Why Is 3 Squared 9

In this special written report, Jeff Cooper, creator of the Hitting and Run Trading Report, explains his utilise of the unique foursquare of 9 cycle. Click hither  to get Jeff'southward legendary book Hitting and Run Trading for just $19.95 .

"Gann tin can compound money faster than whatever man I have always met."
-Richard D. Wyckoff

The Square of 9 or Foursquare of 9 Wheel is one of the about mysterious and pop marketplace tools of legendary trader West.D. Gann, a financial advisor and trader in the stock and commodity markets during the outset half of the 20th century.

My introduction to Gann's methods started with a serial of lectures in the late 1980's given by a professor of physics at USC who had an avid interest in the markets.

I was inspired to learn how to use the Square of nine by this course where I first was introduced to Gann's concept that markets were proportional and symmetrical — geometrical equally opposed to random.

It was during my research for a course I created called Unlocking the Profits of the New Swing Chart Method, where I analyzed every major swing in the SPX from 1941, that a light seedling really went on. I could see the synchronicity betwixt fourth dimension and price that repeated over and over again.

I could see unequivocally how fourth dimension and price counterbalanced out or squared-out creating a change in tendency that the Square of 9 could pinpoint.

What Is the Square of nine?

The Foursquare of 9 is a screw of numbers starting with the number one in the center.

The numbers spiral around the center in a clockwise way to the number 9, which completes the first cycle or square of numbers effectually the heart. Hence, it is called the Square of nine.

Circumscribed around this spiral number grid are the dates of the twelvemonth.

The truthful origin of the Foursquare of 9 is unknown, only nosotros know for certain is that Gann used the Foursquare of 9 and considered it very valuable.

The concept behind the Square of nine is that growth is non linear. Rather, it occurs in a spiral fashion.

Many traders are familiar with the apply of the Fibonacci sequence of numbers as a fashion to measure market moves.

A Fibonacci spiral is, in outcome, a serial of quarter-circles (ninety degrees) drawn inside an array of SQUARES representing the Gilt Hateful.

Observe the Fibonacci spiral itself forms a number ix, resembling the natural vortex shape of a nautilus and the Milky Way.

So this is the basis for the concept of the Principle of Squares and the idea that growth occurs in an expanding spiral as opposed to a linear fashion.

This is clearly depicted in the chart of a strongly trending market as it pulls dorsum before resuming its underlying trend.

The Foursquare of nine is very important considering nine digits are used to measure out everything. We cannot go beyond 9 without starting to repeat and using 0.

Gann believed the market was geometric, not happenstance. He said, "We utilise three figures in geometry: the circle, the square, and the triangle.

We get the square and the triangle points of a circle to decide points of time, price, and space resistance.

We employ the circle of 360 degrees to measure fourth dimension and cost.

Gann's methods revolved around measuring the natural divisions of the year — particularly the 90, 180, and 270 'natural' divisions of the 360 degree twelvemonth.

The term 'degrees' is used by Gann interchangeably with 'days' (or when specified with weeks, months, or years as in ninety weeks, months, or years) — an extension of the concept that time is geometric in nature.

A year is a 360 degree movement of the World effectually the Sunday and is measured by a similar (though not exact) number of 'days'.

A unmarried twenty-four hours represents slightly less than a single degree (.9856) — but shut plenty for our purpose.

The primary divisions of a circumvolve are the 90 and 180 degrees, which equate to the primary divisions of a year — ninety degree seasons and 180 degrees betwixt opposing solstices and/or equinoxes.

The term 'square' is used past Gann in many ways.

Squaring means fourth dimension and/or toll accept balanced out or squared out, which we volition explicate after.

Square-outs also refer to the Principle of Squares or foursquare roots.

Legendary money manager John Templeton, 1 of the nearly successful investors e'er, stated, "The fluctuation of share prices is roughly proportional to the square root of the price."

Hither is how the Square of 9 becomes a figurer to mensurate these fluctuations.

As we noted above, the number nine ends the commencement cycle on the Foursquare of nine Wheel.

If you want to determine the side by side full price wheel of 360 degrees or 1 full square higher, you take the square root of 9, which is 3, and add 2, getting 5, and then re-square, which gives 25.

Hence, on the Square of ix, the number 25 is directly above the number 9. It is i cycle of 360 degrees or ane square higher.

Find in the Square of 9 above that the number 16 is 180 degrees directly across and opposite the numbers 9 and 25.

In order to find a 180 degree move upwards from nine:

A) Take the square root of 9, which is 3
B) Add 1 to get 4
C) Resquare, getting sixteen.

16 is 180 degrees directly across and contrary ix.

The reason why calculation 2 to the square root of a low and re-squaring calculates a full 360 degree price project is because all odd numbers are separated by units of 2 and all fifty-fifty numbers are separated by units of two.

This is why adding or subtracting 2 to the square root of a number, so re-squaring the sum is the equivalent of a 360 degree cycle up or down on the Foursquare of nine.

Let's use GDXJ in the terminal twelvemonth (2018-2019) as an example.

GDXJ struck a low of 26 in late September 2018 and turned up.

Based on the number 26, what are the price objectives using the Foursquare of 9 Bike?

The square root of 26 is 5.10.

Let's find a 180 caste motion:

A) Take the foursquare root of 26, which is 5.ten
B) Add 1 to get 6.ten
C) Re-square half dozen.ten, getting 37.21.

To find a 90 degree motion, we have 5.ten and add .50 and re-foursquare, getting 31.36.

A 360 degree price project is determined past adding 2 to the foursquare root of the low, and then re-squaring (5.10 +2 =vii.10 with 7.ten squared giving fifty.twoscore).

This gives a potential target of 50.xl IF it is adamant that an impulsive change in trend is in playing out following the low.

Based on the powerful impulsive nature of GDXJ'south move off its May 2018 low, a 360 degree minimum  motion (ultimately) is the logical expectation.

Yet, nosotros don't know WHEN that project will be satisfied.

Consequently, we want to also expect at the behavior at the ninety, 180, and 270 degree projections in order to gauge the move.

If you tin't measure a trend, you can't manage risk.

Looking at how this is represented on a physical Square of 9 Wheel shows these relationships immediately.

The first projection is 90 degrees up to 32.

180 degrees up is 38.

270 degrees up (3 squares of ninety degrees) is 44.

A full 360 degree price bike up is l.40, which is just above 26 on the number grid.

On the daily GDXJ above, nosotros can run across how things played out.

GDXJ cleared 32 but topped at 35, shy of the 37/38 projection.

There must be something else going on.

In that location is.

Information technology is the correlation betwixt time and price.

I've never seen any traders use the Square of ix Wheel the way I do — marrying time and price.

While it is meaningful to await at price and time independently in their 90 degree movements, in my experience, it is the marrying of Fourth dimension & Toll that often pinpoints turns.

In the instance of GDXJ, the engagement of the September 11, 2018 low is 90 degrees square the 35 toll high.

September 11 is square 35.

The next pullback struck a low of 28, which vectors/aligns with September 11 for a residual-out or time/toll square-out.

Reverse September 11 is a price of 41.

Yet, GDXJ hit 43.10 on August 7 and has been correcting always since.

Why did GDXJ eclipse the theoretical resistance of 41?

Was there something 'off' on the Wheel?

Did not immigration 41 signal a cost project to the 50.twoscore region?

The answer is that August 7 is 180 degrees direct across and opposite 43, the high on August 7.

So there was a time/price square-out at the August loftier.

Green arrow is Aug 7
Carmine arrow is 43

You tin see how important Fourth dimension is in determining turning points and defining the trend.

While the vast majority of market participants use PRICE exclusively, as Gann stated, "Time is the well-nigh important factor in determining market movements."

It must besides be said that while we are looking at geometric relationships, the essential technique of the Square of 9 Wheel is as much art equally science; the analysis of the marketplace being more of a Picasso than a Rembrandt.

Additionally, in measuring the market, nosotros must ever look from below and from above.

In other words, we must consider the low at which a tendency started, as well as the prior major swing loftier.

There are always multiple time and price relationships working out concurrently.

In the example of GDXJ, you want to measure from the main low of 26, the secondary low of 28 (May 22, 2019), as well as from the the prior major swing high, which in the example of GDXJ was 52.50 on the WEEK of August viii, 2016.

It is fascinating that the calendar week of the 2016 top ties to the date of the loftier for the move and then far in 2019 on August 7.

Checking a Square of 9 shows that 52.50 "points" to September 30.

GDXJ was in a precipitous pullback since August 7 until September 30, 2019.

Is it possible GDXJ struck an important low on September 30?

Green arrow points to Sept xxx
Red arrow points to 52.50

The respond to reconciling what seems to exist the enigma of the Foursquare of ix is actually very simple.

Every twenty-four hour period, I take the 'nix' point on the articulate overlay that spins effectually the Bicycle, allowing information technology to deed as a dynamic calculator, and put 'nix' on that day.

Doing so on August vii would have revealed that GDXJ may be striking a high at 43.

As shown above on August 7, GDXJ allow a point bar reversal day underscore the notion of a time/price square-out — 'proving' the idea of a turning point.

Let'due south look at a large picture example of the major 2007 Oct bull market high on the SPX.

On October eleven, 2007, the SPX topped at 1576.

Below is a weekly SPX showing the October eleven, 2007 pinnacle at 1576 and the March half-dozen, 2009 depression at 666.

On the Square of nine, the number 1576 is xc degrees square October eight.

The loftier shut was on October 7.

Remember, the market place is not a fine Swiss watch.

Gann ever said to key off the weekly chart, i.e., the Calendar week OF.

Blood-red arrow is 576 (for 1576)
Light-green arrow is Oct 8

Confirming the idea of a square-out at the October 2007 high was the Key Reversal Solar day on October 11, 2007.

Hither's how the acquit market place was calculated using the Principle of Squares.

The square root of 1576 is 39.seven.

To determine 1 cycle of 360 degrees down in price, we subtract 2 from 39.70, giving 37.seventy, and re-foursquare, getting 1421.

Notice that the pre-crash pivot high from May 2008 was 1425-1440.

The market crashed from this 1421 region.

West.D. Gann said 7 is the number of panic.

From 1576, the SPX tumbled Seven squares or cycles or 360 degrees.

Red arrow is 576 (for 1576)
Blue pointer is 660

Hither's how nosotros get seven cycles down.

We take the 38.70 square root of the high (1576) and subtract 14 (recollect we need to use 2 units for each 360 degree move).

39.7 -14 = 25.seven

25.vii squared = 660.49.

The bear market low on March 6, 2009 was 666.65.

Carmine arrow is March six
Dark-green arrow is 666/667

When looking for major turns using the Square of 9, it is good to have of import confirmation.

As offered in a higher place, every day I look at the possible time/price relationships by putting "zero" on the current day.

Coming into early March in 2009, as you got to March 6, yous would discover that 666/667 is 90 degrees square March six for a perfected square-out.

And nearly seven cycles in toll down from the top.

So, the March 2009 low was a square-out in the same style every bit the October 2007 high with a 90 caste foursquare-out.

The early October 2007 bull marketplace top is square the toll of the top.

The early March 2009 carry market bottom is square the price of the low.

Remarkably, the 1576 October 2007 top is vi rungs or squares of 360 degrees up from the 768 carry marketplace low.

That was also a time/price square-out equally 768 is 90 degrees square early on October.

Red arrow is 576 (for 1576)
Blue arrow is 768

It is one thing to ride a trend, just it is quite another to be long and be able to exit near a high, or be curt and leave near a low.

This is the unparalleled value of the Foursquare of nine Wheel.

Equally hedge fund sorcerer Paul Tudor Jones says, "I believe the very best coin is made at market turns. Everyone says you will go killed trying to option tops and bottoms and y'all make all your coin past playing the trend in the middle. Well, for twelve years I accept been missing the meat in the middle, but I have made a lot of money at tops and bottoms."

If there is a better tool than the Foursquare of 9 for pinpointing major tops and bottoms or swing tops and bottoms, I have however to notice it.

Let'due south wait at some intriguing historic fourth dimension and cost harmonics revealed by Foursquare of 9.

The loftier before the 1987 crash was August 25 at 338 SPX.

339 is 180 degrees opposite August 25 for a time/price square-out that nailed the summer accident-off top in 1987.

Red pointer is Aug 25
Blueish pointer is 339

The low of the crash occurred the twenty-four hour period after Black Mon, on Tuesday, Oct 20, at 216.46 SPX.

Notice how 215 is 90 degrees square October 19.

Even in the midst of the turmoil, the geometry of the Square of 9 held sway.

Once you lot work with the Square of 9, yous will be amazed by the spectacular fourth dimension/price relationships information technology unlocks.

For case, the DJIA high in 1929 prior to the crash was 386.

It is well known that the blueprint in 1987 mirrored the pattern in 1929.

What most market participants would be surprised to learn is that 386 is xc degrees square Oct 19, the crash solar day in 1987.

In other words, the high 24-hour interval in 1929 points to/vibrates off Black Monday in 1987.

Red pointer is 386
Blueish pointer is October xix

It was 58 years betwixt the 1929 crash and the 1987 crash.

Black Tuesday in 1929 was October 29.

Checking a Foursquare of 9 shows that 58 is 90 degrees foursquare Oct 29.

Red arrow is 58
Purple arrow is Oct 29

So, 58 years from the Oct 1929 crash, some other crash was triggered in October.

Think near this: the Great Fiscal Crisis in 2008-2009 was considered the worst crunch since the Keen Low.

The depression of the GFC occurred in the first week of March.

The high prior to the Great Low occurred in the first week of September.

The start week of March is 180 degrees straight across and opposite the first week of September.

So, the engagement of the high prior to the worst turndown in U.S. history is opposite the date of the depression of the 2^nd worst turndown.

Green arrow is 1st week of March
Blueish pointer is 1st week of September

Additionally, the SPX high in 1929 was September vii.

September seven is square 667 (the low in 2009) and opposite March vi (the appointment of the '09 low).

So the date of the high in 1929 is square the toll of the depression in 2009.

Red arrow is September 7
Purple arrow is 667

If the Square of 9 Wheel can reflect the time/cost harmonics of 2 of the biggest turning points of the last 100 years, certainly it tin can decipher turning points on a less dramatic scale.

Let's wait at the marketplace in 2019.

The SPX struck a momentum high in late January 2018 at 2872.
That high more or less capped the market for the adjacent 20 months.

On July 26, 2019, the SPX struck a nominal new all-fourth dimension high.

2872 aligns with July 26.

From July 26, 2019, the SPX fell 200 points (7%) in vi days.

Crimson pointer is 872 (for 2872)
Blueish pointer is July 26

Interestingly, in keeping with the Principle of Squares, 55 squared is 3025, which ties to the SPX ATH.

The takeaway is that the market place is doubtable until it clears the 3025 endmost high from July 26, 2019.

On September 21, 2018, the SPX struck an all-fourth dimension high of 2941 and tumbled to 2346 on Dec 26 (a period of roughly xc days/degrees).

On the Square of ix, the number 2941 is 90 degrees square December 26.

Red is 2941
Green is December 26

This is a stunning case of how time points to price and toll points to time.

Allow's look at some more examples of the concept that time is cost and price is time.

In late 2019, we got the Dec Massacre.

AAPL dropped from an all-time high of 233 on October 3, 2018, to 142 on January two, 2019.

This was precisely ninety days/degrees subsequently.

October 3 aligns with a price of 232 for a square-out.

Red pointer is Oct three
Bluish pointer is 232

On Jan 3, 2019, AAPL saw a large gap downwards.

After its substantial slide, this had the potential to be an Exhaustion Gap.

Setting "zero" on January iii shows that a price of 231 is foursquare January 3.

The all-time high was 233. The all-time endmost loftier was 232.

So the date of the depression was square the price of the high. Price pointed to fourth dimension, time pointed to toll.

Ane yr later, AAPL has struck a new all-fourth dimension high of 237, which is 90 degrees square the 142 low.

If AAPL can clear 237 on a sustained basis, the indication is a move to 253, a full 720 degrees or 2 full price cycles upward from the January 142 low.

These examples flesh out the statement that Gann made: "Every top and every lesser in the markets had a mathematical counterpart in both fourth dimension and price. When time and toll coincide, change is imminent."

Coincide is another way of proverb "foursquare-out."

Permit's take a look at an example of fourth dimension and cost squaring out using Store, the poster-child of the bull in 2019.

SHOP struck a high at 175 on June 20, 2018 and declined to 140 rapidly — in half-dozen days.

June twenty is 90 degrees square 176 for a fourth dimension/toll square-out.

Ruddy pointer is 176
Blue arrow is June 20

SHOP recovered to make a nominal new loftier at 176.lx on July 24, 2018, where it left a large range Primal Reversal 24-hour interval earlier plunging to 133 by the end of the month

90 degrees upwardly from the initial break to 140 is 177.

So, the low of the first break pointed to the test failure loftier at 177.

Green arrow is 140
Red pointer is 177

Armed with this knowledge, the reversal at 177 could be seen for the failure it was destined to be.

The geometry of the Square of 9 was telegraphing that SHOP was in a weak position.

Information technology was — dropping 43 points in iii days.

How much could you have banked with put options with the benefit of this cognition possessed by the Square of ix?

This is i of the corking benefits of The Wheel. Options require timing. The Foursquare of 9 does a good job pinpointing fourth dimension frames.

Let's look at some examples from the 3^rd quarter of 2019.

Once again, let's clarify SHOP.

SHOP struck a high of 409.60 on August 10, 2019.

From there information technology declined to 286 on September 25, where it left potentially bullish Train Tracks — sometimes a signal of exhaustion.

What is interesting is that September 30 is 180 degrees straight across and opposite the 410 high.

Red pointer is  410
Green arrow is Sept thirty

Putting "zero" on the engagement of the loftier, Baronial 27, reveals that 285 (1 point from the depression) is square Baronial 27.

Blue pointer points to Aug 27
Red arrow points to 285

Could 286 have marked a Selling Climax?

8 trading days after the 286 low, Store struck 330, a rally of 44 points in 8 trading days.

SHOP tagged a high of 330.45 on Fri, October iv, 2019.

331.l is 180 degrees straight across and opposite Monday, Oct 7.

It will exist interesting to see how things play out.

ROKU'southward big run from its December 24, 2018 low of 26 reversed decisively from 176.55 on September 9, 2019, dropping all the mode to 98 on 9/29.

Checking a Square of nine shows that 177 "points" to September nine.

Red arrow points to 177
Blue arrow is Sept 9

360 degrees downward from 176 is 126. ROKU gave signs of trying to contrary from 126, but when information technology failed from a quick 360 degree drop, information technology crashed.

That said, September 27 aligns with the 176 all-time high.

ROKU struck a low on September 27 at 98, running all the way to 124 in 10 days… just below the 127 region which we flagged to a higher place as existence 360 degrees down from the 176 top.

Red arrow is 175
Blue pointer is Sept 27

Remarkably, the date of ROKU'south December 24, 2018 low is foursquare its 176 record high.

Green is Dec 24
Blue is 176

Few stocks command the controversy TSLA ignites.

Can the Foursquare of 9 tame TSLA's wild swings?

TSLA struck a major high at 379.49 on Dec seven, 2018, falling to 177 on June 3, 2019, a period of 180 days/degrees.

177 is xc degrees square December 7 for a square-out.

From its 177 low on June 3, 2019 (180 degrees/days from the December 2018 peak) TSLA ran up nearly 90 points.

Remarkably, 266 is 360 + 180 (540) degrees in price up from 177.

Green pointer is Dec 7
Blue pointer is 177

Hot IPO's are the centre and soul of speculative sentiment and respond quite well to the synergistic psychology reflected past the Square of nine.

Permit's take a wait at CRWD, a hot IPO from June 2019.

The IPO low of 56 aligns with the all-time loftier twenty-four hour period of August 20.

Green arrow is Aug xx
Blue pointer is 56

On September 30, CRWD carved out a large range signal reversal bar from a low of 51.61.

September 30 "points" to/aligns with 52.

Green arrow is Sept 30
Regal arrow is 52

Subscribers bought CRWD off the setup, selling the balance of their shares almost 63 on Friday, Oct 4.

I'yard often asked whether the Foursquare of 9 works with low-priced stocks.

The last example shows how we worked-out silver miner AG on the Wheel, allowing subscribers to do good from a large run in calls and the stock.

AG struck a low of v.48 on May 24.

To work with depression-priced stocks, we move the decimal betoken to get 54.8 and round to get 55.

55 is square May 24.

360 degrees up from 55 is 89.

Moving the decimal point back, nosotros go 8.90, which should act as support and subscribers re-loaded.

In late September, AG pulled back to 8.90 subsequently a more than 100% run to eleven.threescore over in approximately ninety days (May 24 to early on Sept — Detect that the big breakout day was June 3, exactly 90 days prior to the high).

Red arrow is 55
Green arrow is Sept 3

Interestingly, AG'due south xi.60 top on September 3 was a foursquare-out with September 3 straight across and contrary 55 (the five.48 low).

Cherry pointer is 55
Light-green arrow is Sept iii

Conclusion. The important thing to understand about the Square of ix Bike is that non all foursquare-outs are created equal.

While all significant tops and bottoms are foursquare-outs of fourth dimension and price, not all square-outs are major tops or bottoms.

The key to speculation is observation of the behavior from a time and price relationship.

Combining fourth dimension/price square-outs with bespeak bar reversals and price action is a superior fashion of capturing boggling swings and major trends.

The question I go asked the most is why does the Square of 9 work?

I can't tell you unequivocally why it works — simply that it works.

The all-time way I know to explicate how it works is in the proof offered in these examples.

The best way I know how to explain the value of the Foursquare of 9 is that if you can't measure chance, yous can't manage risk.

Why Is 3 Squared 9,

Source: https://www.t3live.com/blog/2019/11/18/jeff-cooper-square-of-9/

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