Predicting Major Turning Points in Gold and S&P Months in Advance with W.D. Gann’s Tools

MonkeyMakesMoney
7 min readSep 5, 2023

A truly unique forecasting tool that is based on findings made by a legendary trader W.D.Gann

Who was W.D.Gann?

William Delbert Gann remains a legendary figure within the realm of stock and commodity trading. He is widely regarded as one of the most accomplished traders in the history of these markets. His journey into trading commenced in the early 1900s, ultimately leading to the establishment of his brokerage firm, Gann & Company. Employing his unique approach to technical analysis, W.D. Gann reportedly amassed over $50 million in profits from his astute market maneuvers.

Gann introduced innovative trading techniques and tools that were groundbreaking for his time. His core belief was that financial markets followed specific laws and geometric patterns. To predict future price movements, he developed a diverse set of methods and tools drawing from technical analysis, astrology, and numerology. This approach made him stand out from the conventional traders and analysts of his era.

This unique blend of disciplines gave W.D. Gann the ability not only to foresee upcoming shifts in market trends but also to identify the best times to enter or exit the market. His expertise in Natural Law and geometric principles, based on the circle, square, and triangle, remains effective in today’s ever-changing stock and commodities markets, just as it was during his lifetime.

Gann authored several books and courses, such as “Truth of the Stock Tape” (1923) and “The Tunnel Thru the Air” (1927). These publications detailed his trading philosophy, methods, and market predictions, further solidifying his reputation and attracting followers.

Gann offered courses and seminars where he shared some of his insights and methods with students and followers. However, even in these educational settings, he reportedly did not provide all the details, leaving room for interpretation and further study. Gann’s mystique and the aura of mystery surrounding his methods may have contributed to his fame and allure. By being somewhat enigmatic about his techniques, he added to the intrigue and fascination that surrounded his persona.

You can find numerous articles and watch many videos on YouTube where individuals share their efforts to uncover hidden meanings in Gann’s work. Honestly I think those people just waste their time. In this article, I will demonstrate that focusing on just one facet of Gann’s legacy can equip you with a significant advantage in the fiercely competitive stock market.

Price Projections

The “Wheel of 9” was one of numerous forecasting tools created by W.D.Gann. By measuring the angles formed by market price movements and the segments of the “Wheel of 9”, traders can make predictions about potential turning points, trend changes, and important dates when significant price action might occur.

What I did is that I used a formula that describes the relationships between numbers in the “Wheel of 9” to create a powerful indicator for TradingView charting platform.

Let’s look at the chart of Gold:

Gold futures, 480 min chart

The chart shows that Gold made the major low at $1,618 in early November 2022. W.D. Gann employed his ‘Wheel of 9’ to predict price targets for a market rally, relying solely on a single number — the precise price of the major low.

You can see three red lines, projections off the major low, where price was expected to hit at least a temporary resistance. For each rally there are two main targets and resistance levels:

  • 1 cycle or 360 degrees up and
  • 2 cycles or 720 degrees up.

Note how gold stumbled upon the 360 degrees up projection in November 2022 and then stopped at the 720 degrees up projection in February 2023:

Gold futures, 480 min chart, 2022–2023

Have you ever come across a tool capable of forecasting the precise peak of a rally several months in advance? Would you believe it if I told you that it all hinges on just one number — the exact price reached by the major low?

Now let’s add projections off a higher major low made by Gold at $1,810.80 in February 2023:

Gold futures, 480 min chart, 2023

Note that gold popped up to the first target at 360 degrees up projection at $1,985. Bulls could not slice through that level but after consolidation gold pupped again and topped precisely at 540 degrees up off the February low!

Now let’s see whether we can successfully predict target for a move down off the major top made by Gold in May 2023:

Gold futures, 480 min chart, 2023

We can see that Gold found support right at 1 cycle or 360 degrees down off the May 2023 top!

Now let’s look at the major top made by the S&P 500 index at 4,818 in January 2022. Let’s add Gann’s Levels indicator to see expected levels of support for the first leg down off that top:

S&P 500 Index, 8 hour chart, 2022

Note that S&P dropped hard until it hit the 2 cycle down or 720 degrees down off the January top.

Off the late January low S&P bounce back up hard until it topped at 4,595 on Feb 2nd, 2023. That high becomes our new starting point. We add projections down off that new high pivot to find potential targets for the next leg down:

S&P 500 Index, 8 hour chart, 2022

Note that S&P made a triple bottom at 1.5 cycles or 540 degrees down off the early February 2022 high!

Now if you wanted to know what could be potential targets for a corrective rally off the February low you pick that new low as a starting point and add Gann’s projections:

S&P 500 Index, 8 hour chart, 2022

The first bounce stopped right at 360 degrees up off the February low!

The second leg up topped at 1.5 cycles op or 540 degrees up off the low.

To be frank, I’m always amazed by how accurately that tool pinpoints market tops and bottoms.

Now let’s add projections down off the top made by S&P 500 at 4,637 on 29 March 2023:

S&P 500 Index, 8 hour chart, 2022

We can see that S&P produced a large tradeable pullback right after it hit a 360 degrees down off the March top. And then it produced another strong bounce off the 720 degrees down level.

Now let’s start projections down off the high made in May 2022:

S&P 500 Index, 8 hour chart, 2022

Note, the 720 degrees down projection nailed the bottom of the decline in May 2022!

The rally off teh May low topped at 540 ddegrees up projection:

S&P 500 Index, 8 hour chart, 2022

And the next leg down off the early June top found a firm support at 720 degrees down projection!

S&P 500 Index, 8 hour chart, 2022

I hope I showed you enough examples to inspire you to study Gann’s works and their potential applications in technical analysis of stock charts.

I offer that TradingView indicator as part of a package of my proprietary indicators for TradingView:

You can start your subscription here.

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Important Disclaimer

Neither the author nor the publisher of this article is registered as an investment adviser nor a broker/dealer with either the U.S. Securities & Exchange Commission or any state securities regulatory authority. Readers of this article are advised that all information presented here is solely for informational purposes, is not intended to be used as a personalized investment recommendation, and is not attuned to any specific portfolio or to any user’s particular investment needs or objectives.

Trading stocks, options, or futures carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. The author provides general overview of trading methods that does not take into account your objectives, financial situation or needs. The content of this article must not be construed as personal advice.

Past results are not indicative of future profits.

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MonkeyMakesMoney

Monkey Trader uses Premium TradingView indicators to get an edge over millions of other traders