Showing posts with label Natural Trading Days. Show all posts
Showing posts with label Natural Trading Days. Show all posts

Friday, October 14, 2022

Chinese Stock Indices, Gann Time Theory & Solar Terms | Tianbao Zhou et al.

Tianbao Zhou, Xinghao Li & Peng Wang (2021) - Stock indices proved to be rather predictable to some extent. Therefore, according to the study, investors can invest in ETFs that belong to the indices as an ETF is completely coincidental with the index it belongs to. Furthermore, ETFs provide investors with a variety of options of risk and profit. The Shanghai ETF is smooth whereas the Second Board 50 Fund fluctuates a lot. Investors are able to get a high profit from individual stocks as well through implementing the results of this study. The correlation between the turning points of indices and the Chinese 24 solar terms was positive (r = 0.9878).

Turning points always occur near solar terms. Through testing n-day extreme points with a different n value, the sharp turns of the trend often happened near the solar terms, and if we choose 4 days as the valid time radius, the probability is about 80%. Investors should be alert for four days before and four days after a solar term. If the price is too high (low), it is more likely to be affected by the coming solar term, and the higher (lower) the price is, the more instability the trend then would have. However, solar terms are not always strong turning points, but they might cause weaker turning points. In other words, solar terms might not cause a sharp reversal of the stock trend; strong turning points were just some exceptions. Usually, the turning points were not that strong but sufficient for medium-term and short-term investors. The alert period provided investors with a good strategy for short-term and medium-term trading. When judging the upcoming reversal, it should be dynamic. 
 
 
[...] Eight of the Chinese 24 solar terms are very prominent, namely, Chunfen (6), Xiazhi (12), Qiufen (18) and Dongzhi (24), which represent the most vigorous time-points in each season and are the most important four solar terms; the other four are Lichun (3), Lixia (9), Ligiu (15) and Lidong (21). These four represent the beginning of each season and are the second important four solar terms.
 

To our surprise, the importance of these eight solar terms exactly coincides with the wheel of the cycle theory in Gann theory. In Gann’s wheel, the most important four angles are 90°, 180°, 270° and 360° (0°), and the corresponding time-points of each year are exactly the four solar terms of Chunfen (6), Xiazhi (12), Qiufen (18) and Dongzhi (24). The second important four angles, 45°, 135°, 225° and 315° exactly correspond to the four solar terms of Lichun (3), Lixia (9), Liqiu (15) and Lidong (21). Regardless of the angle in Gann theory or solar terms, they all point to a common rule, that is, the stock trend is most likely to turn at these eight points. We can summarize the above results as follows: variable or more significant extreme points often occur at the solar term point, and the solar term point usually makes the stock trend turn according to its strength, and the turning strength is large or small.
 
[...] the Chinese traditional culture, human society is affected by natural factors at every moment, and one of the factors is time (including the time cycle, time-points and time periods). Despite the fact that the absolute price of a stock is generally supposed to be unpredictable, the turning points and reversal of trend of stock indices have rules to follow. 
 
Gann theory suggests that the cycle of time is almost everywhere in the stock market, like our pulse cycle and four seasons of the year. Nobody denies the existence of the time cycle as it retains its rationality and regularity in the nature. Whether or not we know, the regular shocks and vibrations in the stock market caused by time do happen.

[...] we only analyzed the trend and turning points of the Shanghai Index rather than a certain stock or an absolute stock price. We supposed that the index is a wide and general performance of the stock market which eliminates many extreme and irregular cases. Many theories have focused on calendar effects, and all of them show the effort in searching for the independent time factors over regular human factors that may affect the stock market. However, such a division of time is so modern that the turns do not always fall on them. 
 
Besides the solar terms, in China, we have 12 zodiacs (corresponding to a 12-year cycle), lunar months (corresponding to the monthly change of the moon), 10 heavenly stems and 12 earthly branches as well as the constellation of both the Chinese version and the Western version. Thus, we can see that throughout the history, ancient people were always doing tremendous work in summarizing many kinds of time cycles in order to survive, forecast and develop their civilization.
 

[...] The 24 solar terms in each year and their links accurately fitted the trend of the stock in that year. Using 24 price data-points instead of nearly 250 daily data-points of the whole year could make the daily data of high frequency more concise and easier to process. With 250 high-frequency daily data-points, there is strong volatility, which leads to the obvious heteroscedasticity of the data and increases the complexity of data analysis. 
 
The use of 24 solar terms instead of annual data also greatly reduces this unstable and irregular fluctuation. This also coincides with Gann theory. The forecast of future trends in the all-terms group and the eight-terms group was precise, but there remained a gap with the absolute price. We were only able to forecast the time-points and the turning points; as for the absolute price, we hardly made it. This is because the stock market involves a great deal of instability and is extremely complicated.



[...] as we were inspired by Gann, Elliott and the Chinese 24 solar terms, we would rather look for those that do not change, and that is the key to have a better understanding and cognition of our real world, of course, including the stock market. For this reason, it is the higher dimensional time factor and time cycle that produce an overwhelming impact on the stock market, so it reminds us of taking into account the importance of time when conducting such a study. That is why Gann summarized a tremendous amount of time periods to inform the possible reversal in the capital market while the ancient Chinese figured out 24 divisions of a year as 24 solar terms which all solely point to time.

In addition, the ancient Chinese elaborated a complex system, and there are actually many  other divisions of time, years, months, etc. in the Chinese culture. For example, the ten heavenly stems and the twelve earthly branches decide what a year would be like, and that is a 60-year cycle as there are 60 different combinations of one out of the ten heavenly stems with one out of the twelve earthly branches. By the way, one combination is called Gengzi, which is supposed to be the year of disasters and conflicts; the latest Gengzi year was 2020.

 
 

Sunday, August 5, 2018

S&P 500 Index vs Natural Trading Days | Cluster ± August 8-9 (Wed-Thu)

Aug 08 (Wed) = 90 TD from Apr 02 (Mon) Low + 180 CD from Feb 09 (Fri) Low
+ True Lunar Node Speed @ Max + MOO @ Max N-Declination
Aug 09 (Thu) = 135 TD from Jan 26 (Fri) Major High + SUN 000 MER
+ VEN contra parallel SAT (heliocentric) + VEN 120 URA (h) + VEN 090 SAT (h).
S&P 500 Index vs True Lunar Node Speed @ 0 and Extremes | 30 Day CIT Forecast

Monday, March 19, 2018

Vernal Equinox | March 20 (Tue) Sun at 0° Declination and at 0° Longitude

Manly P. Hall (1928) - "As the zodiacal band marks the pathway of the Sun through the constellations, it results in the phenomena of the seasons. The ancient systems of measuring the year were based upon the Equinoxes and the Solstices. The year always began with the Vernal Equinox, celebrated March 21 [March 20, 2018 12:15 pm (EDT) = 0° declination and 0°Aries] with rejoicing to mark the moment when the Sun crossed the equator northward up the zodiacal arc. The Summer Solstice was celebrated when the Sun reached its most northerly position, and the day appointed was June 21. After that time the Sun began to descend toward the Equator, which it recrossed southbound at the Autumnal Equinox, September 21. The Sun reached its most southerly position at the Winter Solstice, December 21.

The seasonal variation of geomagnetic activity is related to the Earth's angle and position
towards the Sun: when the dipole is perpendicular to the solar wind flow, increase in geomagnetic
activity will occur around the equinoxes, and minima around the solstices (HERE)

Four of the signs of the zodiac have been permanently dedicated to the Equinoxes and the Solstices; and, while the signs no longer correspond with the ancient constellations to which they were assigned, and from which they secured their names, they are accepted by modern astronomers as a basis of calculation. The Vernal Equinox is therefore said to occur in the constellation of Aries (the Ram). It is fitting that of all beasts a Ram should be placed at the head of the heavenly flock forming the zodiacal band. Centuries before the Christian Era, the pagans revered this constellation. Godfrey Higgins states: "This constellation was called the 'Lamb of God.' He was also called the 'Savior,' and was said to save mankind from their sins. He was always honored with the appellation of 'Dominus' or 'Lord.' He was called the 'Lamb of God which taketh away the sins of the world.' The devotees addressing him in their litany, constantly repeated the words, 'O Lamb of God, that taketh away the sin of the world, have mercy upon us. Grant us Thy peace.'" Therefore, the Lamb of God is a title given to the Sun, who is said to be reborn every year in the Northern Hemisphere in the sign of the Ram, although, due to the existing discrepancy between the signs of the zodiac and the actual star groups, it actually rises in the sign of Pisces."


W.D. Gann knew the year actually begins on the Vernal Equinox (not on January 1st) and said this was a very important seasonal time also in the financial markets. He used geometrical divisions of the solar year (solar degrees of longitude and calendar days) to ascertain turning points in financial markets.

11°15' (= 360°/32 = 32nd harmonic), 22°30'
(= 360°/16), 45° (= 360°/8), 90° (= 360°/4), 135° (= 3 x 45°), 180° (= 360°/2), 225° (= 5
x 45° = 0.618 of the Solar Year), 270° (= 3 x 90°), and 315° (= 7 x 45°) Solar Degrees from the Vernal Equinox (= 0°Aries) are what he called Natural Trading Days. Though 15°, 22°30' and 45° also may coincide with changes in trend, Gann stressed the importance of the cardinal points (90°apart) and fractions of 8ths (11°15'). Gann also used multiples of 90°(squares) and 144° (= 12 x 12°), i.e. 90°, 180°, 270° etc. and 288°, 576°, 720°. Changes in market trends may also occur every 30°(= Sun moving into the next sign of the zodiac) or 11°15' (11-12 calendar days and multiples thereof) from any significant high or low in the marketSince the Sun moves at different speed, e.g. 90°not always equals exactly 90 calendar days. For exact calculations and projections an ephemeris is needed (e.g. HERE). The dates of the Vernal Equinox, Summer Solstice, Autumnal Equinox, and Winter Solstice slightly change over time (see HERE).
Because of the rotation of the Sun around the Earth, the spring equinox only falls
on Tuesday evening or Wednesday morning (the Jewish day begins at sunset) every 28
years. When the equinox does fall on Tuesday or Wednesday, a very special prayer is
to be recited. It is called Birkat Hachama, the “Blessing of the Sun.”

Celestial mechanics are also the reason for the flip of correlation between astro-indicators (Bradley Index etc., but also ‘space weather’-data like sunspots, solar flux, geomagnetic indices) and financial markets. The inversion of polarity oftentimes occurs in a time-window of +/- 2 weeks around the equinoxes and solstices. When the Sun periodically experiences significant increase in sunspots and solar flare activity, flares release energy in many forms, including electromagnetic energy and energetic particles such as protons and electrons. When this energy reaches the Earth, it interacts with the Earth’s magnetic field. This generates an electric current that flows through the Earth’s surface and affects electric power, satellite communication, oil pipelines and of course human brains, mood and actions.Three mechanisms were proposed to explain the seasonal variation of geomagnetic activity: 

(1)   The Axial Hypothesis established the fact that the geomagnetic variation was associated with changes of the Earth heliographic latitude. This indicates that the Earth would be favourable connected to the solar wind from the active solar regions resulting in an increase in geomagnetic disturbance. 
(2)   The second is the Equinoctial Hypothesis. It focuses on the angle when the dipole is perpendicular to the solar wind flow, increase in geomagnetic activity will occur around the equinoxes, and minima around the solstices. 
(3)   A third approach assumes that the Interplanetary Magnetic Field lies in its typical parker spiral configuration on solar equatorial plane, the southward component of the interplanetary magnetic field in the geocentric solar magnetospheric (GSM) coordinate system is increased when the angle between the z axis of GSM coordinate and the solar equatorial plane is minimum near the equinoxes. The southward component of interplanetary magnetic field is maximum in early April and October (HERE)

S&P 500 Index vs Delta Cycle | March 2018 Update

Tuesday, January 10, 2012

Natural Trading Days for 2012

... derived from the Equation of Time & the Declination of the Sun

Astronomical cycles such as the Mercury Cycles, the cycle of the star Sirius, the Lunar Cycles, the Earth/Sun Cycles and the Equation of Time (EOT) can be used for timing potential turn dates in the stock, forex and commodities markets.

Earth in Perigee = Jan 05 
EOT @ minimum  = −14 min 15 sec  = 11 February 
SPRING EQUINOX = March 20
EOT @ zero = 15 April
EOT @ maximum = +03 min 41 sec = 14 May
EOT @ zero  = 13 June
 
SUMMER SOLSTICE = June 20
Earth in Apogee  Jul 05
EOT @ minimum = −06 min 30 sec = 26 July
EOT @ zero = 1 September
 
FALL EQUINOX = September 22
EOT @ maximum = +16 min 25 sec = 3 November 
WINTER SOLSTICE = December 21
EOT @ zero = 25 December