Noel Campbell
Noel Campbell 		This week’s article is being written from San Francisco, California. Aaron Lynch and I have just finished our first round of Safety in the Market Seminars in the U.S. of A. It would be an understatement to say that the seminars were anything else but a complete success. Our first seminar was in Dallas, Texas with a group of experienced traders, some of which commented that this was the best trading seminar they had ever attended.
At this seminar we were speaking to traders who were looking for more in their trading through the techniques of W.D.Gann and David E. Bowden. While speaking to one of the students nearing the end of seminar at the San Francisco, he was interested in the Nasdaq Index. David Bowden has always maintained that it is a case of hindsight that will become some else’s foresight. A forecast cannot always be put together in just a few moments. As we teach at the Gann Mastery Seminars, it is the culmination of a series of calculations and a search for harmony.

The ability to make forecast of dates and subsequently prices for future changes in the market, begins by studying the past. One thing a student of forecasting needs to understand is that it is in fact easier to figure a future date for a change in trend, than it is a price. Once you have a date in mind, you can then monitor price targets closely as you lead into your pressure date.

In Chart 1, we have the weekly bar chart of the Nasdaq futures contract. The Nasdaq has been through a massive bear market. The bear market this index has been through is almost unparalleled with the exception of the bear market of 1929.


Chart 1

click chart for more detail

Many of the techniques we studied at the U.S. seminars involved the use of the Video Series Software and its various tools. Looking at the time cycle of the bear market in the Nasdaq, which ran from March 2000 (4882) to October 2002 (797) and using the Balancing Time Tool, the market has run up exactly 50% of the run down in terms of time. The recent bull cycle high for the Nasdaq occurred on 20 January 2004.

The Balancing Time Tool on the weekly swing chart gives us a date of 20 January 2004, as the 50% retracement in time, just one day off. We have only picked this example of the success of Gann’s techniques in hindsight; however it goes a massive way towards proving the rules.

The Nasdaq is pulling back from this top, much slower than it ran up from the bear market low. This pattern suggests that the long-term bear cycle is over. However one cannot get too excited about the future prospect of stocks within this index until it at least breaks this January 2004 high. All of this aside though, the fact that the recent top (Jan 04) occurred at 50% retracement in time, with regards to the time frame of the recent major bear cycle, should excite all Gann students new and old.

Until next week......

Noel Campbell