The principles of Gann’s Law Of Vibration, as discerned from his interview of December 1909 to the “Ticker And Investment Digest” are as follows.
1. Stocks and commodities (and everything else on earth) vibrate. Moreover, vibration provides a comprehensive explanation of price movement in financial markets.
Vibration is fundamental; nothing is exempt from this law; it is universal, therefore applicable to every class of phenomena on the globe…. After years of patient study I have proven to my entire satisfaction, as well as dem-onstrated to others, that vibration explains every possible phase and condition of the market” (Ticker interview).
2. Stocks and commodities vibrate in accordance with both their own individual energy/vibration (i.e. inter-nal vibration) and also in accordance with energy/vibration transmitted through space (i.e. external vibration).
From my extensive investigations, studies and applied tests, I find that not only do the various stocks vibrate, but that the driving forces controlling the stocks are also in a state of vibration” (Ticker interview).
3. The overall energy/vibration of a stock or commodity is reflected in its price.
These vibratory forces can only be known by the movements they generate on the stocks and their values in the market” (Ticker interview).
4. Financial markets essentially comprise a series of impulses that produce price movements with specific rates of vibration.
Science teaches that an original impulse of any kind fi-nally resolves itself into periodic or rhythmical motion” (Ticker interview).
5. The price movement of a stock or commodity unfolds in a coherent way because stocks and commodities are essentially centres of energies and these energies (or vibrations) are controlled mathematically.
Stocks, like atoms, are really centres of energies. There-fore, they are controlled mathematically…. There is no chance in nature because mathematical principles of the highest order lie at the foundation of all things” (Ticker interview).
6. When the overall vibration of a stock or commodity is in balance, its price will maintain a constant rate of vibration (i.e. prices will form a trend). Consequently, this overall rate of vibration (or trend line) can be precisely measured and future prices forecast by means of the so-called Gann angles or Gann fan lines (i.e. 1 x 1, 1 x 2, 1 x 4, 1 x 8 angles, etc. and their subdivisions).
“The power to determine the trend of the market is due to my knowledge of the characteristics of each individual stock and a certain grouping of different stocks under their proper rates of vibration. Stocks are like electrons, atoms and molecules, which hold persistently to their own individuality in response to the fundamental Law Of Vibration…. After exhaustive researches and investigations of the known sciences, I discovered that the Law Of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the Street is aware of either” (Ticker interview).
7. These principles can be applied to forecast the trend of stocks or commodities over multiple timeframes. For example, a minor impulse may produce a price movement with a specific rate of vibration that lasts only a few hours. Alternatively, a major impulse may produce a price movement with a specific rate of vibration that lasts for a number of years (e.g. the rise in the Dow Jones Industrial Average from 1921 to 1929).
The law which I have applied will not only give these long cycles or swings, but the daily and even hourly move-ments of stocks” (Ticker interview).
8. The external energy/vibration acting on a stock or commodity is in fact astrological influences.
Unfortunately, Gann does not explicitly state this in his Ticker interview. This is not surprising in view of the fact that Gann made it clear he would not provide a detailed explanation of his Law Of Vibration (“Mr. Gann has refused to disclose his method at any price”, Ticker interview).
Consequently, one has to turn to Gann’s semi-autobiographical novel entitled “The Tunnel Through the Air,” writ-ten eighteen years later in 1927, for supporting evidence on this key principle. Such supporting evidence includes the following excerpts.
“Robert was a great believer in astrology because he had found this great science referred to so many times in the Holy Bible…. He had made notes as he read “The Bible” at different times where it referred to astrology or the signs in the heavens and was thoroughly convinced that the influence of the heav-enly bodies govern our lives” (The Tunnel Through the Air, page 172).
I believe in the stars, I believe in astrology, and I have figured out my destiny. “The Bible” makes it plain that the stars do rule” (The Tunnel Through the Air, page 66).
“Through my study of “The Bible,” I have determined the ma-jor and minor time factors which repeat in the history of na-tions, men and markets” (The Tunnel Through the Air, page 70.
“I have studied “The Bible” very carefully because I believe it is the greatest scientific book ever written. The laws are plainly laid down how to make a success. There is a time and a season for everything and if a man does things according to the time, he will succeed” (The Tunnel Through the Air, page 204).
“Robert had gone deeply into “The Bible” study in order to learn more about the great science of astrology” (The Tunnel Through the Air, page 213).
“He read all the books he could get on astrology and began to understand why things had happened as they had” (The Tun-nel Through the Air, page 215).
1. Astrological influences act in a way that is analogous to radio waves; i.e. they have a specific wavelength, they travel through space and they are received by and influence those stocks and commodities that vibrate with a resonant frequency.
“It is impossible here to give an adequate idea of the Law Of Vibration as I apply it to the markets. However, the layman may be able to grasp some of the principles when I state that the Law Of Vibration is the fundamental law upon which wireless telegraphy, wireless telephones and phonographs are based” (Ticker interview).
2. From time to time, a stock or commodity will lose its sensitivity (or receptivity) to astrological influences (i.e. to external energy/vibration). As a consequence, it will become inert (i.e. its rate of vibration will fall) and its price will typically enter a downtrend.
“Stocks create their own field of action and power; power to attract and repel, which principle explains why certain stocks at times lead the market and ‘turn dead’ at other times” (Ticker interview).
3. Thus, the key technique in applying the Law Of Vibration is to accurately identify the major astrological influence driving a particular stock or commodity, to identify the resultant rate of vibration and to forecast how future astrological influences will impact this rate of vibration.
“By my method, I can determine the vibration of each stock and by also taking certain time values into consid-eration I can in the majority of cases tell exactly what the stock will do under given conditions” (Ticker interview).
4. Taken together, these principles of the Law Of Vibration constitute a coherent theory of how financial mar-kets work. Indeed, they constitute a new paradigm. However, as with any new paradigm, it challenges the conventional wisdom and therefore encounters resist-ance from practitioners of the conventional wisdom.
It appears to be a fact that Mr. Gann has developed an entirely new idea as to the principles governing stock mar-ket movements…. We have asked Mr. Gann for an outline of his work and have secured some remarkable evidence as to the results obtained therefrom. We submit this in full recognition of the fact that in Wall Street a man with a new idea, an idea which violates the traditions and en-courages a scientific view of the proposition, is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities said majority ab-hors” (Ticker interview).
- The Principles Of Gann’s Law Of Vibration By James Smithson
- See Also W. D. Gann eBooks