Market Psychology and Solar Eclipses
May 13, 2013
For those who follow my writings and have purchased my books, you are well aware that I closely follow events in the cosmos that influence human emotion and thereby also the financial markets. After all, our changing emotions are what drive our decisions to buy and sell.
Several times each year, there occur events called “eclipses”. Eclipses can be seen to correlate to changes in human emotion.
An eclipse occurs when the Moon passes between the Sun and the Earth. This happens once each lunar month anyhow, but an eclipse does not always result.
The Moon’s orbit around the earth is not a perfect circle. In fact the orbital shape of the Moon’s path is slightly oval. Thus there will be certain times of the year when the Moon is sufficiently close to Earth that it creates enough of a shadow to interfere with our view of the Sun. This is what is called an eclipse. The following diagram taken from www.hermit.org illustrates the eclipse concept further.
Depending on the distance of the Moon from Earth, we may experience a Partial Solar eclipse in which the Moon does not completely obstruct the Sun, we may get a Total Solar eclipse where the Moon does completely cover the Sun or we may get an Annular Solar eclipse where only a ring of the Sun will be visible to viewers on Earth. Depending on the time of maximum eclipse, the effect on human emotion (and the markets) may vary because viewers in North America may not even get to see the eclipse event.
On June 1, 2011, there was a Partial Solar eclipse visible to people in parts of Asia and in North America. The following daily nearest futures chart of the S&P500 shows this event. Notice how the futures had been pushing higher and then on the date of the eclipse futures suddenly fell. What’s more interesting is how this eclipse event then led to a sustained sell off for several more sessions.
On May 20, 2012 there was an Annular Solar eclipse visible to people in parts of Asia and in North America. The following daily nearest futures chart of the S&P500 shows this event. Notice how futures had been falling in price. Right on the day of the eclipse event, the downtrend halted and the markets turned around and moved sideways to higher for the next 6 sessions.
On May 10, 2013 there was an Annular Solar eclipse event, but it was visible only to people in Australia and New Zealand regions.
The following chart of June 2013 Aussie dollar futures shows how in the hours leading up to the eclipse, the Aussie dollar experienced a bout of weakness. The media tried to explain this selloff with a quickly crafted story of George Soros being short the Aussie Dollar. Unfortunately, the media remains reluctant to embrace a higher plane of thought when it comes to the markets.
There is only one more Solar eclipse event to watch for in 2013 and that will occur on November 3 and will be visible to people in eastern North America and southern Europe.
The financial markets are indeed a dynamic entity fueled by ever changing human emotion which is impacted by planetary events in our cosmos.
Solar eclipses are but one example of how our cosmos can influence our emotions.
About the Author
Malcolm Bucholtz, B.Sc., MBA, a 32nd degree Freemason, resides in western Canada where he trades the financial markets using technical chart analysis, esoteric mathematics and the astrological phenomena outlined in his two books (The Bull, the Bear & the Planets) and (The Lost Science).