DO NOT TRADE OR INVEST BASED ON THESE IMAGES OR INFORMATION
Above is a copy of our W. D. Gann Annual Forecast for the 2015 $SPX (US S&P 500 Index) that we published on the site back in May of 2015. The forecast runs from March 21st 2015 through March 21st 2016. See our original post of the 2015 Annual Forecast posted in May of this year.
In the original post, we explained how the forecast is constructed of 2 “curves” Gann used. For the first time since we have made been using this technique, those two curves ran parallel until November then split in 2 different directions. As the yellow line goes up, the red line went down. As the other years were dead-on, we knew this year would not be one to trade the forecast outright. But the forecast still has enormous value.
First, let’s review. We had the market declining a little over 8% from the March highs. We received criticism from around the world, with critics passionately telling us that the market would simply continue breaking to new highs and not dip. But it did decline over 13%. And it took a little longer than predicted to do it.
While we had the market pulling down 8% into July, it did pull back only about 4% into July. We then had the market rebounding to March highs around September 1st. While it did rebound, it did not quite catch the highs. Then the sharp fall in August.
But now it appears that the market has caught up to the forecast, making a high around November 1st and then declining. So now we are in a position to play the indecision in the two splitting lines to our advantage. We now have a top and bottom for breakouts and breakdowns. In the second chart below of actual market movement for 2015, the green line signifies breakout to new highs and the red line breakdown to new lows. So the breakout would follow the yellow line forecast to new highs and the breakdown would follow the red line down to the August lows and maybe lower.
One thing to keep in mind this year that may be manipulating the natural market activity. Carly Fiorina swears that the FED will end up doing nothing as fas as raising rates until the election in 2016. She is probably right. The August drop out of now where through miles of everyone’s standard deviations looks like manilulation to prevent the FED from hiking. And it worked like a charm. So what is to stop them from doing it again?
The original 2015 forecast was crafted as a class project during the “W. D. Gann: Magic In The Markets” Seminar in early 2015.
DISCLAIMER: The examples above are given as demonstrations of technical analysis and are not trading or investment advise.