VOLUME TWO – EDITION ONE

T H E T I M E FA C T O R
TH E B E ST OF TH E TRADING TECH NIQU E S
B Y W . D . G A N N – E X P L A I N E D , S I M P LY.

BY FRANK BARILLARO
112 T R A D I N G W I T H T H E T I M E FAC TO R
FOR MILLIE A N D M AT TEO
You are my two greatest achievements.

– NON IN V ECCHIAR E M A I –
114 T R A D I N G W I T H T H E T I M E FAC TO R
 PREFACE
In volume one of this course, I shared with you why I believe it is possible
to do what many will tell you is impossible. To do this, you will need to first
understand the Time Factor.
The Time Factor is a phenomenon which exists in all financial markets.
Once understood, it is a powerful tool that can allow you to calculate
predictable and repeating market cycles so that you can better time your
investment decisions.
I am not only convinced that a Master Time Factor exists in all financial
markets, I am certain that it is present because I have seen it. I have also
been able to predict it occurring time and time again.
Understanding how the Time Factor works has allowed me to calculate and
share with colleagues, in writing, future dates that have accurately forecast
major market turning points to the exact day, years in advance. In volume
two of this course, I will explain how you too can calculate these predictable
market cycles and give your trading and investment decisions
an unparalleled edge.
I discovered the Time Factor after years of studying the markets, and in
particular, the works of William Delbert Gann. W.D. Gann is reputed to have
taken over $50 million from the stock markets during his career in the first
half of the 20th century – that is worth over a quarter of a billion dollars in
today’s money. During one month of trading alone in October 1909, in the
presence of a finance journalist he made 286 trades with an astonishing
profit ratio of over 92%. It resulted in a return of over 1000% of his
original capital.
T R A D I N G W I T H T H E T I M E FAC TO R
Gann developed the theory that there is a discernible relationship in all
financial markets between price and time. He believed that the geometric
representation of price through time revealed important cyclical patterns
in markets that had predictive values. Many have explained in different
variations the premise for why Gann’s theories work. The most simple that
has resonated with me however, is that as human nature will never change
history is destined to repeat.
As markets are essentially made up of human sentiment and emotion,
future generations are destined to repeat the behaviour (or cycles) of
previous generations. This causes all financial markets to work in cycles
which will repeat over and over. By looking at a historical chart of market
action, one should then be able to identify the past cycles which have
occurred and which will inevitably repeat in the future.
What I am about to share with you is a series of easy to follow lessons and
illustrations that will teach you how to identify major bull and bear market
cycles, years before they happen. You will be shown how to identify the
long term trends, and more importantly, how to stay invested with them.
Every significant turning point in financial markets over the course of history
can be traced back to the Time Factor. And the techniques which you are
about to learn in this course have proven the test of time. They worked over
one hundred years ago and I am confident they will continue working for the
next one hundred years.
By the end of the course you will have learnt the geometric Time Factor that
is present in all financial markets – and you too will be able to achieve what
others will tell you is the impossible.
115
Before you begin, please read this really important stuff first...
Thank-you and congratulations for purchasing
Volume Two of trading with the Time Factor. As
I mentioned in volume one, I have absolutely no
doubt that this trading course will change the way
you look at financial markets.
Thank-you also for continuing on this journey with
me. If you feel that Volume One has opened up
your understanding of the financial markets in a
way you did not think was possible, then Volume
Two is going to absolutely blow your mind. Once
you have finished this section of the course, I can
assure you that you will never look at the financial
markets in the same way again. You are about to
learn the techniques that can allow you to identify
the exact date of major market tops and bottoms
– years in advance.
This will completely change the way you look at
your investment analysis.
Imagine knowing when the stock market or the
price of gold is going to make its next major
bottom. What could that do for your investment
portfolio? If you think it is impossible, then I
encourage you to keep reading. You will soon
change your mind.
116
Before we begin, there are some important The contents of this course are
housekeeping matters which we need to cover confidential
off first. There is some fine print below that you
Please respect that I have spent hours upon
should take the time to read and understand
hours in researching, drafting, writing and
before you proceed. But just in case your time
publishing this trading course. Not to mention
is short, let me summarise the key points for
the thousands of dollars spent. If you spent
you below.
countless hours researching what the winning
lotto numbers for next week’s jackpot were
going to be and you told me, how would you
This course is not personal advice
feel if I shared those with the rest of the world
I am not a licensed financial adviser, nor do I on the internet?
know your individual circumstances. If you
are looking for personal advice, please consult Now I’m not saying that reading this course is
someone who is appropriately licensed to do so. going to be like winning the lotto, but I hope you
take my point. After all, if you are reading this,
you have signed a confidentiality agreement with
This course is not general advice me anyway. You wouldn’t go against your word
This course is about educational material on how now, would you?
to analyse the markets only. It aims to teach you
how to make your own investment decisions.
That’s right, so that you can make your own
decisions. This course teaches you the theory
on how to fish. Unfortunately, I cannot catch the
fish for you. But I can at least show you where to
look. Trust me, by the end of it I am sure you will
be able to do it.
T R A D I N G W I T H T H E T I M E FAC TO R
Accuracy of contents:
The contents in this course have been prepared
in good faith and may be based on information
obtained from sources believed to reliable but no
independent verification has been made, nor is
its accuracy or completeness guaranteed. Each
of the charts contained in this book have been
hand designed by the brilliant graphic design work
of my good friend Joe Caminiti. Whilst we have
attempted to re-create every line, angle, axis and
label as accurately as possible we are only human
and humans can make mistakes.
These however should not detract from the
message we are sharing with you. To the extent
permitted by law, ThirtyTen Investments Pty Ltd
does not give any warranty of reliability, accuracy
or completeness of the information contained
in this document and does not accept any
responsibility in any way (including negligence)
for errors in, or omissions from, the information
in this document. The author or ThirtyTen
Investments Pty Ltd is under no obligation to
update or correct the information in this course.
One view isn’t necessarily the right view:
If there are any views or opinions expressed in
this course, these may be the views of the author
or other parties. Whilst everyone is entitled to a
view or an opinion, it doesn’t necessarily mean
those views or opinions are right...
Just ask my wife.
T R A D I N G W I T H T H E T I M E FAC TO R
Future Returns:
This is not a course telling you to implement a
particular investment strategy or to invest into a
particular market. That is a decision for you to
make. Please bear that in mind when you are
investing. The value of any investment and the
income derived from it can go down as well as
up. Never invest more than you can afford to
lose and keep in mind the ultimate risk is that
you can lose whatever you’ve invested. Please
seek independent financial advice regarding
your particular situation. Investments in foreign
companies or foreign markets involve risk and
may not be suitable for all investors. Specifically,
changes in the rates of exchange between
currencies may cause a divergence between your
nominal gain and your currency-converted gain,
making it possible to lose money once your total
return is adjusted for currency.
So now that is out of the way, let’s begin…
117
SEC TION FOUR
“TIME is the most important
factor of all. Not until time is
up does any big move up or
down start.”
– W.D. Gann
Chapter 7 of his Master Stock Market Course
How to forecast future market tops
and bottoms using the Time Factor
Many traders and investors will probably know
the feeling of what it is like to sell out of a stock
too soon or buying into it too late. It can certainly
be a frustrating experience selling a stock and
seeing it continue to rise another fifteen or
twenty percent.
This section of the book is all about
demonstrating to you the geometric relationship
that exists between past movements of price
and how these can be used to forecast future
movements of price.
Once you have mastered the ability to identify
how past movements in price affect future
movements, you will then be able to translate
these into calculating future price support and
resistance levels on any market – not only can
this be useful in forecasting future tops and
bottoms, more importantly, it will significantly
improve your entry and exit points into your
chosen stock or commodity.
T R A D I N G W I T H T H E T I M E FAC TO R 119
Chapter Nine - Repeating time
In the preceding chapters, we learnt how previous
price movements in financial markets can allow
you to project future movements in price. We
walked through some examples where earlier
ranges in price were repeated in exact proportion
to future movements in price.
One of the astonishing discoveries that Gann
made was that time movements in markets will
regularly repeat. This was fundamental to Gann’s
ability to predict the future dates of market tops
and bottoms.
In order to calculate a time cycle, we simply
determine the number of hours, days, weeks
or months which have elapsed between any two
reference points. Ultimately, this gives us four
sequences with which we can calculate a
time frame:
1. Low and a High
2. High and a Low
3. Low and a Low
4. High and a High
Every market will move to repeating time frames,
whether they are major (weekly or monthly) or
minor (hourly or daily) time periods.
120
Minor time frames
In the chapter earlier, we demonstrated how
the S&P500 market made minor movements in
price of 108 points that coincided with a major
movement of 807 points to help produce a
significant change in trend. These same patterns
will occur with respect to minor time counts that
will often culminate with a major time frame
coming to an end.
In my view, a minor time frame is one which
consists of a move that is less than a full calendar
year (or 365 days) in duration. As a general
rule, I look for minor time frames to produce
minor turning points in the market. These often
represent good buying or selling opportunities
within the long term trend.
Always look for repeating time frames within a
market. The greater the time frame, the more
important it is for a significant change in trend.
I will never rely solely on a minor time frame to
make a forecast about the start or end of a major
bull or bear market campaign. I do however, like
to see minor time frames culminating at or near
a major time frame. This is generally a good
sign that the major time frame will produce a
meaningful change in trend.
T R A D I N G W I T H T H E T I M E FAC TO R
How minor time frames repeat – S&P500
(Oct 2011 to 2013)
In demonstrating how this type of market
symmetry works in the current markets, the
following chart is a daily calendar chart of the
S&P500 index using the very recent price action
off the October 2011 low to the end of June 2013.
You will notice I have highlighted five sections
of the market. The first section represents a
time count from top to bottom in a period of 32
calendar days. This was repeated again almost
exactly in the fifth shaded section, where the
market again moved from a top to a bottom, this
time in 33 calendar days. The third box I have
highlighted shows a significant market move
from top to bottom, in 63 calendar days. The box
immediately following it highlights that the move
down from the next significant top to bottom was
also an exact 63 calendar days.
In between this action in the second shaded
section, I have highlighted a move from a bottom
to a top which occurred in a period of 126 days.
Hopefully, the relevance of this time frame has
stood out to you. The time period of 126 days is
exactly twice that of the 63 day period – the first
63 day run down therefore represented exactly a
50% retracement in time. Incidentally, 50% of
63 days give us 31.5 days, which is almost exactly
in geometric proportion to the 32 and 33 day time
counts that were also working at that time in
the market.
1800 –
Once you have seen a time frame complete, it is therefore
very important to not only watch for a repeat in that time
period into the future, but a 50% retracement in time 33 DAYS
1700 –
immediately following that move.

1600 –

1500 – 63 DAYS

126 DAYS 63 DAYS

1400 –

32 DAYS
1300 –

1200 –

131pts 264pts 131pts 264 x 50% = 132pts 127pts

1100 –
repeating ranges of price
OCT 2011 LOW

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

S&P 500 Daily Chart Illustration 9.01

T R A D I N G W I T H T H E T I M E FAC TO R 121
The next chart I wish to show you follows 1800 –
the same period of time used in our previous
example, but instead of measuring our time
1700 –
frames from a bottom to the next immediate top,
or a top to the next immediate bottom, we are
measuring time frames within a series of minor 1600 –
turning points in the market.
165 days
I have again highlighted five sections to show the 1500 – 166 days
variations in the time count. The first two time
frames highlight that the market made significant
1400 –
turning points following a 165 day count and a
187 day count. I used the 28 October 2011 high 187 days
as our starting date, which was a significant high 1300 –
187 days
that immediately followed the major October
165 days
2011 bottom. Once we have seen a time count
1200 –
appear at the start of a cycle, the rule is to look
from them to reoccur throughout the remainder
of the cycle in the market. 1100 –

OCT 2011 LOW

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Important note: S&P 500 Daily Chart – Repeating Time  Illustration 9.02

As you can see, the market made

a further two time counts of 165
days, and a major time movement
from low to top of 187 days.

122 T R A D I N G W I T H T H E T I M E FAC TO R
How major time frames work in
the market
Just as repeating minor time frames can indicate
there is about to be a minor change in trend,
major time frames will repeat over and over in the
markets. These will give you the signal that there
is about to be a major change in trend.
To continue our use of recent price history, I am
going to refer to the last completed bull market
cycle that began on 10 October 2002 and which
ended on 11 October 2007. Right before the
October 2002 low came in, the market ran down
for 205 calendar days from a very major high in
March earlier that year. From the 10 October
2002 low, the market then proceeded to move
higher, creating its first major section by reaching
a high on 5 March 2004, a move which occurred
over a period of 512 calendar days. At this point,
I think it is worth mentioning that 50% of 512
gives us 206 calendar days, so the market moved
exactly twice the length up than the preceding
move down. In any event, as the 512 day time
count represents the first major move in the new
bull market cycle, it becomes important to watch
for the remainder of the campaign.
As a general rule, when I am running my
analysis on time counts, I consider a time
count has repeated if it is within a one
percent of a previous time frame.
Now that the market has given us some As the chart shows, a very significant low
significant numbers to work with, we now figure occurred on 14 March 2007, so our time
that we need to keep an eye out on the time counts continue to repeat within the same
frames of 512 +/- one percent (or 5 days) and bull market cycle.
50% of this time frame (or 206 calendar days) to
It is also worth mentioning that during that first
repeat in the future.
run of 512 days from the 10 October 2002 low
You will see that off the 5 March 2004 top, the to the 5 March 2004 top, the market produced
S&P500 ran a further 516 calendar days to make two repeating time frames within that period of
another very significant high on 3 August 2005. 211 and 212 days. These occurred between the
In between this run, there was also a significant 2 December 2002 high and the low on 1 July
bottom to top time frame of exactly 206 calendar 2003 (211 days), and again between the 8 August
days between the 13 August 2004 low to the 7 2003 low and the 5 March 2004 high (212 days).
March 2005 top. The date of that 7 March top Prior to the October 2007 final top, the market ran
is also important. Earlier, we calculated that a higher off the 14 March 2007 bottom. The time
significant high was made almost a year earlier period between these two dates was exactly
on 5 March 2004. And remember, the major bear 211 days.
market low which occurred four years later in
2009 happened on 6 March.
Following the sequence in this run, the next
significant turning point was a low on 13 October
2005. By now you will know that we began this
bull market on 10 October 2002, and with the
foresight of history, we know it is about to end on
11 October 2007 – so the market keeps giving us
these significant turning points on or around the
same date. In any event, from 13 October 2005
we run another significant time frame of 207
calendar days to the 8 May 2006 top. Still using
the low of 13 October, we figure we would add
on another 516 days (which is a repeat of the last
major range of 516 days) and we get 13 March
2007 as a date to watch.
T R A D I N G W I T H T H E T I M E FAC TO R 123
 1800 –

512 days

11 OCT 2007 TOP

1600 – calendar days

1400 –

8 MAY ‘06 14 MAR ‘07

516 days
211 days
3 AUG ‘05
7 MAR ‘05
205 days
1200 – 5 MAR ‘04
13 OCT ‘05
208 days
211 days
13 AUG ‘04
517 days
1000 –
206 days

212 days

800 –

10 OCT 2002 LOW

512 days
MAR 2009 LOW
600 –

2002 2003 2004 2005 2006 2007 2008 2009

S&P 500 – (2002 to 2009) Repeating Time Illustration 9.03

1 24 T R A D I N G W I T H T H E T I M E FAC TO R
The market action which we just walked through
between the 10 October 2002 low and the 11
October 2007 top occurred over a period of 1827
calendar days (or 261 weeks). Incidentally, this
cycle was a repeat of the major bull market that
began on 8 August 1982 and ran to the extreme
high that was reached on 25 August 1987 – the
date which marked the final high before the great
1987 stock market crash. The actual length of the
1982 to 1987 bull market was 1842 calendar days
(or 263 weeks) – which is within our tolerance
for a repeating time frame – and there were a
number of clues that the market was giving you
to let you know that the 1842 day time frame was
going to come in early. The expiring time frame
of 211 days that we mentioned earlier was one of
them. In later chapters, I will show you how an
appreciation of anniversary dates and our other
Trading Tools could be used to narrow the date of
the 11 October 2007 top.

Finally, and before ending it there, I think it is

interesting to note that once the top came in on
October 2007 (marking the start of the Great
Recession and the global financial crisis), the
duration of the bear market which followed to
the March 2009 low lasted for a period of 512
days. In other words, the bear market ended on
a time frame which the bull market immediately
preceding it started – to the exact day!

T R A D I N G W I T H T H E T I M E FAC TO R 125
The key time frames ending the 20
year gold bear market
When I first embarked on my study of the
markets and how the Time Factor plays such a
large role, I never imagined that it would one day
lead me to being able to forecast future market
turning points with such accuracy. Seeing the
markets move with such exactness over and over
again can make you at times expect that all major
market movements need to start and end with
the same Swiss clock like precision.
My early studies of Gann involved going back
and finding historical data on commodity prices
as far as I could find them. I even went to the
lengths of going through all of the historical data
Gann left behind in his book How to Make Profits
in Commodities and recreating these into price
charts on huge sheets of paper to see how past
cycles had worked. Back then, I wasn’t looking
for the exact precision in time cycles repeating
as I tend to find myself doing these days, which
actually proved to be a good thing. As I have
mentioned before, trying to get everything to
work to the exact day and exact price can mean
that you may miss out on the biggest moves,
particularly when you are working with long term
time frames.
In early 2000, my study of the markets was
quickly drawn to the precious metals gold market.
My father and I had a broker at the time who was
a perma-bull on commodity stocks, despite them
having been beaten down for so many years.
1 26
Both dad and I had been looking at some
fundamental research on the gold market, which
suggested to us that the price of gold should be
higher than the price it was trading at.
My father therefore sent me on a mission to
analyse the time frames in the gold market to
see if I could discover if any of this Gann stuff
was also telling us that the timing was now right
to buy.
In his books and courses, Gann frequently refers
to keeping a count of weekly and monthly time
frames. So when I began my analysis of historical
gold prices, it was the monthly and weekly time
counts that I was most interested in. The first
significant time frame which I counted used the
then all-time record high price of gold reached
on 21 January 1980 as the starting point. From
there, a twenty year-long bear market in gold
prices commenced with prices falling over 70%
from the top. I had seen from the historical
charts that a significant low in gold was made in
February 1985, which by my monthly time count
was 61 months or 266 weeks. The actual low
was 25 February which made for a calendar day
count of 1862 days. 266*72=1862
From the 1985 low, the market ran up a
considerable amount, making a high on 14
December 1987. The next phase of the bear
market then began, before gold prices made a
double bottom on 13 January and 10 March in
1993. My monthly time count off the December
1987 top showed that this was a move down of
61 months and 63 months in time (depending on
which bottom you looked at).
T R A D I N G W I T H T H E T I M E FAC TO R
The actual calendar day counts between the
December 1987 top and the respective double
bottoms were 1857 and 1913 days.
Once the market bounced off that low, gold
prices moved higher to reach a top on 2 February
1996. It was from this point where my real-time
calculations were now being based. I had figured
that another 61 months off that top would bring
us to March 2001, so that was the time period
I was looking out for. As history shows, gold
prices continued their move south reaching a
final bear market low in August 1999 at
$253.00 an ounce.
With my March 2001 date in mind, I was
expecting that this level would eventually be
broken, so I did not recognise the August low as
a buying point (and with hindsight, this actually
worked out in my favour). After a brief spike
in September and October 1999, gold prices
eventually ground their way back down again,
and double bottoms were finally achieved on
16 February 2001 and 2 April 2001 at around
$255.00. Using my monthly time count, we
had moved another 60 and 62 months down
respectively, with the average time between
those two dates being 61 months.
By this time, I had realised that the bear market
had now completed three main sections down
that were equal in time. The work I had done on
both the major time frames and the sections of
the market was telling me that a major low was
due and that we should be looking for the buy.
The following chart summarises this price action
much more simply.
USD / oz

1900 –

1700 –

1500 –

SECTION 1 SECTION 2 SECTION 3

1300 –
266 Weeks 265 Weeks 265 Weeks

1100 –

JAN 1980
900 –

700 –

DEC 1987

500 – FEB 1996

300 –
JAN & MAR 1993
FEB 1985 double bottom FEB & ARP 2001 double bottom

1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Gold – (1974 to 2011) – Master TIme Cycles Illustration 9.04

T R A D I N G W I T H T H E T I M E FAC TO R 127
 Months down
Section One 61
61 (Jan low)
Section Two
63 (Mar low)
61 (average)
Section Three 60 (Feb low)
62 (Apr low)
Know the length of each bull
market from every major low and
watch out to see these major time
frames repeating in the future.
Now, I recognise that it was August 1999 when
the extreme low in gold prices was reached.
However, it was a good 18 month wait until the
February and April 2001 lows were formed,
and these proved to be the best places to buy.
Another important factor in the analysis, was
that I wasn’t looking for absolute precision in the
markets – by that I mean that I wasn’t looking for
1862 day counts to exactly repeat themselves
(although they came very close), nor was I put off
by the fact that double bottoms had been made
which required us to average out our time calcs.
128
Weeks down
266
265 (Jan low)
266 (average)
In the end, once Dad and I saw the 2001 lows
hold, we soon figured that the time to buy
was right.
We purchased our first pieces of investment gold
bullion at just over US $300 an ounce, which the
family still owns to this day, and Dad positioned
himself with a heavily overweighted portfolio of
gold stocks. Dad soon became the ultimate gold
bug, and our stock broker eventually gave him the
nick name ‘Goldfinger’ – in hindsight, it wasn’t as
nearly as a creative a nickname as “Bob.”
The time cycles calling the 2011 gold top
Before ending this chapter on repeating time
frames, I want to bring you back to something I
said earlier about watching for the market to make
a 50% retracement in time, as well as price.
T R A D I N G W I T H T H E T I M E FAC TO R
Calender days down
1862
1857
1863 (average)
In the example on gold above, we measured that the
bear market that began on 21 January 1980 ran all
the way down to provide the buying opportunity of a
life time in February and April 2001.
Using a weekly time count, the actual time frame
between the January 1980 high and the February
2001 low is 1100 weeks, which gives us a very
major cycle of time. If we multiply that by 50%,
we come up with a time frame of 550 weeks into
the future to look out for a major change in trend.
Adding 550 weeks to the 21 February 2001 low
gives us a target date of 2 September 2011 to
look out for. The current, all-time high in gold
prices at the time of writing stands at $1920.80
an ounce, reached on 6 September 2011. So by
using a time frame of more than 7700 days, we
were able to project a date that that was within 4
calendar days of the all-time record price in gold!
USD /oz Major Bear Market Cycle = 1110 weeks Bull Market Cycle = 550 weeks

2000 –

1800 – Forecast date - 2 Sep 2011

In mid-March 2022, the next cycle of 550 weeks will
complete, and this will coincide with a repeat of the Actual high - 6 Sep 2011
1600 – 1100 week major cycle that preceded it.

I am looking forward to being around when it arrives –

1400 –
it will certainly be an interesting period to watch.

1200 –

1000 –

800 –

600 –

400 –

200 –

1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014

Gold – 1974 to 2014 Illustration 9.05

T R A D I N G W I T H T H E T I M E FAC TO R 129
Chapter Eleven – Anniversary dates

As a married man, I am certainly aware of
the importance of and the need to remember
significant anniversary dates. Having my first
child born on the very same day as my own
birthday, has simply served to reiterate the point.
Incidentally, our second child was born just one
day before my wife’s birthday – as he was born
on a Thursday my wife and I often joke that had it
not been a golfing day for our delivering doctor on
the Friday, there would have been two equal sets
of birthdays common in our family.
Now I have been married long enough to
realise that it would be wrong of me to say that
anniversary dates in the market are the most
important dates to watch… (and yes, I do realise
that I just in fact said it!!). So behind wedding
anniversaries and birthdays of course, the date
in which a market celebrates a significant top or
bottom should also be etched into your memory
bank.
The way Gann described
anniversary dates
We have already touched on the significance
of repeating dates in the markets in an earlier
chapter of this book, so no doubt you already
have an appreciation of how particular dates
reoccur over and over to produce significant
market tops and bottoms.
Gann spoke about anniversary dates in chapters
VIII and IX in his books 45 Years in Wall Street
and How to Make Profits in Commodities,
respectively. These are actually some of the
easiest chapters in all of Gann’s works to follow.
It is a very worthwhile exercise to not only read
these chapters, but to complete the analysis Gann
began in chapter VIII of 45 Years in Wall Street
by updating the tables of when extreme highs
and lows were made in the Dow Jones up to the
present day. Even though Gann left off at 1949,
you will soon appreciate the relevance of this
lesson today.
Significant anniversary dates to watch
in the S&P500
Now, I might be biased, but I think October is a
great month. Not only does it represent the time
of my birthday, it represents some of the greatest
tops and bottoms and movements in the market
of all time. Below are just a few examples:
– The Panic of October 1907
– The October 1917 crash.
– The October 1987 great stock market crash
– The October 1997 Asian currency crisis
– The October 2007 pre-GFC high
And these are just to name a few.
What I also find absolutely mind boggling about
the month of October is the number of times it
has produced either a yearly top or bottom, or
major high or low, in the US equity markets.

The simple rule with anniversaries is this:

Markets will often reach extreme high or low

(or make other significant tops and bottoms)
on or about the same day of the month in
different years.

130 T R A D I N G W I T H T H E T I M E FAC TO R
 OCT 10
1989 TOP
OCT
1987 CRASH

300 –

OCT 11
1990 LOW

OCT 11
1983 TOP

150 –

OCT
1978 CRASH

600 –

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

S&P 500 (log scale) – Anniversary Dates Illustration 11.01

T R A D I N G W I T H T H E T I M E FAC TO R 131
 2000 –

1800 –
OCT 11
2007
1600 –

1400 –

1200 –
OCT 8
1997
1000 – OCT 4
2011

OCT 8
800 – 1999

OCT 10
2002
600 –

400 –

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

S&P 500 – Anniversary Dates (cont.) Illustration 11.02

132 T R A D I N G W I T H T H E T I M E FAC TO R
The previous charts highlight some of the more
significant turning points which have occurred
in the markets in October – particularly in early
October, and more particularly around the 8th
to the 11th of the month. In the examples we
have walked through earlier, you will have noticed
many other examples of where an October date
produced a significant market top or bottom,
which haven’t been included in the charts.
I think it also helps to pay a visit back to Friday, 11
October 1929 and look at the price movement of
the Dow Jones immediately following that date!
Some commentators have in fact attributed
8 August 2007 as the date where the active
phase of the recent global financial crisis can be
attributed to – this was the date when a major
international bank terminated withdrawals from
three hedge funds manifesting into a complete
liquidity crisis and sparking the now famous
collapse of Lehman Brothers and market turmoil
which soon followed. Finally, and at the risk of
labouring the point, the 8th of August is also
considered to be a significant time in another
major period involving US equity markets.
A key anniversary date to watch in
the silver market
I would like to end this chapter on anniversaries
by using a very recent example in the precious
metals silver market. The following chart simply
highlights three significant turning points in silver,
all of which occurred exactly on June 28 in 2011,
2012 and 2013.

Over the years, I have learnt that different
markets will work to different anniversary dates.
In some instances, an anniversary date may not
necessarily mark the date of a top or a bottom,
but a significant day that influences market
behaviour or which creates volatility. The Dow
Jones in particular seems to like the month of
August as a time to celebrate its anniversaries –
for example the 1921 low on August 24 and the
stock market high in 1987 on August 25. In 1997,
the Dow Jones index made its yearly high on
August 8, and then exactly ten years later in 2007,
a very sharp decline commenced off a significant
top which occurred on August 8.
On 8 August, 1929, the Federal Reserve
announced that it had increased its discount
rate from 5 percent to 6 percent. This caused a
swift and immediate market reaction which saw
stock prices dramatically fall. Whilst stock prices
eventually traded higher to reach a final high on 3
September 1929 (after some market intervention),
it is 8 August 1929 which is commonly referred
to as the date which first broke the 1920’s bull
market, precipitating the greatest stock market
fall in history.

T R A D I N G W I T H T H E T I M E FAC TO R 133
 U S D / OZ

I hope this demonstrates to you the importance

$50.00
of anniversaries. In the next chapter, I will
continue to show you the importance of
anniversary dates and how I have incorporated
$45.00
a simple adaptation of this predictive tool
to forecast turning points on a monthly time
frame. I call this technique, “trading to Time.”
$40.00

$35.00

JUNE 28
$30.00 2011

$25.00
JUNE 28
2012

$20.00

JUNE 28
$15.00 2013

$10.00

Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13

Silver – Anniversary Dates Illustration 11.03

134 T R A D I N G W I T H T H E T I M E FAC TO R
Chapter Twelve – trading to Time
If the previous chapters haven’t already changed
the way you look at the markets, then this chapter
will. I honestly believe that what you are about to
learn in this chapter can be used as a standalone
tool for trading the dates of your forecast market
tops and bottoms. Before going any further, it is
at this stage that I wish to make an important
point, as I underscored the word ‘trading’ for a
specific reason.
The Trading Tools I am teaching you in this course
will equip you with what is needed to forecast a
future turning point in the market a year or more
in advance – but it is important to remember that
you won’t actually be able to buy or sell off that
forecast until the day actually arrives. When you
eventually do get closer to the event, it is at that
point in time where it seems sensible to use your
Trading Tool box to try and pin point the exact
date of the market turn.
In an earlier chapter, we walked through how to
calculate when a major bull or bear market cycle
is likely to begin and end using long term time
frames. In almost all circumstances, those time
frames you will be dealing with will be over 500
or even 1000 days. When working with such
large time frames, you need to allow yourself a
small degree of variance in your analysis – I will
typically allow for a one percent variation when
I am using a major time count. My ‘trading to
Time’ technique however, allows you to narrow
that forecast to within one or two trading days.
This is why I believe the “trading to Time”
tool is so important. trading to Time is directly related to our previous
The bull market high in the S&P500 on 11
October 2007 is a good case in point. In an
earlier chapter, I outlined that Bob and I were
expecting the 2002 bull market to be a repeat
of 1982. Had we stuck exactly to the 1982 bull
market time frame of 1842 days, it would have
kept us waiting until 26 October 2007 before
we began looking for a trade signal confirming
that the top was in. In the end, it was our yearly
anniversaries which told us that 10 October was a
date to watch (being the yearly anniversary of the
2002 low) – and this date proved to be only one
day out from the actual top.
As you will soon see, the trading to Time tool
uses monthly anniversaries to achieve the
same purpose. In 2007, it was the monthly
anniversaries that were telling us the 15th day
of the month was a crucial time each month
to watch. In October 2007, it was the 15th of
October (which came in only two trading days
after the yearly top) which just happened to give
the best trading signal to sell, confirming that the
top was in.
T R A D I N G W I T H T H E T I M E FAC TO R
trading to Time
chapter about anniversary dates. The key
difference however is that instead of looking at
the same date appearing each year, we use a
major reference point that has produced a recent
significant high or low in the market, and watch
for that same date to produce future market tops
and bottoms on a monthly basis.
To illustrate the point, the following chart
represents the same price action in Silver that
was presented in the last chapter. Earlier, we
highlighted June 28 as the yearly anniversary date
to watch in the silver market. The date “28th”
therefore becomes significant. Applying this on
a monthly anniversary basis, we would therefore
watch out for significant turning points to occur
in the silver market on or around the 28th of each
month.
trading to Time dates to watch
in the silver market
The following chart shows the incredible
frequency with which significant tops and
bottoms have occurred in the silver market on
either the 28th or the 29th day of the month –
a pattern which has continued for three
consecutive trading years since the start of 2011.
135
 U S D / OZ APR 28
2011
50.00 -

48.00 -

46.00 -

44.00 -

42.00 -

40.00 - FEB 29
2012
38.00 - OCT 28
2011 NOV 29
36.00 - 2012

34.00 -

32.00 - JUN 28
2011
30.00 -

28.00 - AUG 28
2013
26.00 -
JAN 28 DEC 29
SEP 26 2011 JUN 28
24.00 - 2011 2011 2012
22.00 -

20.00 -
JUN 28
2013
DEC 31
2011 2012 2013
2013

Silver – Trading to Time (Monthly Dates) Illustration 12.01

136 T R A D I N G W I T H T H E T I M E FAC TO R
By observing the markets closely, and the day
of the month where major and minor tops and
bottoms are formed, you will soon discover that
the market will ‘tell’ you which date (or time) in
the month you should be watching for future tops
or bottoms to occur.
The ‘trading to Time’ technique will improve the
accuracy of your long term forecasts and help
you to pin-point the exact date of a forecast
future market top or bottom.
Knowing when a trading to Time date
will work and when it won’t
In our experience analysing and trading the
markets, Bob and I have observed that markets
will work to their own particular behaviour or
rhythm, and will tend to favour one particular day
in the month over others over a twelve to twenty-
four month period.
For example, the silver market was clearly
favouring the 28th of the month in the three year
period between 2011 and 2013, and the market
was producing more significant turning points on
this day of the month than any other – this is what
I refer to as an ‘active trading to Time date’. This
does not mean that all markets will therefore be
turning on the same day of the month.
A currency or stock index during that same period
for example, may be favouring the 15th of the
month as its ‘active trading to Time date’ to make
its significant turns.
Now it would be great if the same market
continued to make significant tops and bottoms
on the same active trading to Time date each
month for the next one hundred years. Of
course, it isn’t that easy. What you will notice
by reviewing the daily charts and observing the
dates of key turning points in your chosen market,
is that a particular active monthly date which has
been working for a certain period will begin to
‘phase out’ – producing less significant turning
points or none at all. Typically, when one active
date begins to phase out, it will be replaced by a
new active date in the month which will begin to
produce significant tops and bottoms.
For example, although the silver market has been
working to the 28th of the month for the last
three years, I will be watching for the next major
top or bottom that forms on a different day of the
month to start calling future tops and bottoms.
Let’s just say the 6th of the month gives us a very
significant low – it is at that point that I will begin
watching both the 6th of the month and the 28th
of the month and waiting to see if the market
begins fading out the 28th in favour of the 6th.
After a major top or bottom has been made,
watch the same day of the month which that
top or bottom was made – this will produce an
‘active trading to Time date’ that can be used
to call future market tops and bottoms
Once a new active monthly date is in, continue
to watch both the new date and the old – the
market will soon tell you which one it is beginning
to favour to produce major or minor changes
in trend.
T R A D I N G W I T H T H E T I M E FAC TO R
trading to Time – S&P500 2011 to 2012
The following chart illustrates a series of
significant turning points occurring in the S&P500
market on repeating monthly anniversary dates.
A number of key dates are highlighted which
produced significant turns on the 16th or the 18th
of each month. You will see that following these
sequence of turns, a major high was made on 2
May 2012.
At this point, 2 May now becomes our new
reference point, and we begin looking for
significant turning points to occur on the second
day of the month (or very early on in the month)
going forward. Notice how over the next calendar
year major turns were subsequently made on
4 October 2011, 2 April 2012, 4 June 2012 and
finally 5 October 2012 (which was a day out from
the annual anniversary the year before). Further,
by studying a daily chart of the S&P500 during
this time, you will also see that other tradeable
turning points were made on 1 May, 3 July, 2
August and 2 November 2012 – all of them being
on or around the active trading to Time date.
At the end of this book, I will walk you through
a series of emails which I had written which
identified in advance that each of these dates
were key times to watch.
137
 1550 –

1500 –
14 SEP 2012 5 OCT 2012
1450 – 2 APR 2012

1400 – 2 MAY 2011

18 FEB 2011
1350 –

15 NOV 2012
1300 – 18 APR 2011

16 MAR 2011 16 JUN 2011

1250 – 4 JUN 2012

1200 –

1150 – 18 NOV 2010

1100 –

1050 – 4 OCT 2011

2010 2011 2012

S&P 500 Stock Index – 1 Day Bar Chart – USD Illustration 12.02

138 T R A D I N G W I T H T H E T I M E FAC TO R
Chapter Thirteen – Counting time
Learning how to count time not only in calendar
days, but in mathematical degrees will further
improve your ability to pin point and forecast
future turning points in the markets. In particular,
this Trading Tool will help you enormously to
identify which one of your trading to Time dates
will have a higher probability of producing a
significant change in trend than other monthly
dates.
Every good book or course written about Gann
has covered this topic in one way or another–
and with very good reason. I believe it was
this discovery by Gann which completely
revolutionised the approach to technical analysis
and the way some analysts look at trading the
markets.
The biggest thing to overcome however about
counting time in degrees, is accepting the way
in which Gann discovered how to calculate it.
Whilst there is nothing overly complex about it, it
will require you to keep an open mind. Hopefully,
this chapter goes some way in letting the market
demonstrate to you the power of this tool and
how keeping an open mind can significantly
benefit your trading.
How to calculate and divide a yearly cycle
of time
Gann covers this topic in some way or form
in nearly all of his books and trading courses.
Unfortunately, the clarity of his message is at
best, difficult to understand, so you really need to
know what to look for when he discusses it.
He covers the topic well in chapter 7 of his
Master Stock Market Course, but goes into a
great level of detail in chapter III of his book
How to Make Profits in Commodities on pages
56 to 59.
In his discussion on how to forecast daily moves,
Gann outlines the importance to watch for a
change in trend 30 days from the last top or
bottom, and then again for changes 60, 90, 120
and 180 days for significant tops or bottoms.
Those day counts that Gann refers to however
are simplifications of how to actually calculate the
time frames you need to watch. In How to Make
Profits in Commodities, Gann describes the time
period of 90 to 98 days as an important time. The
problem with trying to trade or forecast using a
day count as wide as this, is that it spans a time
frame of eight calendar days – and quite a bit can
happen in the market over eight days!
The eight day time span Gann referred to, was an
oversimplification, as he had actually devised a
method to calculate the exact date or time period
to look for. The secret behind understanding how
Gann did this is covered when he discusses the
concept of ‘How to Divide the Yearly Time Period’
in his books and courses. To illustrate, in his
book How to Make Profits in Commodities, Gann
outlines that you should:
Divide the year by 4 to get the 3 months’
period or 90 days, which is 1/4 of a year or
13 weeks
T R A D I N G W I T H T H E T I M E FAC TO R
What Gann is actually doing here is dividing the
calendar year into 4 equal parts. To accurately
determine the correct day count however, you
need to view the calendar year as one complete
cycle (or circle). The laws of mathematics have
taught us that each circle is made up with a
rotation of 360 degrees. So according to Gann’s
logic, once we have travelled 360 degrees in the
circle, we have completed a full cycle.
I hope by now that in reading this book you have
been able to keep a pretty open mind about
things and the way geometrical relationships
influence the markets. What I am about to
show you is how to calculate mathematically the
divisions of time that influence the daily time
counts you will see reoccurring again and again in
the markets.
By viewing the calendar year as one cycle of time,
a period of 365 calendar days needs to elapse
before we have completed one full circle (or 360
degrees) of time. If we divided the year into four,
as Gann tells us to do, we would end up with
91.25 calendar days in each quarterly division of
the yearly cycle. The issue here however is that
the earth does not travel exactly 91.25 calendar
days in each 90 degree cycle of time. The reason
for this phenomenon is because it takes varying
degrees of time (in calendar days) for the earth
to make a 90 degree rotation around the sun.
And that’s not crazy talk – it is scientific fact.
contare 90° significa avere 90a 96 giorni di calendario circa
dipende dalla stagione dell'anno
139
Each 90 degree rotation represents one full
season of the earth – spring, summer, autumn,
winter – with the true beginning and ending of
these seasons determined by the earth’s position
relative to the sun (the equinox). In the southern
hemisphere, our summer actually begins on
or around 21 December each year culminating
approximately three months later on or around
21 March.
During that period, the earth will have travelled
exactly 90 degrees around the sun in 90 days. As
the season (or cycle) of summer ends, the season
of autumn beings, and so we travel another 90
degrees which ends on 22 June. Whilst the
earth has rotated another 90 degrees during that
period, it has taken us a total of 93 calendar days
to get there.
The two equal 90 degree movements in time,
have not been represented by two equal
movements in days. The earth’s ‘natural divisions
of time’ as it moves through its seasons is
summarised in the table below. Each division
is an equal 90 degrees in time, but will vary in
length according to the calendar.

Total degrees travelled Days between each season Total days travelled

0° 21 March (start)

90° 22 June 93 days 93 days

180° 23 September 93 days 186 days

270° 21 December 89 days 275 days

360° 21 March (end) 90 days 365 days

The natural divisions of time explain why you
will sometimes see time counts in the market
expiring exactly on a 90 day period and others
on a period of 92 to 94 days.
The highest probability daily time counts • 90 degrees (or multiples of 90 degrees)
Now that we have a firm grasp on how time by dividing the cycle into quarters; and
counts can be measured in degrees, I would like
• 120 degrees (or multiples of 120 degrees)
to share with you what I consider to be the most
by dividing the cycle into thirds
important divisions of a yearly cycle to look for
when determining future daily changes in trend.
In my experience, the time counts which occur
the most consistently in all financial markets to
product market tops or bottoms are:

140 T R A D I N G W I T H T H E T I M E FAC TO R
Gann often spoke about the importance of
these divisions and that they should be applied
to all cycles of time, whether we are working of
a daily, weekly, yearly or even hourly
• The point of each square and triangle will
time count.
• By dividing cycles into quarters and thirds,
we are creating both a square and triangle
within the circle (or cycle) of time.
represent key milestones which need to be
watched in any time frame or cycle.
If you are using the calendar year as your cycle,
each of these divisions of time represented by the
Square and the Triangle, will give you the highest
probability day counts to watch for future changes
in trend.
In my experience, I have noticed the following
daily time and/or daily degree counts work
the most consistently and have the highest
probabilities of producing a future change in trend.

In order of importance:
0º/360º 90º or 0º/360º
1/4
1st 90 days or 90 degrees

120º or
1/3
2nd 180 days or 180 degrees

3rd 120 days or 120 degrees

4th 42 to 49 days (not degrees) –

but look mainly for 45 day counts

270º or 180º or 5th 240 and 270 days or 240 and

3/4 1/2
240º or 270 degrees (equal importance)
2/3

In my opinion, these are the most important daily

Divisions of a cycle Illustration 13.01 time counts to watch – in all markets

15 NOV 2012

4 OCT 2011
T R A D I N G W I T H T H E T I M E FAC TO R 141
How to calculate calendar time into Approx. calendar date
degrees No. Symbol Position in degrees Latin name when each period starts
Nowadays, there are a number of charting every year
programs which do all the hard work for you
and will accurately convert a daily calendar time 1 0° to 30° Aries 21 March
count into a daily degree count. If you do not
have such charting software however, a simple 2 30° to 60° Taurus 20 April
internet search of an Ephemeris will give you the
information you need to convert calendar time 3 60° to 90 ° Gemini 21 May
into degrees.
4 90° to 120° Cancer 22 June
An Ephemeris provides us with the position of
the earth relative to the sun and measures it 5 120° to 150° Leo 23 July
in degrees for each calendar day of the year.
Fortunately for us, the rocket scientists at 6 150° to 180° Virgo 23 August
NASA have figured out the complex series of
mathematical calculations that go behind this 7 180° to 210° Libra 23 September
information. All we have to do is look up the data.
8 210° to 240° Scorpio 24 October
It is important to recognise that the division of
one full cycle of time each year is divided into 12
9 240° to 270° Sagittarius 23 November
equal sections of 30 degrees. For those of you
who read your daily horoscope, it is the twelve
10 270° to 300° Capricorn 21 December
signs of the zodiac which are used even by the
NASA rocket scientists to calculate the position
11 300° to 330° Aquarius 21 January
of the earth’s movement relative to the sun.

The twelve signs and their corresponding position 12 330° to 360° Pisces 19 February
when measured in degrees is as follows.

142 T R A D I N G W I T H T H E T I M E FAC TO R
In order to find the position of a market top or By using an Ephemeris we can look up the corresponding calendar dates for the following points of time
bottom in degrees, you will need to identify when measured in degrees:
where it is in the division of the calendar year.
4 October 2011 (start)= 10 25
For example, on 4 October 2011, the sun was
in the position 10 25. In other words, we 4 October 2011 + 90 degrees = 10 25 (which gives us Monday, 2 January 2012)
were 10 degrees into the sign of Libra. As Libra
commences at 180 degrees, if we have travelled 4 October 2011 + 180 degrees = 10 25 (which gives us Saturday, 31 March 2012)
a further 10 degrees into this sign, then according
to the rocket scientists, we must be 190 degrees
into the cycle.

As the 90 degree and 180 degree time counts
are the most important to watch, we would
naturally calculate the exact date to tell us when
time has moved 90 degrees from the 4 October
2011 low. As the 4 October 2011 low is starting
at 190 degrees, an additional 90 degrees takes us
to 280 degrees. Referring to the previous table,
we can see that this would mean 10 degrees
into Capricorn . Repeating the process again to
calculate our 180 degrees movement would bring
us to 370 degrees, which is the same as
10 degrees into Aires .
It just happened to be that 2 January 2012 was a
public holiday and 31 March 2012 was a Saturday
– both being dates where the market did not
trade. In circumstances where a time count in
degrees occurs on a weekend or non-trading
day, you should closely observe the market on
both the trading days immediately preceding
and following your calculated date. In the case
of 31 March 2012, this would mean we watch
Friday, 30 March 2012 and Monday, 2 April 2012
as the two trading dates. As you can see on the
following chart, Monday 2 April 2012 produced a
very significant top in the S&P500 index.
The following chart highlights a number of
significant time counts in degrees that produced
significant changes in trend in just over a full
calendar year period from the 4 October 2011 low
in the S&P 500. I have used various important
tops and bottoms as the starting points, and have
calculated the significant time counts in degrees
to measure future dates. Notice how the first 180
degree count from 4 October 2011 to 2 April 2012
was exactly 180 days, but the second 180 degree
count between the May to November 2012 highs
occurred over a period of 185 days.

This is an example where time counts in degrees can pin point your turning points to
the exact day whereas calendar day counts would have left you just that little bit out.

T R A D I N G W I T H T H E T I M E FAC TO R 143
 1600 –
2 APR 2012 3 JULY 2012 5 OCT 2012

1560 –
4 OCT 2011
1520 –

1480 –

1440 –

1400 –

1360 –

1320 –

1280 –
2 NOV 2012
1 MAY 2012 2 AUG 2012
1240 –

1200 – 4 JUN 2012 5 OCT 2012

1160 –

1120 –
180 DEGREE COUNT
1080 – 90 DEGREE COUNT
120 DEGREE COUNT
1040 –

SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV

S&P 500 Stock Index – 1 Day Bar Chart – USD 13.02

144 T R A D I N G W I T H T H E T I M E FAC TO R
In my analysis, I use time counts in
degrees to measure future dates from
tops and bottoms 90, 120, 180, 240 &
270 degrees apart.
For all of my other daily time counts, I stick to a
daily calendar day time count and use my ‘trading
to Time’ as the dates to watch. Accordingly, I do
not measure the interim time counts of 30, 45
and 60 in degrees. I have found that these simply
do not produce any consistent results to base
your trading off.
I have observed that without doubt, the 90
and 180 degree time counts are the two most
consistent counts in degrees which work in all
financial markets. If you go back and review
a historical chart of any stock, currency or
commodity, you will soon see the number of
times that significant, tradeable changes in trend
occurs either 90 or 180 degrees away from a
previous top or bottom – it is truly astonishing!
Important note:
Always watch the 90 and 180
degree counts from any major
or minor top or bottom –
these are the most important
time counts for future changes
in trend.
The predictable yearly highs and lows in 2000 and 2001
The following chart is a daily bar chart of the Australian equity markets futures contract – the Share
Price Index. We referred to this chart in an earlier chapter where we discussed repeating cycles of price.
In that example, I mentioned why I thought it was quite easy to anticipate the key dates which the market
was going to turn on during that period of trading.
Each of the dates in the following chart represents a very significant turning point in the market. Gann was
aware of the significance of these exact time frames each year – all of which were permanently marked in
his Master Square of Nine Calculator.
22 March 2000 (cycle top) + 180 degrees = 22 September 2000 low (major low)
22 September 2000 low + 45 degrees = 7 November 2000 (yearly top)
22 September 2000 low + 90 degrees = 21 December 2000 low (major low)
21 December 2000 low + 90 degrees = 23 March 2001 low (major low)
23 March 2001 low + 180 degrees = 24 September 2001 (yearly low)
In the following example, I have also highlighted
the 29 March 2001 low which was a double
bottom with 23 March 2001. You will see that
the yearly top in 2001 occurred on 29 June –
exactly 90 degrees from the 29 March 2001 low –
proving again, how powerful a tool measuring 90
and 180 time counts in degrees can be for calling
major market tops and bottoms.
T R A D I N G W I T H T H E T I M E FAC TO R 145
 3600

29 JUN 2001
3500

7 NOV 2000

3400

22 MAR 2000
3300

3200

21 DEC 2000 29 MAR 2001

22 SEP 2000
3100
23 MAR 2001

3000

2900

24 SEP 2001
2800
Jan-00 Mar-00 May-00 Jul-00 Sep-00 Nov-00 Jan-01 Mar-01 May-01 Jul-01 Sep-01 Nov-01

Natural TIme – Square of Nine (ASX 200 Daily Chart) 13.03

146 T R A D I N G W I T H T H E T I M E FAC TO R
Chapter Fourteen – The Master Time Factor – explained, simply
perchè usa la decade e non vent'anni
Discovering the secret to the “Master Time
Factor” has intrigued many Gann students
and experts, even today. I believe the best
description by Gann of his Master Time Factor
was written in section seven of The W.D.
Gann Master Stock Market Course – which,
funnily enough, can be found under the chapter
titled ‘Master Time Factor and Forecasting by
Mathematical Rules.’
In my humble opinion, chapter 7 of the WD
Gann Master Stock Market Course contains
the greatest discovery Gann made in all of his
extensive years of analysing the markets. It is
some of the best material ever written by Gann
on the subject of Time.
In this chapter, I will show you how to interpret
the Master Time Factor and how to apply it in a
simple manner. Incorporating the Master Time
Factor will significantly improve your analysis of
financial markets and your investment decisions.
By the end of this chapter, you will have the
tools to identify, years in advance, major cyclical
lows that market the start and end of major bull
and bear markets. I will also show you how to
construct a yearly road-map that can guide you on
the future price action for the year ahead (and in
some cases many years in advance).
The Ten Year Road Map Calendar
In chapter 7 of this Master Stock Market Course,
Gann describes how he constructs his long
term forecasts using major cycles of time –
these major cycles span a number of years and
decades.
One of the discoveries Gann made in his analysis
of the US equities was that the market moved
to a 10 year (or decade) long cycle which has
characteristics that often repeat again and again.
I believe the Ten Year Road Map Calendar was
the greatest discovery by Gann of all – it was
also his most simple.
At its core, Gann used this 10 year cycle to
determine whether to expect higher or lower
prices throughout the particular calendar year
ahead. By observing what the market was doing
in one year, he could refer to the greater 10-year
cycle to determine whether prices should be
higher or lower over the next. Even Gann himself
recognised the simplicity of this discovery, saying
that all that one needs to learn how to use this
technique is to count the digits on your fingers to
determine what type of a year the market is going
to be in.
T R A D I N G W I T H T H E T I M E FAC TO R
If the Ten Year Road Map Calendar is telling
you that higher prices should follow for the next
twelve months, then the objective should be to
look for buying opportunities throughout the year
to trade each section of the market.
One of the most worthwhile exercises I have
ever done, was to go through the historical price
movements of the Dow Jones and S&P 500 as
far back as possible, and record what the market
did in each year of every decade. By doing
so, you will see a familiar pattern emerging,
particularly during certain years of a decade.
These stock market movements have an uncanny
ability to repeat and repeat. By doing this, you
will then be able to construct your own general
road map for each decade, that can help you
determine future stock market movements over
the next ten years ahead.
My analysis of the Ten Year Road Map
Calendar (the Gann Decade Cycle)
Based on my study of the US equity markets over
the last 100 years, I have identified the following
characteristics attributable to each year in the Ten
Year Road Map Calendar.
1 47
My analysis of the Ten Year Road Map Calendar (the Gann Decade Cycle)

– The early years of the decade typically see the formation of significant cyclical lows from which a bull market will be based.
Years 1 & 2 – Lows which are created in the “year 2” are often major bull market bottoms, from which a strong bull market will commence.
– Refer to 1932, 1942, 1962, 1982 and 2002

– The third year will often be a year of stronger prices, particularly if a low has been formed in year 1 or 2.
Year 3
– You should study 1933, 1963, 1993, 2003 and 2013.

– It has been my observation that you should look for significant intermediate cycle lows to form in the fourth year around May to July.
– In these situations, it normally presents a strong buying opportunity, particularly if the fifth year is a strong year in a bull market.
Year 4 – Look up 1914, 1924 and 1984 in particular.
– Also look up the major low in 1974 which came in December.
– This occurred on a 60 year cycle from the World War I low reached in December 1914.

– Consistent with Gann’s analysis, the fifth year has always been a year of Ascension and has normally produced considerably
higher stock prices.
Year 5 – When measuring the combined annual performance of the Dow Jones since 1900 and S&P500 since 1970,
the 5th year has always resulted in a positive year each year over the last 100 years with an average return of over 30%!!
– Study the years 1905, 1935, 1975, 1985 and 1995. The year 1915 in particular was an extraordinarily strong year.

– Will often produce a year of consolidation with sideways to slightly lower behaviour, particularly if prices have been strong
in the fifth year or if a major bull market began from a low starting in the fourth year of the decade.
Year 6
– In a number of cases, minor tops will often form in the sixth year.
– Look up the tops in 1906, 1916, 1946, 1956, 1966 and 1976

148 T R A D I N G W I T H T H E T I M E FAC TO R
My analysis of the Ten Year Road Map Calendar (the Gann Decade Cycle)

– The seventh year has an uncanny knack for producing extreme volatility in the markets, including panic and sell-offs.
Gann sometimes described the seventh year as a ‘fatal’ year and a bear number.

– It is always wise to watch for the US equity markets to make highs in August or October during the seventh year –
Year 7
this will often see a sharp sell-off follow in October.

– Look up the Panic of October 1907, October 1917, October 1957, October 1967, the October 1987 stock market crash,
and the October 1997 Asian currency crisis

– Gann said to look for the eighth year to be a bull year, particularly if prices begin rising off a low that has been formed in the
seventh year.

– After the fifth year of the decade, the eighth year is normally the next strongest year in a bull market.
Year 8 – Always watch for strong gains in the eighth year of a decade that is working to a bull market.
It is often a prelude into higher prices which are achieved in year 9 which often marks the end of major bull market cycle.

– The years 1908, 1928 and 1958 in particular were very strong bull market years.
Also look at 1988 and 1998 which were strong bull market years.

– The ninth year often culminates in a major bull market high.

This is particularly so if the eighth year of the decade has been a strong bull year.
Gann noted that the ninth year would often mark the end of a major cycle.

– In most cases, extreme high is reached in the months of September or November.

Year 9 – Recent exceptions have been 1999 (where equity markets extended slightly longer and made final highs in early 2000),
and in 2009 which was a significant bear market low.

– Note: The 2009 low was preceded by lower prices in 2008 and did not display the characteristics typical of a 9th year ending in a
bull market. It was also 60 years from another major bear market low reached in 1949 – both were indicators not to expect a market
top in that year.

T R A D I N G W I T H T H E T I M E FAC TO R 1 49
 Year 9
Not all market cycles will exactly follow the Look for
200 sequence described in the 10 Year Road Map cycle highs
Calendar, however the chart below provides an to form
average annual performance history of
the Dow Jones for each year of the decade
Year 7
180 since 1900.The Gann Decade Cycle (Index = 100)
Volatility
and panic
- 10 anni road map The 10 Year Road Map Calendar is best used in
- Master time Factor conjunction with the Master Time Factor and
- long term cycle long term cycle analysis. When your long term
160
analisi pag 157 cycles are aligning with the Road Map, it can
produce incredible results.
Year 8
Big gains
140
towards
the end the
bull market

120

Year 5
The year
100 for strongest
gains

Years 1 & 2
Look for cycle lows to form
80
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 0

The Ten Year Road Map (the Gann Decade Cycle) Calendar – typical pattern (US stocks) Illustration 14.01

150 T R A D I N G W I T H T H E T I M E FAC TO R
The Master Time Factor
Gann always referred to major time cycles
when he made his annual forecasts.
He often quoted that –
Important note:
There must always be a major
and a minor, a greater and a
lesser... In order to be accurate
in forecasting the future, you
must know the major cycles.’
In his Master Stock Market Course, Gann goes
through the major yearly cycles and how to apply
them, describing the need to look at 60, 50, 45,
30, 20, 15, 10, 7, 5 and 2 to 3 year cycles.
I have spent years and years of study to identify
which major time cycles to use and why. In the
end, I find that simplifying the analysis will often
produce just as good a result and with much less
effort than trying to use every single working
cycle of time.
The three major cycles I therefore use in my
forecasting analysis are the 60 year, 20 year
and 30 year cycles. I use these in conjunction
with the Ten Year Road Map Calendar described
earlier. I also observe the 90 year cycle (as this
is three repeats of the 30 year cycle) and the half
way points of those two cycles which are the 45
year cycle and the 15 year cycle, respectively.
Begin your long term cycle analysis using the
20, 30 and 60 year cycles.
Next, look at the 90, 45 and 15 year cycles.
Use these in conjunction with the Ten Year
Road Map Calendar to forecast the start and
end of major bull and bear markets.
The Great Cycle
Gann referred to the 60 year cycle as his
“Great Cycle” or his “Master Time Period”.
He described this cycle as the greatest and most
important cycle of all and advised that one should
look for it repeating every 60 years particularly
when it coincides with the completion of a 20
year cycle.
tre cicli di giove saturno
T R A D I N G W I T H T H E T I M E FAC TO R
Gann observed how the cycle from 1861 to
1869 was repeated again 60 years later in 1921
to 1929. In both cases, the cycles had distinct
similarities, with great panics following the end
of each of them. In my observation of the 60
year cycle at work, I have found that in almost
all situations, the start and end of the cycle will
share common features.
The 60 year cycle will often work in a calling a
low to low or a top to top sequence, and is most
powerful when it coincides with the end of a 20
year cycle.
When using a 60 year cycle, it is best to do so
using a monthly chart. A common misconception
is that a 60 year cycle works only when it
produces exact results – ie a bottom on 1 January
1900 must be followed by a bottom on 1 January
1960. As with all market cycles covering long
periods of time, you should not expect this type
of perfection. Quite often you will see 60 year
cycles starting and ending in the same month –
for example the 1914 war low and the 1974 major
stock market low both occurred in the month of
December. In some instances, the 60 year cycle
may produce major cycle turning points one or
two months either side of the start date – for
example, the November 1916 and September
1976 major stock market tops.
151
 JAN 1966 SEP 1976

DEC 1974

NOV 1916
JAN 1906

DEC 1914

00 10 10 30 40 50 60 70 80

Dow Jones Industrial Average – The Great Cycle of 60 years Illustration 14.02

152 T R A D I N G W I T H T H E T I M E FAC TO R
Other examples of the 60 year cycle at work
include:
The 1924 low (May) + 60 years = 1984 low
(June). You should compare the market run-ups
from both of those lows to the highs that were
reached in September 1929 and October 1989.
The 1949 cycle low + 60 years = March 2009
low. These two years occurred in the 9th year of
the decade in a year which typically produces a
major market top. The lower stock prices which
occurred in 2008 indicated to you that 2009 was
not going to produce a final high and the 60 year
cycle gave you the guidance to expect a major
low instead.
By studying the Great Cycle of 60 years, you will
find that it can be applied to all financial markets.
In my observations, the commodities markets in
particular work the best to the Great Cycle than
any other markets – the agricultural commodities
such as wheat, soybeans and corn in particular
work extremely well to this cycle. In order to
properly appreciate the value of the Great Cycle
in your long term analysis, you should go back
and review historical data for your chosen market
as far back as possible. In many cases, monthly
closing prices of a number of markets (particularly
the soft commodities) are available going back for
hundreds of years. A study of these prices will
demonstrate to you the power of the Great Cycle
at work.
The 20 Year Master cycle The chart can be adapted to count weeks or
months if one feels that 400 years is outside the
Gann wrote that the 20 year cycle is also one
scope of their lifetime, however I think the best
of the most important cycles, with most stocks
results are produced by using a yearly time count.
working closer to this cycle than to any other.
The 20 year cycle he referred to is actually a
natural cycle of time that averages approximately
The fourth dimension –
19.85 years, and will often run longer or shorter The 20 year Master Cycle
than an exact 20 year period. It is for this reason Gann overlayed his NYSE Permanent Chart
that when you are working with the 20 year with 45 degree angles to provide his ‘fourth
cycle, you should not expect your dates to give dimension’ to the chart. He did this by drawing
you exactly matching time frames – ie do not 45 degree angles across certain mid-points of
necessarily expect a low in August 1982 to be the chart – these angles could also be followed
followed by another low in August 2002, although to determine years when significant tops and
this can occur in some instances. bottoms would be made.
allineare cicli di 20 anni
The simple way to use the 20 year cycle is to line The two angles I feel are the best to follow is the
up each of the periods of 20 years into a chart, angle starting at “10” (the 1803 angle) on the
and look for major a pattern emerging between left hand side of the Permanent Chart running
each 20 year period. up and the angle starting at “5” (or the 1798
angle) on the Permanent Chart. Both of these
Gann developed a Master Chart of the 20
angles start on natural divisions of the Permanent
year cycle which specifically applied to US
Square – with “10” beginning at the half-way
equities. He referred to this as his ‘New York
point (or 50%) point in the Square which is the
Stock Exchange Permanent Chart’. The chart
most important, and “5” representing 25% or the
begins on 17 May 1792, which is the date the
first 90 degrees of the Square, which is another
NYSE was first incorporated. The year 1792
important geometric point.
therefore becomes your zero date, and the chart
begins with year 1 (or 1793) in the bottom left
hand corner. The Permanent Chart then simply
measures each year of the calendar moving 20
years up and 20 years across, giving a permanent
square representing a cycle of 400 years.
permanent chart di 20 anni
T R A D I N G W I T H T H E T I M E FAC TO R 153
Each of the years on these angles will often 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

represent significant tops or bottoms in the 20 1812 1832 1852 1872 1892 1912 1932 1952 1972 1992 2012 2032 2052 2072 2092 2112 2132 2152 2172 2192
market or major events that will affect the
19 1811 1831 1851 1871 1891 1911 1931 1951 1971 1991 2011 2031 2051 2071 2091 2111 2131 2151 2171 2191
US markets. For example, the 1803 angle
contains the years 1929 (the start of the Great 18 1810 1830 1850 1870 1890 1910 1930 1950 1970 1990 2010 2030 2050 2070 2090 2110 2130 2150 2170 2190
Depression), 1950 (which began the Korean war)
and 1971, which was the year the United States 17 1809 1829 1849 1869 1889 1909 1929 1949 1969 1989 2009 2029 2049 2069 2089 2109 2129 2149 2169 2189

dollar was last devalued.

16 1808 1828 1848 1868 1888 1908 1928 1948 1968 1988 2008 2028 2048 2068 2088 2108 2128 2148 2168 2188

The 1798 angle has similarly produced calendar 15 1807 1827 1847 1867 1887 1907 1927 1947 1967 1987 2007 2027 2047 2067 2087 2107 2127 2147 2167 2187
years which coincided with many significant
events in American history – the angle marked 14 1806 1826 1846 1866 1886 1906 1926 1946 1966 1986 2006 2026 2046 2066 2086 2106 2126 2146 2166 2186
1861 was the year the Civil War broke out; 1882
13 1805 1825 1845 1865 1885 1905 1925 1945 1965 1985 2005 2025 2045 2065 2085 2105 2125 2145 2165 2185
started the Depression of 1882-1885; and 1945
was the year World War II ended and one of the 12 1804 1824 1844 1864 1884 1904 1924 1944 1964 1984 2004 2024 2044 2064 2084 2104 2124 2144 2164 2184
greatest periods of economic growth in American
history began. More recently on the angle has 11 1803 1823 1843 1863 1883 1903 1923 1943 1963 1983 2003 2023 2043 2063 2083 2103 2123 2143 2163 2183

been the years 1987 (the year of the great stock

10 1802 1822 1842 1862 1882 1902 1922 1942 1962 1982 2002 2022 2042 2062 2082 2102 2122 2142 2162 2182
market crash) and 2008 which was the year
Lehman Brothers collapsed, triggering a wave 9 1801 1821 1841 1861 1881 1901 1921 1941 1961 1981 2001 2021 2041 2061 2081 2101 2121 2141 2161 2181
of panic and the global financial crisis of 2008.
8 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100 2120 2140 2160 2180
Interestingly, the next year in this sequence is
2029 – a very significant time frame as you will 7 1799 1819 1839 1859 1879 1899 1919 1939 1959 1979 1999 2019 2039 2059 2079 2099 2119 2139 2159 2179
soon see.
6 1798 1818 1838 1858 1878 1898 1918 1938 1958 1978 1998 2018 2038 2058 2078 2098 2118 2138 2158 2178

5 1797 1817 1837 1857 1877 1897 1917 1937 1957 1977 1997 2017 2037 2057 2077 2097 2117 2137 2157 2177

4 1796 1816 1836 1856 1876 1896 1916 1936 1956 1976 1996 2016 2036 2056 2076 2096 2116 2136 2156 2176

3 1795 1815 1835 1855 1875 1895 1915 1935 1955 1975 1995 2015 2035 2055 2075 2095 2115 2135 2155 2175

2 1794 1814 1834 1854 1874 1894 1914 1934 1954 1974 1994 2014 2034 2054 2074 2094 2114 2134 2154 2174

New York Stock Exchange – Master 20 year cycle chart

1 1793 1813 1833 1853 1873 1893 1913 1933 1953 1973 1993 2013 2033 2053 2073 2093 2113 2133 2153 2173
Illustration 14.03

The simple way to use the 20 year cycle Master Calculator

The easiest way to use the Master 20 year cycle, is simply to identify points within the Permanent
Chart where significant market tops and bottoms occur and repeat.
154 T R A D I N G W I T H T H E T I M E FAC TO R
To illustrate this by way of example, the following chart represents a section of the NYSE Permanent
Chart covering the years 1893 to 2032. I have selected this period as it represents the period when
The simple way to use the 20 year cycle 18 1910 1930 1950 1970 1990 2010 2030
The tenth row in particular is a significant row to
Master Calculator watch as it represents the half-way point in the
17 1909 1929 1949 1969 1989 2009 2029 Permanent Square, which is the most important.
The easiest way to use the Master 20 year cycle,
16 1908 1928 1948 1968 1988 2008 2028 It has produced a series of major cyclical lows in
is simply to identify points within the Permanent
the US equity markets in 1942, 1962, 1982 and
Chart where significant market tops and bottoms 15 1907 1927 1947 1967 1987 2007 2027 2002. The period of time between each of these
occur and repeat.
14 1906 1926 1946 1966 1986 2006 2026 turning points has been exactly 246 months, with
To illustrate this by way of example, the the third 20 year cycle from 1942 ending a Great
13 1905 1925 1945 1965 1985 2005 2025
following chart represents a section of the NYSE Cycle of 60 years when the October 2002 bear
Permanent Chart covering the years 1893 to 12 1904 1924 1944 1964 1984 2004 2024 market low came in.
2032. I have selected this period as it represents 11 1903 1923 1943 1963 1983 2003 2023 The seventeenth row in the Permanent Chart is
the period when information on the Dow Jones
10 1902 1922 1942 1962 1982 2002 2022 also worthy of some attention as it has been a
Industrial index is available – the first calculation
year which has produced some very major bull
of the Dow Jones Industrials index occurred on 9 1901 1921 1941 1961 1981 2001 2021
and bear market highs and lows, including the
26 May 1896. In the following chart, you will see
8 1900 1920 1940 1960 1980 2000 2020 Great Depression high of 1929 and the more
three rows highlighted with red or green boxes,
recent GFC low of 2009. Interestingly, the next
which represent years where a significant low or 7 1899 1919 1939 1959 1979 1999 2019
major time frame in that sequence is 2029 –
high occurred in the market, respectively. The 6 1898 1918 1938 1958 1978 1998 2018 which will be 100 years from the 1929 high and
selected rows are years where the 20 year cycle
5 1897 1917 1937 1957 1977 1997 2017 120 years (or two Great Cycles) from the high in
has consistently produced significant events
1909. This makes 2029 (in particular late August
in the US stock market. These rows should 4 1896 1916 1936 1956 1976 1996 2016 to early October) a very important time period
therefore continue to be followed and each of
3 1895 1915 1935 1955 1975 1995 2015 to watch.
the following years in the 20 year cycle sequence
should be watched as significant years in the US 2 1894 1914 1934 1954 1974 1994 2014
equity markets.
1 1893 1913 1933 1953 1973 1993 2013

The tenth row in particular is a significant row to watch as it represents the half-way point in the
Title Illustration 14.04
Permanent Square, which is the most important. It has produced a series of major cyclical lows in the
US equity markets in 1942, 1962, 1982 and 2002. The period of time between each of these turning
points has been exactly 246 months, with the third 20 year cycle from 1942 ending a Great Cycle of
60 years when the October 2002 bear market low came in.

The seventeenth row in the Permanent Chart is also worthy of some attention as it has been a year
which has produced some very major bull and bear market highs and lows, including the Great
Depression high of 1929 and the more recent GFC low of 2009. Interestingly, the next major time
frame in that sequence is 2029 – which will be 100 years from the 1929 high and 120 years (or two
Great Cycles) from the high in 1909. This makes 2029 (in particular late August to early October) a
very important time period to watch.

T R A D I N G W I T H T H E T I M E FAC TO R 1 55
The Master 20 year Cycle at work – Dow Jones Industrials index
Illustration 13.05
 242 months

Third Cycle of 20 years

OCT 2002 LOW

242 months

Second Cycle of 20 years

242 months

First Cycle of 20 years

AUG 1982 LOW

1929 HIGH
JUN 1962 LOW

APR 1942 LOW The Great Cycle = 60 years

1932 LOW

1930 1940 1950 1960 1970 1980 1990 2000

The Master 20 year Cycle at work – Dow Jones Industrials index Illustration 14.05

156 T R A D I N G W I T H T H E T I M E FAC TO R
How to use the Master Time Cycles October 1997 (Asian Crisis)
to create a forecast
Minus 10 years October 1987 Global stock market crash, October low.
The easiest and most efficient way to use the
Master Time Cycles in your forecasting is simply
Minus 30 years October 1967 Strong decline in October.
to look back every 20, 30 and 60 years and
compare your current market forecast to any
Minus 2 x 20 years October 1957 Severe decline, October low.
significant highs or lows which formed back on
those time cycles.
Minus 90 years October 1907 Severe decline, panic of 1907
As mentioned earlier, I like to check the 90 year
cycles as a major point in time, as well as the 45
year and 15 year (or 180 month) cycles. The cycle
of 100 years should also be watched as a period October 2002 (Major Bear Market Low)
of importance.

The key to using long term cycle analysis is to Minus 10 years October 1987 Global stock market crash
identify a point in the future that has a number
of major time cycles ending at the same date. Minus 30 years August 1982 Major low before 1987 bull market
Using just a small set of examples, you can see
the power of these cycles and the simplicity with Major cyclical bear market low before strong
Minus 2 x 20 years June 1962
which to apply them. bull market began

LONG TERM CYCLE Minus 45 years October 1957 Severe decline and major cycle low

Minus 60 years April 1942 Major cyclical low before strong bull market began

Minus 90 years October 1912 Major yearly high.

T R A D I N G W I T H T H E T I M E FAC TO R 157
 OCT 2002

OCT 1987

AUG 1982

JUN 1962
OCT 1957

OCT 1912

APR 1942

1900 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Dow Jones Index (Log Scale – Master Time Cycles) Illustration 14.06

158 T R A D I N G W I T H T H E T I M E FAC TO R
 OCT 2007

Looking to the future –

what do the major time cycles tell us
To end this chapter, I would like to outline the
following significant major cycles ending in 2017 OCT 2002
to show how this technique can be applied into
the future. The following chart of the Dow Jones
highlights some significant market turning points
which have major cycles ending on or around
August to October 2017. Other significant time
frames to consider when reviewing this chart
include the end of the Great Panic & Depression
of 1893 to 1897 (marking a 120 year cycle of time, OCT 1987
or two Great Cycles of 60 years), and the more
recent Asian currency crisis in 2007.

OCT 1957

October 1917
decline

Oct 1907 DEC 1917

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Master Time Cycles – Constructing a Forecast Illustration 14.07

T R A D I N G W I T H T H E T I M E FAC TO R 1 59
What is interesting to note about these major
time cycles is the following:

2017 minus 120 years = 1897 (Major Stock Market Low)

2017 minus 60 years (half of 120 years) = 1957 (Major Stock Market Low)

2017 minus 30 years (half of 60 years) = 1987 (Stock Market Crash)

2017 minus 15 years (half of 30 years) = 2002 (Major Stock Market Low)

Each of those major time cycles is an exact half

of the cycle preceding it. (ie. 120, 60, 30, 15.)

Whether or not the August to October 2017

time period produces anything of significance
remains to be seen, but it is a time frame I will
be watching. In order to be confident that our
long term cycles are working, we would refer
back to our Gann Decade Cycle Calendar as a
confirmation indicator. You should also look for
major daily or weekly time frames expiring on
or around that period as a further indicator that
the time cycle will produce a significant change
in trend.

160 T R A D I N G W I T H T H E T I M E FAC TO R
SEC TION FIVE
In this section of the course
I will share with you some
mechanical points of entry
and exit to make your trading
decisions more clinical, as
well as five simple rules for
trade psychology and risk
management.
The best rules for trading
This section of the course is actually a recap
of a topic that we covered in volume one. The
reason why I am including it again is that I
believe it is one of the most important topics
to understand in the entire course. At the risk
of sounding repetitive, let me say that again. I
think this topic is one of the most important to
understand in the entire course. If you are an
experienced trader, you will understand why. If
however you are only new to this game, then
my suggestion would be to come back and
read this section of the course after your first
three months of trading. You will very quickly
understand why.
I cannot emphasise enough that in my view,
making fewer but longer term trades is the
easiest and the most profitable way to trade the
markets. It also requires far less work. Trading
the markets however is a skill that requires you
to master the techniques of trade entry and exit,
as well as the psychology associated with each
of those steps and everything else that happens
in between.
T R A D I N G W I T H T H E T I M E FAC TO R 1 61
Chapter Fifteen – Trading psychology and risk management
I am confident, that with practice, the techniques
I have shown you in this course can make you a
much better trader. But make no mistake, there
is no single system or no single trader who has
a fool proof system for trading. The reason for
this is that markets are essentially made up by
an aggregate of human emotion. When people
are feeling good about things, the markets will
generally trade up. When things are not looking
so optimistic, human emotion will tend to see
markets trade down.
Human emotion however is the one element
that not even the most sophisticated computer
algorithms or ‘black box’ market systems have
been able to predict. This is particularly so near
market tops and bottoms where human emotion
is at its greatest, whether it be the irrational
exuberance at a market top or the fear and panic
that often ensues at a market low.
Whilst winning trades will provide you with a
huge adrenalin rush, it is important too to realise
that losing trades are also inevitable. And it is the
losing trades that will test your mettle.
If you do however find yourself on the end of a
losing streak, then my advice would be to come
back and visit this section of the course first
before any of the others. I can almost guarantee
that the five rules I am about to describe will take
on a whole, new meaning.
162
Five simple rules for risk management At the end of the day, the objective in trading
Most of the trading books and courses which I should be getting yourself profitable.
have read (the good ones at least, that is) include
To do this, you need to make sure you have more
a section on trading psychology and how human
winning trades than losers, and that your winners
emotion has such a large impact on actual trading
are bigger than your losing ones. Having said all of
decisions. Make no mistake, this is certainly
that, there are a few simple rules that you should
true. Putting your own money at risk will affect
know for certain which I do think are absolutely
your trading decisions in a way that you simply
necessary to control your trade decisions and
cannot simulate through paper trading a market.
keep your investment capital intact.
I have found however, that to properly learn
how to control your emotions in your trading
and investment decision-making, you need to
experience the process first of making an actual
trade. You will never fully prepare yourself for the
rollercoaster ride of emotions that go with trading
until you place that first trade no matter how
many trading psychology books you read.
Please do not interpret that as me dismissing the
need to have the right trading psychology to beat
the markets. It is absolutely necessary. In my
view however, the subject matter of psychology
is something I think is best left to be explained by
someone who is actually an expert in psychology.
And don’t worry, there are plenty of books out
there on the subject.
In addition, each individual person has their own
temperament, their own risk appetite and their
own differing desires for profit. And whilst I
am more than happy to share my own personal
experiences with anyone who asks, just because
that was my experience, it does not necessarily
mean it will be the same as yours.
T R A D I N G W I T H T H E T I M E FAC TO R
 Rule 1:
Never enter a trade without placing a
The greatest lesson STOP LOSS order
you will ever get about Entering a trade without a stop loss is the cardinal
sin in trading. ALWAYS identify your stop loss
trading psychology will
position before you enter a trade and stick to that
come from your own price level religiously. Your stop loss is not only
experience in trading there to quarantine your risk, but it represents the
point where the market is telling you that you are
the market.
wrong. As the saying goes, ‘don’t leave home
without it’!
Rule 2:
Hope is for dopes
If you are uncertain about a trade and begin to
“hope” that you are right, reassess your position
as it is probably a good indicator that it is time
to get out. This is particularly so if you are still
holding on to a position even though your Stop
Loss indicator has been reached.
T R A D I N G W I T H T H E T I M E FAC TO R
Rule 3:
Don’t be greedy when it is time to
take profits
Identify where you want to take your profits at
the beginning of the trade and do not change your
mind unless the market is giving you a very good
reason to do so. The trick here is to avoid getting
emotionally attached to a winning trade. Not
wanting a good feeling to end when you should
in fact be taking your money and banking it is a
common trap. Avoid the expectation that you
need to get every last cent out of a move – even
though your forecasting will at times pin point
turning points to the exact price – as trying to
squeeze out the last cent in a move will often be
the most costly.
163
Rule 4: profits on half your position (ie by selling 1000 The benefit of this approach is that by taking
shares), you can book the 50 cent gain (or a $500 trades where your average profits are greater than
Minimise your risk wherever possible
profit) and keep a remaining 1000 shares long your average losses, even if you have a win to
The market will often give you an opportunity
position in the stock. At this point, even if the loss ratio of 50:50, on an overall basis you will still
to take some profit off the table and reduce
stock trades back down and triggers your original be profitable. For example, if you made 5 winning
your position and exposure. One of the lessons
stop loss position at $19.90 (or creating a $500 trades where the average profit was $2.10 per
Bob learned in his trading was to take profits
loss), you have put yourself in a position where share (or $10.50 in profits) and you made 5 losing
at points where it either covered his position or
overall, you will not lose on the trade (putting trades where the average loss was $0.50 per
significantly minimised his risk. Not only will this
aside for the moment any brokerage or trade share (or $2.50 in losses), on an overall basis,
help you sleep better at night, but it will allow you
commissions). Pretty clever, huh!? from your 10 trades you will have made an $8.00
to execute your trade decisions in a much more
gain (or $0.80 per share) overall.
clinical manner and with less emotion. It also The effect of this strategy on your trading
has the added benefit of significantly improving decisions can be enormous, as it can completely Now that might sound to you like it is absurdly
your strike rate between your winning trades and change your trading psychology. By booking simple, but that is because it actually is!
losing ones. profits on half your position, you are minimising
your potential for loss, and putting yourself in a
For example, assume that you are looking to
position to hold on to your trade for further upside
trade a recent low in your favourite stock after it
with significantly reduced risk. In the example
reached your price target of $20.00. Your price
above, if the stock ultimately does move higher
forecast is now suggesting that the stock may
to hit your price target of $22.50, it would mean
make a move up to $22.50 per share. Let’s then
that you would stand to make a $2.10 per share
say that you entered your trade by purchasing
profit on the remaining 1000 shares long position
2000 shares of stock at $20.40 after your signals
you hold (or $2100 gain) in addition to the 50 cent
confirmed that a potential low was in place. Your
gain on the 1000 shares you sold earlier (or $500
identified stop loss should now be underneath
profit). Not only have you made a healthy profit,
that low of $20.00 – for this example, let’s call it
but you have done so by minimising your risk.
$19.90.
The other significant advantage of this type of
That gives your trade a risk of $0.50 per share if
strategy is that it can significantly reduce your
you are wrong, or a total risk exposure on your
number of losing trades, thereby improving your
2000 shares of $1000. (Note, we will cover
overall win to loss ratio. In the next chapter, we
trade entry and exit points, as well as stop loss
will discuss how to identify price entry and exit
positions in the next chapter). If the stock then
levels that allow you to identify trades where your
makes a move to $20.90, you would be sitting
potential for profits is greater than your potential
on a paper profit of 50 cents per share, or $1000.
risk.
By using this price level as an opportunity to take

164 T R A D I N G W I T H T H E T I M E FAC TO R
Rule 5: Only once you have built up some considerable
profits, would I suggest that you start thinking
Keep your trade sizes consistent
about increasing your contract sizes. For
Another one of the easiest mistakes to make is
example, if you are starting with a trading Important note:
to increase the amount of capital you are putting
account of $10,000 and are taking trade sizes of
at risk on a single trade. Whilst this might sound
10 contracts for each trade, maintain those trade
obvious, breaking this rule is actually easy to do,
sizes until your trading account hits a milestone
particularly when you have all of your Trading
of (say) $20,000. At that point, you could look The market will often give you an
Tools confirming your market top or bottom and
to increase your trade sizes to 15 or 20 contracts opportunity to take some profit
you have convinced yourself that there is no other
as this would be proportionate to your account off the table and reduce your
possible outcome other than for your forecast to
balance. The worst thing to do is to take a 20
be right! position and exposure...
contract position if your account has gone from
There is no worse feeling than to have made $10,000 to $5,000 as that is just amplifying Not only will this help you sleep
four or five profits in a row, and then doubling your risk. better at night, but it will allow
or tripling up your bets only to have all those you to execute your trade
profits wiped out by the next trade. Equally, decisions in a much more clinical
you will need to avoid this temptation if you manner and with less emotion.
have been on a bit of a losing streak and you are
looking to make up all those previous losses on
the next trade. Taking on trade positions that
are too large and that will end up causing you to
be hurting badly (emotionally) if you take a loss
is something that you should avoid at all costs.
Trading is a tough enough game emotionally and
psychologically as it is. There is no need to give
yourself added pressure on a single trade by over
committing yourself to one particular trade or
position. My advice – AVOID THE TEMPTATION
FROM OVERTRADING.

T R A D I N G W I T H T H E T I M E FAC TO R 165
Chapter Sixteen – How to know when you are right
They often say that patience is a virtue, and
when it comes to forecasting and trading, this
is certainly true. I cannot stress to you enough
how important it is to wait for your trading
signals to provide you with confirmation that your
forecast top or bottom is in and that the trend
has changed. Gann referred to this in a number
of different ways throughout his books although
his language was so opaque at times that these
references can be easily missed.
Throughout our 30 years of collective experience,
Bob and I have developed what we consider to
be the four most reliable signals to confirm that a
forecast top or bottom has a higher probability of
producing a meaningful change in trend. We have
also found that these signals can also be used to
trade off significant ‘trading to Time’ dates on a
more regular basis if you are looking for additional
points of entry within the longer term trend.
166
Indicator one – reversal signal
The first indicator is to watch out for a reversal
pattern on the projected day of your forecast top
Important note:
or bottom (or trading to Time) date.
The bar marked with the arrow on the following
chart shows that although the market had moved
higher and created a higher bar compared to
the previous day, the daily close on our forecast I cannot stress to you enough how
date is below the daily open – this is the reversal important it is to wait for your
signal. I have found that the best market set-ups trading signals to provide you with
occur when a market moves to create new highs confirmation that your forecast
(or lows) within a broader move, and then creates top or bottom is in and that the
a reversal signal to confirm your forecast date. trend has changed.
What the price action of a reversal signal is
actually telling you is that the trend has already
changed from an intra-day perspective. Prices
have moved higher earlier in the session (at the
open), but have changed trend and moved lower
by the close.
A reversal signal allows you to enter the market in
the last 15 to 30 minutes before the market close
if prices are trading below the open. Your stops
should be placed at the top of the daily high, as if
this is broken, the market will have told you that
the date has not worked.
T R A D I N G W I T H T H E T I M E FAC TO R
 trading to Time date
Reversal indicators (short trade)
= reverse signal
1800
1) Market has made a new high compared
the previous day.

2) Market close is lower than the open

1775
Reverse the above for a long trade signal

1750

1725

1700

1675

SEP OCT NOV

Indicator one – reversal signal Illustration 16.01

T R A D I N G W I T H T H E T I M E FAC TO R 1 67
As we discussed in the earlier chapter, your
‘trading to Time’ dates should give you a reliable
indicator to forecast a significant change in trend
within a trading day or two. On some occasions,
you may experience the market provides you
with a reversal signal on one day, and then a
further reversal signal on the next day. In these
situations, you will be stopped out of the trade
on the first date, and you should look to re-enter
again on the second reversal day.
Sometimes, it is just the market’s way of
trying to throw you off the platform before
the train departs the station.
168
Indicator two – confirmation day
The second indicator is to determine whether
the market trades lower (or higher) on the
following day after a potential reversal pattern
top (or bottom) has been made on our forecast
date. The confirmation day indicator can be used
whether or not a reversal signal was generated
on your forecast date. In a number of instances,
market tops or bottoms will be formed without
providing a reversal signal – the confirmation day
allows you to initiate a trade when no reversal
signal is made.
In the next example, after the reversal signal
occurred on our ‘trading to Time’ date, the next
day’s price action further confirmed the trade
by moving lower and creating a down bar. The
break of the previous day’s low is where the
confirmation day signal is created. If you have not
already initiated a trade position, the confirmation
day provides you with another opportunity to do
so. You may also use the confirmation day to add
to your position on the trade. Stops should be
placed above (or below) the top (or bottom) you
are trading, and not above the high (or low) of the
confirmation day. In other words, your stops are
the same here as they are with indicator one.
T R A D I N G W I T H T H E T I M E FAC TO R
 Keep stops here.
1800

trading to Time date

= reverse signal

1775

1750

1725

confirmation indicator two

= previous day’s low broken

1700

1675

SEP OCT NOV

Indicator two – confirmation day Illustration 16.02

T R A D I N G W I T H T H E T I M E FAC TO R 1 69
Indicator three – lower swing top
(or bottom) 1800 trading to Time swing top

The third indicator is to refer to your swing charts trading to Time date
first lower swing top
and wait for a confirmation that the swing charts
turn in favour of the changing trend. In the case 1775

of a market top, this is confirmed when the

swing charts create a first lower top, and in the
case of a market bottom when the swing charts 1750

creates a higher swing low. lower swing bottoms

The next chart shows the point where the first

lower sign top is created using a daily swing 1725

chart. The swing is created by the down day

when the low of the previous day’s bar chart is
broken. This allows you a further point of entry 1700

to initiate a trade (or add to your position) once

the swing confirms lower.

The first lower swing top (or bottom) also gives 1675

you an opportunity to assess your risk and

manage your stops. Depending on your risk
appetite, you may wish to move your stops
down to just above the lower swing high (in the
case of a market top), or just below the swing
low (in the case of a market bottom). Using the Indicator Three – Swing Charts Illustration 16.03
third indicator to adjust your stop loss position
is a personal decision and will depend largely on
each individual’s own risk appetite. I therefore
suggest it is something you can experiment
with to identify whether the stop adjustments
work for. Where possible, I like to keep my
stops above (or below) the actual forecast top
(or bottom) I am trading, and will try to only
use a swing chart stop in instances where I am
conscious of risk

1 70 T R A D I N G W I T H T H E T I M E FAC TO R
Indicator four – lower swing top and bot-
tom (or bottom and top)
The fourth indicator is to wait for the swing charts
to make both a lower swing top and bottom
(when you are looking to trade a market top) or a
higher swing bottom and top (if you are trading a
market low). If you refer back to our earlier lesson
on trading with the trend, it is when the market
is making higher tops and bottom that confirms
we are in an uptrend (or lower tops and bottoms
to confirm we are in a down trend). Indicator four
therefore uses our swing charts to confirm that
the trend has finally changed, providing you with a
higher probability that your forecast top or bottom
has in fact, worked.
How to determine the strength of each
indicator
Each of the signal indicators should be used to
build upon each other. When all four indicators
are present, then there is a higher probability of a
forecast top or bottom producing a decent move.
The strength of each indicator increases
sequentially – confirmation of indicator four will
give you the highest probability results that a
change in trend has taken place. Next is indicator
three, then indicator two and finally indicator
one. For this reason, I place varying degrees of
confidence in the trade decision depending on
which indicators have confirmed.
The highest probability set-ups occur when
all four indicators are present to confirm your
forecast top or bottom.
T R A D I N G W I T H T H E T I M E FAC TO R 171
Chapter Seventeen – The best trading entry and exit points

Earlier I mentioned, that in my view, making
fewer but longer term trades is the easiest and
most profitable way to trade the markets. I
simply cannot emphasise the relevance of that
statement, and this is certainly what Gann meant
when he described trading the “long swings”
as the most profitable way to trade.
In an earlier section of this course, we discussed
how to identify the definable waves or sections
of a market that all major bull or bear market
campaigns move to. Whilst it may have
appeared unassuming at the time, that chapter of
the course is actually one of the most important.
When trading, your primary objective should
be to ensure you are trading with the trend and
capturing as much of the move in each of those
sections as possible. Put simply, if the market is
in a major bull campaign, you should be looking
for one or two buying opportunities to trade each
section using your Trading Tools – this is where
you will make the most profit with fewer trades
and the least amount of work.
The Trading Tools however are also useful
indicators to identify counter-trend trades within
a major bull or bear market. As highlighted in
earlier chapters, you can also use your Trading
Tools to determine points in price and time where
you can either hedge your longer term position
with the trend, or for the more aggressive trader,
to actually take an against the trend position. In
this chapter of the course, we describe how to
do both.
Rules for trading with the trend.
Rule 1: When to enter
• 0% to 38.2% Is the place where you
should look to initially enter your trade
• Consider placing your stops 2.0%
above / below the market top/bottom you
are trading.
Trades entered within this point will give you a
profit to risk ratio of approximately 2 to 1. For
example, if we are looking to trade a price range
of 100 points, then we ideally want to have
entered before the 38.2 point mark is reached.
If the price move hits our profit target of 100, then
we have made a 61.8 point profit on a risk trade
of only 38.2. In an ideal situation, trades entered
into before the 23.6% Fibonacci level provide the
best set-ups as they come with a much lower
level of risk and a higher profit to risk ratio of
more than 3 to 1.
Rule 2: When to reduce your position (the
‘break-even’ rule)
• At ‘break-even’ consider reducing your
position at this level to minimise risk
Traders who have a lower risk appetite may look
to use this area as a place to reduce their position
or cover their trade to avoid a loss. For example,
if the range you are seeking to trade is 100 points,
and you entered at the 23% point in the range,
then you would have a total risk position of 25
points (including 2 points for your stop).
Once the market reaches the 50% level, by
reducing half your position, you will have taken
profit of 25 points on half your trade, whilst
maintaining a risk exposure of 25 points on the
remaining position. At this point, your overall
position is at a ‘break-even’. For those who have
a lower tolerance for risk, the break-even point
will mean you should end up having more winning
trades. The flip side to this is that you may see
yourself taking profit off the table too early and
missing out on some further gains.
Using the break-even rule therefore will depend
on each individual trader and their own desired
level of risk appetite

172 T R A D I N G W I T H T H E T I M E FAC TO R
Rules for trading with the trend.
Rule 3: Risk management Rule 4: Profit taking levels
• At 61.8% consider moving your stops
higher/lower to 38.2%
Once the trade has crossed 50.0% and reached
the 61.8% mark, you typically do not like to see it
moving back below the first of our key Fibonacci
levels. By moving your stops to 38.2% (which
is the place at which you should have entered
your trade), you should no longer be in a losing
position. Not only will this help improve your
winning average, but it should help you mentally
to stick with the trend and ride the winning
trades.
• At 100% consider taking profits and fully
exit your position (or hedge your position)
The 100% level marks our trade objective, and
is where we should look to thank the market and
take profits off the table. The exception to this
rule is if your indicators are telling you that a move
beyond 100% is likely (see rule five below). If
this is the case, you can then use the 100% level
as a place to hedge your position – for example
through a put option strategy or writing some
covered calls if you are long the market.
T R A D I N G W I T H T H E T I M E FAC TO R
Rule 5: Additional profit taking levels
• At 123.6%, 138.2%, 150.0% and 161.8%
consider these as additional areas for taking
profits, if the indicators are telling you a
move ofmore than 100% is likely
Markets will often give you clear signals when a
new move is more likely to exceed the previous
move in terms of price. In situations like this
when a market is trending strongly, you will leave
some considerable upside profit on the table
by exiting completely at the 100% level. You
should refer to the Barillaro Box and the Price
Retracement trading tools as your gauges of
strength to determine if such a move is likely.
Use a trailing stop strategy at each of the above
Fibonacci Levels can allow you to lock in profits
whilst at the same time allowing you to continuing
riding the market.
173
 2000

WITH THE TREND TRADE (LONG POSITION)

Risk (38.2%) = 975 Minus 667 (or 208pts)
Reward (100%) = 1474 minus 975 (or 499pts)
1750
OCT 2007
TOP = 1576

1500

100% = 1474
(PROFIT TARGET)
PROFIT RANGE

1250

61.8% = 1166
(MOVE STOPS)

1000
38.2% = 975
(ENTER TRADE BY HERE)

750
TRADE ENTRY RANGE
OCT 2002 MAR 2009
0.0% = 667
LOW = 768 LOW (INITIAL STOP LOSS)

500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

S&P 500 example – entry and exit rule for trading with the trend  Illustration 17.01

1 74 T R A D I N G W I T H T H E T I M E FAC TO R
Rules for trading against the trend
(counter-trend trades)
A more cautious approach should be adopted
when attempting to take a trade against the
main direction of the trend – after all, in these
situations you really are attempting to swim
against the tide. A counter-trend trade occurs
when you are looking to trade short off a top
in the middle of a bull market or go long off a
bottom in a bear run. The latter in particular can
be a hair-raising experience – particularly in a fast
moving bear market, as you don’t want to be
caught out trying to catch the falling knife.
I therefore adopt a slightly different approach
when determining rules to follow against the
trend exit and entry points than those used for
‘with the trend’ trades. The price levels below
refer to moves using Fibonacci Retracement
levels of the previous ‘with the trend’ range.
Rule 1: When to enter
• 0% to 23.6% Is where you should look
to initially enter your trade
• You can place your stops 2.0% above/below
the market top/bottom you are trading.
Notice how the entry point for a counter-trend
trade is tighter than that of a with the trend trade.
This is purely designed to minimise your risk from
the outset.
Rule 2: Covering risk A final word
• At ‘break-even’ Reduce your position
The trade entry and exit techniques described
and look for the ‘break-even’ rule where above are designed to make your trade decisions
possible. more clinical and to develop areas that allow you
an opportunity to ensure that your gains from
The half-way point of any price retracement is
winning trades are greater than the losses on
the most important area where price support
your losing ones.
or resistance will occur. This level should
therefore be used as an area of caution and This will mean that even if you have a 50:50
monitored closely. win: loss ratio, you should still end up being a
profitable trader!
Rule 3: Risk management
• Aim to take profits at 100% of previous
counter trend move
• Also watch the 50.0% and 61.8%
retracement levels for profit taking.
When taking a counter-trend trade, I will often
look at the 61.8% price retracement levels as an
area to take profit or exit the trade. Equally, I will
use 100% of the previous counter-trend move as
an area to set exit targets.
For example, if I am trading short in a bull market,
and the previous price reaction down was 50
points, I will also look to see a repeat of that
move off the current top I am trying to trade as a
potential exit level. I will pay particular attention
to this level when it also converges with either a
50% or 61.8% retracement.
T R A D I N G W I T H T H E T I M E FAC TO R 1 75
 1550

1500 END = 1474

0.0%
(INITIAL STOPS)
1450 TRADE ENTRY RANGE
23.6% = 1425
PROFIT RANGE (TRADE ENTRY)
1400

50.0% = 1371

1350
61.8% =1346
(PROFIT TARGET)

1300

1250
START = 1267

1200

1150

TRADE ENTRY RANGE

1100

1050
Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12

The best trade entry and exit points (counter-trend trading) Illustration 17.02

1 76 T R A D I N G W I T H T H E T I M E FAC TO R
T R A D I N G W I T H T H E T I M E FAC TO R 177
 THE FOUR POINT FORECAST CHECKLIST

1. Identify the trend 2. Time

Check Primary indicators Check Primary indicators

Do your Trading Tools tell you that you are trading with Is your forecast on a ‘trading to Time’ date?
the trend:

• higher tops and higher bottoms = trend is up

• Lower tops and lower bottoms = trend is down Check Supporting indicators

Are there any significant time counts ending on your forecast date (90
Check Supporting indicators (for trades with the trend) or 180 degrees the most important, 270, 120 and 240 the next important)

Identify which section of a bull or bear campaign you are in

Do you have any repeating time cycles ending on your forecast date
- Section 1
minor time cycles
- Section 2
- Section 3 major time cycles
- Section 4

Is your forecast on any significant anniversary date

Is there any overbalancing in price or time

Do your moving average indicators support your identification of the trend

Do your trend line indicators support your identification of the trend

Do your weekly swing charts support your identification of the trend

1 78 T R A D I N G W I T H T H E T I M E FAC TO R
3. Price 4. Confirmation indicators

Check Primary indicators Check Primary indicators

Has the market reached a significant price retracement level on your Have your trade signals confirmed your forecast top or bottom
forecast date (38.2%, 50.0% or 61.8%)
reversal day signal

confirmation of reversal day

OR –
lower swing top or bottom

confirmation of swing top or bottom

Are there any repeating extensions of price occurring on your forecast date

The greater the number of confirmation trade signals, the higher the
probability of a successful change in trend.
Check Supporting indicators

Is price supported by a percentage of a previous high or low Check Supporting indicators (for trades with the trend)
is there a repeating multiple of a previous low
Price retracements – has price retraced < 50%,
is there a significant division of a previous high
indicating a resumption of the trend

Are there any significant Time & Price angles supporting your price forecast
Barillaro Box – has the market been trading above its current Pitch Angle,
indicating a move greater than its previous range is likely

Is the market displaying any overbalancing in time and price

no time and price overbalancing supports trades with the trend

time and price overbalancing supports counter trend trades

T R A D I N G W I T H T H E T I M E FAC TO R 1 79
CONCLUSION Putting the jigsaw puzzle together

There is definitely a benefit
that comes with hindsight.
While the rear view mirror will
tell you where you have been,
successfully trading the markets
is all about knowing where the
road ahead is going
I can understand that a critic or a sceptic might
make the comment that the Trading Tools and
the examples I have shown you can easily be
‘made’ to work with the benefit of hindsight.
To those in that camp, please read the following
series of emails which I wrote to friends and
colleagues outlining my forecasts for the
S&P500 for the years 2012 and 2013. It will
show you how to put the jigsaw puzzle pieces
together using a real-time example.
The email forecasts below were written on 18
September, 6 October and 11 October 2012,
respectively – Australian time. In the first of
them, I outlined the reasons why I felt the 1474
top was going to be a significant top in the S&P
500. That email actually reflected a series of
discussions I had been having with colleagues
late in 2011 where I first nominated 1474 as a
future price that I felt the S&P500 had to reach
during the recent bull market. That price, proved
to be a significant top – to the exact point.
The date of the 1474 top was 14 September
2012. But the best date for actually trading it
was off the secondary top made on 5 October
2012.
Each of the forecasts were shared with close
friends and family only – they were therefore,
quite informal. I have sanitised them in parts
where appropriate for publication in this book,
but I have provided the same charts which were
attached to identify what I was looking at. The
working charts providing my calculations in the
email attachments will very closely resemble
many of the illustrations used in earlier chapters
of this book – I trust this will prove to you that I
was in fact watching and using the Trading Tools
I have described in this course before the event
and that I practice what I preach.

The second email was written before the US

markets had opened for trade on 6 October after
the 1474 had occurred. I had written the email
in Australian time, therefore the last available
day of price action at the time of writing was
actually 5 October 2012.

T R A D I N G W I T H T H E T I M E FAC TO R 181
The email of 18 September 2012
This email was written only two
trading days after the 1474 top on
14 September 2012.
It highlighted some of the reasons
why I was expecting this price to be
significant, but why I also expected
it to be taken out at a later point.
182
For those of you who may have been paying some attention to some of my
previous emails, you may recall this chart which I have been watching since
the start of the year. I have maintained pretty consistently that I expected the
S&P500 to ultimately reach the 1440 to 1474 range at some point during this
bull campaign.
Last Friday, the index touched 1474 exactly.
For those interested, this is an exact repeat of the run up from the 768.63 low in
Oct 2002 to the 1576.09 high in Oct 2007. It was a run of 807.46 points. If you
take the 666.79 low in March 2009 and add 807.46 you will get a price target of
1474.25. The S&P reached a high of 1474.51 on Friday.
There are a bunch of other reasons suggesting why 1474 might give us a top
which I won’t go into detail right here. Of note however, is that this latest run
of 807 points has occurred over a period of 1287 days compared to a period of
1827 days off the 2002 low.
This normally suggests that this “cycle” is stronger than the previous cycle,
meaning that it is likely the market has more upside to go than the 1474 target.
What all of this means from a portfolio perspective, is that I wouldn’t be buying
into the market at these levels. I would like to see 1474 clearly taken out first,
and then use dips as buying opportunities.
From a short term trade perspective, those inclined might very well like to short
the S&P500 market with stop losses above the 1474 highs. Further, it might be
a good time to take out some put option protection at these levels given volatility
is cheap to protect the portfolio from a possible decline.
T R A D I N G W I T H T H E T I M E FAC TO R
 Illustration email 1.01

You should compare this chart to the Illustration 031 and the examples I gave you earlier on boxing
theofmarket.
Email 18 September 2012

the email of 6 October 2012

I sent the second email to friends and colleagues once I had seen the price action on 5 October 2012
provide a signal indicating that the top was in. By this time, I was receiving more and more requests
to explain how I was producing my calculations – the email therefore was like a mini-lesson on a
number of the Trading Tools described in this book.
I thought I would provide a brief update on the markets and where things seemed to be headed. Looking at the US futures (as that
is the market I have been following), the S&P500 continues to flirt with the 1475 level.
T R A D I N G W I T H T H E T I M E FAC TO R 183

As I mentioned in a previous email, the 'speed' of this market compared to the last cycle suggests to me that overall this market will
The email of 6 October 2012
I sent the second email to friends
and colleagues once I had seen the
price action on 5 October 2012
provide a signal indicating that the
top was in.
By this time, I was receiving more
and more requests to explain how
I was producing my calculations –
the email therefore was like a mini-
lesson on a number of the Trading
Tools described in this book.
184
I thought I would provide a brief update on the markets and where things seemed to
be headed. Looking at the US futures (as that is the market I have been following), the
S&P500 continues to flirt with the 1475 level.
As I mentioned in a previous email, the ‘speed’ of this market compared to the last
cycle suggests to me that overall this market will go higher and 1475 will be taken out
at some point. Whether that point happens next week or next quarter is the critical
question.
I would still not be a buyer at these prices. I would want to see a very clean move
above 1475 (and ideally, above 1485) to give me confidence that this market will
continue to go up, up and away.
One of the advantages that I have gained from all of my market studies over the years is
how to “time” the market. People often say that it is not “timing the market, but time
in the market” that will make you money. In my view, those people haven’t worked out
when the market gives you signals.
I’ve been building up in my last emails a series of lessons that if you wish to study
them, can also help you understand how to time the markets. I started off by providing
you with a series of time sequences, particularly in the “90 day” counts. Ninety is
a full quarter of a circle (or in other words a “cycle”). When we talk day counts, we
speak in terms of calendar days. As you know, there are 365 calendar days in a year, so
breaking up a year into quarters won’t give you exactly 90 days apart. That is why you
will sometimes see day counts coming in at 90 days, other times at 92 or 94.
The chart named “5 Oct update” shows the harmony in the market beginning off the 4
Oct 2011 low last year. The day count to the 2 April 2012 high as you know was 181 (2
cycles of 90). From that 2 April high, I have marked in the “scientific way” of counting
key dates upon which you would expect the market to change in trend. I won’t get into
the detail here, as I don’t want to give away my trade secrets, but suffice to say, the
market either hit those days on the head, or was within a day or two out (which I can
easily live with).
T R A D I N G W I T H T H E T I M E FAC TO R
You should refer back and compare this chart to Illustration 051 to see the similarities.
Email of 6 Cutting a long
story short – one quarter of the cycle (which is a cycle of 90) from 2 Apr gives you 4 July (notice the 3 July
October 2012
top). And another cycle of 90 from there gives you 5 Oct 2012.

This brings me to the chart labelled "S&P500 futures". You will notice from that chart that the S&P500 index last night started
higher, but ended the session lower (or a classic "reversal" pattern). You won't see this come up on a S&P500 cash index chart,
which is why we look to the futures charts for the "reversal" signals.

So what does this mean?

It means that if Friday's top of 1471 can hold, and we can see a break through 1433 on the S&P500, then I think we will see a run
down to at least 1400, but probably much lower prices.
T R A D IThis
N G W Iwill
TH THgive
E T I Mus theTObuying
E FAC R opportunity on quality stocks for a much 185

higher run.
The email of 6 October 2012 (cont.)

Cutting a long story short – one quarter of the cycle (which is a cycle of 90) from 2 Apr
gives you 4 July (notice the 3 July top). And another cycle of 90 from there gives you 5
Oct 2012.
Important note:
This brings me to the chart labelled “S&P500 futures”. You will notice from that chart
that the S&P500 index last night started higher, but ended the session lower (or a
classic “reversal” pattern). You won’t see this come up on a S&P500 cash index chart,
I had also highlighted two key
which is why we look to the futures charts for the “reversal” signals.
dates in this chart – 19 December
So what does this mean? 2011 and 19 June 2012. Both
these are ‘trading to time’ dates
It means that if Friday’s top of 1471 can hold, and we can see a break through 1433 on and directly related to the 14
the S&P500, then I think we will see a run down to at least 1400, but probably much September 2012 top, as they are
lower prices. This will give us the buying opportunity on quality stocks for a much 270 and 90 degrees apart.
higher run.

Friday was actually a ‘short trade’ signal. You could have sold short the S&P500 index
at 1468 and have your stops placed above 1471. You could also add to the position on
last night’s close. You would further add to the position on Monday if the low of Friday
is taken out at 1456. Keeping stops tight above 1471 gives a good risk reward trade off.

I have attached another file showing some geometric lines which is another tool I like
to use on the markets. These are similar to the standard trend lines that every man and
his dog use, but unlike the trend lines which require two points to ‘connect’ a line, my
geometric lines can be used immediately following a top or bottom being confirmed.

So, overall - we still have no clear direction [yet]. It is still a wait and see game as to
whether 1475 can hold. Personally, I was hoping for a “reversal signal” on Friday night,
which we got, so I am expecting lower prices, but I wouldn’t bet the house on it.

186 T R A D I N G W I T H T H E T I M E FAC TO R
 You should refer back to Illustrations 027 (Price ranges of 218, 220 and 208) and Illustration 035
(Time & Price Angles) used earlier to see the resemblance. Note also how I had highlighted two key
dates in this chart – 19 December 2011 and 19 June 2012. Both these are ‘trading to time’ dates and
Email of 6 October 2012
directly related to the 14 September 2012 top, as they are 270 and 90 degrees apart.

the email of 11 October 2012

The last of the series of emails, identifies how I used the counter-trend entry and exit rules described
in this course and how they were influencing my thinking at the time. In particular, the email highlights
how I was keen to follow the rules on risk management by taking profits where possible, given it was
an against the trend trade. T R A D I N G W I T H T H E T I M E FAC TO R 187

The S&P500 has broken down nicely and the short trade has been confirmed. The initial profit target of 1427 has been reached, so
The email of 11 October 2012
The last of the series of emails,
identifies how I used the
counter-trend entry and exit rules
described in this course and how
they were influencing my thinking
at the time. In particular, the email
highlights how I was keen to follow
the rules on risk management by
taking profits where possible, given
it was an against the trend trade.
188
The S&P500 has broken down nicely and the
short trade has been confirmed. The initial profit
target of 1427 has been reached, so it is an
opportunity to take some profit off the table and
leave 50% of your position to run, which means
this can no longer be a losing trade.
The 1427 area is some key support and
resistance, so the expectation would be for
there to be a bit of a counter trend rally off these
levels. If the 1425-1427 level is cleanly broken,
then I would expect a move at least down to the
1398 area.
The price target of 1427 identified, simply
represented a 100% repeat of the first move
down from the 1474 top to a low of 1430, which
gave a range of 44 points. After the S&P500
had rallied back to the 5 October 2012 high of
1471, I figured that a repeat of this 44 point price
range down would give me a target of 1427 as
a place to minimise my risk. This is consistent
with the rules about taking a counter trend trade
and looking for repeating price ranges as an area
to take profit.
T R A D I N G W I T H T H E T I M E FAC TO R
The broader counter-trend move off the 1474
top however can be referenced back to the
207 point range up leading into the high. As
the earlier charts illustrated, the market ran up
207 points to reach the 1474 top, so this gives
us our reference range to calculate our Price
Retracement levels on the way down. These
identified the price levels of 1426, 1371 (50%)
and 1346 (61.8%) to watch.
The level of 1426 coincided with my mini-
repeating price range and target of 1427, so
it was naturally a sensible area to reduce risk.
Interestingly, the counter-trend move off the
1474 top eventually bottomed out at 1343,
which is within a fraction of our third Fibonacci
level and our ultimate profit taking target point.
So there you have it. The jig saw puzzle of
putting together a forecast and trading it, is
now complete – showing you that with some
simple application, forecasting the prices of
future market tops and bottoms can be
made easy.
 So there you have it. The jig saw puzzle of putting together a forecast and trading it, is now complete
Email of 11 October 2012
– showing you that with some simple application, forecasting the prices of future market tops and
bottoms can be made easy.

T R A D I N G W I T H T H E T I M E FAC TO R 189
The Conclusion

So there you have it. The jigsaw
puzzle of putting together a
forecast and trading it, is now
complete – showing you that
with some simple application,
forecasting the prices of future
market tops and bottoms can be
made easy.
Thank you for letting me share with you the
most consistent and reliable time and price
forecasting techniques that I have discovered
working in financial markets. We’ve covered
a lot of ground together to get to this point,
but I hope you feel it has been a journey well
worth spent.
Throughout the years, I have tried and tested
many theories about timing markets and making
successful forecasts. It has taken me many
years of study, trial and error to identify those
techniques which work and those which don’t.
In the end, I have discovered that there is no
one tool, or no single method which will bring
absolute success without any application or
work. But with a little application and a little bit
of work, you are now equipped to make your
investment and trading a huge success.
I have done my sincere best to identify those
techniques which I believe are the ones you
actually need to know and those which work.
Now it is your turn to study these lessons
and begin applying them to your own market
analysis. The techniques described throughout
this course have stood the test of time. They
worked long before you and I were here and
they will continue to work long after you and I
are gone. Most importantly, the techniques I
have shown you will stay with you for a life time.
I hope this course has changed the way you
look at financial markets – and that you too can
now achieve what others will tell you is the
impossible.
Until next time.

Understanding the importance of time and the

presence of geometric symmetry in financial
markets will help you identify what a bull market
top and a bear market low should look like.
Once you have mastered the skill of identifying
the geometric symmetry that has unfolded,
you will quickly begin to learn how to predict it
unfold ahead of time.

190 T R A D I N G W I T H T H E T I M E FAC TO R
Acknowledgments
My journey throughout life would not be possible
without my friends and family. They are my
inspiration in all that I do and this book would not
have been possible with them.
Firstly, to my father who taught me that in life, it
is always better to give to than to receive. Each
day your presence is missed but your memory is
felt. This book is dedicated to you.
To my beautiful wife and two even more beautiful
children who energise me with spirit each day as
we move forward in time. For my two children
especially, this book is from me to you.
May you both never grow old.
To my good friend Joe who has worked tirelessly
with me on this project and has found the time
with so much more going on. The result is such a
wonderfully presented course that is truly, second
to none out there.
To Andrew and Gary for providing me with
feedback on the contents along the way.
Good friends are truly hard to find.
And finally, to the works of WD Gann and the
books and courses he has left behind. They have
truly inspired, challenged, confused and amazed.
And they have stood the test of time.
It is possible to do what many will tell you is the
impossible.
Until next time.
T R A D I N G W I T H T H E T I M E FAC TO R 191
UNTIL NEXT TIME.