jeffgreenblatt-033011

HARNESSING EXPLOSIVE

MOVES USING GANN

JEFF GREENBLATT MTA WEBINAR MARCH 30, 2011

TECHNICAL ANALYSIS

• Is Pattern recognition

• Traders lose money because they are

emotional

• They get emotional because they don’t

understand the pattern

• Understand the pattern=greater

opportunities

COMMON FIBONACCI

RETRACEMENTS

• Once the domain of elite traders • Now popularized by media outlets • Its good for them but…..

• Once the crowd learns it • No longer cutting edge

• So that is only our foundation • We go way beyond Fibonacci

What We Will Cover Today

• Pattern recognition • Cycles and symmetry

• Price and time ratio squares • Percentage change readings • Median lines (pitchforks)

• Support and resistance • Range squaring time

• Relevant current situations

CYCLES ARE LEADING

INDICATORS

• Time dimension missing X factor to

most people

• Can be anticipated in advance

• Eliminates need for lagging indicators • In my work 262 week pivot at bull top

was anticipated 6 months in advance as ‘MOST IMPORTANT PIVOT OF

DOW 262 WEEK BULL MARKET

COMMON FIBONACCI

FORMATION

• A is .60 of the whole correction/first

This time according to calendar days

TAKING IT ONE STEP BEYOND

• Calendar day cycles-90 days (RUT-Dow

top)

• Time retracement- 55.5 (calendar

days)up = .616%

• Clusters with Dow all time high at 262

weeks

• These calculations are the underlying

structure

MOST IMPORTANT RULE:

WHEN PRICE AND TIME

SQUARE THE TREND CHANGES

DIRECTION

MOST IMPORTANT INTERNAL

READINGS

• Price and time square to get a ratio

• Ratio dictates when we are close or at a

turn

• Cluster from various pivots

• Percentage change readings important

NUMBERS ARE LANGUAGE OF

MARKETS

• Golden spiral, sq roots – .618, 1.618,

2.618, 4.23, 6.84, .382, .786, 1.12, 1.27, 2.05, .236

MORE IMPORTANT NUMBERS

WHAT TO DO WITH THESE

NUMBERS

• Divide number of points into number of

bars

• Ratio is the squaring of price and time • Most pivots have some combination of

these ratios

• Feel free to move decimal point

• Percentage change low to high or high

to low

STUDY OF BEAR BOTTOM

• Best percentage change readings I’ve

ever seen

• Russell was Gold standard • Was only part of the story

• Cycles and symmetry goes back 21

years

• Importance to understand strength of

KEY DAILY READINGS

• Cluster of price and time=1.23 sq and

PERCENTAGE % AT BOTTOM

DOW 87 CRASH RANGE

NDX BOTTOM SQUARES DOW

RANGE

INTRADAY TRADING

• Price and time squares

• Best situations cluster with

support/resistance

• Support/resistance could be

retracement

• Always be aware of larger daily cycles • Percentage change less important on

MOST BASIC SQUARE

• Numbers of bars ratio to points (5 min) • 1-1 relationships are powerful setups

GANN GEOMETRIC ON 15 MIN

MORE NUMBERS=MORE

OPPORTUNITIES

• I’ve always taught to look for

Fibonacci/Lucas cycle symmetries

• When combining price/time we open up

understanding to greater

possibilities/profit opportunities with almost ANY SET OF NUMBERS

• Fibonacci/Lucas numbers are part of a

TESTS OF FIBONACCI

RETRACEMENTS

• How do you trust a retracement? • Give it a great square reading

NEXT SEQUENCE

INTRADAY EXTENSION

• 2.618 extension last leg down/confirms

PRICE POINT MAGNETS

KEY PRICE/TIME SQUARE

KEY POINTS TO REMEMBER

• These readings are the underlying

structure of all markets

• They are leading indicators as we no

longer need RSI/Stochastic/MACD, etc.

• We always wait for change of direction

(no front running)

• 3 components before trading

(support/resistance + square reading)

BE CREATIVE

THE CALCULATIONS

• Based on continuation chart at the time • High was 15.517/low at 2.409

• There was 305 td/429cd • 15.517-2.409 = 13.108

• 13.108/305 = .0429

• Bottom was on 429th _{calendar day}

NEXT TRADING SEQUENCE

MAJOR 2010 SUGAR TURN

UNLESS ITS UP 317 WEEKS

GOLD CASH TO 99 BOTTOM

July/Aug double bottom

TEXTBOOK SQUARE

2009 BOTTOM IN CORN

• Price 302 in 302 trading days/262 from

CORN PRICE/TIME SQUARE

GREAT DEPRESSION

PRICE/TIME SQUARE

• 2.326 and 89% drop makes this method

INITIAL LEG OFF 80 SILVER TOP

• 3956/88d=44.95sq @ 78.55% (Month

SAME CASE STUDY

LARGER DEGREE VIEW

SUMMARY

• Perfect price and time (Corn, Nat Gas

and POT) rare but very important

• Every leg has some combination of

price and time

• Markets spiral in all degrees of trend • We take snapshots of these points in

time and look for opportunity

• We use underlying structure to identify

MEDIAN LINES

• Help keep us grounded

• Give us a good visual on the trend • Act as magnets to the price action

• When channel lines hit sentiment also

NOT VERY CLEAR

IS THIS MORE CLEAR?

WHY DID DOLLAR TOP LAST

YEAR?

BKX BOTTOM TARGET

FLASH CRASH THURSDAY

• NDX bottomed out at 2 pitchfork levels

PARALLELS ON BOTH ENDS

CONFLUENCE

READINGS/PITCHFORKS

WHEN CHANNEL AND READING HIT

HEADLINE MATERIALIZED

SUPPORT AND RESISTANCE

• Polarity where support becomes

resistance

• Resistance becomes support

• Important supply and demand points • The ‘A’ wave tendency

FORMER SUPPORT

ADD PITCHFORK TO ‘A’

WAVE

GARDNER STUDY

• Studied musical savants (1973)

• Later found young children with access

to elite training attained same levels as musical prodigies (1983)

• Conclusion: Innate ‘gifts’ only

CHILD PRODIGIES

• Never attain excellence as adults • Studies according to Barlow (1952)

• Feldman (1986) and Scheinfeld (1939) • Studies show most exceptional adult

performers got instruction early and often

REQUIREMENTS

• Passion/motivation

• Time, equipment and training • Access to money

• Yours or acquired funds • Don’t give up

WHY STUDY UNDERLYING

STRUCTURE?

• Many traders have syndrome of win a

few lose a few

• Only way to win is understand why you

win

• Develop conviction with higher quality

setups

• Put yourself in a position to let winners

GANN’S MOST IMPORTANT

DISCOVERY

• History repeats

• Past best predictor of future • Squaring price/range and time

• Equal number of points balances equal

number of periods

• Adapt universal principle to present

Modern Era Squares

• Gann didn’t have to deal with multiple

indices

• Modern markets more complex

• We must combine various indices to

make this work

• All indices related to each other in

APPLICATIONS

• Catch important turning points in key

indices

• Buy and sell points in stocks

• Leverage information in important

sectors

• Use in any market

• Knowledge in one area allows us to

DOW 87 CRASH RANGE

AMGN SETUP

AMGN/BTK CONNECTION

RIMM CASE STUDY

RIMM NEXT SEQUENCE

SYMMETRY ENDS CORRECTION

DUSA PENNY STOCK

SPECULATION GANN WINNER

CELGENE CASE STUDY

• 60.90 in 61.5 days off high/ low at

TRAINING PROGRAM

• Cover materials from today in greater

detail (3 major components)

• One on one attention from me

• Email correspondence go at your own

pace

• Includes Gann square of 9 and

ULTIMATE GUIDE TO PATTERN

RECOGNITION ROUGH CUT

• We only had time for several chapters • Adapted from the training program

• For the individual who doesn’t want

personal attention

• Covers Andrews, Gann ratio, Gann

calendar, range/price square, sq of 9, support/resistance, trading strategies and psychology

MORE INFORMATION

• www.Lucaswaveinternational.com

• [email protected]