Following is a particularly interesting item from a Rick’s Picks forum regular who goes by the name ‘Seneca’. His latest post, which concerns the effect of solar and lunar cycles on the markets, deserves a wider audience than it would ordinarily get in my forum. The material he quotes is from the work of Stephen J. Puetz, a cycles theorist who is highly respected and particularly well known to stock market traders and chartists. What Puetz had to say back in 1995 should perk up the ears of anyone wary about the risks the bull market will face as it enters the oft-fraught month of August:
“Puetz attempted to discover if eclipses and market crashes were somehow connected. He emphasized that he is not contending that full moons close to solar eclipses cause market crashes. But he does conclude that a full moon in general and a lunar (eclipse) full moon close to solar eclipses, in particular, seem to be the triggering device that allows for the rapid transformation of investor psychology from manic greed to paranoia. He asks what the odds are that eight of the greatest market crashes in history would accidentally fall within a time period of six days before to three days after a full moon that occurred within six weeks of a solar eclipse? His answer is that for all eight crashes to accidentally fall within the required intervals would be .23 raised to the eighth power less than one chance in 127,000.
“. . .[Puetz] used eight previous crashes in various markets from the Holland Tulip Mania in 1637 through the Tokyo crash in 1990. He noted that market crashes tend to be lumped near the full moons that are also lunar eclipses. In fact, he states, the greatest number of crashes start after the first full moon after a solar eclipse when that full moon is also a lunar eclipse . . Once the panic starts, Puetz notes, it generally lasts from two to four weeks. The tendency has been for the markets to peak a few days ahead of the full moon, move flat to slightly lower –waiting for the full moon to pass. Then on the day of the full moon or slightly after, the brunt of the crash hits the marketplace.
“2017, the penumbral lunar eclipse on February 10-11 comes one fortnight before the annular solar eclipse of February 26, this was the ’03/01/2017 Brady Turn Date’ and the internal market high, which can be seen in an array of breadth and volume models. The ‘partial’ lunar eclipse on August 7 occurs before the total solar eclipse of August 21. The three-day high chart states the ‘Lack of Buying’ in the last few months.
“Bear Markets do not start on selling, they begin on a ‘lack of buying.’ “