Solar activity and stock markets revisited
What can Galileo Galilei tell us about today’s volatile financial markets?
In 1610, shortly after viewing the sun with his new telescope, Italian physicist Galileo Galilei made the first European observations of sunspots. The sunspot number is calculated by first counting the number of sunspot groups and then the number of individual sunspots.
According to NASA, monthly averages of the sunspot numbers show that the number of sunspots visible on the sun waxes and wanes with an approximate 11-year cycle.
As I mentioned in my previous blog, some have predicted that 2012 will bring a maximum solar activity in sunspots after sunspot activity reached a 100-year low in mid-March 2009 (which coincides with a cycle low in equity markets). And the concern was that a stock market low may happen in 2012, which coincides with either a sunspot low or high depending on the cycle.
However, according to the latest predictions by NASA, we may not reach the maximum activity until May 2013.
“The current prediction for Sunspot Cycle 24 gives a smoothed sunspot number maximum of about 89 in May of 2013. We are currently almost three years into Cycle 24,” Nasa writes.
“Predicting the behavior of a sunspot cycle is fairly reliable once the cycle is well underway (about 3 years after the minimum in sunspot number occurs).”
It may mean that we might have a long way to go before we see a bottom in stock markets.