The Use and Misuse of Statistics in Financial Astrology
April 2007 Financial Astrology Newsletter
In this newsletter I want to address a general stepping-stone for reaching proper conclusions in financial astrology, the use or misuse of statistical studies in order to spread wrong beliefs of how astrology works or does not work.
1) The Disregard of Common Sense or "AstroLogic"
In my last newsletter Bulls&Bears I have already given an overview of bullish & bearish planets and aspects for financial astrology.
Already a year earlier I have stated that trines are bullish aspects for financial astrology and that the conglomerations of trines leads to stock market tops and bull markets. Of course I was not talking about trines of the Moon that are making a bull market. Why ? Because the Moon makes dozens of trines and other aspects everyday, the same is true for some of the inner planets particularly Mercury, the fastest moving planets after the Moon. Of course I was referring to the outer planets with the ability to create trends of several months and maybe years.
You would think that any astrologer who has read "Astrology for Dummies" would know that outer planets can create longer lasting trends, while inner planets do not have that ability, yet immediately after I made my statement, an astrologer presented an astrological study based on some statistics that concluded that there are more trines at market bottoms, than at market tops. This study has included Mercury and all other inner planets. So I concluded that the astrologer that has presented the study did not take "Astrology 101" in school and so he thought that all planets are equally powerful. Inner planets are the Moon, Mercury, Venus, Sun and Mars. Outer planets are Jupiter, Saturn, Uranus, Neptune and Pluto. Outer planets move much slower than inner planets, therefore they have a stronger influence on any trend. This is just common sense or (Astro Logic).
But the disregard of common sense (or Astro Logic) is not the only problem in statistical studies presented about financial astrology.
2) Not Citing the Evidence and why Manipulators Love Statistics
Another problem is that often the presenter of a statistical studies will proudly announce his results, but will fail to cite the most extreme cases in favor of particular study results. In financial astrology I consider this a particular sin, since financial astrologers work with market data and market data is freely available to anybody.
In "statistics for dummies" you will learn that you have to look at the most extreme results in favor of your study very critical, because these results might be one time events and cutting these extreme cases away might yield totally different result. For example when backtesting a winning trading system, it is absolutely necessary that you look at the most extreme winners very carefully, because if your biggest winner was a one time event based on an error in your data, your conclusions from the study will be wrong.
Therefore if somebody presents a statistical study about financial astrology, he (she) should present also the three most extreme cases in favor of his/her study. That way he/she will prove that he is NOT a statistical dummy, and he/she will give other people serious about financial astrology the possibility to respond. Again since financial astrologers work with undisputable market data, it is very easy to cite the three most extreme cases in favor of a particular study.
Yet this behaviour is very uncommon in financial astrology forums and also many other areas by that way. Most people do not understand statistics very well, yet most people believe in statistics, as if it was some kind of a powerful religion. Therefore statistics are a favorite tools of manipulators and advertisors. Statistical studies are presented everywhere, without giving anybody the possibility to question the result of the statistical study or the data used in that study.
3) Astrological Aspects in the Financial Markets
On February 27, 2007 the Dow Jones has recorded its biggest one day fall since 5 years. I believe that this drop has been caused by the Saturn to Neptune opposition that has been triggered on this day by several factors, one of which being an exact Trispect from the Moon during market hours. As Saturn is a bearish planet and the opposition is a bearish aspect you would assume this aspect to be bearish (see Bulls&Bears) .
If you are a beginner of astrology you should know that in astrology aspects are generally believed to work until the time they are exact.
Any aspect between two planets will be exact at a certain moment in time.This is the general belief and this is - in my opinion - sometimes true.
Therefore you would expect bullish aspect with bullish planets to create market tops and bearish planets with bearish aspects to create market bottoms, until the time the aspects becomes exact. After the aspects become exact the opposite will happen. AFTER a bullish aspect is exact the market will fall and AFTER the bearish aspect is exact the market will rise.
This is financial astrology 101. What is more advanced than astrology 101 is my discovery of the Rosecast Trispect. In a nutshell the Trispect says that an astrological aspect will not be felt when it is exact, but when another third planet BALANCES the aspect. Like a planetary aspect a Trispect can always be calculated for an exact moment in time. Mathematically this moment in time will be the time, when a third planet is making an aspect to the midpoint of the two other planets. In financial astrology this means that the market will not fall into an exact bearish aspect, but into an exact bearish Trispect and a market will not rise into an exact bullish aspect, but into an exact bullish Trispect.
4) Uncovering the Conclusions of a Statistical Study as Wrong
Talking about Saturn 180 Neptune, we would expect the market to fall before the Aspect/Trispect has become exact and to rise after the Aspect/Trispect becomes exact, if this was to happen, then we would conclude that Saturn opposition to Neptune is indeed a bearish aspect for the market.
Chart: November 25, 1971: Market falls strongly into Saturn/Neptune opposition in TRISPECT with the Sun and rallies strongly afterwards. Software: Rosecast Astro
And this is exactly what has happened in late November of 1971. On November 4, 1971 the Dow has made a high at 855 points and on November 23 and 24 the Dow has recorded lows at 790 and 793, respectively. Immediately after the above Trispect on November 25, the market has rallied 80 points to record a high at 872 on December 6, 1971. This proves that talking of late November 1971 the Saturn to Neptune opposition can only be concluded as a bearish influence for the stock market, at least by anybody serious about financial astrology.
You might now wonder why I have chosen to pick a date in November 1971 to make a case about Saturn/Neptune, Bulls & Bears and the Trispect. Do I have a sentiment for nostalgia ?
No, the answer is that a statistical study that was presented by a well-known astrologer has claimed that Saturn to Neptune is actually a BULLISH influence for the stock market "a probability by chance of 98% that this aspect would make the market go up" and November 1971 was presented as the most extreme evidence for this result, with "6.4% move up". This 6.4% move occurred entirely after November 25 (see chart above), but this the study did not tell you. The point of this statistical study was to give evidence that
1) Saturn to Neptune is a bullish influence for the markets, while in reality just the opposite is the case.
2) because of the statistical evidence presented by that study, it was impossible to forecast the big drop on February 27, 2007 using common sense or "astro-logic", when in reality just the opposite was the case.
In fairness I have not reckoned myself with such a big decline on February 27, but my market update from that day has read, "Be Short Until 14h10" and by that time the Dow was already down 350 points. On normal days I do not use the IMPERATIVE in my updates.
I have also cited the Saturn to Neptune opposition as the primary cause of this bearish forecast for this special day.
Statistics about financial astrology can be very misleading, especially if the study is presented without the three most extreme cases or if common sense (Astro Logic) is not entering the design of the study.
In the above study the extreme cases were presented and therefore I applaud the astrologer who has presented the study for doing that. Others financial astrologers should apply the same standards when presenting statistics (so me or others can prove them wrong, if necessary). Nonetheless the conclusions were wrong (since the most extreme case in favor of the study turned out to be just the opposite), because the study has neglected a fundamental principle of how financial astrology works: The Rosecast Trispect.
In the next free newsletter I will talk about another disocovery that I have made about financial astrology, the Rosecast Dispect. The Dispect is almost as important as the Trispect. The Dispect can explain to you why sometimes (August 2006) the market has not fallen into a Saturn/Neptune opposition.
Best regards, Markus Rose
Editor of Rosecast Market Timing