The Law of Vibration Applied to Comex Gold 1970 to 2009

Gann provided a myriad of techniques that can be used at market turning points ranging from geometrical angles (there is still considerable debate and confusion as to how they should be constructed) to numbered squares, fixed cycles and planetary cycles etc. To understand how Gann used the law of vibration in relation to the market we first need to understand some of the concepts behind this law.

The law of vibration is a natural law. All natural laws are built into the structure of the universe and are always found to be true, e.g. the law of gravity, magnetism, cohesion, heat, electricity etc.

All matter in the universe vibrates, this is scientific fact. An atom, a rock, a table or chair, a human being, our planet or the other outer planets, all have an underlying energy or vibration. This law is in action whether you are aware of it or not.

Thoughts and emotions all vibrate too, though the resonance may differ.

The law of vibration states that waves of vibration that have similar properties or resonance attract or merge (hence like attracts like). So when an individual or a group is consistently thinking and feeling in a certain way their harmonic output will attract similar vibrating things or experiences into their reality.

Based on the above law, when a market makes an important top or bottom there is a vibration or resonance (generally fear or euphoria) for a large percentage of the population. Depending on the level of euphoria (in the case of a top) or distress (in the case of a bottom) this causes resonances that go out in waves like ripples in a pond.

Now by applying this law to the financial markets we see that resonant patterns or waves can last for decades.

Perhaps the concept of MVM™ is easier to understand if we think of the market as two dimensional, with one axis being time and the other being price. At the areas of turbulence in the market (when time meets price) major reversals take place. If we get a MVM™ occurring from more than one previous significant market turning point the resulting reversal will be greater in magnitude.

This is how it works in the financial markets. That is, the greater the magnitude of the price rise or fall preceding a top or a bottom (in percentage or absolute terms) and the amount of time taken to reach this point will determine the degree of importance of the reversal taking place.

As everything in nature can be measured, these vibrational waves can also be measured. By applying strict rules we can determine where the limits of the waves are likely to occur. If we transpose these same rules to determine where the limits exist in the market, we can project the boundaries of the future market tops and bottoms (or future waves of euphoria or fear).

We have used a 40 year history of the Gold market to explain certain elements of the Law of Vibration as applied by Gann and others. By using this law and its rules we believe that Gold has reached a significant peak and will more than likely pull back to the $700.00 to $680 level from here. We have applied the same rules to the Dow Jones Industrial Index, S&P 500 and Currencies as well as Gold and have found the results to be just as accurate.

The Law of Vibration is a naturally occurring set of principles that governs human interactions. Understanding this enables us to use the boundaries of the waves of euphoria or fear (market tops and bottoms) to determine future significant price levels.