There are parts of traditional astrology which have a reputation for being unscientific. But for astro-traders, those unscientific features can sometimes provide powerful clues about profitable short-term trades.
When we apply the astro-trading advantage to market analysis and trading, we typically look at things from a geocentric (Earth-centered) perspective. In most cases this is an appropriate approach to take, since as astro-traders we are dealing with markets that are located here on Earth. Even with today's markets linked electronically around the globe, we tend to view market activity through the local filter of our particular location.
This geocentric bias creates some challenges for us as astro-traders, but it also offers us distinct advantages. The challenges are all associated with misunderstandings about the tools and techniques of modern financial astrology; the advantages come through empirical research that can create greater precision and profitability in our trading.
THE SUN IS THE CENTER
The challenges that we encounter are rooted in the fact that the geocentric perspective is a part of an ancient worldview which believed that the Earth is the center of the universe, with the Sun, Moon, planets and stars all revolving around it. But ever since Nicolaus Copernicus published his influential work "On the Revolutions of the Celestial Spheres" in 1543, the scientific community has understood that the Earth revolves around the Sun, and not the other way around, with the Sun as the central point in our solar system.
This discrepancy between the old geocentric view and the more modern heliocentric (Sun-centered) view has led some critics to dismiss astrology altogether, claiming that its unscientific viewpoint invalidates it completely. But today's most skilled financial astrologers are fully aware of the contemporary scientific viewpoint, and don't limit themselves to reciting ancient formulas when they analyze current markets.
In my own work I have found that it's especially useful to combine geocentric observations with heliocentric ones, because this combined perspective gives me more astrological data points for measuring market movements, creating a more robust foundation for back-testing and market forecasting. This approach has become the basis for the forecasting and astro-trading methodologies featured at FinancialCyclesWeekly.com, which have produced a decade-long track record of consistent market out-performance and profitable trading years.
Even so, it's sometimes useful to look at today's markets solely through the lens of the ancient geocentric perspective as well, simply because it reveals planetary phenomena that aren't taken into consideration by heliocentric astrology. The most important of these is the retrograde motion of the planets.
When planets go into retrograde motion they appear to be moving backwards through the zodiacal constellations in the sky. This is only an appearance; the planets don't actually reverse motion, but from our perspective here on Earth that seems to be what's happening. There's a lot of astrological literature on the significance of the retrograde periods of various planets, but what's of particular interest to us as astro-traders are the specific times which mark the beginning and the end of the retrograde periods.
The Retrograde Station is the time when a planet begins its apparent backward motion; the Direct Station is the time when the backward motion ceases and the planet begins moving forward again. The Retrograde Station and the Direct Station are both occasions when the planet exhibits extra strength astrologically, and they are both worth investigating as opportunities for potentially profitable trades.
To get an idea of how this works at a practical level, let's take a look at the planet Jupiter. It's always an important factor in financial astrology, since it is connected in general with optimism, rising market trends, positive results, and business expansion. Jupiter spends about four months in retrograde motion each year; in 2011 its Retrograde Station was on August 30 and its Direct Station was on December 25. More recently, Jupiter made a Retrograde Station on October 4, 2012. It will resume moving forward at its Direct Station on January 30, 2013. Its next Retrograde Station will be on November 7, 2013, followed by a Direct Station on March 6, 2014.
Because we know ahead of time when Jupiter will make a Direct Station, we can plan our trading strategies in advance. And because we know the exact dates when there were Jupiter Direct Stations in the past, we can use them for highly focused back-testing to determine the probability of market moves.
Not all markets respond to Jupiter Direct Stations in the same way, so we back-test each individual market that we might be interested in trading. Using the date of the Direct Station as a reference point, we determine the optimum trading strategy for that particular market, noting both the probability of a trending move and the average size of the moves that have occurred in the past. Based on this information, we can then make an informed decision about whether or not we want to take a trade around the time of the next Direct Station.
Equities indices in the United States typically respond to Jupiter Direct Stations with mildly bullish moves. For the Dow Industrials, the S&P 500, and the NASDAQ Composite, the back-testing shows that the best trading opportunity is to take a long position one trading day prior to the Direct Station, and then sell three days after the Station. In each case, there's a 70% likelihood of higher prices during that time frame, with the Dow and the S&P going up by an average of 0.6% and the NASDAQ rising by 1.1%. For the Russell 2000 the best trade is to buy four days prior to the Station and then sell three days after the Station, with an 84% probability of prices going up by 0.9%.
GOOGLE AND AMAZON CORRELATIONS
When we look at individual stocks, the back-testing results are surprisingly varied. In the case of both Microsoft (MSFT) and Apple (AAPL), for example, there seems to be little evidence of strongly trending tendencies in association with Jupiter Direct Stations. But Google (GOOG) has a 71% likelihood of going up by 1.8% with a trade that begins one day prior to the Station and ends four days after the Station, and Amazon.com (AMZN) has a 79% probability of rising 1.8% by buying the stock six trading days before the Direct Station and then selling it one day after the Station. With General Electric (GE) a longer time frame is required; the optimum trade begins three trading days before the Direct Station and ends ten days after the Station, with a 73% probability of the stock going up by 1.5%.
Stock markets in other parts of the world also respond to Jupiter Direct Stations in a variety of ways. In Germany the DAX can be bought one day prior to the Station and sold four days after the Station with an 85% chance of rising by 1.7%. The Australian All Ordinaries have a 69% likelihood of rising by 0.4%, buying one day prior to the Station and selling two days after the Station. The NIKKEI is also best traded one day prior the Station through two days afterward, with a 75% probability of rising by 1.1%. In Brazil the BOVESPA requires a long trading period, but entering a long position six trading days before the Station and exiting ten days after the Station has a 78% likelihood of bringing in a 5.4% return. And in Mumbai, India, buying the SENSEX five days before the Direct Station and then selling two days after the Station has a 93% probability of gaining 2.2%.
Jupiter Direct Stations can also trigger bearish reactions in the markets, especially in the precious metals. There are opportunities for shorting Gold by selling one day prior to the Direct Station, and then covering two days after the Station, with a 67% probability of the price dropping by 0.8%. Optimum short sales in Silver and Platinum begin on the exact date of the Jupiter Direct Station, with short-sellers covering their positions three days after the Station. Given that time frame, Silver has an 83% chance of declining by 2.1%, while Platinum has an 89% likelihood of dropping by 3.2% in the same period.
So is trading the Jupiter Direct Station a good idea for you?
That depends on your personal risk tolerance, your skill as a short-term trader, and the kind of discipline you bring to managing a trade once you've taken a position. It is of course important to do your own back-testing before you trade. It's also important to remember that, like any other astro-trading indicator, the strategies suggested by the Jupiter Direct Station work best when the directional trade is confirmed by technical analysis and underlying fundamentals.
THE BOTTOM LINE
When the fundamentals, the technical signals, and the astrology all come together, you can be much more confident that you've got a winning combination. And when that happens at a Jupiter Direct Station, it's an opportunity that you may not want to miss.
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