Last evening on Bloomberg, I heard a portfolio manager tell the interviewer that he is sensing a cautious emotion on Wall Street right now. He could not explain this emotion other than to say the Yield Curve is pointing to sluggish growth ahead and with stocks fairly ( and in many cases fully…) valued he reckons portfolio managers are waiting for a correction.
When it comes to investor emotion, one phenomenon that I have been watching is the behavior of the Dow with respect to heliocentric cycles of Venus and Mercury. W.D. Gann reportedly also paid strict attention to these cycles.
Embedded in this post are two weekly charts for the Dow Jones Average. I have quickly drawn in some vertical lines on each chart to illustrate the Venus and Mercury heliocentric cycles. You can see that (give or take a couple weeks either side…) there is a curious alignment between these cycles and inflection points on the Dow. Note that I say it is a curious alignment – not a 100% correlation.
So, looking ahead, we may well see some interesting behavior on the Dow as we go into early April which would mark the end of a Mercury cycle that arguably started at the beginning of January 2014. Don’t forget also that in mid April we have an eclipse event that could lend a heavy hand to market action. Looking a bit farther ahead yet, we may see a reaction on the Dow in August 2014 as a Venus cycle wraps up.