Excerpted from The Encyclopedia of Technical Market Indicators by Robert W. Colby, CMT
Astrology, Financial Applications of Astronomic Cycles
The use of Astrology and Astronomical Cycles applied to analysis of financial markets is complex
and controversial. It is well known that W. D. Gann, a highly influential technician and
trader who practiced in the first half of the 20th century, intensely applied astrology to market
timing, reportedly with remarkable success. Unfortunately, Gann’s methods are not fully
disclosed in his writings.
Astrological literature accumulated over the past 4000 years could fill whole libraries. It
was an important academic discipline taught in major universities until just a few hundred years
ago. Today, astrology has fallen out of fashion on campus, but retains a wide following off
campus.
Few market technicians acknowledge any attempt to incorporate astrology into their work.
Some unknowable number of large money managers take an active but secret interest in the
subject. Arch Crawford and Bill Meridian are the most prominent technical analysts who openly
use astrology in their work.
Arch Crawford has been named “Wall Street’s best known astrologer” by Barron’s
Financial Weekly, based on his many uncanny predictions over the past 40 years. He is famous
for calling the Crash of ’87 months in advance, and he correctly predicted bear markets in July
1990 and March 2000. Crawford also has pinpointed in advance many minor trend change dates,
such as the temporary [gold] bottom on April 4, 2001. And his forecasts extend beyond market
turns. In his newsletter dated September 4, 2001, just seven days before the World Trade Center
was hit in New York on 9/11, Crawford specifically identified two separate Mars aspects that
could lead to war and a steep drop in stock prices in days ahead.
Crawford offers a popular investment advisory service focusing on market timing for the
U.S. general stock market price indexes (primarily the S&P500, the Dow-Jones Industrial
Average, and the NASDAQ 100) as well as futures, including U.S. Treasuries, Gold, Oil, and
Foreign Currencies. For more than two [now three decades as of May ‘06] decades he has
published a monthly newsletter, Crawford Perspectives, 6890 E. Sunrise Drive, #120-70, Tucson,
Arizona 85750, phone (520) 577-1158, fax (520) 577-1110, [Now
www.CrawfordPerspectives.com] [It is also available in German language in Europe] He also
updates a twice-daily phone hotline, [Now (900) 562-7876 or (900) 56-ASTRO] Crawford’s
combination of astronomical cycles and technical analysis to make market calls have earned him
top ratings in market timing in the Hulbert and Timer Digest surveys.
Bill Meridian is an internationally renowned financial researcher, fund manager, and
designer of analytical software, including the first program developed for researching the
correlation between time series data (including stock prices) and planetary cycles. Also, he
compiled an authoritative collection of first trade charts for 1062 individual stocks in the 1998
edition of his book, Planetary Stock Trading. Meridian found that the astrological chart of the
date of the initial trade in a stock correlates with subsequent changes in the stock’s price trend.
His 55 case studies of widely held stocks show precisely how progressions and transits correlate
with changes in price. Meridian’s latest book, Planetary Economic Forecasting, correlates a
monthly index of industrial production with planetary cycles over 200 years. His 1994 study of
the effect of the lunar cycle on the DJIA was confirmed by an analysis at the University of
Michigan in 2001. He also demonstrated a 3.8-year Mars cycle whose signals outperformed the
market. He also demonstrated a 3.8-year Mars cycle whose signals outperformed the market.
Meridian’s studies and market timing advisory services are available through
www.billmeridian.com, or write to Cycles Research, 666 Fifth Avenue, Suite 402, Lower Arcade,
New York, NY 10103.
The following study, updated by Bill Meridian and reprinted herewith his permission,
previously was published in the Journal of the Astrological Association of Great Britain in
1985, NCGR in1986, and Llewellyn’s Financial Astrology for the 1990’s.
THE MARS VESTA CYCLE IN U.S. STOCK PRICES
By Bill Meridian
One of the dominant rhythms in common stock prices is a cycle of approximately four years in
length. Examples of lows in this cycle are 1974, 1978, 1982, 1986, 1990, 1994, and 1998.
This study was first published in 1985 and is updated here. When this cycle first came under
scrutiny, analysts attributed the phenomenon to the four years in the presidential cycle. They
theorized that the government stimulated the economy through the Federal Reserve at election
time to provide the illusion of prosperity and ensure the re-election of the incumbent. However,
closer analysis reveals that the cycle also exists in countries where elections are held every six or
eight years.
The effect of the Mars-
Vesta cycle on the Dow is depicted in graph 1. The graph shows the average tendency for the Dow to move in
percentage terms as Mars and Vesta make a complete cycle. A move from 1.0 to 1.02 represents a move of 2 percent.
When the study was first run in 1985, there was a tendency for the market to top at the 90-degree aspect and to bottom at
the 240-degree angle. Since that time, there have been four more completed cycles. Both the high and the low points in
the cycle seem to have drifted back by about 15 degrees in the last 15 years.
(A x B / (A - B) = Synodic Cycle
(where A and B are the sidereal periods of the two planets involved)
And yet, local media people continue to describe bull and bear markets in terms of their own
economies and local events. They do not see that there is some larger force at work, known as
the principle of commonality. In addition, the cycle existed well before the establishment of the
Fed in 1913.
Some Wall Street veterans contend that the Rothschilds were the first to discover and use the
cycle for profitable trading. Earlier in the last century, a New York investment group reportedly
employed a mathematician to uncover the Rothschild’s secret. More recently, Veryl L. Dunbar
wrote about a 3.84-year cycle in the June 30,1952 issue of Barron’s.
There is a planetary correlation to this cycle. In order to determine the length of a synodic
planetary period in longitude (the length of time that elapses from the conjunction of two bodies to
their next conjunction), substitute the sidereal periods in the following formula:
(A x B / (A - B) = Synodic Cycle
(where A and B are the sidereal periods of the two planets involved)
Substitution of the sidereal periods of the planet Mars and the asteroid Vesta into this formula
gives a cycle of 3.90 years, very close to Dunbar’s 3.84 years. As an aside, I have found that
Vesta is usually prominent in the natal horoscopes of professional stock traders.
The effect of the Mars-Vesta cycle on the Dow is depicted in graph 1. The graph shows the
average tendency for the Dow to move in percentage terms as Mars and Vesta make a complete
cycle. A move from 1.0 to 1.02 represents a move of 2 percent. When the study was first run in
1985, there was a tendency for the market to top at the 90-degree aspect and to bottom at the
240-degree angle. Since that time, there have been four more completed cycles. Both the high
and the low points in the cycle seem to have drifted back by about 15 degrees in the last 15 years.
However, in updating the study, I adhered to the original decision rule that was derived in 1985.
The table in this report demonstrates the results of a mechanical buy-and-sell strategy versus and
simple buy-and-hold strategy since 1903. The rule assumes that the investor bought the Dow
Jones Industrial Average whenever Mars and Vesta were 240 degrees apart and sold them when
the pair was 90 degrees apart. In cases where the aspect occurred more than once due to
retrograde motion, the last aspect was selected as the buy or sell signal.
Following the rule, the portfolio generated 19 gains and 6 losses. A $1,000 portfolio would have
grown to $283,472 versus $117,645 for the buy-and-hold strategy (i.e., purchasing the Dow at the
first cycle and holding to the last). These dollar figures ignore trading costs, interest rates,
dividends, etc.
CYCLE
NO. $ INVEST. BUY-240 DJIA SELL-90 DJIA % CHANGE
1 1000 12/11/03 46 5/11/06 93 102%
2 2016 12/22/07 58 6/3/09 94 61%
3 3256 2/10/11 85 7/9/13 75 -12%
4 2859 2/9/15 57 8/14/17 92 61%
5 4613 2/20/19 83 9/11/21 71 -14%
6 3949 3/16/23 104 10/2/25 146 40%
7 5548 5/4/27 169 10/15/29 347 106%
8 11425 7/8/31 144 11/16/32 63 -56%
9 5005 8/26/35 129 12/9/36 181 40%
10 7022 7/13/38 137 1/4/41 132 -4%
11 6771 9/15/42 106 2/2/45 154 45%
12 9792 10/27/46 166 3/2/49 174 5%
13 10261 11/20/50 232 3/22/53 287 24%
14 12720 12/1/54 384 4/23/56 507 32%
15 16792 1/13/58 440 6/2/60 628 43%
16 23983 1/19/62 701 7/11/64 846 21%
17 28956 1/29/66 984 8/11/68 881 -10%
18 25938 2/16/70 754 9/2/72 969 29%
19 33347 3/22/74 878 9/13/76 983 12%
20 37329 5/21/78 855 10/19/79 815 -5%
21 35565 7/20/82 833 11/13/83 1254 50%
22 53513 5/28/85 1302 12/7/87 1812 39%
23 74501 8/1/89 2641 12/31/91 3169 20%
24 89396 9/25/93 3543 1/21/96 6884 94%
25 173695 1/10/97 6704 1/31/00 10941 63%
26 283472 11/13/2000* 3/17/03
*There are 3 buy signal trines over a period of 1 year: The first is listed in the table. The next two are:May
14,2001 and Nov.10,2001.Mars-Vesta Buy/Sell Strategy Yields: $283,472Buy and Hold Strategy Yields:
$117,645
Thus, the Mars-Vesta cycle outperforms the buy-and-hold by better then two to one. If one
assumes that the funds in the Mars-Vesta portfolio were collecting interest in between the sell
and the buy signals, then the amount would be greater. But then we would have to add dividend
income into the buy-and-hold portfolio. Those who recall the first publication of this study in 1985
may note that the performance of the cycle has improved. Mars-Vesta outperformed by 1.9 to 1
up to 1985. Currently, it is running at 2.4 to 1. All the buy signals since 1985 have been profitable.
The strategy’s most notable failure was a buy into the 1931 bear market when Mars-Vesta was
overpowered by stronger cycles. But the October 15,1929 sell signal kept one out of the crash.
The July 20,1982 buy signal was timely. Most recently, the January 31,2000 sell signal protected
portfolios from the year 2000 turmoil. This study first appeared in the Journal of the Astrological
Association of Great Britain in 1985 and was reprinted by the NCGR in 1986. It also appeared in
Llewellyn’s Financial Astrology for the 1990s without giving credit to the author.•••
Astrology, Long-Term Cycles
According to David McMinn, (Financial Crises & The 56-Year Cycle, Twin Palms, Blue Knob
2480, Australia), 1 56-year cycle has been established in trends of U,S. and Western European
financial crises since 1760 (Funk, 1932; McMinn, 1995). Mills (1867) speculated that the
“mental mood of businessmen tends to run in cycle.” Throughout economic history, generations
of human beings appear to repeat cycles of manic optimism and depressed pessimism. Crises
occur when there is a sudden shift in sentiment from greed to fear. The 56-year cycle correlates
closely with cycles of the sun and moon. It is well established that these cycles have a direct
impact on planet earth and all its life forms, including human beings. The sun and moon directly
impact the following earthly phenomena: gravitational pull causes tides in the sea, atmosphere,
and land surface; earthquake and volcanic activity; weather; magnetic and electromagnetic
energy fields; the four seasons; the 24-hour day; sexual/breeding cycles (human average
menstrual cycle is the same as the synodic month of 29.5 days and the average human gestation
period is 9 synodic months); reproduction, molting, and many physiological rhythms in
mammals are regulated by seasonal changes in the photo period (variation in hours of daylight);
and gravity affects biological tides of bodily liquids in life forms, and that may impinge on
physical functions and emotions. The 56-year cycle appears to correlate with angular
relationships between the sun and moon: the angles 0 deg and 180 deg between the sun, moon,
and nodes repeat to within one degree every 56 and 9 solar years. Perfect correlations exist
between the 36 year sub-cycles and: 1) zodiacal placement of the conjunctions of the sun and
moon’s north node; 2) the moon angles to these sun and moon’s north node conjunctions; 3) the
position of the moon’s north node on a specific date of the year. Major financial crises are most
likely to occur when the moon’s north node is in the quadrants: Aries-Taurus-Gemini and Libra-
Scorpio-Sagittarius. Several variables combine to give rise to complex cyclical behavior.
Specific patterns never repeat exactly but vary and change progressively over long time spans.
McMinn’s ideas presented here were adapted from the Technical Securities Analysts Association
of San Francisco monthly newsletter, April, 1996.
“New evidence Precise Long-Wave Stock Cycles,” was presented by Christopher L.
Carolan of Calendar Research, Inc., PO Box 680666, Marietta, GA 30068,
www.calendarresearch.com. From his position on the floor of the options exchange, Carolan
witnessed first hand the effects of the 1987 crash, which occurred on precisely the same date on
the lunar calendar as the 1929 crash, according to Carolan’s Spiral Calendar. This tool identifies
potential turning points in the stock market that provide highly significant correlations by chisquared
tests. Basically, solar and lunar eclipses offer significant market timing dates, although
not all eclipses have an impact on the market. Tops and panics are associated with eclipses that
occur with a cycle of approximately 36- and 58-years since 1763. Carolan’s Spiral Calendar
enabled him to identify in advance large-but-quick “pothole” declines of 20-30% in July 1998
(the actual drop began on 7/17/98) and on April 14, 2000 which was a selling climax day.
Looking ahead, Carolan identified a potential top in the stock market in December 2001 and a
potential 1987-style panic in July 2023. This is a brief summary of Carolan’s talk given at the
Market Technicians Association’s 25th Annual Seminar in May 2000, adapted from the notes of
Mike Carr, which were posted on the MTA web site, www.mta.org.
It is interesting to note how the same or similar cycle lengths appear in the work of
independent researchers using different approaches. (See Cycles.) |
