Short Term Cycle Update - 16th May 2016

The short term cycle up phase just ended. It was a poor period compared to previous months.

I have decided that the +4 days shift that I mentioned months ago needs to be added permanently. The low came on 6th May and the end date of green =4 days is 19th May. I will add the extra 4 days and follow that instead.

Time cycles are not fixed and do move over time. This is most pronounced in short term cycles.

Fortunately for me I managed to get +62 points trading the FTSE with long positions during the green phase (after costs and dividends). I would have liked more but I feel this is a good result given the FTSE actually fell -49 points.

Sy Harding - Sell in May Signal Given

Sy Harding was the author of the Street Smart Report and also wrote two books on stock markets. Sy introduced his seasonal MACD strategy in his 1999 book, Riding the Bear. His seasonal MACD strategy combines the six month seasonal cycle from the Stock Traders Almanac and momentum using MACD. MACD is used to confirm or trigger bullish and bearish signals. According to the Stock Traders Almanac, using MACD greatly increased the profitability of the seasonal system and reduced risk.  

Discovered by Yale Hirsch, founder of the Stock Trader's Almanac, the six month cycle defines a bullish cycle running from November to April and a bearish cycle running from May to October. This is where the phrase “sell in May and go away” comes from, it is also referred to as the Halloween cycle.

Sy Harding’s buy and sell rules are as follows:

Buy Signal:

1. Buy on October 16th if MACD is bullish.

2. Wait for bullish MACD signal if MACD is not bullish on October 16th.  

Sell Signal:

1. Sell on April 20th if MACD is bearish

2. Wait for a bearish MACD signal if MACD is not bearish on April 20th.

I like these rules as they are simple. Sticking to them however is not!

Sy Harding died in April 2015 and so his report and seasonal timing signals are no longer published. The chart below shows that a sell signal was given on April 22nd 2016.

DJIA & FTSE 100 Short Term Cycle Update 17/4/2016

This was a very good green period. Both the DJIA and FTSE 100 were up over 150 points. I am still unsure about the 4 day shift and continue to monitor it, however I exited my longs last week.

I am up 1975 points since I started trading this system on 29 Sept 2015 (using FTSE 100 CFDs), just a little ahead of the 1518 that the short term cycle produced. I don't trade it exactly, but look to enter longs at the end of the red period/beginning of green period.

DJIA & FTSE 100 Short Term Cycle 10/4/2016

The DJIA was broadly flat from 20/3 to 4/4 gaining only 0.77% (135 points). The FTSE 100 lost 0.4% (-25 points) during the same period.

Adding on the four days that I mentioned as a possible shift in the cycle, the DJIA was still flat from 24/3 to 8/4 gaining only 0.42% (74 points). The FTSE 100 gained 0.09% (5 points) during the same period.

I want to see what the difference is during the positive periods over the next two cycle before I change the short term cycle dates.

DJIA & FTSE 100 Short Term Cycle 18/3/2016

The Dow gain was excellent but the FTSE disappointing, both positive though.

As per the last short term cycle post, the cycle seems to have shifted by four days so I am watching to see if we get a high on 24th March 2016.