Mikula Forecasting Company

Mikula Forecasting Company: Strategy #23: Forecasting World Sugar With the Square of Nine / Planetary Lines Part 3

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Written by: Patrick Mikula CTA
Copyright (c)2003-06 by Patrick Mikula All Rights Reserved. (Please to not copy or foreword this article).

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In this trading strategy we are going to discuss forecasting price and time with the Square of Nine. The focus of this strategy is World Sugar but any market can be used with the same methods. This is also Part 3 in our discussion of Planetary Lines. The first step for this strategy is to apply the Square of Nine method described in Chapter 4 of the book , The Definitive Guide to Forecasting Using W.D.Gann's Square of Nine. See Chapter 4 for the details of this method as we will not restate them here. On the chart below the Chapter 4 method has been applied to the May 2005 World Sugar future contract. The starting date is the long term low pivot that occurred on February 13, 2004. This is seen on the chart below.



The Square of Nine method described in Chapter 4 is a time cycle forecasting method. The chart below shows all the possible time cycle alignments based on the Chapter 4 method. When using this method you are not supposed to use every possible time cycle, you are supposed to select the one or two time cycles that show a correlation between the Square of Nine and the market. This is shown on the next chart.



The chart below shows that I have selected the time cycles from the Square of Nine's 135 degree overlay angle and the 0 degree overlay angle. These two time cycles correlate with most, but not all, of the pivots in the World Sugar market. There is an arrow pointing up or down at a market pivot that lines up with the Square of Nine time cycle. These time cycles will be used to forecast this market.



The next step for this strategy is to apply the Square of Nine method described in Chapter 15 of the book , The Definitive Guide to Forecasting Using W.D.Gann's Square of Nine. See Chapter 15 for the details of this method as we will not restate them here. The Chapter 15 method is a planetary line method using the Square of Nine. The chart below shows the planetary lines created by using heliocentric Mars and the Square of Nine. This is a price cycle method and is used to locate important support and resistance prices. The chart below shows that most, but not all, of the recent World Sugar pivots formed near one of the Mars lines. There is an arrow pointing to each of the pivots that formed near a Mars line.



The next step is to combined the historical pivots identified by both the time forecasting method and the price forecasting method. The chart below has a box around each pivot that has correlated to both the price and time forecasting methods. Once you have established a historical correlation in price and time for the methods you are using, the next step is to make a forecast based on the same methods.



MORE:
To see the final chart, showing the World Sugar forecast, read the version of this article on the MarketWarrior owners page.