Nov 22 2006
Believe it or not, the stock market tends to do better or worse depending on where we are in the lunar cycle. That’s the conclusion of two studies that have circulated for a couple of years in academic circles.
returns are much higher (as much as 10 percent a year) than those of the other half of the month.
The studies, “
Lunar Cycle Effects in Stock Returns” and “Are Investors Moonstruck? Lunar Phases and Stock Returns”, done by Ilia D. Dichev, Troy D. Janes and Lu Zheng agreed that during the 15 days of the lunar month closest to the new moon – starting seven days before it and ending seven days after — the stock market’s average
returns are much higher (as much as 10 percent a year) than those of the other half of the month. The researchers found a lunar effect in all major United States stock indexes over their history, including the Dow Jones back to its start in 1896.
What would cause the lunar cycle to affect the market? It is said the extensive psychological and biological literature can heavily influence our moods. A full moon, for example, increases our tendency to feel depressed and pessimistic, so investors may be more inclined to stay out of the stock market at or near that time. In another word, emotional plays an important part in determining out profit or loss investing stocks or options.
Meanwhile, both my favorites, Google (Nasdaq : GOOG) and Apple (Nasdaq : AAPL) shares surge to new all-time high after the bell Tuesday. While Google closing price passed the $500 mark at $509.65 (up $14.60 or 2.95%), Apple’s stock price closed at $88.60 (up $2.13 or 2.46%). But hey, wasn’t full-moon yet, so shall I start accumulating and wait for the full-moon knowing it’ll peak then (Google to $600 and Apple to $100) ?
Nevertheless, the next time you’re about to buy or sell a stock, you may first want to look up – at the moon for guidance.
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November 22nd, 2006 by financetwitter
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