Planetary models 🪐

In the 1960s Merrill Lynch analyst Arch Crawford began correlating planetary movements with market data, convinced they influenced market direction. Six decades later a new generation is doing much the same. On TikTok, young traders share forecasts of Mercury retrograde and moon phases alongside moving averages and chart patterns. In the US, younger adults are more likely than their elders to believe in astrology and to consult astrology or horoscopes, according to Pew.

Raised on trading apps and volatility Gen Z investors are seeking certainty wherever they can find it. More than half own stocks but a majority are pessimistic about the wider economy. Behavioural finance researchers call it the illusion of control – the tendency to find patterns in chaos, especially when uncertainty is high.

Modern figures

Crawford began using planetary data after reading about traders who based decisions on planetary movements. He tested Donald Bradley’s ‘planetary barometer’ and, convinced of its efficacy, began to incorporate it into his forecasts. 

By the late 1970s Crawford was running his own astrological advisory service, attracting thousands of subscribers including traders at major banks. Crawford’s newsletter was ranked among the top-performing market letters in multiple years and he claims to have called every major crash from 1987 to 2008. A week before 9/11 his newsletter claimed the position of Mars could lead to war and a dramatic fall in stocks.

W.D. Gann (1878-1955), a key figure in financial astrology, combined geometry and planetary positions to forecast market highs and lows, a system known as Gann angles. Louise McWhirter’s (1896-1957) 1938 work, Astrology and Stock Market Forecasting, also linked the US economy to lunar cycles. Some have theorised that McWhirter was an alias of Gann himself.

Financial astrology sits well outside mainstream finance. It isn’t banned but you won’t find it in institutional research. It therefore remains a niche but persistent business. 

There are a few shops that dabble in astrology and other unconventional approaches. Merriman Market Analyst (MMA Cycles) is a long-running ‘geocosmic’ market-timing firm founded by Raymond Merriman selling astrology-based forecasts and training. CLSA, a major brokerage, publishes an annual Feng Shui Index for clients. Although framed as light entertainment it’s widely read in Hong Kong. Henry Weingarten, who runs The Astrologers Fund in New York, has advised clients since 1988 using a mix of astrology and fundamentals. 

Ways old and new

The earliest recorded financial forecast, in Babylon circa 1700 BCE, linked grain prices to Venus cycles. In the Renaissance the Medici family reportedly consulted astrologers before trade voyages. With the Enlightenment and the rise of astronomy, astrology was largely discarded. But the underlying need to divine cycles and patterns lives on.

In the modern era, technical analysis straddles data and divination. Disputed by the efficient-market hypothesis it looks for patterns in price and volume data rather than fundamentals. Practitioners, known as chartists, use moving averages, momentum indicators and formations such as ‘Death Crosses’ or Fibonacci retracements to read market mood.

Japanese candlesticks are one of the oldest forms of market charting, developed by rice traders in 18th-century Osaka. Each candlestick shows four data points for a given period with the colour indicating whether prices rose or fell. Patterns are thought to signal shifts in momentum or reversals in a trend. The method was introduced to Western finance in the late 20th century and remains a cornerstone of technical analysis today.

Method in the madness

Contemporary financial astrology adherents will look at how planetary positions align with market turning points, and track the moon’s phases to infer shifts in investor mood or liquidity. They may associate zodiac signs with markets or companies, often using the ‘birth’ chart of an exchange or firm. Eclipses and retrogrades – the seemingly backward motion of a planet as seen from Earth – are interpreted as periods of reversal or uncertainty. Many financial astrologers will combine these tools with more conventional technical or fundamental analysis. 

Clearly, it’s all metaphysical woo woo. Or is it? Some studies have suggested that lunar cycles affect human behaviour, from small shifts in sleep and mood to reported upticks in hospital visits and crime. 

A study of 48 countries’ equity markets found that returns around new moons were consistently higher than during full moons – an annualised difference of roughly 3–5%. The pattern was strongest in emerging markets and smaller-cap stocks and wasn’t easily explained by volatility or macro data. Later studies covering 62 indices found similar results. But most research suggests the appeal of financial astrology lies in its psychological function rather than any empirical efficacy. 

Parallel worlds

Perhaps astrology and finance share some of the same cognitive foundations, relying on pattern recognition to navigate complexity and chaos. Investor mood and sentiment drives a lot of market action and financial astrology taps into those dynamics.

Some studies suggest mood cycles linked to external rhythms can influence investor behaviour, hinting that the line between ‘rational’ and ‘irrational’ forecasting is thinner than it looks. Stock returns are found to drop by about 1.5% annually in winter months when there’s less daylight, and NYSE returns are 24 bps higher on sunny days than cloudy ones. Effects have been found elsewhere in daylight, weather and even geomagnetic cycles where small shifts in environment align with measurable changes in market returns. Still, astrology is unlikely to beat a balanced portfolio any time soon.

‍

Important Information