The 2012 sunspot sell-off | FT Alphaville

The 2012 sunspot sell-off

Sunspot market-cycle theory rears its scary head now and again.

(We wrote about it last in April 2009, for example — the prediction proved inaccurate, by the way.)

This time, though, it’s more worrying than usual since it’s beginning to tie itself with mystically predetermined “end of the world as we know it date” stuff.

(Yes, we did recently watch 2012, the Hollywood blockbuster, on Sky Movies.)

But it’s Daniel Shaffer, CEO of US-based Shaffer Asset Management and frequent contributor to Fox Business News, who is now making the sunspot related prediction. Although to be honest, we had never heard of him.

According to Reuters’ Natsuko Waki:

Shaffer writes that sunspot activities show that the sun has an approximate 11-year cycle and as of March 31, 2009, sunspot activity has reached a 100-year low (this, interestingly, coincides with a cycle low in equity markets, reached sometime mid-March in 2009).

But a low in solar activity seems to be followed by a high. Scientists are predicting a solar maximum of activity in sunspots in 2012 that could be the strongest in modern times, according to Shaffer.

“The concern is that something weird is going on and that the current extreme low in the sunspot cycle, similar to the stock market, can be followed by an unusually high sunspot cycle leading to a solar maximum, or in other words, a peak in sunspot activity,” he writes in his latest book.

But if you thought a peak in sun spot activity related to a fresh stock market high — you’d be wrong:

“Our analysis is currently indicating a stock market low in the United States in approximately year 2012, which coincides with either a sunspot low or high depending on the cycle. ”

And, Shaffer gets more mystical still:

“There is a force, stronger than us, that may control cycles in the markets… I believe living in tune with the cycles, which can be upset very easily, is a major way to participate in the markets, but one must always remember that trees don’t grow to the sky and how long can a stock go? Zero,” he says.

So super Teflon-coated tin hats at the ready in 2012, we suppose.

Although — for those seeking a little comfort about the future of the world — here’s a reassuring debunker courtesy of Sean Corrigan at Diapason Commodities:

As he points out to FT Alphaville:

If you kind of squint at the 3-year change chart you get a few overlaps (especially early on) but as a timing/prediction tool in real time even these would be rubbish.

Related links:
Markets and sunspot cycles
– FT Alphaville
Meltdown! A solar superstorm could send us back into the dark ages – and one is due in just THREE years
– Mail on Sunday