that Mr. Gann started out with.   WRONG!

Like I said, the logic of that kind of "assumption" is not only clearly false, but in my opinion borders on incompetence and stupidly; eventhough, there are many, many, true believers, that will never see this "faulty reasoning" for what it is.

GET IT NOW?    NO!  KLUNK!  Sorry--but the FREE Game is Over!  To continue please put a quarter in the slot, and since we don't have a slot then try $34 for the E-book ,  or $19/month for the best stock and bond market forecast on Planet Earth.

HEY YOU! YES "U"!  If that Gann chart didn't "cause you to pause," then try out this one, at the URL below, where the DOW is now "Tunneling Thru Air" to where? 

<10/2006: DOW blows out 4-year cycle and breaks into a new bull square?>
IF "U" are a mutual fund trader, the manager of a fund, a professional financial writer, or any other professional person who can spot world class trading information and analysis when you see it, then our highly acclaimed Stock and Bond Market Analysis and Forecasting service should be right up your alley...so to speak.   Like "they" say, whoever "they" are: the most valuable commodity is information, and to which we will add, "that key information is our business."

NEED more "real world" PROOF?  Ok, try this next SPX chart!  SAVE IT to your disk and follow it in the future, THEN we will discuss it again next year and see what the few nay-sayers left have to "say."  

<SPX Gann Analysis:   12/23/06 post with running updates.>

On the other hand, IF you are a DO IT YOURSELF type trader just out looking for some top notch Gann information to educate yourself with, THEN you just passed up one of the most powerful Gann charts you will ever encounter...that QQQQ chart.  Yes indeed!  IF you did actually, "pass it up," without hearing the ground shake-shake-shake or the alarm bells ring-ring-ring then you do have at least a "fair" ways to go in that education. 

While there are three different charts on that graphic, all three are of the same Nasdaq 100 Trust (QQQQ), all illustrate the use of a 40:1 "frame" (divisor) for this trust to the NDX, IIX, SOX, and CMPX proxy, and all three convey the exact same information from our Gann Analysis to the educated observer.  Of course, the one on the left does have a little more detail on it.

IF you are now, or if you were at one time, or if you seriously want to be a competent Gann trader in the future, OR IF you at least currently posses the knowledge to become one, then everything about that left hand chart--except for the Elliott Wave count labels--should be "crystal clear" to you, and it should be silently telling you everything those key Gann methods have to say about it.  

IF it is, then good for you, and I firmly suggest you not waste any more time "re-reading" Mr. Gann's books, trading courses, or "letters."  Just be damn sure you're NOT finding "squares" by dividing the range by eight...as that fallacy has become the amateurs biggest "Gann Trap."

On the other hand, if any, even a small, even a tiny, or even an infinitesimal, aspect of that chart is NOT "crystal clear" to you, AND/OR you could not reproduce it for any other stock or index upon request, then I firmly suggest you either:  1) jump for the fast track into Gann by purchasing and reading our on-line E-BOOK , which cuts through many, many, many, many, torturous hours of hair pulling and foul language to get right at the heart of Gann's methods, or 2) go down the free but difficult route by reading, re-reading, or attempting to read, all of HIS original material.  

If you choose the latter route, then a great deal of that "original material," like his Master Stock Course (500+pages), and Master Commodities Course (400+pages), can be downloaded from our site for free, by making a simple "email form request"...from a menu selection below.

If you decide to go this "hard" but free way, then WHEN you come back to get the E-book, as many seem to do, then just be sure to remember that you were forewarned.  I know, I've been way down that road and done that myself.

By the way, if you think that the 4Q chart posted above is helpful for your trading or education, then you haven't seen anything until you see the "FULL" and updated Gann analysis chart for the S&P 500 index (SPX)...showing it's "Date with Destiny." 

AJQ