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The Educated Analyst | 51 The Planetary Fan NOV / DEC 2009 W.D. Gann charmed many students and traders with hisbrilliant insights into the harmonic laws that bind naturalphenomena to the financial markets fluctuations.As Known, the Gann Theory is based on two main pillars:Time and Price, linked together by a mathematicalrelationship, graphically expressed through the Gann Angles ”.The Gann Angle is a series of straight lines of predetermined slant, with a growing rate of so manyprice units for each time unit. The time unit could be oneday, one week or one month, depending on the timeframe used in the chart.What is most fascinating about the Theory is the timefactor that is no longer exclusively linked to the calendaryear cycle, but also to that of the other Planets rotatingaround the Sun.You can enter any activity listed in the planetary contextby Planetary Angles Task available in Market Analyst , byan algorithm processing the price into a planet, so thatyou can test the aspects of conjunction, squaring,opposition, etcetera, between the price and otherplanets.We are talking about the following algorithm: (Price / price factor / 360 - INT (Price / price factor /360)) * 360 = longitudinal position in degrees While the aspects between two planets (such as aconjunction) can identify a reversal time signal, the Planetary Angle , representing the graphical summary of the conversion of a price into a planet, is helpful toidentify support and resistance levels.The main difference between the Gann Angle and the Planetary Angle is related to the time factor: in theformer, the Time is expressed as a fraction of the solarcycle (days, weeks, months, depending on the frameused in the chart), whereas in the latter, the Time isexpressed in degrees.An example can explain the difference between the twoangles as follows:On a daily chart a Gann angle , with price factor equal to1 per day, will have a rise of 360 points after 360 tradingdays, while a Jupiter’s Helio Planetary Angle will takeabout 12 years to rise 360 points, because this is thenecessary time it will make a complete revolution circlearound the Sun. From this example we can say that Gann Angles are nothing more than an estimation of Solar Angles .Let’s have a look at an example of practical applicationof the Planetary Angles :In Figure 1, the rising line is a heliocentric Mars Anglerising of 1/64 each degree longitude.Between the 25 th till the 28 th of August, Generali Ass.had an average price of 17.70. Adopting a price factor of 1/64 and applying the algorithm of transforming a planetinto a price, we get: 17.70 / 0.015625 / 360 = 3.14666 Removing the integer part and multiplying the result by360 ° we get: (3,14666-3) * 360 = 52.8° The result means that while the planet Generali Ass” ispricing 17.70, it is placed at 52.8° of the Zodiac, in theexact position where Planet Mars is travelling in those With Mariano La Rosa The Educated Analyst | 52 The Planetary Fan NOV / DEC 2009 days. As both are in the same position, then we can saythat they are in conjunction, and consequently the pricewill tend to diverge from that harmonic equilibrium andcause a retracement.After watching the usefulness of the Planetary Angles inthe previous example, we could imagine how useful itwould be drawing these angles from a high or low priceand with different price scales, as if they were the classic Gann Angles . It is at that point that the Planetary Fan Tool, introduced by the last upgrade of Market Analyst ,comes to help, and it is nothing but an evolution of both Planetary Angles Task and Gann Angles Tools .The great advantage of the Planetary Fan compared to Gann Angles is that their position, concerning the price,does not change in spite of the time frame used,because the time is related to the position in degrees of the planet employed, which does not change whetheryou are using a daily, weekly or monthly chart.The following example is about a Planetary Fan application concerning the COMIT Index representing aGlobal Index of the Italian Stock Exchange.In the monthly chart in Figure 2, we can see how thePlanetary Fans 2x1, 1x1, 1x2 just seem classic GannAngles, but infact they arebuilt dependingon the locationexpressed inheliocentriclongitudedegrees of theplanet Jupiter.We used a pricefactor of 8 forthe 1x1 angle,meaning that thisangle has toincrease 8 pointsper Jupiter’sdegree, whichtakes about 11days to moveone degree of rotation around the Sun.We placed these angles on the 1992 low, on the 2007high and on the 2009 low: and what immediately showsis the sometimes extraordinary accuracy, with which theprice reacts with these angles in a time frame of almosttwenty years.Figure 1: The Educated Analyst | 53 The Planetary Fan NOV / DEC 2009 In Figure 3, we can see the same Chart but with a weekly time frame. As mentioned, the great advantage of usingthe Planetary Angles compared to Gann Angles is that the support and resistance levels are always in the samepoints regardless of the time frame used, as for each date, the planet position is univocal and unchangeable.Figure 2: The Educated Analyst | 54 The Planetary Fan NOV / DEC 2009 We can make the same observation on the daily Chart inFigure 4:For this Index we used Planet Jupiter because the ItalianStock Market has proven to be in sound relationshipwith it, over time.It is clear that any activity listed that you want to useneeds a specific study to test the reliability of eachplanet in order to apply the one which fits better. About Mariano La RosaMariano La Rosa is one of the first traders in the world for certified performance of managed portfolios. He acts as anexpert trader in Futures and Options collecting a series of successful results in the accurate forecasting about the Dow Jones movements and about euro/dollar swaps, as widely recognized by the financial press and by Class CNBC television.Graduated in Economics, researcher and student of the knownW. D. Gann Theory, he acquired experience in advanced technical analysis and in cyclical analysis of the financial markets, for over twenty years.He is the editor of the International series “Trading and Finance” published by the publishing house Le Fonti. He is alsothe editor of several editions of books about the Financial Trading and he’s also mentioned in the book “Italian TopTrader”.
