Gann believed that bull phases had 3 or sometimes 4 sections,(not unlike Elliott's 3 waves) and that you could measure the strength of the market by whether the ranges were expanding or contracting.This bull phase has demonstrated weakness in that the second section (1573 points) was less than the first(1590) and the third (784) was less than the second.The corrections within the second section also came back below the previous highs,another sign of weakness.The first and second waves both had corrections that found support at 38%.The 3rd section has broken below 50%,showing weakness.This level may now prove to be resistance.Ranges can be used to establish resistance,with 50% and 100% being the important milestones.1590 added to the first low gives 6111 and 50% of the 2nd range (686) added to the 2nd low gives 6002.The high was 6100.
The 50 point per week Gann angles have provided good support and resistance in both the bull and bear phases.The recent rally has so far been contained within the range of the big move down 3 weeks ago ie we have had 2 inside weeks to consolidate.
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