How To Make Profits Trading in Commodities: A Study Of The Commodity Market, With Charts And Rules For Successful Trading And Investing by W. D. Gann

Author:W. D. Gann [Gann, W. D.]
Language: eng
Format: azw3
Publisher: Golden Springs Publishing
Published: 2016-03-28T04:00:00+00:00

From the above you will see that the greatest number of high levels on Rye have been reached in the months of January and May, and if you will go over the records you will find that the most rapid advances and most of the extreme high prices were reached in the month of May. Therefore, you should watch the months of January and May for tops in the change in trend, especially if Rye has been advancing for three months or more.

The next important months to watch for tops or high levels are July, September and November. From 1896 to 1941, during each of these months, high levels were reached ten times, making these months average the same number of tops.

The next months in importance for tops are October and December. Tops have been reached eight times in these months during the past 45 years.

The next months in importance for tops are February, June and August. Tops have been reached in these months seven times during the past 45 years. April next, six times.

March is the month when Highs have been reached only four times during the past 45 years.

From this you can see that if the market is advancing in March, and the main trend is up, it is not likely to reach top until May. Then when it is advancing during the Summer most tops are reached in the month of July.

When low is reached in August, then you can expect tops to come in September or October and as late as November.

The seasonal trend runs up from January or February to May, then down to August and up until October or November, then down until January or February. This is the natural seasonal trend.

Suppose that Rye or any other commodity follows the seasonal change and makes high in May for three consecutive years. You can then expect the fourth year to be low in May or prices to run opposite the seasonal changes. The same with the month of August. If prices are low for three consecutive years in August you can expect the next year or fourth year that prices will be high or run opposite to the seasonal trend. In some cases prices will only make top according to the seasonal trend for two years, then be opposite in the third year.

SEASONAL LOWS. During the past 45 years the months when extreme low prices have been reached are listed above.

You will see that the most lows have been reached in August. Therefore, when Rye has been declining for several months and reaches low in the month of August, it is safe to buy for a rally.

November is the next most important month for lows on Rye. Sixteen lows have been reached in this month. If the market has been declining for several months and is low in November you can buy for a rally that should last until January anyway.

In March, April, June and December, Lows have been reached 10 times each during the past 45 years.

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