Is 5-year bull S&P move over as of

today? See what Gann says

By Pauline Novak-Reich

April 25, 2014 Reprints

The Square-of-9s Braking Mechanisms

When the market failed to crash last August as I predicted in

Unlocking the secrets of Gann: Will the market crash in August? and
then again in What Ganns Square-of-9 means for the NASDAQ
100 Does it portend a change of direction for the Nasdaq?, it was
time to revisit the drawing board to find out where I went wrong.

As I wrote in the final paragraphs of the Nasdaq article, the issue of

establishing how many 360 revolutions a swing undergoes from
beginning to end was unresolved. Not knowing the number of
revolutions around the Square that the recovery would make after
the Global Financial Crisis and the Eurozone crash, and also an
oversight on my part regarding the link between the Square and the
Elliott wave pattern, resulted in the two erroneous predictions.

To relate what I have discovered since then, and why April 25, 2014 is
most likely the termination date for the recovery wave, it is necessary
to recap the rules the Square-of- 9 follows.

1. The Square-of-9 is a spiral unfolding counter clockwise in the same

direction as the Milky Way, hurricanes, whirlpools and the other
known spirals in nature.
2. The Square is a time, not a price, calculator. It predicts time
intervals more so than swings based on price. Given that the X axis of
a graph represents time, and the Y axis represents price, and given
that X and Y are interdependent tracking the forward procession of
time is less challenging than tracking price changes. Recall that Gann
spoke of a time factor, he never factored price.

3. The termination of any two adjacent time intervals (one with price
rising and the other with price falling) map onto the Square either at
180 or 360 angles. No other angular configuration will trigger a
turnaround.

4. The dominant trends intervals must be longer in duration than the

corrective intervals. This often results in two separate highs, for an
uptrend or lows for a down trend. In an uptrend, the price peak
always forms first and then is followed by the secondary time peak,
which terminates at a lower price level than the price peak.
However, the rising time span into the time peak lasts longer than
that which preceded it. Swings with time peaks and troughs correctly
identified will map onto the square geometrically. Swings based on
price ranges may not map to 180 or 360 angles when they end.

5. Intervals are subject to time dilation. When a swing falls short or

extends beyond the Squares geometrical values must be adjusted
to the Squares nearest cardinal or diagonal value.

6. All swings are consistent with the Elliott Wave pattern. The first
swing of a new motive wave series forms a 360 angle with the
preceding Wave C (the bear markets final corrective swing).

Impulse Waves I, III, V & A form 180 angles with respective Waves II,
IV and B. Impulse Waves V and A terminate at a 360 angle. Waves A
and B terminate at 180 angle.

This article focuses on The S&P 500 Index (CME:SPM14) Waves A & B
(October 31, 2007 March 9, 2009, and March 9 April 25, 2014). The
two are about to align at an 1800 for the last time in this B Wave.
Wave A spanned 496 calendar days and terminated upon the
Squares eastern cardinal. Wave B was irregular in that is exceeded
the peak of Wave V on Oct. 31, 2007. On April 25, 2014, its span will
measure 1873 calendar days and will land upon the Squares western
Cardinal at an 1800 angle with Wave A.

In my previous articles I had erroneously anticipated Waves A and Bs

termination at a 360 angle upon the Squares eastern cardinal. First,
when Wave B was approaching day 1621 of the run (August, 16,
2013), and then again as it neared day 1786 (Jan. 28, 2014). I was
wrong on both counts and unable to establish the number of rotations
when Wave B would complete.

The first date (following Jan. 28, 2014) when Waves A and B form an
1800 angle on the Square was April 23, 2014 day 1871 of the run.
However, that did not assure that Wave B wont continue around the
Square and advance to the next western cardinal value of 2048, or to
2233. Without a stopping mechanism, Wave B could keep sweeping
the Square like a Perpetuum Mobile.

It seemed strange that one of Natures most versatile creations

lacked a braking mechanism of some sort. My quest was to discover
the mathematical formula that would spit out the rotation number, or
date, at which Wave B would terminate.

The first stage involved reconsideration of the S&P 500s chart, which
shows the major swings alternating between the eastern and western
cardinals.
S&P 500 Index daily (October 31, 2007 April 23, 2014)

October 31, 2007 March 9, 2009 = 496cd Eastern Cardinal = 1800

March 9, 2009 April 24, 2010 = 411cd Eastern Cardinal = 1800

April 24, 2010 Dec.18, 2011 = 233cd Western Cardinal = 1800

December 18, 2011 April 23, 2014 = 772cd (771 Southern

Cardinal) = 3600

March 9, 2009 April 23 to 28, 2014 = 1871cd Western Cardinal =

1800

Eastern Cardinal

Western Cardinal

Stage two involved breaking down the S&P 500s major swings into
lesser degree components. These, to my surprise, map onto the
Squares northern and southern cardinals.
The S&P 500s lesser degree swings interchange between the
Squares northern and southern cardinals.

August 15, 2007 October 31, 2007 = 77 calendar days Northern

Cardinal

October 31, 2007 March 17, 2008 = 138 calendar days Southern
Cardinal
March 17, 2008 May 19, 2008 = 63 calendar days (61 Southern
Cardinal) = 3600

May 19, 2008 November 20, 2008 =185 calendar days (190
Southern Cardinal) = 3600

November 20, 2008 January 06, 2009 = 61 calendar days Southern

Cardinal = 3600

January 06, 2009 March 09, 2009 = 61 calendar days Southern

Cardinal = 3600

March 09, 2009 April 29, 2011 = December 19, 2011 = 781
calendar days

April 29, 2011 December 19, 2011 = 234 calendar days (233
Western Cardinal)

Waves a and b combined (March 9, 2009 December 19, 2011)

781+234 = 1014 calendar days (1009 Southern Cardinal) = 3600

December 19, 2011 December 30, 2013 = 721 calendar days (716
Northern Cardinal) = 1800

December 30, 2013 February 4, 2014 = 36 calendar days (34

Southern Cardinal)

February 4, 2014 April 23, 2014 = 78 calendar days (77 Northern

Cardinal) = 1800

Waves A and B combined (October 31, 2007 April 23, 2014)

496+1871 calendar days = 2367cd (2377 Northern Cardinal)

Strictly speaking, a 36 calendar-day swing, when adjusted to the

Squares nearest axis, belongs to the South-eastern diagonal.
However, given that no other swing fell upon squares south-east, the
swing most likely belongs to the southern cardinal)
The Squares Northern and Southern Cardinals

Thus far I have found no formula for computing the number of

rotations a swing will go around the Square. Interval expansion and
contraction is regulated by two seemingly unrelated mechanisms.
One oversees the east-west motion and the other that of the
north-south motion. The gist of the two is that from time to time the
east-west and north-south intervals come together in a confluence of
time. April 23, 2014 is a synchronicity day. The forces of the long and
short-term swings will void one another as each pair maps onto the
Square at a 3600 angle at the same time.

A 3D image of the Square at the moment of synchronisation would

depict a perfect sphere with no bulges at the poles. Nature assigned
not one, but two mechanisms to regulate the expansion and
contraction of swings. Her Square comes with two sets of brakes that
together are capable of stopping all wheels at once.

About the Author

Pauline Novak-Reich is the former manager research-foreign exchange at

the ANZs (Australian & New Zealand Banking Corp.) dealing room from
1980 -1993. Her duties involved analysis and forecast of currencies, interest
rates, equities and commodity markets trends, as well as overseeing
dealers intraday trading. In 2005 she authored The Bell Does Ring (John
Wiley, Australia). This article is an except from her upcoming
book, Mystifying Square, Divine Proportions -- Natures Black Box. You can
reach her
at https://www.facebook.com/pages/Demystifying-Ganns-Square-of-
9/661551103858428