Thursday, May 7, 2009

Mercury Retrograde and Stock Market

In case you are wondering why this site prominently displays Mercury Retrograde dates (after all, this is supposed to be, and trying to be a financial market information site), it's because some unexpectedly bad things happen in the market during Mercury Retrograde.

From what I understand, Planet Mercury is in charge of communication, and when it goes retrograde, communication, or information exchange, goes awry. The stock market, in a sense, is all about communication: sellers and buyers each trying to assess the value of a company and exchange that information through stock pricing in an open market, and each making their own decisions based on that communication.

I am sure it's recency bias, and nobody could have cared less in the bull market that ended in October/November 2007 (non-inflation adjusted). But here's how the stock market behaved in the past several Retrogrades.

  • 10/11 - 11/1, 2007: Dow Jones Industrial went from 14198, all-time high, to 13568. 11/1 happens to be one day after Nasdaq registered the high for the year. The market made a series of jerky movements in both directions, until it finally started to go down, down, and down in late December. (Now we know what the market top looks and feels like, don't we?)
  • 1/28 - 2/19, 2008: DJI went from 12386 to 12337. This was right after the relentless January down days. (And we thought the worst was over.)
  • 5/26 - 6/19, 2008: DJI went from 12573 to 12063. In retrospect, I think this was the first swoon that ended up in a spectacular crash later in September/October. The market never regained the May high.
  • 9/24 - 10/15, 2008: How could we ever forget this Retrograde?
    DJI went from 10928 to 8578. (And we thought the worst was really over.)
  • 1/11 - 2/1, 2009: DJI went from 8603 to 7937, including 343-pt drop on 1/20, largest ever drop on the inauguration day. Then the market accelerated the descent, and kept going down for almost entire month of February. Dow hit the lowest on March 6, at 6470.
  • 5/6 - 5/30, 2009:???? (How about the market getting very confused and going up even further, for a change?)

Here are future dates for the remainder of 2009:

  • 9/6 - 9/29, 2009
  • 12/26 - 1/5, 2009


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