There is a lot of literature about the
relation about the Monn Phases and Stock Market return, here I will
mention just one academic paper that does a good job in showing
empirical evidence about it and describing it: "Are investors Moon Struck? Lunar Phases and Stock Market Returns" (Yuan, Zheng, Zhu,University of Michigan 2001).
We
will not stop here at the well known observation that Moon phases
influence human behavior and hence create minor stock market
cycles, we will try top take a further step forward: in this article we
show how the Moon is not only a useful timing instrument for trading but
it is more than that, we will show how the Moon sometimes provide
traders not only with timing information but also with pricing
information.
The example we
are going to illustrate is based on the Full Moon of April 18, 2011 at
2:44 UT with the Sun at 27°44' Aries and the Moon at 27°44'
Libra.
First let's look at the Zodiac wheel for the exact time of the Full Moon of April 18, 2011:
Zodiac Wheel: Full Moon of April 17, 2011 at 22:43 ET
Then
let's switch to the Financial Zodiac Wheel for the same exact
time. In the Financial Zodiac Wheel we can see the Planets, Sun and
Moon on the Ecliptic and financial instruments as if they were planets
moving along the Ecliptic: the idea of representing financial
instruments as if they were planets moving along the ecliptic
makes it easier to visualize the relative position (i.e.
price) to the planets (this is practically the inverse approach of
Planetary lines that are used to visualize planets as if they
were financial instruments). In this particular case we focus on the
position (i.e. price) of the Emini future: we can see that Sunday night
April 17, 2011 at 22.44 ET in New York it was trading overnight on
Globex at 1317 or 30 degrees away from the Full Moon.
Financial Zodiac Wheel: Full Moon of April 17, 2011 at 22:43 ET
Now
let's look what happened during the day on Monday April 18, 2011 when
the US cash stock market opened for trading: the S&P500 index
dropped almost 2% closing 20 points lower (or 20 degrees of westward
motion on the ecliptic) while the Moon in the meantime almost completed
10 degrees of eastward motion along the Ecliptic. When the US stock
market closed the Emini future settled at 1299 and the Moon was at
8°45'Scorpio: as you can see in the Financial Zodiac Wheel below
the Emini Future and the Moon were conjoined. The Full Moon day was a
timing signal for a major market move and the Full Moon Position was a
pricing signal: the market settled (found it closing equilibrium) right
at a price equivalent to the Moon position (in this case we have
1299/6=Moon position on the Ecliptic when the market closed on Monday
18, 2011 at 16:15 ET) .
Financial Zodiac Wheel: Full Moon of April 18, 2011 at 16:15 ET
Skeptics
will call this coincidence, astro traders used to observe this kind
of patterns know well that this is no chance, it happens
often, many times during Full Moon or New Moon days the market settle or
makes a top/bottom at prices that are harmonically linked to the
position of the Moon on the Ecliptic. If you do not intend to take
a prejudicial view on this subject and you prefer to study it
by yourself before deciding whether it makes sense or not, you
should start by observing what happened during past and then
begin observing these phenomena in real time on the next Full Moon and
New Moon occurrences looking for patterns to emerge. A useful
instrument to facilitate your studying may be our Financial Zodiac
Software, an astrotrader's tool that we have developed to track
planetary phenomena like this and many others.
