The uniqueness of Gann Global’s forecasting is rooted in the application of simple logic and W.D. Gann’s revolutionary methods to our vast wealth of data. No examples better highlight the effectiveness of this approach than our recent calls in the cotton and soybean markets.
Cotton Forecast

Well beforehand, we pinpointed the exact month for the completion of the bear market in the cash cotton on December 6, 2004. The key to this forecast was our adherence to the 100, 90 and 30-year master time factor cycles, completion of important time periods and seasonality of the final lows.

On August 3, 2004, we said, “there is no question the 30-year cycle has had a dramatic impact upon overall commodity prices. In looking across the commodity board, the market which has replicated the 1973-1974 price pattern to a more dramatic degree than any other has been the cotton market. On the basis of the continued adherence to this cycle, the probabilities favor a final bear market low being registered during the month of December.”

In Figure 1, we show the overlaid chart which was provided to subscribers well before the final low was established. The same price pattern was evident during the 1904 and 1914 bear markets as well. We concluded, “on the basis of this pattern, you can see why we are focusing our attention on the cotton market. I am anticipating a final low and major buying opportunity. In looking at the 35 bear markets since 1880, none are a better match for our DNA than the 30-year cycle.” In addition, “the 1914 low is W.D. Gann’s 90-year ‘great cycle’. This makes it a very important reference point confirming what the 30-year cycle is projecting.”

“What remains most intriguing are the 100, 90 and 30-year cycle lows which were established on December 29, 1904, December 11, 1914 and December 26, 1974. The velocity of the declines into final lows during these three cycles ranked as 3 of the 8 greatest in history. Ours is on track to make it 4 out of 9. The velocity of the declines carried with it the seeds of the upcoming bull markets. Once the lows were in place, major advances took place. The advances coming off the final lows were 65%, 65% and 44%. This is the type of price movement I expect to see in our market.”

Since establishing the final low on December 6, 2004, the cash price has advanced as much as 35% off the low. As a result, the formation has been almost identical to what occurred during the three master time factor cycles.
Soybeans

The unfolding drama in soybeans between 2003 and 2004 demonstrated the compelling value of Gann’s Time Period analysis (Figure 2).

In our July 2004 Advisory Services which were published at Point A on the chart, we warned subscribers of the dramatic decline which would take place. “Our bull market advanced 161% in 2 years, 5 months, 0 days. Based upon price, this bull market ranked #4 out of a total of 25 since 1936. Based upon time it ranked at #3. On the basis of both these measures, our bull market is in a very mature position when it hit the March 22, 2004 high.”

Furthermore, “Between July 31, 2003 and March 22, 2004 cash soybeans advanced 95% in 7 months, 20 days.” Of all climactic bull market segments, “it ranked 3 rd behind the final legs up into the 1973 and 1988 bull market tops. On the basis of the extreme to which our market advanced, the probabilities favor our being in a bear market.”

We quickly narrowed the list of meaningful historic precedents to a mere 5 bull markets “most similar to ours based upon a number of criteria, the most important of which are overall percentage advance and time period of the advance. These occurred into final tops in 1954, 1961, 1973, 1977 and 1988.”

After further examination, we determine that only 3 of these 5 markets fell into the category of being the closest fits to our market. On this basis, what could we expect next?

The “1961, 1973 and 1977 bear markets were relatively short lived at 5 months and 14 days, 10 months and 20 days, 5 months and 28 days.” However, the velocity of the declines in price was the greatest in history. On this basis, “the probabilities are very high for the cash experiencing significant weakness between now and November. Anyone holding cash soybeans should sell them at this time. (Point B)”

By the time of our next soybean report just one month after the July 8 update, we found our bear market diagnosis emphatically validated by a cumulative 45% plunge, already the 7 th greatest ever. “This means on a percentage basis the lion’s share of this bear market is now behind us. The next thing to consider is the timing for a final low.” Of all cash soybean lows, “an incredible 14 of 24 were established in the month of October,” among a grand total of 17 major bottoms in the Sept.-Nov. timeframe.

As you can see in the chart, a final low – what is projected as a final bear market low –was established on October 13, 2004.

You can see how analyzing the time periods of pertinent historical examples – both for important declines and the advances that preceded them – enabled us to predict the short, extremely violent soybean bear market in 2004.

You have just taken seen how we make our forecasts and some of actual results produced by our services. Now you may think your own professional research team would cost you a fortune, what better way to know the direction the markets will turn before they move?