If the U.S. market would have been open on President's Day, there would have been a rally. But, as the one day passed, things are more uncertain on Tuesday. To be sure, there are all kinds of things on the minds of investors that can lead to such volatility, subprime, tight credit, a highly contested U.S. Presidential primary season, and of course the ongoing war against the jihadists, as well as the usual give and take with OPEC, Hugo Chavez, and so on. So, what happens then, if you throw a lunar eclipse, such as the one due on Wednesday into the mix? The answer is that no one really knows, except there is some loose association between such astronomic, and astrologic events and volatile behavior in humans, including stock traders. The most widely quoted such event was the lunar eclipse that occurred in August 2007, some two months or so before the stock market crashed. According to Arch Crawford, the leading proponent of Astro cycles and their influence on the stock market, lunar eclipses tend to be shorter term influences on the markets than solar eclipses, yet, he is convinced that the lunar eclipse in August 1987, triggered the stock market crash. Crawford, in an interview in 2005 on TradingMarkets.com noted: 'There are 3-5 eclipses per year. Around the time of the 1987 crash, The Wall Street Journal ran an article about a guy who had come up with a Mayan calendar date that was very important, and that was supposed to be August 17 and all the new new age people were going to sacred sites and dancing and drumming and praying and meditating and doing what they do. It was called the "Harmonic Convergence." It was supposed to be this Mayan date. Well I looked at this date and I didn't see anything . I looked forward and here seven days later was the tightest 5-body conjunction in at least 800 years and they were all visible bodies. And I said "that is what the Mayans were talking about." I said "this market will peak on August 24, give or take three days, after which we will have a horrendous crash." The market peaked at Noon on August 25 and it dropped and dropped and it stopped and turned violently on the day of the solar eclipse on the Fall equinox and it had the biggest up-day in history, to that date, in points. It broke down in the morning, scared the heck out of traders, turned around and had the biggest up-day in history. Then it rallied for two weeks; at the top of that rally we had the biggest earthquake in Southern California in at least seven years and two days later we had the lunar eclipse, which was the biggest down day in history to date. So the lunar eclipse touched off the earthquake." The way this is supposed to work, is this: planetary alignments and Universal events, affect the emotion of human beings. The larger the event, the greater the opportunity for emotions to be affected. As Crawford saw it in 2005: "These are things that act on emotion and it depends on what markets are moving emotionally at the time. Another thing I discovered in calculating these cycles was the Mars/Uranus cycle and it's just about a two year cycle. The market does not crash every two years but every crash that's taken place in the last 100 years took place in the same 40% of that cycle...every one. So I watch those periods whether we are technically weak or strong, whether we are set up for a possible bad time or not. I said on September 4, 2001 "this market may crash by October 5." The week after the towers fell we had the worst percentage decline since the fall of France in 1940. I also said that there was an event--I think it was Mercury changing direction on the Fall equinox which was September 21--and I said that may make that timeframe more important than normal, and that was the low actually, the 21st--within one day I think Friday was the low and the equinox was Sa turday morning. Also, in that Sept ember 4, 2001 letter I said the United States will be at war around the weekend of the 7th or 8th of September." So what does Arch think about the current market? On the front page of his web site, www.crawfordperspectives.com, is the following, dated January 22, 2008: "Look for news of worldwide import to further exacerbate and/or accelerate these negative emotions. We are also concerned about market reactions to the Eclipse Series on the evenings of Feb 6 & 20." Conclusion Is Arch Crawford a reliable source of information? Let's just say that Arch has had some successes, although he is generally bearish about things. Do we believe in Astro Cycles? Not really, but we don't discount their potential effects on the markets and the world. If there is a connection between the Universe and its inhabitants, which no one has really proven or disproven, this kind of stuff would makes sense. After all, there is now scientific proof that the Universe may have an invisible skeleton made up of dark matter and dark energy. It is theoretically possible that this is the thing that connects everything. So if you can allow for that kind of logic, then Astro Cycles are plausible, although not often reliable as a trading method. So what do we know? Well, if you look around, it's not hard to see that the markets are at a critical juncture, as the S & P 500 is trying to form a bottom. It also makes sense that if some external event, say of a political nature, like maybe something weird happens when the U.S. tries to shoot down the orbiting satellite, on March 20th, the day of the eclipse, then all kinds of hell could break loose. Are we grasping at straws? Not really, we've been at this so long that we've learned that in a Chaotic Universe, life is generally predictably unpredictable. As they say in less sophisticated areas of the South, "this just ain't a good time to be foolin' around." |
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