Investing with the Moon

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 922 other subscribers
  • Archives

  • Categories

  • Tags

    $EURUSD 1920s Bitcoin bonds Brazil Brexit China crash Crude Oil DAX Dow 32000 Dow Jones Industrial Average Earl Eclipse Euro financial astrology FTSE 100 Index gold Greece Hong Kong iceberg key levels long term LT wave lunar cycle lunar cycles mania Market trend method MoM monthly Nasdaq Nikkei oil Oil Prices outlook QE Quantitative easing reversal levels S&P 500 SKEW solar cycle stock market stocks strategy Sunspot Technical analysis TLT VIX weekly

Get ready for the August eclipse

Posted by Dan on June 14, 2017

Despite some air pockets the US stock indexes keep looking up. The recent lunar red period produced a 35 point loss for the Nasdaq and we have started a new green period. There will be total solar eclipse over the USA in August and it will probably get plenty media attention. So, we will have a good look later on in this article but first I want to share the current S&P chart:

^SP500 (Daily) 8_31_2015 - 6_13_2017

This market stays in a nice channel since the early 2016 corrections. S&P 500 is currently in the middle of the range and trying to decide whether it wants to visit the upper or lower boundary next.
The Earl indicator (blue line) has turned down, but this has only produced a sideways pause so far. The slower Earl2 (orange line) is climbing again after some hesitation. This suggests a continuing rally until we see Earl2 top out again.

Bullish participation had been weak in recent months but is now improving:


369 S&P stocks in bullish mode is the highest since early March. In healthy market advances the number of bullish stocks typically climbs above 400 (80%), like it did in February and December. If the number of bullish stocks falls back below 300 (60%) then the rally will be on hold. But as long as that doesn’t happen we better assume higher highs coming up. I keep monitoring this stat and you can find it in my weekly outlook posts on every Sunday.

So what’s up with that eclipse? Well, on August 21st there will be a total solar eclipse crossing the US from coast to coast:


Before you stash away extra sugar, water and canned tuna and sell all your stocks, remember that this has happened before and you would not be able to pinpoint those events on a long term chart of the markets unless you knew the dates. The most recent occasions were 26 February 1979 and 8 June 1918. Nothing unusual happened.

Historically, stocks markets actually perform slightly better than average in the weeks around a solar eclipse. See my old article: Eclipses and the stock market. So, if come August the market is still setting new records then some commentators may start pointing to this eclipse as the reason for a crash. Sure, there may be a market decline in September or October, but that doesn’t mean it would have anything to do with this eclipse.
I would rather watch this chart from 1987, exactly 30 years ago. Markets climbed in the first months of the year, then paused March to May and climbed to new highs in June to peak out in late August. The price action so far this year happens to be identical:


If we reach a major peak in August then I would expect it to come with significant bearish divergences and new investors’ enthusiasm pushing out doomsayers.

Post a comment (disagreement also welcome):

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: