Stellar strategy guide: From NASDAQ to Gold price fluctuations, see how the sunspot cycle can guide your investment decisions. Discover how Gann Explained uses solar cycle insights to navigate the waters of Dow and beyond.
Are you aiming to elevate your stock market forecasting acumen by tapping into reliable cyclical patterns? This article could be the key to unlocking more profits. Unveiling the often-overlooked hidden market driver, solar cycle 25, we delve into its historical alignment of solar maximum and minimum of solar cycle 24 with pivotal market events, including the Dotcom Bubble and the Lehman Brothers collapse. With NOAA's latest projections indicating a peak for Solar Cycle 25 between January and October 2024, how would that impact the market?
This post delves into the intricate relationship between sunspot activity and market prices, challenging the oversimplified view of solar maximums and minimums as mere guiding US stock market trends or pivot triggers. We at Gann Explained explore the complexities of this relationship through historical data from solar cycles 21-24, offering insights into the potential market impacts of the ongoing solar cycle 25.
The solar cycle: An economic indicator in the sky?
The solar cycle spans roughly 11 years, with a peak activity around the 5th year. This cycle shifts between solar minimums, with fewer sunspots, and maximums, with more. Economist Irving Fisher, known for his debt deflation theory, posited a link between sunspots and economic fluctuations. He theorized that solar minimums might cause severe winters, impacting agriculture and food prices, with knock-on effects on the economy. Though Fisher's research was incomplete, it pointed to a potential influence of solar patterns on financial fluctuations.
A historical lens: Reflecting on solar cycles and economic milestones
Solar cycle 16 and the 1929 Wall Street Crash: Coinciding with a solar maximum, this period marked the onset of the Great Depression.
Black Monday and solar cycle 22: The 1987 market crash happened during a solar minimum, witnessing the largest one-day percentage drop in DJIA history. This seismic shake-up serves as a reminder that market forces can align with or defy solar patterns in unexpected ways.
The Dot-com Bubble and solar cycle 23: Aligning with the solar maximum, the burst saw significant declines in major indices and stocks like Amazon.
Lehman Brothers' Collapse in solar cycle 24: Occurring at a solar minimum, this event set off a chain reaction across global markets.
The untold story of solar cycles 17-21 and deciphering the switch-off phenomenon
Do these cycles simply take a hiatus from influencing the market, or do they switch on and off at specific cycles? The absence of direct correlations in certain cycles with the stock market underscores a deeper complexity of how solar activity impacts economic fluctuations. For traders who have been decoding W.D. Gann's work, does it remind you of Marie's Appearance, Disappearance, and Reappearance in the Tunnel Thru the Air?
Debunking the myth: The real impact of solar cycles on market dynamics
The notion that solar cycles dictate a rhythmic pattern of five years of economic growth, followed by an equal period of stock market decline, borders on the realm of fantasy, echoing an 'imaginary economy.' This concept of a predictable, clockwork-like economic pattern is far too orderly and simplistic for real-world economics. However, solar patterns do hold potential as a nuanced financial indicator.
Conclusion: Embracing the solar cycle and 2024 market trend
As we stand at the cusp of solar cycle 25's peak, it's clear that the solar maximum and minimum offer more than just astronomical intrigue; they present a unique lens through which we can forecast market trends. Our journey through the historical interplay between solar activity and economic milestones reveals a complex yet fascinating relationship that challenges traditional market analysis.
The nuanced role of solar activity, as showcased through events like the Dotcom Bubble and the Lehman Brothers collapse, invites a more sophisticated approach to financial forecasting.
In the upcoming post, I will reveal using solar cycle 25 in forecasting the 2024 market trend. Additionally, I'll detail the step-by-step process we employ at Gann Explained to integrate solar cycles into practical, actionable trading strategies in 2024.
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Editors’ Picks
EUR/USD moves sideways below 1.1800 on Christmas Eve
EUR/USD struggles to find direction and trades in a narrow channel below 1.1800 after posting gains for two consecutive days. Bond and stock markets in the US will open at the usual time and close early on Christmas Eve, allowing the trading action to remain subdued.
GBP/USD keeps range around 1.3500 amid quiet markets
GBP/USD keeps its range trade intact at around 1.3500 on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders move to the sidelines heading into the holiday season.
USD/JPY corrects further to near 155.80, gives up entire BoJ policy-led gains
USD/JPY surrenders its entire gains made on the BoJ policy announcement day, and retraces to near 155.80. Investors are in vogue over the outlook of the BoJ’s monetary tightening campaign. The Fed is expected to cut interest rates by at least 50 bps next year.
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EUR/USD Price Annual Forecast: Growth to displace central banks from the limelight in 2026 Premium
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Gold Price Annual Forecast: 2026 could see new record-highs but a 2025-like rally is unlikely Premium
Gold hit multiple new record highs throughout 2025. Trade-war fears, geopolitical instability and monetary easing in major economies were the main drivers behind Gold’s rally.
GBP/USD Price Annual Forecast: Will 2026 be another bullish year for Pound Sterling? Premium
Having wrapped up 2025 on a positive note, the Pound Sterling (GBP) eyes another meaningful and upbeat year against the US Dollar (USD) at the start of 2026.
US Dollar Price Annual Forecast: 2026 set to be a year of transition, not capitulation Premium
The US Dollar (USD) enters the new year at a crossroads. After several years of sustained strength driven by US growth outperformance, aggressive Federal Reserve (Fed) tightening, and recurrent episodes of global risk aversion, the conditions that underpinned broad-based USD appreciation are beginning to erode, but not collapse.
Bitcoin Price Annual Forecast: BTC holds long-term bullish structure heading into 2026
Bitcoin (BTC) is wrapping up 2025 as one of its most eventful years, defined by unprecedented institutional participation, major regulatory developments, and extreme price volatility.
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