Putting stock in the stars
"Astrology is part of our past, but astrologers have given no plausible reason why it should have a role in our future."
I. W. Kelly
On March 15, 2004, astronomers from Caltech, Gemini Observatory and Yale University announced the discovery of the coldest, most distant object known to orbit the Sun. Its orbit is extremely elliptical and it takes 10,005 years to circle the Sun. The team who discovered this object decided to name it Sedna, after the Inuit goddess of the sea.
The discovery of this presumed planet threw the whole astrological profession into paroxysms of petulant disagreement. Some immediately attributed various influences of its existence upon our daily lives, including the recent tsunami. Others are more circumspect and suggest that they would have to spend years deciphering its particular powers and months adapting their software systems before they would be able to comment.
What's your sign?
From ancient times each moving planet was noted to have a relationship with a fixed zodiacal sign. These relationships were neat and straightforward, in that the Sun and Moon ruled one sign each and the five known planets two signs each. The five planets were Mercury, Venus, Mars, Jupiter and Saturn. It is upon the revolutions of these celestial bodies that most astrological prediction is based.
The 'modern' planets were discovered relatively recently-Uranus in 1781, Neptune in 1846 and Pluto in 1930. The trans-Saturnian planets are felt by some astrologers to be irrelevant, while others incorporate the influence of the modern planets in their analyses.
Yet, according to Arch Crawford, publisher of www.astromoney.com, one particular confluence of planets exerts a very powerful influence on stock markets. Since the First World War each time there has been a specific Mars/Uranus opposition, the markets tank. He therefore believes that there will be a substantial sell off before March 23.
Very superstitious
Whether this is just superstitious nonsense remains to be seen, as the well-educated and rational 'experts' are forecasting strong growth, a rising stock market, rising bond yields and a lower dollar. In other words, another linear forecast that is nothing more or less than an extrapolation of last year with a few minor modifications.
The bulls are enamored by the 'fifth year of decades' mantra for the Dow Jones Industrial Index, which, starting from 1897, has never had a down year ending in "5" and gains in "5" years have averaged 38 percent.
Others defer to the market itself and believe that it's behavior in the first few days and in the first month are very significant. There is the commonly held belief that: "As go the first five days, so goes January, so goes the year." Should this be the case then we are definitely in trouble as the DJIA fell by 1.67 percent; the Standard & Poor's 500 declined by 2.12 percent, and the Nasdaq by 3.99 percent in the first week of 2005.
Then we have the January Barometer, which states that the direction the Standard & Poor's 500 takes in January forecasts the direction for the entire year. Yale Hirsch, the original editor of the Stock Trader's Almanac, devised the January Barometer in 1972 and it has been a very effective predictor.
Cycle theory
Others believe that every market is comprised of cycles of various durations. Each of these cycles is constantly ebbing and flowing with one another, much like the currents, the tide, the waves and ripples in the ocean. Sometimes these different cycles are moving together and sometimes they move in opposition.
In cycle theory the trend is defined as the direction of the next larger cycle. For example, if the tide is going out, it does not matter that the smaller degree movements are moving in opposition to the tide. The trend is set by the tide. The same is true for markets.
Interest rates have a cycle of 20 to 30 years. Equity markets have a cycle of 15 to 20 years. If, from 1966, you were out of stocks and in cash for the next 15 years you made money; the high rates of inflation and fixed interest rates guaranteed it. If, from 1982 until 2000, you were in stocks then you made a whole lot of money; during that period all indexes went parabolic. In this period the stock markets advanced without seeing one year where the low of the year surpassed the low of the previous year.
However, from 2000, and from 2005, you should be out of stocks for at least the next 15 years, as the 30-year cycle peaked in 1999/2000. Now all of the long-term cycles have peaked and we are heading for the fateful 2012-2016 time frame when the economic Kondratieff-wave, a predicted 50-year cycle of economic catastrophe and renewal, and the 120-year cycle are both due to bottom out.
This scenario does not preclude the U.S. or, in particular, the European indexes from making one more attempt at sucking in the widows and orphans this year. But should they do so then that will be the largest bear trap in history, reminiscent of the Great Depression but much, much larger.
The revolution of celestial bodies and cycles repeat and they are pointing to the fact that a financial disaster is on its way.
I. W. Kelly
On March 15, 2004, astronomers from Caltech, Gemini Observatory and Yale University announced the discovery of the coldest, most distant object known to orbit the Sun. Its orbit is extremely elliptical and it takes 10,005 years to circle the Sun. The team who discovered this object decided to name it Sedna, after the Inuit goddess of the sea.
The discovery of this presumed planet threw the whole astrological profession into paroxysms of petulant disagreement. Some immediately attributed various influences of its existence upon our daily lives, including the recent tsunami. Others are more circumspect and suggest that they would have to spend years deciphering its particular powers and months adapting their software systems before they would be able to comment.
What's your sign?
From ancient times each moving planet was noted to have a relationship with a fixed zodiacal sign. These relationships were neat and straightforward, in that the Sun and Moon ruled one sign each and the five known planets two signs each. The five planets were Mercury, Venus, Mars, Jupiter and Saturn. It is upon the revolutions of these celestial bodies that most astrological prediction is based.
The 'modern' planets were discovered relatively recently-Uranus in 1781, Neptune in 1846 and Pluto in 1930. The trans-Saturnian planets are felt by some astrologers to be irrelevant, while others incorporate the influence of the modern planets in their analyses.
Yet, according to Arch Crawford, publisher of www.astromoney.com, one particular confluence of planets exerts a very powerful influence on stock markets. Since the First World War each time there has been a specific Mars/Uranus opposition, the markets tank. He therefore believes that there will be a substantial sell off before March 23.
Very superstitious
Whether this is just superstitious nonsense remains to be seen, as the well-educated and rational 'experts' are forecasting strong growth, a rising stock market, rising bond yields and a lower dollar. In other words, another linear forecast that is nothing more or less than an extrapolation of last year with a few minor modifications.
The bulls are enamored by the 'fifth year of decades' mantra for the Dow Jones Industrial Index, which, starting from 1897, has never had a down year ending in "5" and gains in "5" years have averaged 38 percent.
Others defer to the market itself and believe that it's behavior in the first few days and in the first month are very significant. There is the commonly held belief that: "As go the first five days, so goes January, so goes the year." Should this be the case then we are definitely in trouble as the DJIA fell by 1.67 percent; the Standard & Poor's 500 declined by 2.12 percent, and the Nasdaq by 3.99 percent in the first week of 2005.
Then we have the January Barometer, which states that the direction the Standard & Poor's 500 takes in January forecasts the direction for the entire year. Yale Hirsch, the original editor of the Stock Trader's Almanac, devised the January Barometer in 1972 and it has been a very effective predictor.
Cycle theory
Others believe that every market is comprised of cycles of various durations. Each of these cycles is constantly ebbing and flowing with one another, much like the currents, the tide, the waves and ripples in the ocean. Sometimes these different cycles are moving together and sometimes they move in opposition.
In cycle theory the trend is defined as the direction of the next larger cycle. For example, if the tide is going out, it does not matter that the smaller degree movements are moving in opposition to the tide. The trend is set by the tide. The same is true for markets.
Interest rates have a cycle of 20 to 30 years. Equity markets have a cycle of 15 to 20 years. If, from 1966, you were out of stocks and in cash for the next 15 years you made money; the high rates of inflation and fixed interest rates guaranteed it. If, from 1982 until 2000, you were in stocks then you made a whole lot of money; during that period all indexes went parabolic. In this period the stock markets advanced without seeing one year where the low of the year surpassed the low of the previous year.
However, from 2000, and from 2005, you should be out of stocks for at least the next 15 years, as the 30-year cycle peaked in 1999/2000. Now all of the long-term cycles have peaked and we are heading for the fateful 2012-2016 time frame when the economic Kondratieff-wave, a predicted 50-year cycle of economic catastrophe and renewal, and the 120-year cycle are both due to bottom out.
This scenario does not preclude the U.S. or, in particular, the European indexes from making one more attempt at sucking in the widows and orphans this year. But should they do so then that will be the largest bear trap in history, reminiscent of the Great Depression but much, much larger.
The revolution of celestial bodies and cycles repeat and they are pointing to the fact that a financial disaster is on its way.
