January 6th, 2011

Lunar Cycle Update – Again

Thankfully, if you’re a bull, the moon just can’t get those Waxing phases with a 50% correct call as the market grew 2.44% when it should have been declining …. according to the theory. Since we’ve been lucky enough to be in a bull market, the Waning phase is holding its own with 10 out 12 hits (an 83.3% accuracy). Since I began tracking in July 2009, the lunar hit rate has been 68.4%. (click on image to enlarge):

Having a very positive view of the outlook for 2011 so I hope we won’t have an opportunity to test the Waxing phase during a declining market.

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  • Anonymous

    Joe,

    First – Thank you for sharing your time, thoughts, and opinions with us. I am a regular reader and appreciate your insights.

    Second – From the look of your charts, I believe you use TCNET; and I also believe you use/rely on OBV as one of your technical indicators. I was wondering if you have used/studied/have an opinion on the Worden Brother's Moneystream indicator? The way they describe it, one would expect it to have some relationship to OBV, however, after some cursory looks, the two are quiet different.

    Thanks again and keep us the good work.

    Regards,
    NJS

  • Joe

    At your suggestion I also took a look at MS as compared against OBV and came to the same conclusion. The two are (sometimes similar) different when looked at over the long-term. For the stocks LTD, BEXP or IBM, as an example, the two overlay almost perfectly (2006-current) but for TROW, LH or ODFL they are very different.

    I prefer OBV because it's understandable and easily replicated. I distrust anything smacking of "proprietary" since I don't understand the logic or mechanics behind it.

    My trading horizon tends to be in months rather than days and I think many of technical indicators are targeted for short-term traders. For longer-term traders, we're not necessarily interested in capturing fractions of a percent since we're interested in sustained trends and seeking 30%,50% even 100% moves … if we're lucky.