Sunspot Cycle 24: "None of us alive have ever seen such a weak cycle"

Conventional wisdom holds that solar activity swings back and forth like a simple pendulum.  At one end of the cycle, there is a quiet time with few sunspots and flares. At the other end, Solar Maximum brings high sunspot numbers and solar storms. It’s a regular rhythm that repeats every 11 years. 

Reality, however, is more complicated. Astronomers have been counting sunspots for centuries, and they have seen that the solar cycle is not perfectly regular. For one thing, the back-and-forth swing in sunspot counts can take anywhere from 10 to 13 years to complete; also, the amplitude of the cycle varies. Some solar maxima are very weak, others very strong (HERE). 

But "none of us alive have ever seen such a weak cycle [as the sunspot cycle 24]", said Dr. Leif Svalgaard of Stanford University and other prominent solar scientists at the 2013 Fall Meeting of American Geophysical Union (AGU), held on December 11, 2013 in San Francisco. This solar max is weak, and the overall current cycle conjures up comparisons to the famously feeble Solar Cycle 14 in the early 1900s (see also HERE & HERE).

John Hampson recently expected the "solar cycle 24′s flat top to end by mid-2014", and one of two possibities playing out: "One, equities peak out within the next 6 months, commodities don’t come again, and we thereafter enter the typical post-solar-peak recession (deflationary). Or, two, equities are peaking now and commodities are breaking upwards out of their large consoliation triangles since 2011 to produce a typical late-cyclical final rally and help tip the weak economy into that recession." (see also HERE).

Credits: John Hampson

Credits: Jan Alvestad

 

Credits: Jan Alvestad

January 11 Major High-Target & 118 CD Cycle Projection for SPX - VAY - VLIC

S&P500

Value Line Arithmetic Index

Value Line Geometric Index

Oscar Carboni - ESH13

Oscar Carboni - DJIY - Bull Flag - No Gap

John Hampson - Lunar Geomagnetic Model for Stock Market 2013

2013 - Peaks in Solar Cycle #24, Stocks and Commodities

Credits: John Hampson

... Solar peaks occur roughly every 11 years and secular peaks in equities and commodities occur close to solar peaks. There is a sine wave in long term real stocks and an opposite-polarity sine wave in long term real commodities, both which have around a 33 year (equivalent to 3 solar cycles or 1 lunisolar cycle) duration ... Treasuries (or inverse rates/yields) move in around a 66 year cycle (2 lunisolar cycles) with peaks and troughs converging with secular commodities peaks. The result is we see two different kinds of secular commodities bulls: one set against rates moving to a peak, and one set against rates moving to nothing ...

S&P 500 - NYMO + % Stocks above 50MA

http://solarcycles.net/2012/05/24/update-5/

John Hampson's Update: Percentage of stocks above the 50MA shows how extreme oversold we just reached, but again from that kind of level we have previously seen v-bounces or more extended basing, lasting from a couple of weeks to a couple of months.

Source: IndexIndicators

But hopefully the message is clear: from such extreme readings in Nymo, % stocks above 50MA and CBI (which hit 11 on Friday), the nominal bottom was close.

My models show downward pressure into the end of next week. What happens the last couple of days of this week I therefore consider to be key. If stocks can rally further away from their lows then I would expect Euro and oil to reverse and join them and for a v-bounce low to be happening, with some consolidation only into the end of next week. If pro-risk alternatively falls and takes out last week's lows then I will be looking to attack on the buy side again once we see the Nymo divergence and that would most likely after the end of next week once positive pressure emerges.

Prediction of Sunspot Cycle 24-Peak & Long Term Trading Strategy

www.sidc.oma.be

SIDC: The daily (yellow), monthly (blue) and monthly smoothed (red) sunspot numbers since 1994, together with predictions for 12 months ahead: SM (red dots) : classical prediction method, based on an interpolation of Waldmeier's standard curves; CM (red dashes) : combined method (due to K. Denkmayr), a regression technique coupling a dynamo-based estimator with Waldmeier's idea of standard curves. Peak: January 2013

www.solarscience.msfc.nasa.gov

NASA: The current prediction for Sunspot Cycle 24 gives a smoothed sunspot number maximum of about 59 in early 2013. We are currently over three years into Cycle 24. The current predicted size makes this the smallest sunspot cycle in about 100 years. Peak: January-February 2013

www.ips.gov.au

IPS: Peak: December 2012

Last updated 26 Mar 2012 13:03 UT

                         FORECAST SOLAR CYCLE 24
-------------------------------------------------------------------------------
Cycle  Sol. Start  Sol. Max  Max SSN     Length     Rise to Max     Max to End
       Year Mth    Year Mth             Yr   Mth    Years   Mths    Years  Mths
-------------------------------------------------------------------------------
24     2009 Jan    2012 Dec   90.2     11.0 132     3.9    47       7.1    86

IPS will adjust this forecast cycle as the new cycle unfolds. 
The difficulty is ensuring that adjustments are not made for short 
term variation, only for longer term cycle variation. 

www.swpc.noaa.gov

NOAA: Given the predicted date of solar minimum and the predicted maximum intensity, solar maximum is now expected to occur in May 2013.

Here is the data supporting the shorter term strategy of buying at solar minimums and selling at the next cycle maximum for an average 70% gain:

Why might stocks consistently outperform in these periods from solar minimum to maximum, and underperform from solar peak down to the next solar minimum, particularly as higher solar activity can cause higher geomagnetism on Earth which affects humans biologically negatively and adversely affects stock market returns?

Well, there is a slight lag in geomagnetic peaks after solar cycle peaks, as shown below, and this fits well with why we have seen an economic recession follow each solar cycle maximum in the last century - it corresponds to the peak in geomagnetism. Historically, this post-solar-peak period has been one of human apathy and peace. Conversely, the period into the solar peak has been one of human excitability, pro-action and economic inflation, which fits well with stock market gains.

Source: Susan Macmillan, British Geological Survey

Solar Cycle 24 began around December 2008 with a solar minimum and it is predicted to peak in July 2013. An average gain of 70% for the Dow over this period would translate as 14500 by mid 2013 (which would mean a new nominal all time high).A recession has closely followed solar peaks for each solar cycle in the last 100 years. The average recession duration is 1 year. The average length of recession-induced stocks bear markets is 1 year 4 months. As the stock market is forward looking, and a leading indicator, we could therefore find the the stock market peaks around the beginning of 2013 and then declines into the solar peak in mid 2013, and then declines through a recession into 2014.

Dow-Commodities ratios and consumer price inflation should peak at extremes at the solar peak (as has occurred each time in the last century), suggesting commodities should push on all the way into mid-2013 whilst stocks lag in the last few months.  

In summary, there is a correlation between stock market performance and solar cycles. A profitable strategy over the last century would have been to buy at the solar minimum and sell at the next solar maximum, and repeat for an average 70% gain in each instance.

An even more profitable strategy would have been to buy and hold over 2-3 decades in between 3 specific half solar cycles. This strategy would have produced 10-fold gains each time, and pattern continuation suggests such a repetition from the solar minimum at the end of 2008 looking out to the 2030s, in line with a further secular stocks bull.

Looking shorter term to the solar peak around mid-2013, stocks should track yet higher, and this implies commodities much higher, as an extreme relative pricing of commodities over stocks should be reached around that solar peak, before a secular inversion.

John Hampson, April 2011 @ www.marketoracle.co.uk/Article27341.html

SoLunar Ultra Long Term Forecast

John Hampson (2012) - Secular peaks in stocks occur around every 33 years, one luni-solar cycle, and occur close to the solar maximum. Secular commodities peaks also occur around every 33 years, one luni-solar cycle, and occur close to the solar maximum.

A secular nominal bottom, panic or crash occurs within 2 years of a solar minimum.

 

Peaks in inflation correspond to solar maximums, troughs to solar minimums. The biggest peaks in inflation correspond to commodity bull market peaks, marked C. US inflation and UK inflation shown.

 

Recessions follow solar cycle peaks, corresponding to the peaks in geomagnetism that lag solar maximums.

The 4 year period from solar minimum to solar maximum is typically one of growth and strong stock market gains. 

Crashes, panics and bottoms typically occur around solar minima. 

US secular stocks bulls last around 24 years, or 2 solar cycles. 

Secular commodity bulls last around 12 years, or 1 solar cycle.

Real (inflation-adjusted) stock prices are in a long term uptrend and follow a sine-wave of 33 year repetition.

Real (inflation-adjusted) commodities are flat over the long term, and follow a sine-wave of 33 year repetition, but of opposite polarity to stocks.

The Dow-Gold ratio is in a long term uptrend and also follows a sine-wave of 33 year repetition.

Super Long Term Delta Cycle in the SPX