

The following article was written by Mr. Cowan
and
published in Tradersworld Magazine
in the Spring 2003 Issue #35. 
Cowan Astro Cycles Provide A
New Approach To An Old Science
If
you have ever been curious about how planetary cycles can be used to
forecast market trends, but gave up after looking at the astrology
books, you are not alone. All those strange symbols and terminology like
orbs, houses, rulerships, and transits can be very intimidating. And
most people do not want to spend years getting a PhD in Astrology to
find a reliable indicator of trend duration. Like most traders using
astro techniques, I started with the classical approach, but soon
discovered that by applying a few simple rules you can forecast the
timing of market turns quite accurately without needing to know all the
details of astrology textbooks.

Simply stated,
all you need to do is follow a 3step process:

Find a clearly identifiable top or bottom on a
chart.

Find locations of planets on that date. (Software
does this for you).

Make time projections by adding multiples of 30
degrees to locations in (2). (Software does this for you)
Where this technique differs from classical Astrology is that I do not
care what the angles between the planets are at the tops or bottoms,
just the distance they travel between two turning points. Classical
Astrology tells us to expect changes when two planets are at certain
predefined angles of separation. Traditionally, these are 30, 45, 60,
90, 120, and 180 degrees. But it seemed a bit arrogant to me to be
telling God that he should do something on our schedule. So I looked
instead at what the market was telling us, at where the planets are at
the tops and bottoms and use THAT angle as the starting point,
regardless of its value. It’s really a simple process that I have
successfully applied to my trading for more than 20 years.
As an example, we will look at a compressed monthly chart of the
DJIA from 1949 to 1975, shown below in Figure 1.

Figure 1. 30degree heliocentric movement of Saturn
relative to Uranus in the DJIA 
Applying the 3step process:
Step 1 – Find a major bottom or top.
Anytime after 1950 the bottom in
1949 would have been easy to identify as a major bottom, so that will be
used as our starting point.
Step 2 – Find the locations of the planets at the date in Step 1 (1949).
A book called an ephemeris can be used to find the locations of the
planets, or there are several software programs that will do the same
much faster. All calculations, projections, and charts in this article
were made using the software
CycleTimer.
Because this is a longterm monthly chart, the major cycles will
correspond with the 3 slower moving outer planets Jupiter, Saturn, and
Uranus. If we were working with a daily chart then the faster inner
planets, Mars, Venus, Mercury would be used.
Experience has taught that most markets have a strong cycle closely
correlated with the heliocentric (viewed from the sun) movement of
Saturn relative to Uranus.
CycleTimer shows that at the bottom in 1949
the location of Saturn was 66 degrees from Uranus, so that is the cycle
origin from which our future cycle dates are projected.
Step 3 – Add 30, 60, etc degrees to the location in Step 2 (66
degrees).
Adding 30degree increments to 66 produces 96, 126, 156, etc.
CycleTimer calculates and plots in Figure 1 the dates that Saturn and
Uranus were separated by these angles. Six instances of this cycle are
shown, or a full 180 degrees. You can see that this cycle closely
corresponded with major bottoms at every instance. Classical
Astrological techniques do not identify this cycle because it does not
coincide with their predefined angles of 60, 90, 120, and 150 degrees.
To improve the probability that your cycles projected into the future
are accurate, be sure that at least three instances have occurred in
your historical data, not including the starting point. If you have less
than three occurrences of the cycle move your starting point back in
time until you have at least three. And more importantly, be sure that
you have no more than one or two “false positives”, that is, a cycle
that arrives with no significant trend change. If you follow these rules
you will have a high probability that your projected cycle dates will be
correct and you can expect a reversal of trend very near that date
Figure 2 shows an example of how I used
this 3step technique to make a realtime forecast in October
2001 for a trend reversal in February 8. Part A is a copy of the
chart I posted on the discussion group at
HarmonicTiming.com in
October 2001 and is available in their archives. Part B shows
how the forecast turned out.
This cycle uses heliocentric
90degree movements of Mars relative to Uranus. Following the
3step process and using a cycle start date at the low of
November 1997, produces a cycle where all eight recurrences
coincided with significant market turns. Therefore, there was a
high probability that the next recurrence in the future would
also mark a turn.

Figure 2a. 90degree heliocentric movement of Mars
relative to Uranus used to forecast cycle low in DJIA
Figure 2.B shows what happened. On February 8 the DJIA
bottomed and began an advance of 1100 points, or 11%, in one
month. This is another cycle that classical Astrologers would
have missed because the angles between Mars and Uranus for this
cycle are 7, 83, 173 degrees, which are not any of the classical
predetermined angles. 
Figure 2b. Cycles arriving after the forecast was
made were highly accurate. Cycle dates were automatically generated by
CycleTimer software.

Nesting Cycles Amplify Their Net Effect
When you gain more experience using this technique you will be
able to watch more than one cycle at a time, which makes sense
because there are more than two planets in the Solar System.
These multiple cycles can either interfere with each other if
they arrive at different times, or reinforce each other if they
arrive at the same time. If two or more cycles bottom closely
together (nest) they reinforce each other and their net effect
is amplified. This results in a sharp panicky sell off followed
by a quick recovery producing a “V” or “trauma” bottom.
Figure 3 shows how I used the technique
of nesting cycles to accurately forecast almost one year in
advance the JuneJuly 2002 sell off and bottom in stocks. This
chart was also posted in the discussion group at
HarmonicTiming.com in October 2001 and is available in their
archives.

Figure 3a. Two cycles arriving simultaneously
allowed this forecast to be accurately made one year in advance.
To keep the technique simple the cycle start dates
were taken out of the textbook
FourDimensional Stock
Market Structures And Cycles and extrapolated into the
future using
CycleTimer software. The entire projection process
took less than one minute.
The SaturnUranus cycle we studied earlier during the 19491975
period is again used with the origin set at the major low of November
1994. The second cycle is another that has historically produced
reliable results, the movement of Jupiter relative to Uranus, or the
JupiterUranus cycle. The crash low of October 1987 was used for the
origin of the JupiterUranus cycle because it has produced a cycle that
has repeated dependably for the last 15 years.
When
CycleTimer projected these two cycles into the future it showed
them nesting (arriving at the same time) in late JuneJuly producing a
warning that this was a very highrisk time. The position trader would
liquidate any remaining long positions he had before this highrisk time
arrived and wait out the storm. So while many traders were panicking
during the JuneJuly sell off and wondering where the bottom was, my
confidence in the cycle locations allowed me to enjoy a twomonth island
hopping vacation in Indonesia, Thailand, and Cambodia, scuba diving and
studying the ancient temples, as my profits accrued.

Figure 3b. This chart updates the DJIA data after
the forecast shown in Figure 3a.
CycleTimer accurately forecast the panic
selling in July, 2002 and January.

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