Time Periods

It’s often said that “timing is everything,” and apparently the financial and commodity markets must be listening; otherwise, why would market movements tend to last as long as in previous campaigns?
WD Gann certainly noticed; he assiduously tracked the time intervals separating every conceivable combination of market tops and market bottoms.

If you know that no bull market in the 140-year history of cotton trading exceeded 3 years and 8 months, you’ll understand that after 3 years or more of a sustained advance it’s about time to consider the prospect of a final “blow-off” rally or start researching bear markets to prepare for a pending 1st leg down.

DNA of Financial & Commodity Markets
Each market manifests its own unique personality (it’s “DNA”), and a careful study of Time Periods through the history of any market will teach you when to choose an entry point and how long to hold profitable positions.

Even subsections of bull and bear markets consistently exhibit uniform Time Periods.
The bull market in soybeans, which topped in March 2004, ranks as the 3rd longest since 1936, and its 95% final-leg gain ranks 3rd among final up legs as well, closely mimicking the 1973 and 1977 markets, which set up respective sharp plunges of 58% and 54%.

Not surprisingly, soybeans plummeted 54% to its low in October 2004 – the same calendar month as the 1973 and 1977 bottoms.
Conversely, by the time of its 2002 nadir, the near-33-month decline in the Dow Jones Industrial Average almost equaled the length of the infamous 1929-1932 Great Depression slide, and a reversal promptly ensued.
In its 1982-’87 bull markets 3 “measured corrections” shaved a roughly identical number of points from the S&P 500.

Once a given market surpasses the amount (or especially duration) of its greatest correction (”overbalancing” of price or time), it loudly signals a change in trend. Look to aggressively fade any move in the formerly prevailing direction as a probable secondary reaction destined to fail.

Market Runaways
“Runaways” form a special but highly profitable subset of Time Periods. By definition, these stages ignite the most explosive price thrusts, usually in meteoric fashion.
By the time the fireworks end, typically within 2 or 3 months, you can mint a truckload of money by taking advantage of the characteristically modest, short-lived and often uniform corrections to systematically pyramid your profits with the protection of tight trailing stops.
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