Beating the Ibex: following Mercury Retrograde

Abstract

Mercury retrograde is an astronomical phenomenon that makes it appear as if the planet has changed direction. It is said that this phenomenon generates chaos in the behaviour of people causing us to be sensitive and more susceptible than normal. This chaos could affect investor sentiment and lead to irrational and therefore unprofitable investment decisions. This article describes an algorithmic swing trading system in the future of the Ibex 35, which takes a short position when entering the mercury retrograde phase. The results of the back test carried out over the last five years show that the System is profitable, and that the sentiment caused by this astronomical phenomenon affects the financial markets.