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I noticed that there are many published research papers about financial astrology. There's also a book published by Wiley: A Trader's Guide to Financial Astrology: Forecasting Market Cycles Using Planetary and Lunar Movements.

Those reading materials are too advanced for me since I am not a finance professional or an astrologer, but I'm curious: how do the movements of moons, planets, stars and other celestial objects affect the stock market?

The theoretical basis of technical analysis is that "past price movements can predict future price movements". What is the theoretical basis of financial astrology? I am sure that it is not "past celestial object movements can predict future price movements" because astronomers are able calculate the positions of astronomical objects far in advance. Such a theoretical basis would imply that stock market movements for the next few decades can be calculated right now, which is nonsensical. This leads me to believe that financial astrologers are using sophisticated methods based on more advanced theoretical foundations. What are these foundations?

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    Are you sure it's not a joke?
    – user253751
    Aug 25, 2020 at 17:05
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    You're being downvoted because many people have tunnel vision. I gave you a +1 because your question is sincere and Arch Crawford and his newsletter is living proof that there may be something to astrology and the financial markets (see my answer). Aug 25, 2020 at 17:40
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    The prices of agricultural commodities have been historically shown to be impacted by the 5-11 year periodic sunspot activity cycle, so, there you go. newscientist.com/article/…
    – user662852
    Aug 25, 2020 at 17:40
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    likely because the word astrology is heavily linked to the pseudoscientific practice of linking the position of stars to personality traits (despite that being patently untrue)
    – illustro
    Aug 25, 2020 at 17:46
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    @illustro Astrology does not need to be a demonstrable physical phenomenom for it to influence markets. Markets are heavily influenced by the people that work in them, and also the value of work done by other people. Those peope have feelings and beliefs - if there is enough common influence from any single event ideology on the pepple that affect it and trade in it, it will influence behaviour of that market. The basis of that ideology does not need to be true, it just needs to influence behaviour. Aug 25, 2020 at 20:34

7 Answers 7

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I don't like to reference other answers In my answer, but there was one item that stood out in the other answer:

Hulbert rated Crawford the country’s top stock market timer a number of times with his biggest win in 2008 when he called the pending crash. He was the top performing stock market timer for the five year period through 1995.

there was a comment that asked:

"He was the top performing stock market timer for the five year period through 1995" How did he do over the 25 years since then?"

So what heppened right after 2008?

This is from January 2010 marketwatch:

We will do everything but guarantee you that stocks will crash worldwide within three months of August first (that is between May 1 and November 1). It is expected that technical market analysis of data generated by current market action will assist in pinpointing most danger/opportunity as critical moments approach. The fate of the world is in the balance

Over the past three years, the letter is up an annualized 8.17% by Hulbert Financial Digest count compared to a negative 5.25% annualized for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

Crawford's given back some ground more recently -- over the past 12 months, the letter was down 9.96% against a 28.3% gain for the total return Wilshire 5000. And over a long career, he's had ups and downs.

Sound like he had a great 2008, but then a very bad 2009. He lost almost 10% while the rest of the market gained 28%.

and by the end of 2010 is was in the list of terrible 10 letters:

Crawford Perspectives, Arch Crawford: -12.4%

So the performance of this method bounces around. Anybody who looked at the great results of 2008 and invested heavily on the advice from the planetary alignment , would have been disappointed in 2009 and 2010.

regarding the 2010 prediction according to marketwatch:

But the opening of Crawford's July issue is definitely the sort of thing that upsets people: "NEVER SEEN ANYTHING LIKE JULY! We mean, of course, the planetary pictures in the sky which are developing towards the tightest harmonic alignments in the most potent areas of the zodiacal circle ever recorded in Earth's written history. These portend increasing and maximizing intensity and rapidity of 'change' on every level of existence: mineral, vegetable, animal, human and spirit. Will Capitalism survive? Will Democracy survive? Will our markets survive? Will governments survive? Will humanity survive? Will Earth survive?

"We don't know, but we'll be SHORT for it!"

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I think that the idea of the stock market and astrology is a steaming load of mumbo jumbo. And yet...

The Hulbert Financial Digest has been tracking the performance of investment advisory newsletters for 40 years. It was acquired by CBS MarketWatch and then acquired by Dow Jones and renamed MarketWatch. I remember it from the 80's, before the internet. It's reputable.

Arch Crawford, formerly of Merrill Lynch, is a financial astrologer who has been publishing a financial newsletter for even longer than that. His advice is based on technical analysis, sentiment indicators and planetary movement.

Hulbert rated Crawford the country’s top stock market timer a number of times with his biggest win in 2008 when he called the pending crash. He was the top performing stock market timer for the five year period through 1995.

Mumbo jumbo or or should you be thinking differently about how Uranus moves?

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    There have also been experiments showing that chimpanzees picking sticks by throwing darts at dartboards do better than some analysts. Aug 25, 2020 at 17:59
  • @DJClayworth - You're equating chimpanzees throwing darts with someone who had the best track record in the country for a five year period (500+ newsletters), had the best one year performance several times, as well as calling the 2008 crash? Despite your cynicism, they're hardly equivalent. Aug 25, 2020 at 18:13
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    @BobBaerker how much of that performance is due to the technical analysis and sentiment indicators over the planetary movement data? (is it even quantifiable) Is some of the planetary movement data based on actual scientific research like the link between the sunspot cycle and crop yields.
    – illustro
    Aug 25, 2020 at 18:20
  • Were his predictions always right, or did they just do "better than average"? (the stock market as a whole is a zero sum game, with some fees and taxes thrown in, someone has to lose in order for someone else to gain)
    – illustro
    Aug 25, 2020 at 18:22
  • @illustro - Even if I followed Crawford, how would I know how much of his out performance was due to the technical analysis and sentiment indicators over the planetary movement data? In fact, how would anyone know? This would be proprietary information and Crawford would have no reason to disclose such information. Aug 25, 2020 at 18:37
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Before going into the financial astrology aspect, you have to step back and look at whether astrology in general works i.e., is there any scientifically sound research work. I have not found any.

Secondly, and more importantly, people who do this kind of stuff (forecasting stock prices based on astrology) are very shady. Even if there was someone who can do it right, there will be thousands more who are there to scam gullible folks and when looking for the genuine stuff you will most likely run into these shady guys which is a big risk.

Thirdly, if something goes wrong, I don't think you can take any legal help unless there is any regulatory oversight which isn't in such kinds of things.

I would suggest you stick to educating yourself about how financial markets work and the underpinning of equity analysis/quantitative analysis/technical analysis etc to understand what market commentators are saying and which views may be more relevant to your investing style rather than look for obscure methods for forecasting stocks movements.

That said, it is good to spend some time on researching new areas/techniques/contrarian views etc. but not let that be your main focus. This way you can keep an eye out for new developments and ideas as well while being safe with your finances.

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  • You're claiming that financial astrology has no basis?
    – user102086
    Aug 25, 2020 at 17:17
  • Nope. I am saying I haven't found any. If you have please share. I try to keep an open mind and not come to a conclusion without seeing any data.
    – Canute S
    Aug 25, 2020 at 17:19
  • The connection you are missing is that while astrology itself is a baseless pseudoscience, there are people who still believe in it nevertheless. Those people might make financial decisions based on their horoscope. And those decisions might then influence stock prices. So there might still be a correlation just because some people believe there is one.
    – Philipp
    Aug 27, 2020 at 11:28
  • @Philipp There is the theory of reflexivity.
    – Canute S
    Aug 27, 2020 at 19:21
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tl;dr: You can make money using financial astrology. You might even beat the market with it.

My father is a physicist. He spent much of his career analyzing data, and when I was a kid he showed me how he could take pretty much any set of linear (non-random) data points, and he could find an equation that would yield those points. I once asked, "But is that really useful? Was matching to existing data predictive of new data points?" He told me, "Sometimes it ends up being predictive, and when it is it's a lot more fun! And then I might get another patent..." (He has over 100 patents.)

Humans are wired to notice patterns and predict future events based on them; it's one of our survival mechanisms. Some people are much better at it than others, and this is true in pretty much all aspects of life. The thing that makes astrology in particular so compelling is the fact that it's cyclical, and there are so many objects with various cycles that you can pretty much match any set of historical data points to something celestial if you try hard enough. But obviously the interesting question is whether or not it's predictive of future data points. Well, on average, in relation to stock markets, the markets are generally increasing, so it doesn't matter that much as long as the decisions it guides you to make do not deviate too far from the norm. You'll make money at approximately the same rate, but it just might be a heck of a lot more fun, especially if you believe in it. And if you do end up beating the market (which you might just have a 50% chance of doing any particular year), who's to say you can't go on to write some books and start teaching it to other people?

If you aren't satisfied by this answer yet, then consider this: celestial objects were set into motion nearly 14 billion years ago. The observable patterns of bodies are well known, and can be predicted from long ago to far into the future. Stock market fluctuations are a direct result of human reactions to corporate decisions, national and world events, and the way the news media reports on those events. If you believe celestial bodies are causing pandemics, technological breakthroughs, acts of war and terrorism, political maneuvers, corporate decisions, and the way the media reports on them, well, then, I promise you, we probably could have known a billion years ago (but definitely 100 years ago), that Jupiter was going to do that interesting thing tomorrow. It doesn't mean it's time to buy more gold.

Further reading in this answer.

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I don't think that I need to provide any citations that astrology is nothing but a baseless pseudoscience. With the exception of the tides caused by the moon, the movement of celestial bodies has no physical effect on anything that happens on Earth.

And yet, there is a psychological effect! Because any prediction about the stock market becomes a self-fulfilling prophecy if enough people act on it.

Regardless of the lack of any scientifically valid proof that astrology works, there are still people who believe in it. People who might make financial decisions based on their horoscope. And those financial decisions might affect the stock market. So:

  1. Study astrology to predict what horoscopes the astrologers are going to provide in the near future
  2. Estimate what investment decisions people will make depending on the horoscopes they are going to receive
  3. Estimate the price changes on the stock market which will result from these investment decisions
  4. ???
  5. Profit!

But in order for this to provide you with any reliable market forecast, you have to assume that the amount of money invested based on horoscopes is non-negligible compared to all the other factors which affect the markets. And then you have to assume that the horoscopes those investors receive are actually based on the same interpretations of established rules of astrology you are using and not just made up on the spot (most horoscopes are made up). And those are two big if's.

So unless you are targeting stocks of companies which are specifically attractive to investors who actually believe in horoscopes (or rather the even smaller subset who are knowledgeable enough to only believe in "real" astrology, yet are still too naive to understand that there is no such thing as "real" astrology), you will likely not see much correlation between astrology and stock prices.

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Planets, stars and moon shouldn't affect stock market at all, but the sun certainly does.

I suspect that when most people are having their vacations, the stock market returns less because people spend money during their vacations and that's during summer. Northern hemisphere has more population than southern hemisphere, so the the months to avoid should be approximately May, June, July, August and September. During those months, people are converting stock holdings to cash, driving prices down whereas during other months, people are converting cash to stock holdings, driving prices up.

However, that doesn't mean you should sell all stocks in May and wait for winter. There are several problems with timing the market:

  • Even though it may be the average that summer months yield less than winter months (in northern hemisphere), this may not be true for a particular year
  • Stocks have an inherent about 8% annual yield (to calculate this, add together inflation, real GDP growth and dividend yield). The yield in (northern hemisphere) summer is less than the yield in (northern hemisphere) winter, but there's still probably enough yield to beat bonds and money market investments.
  • Selling and buying has transaction costs and spread costs (and usually tax consequences), so it may be better to hold stocks during the northern hemisphere summer period as well.
  • There may be some investors who either don't spend during vacations or their net worth is so much more than what they're spending, that specifically want to be "counter-cyclical" and buy during the summer months when others are selling and sell during winter months when others are buying to take advantage of the stock price variations. So these investors make the effect far smaller than it otherwise would be.

That observation that stocks yield less in northern hemisphere summer is called "sell in May and go away".

The sun also affects stock market in another way: it has a lifetime of about 5 billion more years, so I suspect at 8% annual yield you won't be getting more than 100% * (1.08^5000000000 - 1) return -- which my calculator says is too large number to output.

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For those that are sincerely interested in how astrology might be relevant to financial planning, I'll try to write this in non-astrologer terms.

Because my time is limited, I will not answer critics that astrology is "pseudoscientic nonsense." I've written in other places about why it is not, (my blog specifically) and have publicly argued with these critics in forums like Quora where instead of providing reasoned answers these critics resort to ad hominem attacks, and insults. This is their last resort because they have NO proof of their claims. (And please don't waste my time with Carlson, the supposed Time Twins study that has never been published, or the Star Baby incident. Asked and answered in other forums.)

The Answer:

1.) The planets move in cycles, as one person here noted. Certain financial astrologers have tracked the movements of the planet Jupiter (the planet of expansion) and Saturn (the planet of constriction) as indicative of stock market expansion and contraction. Astrologer Barbara Koval wrote about these extensively in her out-of-print book, Time and Money and how they relate to market cycles. Unfortunately, even for trained astrologers, the material can be dense and you need a thorough grounding in astrology before you attempt to read it.

2.) In my experience, because the planet Pluto is the planet of the rich, money in the markets, and the Plutocracy in the US (Pluto is prominent in the US natal chart in the second house of money,) and the planet of sudden charges, Uranus can shake things up, you need to toss those into the mix.

3.) Even with those four planets and the other transits at the time of the reading, you need something to read them against. These would be in my experience the Dow Downs "natal" chart (the planets as they sat on the inception of the market,) and the Sibley chart of the United States (if you are speculating in US markets.) Also, you need the "natal" chart of the individual company or fund you are interested in. Many astrologers (because many have not had that depth of training) have trouble reading three charts together, let alone four or five.

4.) The interpretation comes from a careful consideration of all the factors. It's not as simple as saying "Jupiter sits in the second house of money in the United States chart so the market will expand. You need to evaluate how the other planets both transiting and natal interact with each other. For instance, the planet of transformation Pluto has tenanted the zodiac sign of Capricorn since January 2008 in the US money sector, and most of us remember how tumultuous that year was. In addition, entrances and exits from one sign to another, or from one house to another in the chart you are studying signal seismic shifts. (I can hardly wait when Pluto moves into the sign of Aquarius in January 2024.[sarcasm])

For instance, when the planet of stability, Saturn, in the sign of constrictive Capricorn crossed the US first house cusp (the ascendant—outward appearances) on February 5, 2018, the US saw a precipitous drop in the stock mark—the lowest of the year. According to Business Insider 2018 had a -4.4% return on stock investment.

It's not enough to say that astrology works in cycles, even though it does to a great extent. You need to look for similar kinds of events within astrological symbolism to make your predictions. Each zodiac sign has a ruling planet, so you look at both the sign and then the planet that rules it to find their influences. And this takes a trained astrologer who has also studied financial markets, and these folks are rare birds in astrology. So it's a difficult study, but not an impossible one.

If you were to seek the advice of an astrologer for finances they would look at your entire chart but pay specific attention to the second (your money house,) the eighth (other people's resources), the planets in those houses, if any, the zodiac signs on the cusps of those houses, and the planets that rule those zodiac signs, and the planets transiting those house. I've been able to reliably tell disbelieving when they would get a raise, or when to start a business, what resources were available to them.

Don't ask me when you'll win the lottery. You'll be disappointed. From what I can figure out you need to be in the area the ruling planets of individual lotteries are passing overhead when the numbers are drawn to win. Even then there is no guarantee you'll be the person winning and not any of the other thousands in the area. If I could get the birthdate of lottery winners, I could make a hypothesis after studying their charts why they won, but that data is not available.

So there is a method in using the planets for financial planning, and it makes sense to astrologers, but I'm afraid it sounds like so much goobley gook to non-astrologers so it's not of use to most of you. Astrology, especially financial astrology is not DIY project, and it's not an easy study.

That's as good as I can explain it.

Credentials: Practicing astrologer since 1986, Astrology Explored blog from 2008 to present, and wrote the e-Financial Times yearly horoscope from 2011 to 2015 until a new editor decided it was too silly a subject to put in their publication.

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    "I can hardly wait when Pluto moves into the sign of Aquarius in January 2024.[sarcasm]" — What's going to happen when Pluto moves into the sign of Aquarius?
    – Flux
    Jul 29 at 16:52

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