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This is it! Thanks.
>>> "Gitanshu Buch" <onwingsofeagles@xxxxxxxxxxxxx> 01/08/98
02:43pm >>>
If this is what you were looking for... with Clyde Lee's comments
attached from a related post.
You may have heard of the old commodity trading saying, "buy the new
moon and sell the full". It may be good advise for
some commodities like beans and greens and corn bread, but for trading
S&P's or OEX options this year, it hasn't been
worth a flip. Why? Because so far this year any trading day that also
happened to be the full moon, has closed Positive 83%
of the time. So much for old commodity trading sayings, huh? Well, not
really. Like most things in the markets there is another
side of the story. So we asked our computers to give us some additional
information on trading during a full moon. Here are
the results.
So far this year we have had 10 full moons. Only two fell on a weekend
so we used the following Monday as the "full moon
day". We asked the computers to look for any patterns on the 3 trading
days before a full moon day, and (since everyone
wants to buy an option, hold it for a week, and hit a home run) on the 5
trading days after a full moon day. What we found is
very interesting.
As you learned above, full moon days close up 83% of the time. AND
that
is the worst day to be short, as the average drop
on a full moon day is only 20.10 points on the Dow. BUT, shorting before
the full moon does much better. The average
cumulative drop during the three days BEFORE a full moon trading day is
90.40 points. That's the equivalent of over 10
points on the OEX. AND, the best day of the three to be short, or in
puts, is the day BEFORE the full moon, which averages
dropping 35.20 points.
BUT, if you really want to go for a big lick in puts, study this. The
average cumulative drop in the week (5 trading days) after
a full moon is 168.80 points. That's 19 points on the OEX and not bad
for a weeks work. The best day to be short is the
THIRD day after the full moon trading day, which averages dropping
72.50
points. The second best day to be short is the
FIRST day after the full moon trading day, which averages dropping
35.60
points.
Now before you start thinking that this full moon stuff is a bunch of
bull, tell us how much and on what day was the biggest
one day drop in 1996 (so far). We'll even give you a hint. Elaine
Garzarelli had nothing to do with it. While your at it, tell us
how much and on what day was the biggest one, and two day drops in
1995.
Give up? The biggest one day drop in 1996 was -216 points on March 8.
It was the THIRD day after the full moon. The
biggest one day drop in 1995 was -133 points on July 19. It was the
fifth day after the full moon. The biggest two day drop
was that day and the day before, the fourth day after the full moon
when
the Dow dropped -58 for a total two day drop of
-191 points.
Of the 15 biggest one day drops in 1996 so far, 11 of them were within
the time frames examined by our computers during
the full moon each month. Ten of them fell in the "week" after the full
moon. If we ignore the Garzarelli selloff days that means
that only 2 of the biggest drops this year have NOT been during a full
moon. Making 10 out of 13 of the biggest drops hitting
after the full moon. All other things equal, we know of no better time
to be holding puts.
Only once in the past year has holding puts right after a full moon not
worked very well. That full moon was also a "Blue
Moon", proving once again that that old saying of "once in a Blue Moon"
really is something unusual.
H. L.Camp
October 1, 1996
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