LunaticTrader

Investing with the Moon

LT Wave for July 2013

Posted by Danny on July 1, 2013

Our LT Wave chart for June did reasonably well. It was a roller coaster month indeed. The weakness in the 3rd week came a few days later than expected, and we did get the expected strength in the final week.

Here is the LT Wave for July (click for larger image):

LT Wave july

The chart shows some weakness around the 4th, and then a strong period lasting well into mid month.
Potential peaks around July 12th or 17th.
The second half of July looks weak, with the LT wave indicating a possible bottom around 23rd-25th.

So it is quite possible that the market gives back most of the gains (if any) we see by the middle of the month.

Reminder: this chart is experimental, and past performance does not guarantee future results..

Stay tuned,
Danny

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4 Responses to “LT Wave for July 2013”

  1. Chris Martin said

    hi Danny, I have been studying your book. You wrote me saying your Earl 1 and Earl 2 are indicators you have found you liked and perform the way you like. Do you give any insight on what they are? If not I will work on my own to find mine. They do seem similar the the CCI and other indicator you talk about in the book? Chris

    • Danny said

      Hi Chris,
      I wonder what book you are talking about. I have not written any books.
      Maybe you are confusing me with somebody else.

      Anyway, I would encourage people to try to develop their own market indicators, especially if they have the required math skills. It is a very rewarding journey. The problem with standard technical indicators is that too many people are acting on the same information, which tends to render the indicator useless. That problem is removed when you develop and use your own custom formulas.

      Danny

  2. Rui Vaz said

    I suppose it is clear that the “lunar effect” doesn’t work when volatility is high (see 2000-02 and 2008). I wish to know if this is taken into account in the trading strategy of the LT.

    • Danny said

      Hi Rui Vaz,

      Over the last 60 years, our lunar green periods have outperformed the red periods in 63% of the years. So, we can say the lunar effect has worked about 2 times out of 3. One has to bear this in mind when using the lunar cycles.
      But it is not really tied to high or low volatility.
      E.g. In the year 2000, the green periods saw gains of 2% vs a 12% loss in the red periods. In 2001 the green periods showed a loss of 8% vs a 6% loss in red periods. In 2002 there was a loss of 20% in the green periods vs a loss of 4% in red periods, so clearly that was a bad year for the lunar cycles. In 2008 the market lost 21% in green periods vs loss of 23% in red periods.
      Historically the worst years for the lunar cycles have been 1971, when the market lost 5% during green periods while gaining 17% in red periods; and 1987 when the market lost 18% in green periods while gaining 25% in the red periods.

      On this page we list the performance of the lunar periods since the start of this blog: https://lunatictrader.wordpress.com/performance/
      You can see that 2012 has been a bad year, but in the other years it did well. That’s pretty much in line with the historic average.

      Danny

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