InvestingSuccess

Archive for January, 2017

As the above image shows, circular motion around the circumference of a circle can be translated into a cosine curve. This is not a new phenomenon. The mathematics relating circular motion to sinusoidal curves dates back to the ancient Babylonians. Our formal knowledge of this branch of mathematics reached a pinnacle with the work of Newton, Euler and others in the 1600s and 1700s.
Fourier

What if we had circles all of varying sizes being translated into sinusoidal curves? What if we combined the sinusoidal outputs and smoothed the outputs into one curve? Such was the question posed by mathematicians such as French thinker Joseph Fourier. His work opened the door to the notion of the Fourier sequence.

The Dow and Gann

The concept of a curve with some pattern to it then takes us into the realm of the stock market. In the late 1800s, Charles Dow was the first to postulate that there appeared to be a repetitive pattern to the Dow Index of 30 stocks. Those that followed, including W.D. Gann, made the connection to planetary motions and periodicities of pairs of planets. This opened the door to a full blown application of astrology and to people like McWhirter with her New Moon analysis.

Harmonics and Astronomy

Thanks to the work of W.D. Gann, it soon was laid down that there was a 20 year cycle behind the action of the markets. This 20 year cycle could be expressed as two 10 year cycles. These 10 year cycles then acted as the fundamental frequency, or First Harmonic. Gann refined this 20 year notion into the heliocentric synodic period of Saturn and Jupiter – which he dubbed his Master Cycle. The actual synodic period of these two great planets is 19.853 years and the half-period is 9.929 years.

Prof. Weston

In 1921 a person identified as Prof. Weston from Washington D.C. further analysed 600 months of Dow Jones data and using Fourier analysis and cosine mathematics he laid down the idea that the Dow Jones could be described by way of 4 (harmonics) cosine curves – a 20 month curve, a 28 month curve, a 10 month curve and a 14 month curve – all blended together.

He went on to describe how the 20 month curve begins in November of the 1st year of the 10 year cycle and another 20 month cycle begins in November of the 5th year of the 10 year cycle.
He said the 28 month cycles began in July of the 3rd and 7th years of the 10 year cycle.
The 10 month cycle begins in November of the 9th year of the 10 year cycle.
The 14 month cycle begins in September of the 10th year of the 10 year cycle.

Let’s test this Prof. Weston notion using the S&P 500. Jupiter and Saturn (heliocentric) were at conjunction in April 1981, thus marking the start of a Gann Master Cycle. Weston says a 20 month cycle should start in November 1981. The following chart illustrates this cycle – November 1981 through July 1983 = 20 months.

Weston says another 20 month cycle should start in November 1985 (fifth year of the 10 year cycle). The following chart illustrates this cycle – November 1985 through July 1987) = 20 months. As the following chart shows, the Weston 20 month cycle started just shortly after a key 1985 low and concluded mere weeks ahead of the a key price peak that culminated in the nasty 1987 crash.

Weston says a 10 month cycle will start in November of the 9th year (1989) of the 10 year half-Master cycle. Note how the end of this 10 month cycle landed within a week or so of a key market low.

And so it goes. This is exactly the type of stuff that I strive to share with subscribers to my Astrology E-Alert newsletter. The 1920s and 1930s were an amazing time. A handful of people with deep astrology knowledge came to understand the cycles that drive the financial markets. Sadly, this knowledge, starting in the 1940s, was swept aside by what I like to call the ‘academic crowd’. People at Yale and Harvard with too much time on their hands started to develop inane theories like the Efficient Market Hypothesis, Modern Portfolio Theory and the Efficient Frontier. Chart technical analysis was poo-pooed upon as being akin to voodo science.   This effort by the academics ended up laying the foundations for today’s modern investment industry. You know – the industry that makes billions of dollars every year by siphoning fees from Mr and Mrs Average Investor who are told to buy and hold as investing is for the long term. The industry that I was a part of from 2002-2007 until I got sick of the bullshit and the fee-grabbing nonsense.

My goal here at InvestingSuccess remains as it always has been – to ensure the science of astrology is not lost. To ensure that Mr and Mrs Average Investor have access to the basics of astrology so they can start to make better market timing decisions to sidestep major market pitfalls.