June 17th, 2010
I’m really surprised at how receptive many of the readers here are to the notion that the moon might actually impact the market in ways not yet understood or explained.
I’ve been tracking lunar cycles against the S&P 500 for nearly a year and conclude that while it’s not foolproof, it does seem to improve performance should you decide to follow the theory.
There have been 12 full cycles consisting of 12 waning to New moons and 12 waxing to Full moons. Of the 24 phases, 21 were in sync and 7 that were not, or a respectable 70.8% batting average. A graphical representation of the results follows. The red bars are those that were out of sync (as usual, click on image to enlarge):
Even more interesting perhaps are the market’s percentage changes during the various phases. The market’s cumulative total percentage change of only when the moon was waxing to full was a decline of 9.65% during 7 correctly and 5 incorrectly synced phases. When the moon was waning to new, however, the market’s cumulative total percentage change was a whoping 31.39% gain; only 2 of the 12 phases were out of sync. The complete statistics follow:
Are these completely unbiased results? Probably not since the market was in a upward trend during most of the period. And more that one year’s worth of data would add credibility to the study.
What does the theory say for the next phase ending Friday’s close on June 25 (the next full moon is on Saturday)? We should expect to see the S&P fall back below the 200-dma, back to about 1080 or more (1% or more lower). Watching lunar phases is like betting on the total score of the World Series without really knowing or caring which team actually wins.