July 10th, 2010

Lunar Cycle Batting Average now up to 73.1%

I know you’re all sitting on the edge of your seats waiting for the results so here’s the scoop. The Lunar cycle held for through one more phase, just by a hair. As the post below indicates, the S&P 500 Index needed to close above 1076.76 yesterday, up for the just ended Waning phase to a New Moon and it did, closing at 1077.95:

That brings the average to 19 out of 26 in sync phases, or a 73.1% average. That’s a pretty good average in any sport, including betting on the stock market.

The next Full Moon will be July 26. It won’t be a difficult challenge to continue adding to the average. My guess, though, is that we’re due for a nice, juicy decline at or near the top end of the range. I’m looking for a decline of 5-6%, to around 1026.00 on July 26.

Pure speculation but, hey, you come up with a better one.

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  • Anonymous

    What is your short term view on gold? Some say significant correction coming! Thanks.

  • Joe

    I don't see a meaningful correction coming in gold. I'm staying long.

  • Anonymous

    Hi,

    Two posts ago, you mentioned MTI and said

    "Before translating this to the MTI, the Market Timing Indicator, let me point out what's important for me on the charts …."

    you then continued with your always keen insight but I am not sure if I understand how you translated into MTI. Was that a train of thoughts that got abandoned? or is it me being dumb? :-((

    Could you forgive my lack of seeing it and tell us how you translate current situation into MTI?

    regards,

    Brad

  • Joe

    Good point, Brad. Sometimes my writing resembles free associations; I need to reread before posting to make sure they say exactly what I mean.

    MTI results from back-testing 50 years of S&P Index data to determine which set of binary rules (all or nothing), had they been followed, would maximize trading results vs. buying and holding the Index.

    Because I was doing this on a PC, the test focused on 4 moving averages and the position of the Index itself relative to those MA's.

    There are 24 possible unique permutations of 4 moving averages and the Index can be in any one of 5 positions relative to each permutation for 120 total combinations. Over 50 years, 93 combinations actually occurred; 27 never occurred.

    Each combination was tested on a in/out basis to see whether cash or owning produced better result over the 50 years. Maximum results were if you're out of the market during any of 32, or 34%, combinations of the MA's and Index; you should be in the market during 61 combinations, or 56%.

    Some black crosses (50-dma cross under 200-dma) wound up in the all-out column and some in the all-in column. This post attempted to distinguish between the two.

    Hope this illuminates.