In my forthcoming book, The Lost Science, I devote a chapter to a look at the lunar cycle of 29.5 days. The connection between the lunar cycle, mathematics and the markets (via human emotion) is humbling. In particular, if one takes the Fibonacci Sequence, 1, 1, 2, 3, 5, 8,13, 21, 34, 55, 89, 144, 233 and so on and then takes the square root of each of these terms one gets 1, 1, 1.41, 1.73, 2.24. 2.83, 3.61, 4.58, and so on….
Now, treat each of these terms as a lunar cycle and convert into days (or years). That is, 1.41 lunar cycles is 1.41 x 29.5 = 41.8 days. Likewise, 4.58 x 29.5 = 135.3 days. On a larger scale, the Fibonacci term 4181 has a square root of 64.66. Taking 64.66 and multiplying by 29.5 yields 1909.5 days or 5.2 years.
Next, apply these time periods to a stock chart, commodity chart or index starting from notable highs and lows. See what happens. You might be surprised.
As an example, the chart embedded herein is the Goldman Sachs Commodity Index dating back to the 1990s. The chart is a monthly one.
I have outlined several time frames on this chart using the above mathematical technique.
Observe that the significant swing highs and lows on this Commodity Index align very well to the lunar math.
As for right here and now, this Commodity Index made a notable low in early 2009. We have since seen 50.83 lunar cycles elapse. Have we hit support? Or, will we have to wait until 64.6 lunar cycles have elapsed.
All very interesting and mind-bending stuff that helps you look at the markets in a way that most traders and investors are not….