With John Hampson
Self-taught Independent Global Macro Trader, trading since 2004
Interests: Stock Indices, Commodities, Currencies, Bonds, Real Estate
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Email: john (at) solarcycles (dot) net / Twitter: @SolarCyclesNet
John, I am trying to understand some of the results of the Dichev/ Janes study on market returns and lunar cycles.
Firstly the differences in returns for some countries in Fig 3. are a puzzle. Compare Indonesia and South Africa. Also Sweden compared to the other Scandinavian countries Denmark and Norway. What do you make of this?
Also their comment that their report is of little use as a market strategy. Surely if the results are significant this is obviously a basis for timing trades. What do you think they mean by that comment? I would love to hear your views on this.
The phase of the moon is important for one reason: nocturnal illumination. How much light there is at night time affects plants (photoperiodism – flowering) and animals (around the full moon, day animals can hunt or perform other activities, and be hunted by other day animals). Artificial lighting has barged its way into this cycle in the last century, but modern humans have acted on and reacted to the moon’s illumination patterns for over 200,000 years. So even if its light matters less to us now, our reactions to its phases are hard wired by evolution.
Dichev/Janes don’t attempt to explain it in this way, but appear to consider it unexplained, like the Monday effect that they reference. I think their comment about it not being useful in trading strategies concerns the lack of understanding of the phenomenon, even if a correlation is clear.
Now the whole global population experiences the same illumination extremes at the same time, so convergence of global stock market fortunes makes sense, but marked differences between nations less so. I think that curiosity needs a new paper in itself, as it would need an examination of the historical importance of nocturnal illumination in different countries, the variance in receptiveness to lunar phenomena in non-finance in different cultures, the extent of use of lunar trading in the different countries, the weighting of the stock indices in the different countries to different sectors and the correlations between the moon and these individual sectors.
Nice Graphic of the anticipated solar peak 2013, which is estimated to be the weakest in 100 yrs!
Have you a view, or do you know of any scientific studies, on the physiological process through which geomagnetism affects humans?
The reason I ask is that there seems to be fairly widespread medical acceptance that lunar illumination affects us via the eyes – hypothalmus – pineal gland – melatonin route, but there seems to be much less knowledge as to exactly HOW geomagnetism affects us.
Hi Mark, there is a correlation between geomagnetic storms and depression and suicide in humans, and an increase in psychotic episodes in individuals who already suffer from unstable psychological states. Geomagnetic activity is also shown to make people more irritable and aggressive, and can affect melatonin synthesis, blood pressure, heart disease and light sensitivity. If you look in the Krivelyova/Robotti doc in References you’ll find some papers referenced.
John, following on from your reply to my previous comment. I have found a theory that the moons pull on the earth’s gravitational field during full moon is pulling on the atmosphere leaving a thinner layer facing the sun – making us more vulnerable to solar radiation – just as we are during solar storms. I find this a convincing idea. The opposite would of course happen during new moons.
I take your point about the extra light and its negative effect on production of melatonin during full moon. There is so much light pollution in the first world
(where investors mainly live) that we may all be in more or less the same equally slightly deprived condition when we make decisions.
Thanks John. Do you have a link where this theory is written about?
Sorry John, I didn’t keep the link because it went on to justify a long winded religious viewpoint which didn’t interest me – I was mainly interested in the idea that the atmosphere could be distorted by the moon. How true this is scientifically I don’t know (judging from the site). The idea of us being more vulnerable to solar radiation is mainly my addition.
Congratulations for this studies.
In the above paper, example, in page 15, how construct the chart with solar cycles? Or where i can find data?
P.S.: I do not know if i can post my email here.
Hi Jose, NOAA is my main source for solar data.
Thank you Mr John for sharing such out-of-normal-world and very interesting studies. Would certainly visit your site again and again in future to read more of these studies.
Can you please indicate source for daily sunspot forecasts, for how long the data is available.
Thanks Ashok. Don’t know of a daily sunspot forecast. NASA provide a smoothed sunspot cycle forecast, currently out to 2020.
John it is refreshing to read such a blog. I never thought anyone would take this subject seriously. Having lacked a consistent strategy, I never really made it as a successful trader. Many moons ago :) I started an excel study in private where I observed the FTSE movements against the lunar rise/set times for the day. With the need to sustain an income I never really took the study too seriously and couldn’t really ascertain the correlation. However, I do remember there actually being a mild correlation between the volatility during rise/set times.
I would like to know if you have ever looked into this? My research was done with an amateur hat and the inability to follow a scientific method; so this theory is more intuitive. However, I can’t help but think that there could be something in this. I welcome your thoughts.
Thanks RM. I’ve looked into the lunar cycles of declination, latitude, apogee and perigee and found no notable correlation – only with the new/full moon cycle. But I haven’t looked into daily rise/set times, so now I will. Do you have anything to assist, before I take a look?
Thanks John – I do have an old excel file where I started some tests. It must be a few years old now so a lot of the context may be missing for me, but I’ll happily dig it out and email it to you? It’s half-hearted, incomplete and amateur so not sure it’ll be much use but you’re most welcome to it.
1) My initial logic was that if humans are made primarily of water and the moon can pull an ocean then surely its rising/setting can affect the behaviour of humans. So, the theory was underpinned by the position as opposed to the luminosity.
2) In my desperation to earn an income out of trading, I wanted to find anything remotely credible in this theory. It was the same bias that created my impatience. I started noticing patterns where anything up to 2hrs before the moon set-time, we’d see an excellent opportunity to short the FTSE (London moon set).
3) Today may be a good random example given that I haven’t looked at this in years. Moon set time = 10:27am. Notice what happened at 10:28am. Also note what shorting opportunity we had 50mins prior.
4) Now, does this example work for yesterday? Not really. This is what led me to give up the study. After seeing your work for the first time this week I’ve been inspired to look at this again. Although the theory wouldn’t be 100% valid for yesterday, there is certainly something true when you apply it to volatility. Note the movement at 09:25
I do remember trying it with moon rise times, meridian times etc. Look forward to hearing your views.
I like your idea…..
Hi John, have just been made aware of your site and have done some reading on your Solar Cycles and your Gold article. I find your information very informative and
reinforces some of the books I have read on Financial Astrology.
Brief history: Was trading the share market in Oz up until late 07′and jumped out just before the crash. Then I invested in gold and sold late August 11′ to capitalise my profit.
In the interim I have been reading up on Financial Astrology, Alchemy, Fulcanelli, Monument To The End Of Time etc and realized that there are planetary forces at work that I was largely unaware of. Your explanation has made a lot of sense.
Have book marked your site and will visit regularly.
Thanks Keith, welcome.
I’m not sure if you looked into the rise/set time correlation? I’m not sure if its just mere coincidence but I thought I’d check to see how things went today and again at 10:28 (rise) you can see what happened to the FTSE.
09:13am on wednesday
08:32am on Tuesday
If I’m not mistaken, I’m sure all these times (to the nearest minute or so) would have produced some volatility spike on the FTSE future? Please do let me know if you’ve seen any credibility in this line of thought at all.
Hi RM, not yet. At some point in the future I will look into it – it’s on the to-do list. But if you generate more findings in the meantime, I’m interested to hear.
Thanks John – I’ll keep you posted on findings in the hope that you can find some logic in there.
For your consideration
02/04 – Moon rise @ 13:11 – This was the precise start of a 110pt bull run.
30/03 – Moon rise @ 10:58 – This was the precise end to a 25pt bull run
29/03 – Moon set @ 01:09 – Precise reversal on FTSE Future
29/03 – Merridien Passing London@ 18:24 – Precise reversal FTSE Future 45pt run
28/03 – Merridien Passing London@17:34 – End of volitile drop
Sometimes you could just look at the chart first and you’ll figure out where an intra-day lunar event lies.
I am unable to follow Moon rise and set timings as mentioned by you. How is it that it rises earlier in morning hours and sets at midnight. Can you please take a few moments to post your reply.
Here in Mumbai, India, I was trying to get those timings but moon rise is always in evening hours and trading is shut during those hours. So was unable to relate with Indian markets.
That cannot be possible. The moon will rise and set during the course of a lunar month on a daily basis. It’s rise and set times will move around 24 hr period during this month. For example on the 1st of the Month it may rise @ 10:00am and each day it will add approximately 1 hour until by the last day of the month it will rise again at about 10am. Yes you are right that there will be only a few days in the month where the rise/set times coincide with market trading hours. Bare in mind that my experience is only an amateur observation and I am trying to ascertain some rule of repeatabiliy.
Here is a link for your consideration:
FTSE [Moon Set = MS]
10/04 – MS @ 08:17 (high volatility/nothing significant)
11/04 – MS @ 09:17 (Confirmed reversal – Start of a full day bull run)
12/04 – MS @ 10:25 (Precise bottom of the day)
13/04 – MS @ 11:38 (Nothing significant althoug you might find something significant with the level)
16/04 – MS @ 15:12 (Penultimate leg down before reversal. Also interestingly seems like a significant level for the day)
17/04 – MS @ 16:20 (Precise peak on the ftse future)
FTSE [Meridian Passing = MP]
16/04 – MP@09:28 [Nothing significant although the FTSE didn't fall below this level]
17/04 – MP@10:11 [Looks like an end level to the morning bull-run]
18/04 – MP@10:54 [ …..
From more recent views I’ve noticed that the intraday lunar activity may actually be correlated to daily levels.
Would be interested to see if anyone has looked at this further..
Not yet RM, but I appreciate the info you are providing. I have a list of things to look into, and will get to them all eventually.
Thanks John. I was asking generally. Understand you’re busy. Hope you don’t mind me continuing to post the same.
18/04 – MP@10:54 [precise start to a 28 point drop]
19/04 – MP@11:36 [relatively precise within a few mins start of a 50 point drop]
20/04 – MP@12:19 [Key resistance level for today which has been broken]
After posting these times/actions here I have certainly noticed something which wasn’t obvious the last time I did this study. It seems as though the actual rise/set/MP times seem to contribute to key levels. If there is a way I can post a picture up then let me know.
For those who wish to see the intraday lunar phases mapped onto a chart for this year so far then you may request it accordingly – i’m on email@example.com (john hope its OK to dish my email here?) Another eye would be most useful..
john, martin armstrong (currently at martinarmstrong.org) is big on cycles. i’ve been following martin’s essays since he started writing (typewritten) out of prison about 4 yrs ago. amazingly enough, looking back at his predictions from, let’s say ’90s re today’s debt crisis, based on his “pi” cycle theory, he was correct. he’s written many essays. many of his past works are not on his site. These (Christiaan-Huygens-The-Father-of-Cycle-Theory-10-15-09.pdf, The%20End%20of%20Time-Part%20I%2005-22-2011.pdf, The%20Next%20Wave%2004-21-2011.pdf) and many more are.
i’m not sure how much time you want to spend on this; but, my question is: have you ever, and if not, would you have enough data to compare martin’s cycles w/ your solar cycles and come to the same conclusions? and if not same conclusions, why not?
Hi Rolan, I followed his work for a while and then stopped. I found a couple of his key turn dates came to nothing, and as the key turn dates are not necessarily stock market turns but can also be major currency inflections or economic reversals it’s hard to use as a predictive tool. I’m not dismissing him completely, but I didn’t find him compelling enough to stick with him.
I really like this site and the author. Thanks for doing this. It has changed my thinking forever. One thing that would be nice to see as with this article is an attempt to falsify a view. From what I understand the author is Long as myself but when one is Long, the brain starts to create mind tricks into the field of induction i.e. we try to prove something and predict. Prediction is impossible in the long run. We only get a statistical edge but the market could crash as much as it could rally. It seems likely we will rally soon but would like to see an attempt to falsify that view.
Thanks for writing and posting “Trading the Sun”. Still skeptical, but it is the most original investment/economics piece I’ve read in a long time.
One question that mostly exposes my ignorance: Is the cycle in Asia different than in the US? Is there a difference in Southern vs. Northern or Western vs. Eastern hemispheres? i.e. how can we apply this knowledge to markets and economies located in Europe, Asia, Australia, S. America and other places that don’t have a high correlation to US markets, and have different demographics? Has there been much research on this?
Just to let you know, I posted a link to the article in the Asian Behavioral Finance Group I organise on (Linked-In http://www.linkedin.com/groupItem?view=&gid=4481293&type=member&item=202214616&qid=aadd225d-2327-4cfe-a665-fd96c8efb673&trk=group_most_recent_rich-0-b-ttl&goback=%2Egmr_4481293)
Hi Michael, and thanks. All 3 models are global: sunspots, geomagnetism and lunar phasing. Full and new moons occur at the same time all over the world – the lunar edge has been demonstrated across all the major global indices by Dichev Janes, with Germany one of the most influenced by the oscillation. Geomagnetism occurs more intensely in certain parts of the globe, so US, Canada, UK, Australia show more influence than Japan, Germany. Sunspots influence globally, so the relations with inflation, secular asset cycles and growth/recession can be applied globally, however I suspect there will be local differences in the size of the influence, as per the other two (that research is lacking). Other factors clearly come into it, such as demographics, political policies and so on, as we see generally global markets move together but within that regional and sectoral differences. I have used US and German indices for most of my examples, but one telling Asian example is the Nikkei secular peak of 1989 coinciding with the solar peak of 1989.
Thanks so much for taking the time to answer such a basic question.
Again, very good study. Thanks for posting.
By the way, I posted a link to your site and study at a Linked-In Group I established called the Asian Behavioral Finance Network. I hope this is okay. If not please let me know and I’ll remove or change wording to your liking. I think it is important for the author to get full recognition for their work.
I think this will link to the the entry:
Outstanding Cycle Analysis
John, in the first instance; thank you for sharing your thoughts and comments.
There is lot to discuss here about the details and research efforts surrounding
solar cycles; but for the moment, let me cut to the chase and ask if you or your readers have perhaps read “A Roadmap Of Time”, by Brad Steiger. It’s been a long time since I read his book; but if I recall he reported on a trading system based on the positions of the sun, moon, and earth. I’m fuzzy on the details; but if I recall;
two aspiring young men concluded that it was the basic straategy the famous commodity speculator; Arther Cutten. These two young men used longitude and lattitude timetables to try and reconstruct what Cutten was doing. Science is not my
forte so I was unable to understand the explanation/concept offfered in the book.
I thought I would call this to you attention and was hoping for some feedback or
explanation from someone who has more experience and training on this subject.
Thank you for your consideration.
Hi Charles, thanks. I have made a note to look into this when I return from travelling. It’s not something I’m familar with.
Thanks for providing your cycle analysis. Your work could very well be the practical breakthrough that Raymond Wheeler alluded to at the conclusion of his seminal book on weather cycles.
Do you have any thoughts on the Unified Cycle Theory by Stephen Puetz, and\or the Puetz crash Window? (by my calculation a crash window opens on May 19) if this information is elsewhere on your blog I apologize.
Thanks again for sharing your work and insight gratis.
Thanks Tony. I tracked the Puetz crash windows for several years and gave up on them – more misses than hits.
Would you be interested in managing HNWI trading account from UAE through LPOA structure?
More details please to john(at)solarcycles(dot)net, thanks
Although I’m not a trader – and I don’t have any intention to become one – I’ve been studying the Lunar Cycle for the last 3 years, in order to build a lunar trading strategy for the main indices, such as SPX, NDX and DAX.
Here I leave a link for my latest topic on the subject, although it’s a Portuguese financial forum:
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