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The Jupiter Cycle: Predicting Major Market Reversals

  • Written by Syndicated Publisher 250 Comments250 Comments Comments
    March 1, 2012

    Could the heavenly wanderings of an old Greek god have an impact on world stock markets?

    Is it possible that the position of the planet Jupiter could consistently predict the timing of Bull market tops and Bear bottoms?

    According to recent research tracking 140 years of prices on Wall Street, the answer is a simple: Yes.

    In the Greek mythology, Zeus/Jupiter was head honcho of the Old Gods. The ancient Greek tales, when studied in depth, are Creation stories charting the history of the world.

    And the tales form the basis of the system of astrology still used in the Western world. They also have counterparts in other cultures. In Vedic astrology and the Hindu religion, for example, Zeus/Jupiter has a counterpart in the figures of Guru/Ganesh.

    In both cases, this “king” of gods introduces the concept that one can break free – spiritually or materially. In brief, Jupiter is the symbol of growth and expansion.

    And Jupiter’s cycle through the zodiac shows up a very interesting statistical tendency in stock markets.

    Since the 1870s, Wall Street has shown a distinct tendency to peak while Jupiter is in late Aries/early Taurus … decline into Jupiter in Leo … rise again until Jupiter is in his own primary sign, Sagittarius … and drop dramatically into Jupiter in Aquarius.

    The kneejerk response of most readers will be to dismiss the assertion as superstitious nonsense. It is an understandable, if predictable, response. Most people simply don’t know anything about the complexity of astrology, its history, or the fact that the system of symbolism and prediction is based on observation by literally millions of practitioners over thousands of years.

    It is simply a clearly demonstrable fact that trading The Moods of The Moon – the monthly phases of the lunar cycle – produces steady and reliable profits across almost any long-term timeframe.

    And many of those same dismissive readers will happily fork out bundles of boodle to be trained in Gann techniques, or take notice of the Bradley Model turn dates – without having a clue that both are deeply rooted in astrological aspects.

    But, the proof of the pudding is in the eating and nothing paints a clearer picture than … a picture.

    The chart above shows The Jupiter Cycle at work since the late 1990s.

    It is a monthly of the venerable Dow Jones Industrial Average and shows the statistical tendency worked perfectly at the 1999/2000 top, the 2002/03 bottom, the 2007 blow-off and the March, 2009 bottom.

    The warning signals from the research are clear. If the historical tendency plays out as usual, Wall Street is reaching a peak in early 2012 and heading into a Bear market which could last until mid-2014.

    In fact, the late Aries peak expected by the research data did play out on schedule in May, 2011. You’ll notice the price bars on the DJIA peaked just before the dark green solid bars which identify when Jupiter changed signs to Taurus and that the index is currently challenging that level again.

    Since the May 2011 peak, Jupiter has been moving Direct and Retrograde in the early degrees of Taurus.

    When I first published this chart in my Forecast 2012 early in January, I warned the position of Jupiter allowed a final rally into the first few weeks of March.

    Now, the research shows a statistical tendency … not a cast-iron guarantee.

    While the formula played out exactly from 1999 to 2009, there have been a few times when rallies have briefly exceeded the Jupiter in Taurus limit before diving into a Leo Bear bottom.

    And 1929 was one of them.

    We could consider that the blow-off rally past Taurus was the technical equivalent of “a false break”. And one of the rules of a failed false break pattern is that the reversal is large and sharp, regardless of whether the break is a high or a low.

    The dive into the red Jupiter in Leo bars is as obvious as the recovery rally which peaked as Jupiter again left his home sign of Sagittarius and the DJIA dropped into the first trough of a double-bottom pattern that sparked the multi-decade Bull market into the 2000/2007 peaks.

    The two previous charts have shown exactly how The Jupiter Cycle performed from the late 20s to the early 40s and the late 90s to early 00s.

    What is interesting to observe is how the tendency played out during the great sideways shuffle from the early 60s to 80s … and how similar that period seems to be to market performance since the 1999/2000 peak.

    The comparison with current market behaviour is stunning. This 20-year timeframe last century was marked by sudden Bull rallies and equally sharp Bear plunges in quick succession.

    And while the exact tops and bottoms fell outside the statistical tendency of The Jupiter Cycle, nevertheless there were consistent rallies into the Taurus and Sagittarius periods and sharp declines into the Leo and Aquarian periods.

    Combined, the three charts show why extreme care is needed maintaining Long positions as we go further into 2012.

    • We are moving into the long-term negative tendency of Jupiter moving out of early Taurus and towards Leo, where he will take up residence from the second half of 2014 until June, 2015.

    • We are entering the exact timeframe of another long-range negative astrological aspect – Uranus square Pluto, an aspect which last occurred at the bottom of the 1929-1932 crash – and the first exact hit of that aspect occurs this year in June and will continue until March, 2015.

    On a technical level, Jupiter’s orbit of the Sun corresponds broadly with three and four year “cycles” in the markets. The Old God’s journey through the zodiac takes 12 years.

    On my website – www.theidiotandthemoon.com – I constantly caution my readers against allowing astrological expectations to override the commonsensetechnical conditions shown by the current state of the charts.

    Accurate astrological prediction is as much a skill as it is the result of many years of study and empirical research.

    Nevertheless, it’s why W.D. Gann has a large worldwide following, decades after his death – and why J.P. Morgan had the renowned astrologer, Evangeline Adams, on his payroll.

    “And therefore as a stranger give it welcome.
    There are more things in heaven and earth, Horatio,
    Than are dreamt of in your philosophy.” – Shakespeare

    Images: Flickr (licence attribution)

    About The Author

    Randall Ashbourne is a former journalist and political strategist, author of the eBook, The Idiot & The Moon, which aims to provide newbie traders with the skills they need to start trading confidently.

    While the book concentrates its main techniques on orthodox technical signals, Ashbourne also outlines a lunar cycle trading system he calls The Moods of The Moon and plots intermediate and long-range price targets for various indices using the planetary position of what he calls the Old Gods.

    His website includes a free weekly column in which he explains the potential impact of looming astrological aspects and whether the expected symbolism is endorsed by the current state of technical conditions.