DJIA
Forecast
Signal 1900-1925
Signal 1926-1950
Signal 1951-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


S&P 500
Forecast
Signal 1950-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


NASDAQ
Forecast
Signal 1950-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


40 Year History
Prime Rate
Mortgage Rates
Treasury Rates
CD Rates
Conclusions:

Virtually all Stock Market gains since 1950 occurred in the November through April period.
Five year histories are too short for reliable forecasting.
Introduction:
With September 22 being the date of the Fall Equinox it seems appropriate to evaluate the effect of the
Spring/Fall Equinox Cycle on stock prices. It's power is substantial. The fall and spring equinoxes mark the
beginning of fall and spring respectively. Days and nights are of equal length on the date of either equinox.
Daytime is shortest in the winter on the day of the winter solstice ( Dec 21 or 22). The days lengthen until the
summer solstice, the longest day of the year (around June 22). Then the days shorten until the winter Solstice.  
The spring equinox this year was March 20th.

The proposition that seasons influence the financial cycles may challenge theories that veteran investors have  
formed through years of observation. The evidence presented herein spans more than a century. Please give
this theory your earnest consideration. An objective seeker of knowledge will follow the evidence... wherever it
leads.
1) Historical Summary: The 50 Year, 100 Year and 4 Year Record
Spring / Fall Equinox Cycle - Compounded Returns β
  Jan - Dec
Nov - April*
May - Oct*
1950 - 2004
7.52%
7.62%
- 0.10%
1900 - 2004
4.95%
4.27%
0.68%
2001 - 2004
0.50%
5.50%
- 5.00%
* These are not annual returns. They represent 6 month DJIA returns.
Analysis:
From 1950 through 2004, ALL of the stock markets annual gains are concentrated in November -
April. The average compounded return for the 55 Nov -April periods was 7.62%. The average
compounded return for the 55 May - Oct periods was - 0 .1%.  Dividends were excluded.

From 1900 through 2004, 86% of the stock markets annual gains are concentrated in November -
April. The average compounded return for the 105 Nov -April periods was 4.27%. The average
compounded return for the 105 May - Oct periods was .68%. Dividends were excluded.

From 2001 through 2004 the equinox effect was very pronounced.
4 years is a relatively short period for
statistics on the stock market and will deviate greatly from results observed in longer periods. The reader is
cautioned against making forecasts based  on data from such a short time span. Short periods are often
affected by influences that vanish after just a few years... and the expected market action vanishes with them.  
The volatility of annual returns is evident from the yearly returns that you will find at the end of this article.
Implications:
The Spring / Fall Equinox Cycle is one of many tools that may improve investor's skill in interpreting  the action
of the markets. It provides evidence that market movements are not random... evidence that there are cyclic
forces pushing, then pulling the market... evidence for the timing of  the market's next change of direction.  
However, it is just one piece of a complex puzzle.  It should not be used as a "stand alone" indicator.
SignalTrend's Stock Market Timing System has produced a far greater return of 15% / year. If a cycle is present
from the horse and buggy days through the atomic age, one should consider the probability that it is not a
temporary aberration but an intrinsic part of equity cyclic behavior.

The correlation is too great, too consistent and continues over too long a period to dismiss as mere
coincidence. The century contained war and peace, booms and busts, crises, panics, discoveries and
achievements. It also saw the rise and fall of technologies, industries, empires and ideologies. Man's attention is
drawn to those readily visible events. We tend to attribute the rise and fall of the stock market to those visible
and emotional events which gain the attention of the media.  To the contrary, much of the markets movement
can be correlated with unseen influences like the Equinox Cycle. The effect of the equinoxes is not visible when
viewing one year at a time as it appears to make its mark steadily and without fanfare. It's effect is often masked
by visible and supposedly dominating forces which rise,  fall and then are replaced by different and opposing
forces. The effect of the equinoxes on the market can only be observed when analyzing many years at a time.
Some events can be more clearly seen from a distance. This is one such event.  

No attempt will be made presently, to explain why the apparent correlation between the equinoxes and the stock
market exists. Scientific, political, commercial, biological and  psychological influences are some of the
possibilities.
β
Compounded Return (also called Internal Rate of Return): These figures represent the compounded
return
for the subject periods. They are not average returns. The following will illustrate the difference
between the two:   

If you invest $1000 and have a 50% loss followed by a 50% gain, what is your return for the 2
periods?

Calculation by Averaging:
Averaging the returns indicates that the investor broke even. The average of those two returns is Zero.
(-50% + 50%)/2=0%.

Calculation by Compounding:
The compounded return indicates a 25% loss. ($1000 -50%=$500 remaining at the end of the first period.
$500 + 50% =$750 remaining at the end of the second period. Having begun with $1000 and ended with
$750 after the 2 periods, the investor has incurred a 25% loss. [(750/1000-1)].
Compounding is the
appropriate method in this case.
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Spring - Fall Equinox Cycle
SignalTrend
Signals the Trend... in Stocks and Interest Rates                  Backtested 100 Years !