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Building the Chart

The chart begins with 1 in the center; the first circle or cycle ends in 9 (the square of 3); the next cycle ends in 25 (the square of 7); the next cycle ends in 81 (the square of 9); the next cycle ends in 121 (the square of 11), and so on-each cycle increasing by the square of sequential odd numbers.

Looking to the opposite side of the squares of the odd numbers, starting with 4, one cycle up to the right begins the sequential squares of the even numbers-4, 16, 36, 64, 100, 144, etc.

So for starters, the Cardinal Squares is a calculator invented by the Greeks who didn't have those handy little electronic marvels that we take for granted today. It also has some amazing properties that our modern calculators don't have-it is extremely useful in the markets. The numbers which fall in the "Cardinal Cross" sections, along with the numbers that end cycles, are natural support and resistance numbers.

Building the Chart

Jones' collection of Gann's work includes many variations of the "Cardinal Squares" which Gann used for his own trading. Instead of the wheel beginning with 1 as the number in the center, he began with the lowest price that a futures contract for a commodity had ever traded for-that particular commodity's own No. 1. The other numbers followed in sequence around the circle, yielding "Cardinal Squares" customized for the commodity.

Cardinal Squares

On the pork belly cardinal squares chart, for example, the No. 1 number is 197-the all-time low for pork belly futures was the August 1971 contract low at 37.20 cents (circled on Figure 2) are within two ticks of being in the same cardinal point three cycles apart. If February bellies make new highs, then $64.60 - $64.80 would be the next target in the next cycle up in the same cardinal point area. The extreme high that August bellies made in 1975 at 105.1 cents per lb. Is also in the same cardinal point area.

The all time high that July soybeans made in 1973 was $12.90 per bu. The end of the 17th cycle on the soybean cardinal squares is $12.89. In fact, the lowest low that November, March and July soybean futures have traded at are in the same cardinal point but in different cycles.