Lunatic Humans

Lunar Cycle Effects in Stock Returns is an interesting study by ILIA D. DICHEV , University of Michigan at Ann Arbor - Stephen M. Ross School of Business and TROY D. JANES SUNY at Buffalo first published in August 2001.

They found that strong lunar cycles effect stock returns. Returns in the 15 days around new moon dates are about double the returns in the 15 days around full moon dates. This pattern of returns was widespread across long time frames and across markets. They found it for all major U.S. stock indexes over the last 100 years and for nearly all major stock indexes of 24 other countries over the last 30 years.Further, they found no reliable or economically important evidence of lunar cycle effects in return volatility and volume of trading.

Taken as a whole, this evidence is consistent with popular beliefs that lunar cycles affect human behavior. It seems that humanity in general is more optimistic during new moon than during full moon. Are we, as a species, plain lunatic?