Is there a correlation between sunspot activity on the sun and the stock market? Yes. Further, if such a technical theory has a spokesperson who says it with confidence and a track record, people listen. However, for me personally, the correlation has no meaning. I would also imagine for a serious stock traders, it is more of a coincidental, but, let the fact be told there is connection and a good one at that. That is the purpose of this post, to look at the correlation.
- Upward trending market are observed – when sun spot activity and solar intensity is high, there is usually a bull market.
- Downward trending market are observed – when sun spot activity and solar activity is low, there is usually a bear market.
- Sunspots and social trends – sunspot watchers point out solar activity affects human mood and emotions, they contend using Occam’s razor it is a good hypothesis. I believe there is no way to make a meaningful comparison and it is coincidental.
- As an economist – who is a fan of Austrian economics and social behavior, there is no way quantitatively to predict human action that simply, if at all, based on an exogenous variable from the cosmos.
The next major stock market crisis in 2013
This is according to former Goldman analysis and current stock market prognosticator and technical analyst Charles Nenner believes based on solar trends we are in for another big drop in two years. Charles Nenner has been right in the past mind you, most not worthy about 2007, perhaps the only reason he has any attention.
- Based on solar activity he believes the stock market will muddle through the next couple of years until a drop in 2013.
- You can explore NASA website yourself and read about solar activity trends and the stock market , OK maybe they do not mention equity trends.
The following video is interesting to watch generally, not just about money-making.
Do what you like with the information, consider it maybe one more arrow in your quiver or ignore it, but I personally think market trends are hard to predict using any methodology, especially when expectations are factored in. This is why I prefer to look at the trend line as a whole and then drilling down to quantitative picks. On the other, hand I am writing about it as it sparks my curiosity a bit. In some fantasy world, I would love to think like with Elliot wave or a Fibonacci sequence numbers there is an easier way to make money buying and selling stocks (I would never ever, go for something like astrology and the stock market). But I always beam down to reality and return to the brick and mortar methods like outlined by Stan Weinstein or quantitative research companies.
So my question to you is, do you feel Wall Street is influenced by powers in the universe unseen or do you believe like Hans Solo in Star Wars IV ‘ who boldly states ‘ There’s no … energy field that controls my destiny’?