I modelled the Poland WIG in the same way as the Malaysian, Indian and Brazilian stock indices.
The lunar edge over the last 4 years for the Polish stock index looks like this, compared to the others:
A decent sensitivity.
The Polish WIG now features on the short and medium term model pages, and here it is on the latter timescale:
A pretty good tracking of the model.
The geomagnetic model has lately made a notable switch into a downtrend, shown against the SP500 on the shorter term timescale here:
There is now a notable divergence which could spell a trend change in stocks or a topping process beginning imminently. However, rising into the solar maximum has previously encouraged speculation and into the 2000 peak the market pulled away from the geomagnetic model, as the speculation overruled. So two competing things to consider, but in short the low-geomagnetism support for the market has been pulled away.
Lastly, I checked the US dollar index history to see if previous bull markets in the dollar corresponded to positive demographic trend periods. Here is the USD history since 1967:
Source: Bespoke
The US enjoyed a positive demographic trend period from around 1980 to 2000, so both the main bull markets that can be seen fell within this. However, so did the USD bear market from around 1985 to 1995, so I don’t see a useable relationship.
I am away for a few days, back Monday. See you then.
S O L A R C Y C L E S 
Hi John, som thoughts on the market:
For US I have a sell-signal, or perhaps a pending sell-signal if we go high today. And there is need for a pullback below 20MA, maybe deeper to 55ema (either ~1630 or ~1600).
Both my 6month cycle and 4 month tidal cycle are bearish into June ~15.
But then they get bullish. If we get a bearish left-translated 6month cycle, it could top around mid/late August.
From my Laundry-T work, I see a possible long term T projecting a top just around mid August. There is a short term T that ends today/tomorrow, and normally that results in a pullback to 55ema or close.
Looking forward to mid-August, I see two possible scenarios
-either we soon make a short pullback to 1600-1630 somewhere. Then rally to June ~20. Pullback a couple weeks, and rally to mid-August
-or we get a 3-4 week correction very soon and make a low near June 20. And then rally to mid-August
Just continuing the parabolic from here could of course happen, but I dont see that scenario… could still happen 🙂
Hi John, first of all I would like to appologise for my english, I am still learning, so maybe my language will be better in the future, but for now, I can write you wrong english, or nor write at all. I choose first possibility :))) and I hope you will understand what I want to describe.
You wrote:
“If June turned out to be the solar peak then we’ve got a risk asset speculative peak to go with it, only it’s in equities not commodities”.
I disagree with you. I am going to explain why, but if you will find my explanation not correct, or you will find there some logical flaws, please give me feedback.
So this is my explanation:
I am going to start with another quotation of you. You wrote also this : “Rising into the solar maximum has previously encouraged speculation” – and I generally agree with that quotation. But that doesnt say anything what directions that speculators are betting. They could still be wrong in their bets (I mean going against the trend they “should” be going with). Approaching solar maximum should have (or has) influence on ability of speculators to risk more than they normally would. They take bigger positions, more margin, and higher leverage (like options play), so they play more aggresive way, but that doesnt mean, that they play “proper” direction in the trend.
But I guess, it doesnt matter if speculators play long or short, only what matters is that they play that game very very aggresive way (because of solar maximum and its influence to their selfconfidence). I suppose, that they always play prevailing trend (which prevails going into solar maximum) and drive it aggresivelly to unsustainable levels, and made prevailing trend overextended and extreme. If they play long, they drive prevailing trend up to the mania phase, and trend is clearly parabolic (up). Once it topped, it crash (like all parabolic trend eventually).
If they play short, they take too big short positions, high level of margins and are overleveraged. Their short positions are extreme and drive trend to unsustainable levels (down). Once it cannot go lover, because short positions cannot be bigger (like always finally happen), trend will turn violently up, and short squeez of ubelievable proportions will occur, which will drive market up parabolic.
So it really doesnt matter, if speculators play long or short, result is the same eventually – price going up to parabolic rise. Only thing what matter is agresivity in size of position, margin level and leverage, (which all of them is connected with solar maximum) And direction of that play is unimportant.
Now speculators play commodities short, because as we are approaching into solar maximum, prevailing trend in commodities is down (last two years). So as I wrote before, I guess, speculators always extrapolating trend which prevails into solar maximum to the future, so they are expexting commodities to continue going down right now. This is why they are playing this time short.
We have biggest short position on gold and silver in whole 13 years history of this bull market and as we can see at COT reports data, commercials were finaly! able to distribute most of´their short contract to public (which they were not able to do for many years before in such big measure). And that means that biggest number of short contract in history of this bull market has changed position from strong hands to weak hands. Bullion banks will not cover short contract, if positions going against them, but most hedge fonds will do. That is why I consider commercials as a strong hands and hedge fonds not. So I hope that I am right, when I suppose, that in such situation like is today is logical expextation that ensuing short squeez should be biggest one in this bull market.
So the point of my view is that to make that monster short squeez possible you should have first build the “base” – I mean “fuel” which will drive squeez violently up. That “fuel” in the tank, or that “base” if you want is monster short position in gold and silver, which will of course be impossible to be built, if there will not be “help” from solar influence and overconfidence of shortplayers.
So I think, we allready can feel approaching solar maximum, because trend in excess of speculators behavior (number of short contract) is going clearly up and as we approach solar maximum is starting to be unsustainable. Isnt this what is normally always seen approaching into solar maximum? I think this very trend in behaviour of speculators selfconfidence and oversized position is trend, which we should watch, instead of focusing our thinking to trend of gold and silver price alone.
I think we are at so unsustainable levels (in short contract) right now, that we are practically waiting here just for trigger, which will start short covering rally, and that rally will not be able to stop, until all shorts are closed (I mean only shorts, which are not in hand of commercials of course, but it is still biggest number in history of this bull market).
I have no idea, what that trigger would be and when it will come, but I bet that it is not far away.
So will solar maximum cause biggest (and last) commodity rally also this time or not? I dont know of course, but all ingrediens are in. Because of solar maximum, short positions should be much bigger than normally would be, players should be overleveraged and on high level on margin ( or higher than normally would be). Are they? I have no proof, but if solar maximum “works” as in your theory should, so than they now should be overlevaraged and on high margin. And they should short market more aggresive way, then they normally would be.
And this last is in accordance with what we can already see right now. So we can say, at minimum, that solar maximum definitively has influenced size of short position, which is biggest in whole bull market, so is resonable expect, that also margin and leverage of short players are bigger than normally would be.
Conslusion: we can clearly see, that trend in aggresivity of speculators ( which play gold and silver short) is growing to unsustainable levels and number of short contract are in higher levels in whole bull market. Plus we just finished biggest distribution of short contract from strong hands to weak hands in history of this bull market (COT report). Isnt all of this proof of your quotation in beggining: “Rising into the solar maximum has previously encouraged speculation” ??? I think it is clear proof, that this speculation was encouraged in gold and silver market to levels not seen whole bull market, only difference is that speculators betting wrong way. But every excess of short positions to unsustainable levels always end at shortcovering rally. There is not reason, why this time this will be diferent. Once shortcovering rally will start, short squeez will be staggering and rise parabolic.
And it will be in commodity market, not equities.
And that is also my explanation why I dont agree with your first quotation “If June turned out to be the solar peak then we’ve got a risk asset speculative peak to go with it, only it’s in equities not commodities”. No, I dont think this is correct, because as approaching into solar peak, we are continuing step by step in building enough “fuel” and “base” for massive shortsqueez (which can not occure without this fuel), and we are accelerating in this proces faster and faster and are already in the point where all this comming squeez is irreversible and monsterrally is built – in. So everything what should be there (in gold and silver market) as we approaching solar maximum is there – excessive speculation, record levels of short contract, unsustainable extreme, and continuing acceleration of this proces into solar maximum. But everything is stealth, because one think is missing – price. So this process is built secretly, but is clearly there. Price is missing, because speculators are betting wrong way, but as I sad before, it doesnt matter at all, result will be the same – parabola up. So price will be the last, final piece of all that proces.
Once again sorry about my horrible english, maybe next time will be better.
Peter
Hi Peter, no problem with your English. I think your idea has merit, many thanks for sharing. The record short interest is there, and there are multiple examples of short squeezes from the past. We will see if it occurs here with a trigger. Like you I don’t know what that trigger would be, so it will remain an idea until and if that occurs. But if it does then it would fit very well with the theory, like you say. Thanks again.
excellent Peter 🙂 I have to read this agaian… not because of any bad english, but because it was a long text that I read too fast 🙂
At first glimpse, I think you have made some good observations on how things work, specially in the short term.
After a sunstorm we often initially see a squeeze upwards. I think because bears are the traders with shortest perspective, and the easiest to make afraid (cause short cover).
And sometimes the outcome of a sunstorm can be unexpected, because the fear may show up in unexpected places. One has to see what market that is vulnerable. If for example the USD i technically weak, a sunstorm may cause it to crash. And a falling USD may be bullish for commodities and stocks… so the sunstorm eventually could be bullish for stocks, while the normal effect is bearish.
In the longer term however, I think these speculation-mechanisms are less important, and the solar effect is more on the general economy and general stockmarket sentiment (main trend).
regarding the sunspot cycle, the rising phase in 2009-2011 was the bullish one. After that the sunspot cycle has gone sideways, and also most markets. SPX has been one of the most bullish ones.
Commodities and emerging markets toppet around 2011 and have gone sidways/down. Doesnt seem they want any more euphoria, and when the sunspot cycle tops out this summer/fall, and we begin to see the volatility in SPX that tells us the top is near, everything should start trending steeper down.
In the meanwhile we have to wait for the topping signals in SPX. Sometimes they dont show up, like 1987… but I dont see this as a crashy market, but rather a more rounded top like 2000.
looks to me that only the defensive/liquid markets experience euphoria at this solar maximum. Like SPX and some European markets. And in US specially the defensive sectors, that have gone parabolic (like helathcare and consumer stocks). I guess healthcare profits on the healthreforms, and consumer stocks on falling commodities and better margins… as long as it lasts…
and I dont think commodities will go up and worsen margins, but rather the consume and prices will go down (with deflation)
Any updated thoughts on the current status of the angular momentum theory; which claims that the solar max may come much later than originally predicted?
do you have a link to this particulary work?
My own models also include angular momentum, or similar mechanism/cycles (angular momentum, barycentre, wobble). And they point to solar max this summer/fall.
the thing about this sunspotcycle, is that it is out of phase with the angular momentum. Therefore it is weak. However the angular momentum suggested that typically a new sunspot cycle should have startet now, and instead it produced this final pop/top in SC24. The next sunspot cycle will also be out of phase, but SC26 should be back in phase and stronger.
The reason that we get sunspot cycles out of phase, is that there are other important cycles/mechanisms that regulate the sunspot cycle, and every now and then some of the mechanisms are being surpressed by others.
With several cycles in play, that seldom are in phase with each other, we get a constant fight between the cycles and a variety of different sunspot cycles.
interesting… everything is being sold. Gold, commodities, all bonds, most stockmarkets. So far it is not so visible in SPX, but the moneyflow is very negative.
This looks like the start of a big deleverage where everything is being sold.
However I read people say we have the “big rotation”… I think they are misinterpeting the broad deleverage…
Jan, it was contributor Danny who I believe brought attention to the AM theory. He also referenced the following website which discusses this concept as it relates
to the SC.
http://www.landscheidt.info/
thank you. I am familiar with Geoffs work 🙂
Angular momentum, barycenter and wobble is probably all about the same thing. I like the wobble approach. When our solar system is seen from outside, the Sun wobbles. Mainly because of Jupiter and Saturn. At conjunction they pull together, and at opposition the cancel each other. The biggest _change_ in wobble is when Jupiter and Saturn are at right angle, and I think the rate of change is “feeding” the sunspot cycle.
Here I found some old work of mine: http://www.sibet.org/images/2013/20130529d.jpg
This is a simplyfied model, because it doesnt include Uranus and Neptun, which have significant effect, specially around UrNe conjunction.
The image shows a model/forecast for the sunspot cycle based on Jupiter and Saturn. The model will break down from 2015-2030, because the tidal cycles are forcing the sunspot cycle out of phase with this cycle.
The JuSa-cycle favors short ~10 year sunspot cycles, but at some point the tidal cycle will force the sunspot cycle to prolong (as in SC23, and SC24), and the sunspot cycle is no longer able to kick off at the favorable JuSa time.
Normally we need two sunspot cycles to get back in phase with JuSa.
The image above indicates SC24max around summer 2013, and minimum around 2016, and the next maximum around 2021. However my cycle work says minimum will be around 2020, and the next SC25max around 2025.
I have a setup in DOW, that looks very reasonable in the chart: double top and flush down ~2% in two days. Bounce up to broken support, and flush down again. That may be the bottom, or the begin of a correction
some analogies… and assuming we follow this pattern
Still just holding my longs :). Have been on holiday in Poland :). Back now trying to catch up. It was better swimming and sunbathing than following the markets. More cash that way.
this would be too obvoius… 🙂
What is this again jan?
the heliocentric Earth-Jupiter cycle of ~400CDs is regarded as one of the most important astrocycles. Here is from Merriman:
“The current critical reversal zone is not over yet. On Sunday, December 2, a very important geocosmic signature occurs, known as the Sun- Jupiter opposition. This is one of the most significant of all trading signatures used in Financial Astrology for timing stock market turns. Within an orb of 10 trading days, this signature has an impressive 50% correlation to reversals in 50-week of greater long-term cycles! It has a 75% historical correlation to primary cycles within 10 trading days.”
This is what the cycle looks like, and it also shows an important concept, of inverted cycles, or collapsing cycles which I call them.
And collapsing cycles have a typical pattern, where the rising phase fails, and we get a panic low in the middle of the cycle, and then the real low is a higher low.
The 400CD cycle has some correlation with sunspot activity, but not as strong as the ~4 month cycle. Seems that the market like them both…
where did the sunspots go? All burned out after the May 16 tidal peak?
And long time since we had Kp=6
Are you betting on things going lower Jan?
absolutely 🙂
Both my 4 and 6 month cycles are bearish to June ~15
My ~1month cycle is bullish for the coming week, but I think the bullish phase will fail, which is normal in corrrections. And todays geomagnetic storm is a typical reason that the bullish phase can fail. Todays storm is the strongest since March 17, which triggered the previous correction in Norway.
About 6-7 days ago SPX triggered sell-signals in my 20, 50 and 100-day momentum indicators. This should be a pretty robust signal, and favors a ~2 week pullback or a 3-4 week correction. Normally down around 50MA/55EMA, which are around 1600 now.
Also we have the 400CD Earth-Jupiter cycle that triggered 6month ~300 point rallies in SPX from July 2009, August 2010, October 2011 and November 2012. And this cycle is at its midpoint, where we should start to flatten/reverse. Those previous cycle tops in Jan 2010, March 2011 and April 2012 all made correction down around 20weekMa, which now is at SPX ~1560.
My tick moneyflow has given a sell-signal, and has a huge bearish divergence like winter 2011. The weekly raw data suggests the correct SPX price is about 1400 (!), and the Opex corrected data says the correct price is 1460. This price-divergence doesnt have to close at the first attempt, but should be closed some time the next ~6 months. The size of divergence can shrink, but is suggesting huge downside. Could also mean we have a crashy condition if we get the right trigger.
For crude oil I have projection pointing down the next 3-4 weeks or so. The depth of that low will tell us whether it is a low, or start of downtrend.
Conclusion: I expect sideways/down the rest of the year. Great chance that we get a marginally higher high later this summer. But first we should see 1-3 weeks of downside, to SPX 1560-1600 somewhere. And there is a crash-potential.
JAn 🙂
>where did the sunspots go?
Hi Jan. The current cycle seems to be stuttering along much like cycle 16, which was also a weak cycle peaking around ssn 70. This chart shows you the monthly numbers: http://www.solen.info/solar/cycl16.html
There were several monthly spikes just above 100, but no outstanding peak period. Just like now, there was also a monthly high spike early in the cycle, which subsequently wasn’t surpassed for years.
May got a ssn of 78, and if it continues like this then June will record another 50 or something. We will probably still get some monthly spikes to 80 or 90 as late as 2015 or even 2016. But that’s how it goes in these weak cycles.
Bulkowski: 05/30/2013 I think the indices will consolidate for a few days but then resume the upward march to new highs over the next two weeks.
Jan – how many points of data of the past is your analysis based on so I can understand?
my analysis above is a mix of cycles, wavelets, momentum, internals etc
In general I use daily data from 2003 or 1996 for most of my analysis and projections. I also have weekly US data since 1950 and monthly since 1790, and hourly since 2008.
And my weekly data says there is not likely much upside next ~1 year, unless we have a 1996-situation. And my monthly data since 1900 says there is not likely much upside, unless we have a 1926-situation.
And we also know that the market has its weakest (on average) period after solar maximum.
But do we know the solar max has been attained?
How many observations is each of your indicator based on to draw the conclusion?
we dont know that solar maximum is behind us, and my analysis says it should be in 1 month, perhaps early fall. And my stockmarket analysis also says we should expect a higher high in SPX in July-August. In general my daily, weekly and monthly data indicates that we are near a longer term top, but most likely it is not now, but later this summer/fall.
For the short term view, I cannot find a single indicator that tells me that SPX is a buy… yet. That doesnt mean that it could break up from here, but the odds favor more downside. And that is supported by most of my cycles, solar activity, internals, momentum and pattern recognition.
BUT if we break above the previous high in SPX, it may cancel all sell-signals, and it may give a new buy-signal projecting the next top around late June.
The number of observations vary from indicator to indicator/cycle/etc. Mostly I am happy with some 20-50 observations.
I think I suggested two scenarios further up, that both point to a top around mid-August. Could be double/higher/lower top. But longer term momentum suggest that the momentum we have, should not collapse until then, and first create a topping formation.
-first scenario is a short ~2 week pullback here. Could be just a few days from bottom. That would project the next top around June 20, coupple weeks pullback, and top mid-August
-second scenario is a longger correction with a bottom June ~15. And then rally to mid-August.
-and a last extension after mid-August is also possible, topping perhaps in September.
All this will be continously evaluated. First we have to finish this sell-signal, and we should see some kind of oversold condition, unless there is some kind of game-changer in the news, that creates a squeeze and new buy-signal.
But if the sell-signal is allowed to complete, SPX needs some 5-10 days to get oversold and make a bottom somewhere around/under 1600, and prove that it does not collapse (after all we have had some parabolic tendensies).
And when we see a high TRIN, high PC-ratio, 50MA being tested, look for a typical ABC-pattern and so on… we could have a setup for SPX ~1700 🙂
Just use a straight line 🙂
that works for trading, but forecasting is a much more complex job 🙂
a look at solar flux versus my ~4 month planetary Venus-Earth-Jupiter tidal force cycle. My work has found a correlation between the tidal force cycle and flux. The average cross correlation shows a lag of ~40 days, but the lag may not be the same through the sunspot cycle.
The physical explaination is not known, but I like to see it this way: beneath the surface the sunspots grow (invisible). And when they are hit by the periodic 4 month tidal wave, they are uncovered, stirred up, mature, “explode” and fade away.
But throuh the sunspot cycle, the speed of this mechanism may change (and I do think it does, allthough I havent analyzed it yet)
Here is SC24. It may suggest that the lag is changing, getting shorter. The red tidal cycle is shifted about 40 days to fit the flux-tops. However the two recent flux-tops seem to come earlier, and top about the same time as the tidal cycle. Could mean that there are less spots to uncover, or that they mature faster. Have to wait and see the next month whether flux stays weak, or ramps up again.
Here is the previous sunspotcycle 23. This is of course a simplyfied model, and I dont expect the correlation to be perfect all the time (the Sun is a messy place). I do however think there is a nice correlation here as expected.
Visually there seems to be a change in lag from around year 2002, where the fluxtops come early… just like now?
Could be that there is a pattern of shorter lag as the sunspotcycle tops out…
Many thanks for all your input Jan.
SIDC updated their forecast and are still running with the two alternatives: http://www.sidc.be/html/wolfjmms.html
However, the ‘peak ahead’ option has been shifted later, making for a peak around the end of 2013.
thanks John 🙂
My pattern recognition, based on wavelet analysis and the average of weak sunspotcycles, suggest that we are near a local peak, and that there will be another peak in some ~9months. This pattern recognition may shift to right/left as new data comes in
Hi Jan. Did you consider that calculating a moving average introduces a lag with the data? If it is a simple moving average then the lag is half of the considered period. For an exponential ma the lag is less than half of the period.
This could explain all or part of the lag in this case, e.g if you used a 80 day simple moving average..
By the way, the SC24 max does not have to come on a high monthly number, as your chart seems to suggest. It is the 12 month average that counts, so it can also fall on fairly low monthly ssn. That was actually the case with the current peak in early 2012, which came on fairly low month.
and those two peaks should be correlated to these two tidal peaks with questions marks
Just follow the moon 😉 or use a straight line. I have to give Warren Buffet cudos in saying nobody can predict the cycle =). John’s theory is beautiful and I think it is correct i.e. the business cycle is connected to the sun as well as planets etc. The only problem is predicting it all. Even Nasa can not get it right. Say the peak gets shifted to end of 2013 and there we have some other planetary cycle that makes the solar peak shift again… It is like predicting what God will do. Better just follow price i.e. the horizontal line or become a true value investor. I think the rest makes us become yale students instead of traders. I would like to see 100 occurrences in order to believe. With the moon cycle there is so it is tradeable. Also, I am losing faith in the geomag storm theory a bit i.e. the tradability of it but you may educate me if you are profitable in using it.
I hear you Robert on the geomag. It’s hard to convert it into a definite trade. But I don’t see lunar phasing as problem-less either. You can play the lunar edge but need to do it for a long time to allow the edge to shine through – and even then most of my results show that buy-and-hold would still beat only being in for the lunar positive period, not least when the trading costs are factored in. But this is still all work in progress. No question lunar phasing and geomagnetism influence the markets, but I feel their convertability into the best trading system is still what I’m gradually building.
Hi Robert. We have only a few hundred years of observed financial markets. So, the problem of having rather few observed cycles occurs with all kind of cycles that are longer than a year or two. That’s also why for example the Kondratiev wave is not accepted by mainstream economists, too few observations.
I think the geomagnetic storms are not very tradeable for the moment, because the current solar cycle is so weak. The solar wind remains mostly at levels that are normally seen near solar minima. The geomag effect has always been rather weak anyway. E.g., look up the biggest solar superstorm ever: http://en.wikipedia.org/wiki/1859_solar_superstorm It did a lot of real damage to electric systems. The stock market in August and September 1859? It went up in both months, and kept rising well into 1860.
The geomagnetic storms we have seen in recent years would not even break a light bulb in Delhi.
the geomagnetic effect depends on market strength/trend. For example there were lot of strong storms in 2003, but the market rallied up from oversold
I think the best way to use lunar cycles is to look at tic data, 5, 15 min data and use oscillators to buy and sell within that cycle for specific stocks i.e short term just like Danny explains in his toolkit. Key is to add to positions within the cycle. Focusing on stocks you can hold for a while if the phasing fails is good in my view. But from my own studies bad stuff i.e. 20% drops in individual stocks tend to happen in the bad lunar cycle. Look at SHLD for example. I do not think there is any system that beats buy and hold and doubling down over the long term that use dailies data (if you are not using leverage). It is a mirage. Better just buy and hold and buy some put protection when you are scared. My BAC, AIG, BBRY etc positions from last year are up 100% and I just slept – key was not to sell. Otherwise trade futures/forex again tic data and a straight line =). Just my humble view.
Norway seems to have lost its sell-setup, and could indicate a 3-drive top completing later in the week. Cash 🙂
Robert
The most common pattern is a squeeze up after a geomag. storm, and then a steep downswing. Right now it looks like the storm in the weekend could produce that…
sometimes panic right away, but doesnt look like that today, so it smells squeeze instead
Have added to long Nikkei here. Conditions aren’t calling for a renewed upswing in equities yet but we’re close to the 38 fib of the whole 6m upmove today. If we can go lower to the 50 fib then I’d twist again.
I think we need to have several storms close to each other in order for it to have effect. Have you done research on it? Fed is not stupid. Fed pumps more when the storms come. They created the study.
John: What is the lead and lag time (in days) that you use when determining “into and around”?
Positive lunar period: buy on the 4th day after a full moon, sell on the 4th day after a new moon. Negative lunar period: buy on the 4th day after a new moon, sell on the 4th day after a full moon.
Gentlemen, while I don’t claim to know all the answers; I thought the following information might be of practical relevance to those who it appears are searching for
a general system: stock market seasonality. The simple rules are as follows:
Using SPY as the index to generate the buy and sell signals, (Buy when the MACD
12-25-9 is positive on SPY on/after Oct 1st. Sell when the MACD 20-50-15 is negative on SPY on/after April 1st). This strategy is taken from many on-line websites having to do with seasonality. I have a friend who has done quite well
trading this strategy for the past several years.
I believe there is a link which has tested this strategy to be profitable over 150 years; using the FTSE. I am providing the following link as a guide.
Click to access SellInMayGoAway.pdf
Everyone can now ‘tweek’ their favorite solarcycle triggers to mesh with this general set-up.
John (group) I am still seeking feedback from the erudite on a system Brad Steiger discussed about Arthur Cutten’s using the position of the earth, sun, and moon in
“A Roadmap Of Time? I was able to cobble together a very elementary and simple system based on this concept; but with mixed results. Important
information I would think; especially for this group. Thank you for any feedback.
http://www.amazon.com/dp/0137813856
I think the seasonality and all works and it did work very well in the normal interest regime i.e. interest rates were lowered and monetary policy was tied to this (again there is no long term correlation with interest rates). However, today we sort of have a situation that to me resembles the times of John Law and though it makes sense to trade I keep half a position all the time for the long haul. Asset price inflation is everywhere and if it all collapses then society as we know it may collapse with revolutions. I think the money printers will continue to print or buy outright until people forget. Study the half life of human memory. Protect the right tail too to only the crash tail…
Eclactic. Skip indicators. Just use a straight horizontal line. Problem with squiggly line indicators (after going through indicator Yale) is the question of what set of variables you should use. I mean why this certain configuration of numbers? Is it not just curve fitting. You can use optimization and find the best set of variables for various trading systems but then it may not work in real trading after a longer time. Each rigid trading system just becomes a gamble. What matters is your risk. Where you take profits and loss. The entries can be random. Money is made by taking profits.
Robert, I certainly agree w/all you points about curve fitting, system development and random entries. Your thoughts and comments about seasonality are also very perceptive; when viewed in the light of monetary policy. I guess like most systems; it will work until it doesn’t. I suppose one could add that money is also made my keeping losses small.