Do you think there is a connection between sunspots/solar flares and the stock market as science is discovering? The sun has been very active recently, so has the stock market....how can we understand this connection better?
Often we look for physical ties to the stock market. The stock market is just a collective physchology of the participants. That is it.
There have always been people who are looking for a short cut to make a fortune on the stock market.
The only way you can guage the market is to look at the charts and study the fundamentals......Even the charts and fundamentals are backward looking. They are just a indicator of something that is probable. They arent 100%.
Understand it this way:
There are two particpants in the market.....A buyer and a seller. If the market is rising (or falling for the matter), there is one side that is a winner of the transaction at that instance. (ie the transaction is made by the seller that the stock wont go higher and the transaction is made by the buyer which is opposite the seller)
Any mechanism that would work 100% of the time cant work in the market because everyone would use it. Once again, only 50% can be on the winning side of the transaction.
Solar flares are physical. The stock market is physchological. There is no tie.
As I read your reply, I am reminded of the story of the blind men trying to describe an elephant. Each one is positioned at a different place on the elephant's body. One is holding the tail, another a leg, another the trunk. Each is saying that this is what the elephant looks like, each is wrong because none can see the whole elephant. I am not saying I can see the whole elephant, because I can't. But I can tell you that there is a direct connection between the light of the sun and our psychological states. Ever heard of seasonal affective disorder? Have you seen any of the research on the connection between the economy and the sun?
I am not trying to make light of this. I am not knowledgeable about the affects of the moon cycles and solar flares on the human psyche.
The question I have is this psychological state one that causes consternation, happiness,etc? Does it affect all of us the same way? Does it make us buy or sell stock?
The reason I say this is that the market is very contrived and the fundamentals are man made. They don't follow natural law. If you have day traded you also find that the market (especially first thing in the morning) is based on computer algorithms.
If you watch the market, one stock or can behave totally different from another even when the market is faced with and event like a 400 point drop in the dow.
So if any of the aforementioned events will affect a person's pyschological state, it will only be a small part of many other psychological factors that are prevalent in this person's mind.
I think it is mistake to use solar flares, moon phases or astrology to try to predict the market. If there as a tie (I am not going to argue this), can this tie be a direct predictor of a market direction?
I dont think so but I know what does predict market direction:
The trend is your friend until the end when it bends.
The best predictor of the market is the trend and trendlines. If it has been going up, then it is likely to continue that trend.
The counter trend trader tries to predict the bend. This is hardest way to trade and there more articles on how to trade "the bend". All I can tell you is the counter trend swing trader is often the least succesful trader. I can assure you that there is no easy way to trade the market.
Solar flares would not be a good way either. IMHO
Oh, I wasn't even considering the idea that solar cycles should be used as an investment tool. And I really appreciate your response. I find your observations really interesting and was considering all of the studies that have been done to prove how the thoughts and expectations of researchers affect the outcome of the research. I am thinking this principle might also translate over to the stock market. However, I guess the question is what is affecting our thoughts? Ask any policeman, fireman, critical care or emergency room nurse or EMT and they will tell you that the world is a little crazier during a full moon. If I have a point, I think it is that we have lost touch with our connection to the natural world around us and how it interacts with us and we with it. That's created a pretty dangerous situation for our planet ecologically and economically in my mind. Thanks for the good discussion. I invite you to really look up swara yoga, and to look at how the light of the sun affects our hormonal cycles. Please do consider seasonal affective disorder. These are simple places to begin to rethink our connection to the world around us and see it in different ways that might help us help ourselves.
There's been research done on that. Ditto the moon. I do not know what the results were.
Have you heard of Swara yoga? I know there is a direct connection to the workings of our breathing, brain and hormonal systems related to the cycle of the moon and the rising and setting of the sun. There is plenty of scientific documentation on that....haven't heard about the connection between the moon and the economy, only the sun,. But would welcome a hint as to where to look for more...
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