Sell Rosh Hashanah & Buy Yom Kippur 2023 | Jeff Hirsch

Sell Rosh Hashanah, Buy Yom Kippur is aligning quite well this year with late September seasonal weakness and the notoriously treacherous week after quarterly options expiration, AKA Triple Witching (Fri, Sep 15th). It’s a few days before FOMC (Tue-Wed, Sep 19-20) with a market jittery on hotter inflation data.
 

Rosh Hashanah lands on Saturday 9/16 this year so we close the day before. This is right at the mid-month peak of the typical September pattern. Yom Kippur falls on 9/25 (Mon) which is the 16th trading day of the month, right around the seasonal monthly low point.

The thesis is that folks sell positions on Rosh Hashanah the first of the Days of Awe to rid themselves of financial commitments and then return to the market after Yom Kippur, the Day of Atonement. It is no coincidence that this coincides with the seasonal September/October weakness. The market has been tracking the 4-year cycle and seasonal trends to a T this year and the past 3. So this should make a great entry for the Q4 pre-election year rally.

Quoted from:
Jeffrey A. Hirsch (Sep 13, 2023) - Sell Rosh Hashanah Buy Yom Kippur Sets Up.

 

See also:
Jeffrey A. Hirsch (Sep 03, 2023) - S&P 500 Pre-Election Year Seasonal Pattern 1949-2022 vs 2023.

Jeffrey A. Hirsch (2014) - Best 6 Months.

The Gann 707 Fractal | Allen Reminick

W.D. Gann understood the nature of how markets expand, how they contract, the differences between time frames and the similarities between them. Nowadays we call this fractal geometry. Fractal geometry is extremely important to understand how markets develop and has been used by various market technicians. 

 

How do we use the 707 fractal to forecast the next few months in the S&P 500? In our most recent forecasts we've talked about a continued rally into the 20th or 25th of September 2023, and probably another high around October 3rd. After that we're looking for a decline that may be somewhat severe:

 

The number 707 shows up here on several different time frames. In the chart below the blue line is the 240 minute bar chart of the S&P 500 Futures shifted forwards by 707 units, and the red bars above are the actual current market: 

 

What is really interesting is that 707 weeks (707 weeks ≈ 12.9 years) and 707 months (≈ 58.916 years) are also repeating. This is where the concept of fractals comes in. Different time frames are having the same form or pattern. Look at this chart of the weekly S&P 500:

 

The major low of 2009 and the major low of October 2022 are 707 weeks apart.

 

The low in 2009 lines up to the week with the low in October 2022 - the major low that kicked off the whole bull market since 2009. This is lining up exactly with the low in October 2022, and the pattern in the decline between 2008 matches the decline in 2022. Even though the price action was much more severe back then, the form was the same. And we are talking about the form and now the rally that was taking place since October is also repeating very nicely 2009 into 2010 and 2011. 

 

 

So we saw two examples of 707, the first on the 240 minute bar chart and the second on the weekly chart. From this we take it one step further and look at 707 months (58.916 years). 707 months turns out to be two times the exact length of the cycle of Saturn. 25.457 years is the exact number of years of Saturn's revolution times two which equals 707 months to the day = 10,759 days.

Quoted from:
Allen Reminick (Sep 04, 2023) - Revealing the Gann 707 Fractal: Unlocking Market Secrets. (video)

 

See also:

Allen Reminick (2023) - Trade Forecast Mastery.

S&P 500 Pre-Election Year Seasonal Pattern 1949-2022 vs 2023 | Jeff Hirsch

References:
Jeffrey A. Hirsch (Aug 23, 2023) @ X

J.C. Parets (Sep 3, 2023) @ X

 

Lunar Cycle & Chinese 24 Solar Terms - Sep 2023

The 4 Year Presidential Cycle | Carol S. Mull

The 3 1/3 - Year Kitchin Cycle

Within the average 11.094-year sunspot cycle, there are shorter periods of solar prominence which occur every 40 or 42 months. These were first recognized in 1923 by the American economist Joseph Kitchin. They account for trade fluctuations and have a marked effect on terrestrial weather, alternating between hot and dry to cold and wet. Articles in Cycles magazine proclaim a 40.68-month cycle, an example of which follows:

The Mars/Vesta Cycle (4.17 years)

The planet Mars and the asteroid Vesta have a synodic cycle period of 4.17 years. (Mars often serves as a trigger planet to aspects of the heavier business planets (Saturn, Uranus, and Jupiter); Vesta has consistently been found in a prominent position in the natal horoscopes of stock traders.) The Dow is likely to peak at the first square (90-degree angle from the conjunction) between Mars and Vesta and to bottom at the second trine aspect (240-degree angle from the conjunction). Based on this, you should have bought May 28, 1985, and sold on December 7, 1987. (Ed. Note: October 19, 1987 was Black Monday. December would have been too late in this case.)

The 4 1/2-Year Martian Cycle

According to Lt.Comdr. David Williams, author of Financial Astrology (American Federation of Astrologers), the Mars/Jupiter 4 1/2-year cycle is one of the most dependable market indicators. Mars and Jupiter are in conjunction or opposition every 2.2353 years. Thus, every other conjunction is 4.4706 years, or approximately 234 weeks. Thomas Rieder, author of Astrological Warnings & the Stock Market (Pagurian Press), ties the 4 1/2-year cycle to the synodic period of Mars, The synodic period of a planet is the length of time elapsing between two successive conjunctions of that planet with the Sun as seen from Earth. Mars conjoins the Sun at intervals of about two years and three months, so this cycle is just twice the synodic period of Mars.

 The 4-Year Presidential Cycle

The 3 1/3-, 4.17-, and 4 1/2-year cycles overlap and become what is sometimes referred to as the 4-year presidential cycle. It is theorized that the government stimulates the economy at election time to provide the illusion of prosperity and to insure the re-election of the President. However, closer analysis reveals that the cycle also exists in countries where elections are held every six or eight years or not at all.

Quoted from:
Carol S. Mull - Predicting the Dow.
In: Joan McEvers (Ed. 1989) - Financial Astrology for the 1990s.

 

See also:

 Carol S. Mull (1989) - Astrological Methods of Forecasting the DJIA.

Carol S. Mull (1989) - The Lunar Cycle.

L.H. Weston - Gann’s Professor | Hans Hannula

I've been told that Gann was very private about his office. He absolutely forbid anyone from entering it. He wanted to protect his secrets. But one document he kept in his safe. That document was a manuscript by Professor Weston of Washington, D. C. It was written in 1921 (part 1) and 1923 (part 2), four to six years before Gann published his Tunnel Thru the Air, Or Looking Back From 1940, Tunnel Thru the Air contains, in coded form, Gann’s explanation of how to use planetary cycles to trade stocks and commodities. 

 

He told his own family that it was all they ever needed to learn his market secrets. Many Gann students have labored very long and hard (yes, me, too) to decode Gann's writing. Gann loved to write in the abstract style of the Biblical mystics, whom he admired. Much of what is written in the Bible is information about planetary cycles. It is hidden in census counts, symbolic imagery, and heavily coded to escape notice of the casual reader. While one can dig out this material, it takes time, an ephemeris, and a lot of work. Gann had it much easier. What you are about to read is the paper Gann kept in his safe. 

 

Take your time and read it carefully. It’s one of the best papers ever written on the market. 

After you read it, I'll point out some interesting things about it.

 

HERE

 

[...] First, this is clearly the foundation of Gann’s use of the 10 year cycle, and its multiples. Second, this is historically a fairly early use of Fourier sequences, and far more mathematical than just using financial astrology. This is no surprise, since it is well known that Gann was a very good mathematician. It is also a source of many of his ideas that market movements follow geometric rules.

 

[...] It is also quite interesting that Weston actually proposed two different versions of the ten year pattern. The first is his computation, using 50 years of data, of a series composed of 20 , 28, 10, and 14 month components, to which he adds a Venus term. In this system he cites use of heliocentric positions. We'll call this first method "Weston’s Curve’.

A most interesting point made in this method is Weston’s discovery that the planetary cycles tend to slip to synchronize with the earth’s annual cycle. I discovered this in my own work, and was sure it was an original discovery. So much for that vanity!

The second method I call “Weston’s Snowflake.” In it he proposes a sequence of turning points in the Jupiter-Saturn cycle that divides it into 10 irregular parts. Interestingly, Weston claims that this is a geocentric system. We'll show in a moment that it was not. But this “false lead” may have been intended for those whom Weston feared would learn his secret. Gann obviously made good use of Weston’s methods.  

[... Weston used] the 0, 18, 54, 90, 126, and 180 degree points of the Jupiter-Saturn cycle as turns. One can quickly see the problem with using this geocentrically. Almost all of the points are triple points, as the earth moves around the sun, giving multiple views from which to measure the angle between Jupiter and Saturn. The problem becomes one of which points to use.

[...] It took only one look at using this rule heliocentrically to convince me that Weston used it that way. Obviously, W. D. Gann watched these outer configurations to be alert for the deviations they might cause in the Jupiter-Saturn cycle. You are advised to do the same.

Quoted from:
Hans Hannula (1993) - Gann's Greatest Secret.

See also:
L.H. Weston (1921 & 1923) - Being a Treatise on the Geometrical or Chart System of Forecasting in which is explained the principles of the art, and, in this lesson no. 1, giving demonstration with the price curve of potatoes in U.S. 

TPR (2012) - W.D. Gann's Financial Time Table 1784 - 2121.

TPR (2012) - W.D. Gann.

 

Pre-Election Year Seasonal Pattern of U.S. Stock Indexes | Jeffrey A. Hirsch

In 2023 the 15th trading day of June will be Wednesday, 21st - summer solstice.

Reference:

Jeffrey A. Hirsch @ Twitter.

Dow Jones Industrial Average Self-Similarity Charts for 2023 | Sergey Ivanov

1938 vs 2023

Highest Similarity Ratio between 1963 and 2023 - Projected Low of the Year is February 22 (Wed)

1966 vs 2023

1973 vs 2023

1982 vs 2023

2003 vs 2023

2009 vs 2023

Source:

Sergey Ivanov (Jan 24, 2023) via his free Timing Solution Forecasts Telegram Channel. 

See also:

Sergey Tarassov (2003) - Back Testing of Similarity Module.

Sergey Tarassov - Timing Solution Software.

Sergey Tarassov - Timing Solution Community Group.

The Turn of the Year (TOY) Barometer | Wayne Whaley

Jason Leavitt (Jan 22, 2020) - According to Wayne Whaley, the most predictive period of the year is November 19 to January 19. He considers this period to be the single most reliable seasonality barometer of forward stock market returns – so much so that he’s said if he could only make one trade/year based on one indicator, this is the indicator he’d use. Whaley’s goal was to identify what he called the "kingpin of seasonal barometers." He stated: "I implored my computer to take a few seconds to exhaustively study S&P performance over every time period of the year and determine which time frame’s behavior was proprietor of the highest correlation coefficient relative to the following year’s performance."

 

What he found was there was a high correlation between the S&P 500’s returns between November 19th and the following January 19th and the S&P’s performance the 12 months following January 19. And since the 2-month period straddled the turn of the year and the gift giving season, he called it the TOY Barometer [...] if Nov 19 is on a weekend, use the Monday after the weekend, and if Jan 19 is on a weekend, use the Friday before). He only considered the price-only return (no dividends). If the return during this 2-month period was greater than 3%, a bullish signal was given, and the market was very likely to do well over the following 12 months. If the return was 0-3%, the signal was considered neutral, and results were somewhat random and in line with what is considered average. And if the return was negative, a bearish signal was given, and returns tended to be very poor.

 

Since 1950, there have been 36 bullish signals (including the one that just triggered), 19 neutral signals and 16 bearish signals [as of Jan 22, 2020]. Let’s look at each signal group.

Bullish Signals:    The 35 completed bullish signals have led to gains 33 times the following 12 months. The losses were in 1987, the year of one of the biggest single-day crashes in history, and 2018, that year that included a 20% drop during the fourth quarter. The average and median gains of the 12 months following the bullish signals were 17.7% and 15.1%. This isn’t much better than the “all years” stats, but the win rate (94%) is much higher than the “all years” win rate (73%). 

 

Neutral Signals:    There have been 19 neutral signals. The following year was positive 12 times (63%), compared to 73% win rate for “all years.” The overall average and median returns were 6.0% and 7.1%. But among the “up” years, the average and median gains were 14.4% and 9.4%, while the “down” years’ average and median losses were -8.5% and -7.8%. There were several big up years (1995, 1996, 1998, 2003), and two big down years (1973, 1977), so even if there is a neutral signal, there’s still a decent chance the following 12 months will venture far from its January 19 print.

Bearish Signals:    There have been 16 bearish signals. Only 6 (38%) of the following years posted a gain while 10 posted losses – and 6 of those 10 posted double digit losses. The overall average and median returns were -3.6% and -6.0%. The “up” years posted average and median gains of 14.6% and 15.5%, while the “down” years posted average and median losses of -14.6% and -12.9%. So despite the low win rate, when the market does well, it has the ability to do very well, as was the case this past year.

Summary:     

The bullish years have a very high win rate (94% vs 73% for “all years”). The average gain (17.7%) isn’t much higher than the “all years” gain (16.6%), so a bullish signal increases the odds of an up year but doesn’t increase the gain itself. 

 

The bearish years have a low win rate (38%). The gains during those up years (14.6% vs 16.6% for all years) are very good, but the losses during the down years are noticeably bigger than when a bullish or neutral signal is signaled (-14.6% vs -6.2% for bullish years and vs -8.5% for neutral years). So the odds of a down year are much higher, and the losses that follow are much bigger. 

 

The neutral years are mixed. The win rate is 63% (vs 72% for “all years”), with the gains during up years being pretty good (14.2% vs 16.6% for “all years”) and the losses during down years being moderate (a little worse than bullish years but much better than bearish years).

[...] When a bullish signal is in play, odds heavily favor solid gains over the following 12 months, but when there’s a bearish signal, odds favor a down year with a relatively big loss. But regardless of the signal, “up” years tend to be very good.

Quoted from:

 Jason Leavitt (Jan 22, 2020) - Wayne Whaley’s TOY Barometer.

 

See also: 

G. Wayne Whaley (Aug 31, 2012) - Trade less, earn more with Turn of Year timing model.
Steve Deppe (Nov 19, 2015) - Maximizing Returns With Wayne Whaley’s TOY Barometer.
Steve Deppe (Jan 20, 2016) - Whaley’s “TOY Barometer” Sends Bearish Signal To Investors.
Taylor Dart (Jan 07, 2019) - S&P 500: One Study Worth Paying Attention To.
Seth Golden (Jan 19, 2021) - State of the Market: Historic Data Studies Offer A Guide.

Kora Reddy (Jan 20, 2022) - TOY Barometer for the Sensex.

Bryan Hayes (Jan 31, 2022) - As Goes January, So Goes The Year?
Leavitt Brothers (2022) - Wayne Whaley's TOY Barometer.

 

Update January 20, 2023 by TradeTrekker

Range Extension & Contraction - Reversals - Time Cycles | Stacey Burke

Stacey  Burke (Dec 21, 2022) - Cheat Code For The High and Low of The Year (Advanced Technical Analysis).

 

oOo

 

Old Baron Rothschild's recipe for wealth winning applies with greater force than ever to speculation. Somebody asked him if making money in the Bourse was not a very difficult matter, and he replied that, on the contrary, he thought it was very easy. "That is because you are so rich," objected the interviewer. "Not at all. I have found an easy way and I stick to it. I simply cannot help making money. I will tell you my secret if you wish. It is this : I never buy at the bottom and I always sell too soon."

Jesse L. Livermore

oOo

Quoted from:

Edwin Lefèvre  (1923) - Jesse Livermore - Reminiscences of a Stock Operator.

 

See also:

 Stacey Burke (2022) - Best Trade Set Ups Playbook.

Jesse-Livermore.com (2022) - Patterns in Stock Prices - Jesse Livermore’s Trading Methods.

Franklin O. Ochoa Jr. (2010) - Secrets of a Pivot Boss - Revealing Proven Methods for Profiting in the Market. 

Richard D. Wyckoff (1922) - Jesse Livermore's Methods of Trading in Stocks.

 

Weekly Cycle and Market Structure in Gold (1 hour chart):
Daily and Weekly Highs and Lows, Daily and Weekly Pivot Levels, Inside Days, Outside Days,
Daily and Weekly Accumulation-, Extension-, and Distribution-Levels, Breakouts, False Breakouts,
V Patterns, M & W Patterns, Peak Formation Highs and Lows.

The Four Guiding Principles of Market Behavior | Momentum & Trend

Principle 1:     Trend is More Likely to Continue its Direction than to Reverse

With price established in a clearly defined trend of higher highs and higher lows, certain key strategies and probabilities begin to take shape. Once a trend is established, it takes considerable force and capitalization to turn the tide. Fading a trend is generally a low-probability endeavor and the greatest profits can be made by entering reactions or retracements following a counter trend move and playing for either the most recent swing high or a certain target just beyond the most recent swing high. An absence of chart patterns or swings implies trend continuation until both a higher high and a higher low (vice versa for uptrend changes) form and price takes out the most recent higher high.

Be aware that recent statistical analysis of market action (from intraday to 20 day periods) over the last five years shows that mean reversion, rather than trend continuation is more probable in many equities/indices (as shown by more up days followed by down days than continuation upwards). For the current market environment, until volatility returns (as it may be doing now), this rule may be restated, “Trends with strong momentum show favorable odds for continuation.”

 

Principle 2:     Trends End in Climax (Euphoria/Capitulation)

Trends continue in push/pull fashion until some external force exerts convincing pressure on the system, be it in the form of sharply increased volume or volatility. This typically occurs when we experience extreme continuity of thought and euphoria of the mass public (that price will continue upwards forever). However, price action – because of extreme emotions – tends to carry further than most traders anticipate, and anticipating reversals still can be financially dangerous. In fact, some price action becomes so parabolic in the end stage that up to 70% of the gains come in the final 20% of the move. Markets also rarely change trends overnight; rather, a sideways trend or consolidation is more likely to occur before rolling over into a new downtrend.

 

Three Things Markets do:
1. Breakout and Trend.
2. Breakout and Reverse (False Breakout).
3. Trading Range (High and Low).

 

 

Principle 3:     Momentum Precedes Price

Momentum – force of buying/selling pressure – leads price in that new momentum highs have higher probability of resulting in a new price high following the next reaction against that momentum high. Stated differently, expect a new price high following a new momentum high reading on momentum indicators (including MACD, momentum, rate of change). A gap may also serve as a momentum indicator. Some of the highest probability trades occur after the first reaction following a new momentum high in a freshly confirmed trend. Also, be aware that momentum highs following a trend exhaustion point are invalidated by principle #2. Never establish a position in the direction of the original trend following a clear exhaustion point.

 

Principle 4:     Price Alternates Between Range Expansion and Range Contraction

Price tends to consolidate (trend sideways) much more frequently than it expands (breakouts). Consolidation indicates equilibrium points where buyers and sellers are satisfied (efficiency) and expansion indicates disequilibrium and imbalance (inefficiency) between buyers and sellers. It is much easier to predict volatility changes than price, as price-directional prediction (breakout) following a low-volatility environment is almost impossible. Though low volatility environments are difficult to predict, they provide some of the best risk/reward trades possible (when you play for a very large target when your initial stop is very small – think NR-7 Bars).

Various strategies can be developed that take advantages of these principles. In fact, almost all sensible trades base their origin in at least one of these market principles: breakout strategies, retracement strategies, trend trading, momentum trading, swing trading, etc. across all timeframes.

 

Concept Credit for arranging the four principles: 

Linda Bradford-Raschke (2000) - Swing Trading and Underlying Principles of Technical Analysis. 

In: Rick Bensignor (2000) - New Thinking in Technical Analysis: Trading Models from the Masters.

 

See also:

Richard W. Schabaker (1932) - Technical Analysis And Stock Market Profits: A Course In Forecasting.

Robert Edwards & John Magee (1948) - Technical Analysis of Stock Trends.

Arthuer A. Merrill (1980) - M&W Wave Patterns.

Peter L. Brandt (2011) - Diary of a Professional Commodity Trader.

Aksel Kibar (2021) - Three Types of Breakouts. 

Stacey Burke (2021) - Weekly Template - Three Things Markets do.

TPR (2022) - The Bullish & the Bearish Market Maker Cycle.
TPR (2022) - Daily Range = Accumulation + Manipulation + Expansion + Distribution (AMD).
TPR (2022) - Daily and Weekly Market Maker Cycles.
TPR (2022) - 3 Bar Patterns- The Smallest Fractals of Market Structure.

 

 

 

Year-End Rally, January Influence & Trend For The Year | Jack Gillen

Jack Gillen (2009) - The Sun's position in relation to the stock market can show trends that are more or less active for each year, as the Sun degrees are generally fixed — they fall on about the same date every year. This is why some periods of the year reflect more of a pattern. This means that the Dow Jones Industrial Average will have similar to the same patterns at different sensitive points throughout each year. 

 

 

As an example, Iet’s take the natal chart of the NYSE and the U.S. chart. In the NYSE chart we find Venus, a prominent planet, along with Jupiter, relating to moves of success. The Sun is trine Venus at 5 degrees Taurus with the Sun at 5 degrees Virgo or 5 degrees Capricorn. This would relate to a sensitive point from the transit of the Sun to the NYSE chart. But in the US chart we have Jupiter at 5 degrees Cancer (the opposition of Cancer is Capricorn) so the transit at 5 degrees Capricorn would affect the market during that orb which would last from 5 degrees through 9 degrees, a 4-degree orb. This orb is in effect around Christmas and has become known as the year-end rally. The percentages are thus strongly in the favor as far as the Dow Jones coming up on the plus side from Christmas Day to New Year's Day. This trend is more or less dominant year after year.

 

[...] Regarding the trend for the year, January can give a good indication because of the later degree sensitive points (Venus in Taurus, and Mars and Neptune in Virgo). This means that January can indicate what the eleven months ahead are going to be, bearish or bullish. Research reveals the success rate to be about 80 percent. This does not work when there are crash periods, certain sensitive zones activated in panics and crashes. This will bring some turmoil, as will Saturn going through Capricorn, which also indicates delays. This is very helpful in determining what an individual stock will do, but there are three factors you need to learn in order to determine which stock to start with for the year. In most cases it’s better to buy a stock at the beginning of the year and ride with it because you can get a pretty good indication of the January influence.

Why is the January influence so important? Astrologically speaking, there is the trine aspect related to the year-end rally period. But it’s more than that. We have Venus at 5 degrees Taurus, Mercury at 23 degrees Taurus and the Sun at 27 degrees Taurus, and Mars at 18 degrees Virgo. These points are trine Capricorn. So January is important because there is a grand trine, a configuration that occurs when there arc three planets, each 120 degrees apart. As the Sun leaves the 5 degree Capricorn point that relates to the short rally it moves on to a trine to the NYSE Mars at 18 degrees, the NYSE Mercury at 23 degrees and NYSE Sun at 27 degrees. So this is why January is important in anything related to the Dow Jones Industrial Average. The trine also occurs in the U.S. chart with Neptune at 24 degrees Virgo and the Part of Fortune at 25 degrees Taurus. But the opposition to planets in Cancer show a turning point: and Capricorn rules government. These influences can be seen from about January 9 through January 18, as the Sun transits the pertinent degrees. If the market shoots up in January, it will be up in December; if it’s low in January, then it's going to be low in December, at year's end.

Quoted from:
Jack Gillen (2009) - The Key to Speculation on the New York Stock Exchange (2nd. Ed).

 

See also:
TPR (2018) - Jack Gillen's Sensitive Degrees of the Sun.

The Moon-Stats | Jack Gillen

Jack Gillen (2002) - There is a Moon statistic that falls into the 70 - 100 percent group but is closer to the 70 percent group, and that’s the Moon’s transit from Virgo to Pisces. 

 

Virgo to Pisces Moon Cycle 2019 - 2026

 

Therefore, if you are looking to go long with a stock it’s best to start during this period. For instance, in the year 2003, on the tables we have January 21st - February 3rd. This is indicating that at the closing price of January 21st would represent the Moon in Virgo, and the fact that you can have a big drop in the market with the Moon in Virgo, is the reason this is based on the closing price. Therefore, by going long during this period it is indicating to you there is a 70 percent chance that on February 3rd the Dow Jones Industrial Average will be higher [...] and if you have a stock you want to short, your best chance would be from the sign of Pisces to Virgo.
 

Quoted from:
Jack Gillen (2002) - AstroStats for the New York Stock Exchange.

 

See also:
Jack Gillen (2009) - The Key to Speculation on the New York Stock Exchange (2nd Ed.).
True-Node.com (2022) - Online Ephemeris Generator.