Annual One Day Falls, Lunar Phase & the 9/56 Year Cycle

Introduction

The annual one-day (AOD) fall is taken as the biggest percentage one day-fall in the Dow Jones Industrial Average (DJIA) during the year commencing 1 March. It represents the most extreme negative one day shift in market sentiment during a given solar year. In this paper, major DJIA AOD falls (≥ -4.50%) are assessed relative to both lunar phase and secular trends. Additionally, historic US and Western European financial crises clustered with high significance in patterns of the 9/56 year cycle (McMinn, 1986, 1993, 2021). This cycle may have relevance to the timing of AOD falls and is also considered. Favourable findings will contribute to the growing body of evidence:

• verifying a strong Moon Sun influence in market activity; and

• supporting the concept of a 9/56-year panic cycle.

David McMinn

David McMinn completed a Bachelor of Science degree at the University of Melbourne in 1971 (Geology major) and subsequently became a Minerals Economist in ANZ Banking Group Ltd . Since leaving this position in 1982, he has conducted private research on cycles arising in seismic and financial trends, publishing numerous papers on cycle theory, especially in relation to the 9/56-year cycle.

A listing of major AOD falls (≥ -4.50%) since 1886 is presented in the Appendix. This is based on the DJIA for 1896-2021 and the 12 Stock Average index for 18861895. The Moon Sun data was timed at 12 Noon US Eastern Standard Time on the relevant day, with daylight savings time ignored. The abbreviation A° denotes the angular degree between the Moon and Sun (lunar phase), whereas E° is used for the degree on the ecliptic circle. This is to prevent confusion between two different concepts. Lunar phase at 90 A° is equivalent to the 1st quarter Moon, 180 A° the full Moon, 270 A° the 3rd quarter Moon and 000 A° the new Moon. The DJIA data is based on the closing values throughout the analysis with a Chi-Square test applied where appropriate.

Lunar Phase

McMinn (2000) established a lunar phase effect in the timing of major DJIA AOD falls (≥ -4.50%) for the 1915-1999 era (see Figure 1). These falls nearly always occurred with lunar phase in two segments - 085-195 A° and 270-350 A°approximately 180° opposite in the angular circle. The AOD fall in 1930 was the only exception.

By expanding the time frame to 1910-2021, 10 additional AOD falls can be included in the assessment (see Table 1).

Of the 35 DJIA AOD falls (≥ -4.50%) since 1910, only the 1930 and 2018 events did not have lunar phase within the two segments noted in Figure 1 (significant p < .001). No AOD falls took place with lunar phase between 350 and 085 A° (significant p < 0.01). The lunar phase effect did not apply before 1910 or to DJIA AOD falls below -4.50%. It also did not show up in FT-30 (UK) daily data post 1935.

Of the seven major AOD falls in 1886-1910, only two (26 July 1893 and 18 December 1896) had lunar phase in the ranges noted for Figure 1. In contrast, nearly all falls had lunar phase in these ranges for the post 1910 era. It is puzzling why pre 1910 AOD falls did not experience similar lunar phase to falls after this year. This may arise from long term trends in stock market cycles, a proposition for which there is some evidence.

Secular Trends

The Sun’s ecliptic position at the time of the AOD falls is clearly sited in certain segments during certain eras lasting up to about 35 years (see Table 2). From 29 August to 29 October was the most interesting time frame, as AOD falls fell into two distinct eras 1929–1955 and 1986-2008. These contained some of the most spectacular panics in US history – 1929, 1931, 1937, 1987, 1997, 1998, 2001 and 2008 – reinforcing the view that September – October were key months for severe stock market distress. For 20 January to 11 May, AOD falls also appeared in two eras – 1901-1916 and 1988-2021, with one anomaly in 1938.

Sun in Calendar AOD Falls By Era Anomaly

1901-1916

1901, 1907, 1912, 1915, 1916

1988-2021

1988, 2000, 2007*, 2017, 2020

October AOD Falls

1929, 1931, 1937, 1946, 1955

1986-2008

1986, 1987, 1989, 1997, 1998, 2001, 2008

1895, 1896, 1899, 1904, 1928

Adding or subtracting 60 years to/from the dates of major October AOD falls consistently produced corresponding AOD falls between August 19 and December 20 (McMinn, 2010). It was an enduring trend in US financial history with few exceptions. Between 1910 and 2000, major DJIA October AOD falls (≥ -3.60%) were experienced in 1927, 1929, 1937, 1987, 1989 and 1997. They yielded a precise grid based on two and eight years on the horizontal and 60 years on the vertical (see Table 3). The AOD falls had lunar phase in narrow ranges 150–165 A° (before a full Moon) and 310–330 A° (before a new Moon).

Table 3 may be extended on the right hand side by adding 11 years, which would have given AOD falls on November 3, 1948 (-3.65%) and October 15, 2008 (-7.75%).

August - October AOD Falls

Since 1910, some noteworthy trends arise between lunar phase and DJIA AOD falls (≥ -4.50%) occurring in the three months to

28 October (see Table 4). Of the eight AOD falls between 30 July and 15 September, seven took place with lunar phase from 90 to 135 A° (after the 1st quarter Moon), with an anomaly on 11 September 2001 (281 A° after the 3rd quarter Moon). The five AOD falls between 16 September to 18 October had lunar phase from 115 to 195 A° and the three AOD falls between 19 October to 28 October from 310 to 325 A° (a few days before a new Moon).

9/56-year Cycle

The 9/56-year cycle consists of a grid with intervals of 56 years on the vertical (called sequences) and multiples of nine years on the horizontal (called subcycles). Very few DJIA AOD falls showed up in the 9/56-year grid in Table 5. It made up 32% of the complete 9/56-year cycle, but only contained 15% of the falls since 1886 (significant p < 0.01).

Continued...

NB: The 56-year sequences have been numbered in accordance with McMinn (1993, 2021), with 1817, 1877, 1929, 1985 denoted as Sequence 01; 1818, 1878, 1930, 1986 as Sequence 02 and so forth.

The AOD falls were most likely to fall in a pattern repeating 9-9-27 years on the horizontal and multiples of 56 years on the vertical (denoted as a 9-9-27/56 year cycle). The layout in Table 6 accounted for 41% of the complete 9/56-year cycle, but it contained 63% of all major AOD falls (significant p < .01).

Discussion & Conclusions

Since 1910, virtually all large DJIA AOD falls happened with lunar phase in two ranges, approximately 180 degrees opposite in the angular circle 085-195 A° and 270-350 A°. This pattern was not found in the pre-1910 era, possibly due to secular trends about which little is known. AOD falls taking place during a certain epoch tended to occur in certain months of the year (see Table 2). The best example was for September – October AOD falls, which happened in two eras 1929-1955 and 1986-2008.

Various financial phenomena fall preferentially in 9/56-year patterns.

• Major DJIA AOD falls 1886-2021 (see Tables 5 and 6).

• Major US and Western European financial panics 1760-1940 (McMinn, 2021).

• Beginning and ending of DJIA bear markets 1886-2021 (McMinn, 2022).

Clearly, the 9/56-year cycle plays a key role in US trading activity, but the causal mechanism remains a mystery. It has something to do with the angles between the Moon and the Sun on the ecliptic circle, given the importance of lunar phase and the solar year in the timing of AOD falls.

Several lunisolar cycles align very closely at 9.0 and 56.0 solar years, thus excellent correlates arise between the Moon, the Sun and the 9/56-year grid (McMinn, 2021). Any event taking place in the same 56-year sequence will have the lunar ascending node (LAN) sited in a narrow sector of the ecliptic circle with no exceptions (1st harmonic). Events clustering in the 9/56-year grid will have LAN in two sectors approximately 180A° opposite in the ecliptic with no exceptions (1st and 2nd harmonics). For events in the same 9/56-year grid and occurring around the same time of year, apogee will be sited in three ecliptic sectors 120A° apart, with no exceptions (3rd harmonic, McMinn, 2021). There is also a near perfect 6th harmonic between the ecliptic position of the Sun and the angle between the LAN and mean Apogee (McMinn, 2016).

NB: The lunar nodes are imaginary points sited in the heavens where the plane of the Earth's orbit around the Sun (the ecliptic) is intersected by the plane of the Moon's orbit around the Earth. Where the Moon crosses the ecliptic from south to north gives rise to the lunar ascending node (LAN) and from north to south gives the lunar descending node. Apogee is sited in the lunar orbit, where the Moon is greatest distance from the Earth, whereas perigee is the closest distance. The lunar nodes and apogee are key determinants of terrestrial tides.

The findings emphasize the importance of dividing the raw data into meaningful subsets. If all DJIA AOD falls were considered, a lunar phase effect would not have been produced. It was only by assessing AOD falls over -4.50% post 1910 that good correlates were achieved. Alas, AOD falls have been ignored in financial research to date, even though the concept was first published in 2000.

The random walk-efficient market hypothesis was the prevailing paradigm in academic economics during the latter decades of the 20th century. Under this scenario, free markets were believed to be random and efficient. However, correlates between the DJIA AOD falls, lunar phase and the 9/56-year cycle cannot occur in markets that are random or efficient, thereby presenting a major problem. Either the random walk-efficient market hypothesis is wrong or AOD correlates discussed in this paper are wrong. Both cannot be correct - one must always trust the evidence rather than follow the dogma.

According to the Moon Sun Hypothesis, financial activity is mathematically structured in time and moves through cycles of greed and fear in tune with changing Moon Sun cycles. How this process actually functions remains a great unknown. Even so, lunisolar cycles potentially hold a key to making accurate financial predictions years in advance. Hopefully other cycle theorists will be more successful in solving the mystery.

References

McMinn, D. (1986) The 56 Year Cycles & Financial Crises. 15th Conference of Economists. The Economics Society of Australia. Monash University, Melbourne, 18.

McMinn, D. (1993) Financial Crises & The Number 56. The Australian Technical Analyst Association Newsletter, 21-24.

McMinn, D. (2000) Lunar Phase & US Crises. The Australian Technical Analysts Association Journal 20-31.

McMinn, D. (2010) 60 Year Intervals & October panics. Market Technician. Journal of the Society of Technical Analysts 67 13-15.

McMinn, D. (2016) 9/56-year Cycle: Lunar North Node – Apogee Angles. New Concepts in Global Tectonics Journal 4(1) 32-36.

McMinn, D. (2021) 9/56-year Cycle & Financial Panics. Cycles Magazine 50(4) 31-51.

McMinn, D. (2022) The 9/56-year Cycle & DJIA Bear Markets. Market Technician. Journal of the Society of Technical Analysts 92 29-35.

Appendix

DJIA AOD FALLS ≥ -4.50% 1886-2021, listed chronologically

(a) Based on the 12 Stock Average index.

(b) Two almost equal percentage declines were recorded in 1919, as well as in 1940.

(c) The NYSE did not open on the day due to the 911 terrorist attack.

(d) Worldwide stock market panics occurred on 21 January 2008. It was taken as the AOD fall for 2007, even though the US market was closed for the Martin Luther King Jr holiday.