Watch the Euro

Markets have kept up very nicely and we are now entering a new lunar Green Period.
What to look for?
The phase inversion that started one month ago, will probably need another cycle to get back to normal.
I would remain very careful until normal cycles return.

Let’s have a look at the S&P 500 index (click for larger image):

S&P 500

My Earl2 indicator has bottomed out and turned up, but the shorter term Earl is signalling a short term top. This means that weakness in December can be bought, with an eye on pocketing gains in early 2013.
I would buy on a dip to 1390 or lower and keep a stop-loss just below 1350.


As chart of the week we take a look at the Euro (click for larger image):


We covered the Euro back in October , and advised to sell with a downside target of 1.26
Now this correction seems to be over and my Earl2 indicator has turned up again.
I would buy Euro on any dip to 1.28 in December, and use a stop-loss at 1.26
Once the Euro breaks above its long term downtrend line, the door will open for a rise to 1.40 – 1.50 area by the middle of next year.

Good luck, Danny

By Dan

Author of LunaticTrader and Reversal Levels method. Stock market forecasts based on proprietary indicators, seasonal patterns and moon cycles.


  1. Hi Danny,

    What’s been your experience with these inversions? If you have one, are you likely to have several in a row, and if so, how many in a row is typical?

    One other question: In your research of the lunar phases, how far back in time did you go? I’m wondering whether the lunar phase might shift over a long period of time, say 20, 30 or 50 years… If so, might it be possible that sometime in the past (and maybe again sometime in the future) you could have made money by buying the new and selling the full (instead of what’s in place now which is to buy the full and sell the new).

    1. Hi Pimacanyon,

      My answer to Bob (above) may already partially address your question.

      My research was done on data starting in 1950.
      As you can see in the graph at the top of the Performance page, showing 1950 – 2010, the Green Periods have outperformed the Red Periods quite steadily for over 60 years already.
      Yes, there are occasional years when the Red Periods have outperformed the Green Periods, but they have been quite rare. The normal cycles always seem to return.

      Also bear in mind, our Green Periods do not start on Full Moon, but about 3 days after Full Moon.
      Buying Full Moon and selling on New Moon has also been a profitable strategy for the last 60 years, but not nearly as good as buying our “Green Periods”. These green periods are the historic optimum.

      In a next blog post I will try to give some possible reasons for why using 3 days after the Full and New Moons works better.


      1. Thanks, Danny!

        I understand about the 3 days after New and Full. (I purchased your software a year or so ago, by the way :-) However, I did a mini-research project of my own and looked at just the new and full moons over the last 3 years. Buy the full, sell the new was a clear winner.

        I need to go back and do the same thing using your turn dates and see whether waiting for the 3rd day after the phase change would give better results.

        My main concern was whether the outstanding results of those 3 years would hold if I went back in time say 10 or 20 years, but since you’ve already done that, I won’t bother repeating your efforts. Cycles are mysterious, we don’t know what causes inversions or what causes them to disappear altogether, or to get longer or shorter. I was concerned that maybe there’s are larger cycle (sun spots, Jupiter’s orbit, Saturn’s orbit, etc.) that might cause the lunar cycle to shift over long periods of time.

      2. Hi Pimacanyon,

        We always have to be careful with research that only covers a few years.
        If you test the buy Full Moon – sell New Moon strategy over S&P 500 data since 1950, then the result is quite surprising:
        In Full Moon to New Moon periods the cumulative profit was 3.78 (starting at 1)
        In New Moon to Full Moon period the cumulative profits was 15.54 (also starting at 1)
        So, actually buying New moon (and selling at Full Moon) has historically been a better strategy than buying the Full Moon.

        The reason is in the first and second day after New Moon, which have been the most positive days in the lunar month. If you sell on New Moon already, then you miss out on the profits these days tend to offer.

        That’s why our buy 3 days after Full Moon and sell 3 days after New Moon gives a superior profit of 20.66 (as you see in the chart on our performance page).

        Of course, as the saying goes, past performance doesn’t guarantee future results.
        So, one always takes into account that “something” might change and put a different pattern in place.


  2. I was wondering what would happen after an inversion.
    I understand from your post it goes bact to normal
    So the market should rise till the 13th.

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