What you need to know about May 5th. 
By Robert Hitt

On May 5th a widely touted astrological alignment will occur when 7 planets line up in close proximity to the same location in the sky when viewed from earth. This alignment is being exploited by alarmists as a doomsday indication. >From the viewpoint of a financial astrologer, this alignment of planets is in fact significant, but not necessarily on the date it is exact. It may very well mean the tide has turned and a bear market is about to begin. The aftermath of this event is what is of prime concern, and not what occurs exactly on the date. The following weeks, with May 8th to May 12th in particular, is where the bull / bear debate will probably be settled for the entire year. 

Why some traders use astrology and why any market technician should know at least a little about it.

 Astrology has been around for 1000s of years. Probably about as long as trading itself. It was once a most respected profession reserved to only those who proved to their mentors they had the insight to handle the complexity of it. Until our "scientific revolution" in the last 100 or so years, astrology was learned and practiced by the best and brightest. Ben Franklin is an outstanding example. 

It is a little known fact that astrology has been part of the arsenal of tools in more recent times as well. Legendary W.D. Gann is known to have used it, as well as some very well known modern technicians such as John Murphy. A quote from JP Morgan about his use of Evangeline Adams' astrological skill, "millionaires don't need an astrologer, BILLIONAIRES do," says all you need to know. 

So what does a modern technician need to know? First, he need not know how to divine an individuals horoscope, or be so inclined as to delve into the personal reading skills most astrologers use. The use of astrology does not require faith in it as a mechanism of FATE either. It is simply a matter of understanding that certain dates or time periods make certain types of events more or less likely to occur. As a basic example, it would be foolhardy to predict snow in July in all but the most remote northern corners of the USA. It would be a good prediction in the winter for most of the USA.

It is a scientific fact, mostly ignored by skeptics, that many of nature's cycles have a close correlation to those of the planets and the rotation of the earth. The seasons of the year are associated with the position of the earth in relation to the Sun. The moon controls the ocean tides. The relationship of the planets to each other have proven to be the root cause of the 11 year sun spot cycle which has an effect on weather. Although the exact method the planets affect on human behavior is as yet unknown, we don't have to know the reason why to gain useful information from it. The moon in particular seems to have an inordinate effect on mass mood as any police officer or mental health professional will readily agree. With markets driven by an almost primitive emotional response most of the time, it will pay anyone involved in trading handsomely to at least know when the 4 quarters of the moon occur every month. Going beyond that, simplicity is a matter of personal interest.  Frankly, some individuals are not cut out for anything beyond a cursory understanding of the deeper aspects of astrology. Others take to it with little effort. Technical types seem to have an easier time possibly because they are blessed with visual and pattern recognition skills.

Someone seriously interested in the subject needs to learn some of the language used by astrologers.  When an unusual event such as the mass conjunction of 7 planets on May 3rd through May 5th occurs, he will be able to get the gist of the prognostication and decide using his own methods if the date and situation match what is being called for astrologically. Not so coincidentally, the last times we had as many planets in such a tight area of the zodiac was in 1987 and 1994 and a market nose-dive followed both. Will such an event follow the May 2000 gathering of planets? We won't have too wait long to find out. 

In my work with traders over the years, I have found individual trading styles have much to do with application of this knowledge. Fibo traders who use the timing relationships between previous swings seem particularly adept at noticing when important astrological points of interest coincide with significant days in their counting process.  Mathematical modelers who have less of an ability to work with time as with price use astrological indications to confirm or deny a trading signal. I have seen this method work well by preventing a modeler from aggressively executing a false signal or knowing it may be time to become more aggressive than normal. Gut feel traders need to know when mass psychological extremes may occurring in order to avoid being sucked into the same trap they are trying to trade against. It also helps to have some clues in advance about important economic reports or the potential for surprising news. Elliot wavers seem to use astro well when impulsive planetary patterns coincide with an impulse pattern in price. 

Is astrology a stand alone method of trading? Certainly NOT. Neither is any other form of analysis for that matter. When used properly as a complementary tool it is more than effective enough to be worth the effort to learn. 

To learn more go to the AstroEcon website basic training pages and begin the process of blending another useful tool into your bag of tricks.     http://www.astroecon.com/lesson/lesintro.html