WD GANN: DOW Time Factors
Important DOW Time Factors
WD GANN wrote quite a bit about TIME and stated that it was ultimately, more important than price when it came to market trends endings and beginnings.
GANN stated that: “The TIME FACTOR is the most important. When TIME is up, Time or Space movements will reverse.”
Mr. Gann also said to “Remember that the “overbalancing” of TIME is the most important indication of a change in trend.
The Stock Market continues to generate a lot of interest as represented by the Dow Jones Industrial Averages (DJIA). It’s hoped by most that they’ll get some sort of a clue to the state of the Economy by watching the index.
As stocks mostly lead the economy by quite a time period, they can be used to discern the future in a rough way.
But, there are also Time elements or Time Factors that must be considered when evaluating the future actions of the Stock Indexes.
One of those Time Factors is . . .
. . . the Seasonal Time Pattern.
Normally, seasonality is associated with commodities, but, Human behavior is often very patterned and repetitive over longer time periods and, it turns out that there is an ‘average’ or seasonal pattern of investor behavior for the DOW just as there is for Corn, Soybeans or Gold.
That means there is a prevalent period for selling and generally low interest in buying and a fairly predictable time for buying and low interest in selling.
Tested over a good number of years, an average expectation of ‘normal’ stock market actions (including periods of expected tops and bottoms) can be charted.
We’re in a normal Seasonal Time Pattern at the moment as can be seen in the chart below:
Beneath this Seasonal Time Factor, there’s another set of Time Factors supporting this market.
It’s this set of invisible Time Factors that I watch closely for changes.
Please understand; the Seasonal Pattern is very strong and can give one a reliability of predictions well beyond 70-80% in some cases, but, there are more fundamental forces that actually ‘create’ the Seasonal Patterns themselves and these forces will give the earliest indication of when markets start to deviate from their ‘normal’ seasonal patterns.
Here’s a chart showing the longer-term Time Factor affecting the strength of the Dow right now:
The importance of this chart can’t be overestimated. It clearly shows that there hasn’t been ANY true reversal of the strong upwards trend of the DOW since the bottom back in 2009!
Forget the media and talking heads. Look at the chart and the green line on it. That’s the dominant trend at present. Everything else is shorter-term ‘blips’ of minor significance.
There’s no match-up of this chart with the ‘depression-era’ charts. None.
Will there be another crack in the DOW?
Of course, but, the important point is that’s it’s not happening now.
By observing and absorbing the meaning of this chart, one becomes of aware of the market ‘Times’ we’re presently in.
Clearly. - George
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