*This article was written from Phil’s point of view.

Continuing this year’s market lessons, Gann’s decade cycle is also handy to know. Gann was the first to point at that the decadal years ending in 1 and 2 were often lows, year three recovery, year four retracment of that recovery, year five had always been strongly up, and has continued since Gann’s day, year 6 a bit undulating but up, year 7, at least until Gann’s time, big highs in the (northern) summer, big low in October, year 8 recovery, year 9 high, after which often came recession.

Here are the 07 years, since Gann moved on in 1956. They have happened pretty much as Gann said they would:

• Dow 97 and 87
• Dow 77 and 67
• Dow 57 and 47

To look forward, Gann said to look back. 07 therefore, count back 5, 7, 10, 15, 20, 30, 40 years and so on. Gann explains how to do this in chapter six of the commodities course, and is highlighted in my classes naturally enough. Take a look at the Dow 60 months, 90 months.

By any measure, you have to say an interesting probability for a Dow July high and October low this year 2007.

(I did not do this calculation just now by the way. It is something I had looked at several years back, and added to the real estate 18-year cycle stuff, is one more reason I have been bullish these past couple of years, as past emails have stated.)