Dec 28, 2015

Update December 28, 2015



The possible stock market turn dates for the first quarter of 2016 are:

Based on astrology:
  • 8-2-2016
  • 23-3-2016
Based on day counting:
  • 29-1-2016
  • 9-2-2016
  • 22-2-2016
  • 9-3-2016
  • 28-3-2016
Bradley dates:
  • 5-1-2016
  • 1 to 6-2-2016
  • 11-3-2016
Notes:
·         I defined the dates based on astrology and on day counting myself. The Bradley dates are taken from external sources.
·         Ideally, a turn should take place within a period of 3 trading days before/after a listed possible turn date, and not earlier/later.

Possible reversal dates for 2016 - astrology



Analyzing the planetary events in 2016, I think the following dates are possible reversal dates for stock markets. I usually limit the number of astrological turn dates to 8. However, this year I found it really hard to limit my list of possible turn dates to 8 and I will list 9 dates. These are:

February 8
March 23
April 11
April 22
June 3
September 10 - 16
October 16
November 24 - 30
December 24

For the sake of completeness, the dates that were on my initial list and are not on the final list, are: March 9, May 26, and June 13.

Trading examples


When trading, I combine my expected possible turn dates with an indicator. I make a trade when the indicator lines cross AND the move started within the timeframe of my expected turn date. I use an orb of 3 trading days on both sides.  For example, if October 20 is listed as a possible turn date, any turn should take place within the period of October 15 – 23.














See the following examples taken from the period August – December 2015:
Expected turn dates:
  • August 3
  • September 6
  • September 29
  • October 10
  • October 17
  • November 19
  • December 10

Chart:




Signals:

Date
Signal
August 11
Indicator gives a short signal. The move started on August 6, which falls inside the orb of 3 trading days of the August 3 possible turn date on my list. So there is a trading signal AND the move started within the timeframe of a possible turn. Open a short position and hold until the indicator crosses in opposite direction. The indicator crossed in opposite direction on September 7. Close the position. Using end of day prices, this gives a winning trade of 1185 index points. I only trade at the end of the day to avoid being surprised by intraday exaggeration.
September 7
Indicator gives a short signal. The move started on August 24. This date is not on my list of possible turn dates, so I don’t take any action.
September 22
Indicator gives a short signal. The move started on a date that falls within the timeframe of a possible turn date on my list (September 6). I did not trade this signal. The signal came quite long after the effective turn date on September 9, and it was very close to another expected turn date: September 29.
October 5
Indicator gives a long signal. The move started on a date that falls inside the timeframe of a possible turn date on my list (September 29). Open a long position and hold until the indicator crosses in opposite direction.
November 10
Indicator gives a short signal. Close long position. The move started on a date that is not on my list of possible turn dates, so I don’t take any action.
December 3
Indicator gives a short signal. The move started on a date that is not on my list of possible turn dates, so I don’t take any action.

Remarks:
From mid-November to the beginning of December, the indicator lines run almost horizontally, and hardly separate from each other. This is not a good trade sign and it should be better not to trade.

Results of the expected turn dates:

August 3
A turn took place within the timeframe and the indicator gave trading signal.
September 6
A turn took place within the timeframe and the indicator gave trading signal, but the signal was very late after the date of the turn, and very close to the next possible turn date. Better not to trade.
September 29
A turn took place within the timeframe and the indicator gave a trading signal.
October 10
No trading signal within the timeframe.
October 17
No trading signal within the timeframe.
November 19
No trading signal within the timeframe.
December 10
Not known yet.

One could call this a refined method of trend-following trading. I don’t act on all trading signals, but only on the ones that started within a certain timeframe. However, this also means that I sometimes miss a profitable trade because the timeframe was not on my list. Not all trades will be winning trades, and sometimes I miss a trade, but this is the trading method that suits me best. In these examples, a day chart is used, but you can also use another timeframe.
 

The problem of the timeframe

The timeframe technique can be confusing when a turn occurs early and another turn occurs later on within the same timeframe. See the example below. There are no indicators displayed but it serves as a good example. The expected turn date was November 17, indicated in orange.
There is a bottom on October 13, two trading days before the possible turn date. The market rises, and on October 19, the trader might be very confident that the turn has already taken place. However, the market makes a top on October 20 and then drops. What does the trader think on October 24? The market made a bottom and a top within the timeframe. Eventually the market rises again and it turned out that the main turn was the bottom on October 13. Nevertheless, on October 24 the trader was very unsure about the direction.