The following is the part of the famous Ticker interview in which W. D. Gann gives his explanation of the Law of Vibration.

"For the past ten years I have devoted my entire time and attention to the speculative markets. Like many others, I lost thousands of dollars and experienced the usual ups and downs incidental to the novice who enters the market without preparatory knowledge of the subject.

"I soon began to realize that all successful men, whether lawyers, doctors, or scientists, devoted years of time to the study and investigation of their particular pursuit or profession before attempting to make any money out of it.

"Being in the brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations of others. I found that over ninety per cent of the traders who go into the market without knowledge or study usually lose in the end.

"I soon began to note the periodical recurrence of the rise and fall in stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. 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. Most speculators can testify to the fact that it is looking at the effect and ignoring the cause that has produced their losses.

"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. Without the existence of this law the above inventions would have been impossible.

One might naturally wonder why Gann said the financial markets, which are generally perceived to be random, are in any way connected with "natural law" such as here described by St. Augustine. The astrologer Sepharial, who was also a numbers expert, says that he has the answer: "Astronomers ... observe that there are cycles and periods within which Nature repeats her phenomena, from the rising of the sun to the apparition of a comet. These observations submit readily to a mathematical law, and the recurrence of similar celestial phenomena are therefore predicable. It is from this basis that I shall be able to demonstrate that matters apparently governed by chance are subject to a like periodicity to that which we observe in Nature, and for the reason that they, too, are governed by natural laws." Kabala of Numbers, Part II, p. 104. Sepharial was a deep student of cycles and was the author whose books most often appeared on Gann's List of Books for Sale to students. As a consequence, he will be quoted herein frequently. 8 "In making my calculations on the stock market, or any future event, I get the past history and find out what cycle we are in and then predict the curve for the future, which is a repetition of past market movements. The great law of vibration is based on like producing like. Like causes produce like effects. Wireless telegraphy, the phonograph and the radio are based on this law. The limit of future predictions based on exact mathematical law is only restricted by lack of knowledge of correct data on past history to work from. It is just as easy to figure 100 years or 1000 years in the future as one or two years ahead, if you have the correct starting point and know the cycle which is going to be repeated." Gann, The Tunnel Thru the Air (Financial Guardian Publishing Co., 1927), pp. 76-77.

"In order to test out the efficiency of my idea I have not only put in years of labor in the regular way, but I spent nine months working night and day in the Astor Library of New York and in the British Museum of London, going over the records of stock transactions as far back as 1820. I have incidentally examined the manipulations of Jay Gould. Daniel Drew, Commodore Vanderbilt, and all the other important Wall Street manipulators from that time to the present day. I have examined every quotation of Union Pacific prior to and from the time of E. H. Harriman's securing control, and can say that of all the manipulations in the history of Wall Street, Mr. Harriman's was the most masterly. The figures show that, whether unconsciously or not, Mr. Harriman worked strictly in accordance with natural law.

<What Gann here calls “natural law” he calls “harmonic analysis” in his novel The Tunnel
Thru the Air. See Appendix III>

"In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the value of stocks and there exists a periodic or cyclic law, which is at the back of all these movements. Observation has shown that there are regular periods of intense activity on the Exchange followed by periods of inactivity. Mr. Henry Hall, in his recent book devoted much space to 'Cycles of Prosperity and Depression' which he found recurring at regular intervals of time. The law which I have applied will not only give these long cycles or swings, but the daily and even hourly movements of stocks. By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be met.

< "What we know in science as the law of periodicity is but another instance of the rhythmic sequence of vibrations, another name for the Kabalistic doctrine of numerical sequence. … If Nature observes these cyclic and periodic laws, then assuredly man must reflect them in his constitution, and, through his dependence on physical conditions, in his thought also." Sepharial, Kabala of Numbers, Part II, p. 48.>

< The book How Money is Made in Security Investments by Henry Hall is available in various editions online at The Internet Archive and at Google Book>

"Those in close touch with the markets have noticed the phenomena of ebb and flow, or rise and fall in the value of stocks. At certain times a stock will become intensely active, large transactions being made in it; at other times this same stock will become practically stationary or inactive with a very small volume of sales. I have found that the Law of Vibration governs and controls these conditions. I have also found that certain phases of this law govern the rise in a stock and an entirely different rule operates on the decline.

<Ebb and flow are words associated with the tides. In Gann's day, harmonic analysis (a term he uses a few sentences later in this interview) was used in predicting tides>

"While Union Pacific and other railroad stocks which made their high prices in August were declining, United States Steel common was steadily advancing. The Law of Vibration was at work, sending a particular stock on the upward trend, whilst others were trending downward.

"I have found that in the stock itself exists its harmonic or inharmonic relationship to the driving power or force behind it. The secret of all its activity is therefore apparent. By my method I can determine the vibration of each stock and by also taking certain time values into consideration I can in the majority of cases tell exactly what the stock will do under given conditions.