TAO Cycle:            The Technical Aspect Oscillator                (updated 03/07/2009)

The TAO 3 is a scientifically modeled astronomical/astrological indicator that is  hypothesized to parallel global human psychology, and similarly the price movements of the global equity markets as they reflect and respond to global human psychology.  The TAO research is an extension of the work done by Donald Bradley and others.
 
1)  On any given day, the angular separation (AS)  between all the planetary pairs (Sun/Moon, Sun/Mercury, Sun/Venus, etc.) is calculated.  That is a known astronomical/mathematical value between 0 and 360 degrees. 
2)   This AS is then inserted into the Aspectarian function that is mathematically derived from the principles of mathematics and physics.  The Aspectarian is a sine wave function that gives a positive or negative numerical value (from +100 to -100)  to every degree of  separation between the planets.
3)   Then, for every planetary combination the resultant Aspectarian value is multiplied by a weighting fraction, a number between 0.00 and 1.00, determined by orbital and cyclical factors.  The individual planetary pair numbers are then added, resulting in the Raw TAO.
4)   The Raw TAO scores are then zeroed over the time period being studied  (by adding or subtracting the calculated correction.    Zeroing is critical for using the TAO with real world and other cyclical phenomena.
5)    Finally, the raw TAO is both averaged over various time periods (Quick TAO), and that average is summed (Slow TAO).
The average of the Quick and Slow TAO is called the TAO 3 on this site.   
6)    The TAO, as an active component of global human psychology, acts over time on individuals, and their decision making process.  Thus with the average and summation, the psychological effect over time can be seen. All of the above comes from known astronomical numbers, and goes through 100% mathematical formulae and transformations.  Numbers in, numbers out.  The creation of the TAO is 100% objective.
7)    The TAO 3 is only one of an infinite number of possible TAO's.  During 2009, Software is being developed to release not only the composition of the TAO 3, but also facilitate the user's ability to create and examine their own TAOs, and study correlations of their own interest, objectively and scientifically..

How the TAO 3 is used here on this site:

      Because the TAO is derived from known planetary positions, it can be calculated as far back into the past or forward into the future as desired.  As a psychological indicator, when the TAO 3 is positive and rising, people's attitudes and outlook are hypothesized to be the most optimistic.  When the TAO 3 is negative and falling, the attitudes are the most fearful and pessimistic.  One measure that is used to test its statistical significance is the equity (stock) market, because it has a known psychological element, and is a measurable, real-time, changing phenomenon.  When stock prices are high and rising, investors feel more positive and optimistic, and are more likely to continue investing and buy.  When stocks are low and falling, investors feel more negative and pessimistic, and are more likely to sell from the fear of projected or real losses. 
      The TAO 3, mathematically derived from known astronomical numbers, is closely correlated with the prices of the global stock markets of the world (astrological implication).  How the aspects of the planets might irrelate with human trading psychology and action (buying/selling, higher/lower prices) is unknown.
      I compare equity prices over time with the cyclic oscillations (above and below the zero line) of the TAO 3 using the standard statistical test of the Pearson Product-Moment Correlation.  It is for two independent variables, and the TAO 3 compared with equity prices qualify.  After the PPRC is run, the result is the Pearson r, a value between --1.00 and +1.00.  If the Pearson r is close to +1.00, then there is a perfect correlation between the two variables.  Over the last 9+ years, the Pearson Product-Moment Correlation for the TAO 3 with stocks:  for N=956,  the DOW, r= +0.82, and SP 500, r= +0.85.  These r's indicate that there is less than  a 1:10,000 probability that the TAO 3 is correlated with stocks by chance.
      There is a significant correlation.  It is to be noted, however, that correlation is not causation.  The correlation between the TAO 3 and equity prices is just one useful tool for stock trading and investing among many.  And, moreover, stock prices have, can, and will move contrary to the TAO 3 for indeterminant periods of time.

Numeric and other Cycles:

From the greatest known influence/effect to the least (in somc's evaluation):

25 year Generational: 
       The 25-28 year Generational cycle is probably a sub-set (harmonic) of the longer 75-84 year cycle.  The four most recent manifestations of this cycle were in 1907, 1929-37, 1956-57, 1980-1982, and Now, 2007-???.  somc postulates that the longer astronomic cycles are related to this 25-28 year cycle, and will do further research with the TAO to consider those probabilites statistically.   Every third cycle seems to carry increased importance: after the 1789 inauguration of US President Washington, the 1860's civil war, the 1930's Depression, and Now, probable depression.
       This cycle, at its best, tends to produce long and grinding Bear markets (falling stock prices).  At its worst, it correlates with financial calamities.  From current market behavior (3/8/09), we are in a global financial crises, now.

10 year Numeric:
      This 10-year negative economic cycle usually appears during the 6th and/or 7th year of every decade.  It just happens frequently--no one knows "why".   I suggest that it is linked to the 20 year Jupiter/Saturn cycle, that, in a TAO perspective, has a variable negative intensity every 10 years.  It is correlated with significant, and sometimes rapid, drops in stock prices and other assets.  High to low, the periods had declines in assets/stocks averaging 20% (substantial corrections being more likely).  The most recent noted 10 year cycles occurred in 1906-7, 1916, 1926, 1937, 1946, 1956-7, 1966, 1976, 1987, 1996, and 2006.  Also, the "8" years tend to be among the most profitable, with 2008 being a notable exception.  I think the profitability of the "8" years is a rebound effect of the preceding "6" and "7" years.  This time, 2006-7 had some sharp drops, but on the whole had rising stock prices, and thus the rebound effect in the "8" year, this time, was negative.

8 year US Presidential Cycle:
      Starting with 1907, the 8-year US Presidential cycle has been one of the most reliable indicators of market variability.  The negative periods tend to occur around the 6th year of two term Presidents, followed by significant rallies into the next election.  The declines averaged, high to low, about 20%; and the subsequent rallies similar in magnitude.  The years include 1907, 1917 (premature related to WWI), 1926, 1937-8, 1946 (would have been Roosevelt's second #2 term), 1957, 1966, 1974, 1987, 1998, and 2006.  2006 was a failure of this cycle.  2006-07 had several short, sharp (about 5-10%) declines, followed rapidly by higher highs.  2008 was The Failure, with the beginning of a Depressionary decline.
      I wrote at the time, in Newsletter issues #9 (Aug 07) and #10 (Feb 08):  "This cycle is probably extinct.  It is likely to decrease in force under increasing global economic influences.  May--Aug 2006 was a mild decline for this cycle.  I suggest that two primary factors are at work: 1) the US is no longer The dominant economic force in the world.  Both Europe and Asia emerged as equal economic powerhouses in the 2000's (and even later 1990's).   2) As the US and European baby-boomers begin to retire in larger numbers, they are not as interested in the promise of growth and prosperity by a new Presdential candidate, but rather in stability and security.  The escalating dependence on and promise of entitlements now dominates; neither of those favors sustainable economic growth."

The FED cycle:
      The US Federal Reserve Bank is a private institution governed by Federal laws that controls both the supply and value of the US Dollar.  I am calling it a cycle, because the FED oscillates between stimulative and constrictive monetary policies.  Since its creation in 1913, the FED has engineered a 90+% Decline in the value of a US Dollar.  The debasement of the US currency allows the US Government (and its politicians) to spend more than is earned, and pay back the promisary notes (debt/bonds) with cheaper dollars.  This has worked, and will continue to work, as long as there is faith in the US Dollar, both domestically and globally.   That faith is Not guaranteed, and a future sudden devaluation is possible, unlike the gradual 90% devaluation to this date.
     Like the US Governemnt, the FED also has Presidents, the current one being Ben Bernacke.  In global economic effect, the President of the FED rivals, if not exceeds at times, the power of the US President.   The FED cycle is probably linked with the cycles of the US, and there is a reliable primary chart that I use for that (not to be disclosed at this time).   This chart responds to the Generational cycles discussed first in this section.

The Kondratieff Cycle:
      A theoretical 54+/- year cycle that interrelates with the Generational cycle.  They both probably derive from the same longer term astronomical oscillations.  With a TAO perspective, these longer oscillations will vary both in intensity and timing.
The rhythms of the outer Planets take centuries to re-occur with any regularity and exactitude.

Schulz  on Market Cycles                                                 Richard  Schulz


TAO  Cycles


For somc research:

1)   Jupiter/Saturn

2)   The USA chart  (in addition to 1776)

3)   Mega numeric cycles (54yr--Kondratiev, 76.6 year, etc.)

4)   The Jupiter/Saturn/Neptune 179 year resonance and Solar system center of mass wobble

5)   Mercury, Venus and Mars retrogrades