Mikula Forecasting Company

Mikula Forecasting Company: Strategy #26: Using The Square of 9, Chapter 3 Method

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Written by: Patrick Mikula CTA
Copyright (c)2003-06 by Patrick Mikula All Rights Reserved. (Please to not copy or foreword this article).

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In this trading strategy we are going to discuss identifying price tops and bottoms with the Square of Nine. To each chart I have applied the Square of Nine method described in Chapter 3 of the book , The Definitive Guide to Forecasting Using W.D.Gann's Square of Nine. See Chapter 3 for the calculation details of this method. On the chart below the Chapter 3 method has been applied to the July 2005 Soybean contract. The starting date used for the Square of Nine indicator is the February 2005 bottom. Notice that this up-move in soybeans has moved almost exactly 2 cycles of 360 degrees on the Square of Nine. I have drawn an arrow from the low to the Square of Nine value showing the distance identified by the Square of Nine in relation to the chart top. You can see that this market made a top very close to the price identified by the 2nd 360 degree cycle.



The chart below shows the Square of Nine chapter 3 method applied to EBAY stock. Notice that the recent down swing moved very close to 360 degrees around the Square of Nine. On the chart below I have drawn an arrow identifying the 360 degree price move. The 360 degree move around the Square of Nine is a very important place to watch for market pivots.



The chart below shows IBM. The Square of Nine chapter 3 method has been applied starting from the January 2005 top. From this top the market fell almost exactly 270 degrees around the Square of Nine. I have again drawn an arrow showing this price move as identified by the Square of Nine.



The chart below shows GM stock and again shows the Square of Nine chapter 3 method. From the December 2004 top this market fell almost exactly 240 degrees around the Square of Nine. It is very common to see the major stock rise and fall amounts the correlate with the major degree divisions around the Square of Nine. The increments of 90, 180, 360 and 120 240 are the most common increments seen in the major markets.




MORE:
To see the final two charts showing Gold futures, read the version of this article on the MarketWarrior owners page.