Price Time Volume Investing

I have noticed the 218 calendar day cycle has come up a number of times on the SP500 Index (SPX) Roadmap I have been following since 2002.  One quarter of the time cycle for the initial five wave move off the 2002 low was 218 days.  The A-B-C correction was 25% of that time cycle and 218 days.  There are many 218 day relationships that can be found on the roadmap chart below.

Dynamic Chart

This chart shows the complete time cycle of the 2002-2007 move.  The March to May move ended at the 12.5% (or 1/8) time cycle.  We are approaching the 25% time cycle around 12Jan09.

Plotting the 218 calendar day cycle on the same chart shows a number of small and big cycle changes or accelerations on the 218 day cycle.  I am not going through them but you can easily find them on the chart.  The big drop in October accelerated on the 218 day cycle.

So I started looking into 218 days and why that is so significant.  Because 1/8 division work well with price and time in many Gann application, I divided 218 by 8.  This equals 27.25 days.  My first thought was that the lunar cycle is about 28 days.  But then as I read I found there are many types of measurements of the lunar cycle.  The cycle that comes the closes to 27.25 day the Sidereal Lunar cycle of 27.322 days.  So now I have a new cycle to watch.  I’ve know that 218 was important on my roadmap for a couple years now, but I didn’t know why.  I’ve read that Gann went to India to study sidereal astronomy.  So maybe this cycle is what WD Gann found useful.

Plotting the 27 day cycle on top of my normal range square shows that Thursday/Friday was 27 days from the October low on the SPX.  The next cycle hits in early December.  The 218 day cycle from the May high hits around Christmas.

So what is my outlook?  I don’t know.  I think we should watch these cycles and readers should overlay these ideas onto their own charts to see if anything pops up.  Feel free to add your own comments and analysis.  There have been some links to e-wave charts posted that look interesting to me.  I don’t know how accurate the charts are but they certainly have a chance to be as accurate as anything I have come up with in the past couple weeks.

A recap of recent posts:

• DJIA Long Term Gann Angles
• QQQQ Geometry of 2007 Price Range
• QUALCOMM at 50 Percent Retrace Level
• Distribution Day Below the 20 Day Moving Average
• US Dollar Correcting After 15 Week Run
• Expected Correction on Lower Volume
• Nasdaq 100 Swing Chart Ready for Correction
• BIDU With A-B-C Retrace Near 50/50 Point
• Transports and Emerging Markets
• VLE Bouncing Off Recent Low
• SP500 Equal Weighted Index
• Natural Gas Approaching Long Term Trendline

Previous Weekend Outlook posts.

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Post Modified: November 9th, 2008 at 11:49 pm

Tags:   How To · Market Outlook · Roadmap · Standard and Poor's 500 (SP500)6 Comments