Fibonacci and Gann Applications in Financial Markets

Gann, The Misunderstood Analysis 157
Figure 9.9
only the end of relative consolidation but the usefulness of the pattern as the fan itself
has opened up too much to be of use. This is an artistic decision from me not to use
it any longer but I feel that the steepness of the fanline pattern and the time elapsed
from the origin is in this case too great.
However, in the chart of Figure 9.9 the fanline pattern lasts much longer. This is
the continuous silver chart seen above in the first section in Figure 9.6. Notice that
the fanline is much shallower in this case. This is a function of the scale. The fanline
works throughout 2002 and 2003 very well and offers target levels, support and
resistance as necessary.
In this next example of orange juice the fanline pattern is applied not to a major
high or low but to a local high (see Figure 9.10). The pattern works very well
throughout September to December 2002 but starts to lose usefulness thereafter.
This is an example of the danger of applying Gann analysis from an intermediate
level and not from a critical high or low. Although there seems to be some connection
in this chart between the fanline and the price, I would feel uncomfortable in
applying this analysis at this juncture.
In these final two fanline examples of the Bobl futures and sugar, the usefulness of
two fanlines is looked at. In the first instance of the Bobl futures (Figure 9.11) the low
in March 2002 was indeed significant as it marked a change to the underlying quality
of the Bobl futures as some of the basket had dropped out. See later for basket discussions.
From the March low the contract can be considered as brand new, so the high and