Is the market going to crash? An overview of the current market
Do you think the overall market sentiment/psychology is beginning to shift or change due to the current outbreak of the corona-virus?
The current chart you are looking at has a Gann Fan placed at the DJI's all-time low price from the year 1932 that was a result of the Great Depression that started in 1929. If you are unfamiliar with what a Gann Fan is - it shows a relationship between time and price and acts as a support and resistance, and it also shows the strength of an overall trend. W.D. Gann - The creator of all Gann Indicators etc., believes that the market is geometric and cyclical in nature - just like the saying, "History tends to repeat itself." and "Those who cannot remember the past are condemned to repeat it." Gann was much more complex than just this, but I am not here to fully explain all of his workings, however, I have found his indicators to be extremely useful and valuable.
With that being said, there is a "rule of all angles" that applies to the Gann Fan's Angles - The rule states that when the market (price) breaks one angle, it will move toward the next one, this can be applied to up and down-trends, and can happen over a long period of time. This has been respected through time, although, it is not "scientific" - as you can place the angles anywhere on a chart as you please. However, the best place to utilize them are on significant swing highs and lows.
It is very fascinating to see how this specific set of angles have been respected as both supports and resistances as time progresses (more specifically - as of the late 1980's to current for this example), you can see that is has been respected time and time again. Is it a coincidence that the market crashed in the year 2000 as it reached the 2/1 angle and was treated as a resistance - only later to find support on the 3/1 angle? And again being rejected by the 2/1 angle in 2008 and finding support on the 3/1 again in 2009? We know that a strong resistance typically doesn't break on the first time and that it may take a couple tries... Is that going to be the case now as we have recently reached the 1/1 angle? We are now in "the middle ground" and there is a large gap between the next support / resistance, which way will we go from here? Time will tell!
The overall purpose of this post is to raise awareness and provide a new perspective to consider and think about. As I mentioned earlier - History tends to repeat itself, and I am a firm believer that events in life (as well as the market) are cyclical.
If you like my content, please feel free to 'like' this post and 'subscribe' to my channel for more updates, trading set-ups, and more.
Do you agree or disagree with what was said, or if you would like to add a comment, please do so below!
* P.S. - You may also drag the map and check to see the origin / placement of the Gann Fan, it is very interesting to look back through history and see how the market played out!
Thank you
*This is not financial advice*
The current chart you are looking at has a Gann Fan placed at the DJI's all-time low price from the year 1932 that was a result of the Great Depression that started in 1929. If you are unfamiliar with what a Gann Fan is - it shows a relationship between time and price and acts as a support and resistance, and it also shows the strength of an overall trend. W.D. Gann - The creator of all Gann Indicators etc., believes that the market is geometric and cyclical in nature - just like the saying, "History tends to repeat itself." and "Those who cannot remember the past are condemned to repeat it." Gann was much more complex than just this, but I am not here to fully explain all of his workings, however, I have found his indicators to be extremely useful and valuable.
With that being said, there is a "rule of all angles" that applies to the Gann Fan's Angles - The rule states that when the market (price) breaks one angle, it will move toward the next one, this can be applied to up and down-trends, and can happen over a long period of time. This has been respected through time, although, it is not "scientific" - as you can place the angles anywhere on a chart as you please. However, the best place to utilize them are on significant swing highs and lows.
It is very fascinating to see how this specific set of angles have been respected as both supports and resistances as time progresses (more specifically - as of the late 1980's to current for this example), you can see that is has been respected time and time again. Is it a coincidence that the market crashed in the year 2000 as it reached the 2/1 angle and was treated as a resistance - only later to find support on the 3/1 angle? And again being rejected by the 2/1 angle in 2008 and finding support on the 3/1 again in 2009? We know that a strong resistance typically doesn't break on the first time and that it may take a couple tries... Is that going to be the case now as we have recently reached the 1/1 angle? We are now in "the middle ground" and there is a large gap between the next support / resistance, which way will we go from here? Time will tell!
The overall purpose of this post is to raise awareness and provide a new perspective to consider and think about. As I mentioned earlier - History tends to repeat itself, and I am a firm believer that events in life (as well as the market) are cyclical.
If you like my content, please feel free to 'like' this post and 'subscribe' to my channel for more updates, trading set-ups, and more.
Do you agree or disagree with what was said, or if you would like to add a comment, please do so below!
* P.S. - You may also drag the map and check to see the origin / placement of the Gann Fan, it is very interesting to look back through history and see how the market played out!
Thank you
*This is not financial advice*