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Beware The Ides Of March at Trader’s Narrative




Beware The Ides Of March


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Caesar: Who is it in the press that calls on me? I hear a tongue shriller than all the music cry “Caesar!” Speak, Caesar is turn’d to hear.

Soothsayer: Beware the Ides of March.

Caesar: What man is that?

Brutus: A soothsayer bids you beware the Ides of March.

Caesar famously dismissed the warning saying, “The Ides of March have come”. The soothsayer replied, “Ay, Caesar; but not gone.” That didn’t end too well for Caesar. His last words were reportedly, “Et tu Brute?” - at least according to Shakespeare.

According to the Roman calendar, the Ides are March 15th. So they have come and gone. Then, why am I still nervous?

Even if we ignore the cryptic warning from our quantitatively gifted soothsayer (QuantDNA Spies Exhaustion Pattern) we have this to ponder:

Click to see larger chart in new tab:
March inflection point in market long term chart RMG

As you can see from the chart above (courtesy of RMG Wealth Management) for some reason, March has been a pivotal month for changes in market direction in the past +10 years. Seasonal patterns are well known on Wall Street but this is the first time that I notice the significance of the “Ides of March”.

Or are we seeing patterns where there are none? Like looking at cloud formations and letting our imagination run wild?

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5 Responses to “Beware The Ides Of March”  

  1. 1 Ed Mullins

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    Great find. Thanks.

  2. 2 David Forster

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    A very interesting one - looking at that chart also highlights what an amazing run we have had… If you look at the Midcaps, they have almost run in a year, the same amount we ran from March 03 to May 06.

    Thanks!

  3. 3 Steffen

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    The only thing of possible significance I can see here is that 3 of the 4 *major* turning points of this secular bear market were in March:

    - Top of the last secular bull market, culminating in the infamous dot-com bubble, in March 2000.
    - Final downleg of the 2000-2003 bear market, occurring in the extremely nervous atmosphere just before the Iraq war broke out.
    - The market low last March, with the current bull run starting when Citibank announced a small profit on March, 11, against all forecasts.

    The other points you marked here: This looks very much like seeing patterns when there are none to me. Only my humble opinion, of course.

    To test whether March might be more significant than other months, I pulled up my chart of the S&P 500 of which I have data since 1950. Honestly, I don’t see very much special about March. Of the major turning points during the 1968-1982 secular bear market, none occurred in March.

    The only other really significant “Ides” I found were: March 15, 1962; Last market top before the sharp bear market caused by the cuban missile crisis.

  4. 4 Wayne W

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    My thought was are the pivot arrows selectively chosen to correspond with bottoms and tops in the month of March? I suggest to do so would be misleading. Or are they consistently chosen to correspond with the beginning, middle, or end of March?

    “Is March a pivot or turnaround month?” I decided to do a quick check and see what I could come up with. I divided performance into the N days before the middle of March (Mar 16th) and the N days after the middle of March. I started with N=20

    Since 1950

    If the 20 trading days before March 16 were up, the 20 days after March 16 were 25-16 for an average gain of 0.51%, suggesting a typical 20 day performance. (avg 20 day perf since 1950 is 0.65%)

    If the 20 trading days before March 16 were down, the 20 days after March 16 were 14-5 for an average gain of 2.56%, suggesting weakness prior to the middle of March leads to abnormal gains afterwords.

    It appears to me from these numbers that as suggested if the Market is weak going into March there is a high probability for a bounce coming out . However, the opposite doesn’t appear to be the case. Since the current market is in an uptrend, I’m can’t say how the ‘Ides of March’ applies in 2010.

    If there is interest, I will try to run the above scenarios for 63 days tomorrow. Below are the results for the 20 trading days after March 16 when the 20 trading days before March 16 are down.

    Date Before After
    510316 -01.64 01.85
    550316 -02.47 05.03
    630318 -01.20 05.38
    660316 -05.70 04.56
    680318 -00.41 08.06
    690317 -05.17 02.42
    730316 -00.80 -1.29
    800317 -11.39 00.36
    820316 -04.19 05.99
    850318 -02.60 02.44
    920316 -01.48 -0.08
    940316 -00.66 -4.91
    970317 -01.58 -5.15
    010316 -13.27 02.53
    040316 -03.97 01.57
    050316 -01.82 -2.19
    070316 -04.80 05.88
    080317 -05.44 04.53
    090316 -08.82 11.64

  5. 5 SCKOFTHSFCKINGMRKT

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    Thanks for mentioning this as i have been following it also. Now that you have POSTED it publicly, I’m sure we’re all screwed somehow, someway, sometime soon.

    I haven’t been trading that long….probably intensely for 3 years now. What i do notice is that it is a game when it shouldn’t be. Its accepted when it shouldn’t be. Countless hours are spent in vain, when they shouldn’t be. Productivity is absolute zero for traders, researchers, analysts, etc, when it shouldn’t be. Blatant manipulation, cheating, deception by those in charge, when it shouldn’t be.

    To be honest, I can see what is wrong with america. Its not the country per se. Its not the government. Its not the bankers or the big corporations.

    Its the moronic imbecile citizens who put up with this detestful and wasteful situation.

    For a simple idea of the public investing in companies and the government, it has turned into a filth-ridden and fixed casino. And why is it that way? Because you all believe this is the way it has to be.

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