June 17th, 2010

Lunar Cycle Batting Average Is 70.8%

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.

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  • Anonymous

    Joe – There isn't another marketoracle/stockchartist/finance guru on the net, who does in depth analyses on market results around Lunar cycles. So we've really got to come to you – you're the established leader on the topic now – even tho I tend to believe that you even doubt the influence of these lunar cycles.

    The results in the bull market are biased to the upside, but I believe shorting around bear markets' new moons proves helpful as well – during the oncoming double dip recession, I'm sure we'll have plenty of time to discuss that and review the charts in real time. 🙂

    In April – buying EDZ around the new moon yielded up to 60% (sell after the crash, or around the full moon)
    In May – buying EDZ around the new moon yielded up to 50% (again, sell after the crash, or around the full moon)

    Using that calendar cycle, the market should have started it's crash by now, but hasn't… possibly the 20-100 S&P point dip/crash won't come, and May's full moon dip (the 25th) was the cycle bottom. Either way, Friday May 25th is a date that many people have their eye on as a buy date (I sure do).

  • Joe

    I'm sure you intended to write June 25 rather than May 25.

  • Anonymous

    oops… June 25th.

    crash or no crash – I'm buying then.

  • Anonymous

    I tested the idea that the New Moon to Full Moon phase is Bearish and the Full Moon to New Moon phase is bullish. I was surprised that when this pattern failed, it tended to be only slightly, though the Dow in the period 19th March to 2nd April 2007 failed totally – an exception.

    This pattern failed spectacularly in the couple of weeks around the October 1987 crash, which made me wonder how much big financial institutions write this Moon phase into their trading programs is responsible for this pattern, and how the reality can sometimes bite back.

  • Anonymous

    Has anyone observed what happens at eclipses, which are types of Full and New Moon? Financial astrologers seem to think eclipses do something but I have never seen an example. Does this lunar waning and waxing pattern continue when the Full or New Moon is an eclipse?

  • Anonymous

    I just noticed that in the current Moon phase, from the Full Moon last Thursday, 23rd June 2011, the Full Moon was actually a Lunar Eclipse. I was wondering if a Full Moon being a Lunar Eclipse or New Moon being a Solar Eclipse would change the pattern in any way.