This post probes the complex interplay between sunspot activity and market prices, questioning the oversimplified view of solar maximums and minimums as mere guiding US stock market trends or pivot triggers. We at Gann Explained delve into this nuanced connection, utilizing historical data from solar cycles 21-24 to shed light on the potential influences of the current Solar Cycle 25 on the 2024 market trend.
The never-revealed secret: Influence of solar cycles on the financial market explained
The Solar Cycle doesn't directly dictate stock market trends. Instead, each solar maximum and minimum uniquely align with the peaks and bottoms of specific financial assets. For instance, Gold, the Nikkei Index, Nasdaq, and West Texas oil have each demonstrated distinct correlations with solar cycles 21, 22, 23, and 24, respectively.
Solar Cycle 21 and Gold: A clear correlation between sunspot activity and gold prices was observed, with price movements echoing solar patterns.
Solar Cycle 22 and Japan’s Nikkei Index: This cycle saw the Nikkei Index's performance aligning with sunspot activity trends.
Solar Cycle 23 & Nasdaq: Nasdaq's rise and fall mirrored the solar activity, particularly during the dot-com bubble.
Solar Cycle 24 and West Texas Oil: Oil prices reflected the solar cycle's pattern, with similar growth and decay phases.
Market outlook by gann explained: Tracking solar cycle 25's market influence in 2024
Solar Cycle 25 commenced with its solar minimum phase in 2020, and with NOAA's recent projections pointing to a peak between January and October 2024, the question arises: how will this influence the market?
Pro-Tip: To conduct this analysis and projection, we assess a broad spectrum of financial assets. We focus on identifying those who experienced their lowest points in 2020 and are currently on a consistent upward trajectory, reaching new highs or approaching their peak during this ongoing phase.
Bitcoin and Solar Cycle 25: Currently, Bitcoin does not show a clear alignment with the Sunspot cycle, presenting an anomaly in the pattern.
Dow Jones Industrial Average: The Dow experienced lows in early 2020 and is currently peaking, possibly in sync with the solar cycle.
US Interest Rates: Similar to the Dow, interest rates bottomed in early 2020 and are now rising, possibly following the solar pattern.
3 Tips for Trading in Solar Cycle 25
#1. Stay Updated with NOAA Forecasts: Regularly check the NOAA's monthly updated sunspot forecasts to stay ahead.
#2. Match Financial Assets with Solar Cycles: Identify and track the price movements of assets that correlate with Solar Cycle 25. Remember, the impact of this cycle will eventually diminish, underlining the importance of deepening your understanding of cyclical influences in the market
#3. Expand Your Perspective: This analysis aims to provide W.D. Gann traders with an expanded understanding of Gann's cycle theory, particularly in its connection to the narrative elements like the Appearance, Disappearance, and Reappearance of Marie in "The Tunnel Thru the Air." At Gann Explained, our mission is to offer a fresh perspective on Gann's work, going beyond a literal interpretation of his texts and delving into the deeper, more nuanced meanings and applications in trading strategies.
Conclusion:
While the Solar Cycle's influence on markets is not a straightforward cause-and-effect relationship, its correlation with financial trends cannot be overlooked. By understanding and incorporating these natural cycles into market analysis, you can gain a unique perspective and edge in your investing and trading.
Next Steps:
To determine if the stocks, indices, or commodities in your portfolio align with the solar maxima and minima of Solar Cycle 25, look into whether they experienced a significant low in early 2020 and are currently peaking or making new highs. It's crucial to remember that the influence of this cycle may not be constant and will switch off. Always stay mindful of your risk tolerance and ensure you implement a stop-loss strategy for added security.
Khit Wong and all members of Gann Explained LLC are NOT financial advisors, and nothing they say is meant to be a recommendation to buy or sell any financial instrument. All information is strictly educational and/or opinion. By reading this, you agree to all of the following: You understand this to be an expression of opinions and not professional advice. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and education and does not constitute advice. The brand name of Gann Explained LLC will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. You are solely responsible for the use of any content and hold Khit Wong, Gann Explained LLC all members harmless in any event or claim. FTC DISCLOSURE: Any income claims shared by myself, students, friends, or clients are understood to be true and accurate but are not verified in any way. Always do your own due diligence and use your own judgment when making buying decisions and investments in your business.
Editors’ Picks
EUR/USD extends slide toward 1.0300, touches new two-year low
EUR/USD stays under bearish pressure and trades at its lowest level since December 2022 below 1.0350 on Thursday. The pair turned south amid a resurgent US Dollar demand and worsening market mood. Investors stay cautious at the onset of 2025, awaiting the US jobs data for fresh incentives.
GBP/USD slumps to multi-month lows below 1.2450
Following an earlier recovery attempt, GBP/USD reversed its direction and declined to its weakest level in nearly eight months below 1.2450. The renewed US Dollar (USD) strength on worsening risk mood weighs on the pair as markets await mid-tier data releases.
USD/JPY drops to test 157.00 amid thin trading
USD/JPY turns south to test 157.00 in Thursday's Asian trading, erasing early gains. The pair loses traction as risk sentiment deteriorates on bleak Chinese PMI data and revives the safe-haven demand for the Japanese Yen. Thin liquidity conditions also exaggerate USD/JPY moves as Japan is on holiday.
Editors’ Picks
EUR/USD extends slide toward 1.0300, touches new two-year low
EUR/USD stays under bearish pressure and trades at its lowest level since December 2022 below 1.0350 on Thursday. The pair turned south amid a resurgent US Dollar demand and worsening market mood. Investors stay cautious at the onset of 2025, awaiting the US jobs data for fresh incentives.
GBP/USD slumps to multi-month lows below 1.2450
Following an earlier recovery attempt, GBP/USD reversed its direction and declined to its weakest level in nearly eight months below 1.2450. The renewed US Dollar (USD) strength on worsening risk mood weighs on the pair as markets await mid-tier data releases.
Gold benefits from risk aversion, climbs above $2,640
Gold gathers recovery momentum and trades at a two-week-high above $2,640 heading into the American session on Thursday. The precious metal benefits from the sour market mood and the pullback seen in the US Treasury bond yields.
XRP rockets 11% as Bitcoin starts New Year with bullish bang
Crypto majors zoomed higher in the past 24 hours as the market entered a widely expected bullish year, with Bitcoin inching above $95,000 to shake off losses from last week. XRP surged 11% to lead growth among majors as of Thursday, led by $1.3 billion worth of trading volumes on Korea-focused exchange UpBit.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
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