The concept of time cycles in the stock market (KIRILOSENG)

The concept of time cycles in the stock market suggests that market movements—both price direction and volatility—may follow predictable, recurring rhythms based on specific time intervals. The core idea is that history doesn't exactly repeat, but it often rhymes, and these rhythms can be measured in weeks, months, or even years.

Gann’s approach was unique and highly influential. He believed that the movements in the stock market were not random, but were governed by natural, mathematical, and even astronomical laws.

He asserted that when time and price coincide at specific points, a major turning point in the market is likely. He used concepts like geometry, squaring the circle, and seasonal cycles to predict market highs and lows with specific dates.

The Business Cycle is a macroeconomic concept that describes the expansion and contraction of an economy over time (e.g., boom, recession, recovery).

The Connection: Time cycle theorists often look for market cycles that correlate with or lead the broader economic Business Cycle. For example, a major stock market decline might be seen as the end of a long-term "super-cycle," predicting the start of a recession. It provides the macro-context for the market's long-term rhythm.

The Connection: Dow Theory focuses on the direction and confirmation of a trend (e.g., is it a Bull or Bear market?). Time cycle theory tries to put a date on when those primary and secondary trends are likely to change. They are complementary: Dow tells you what the trend is, and a cycle analyst tries to tell you when the trend will reverse.

That's the most intriguing part of W. D. Gann's work! His method for calculating time and price targets is based on a concept he called "Squaring Price and Time" 📐.
Gann believed that a market is in perfect balance when its price movement is equal to the time elapsed. When price and time "square out," it signals a major turning point is likely.
He used geometry to visually display this relationship on a chart, where the X-axis (time) and the Y-axis (price) must be scaled correctly so that one unit of price equals one unit of time.

Here are his three main tools for calculating targets:
Gann Angles (The Fan) 📏: These are diagonal lines drawn from a significant high or low point at specific angles.4 The most crucial is the 1x1 Angle (or 45° line), which represents the ideal state where the price moves up 1 unit for every 1 unit of time.Angles steeper than this (like 2x1) show a strong trend, while flatter angles (like 1x2) show a weak trend. When the price breaks an angle, it typically moves to the next one, which provides a price target
Gann Squares (The Master Charts) : Complex numerical grids, like the Square of Nine, that arrange numbers in a spiral. A trader locates a significant price on the square and uses the numbers at 90°and 180° angles from it to project future support and resistance price levels.
Time Cycles : He identified specific recurring cycles (e.g., 90 days, 180 days, 1 year, 7 years, 30 years) which he believed governed when major trend reversals were due. These cycles provide the time target, telling the trader when to watch for the geometric tools (like the Gann Angles) to confirm a reversal.


Gann Angle Price:Time Ratio Geometric Angle (Ideal) Market Interpretation
1x1 1 unit of Price for 45° Balanced Movement ⚖️
1 unit of Time

2x1 2 units of Price for 63.75°(Steeper) Strong, Fast Trend 🚀
1 unit of Time

1x2 1 unit of Price for 26.25° (Flatter) Weak, Slow Trend 🐌
2 units of Time

Hopefully, you understood what the cycle concept is.And how does it work?