The Puetz Window

I decided this weekend to try and learn more about Steve Puetz and his work with the stock market and how all the major crashes happened around Solar Eclipses and Full Moon as what I posted at the bottom of Fridays’ update really got me interested in the subject.

Doing some searching around the internet I came across an old article by a Michael Harris, which was written on January 11th, 2020 on the website called “Price Action Lab Blog“.  I’m re-posting that entire article below.

The rebound in stocks after the March 2009 bottom will be entering its twelfth year soon. Fundamentals and technicals have disappointed bears in forecasting major tops, and some have turned to idiosyncratic methods, including astrology. A new “Puetz window” presents an opportunity, according to some.

I specifically wrote about a rebound because there is a misconception among many analysts that the bull market started in 2009. As I wrote in July 2016, the bull market started in 2013.

The bull market is actually in its eighth year, although the rebound started nearly 12 years ago.

Nothing has worked in the last seven years, technical or fundamental. There is hope now because of a “Puetz window.” What is that?

Steve Puetz has studied market cycles. Among his interesting works is the analysis of cycles triggered by lunar and solar eclipses. The “Puetz window” opens after the first full moon following a solar eclipse when there is also a lunar eclipse. Does this sound complicated? Here is a chart with the 1987 crash.

After a solar eclipse, there was a full moon and a lunar eclipse. Then the market crashed.

I suspect this astrological pattern was fitted to historical data. It was determined that this astrological pattern was present in about eight major market crashes in the past, including the Tulip Mania.  But in some other crashes, it was not present. But in all eight, it was. Other times it was present, but nothing happened.

Or as the Twitter meme goes, “60% of the time, it works every time.”

For example, it did not work in 2013, despite high expectations.

The bull market continued in all strength, damaging those who placed their short bets based on a “Puetz window.”

One of the problems here is that, as I argue in my book Fooled by Technical Analysis, patterns are neither necessity nor sufficiency.

These patterns are not necessary for a major crash and are also not sufficient. In addition, the win rate is not enough. One must know the expectation from those patterns. A 50-day/200-day simple moving average cross may do better in signaling major bear markets and capturing some of the downside.

I have not done a quantitative analysis for the “Puetz window,” so I cannot present any results. I would not spend any time doing it either. The first article in this blog was triggered by an analysis from a major investment bank about trading moon phases. Please excuse the format because that was my first WordPress article, and click on images to make them visible. In a nutshell, the results were flawed because staying out of the market between moon phases reduced exposure to the bear market. One could have done that with a moving average cross-over.

Next, there is now a “Puetz window” as of Friday, January 10, 2020.

If a crash starts, should we attribute it to an astrological pattern? I think the proponents of the method will argue that we should.

If a crash does not start in 2021, the proponents will say that this time it did not work but all the times it worked, it worked.

But 60% of the time, they will say, it worked every time.

The timing of that article was amazing as we all know what happened the following month that year.. the COVID crash.  So I looked up all the dates for Full Moons in 2020 and below is what I found.

• Jan. 10 - Wolf moon and a penumbral lunar eclipse (not visible in U.S.)
• Feb. 9 -  Snow moon
• March 9 - Worm moon (supermoon)
• April 7 – Pink moon (supermoon)
• May 7 – Flower moon (supermoon)
• June 5 – Strawberry moon and a penumbral lunar eclipse (not visible in U.S.)
• July 5 – Buck moon and a penumbral lunar eclipse
• Aug. 3 – Sturgeon moon
• Sept. 2 – Corn moon
• Oct. 1 – Harvest moon
• Oct. 31 – Hunter’s moon (and a Blue moon
• Nov. 30 - Beaver moon and a penumbral lunar eclipse
• Dec. 29 – Cold moon

I don’t know what’s going to happen this year but there’s is certainly a possible window in February/March of another crash.  The market topped on February 20th, 2020 and there was a Solar Eclipse on December 26th, 2019, which was borderline ” within 6 weeks” as stated on Fridays’ update (that came from some one else).

Moving forward to 2024  Here’s that screenshot again, which I posted on Fridays’ update.

And the one showing the Solar Eclipse too, which this year is April 8th…and again, the notes on it are from someone else.

As you can see, we should NOT rule out another crash happening again this year, but… read closely to what Puetz said:

The “Puetz window” opens after the first full moon following a solar eclipse when there is also a lunar eclipse.

Looking at 2023 below for Solar Eclipses I discover that there isn’t one in December as I’d hoped as then February could be “within 6 weeks” of it.

That means we should NOT crash this March as the Solar Eclipse doesn’t come until April 8th, 2024.  We have to get past that date first according to Puetz… unless it could also be within 6 weeks after the Full Moon and Lunar Eclipse, and BEFORE the Solar Eclipse, which was something I noted on Fridays update from another site that was quoting Puetz.  Remember this article here is NOT from Puetz but someone trying to read his stuff and understand it.

What if he’s wrong about it the Solar Eclipse being first, and then the Full Moon and Lunar Eclipse?  For example, the chart below we have a Lunar Eclipse on March 24th/25th and we also have the Full Moon on March 25th.

That is similar to January 10th/11th of 2020 when there was a Lunar Eclipse and January 10th was a Full Moon.  The difference was the Solar Eclipse was on December 26th, 2019 back then (before the Full Moon and Lunar Eclipse) and today the Solar Eclipse will be after it on April 8th, 2024.

The entire point here is that we do have a window of time this year where a crash could happen.  Possibly it’s “within 6 weeks” prior to the April 8th Solar Eclipse or after it.  That’s a wide window of time of course, but it’s something to keep in mind.