May 31, 2001
The basis of my theory of Market AstroPhysics is that the changes in solar energy show up in markets. This can be seen very directly by examining the solar stirring force versus the S&P 500. The solar stirring force is the computed tidal force that the planets exert on the sun. This tidal force leads to gas vortices on the sun, causing solar flares, coronal holes, and other phenonemon which change the energy that the sun emits.
This energy cause the voltage on our ionosphere to change. This in turn changes the electric currents flowing through traders, causing them to be more or less emotional in their trading. These emotional swings account for about 40 percent of market variation, so are very important to traders.
This chart shows the solar stirring force versus the S&P over the past 17 months.
The similarity of the two curves is very good, at least until February 1, 2001. At that point, this system encountered an "inversion."
My Market Chaos Theory holds that as the energy disturbances impact our ionosphere, that they set up two waves in the earth's elecric field, one traveling each way around the earth. This creates a normal, and an inverted wave, which is the normal wave upside down. The theory holds that the market follows the normal wave, the inverted wave, or a combination of the two.
This chart shows how the S&P 500 began following the inverted solar stirring force in February, 2001.
Chaotic systems are systems that can have more than one solution. Markets are provably chaotic. One feature of such systems is that they spend a large amount of time going nowhere. These are times when the two competing forces are balanced.
As a chaotic system approaches a balance point, it only takes a small force to tip the balance. Theoretically, in a market, a single trade could do it.
Once the balance is broken, a chaotic move follows, and continues until the market reaches a new balance level. Such a balance level can be seen on this chart, at a price of 1260.
Chaotic systems have energy points called Strange Attractors. Prices will tend to be drawn to them. As time goes beyond the time of the Strange Attractor, it becomes a Strange Repellor, sending prices away from it.
Two of these SA/AR points are shown on the chart. They are marked SA/SR A and SA/SR B. A tool called the Face of God can be used to track down the physical cause of the energy point. This helps a trader understand what the system is likely to do, giving then an edge. Graduates of our Face of God course will find charts showing the details of SA/SR A and B in the members only FOGGER'S ROOM on our website.
Markets are complex. But the complexity can be understood and used to develop a trading edge. We offer courses to do that. If you trade your own account, you really should check out our Chaos Trader's Trilogy of courses.