Much has been to-do about the unicorn of W. D. Gann’s Gann’s “up & down” alternating cycles from “The Tunnel Thru The Air.” This page was created to explain and showcase our technique for projecting these cycles in advance using Gann’s Law Of Vibration.
The green cycle lengths are up cycles and the red down. After the cycle turns up, there should be higher-highs and higher-lows after the cycle turn, as well as a significant up move in price past the price at the time the cycle began. After the cycle turns down, the opposite should be true. The cycle turns do not promise to mark the exact high or low of the period, and do not guarantee that the price will not make a move against the trend direction during that cycle period.
We have a very, if not overly, strict test for cycle lengths. For instance, in the case of an up-cycle length, we demand that the price at the very end of the cycle should be higher than at the very beginning. And the opposite for down-cycle lengths. The yellow cycle lengths marked below denote cycle lengths where that test failed. Even though these failures are few and far between, the price often makes a significant move in the desired direction in the majority of these cases. In other instances, the price remains close to flat at the end.
When you have an accurate alternating cycle and underlying cause of the cycle the way W. D. Gann did it, you do not change the alternation of the cycle lengths when there is a market failure during a cycle length, or an “inversion.” If the cycle length is up, and the price at the very end of the cycle is lower than at the very beginning, then the market has failed and the next cycle length is still predicted to be down as expected. The market failure does not change the alternation of the cycle. As we found out the hard way for years, when one experiences a failed cycle length that seems to change the alternation of the cycle, they are missing a crucial piece of the underlying cause. As Luther Jensen pointed out in his ACSM book, unforeseen news has the power to cause market action to fail a cyclical move. So true up & down alternating market cycles have roughly an 8% failure rate for the annual cycle. For the monthly, we find the average failure rate using our criteria to be about 10%. But again, at least a third of those occurrences are predicted failures and in reality a trader would have profited off another third of the legs where the market moved significantly in the predicted direction before failing at the end of the cycle.
The bottom line on these cycles is that Gann used them as a tool for confirmation and confluence. Gann used alternating cycles as places to enter and exit when trading with the Arcana. Addd the tedious nature of drawing these cycles out in his time, and you have the reasons why he devoted a smaller amount of material to these cycles than other techniques. Those trying to trade this technique as a stand-alone system will see frustration.
1st LUNAR CYCLE 2017
2nd LUNAR CYCLE 2017
3rd LUNAR CYCLE 2017
4th LUNAR CYCLE 2017
5th LUNAR CYCLE 2017
2017 Annual Daily Cycle
Updated 12/1/17. So far this annual cycle is performing as expected- a couple “failures” illustrated by the yellow legs. During one, the market moved strongly in the anticipated direction before ending on a mild incline when the direction when down. Given are the next couple legs for the cycle.