Donald A. Bradley (1950): Stock Market Prediction. The Planetary Barometer and How to Use it. Original publication by the Llewellyn George Foundation for Astrological Research; 43 pp. |
Unfortunately, no one ever followed up for years, and his work fell into obscurity until 1986 when Jim Twentyman and Larry Pesavento began looking at the Bradley model. They had all of the stock market data on the NYSE from 1876 (10 years after the civil war) through 1986. A 110-year sample size was statistically accurate enough to test Bradley’s theory. The results were quite amazing. Over the past 130 years (since 1876), the correlation is better than 70 percent. Remember that this model can be done years in advance. It is one small indication that the planets may have some say in what happens in the markets.
Although the Bradley Index shows some excellent correlations between naturally occurring cycles and the stock markets, certain caveats must be mentioned:
(1) It has a tendency to invert (be a mirror image of) the regular model at certain times during the year. Sometimes, there are as many as three inversions in a year while, at other times, there are no inversions, and the model correlates quite well. Inversions can be a problem, but they also present an opportunity because the exact Bradley date (calendar date) has a very high probability of being near a significant trend change, plus or minus one day, better than 80 percent of the time.
(2) The second caveat relates to the fact that it is NOT a trading system; it is a guideline for what financial markets may or may not do between the Bradley dates. Practical experience has shown that, when the Bradley model is working, it behooves the trader to pay attention to the high correlation existing at that time.
However, when it is not correlating, it should be viewed with
skepticism. So, it was never meant to be a trading system. In fact, it
is still an unproven theory.
(above text is based on A Stock Market Model That "Shoots for the Stars" by Larry Pesavento, 2006)
2012-07-27 (Fri)
2012-08-13 (Mon)
2012-08-24 (Fri)