RBS Prop Trading Desk: Sheer Lunacy Staring at the Heavens
Hey all, a real cool read that I'm surprised hasn't appeared on ATS yet. At least I couldn't turn it up in a search! The title is a weird bit of
doublespeak, given the article if anything ascribes, to the heavens, a source of order, quite opposite of lunacy, but doublespeak from bankers is
surely nothing new, no?
The doc is "research" (marketing) material published by some blokes from the prop desks at RBS. They do a bit of correlation on major equity
indexes vs. moon cycles and model out a trading strategy based, more or less, on buying on the new moon/selling on the full. They provide charts
illustrating the result of this strategy, and it may shock you!
Figure 2 presents the study
of S&P 500 index versus moon phases for the period since 1928 till 2010. Having
invested £1,000 in S&P in 1928, by now would outcome in holding £63,864 worth
portfolio, while by implementing the proposed moon trading strategy, the value
of portfolio would have been £1,502,689.
So as you pick your jaw off the floor, try not to think of all that time reading your horoscope and the big nothing you have to show for it, perhaps
except for an overcomplicated love life. Ha.
No doubt many of you are not surprised. Any market-minded ATS reader is likely aware of astrology's strange-bedfellow relationship with the voodoo
science that is market timing. But we do not normally see these trends put into writing by a fairly respectable prop desk and published. This is a
territory more often trekked by the likes of Arch Crawford, whom for the unknowing, spent a good part of 2001 playing chicken little over what he
believed would be a Mars/Uranus driven crash, centered around 10/2001, that ominously came true as a weak market collided with 9/11.
See his newsletter from sept 01, 2001.
The RBS memo covers this Mars/Uranus crash and also alludes to the ongoing Cardinal Cross and squaring of the heavens. Though i am hardly an
astrologer myself, I can say without doubt this alignment has brought to me great difficulty. This is not helped buy my being an Aries/Taurus cusp
(or Pisces/Aries cusp, according to new math).
Regardless of myself, the stock market has been quite bizarre throughout this phase as well. Earnings driven volatility in the equities market is
overshadowing what appears to be a new pattern emerging with gold and a firm second shoulder for 2010 in the indexes. The dropping dollar is also
being ignored and written off to the old market up-dollar down correlation that is obsolete in today's High Frequency markets. And the Cardinal
cross, perhaps not coincidentally, will come to a complete end with the new moon on the night of 08/09/10 (*cough* illumnati number freaks *cough*) a
day before the next meeting of the FRB FOMC. Yes, the meeting that everyone expected, back in the April bull season, would bring the first rate hike
but now is poised to bring another dreaded round of Quantitative Easing.
YOWZA! so much potential.
edit: admin pls feel free to move to diff forum should you deem appropriate
[edit on 3-8-2010 by chaeone86]