Monday, August 27, 2007


A total lunar eclipse is expected tomorrow and I decided to pull up some recent charts of the Dow to see market performance before and after total lunar eclipses starting from 2000 onwards. 4 of the last 5 total lunar eclipses have seen big rallies in the market. It appears markets tend to change direction around the time of these eclipses.

January 21 2000 - Talk about timing a top. Dow made an intra day high of 11,513 before closing at 11,251. The market broke down with the Dow falling to an intra day low of 9,611 on March 8. Close to a 15% gain for anyone shorting the Dow in under 2 months.

July 16 2000 - Weekend. Previous close was 10,812 and the following close was 10,804 with a low of 10,653. Dow rallied to an intra day high of 11,518 on September 6. A 6.6% gain in under 2 months.

January 9 2001 - Dow closed at 10,572. Rallied to an intra day high of 11,140 on February 7. Just over a 5% gain. The market however proceeded to tumble from there onwards to an intraday low of 9,047 on March 22. If one had shorted the Dow on January 9 the gain would have been over 14% in two and a half months.

May 16 2003 - Dow closed at 8,678. Markets proceeded to rally over 24% till the end of the year.

November 9 2003 - Was a weekend. Dow closed the precious day at 9,809 and the trading session after at 9,756. Rallied 10% till the end of January.

May 4 2004 - Dow closed at 10,317. Proceeded to fall as low as 9,827 two weeks later. Rallied as high as 10,530 near the end of June. While there was volatility the markets were relatively flat.

October 28 2004 - Dow made a low of 9,900 and closed at 10,004.Rallied to as high as 10,895 near right before Christmas. A 9 % gain in less than 2 months.

March 3 2007 - Was Saturday and the market was closed. The Dow closed the previous trading day at 12,114 . On Monday, the Dow went as low as 11,973 before recovering to close at 12,050. The markets bottomed out over the next 2 weeks and started a 4 month rally all the way till July. Total gains would have been over 16% for anyone buying the Dow on March 5th (first trading day after the eclipse).

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