| Newton's Third Law of Motion states that "for every | | | | weather variables in a multidimensional study in which |
| action, there is an equal and opposite reaction."Such | | | | 24 male university students filled out a mood |
| 'action' can be by direct contact, such as from friction, | | | | questionnaire over 11 consecutive days. The mood |
| tension or applied forces. Then you have such 'actions' | | | | variables included concentration, cooperation, anxiety, |
| as a result of gravity, electrical and magnetic.Forces | | | | potency, aggression, depression, sleepiness, skepticism, |
| come in pairs. For every action, there is opposite | | | | control, and optimism. The weather variables included |
| reaction. The size of the reaction is equal to the size | | | | hours of sunshine, precipitation, temperature, wind |
| of the action. Nature is filled with such evidences of | | | | direction, wind velocity, humidity, change in barometric |
| this law. For example, when a bird flies it uses its wings | | | | pressure, and absolute barometric pressure. Humidity, |
| to push air downwards. As a result, the air reacts by | | | | temperature, and hours of sunshine had the greatest |
| pushing the bird upwards. The size of the force on the | | | | effect on mood. High levels of humidity lowered |
| air equals the size of the force on the bird. The | | | | scores on concentration while increasing reports of |
| direction of the force on the air is opposite the direction | | | | sleepiness. Rising temperatures lowered anxiety and |
| of the force on the bird (upwards).Therefore, we must | | | | skepticism mood scores. Humidity was the most |
| reason that when a futures, commodity or forex | | | | significant predictor in regression and canonical |
| market moves up or down, it does so because an | | | | correlation analysis."We know that the weather can |
| opposite action preceded it. The question is, what | | | | affect how we feel, or mood. And we know that this |
| action or actions is responsible for causing the markets | | | | in turn can affect our desires and emotions. The |
| to 'react' in an opposite manner?To find the answers, | | | | effects of the weather or the news, as well as our |
| we must work our way backwards from the event. | | | | accumulated experiences over time affect our |
| For example, if the event is rising prices in Soybeans, | | | | perceptions. And our perceptions of value |
| we must determine what chain of events may have | | | | accompanied by our emotions affects our buying and |
| led to that rise.The first thing that comes to mind is that | | | | selling decisions.Therefore, we must ask this final |
| buyers were willing to buy at higher and higher prices. | | | | question. Is there anything that affects the |
| Many make the mistake of assuming that there were | | | | weather?And once again, we know the answer to be |
| more buyers than sellers. This would not be a correct | | | | 'yes'. I took the following notes from an encyclopedia |
| statement. While you certainly can have one seller | | | | under the subject "weather"."Weather is an |
| selling to multiple buyers, you can also have multiple | | | | all-encompassing term used to describe all of the |
| sellers selling to one buyer that would cause rising | | | | many and varied phenomena that can occur in the |
| prices. So it is not the number of buyers to sellers that | | | | atmosphere of a planet.""Weather phenomena result |
| cause price to rise. Rather, it is the willingness of | | | | from temperature differences around the globe, which |
| buyers to accept higher and higher asking prices from | | | | arise mainly because areas closer to the tropics, |
| the sellers.Therefore, in stepping backwards to | | | | around the equator, receive more energy from the |
| determine what leads to higher prices, we start with | | | | Sun than more northern and southern regions, nearer |
| the "the willingness of buyers to pay higher asking | | | | to the Earth's poles.""Because the Earth's axis is tilted |
| prices."Now we must consider this understanding and | | | | (not perpendicular to its orbital plane), sunlight is incident |
| ask our next question. Why would buyers be willing to | | | | at different angles at different times of the year. In |
| pay higher asking prices?The obvious answer here is: | | | | June the Northern Hemisphere is tilted towards the sun, |
| Buyer Perception.Consider the example of buying a | | | | so at any given Northern Hemisphere latitude sunlight |
| car. You go out to buy a car and you want the best | | | | falls more directly on that spot than in December. This |
| deal you can find. There are others doing the same | | | | effect causes seasons."Note what is being referenced |
| thing you are. You come upon a car that you feel is | | | | here. We have the "sun" and the rotation/tilt of the |
| worth the asking price. This is because you perceive | | | | earth. A reference is made of "seasons", which is a |
| its value is in line with what the seller wants for it. | | | | direct result of the relationship between the earth and |
| Before you came upon this car, other buyers stopped | | | | sun. What about the closest satellite to earth...the |
| to look at the car but did not buy it. Why not, if you | | | | moon?Well, we all know that the moon affects the |
| feel that it is worth the money asked by the seller?The | | | | ocean tides. So we know that is does have some |
| reason is 'buyer perception'. The previous potential | | | | influence over certain aspects of this planet. And there |
| buyers did not buy the vehicle because they perceived | | | | is also some mention that the moon may have some |
| it was not worth it for them at the asking price. Of | | | | affect on plant life. Note these findings."Practical |
| course, they may feel that the asking price is fair, but | | | | economic use of the lunar cycle has been going on for |
| they didn't like the color or the make. Yet, those | | | | a long time. In tropical rain forest countries in South |
| potential buyers may have bought the car anyway | | | | America and Southeast Asia, where most of the |
| had the price been much lower. For those potential | | | | world's hardwood comes from, tree-harvesting |
| buyers that did not buy, there may be a price that | | | | contracts are linked to the phase of the moon. The |
| would turn them into buyers.Suppose you had ten | | | | trees are only cut down on a waning moon, as near to |
| potential car buyers out looking at the same car. At | | | | the new moon as feasible. This is because on a |
| the current asking price, perhaps only one of the ten | | | | waxing or full moon, the sap rises in the trees and |
| feels it is worth buying at the asking price and would | | | | extensive sap bleeding attracts hordes of deathwatch |
| buy it. As you keep lowering the price, however, more | | | | beetles, which will devastate a crop. Awareness of |
| and more may then consider it a good buy and want | | | | this cycle means the difference between making or |
| to buy it. As you get closer and closer to free, you get | | | | losing millions of dollars every year."Does the moon |
| to a point where almost all the buyers are ready to | | | | also affect people? Consider this finding."At the |
| purchase. It is all a matter of perception, the perception | | | | University of Miami, psychologist Arnold Lieber and his |
| of value.Okay, now let's work back from there and | | | | colleagues decided to test the old belief of full-moon |
| ask the next question. What may affect a buyers | | | | "lunacy" which most scientists had written off as an |
| perception of price?Perception is a mental function. | | | | old wives' tale. The researchers collected data on |
| Therefore, we must address the 'mental', the | | | | homicide in Dade County (Miami) over a period of 15 |
| 'psychological' angle of buying.When we consider the | | | | years - 1,887 murders, to be exact. When they |
| psychological aspect, we must consider the 'emotional' | | | | matched the incidence of homicide with the phases of |
| aspect as well.A person buys a commodity contract | | | | the moon, they found, much to their surprise, that the |
| or stock because that person perceives that it either | | | | two rose and fell together, almost infallibly, for the |
| has or will have greater value later on.. So the buyer, | | | | entire 15 years! As the full or the new moon |
| not wanting to miss the opportunity for gains, will | | | | approached, the murder rate rose sharply; it distinctly |
| immediately buy. This may be motivated by fear of | | | | declined during the first and last quarters of the |
| losing out, or it can be motivated by greed for more. | | | | moon.""To find out whether this was just a statistical |
| Also, it can motivated by an attachment for the | | | | fluke, the researchers repeated the experiment using |
| product itself. Even if the person can address the | | | | murder data from Cuyahoga County in Ohio |
| purchase with all the control of emotions that is | | | | (Cleveland). Again, the statistics showed that more |
| humanly possible, there will always be a 'desire' that | | | | murders do indeed occur at the full and new |
| the purchase will eventually reap rewards. 'Desire' is an | | | | moons."We have now gone from the actual buying |
| emotion.So then, what may affect our emotions and | | | | and selling of stocks and commodities back to what |
| desires that lead us to perceive that the market will | | | | we can see is an influence from weather, which is |
| move higher so that we should buy?Our mental | | | | influenced by the relationship of the earth, sun and |
| perception is mostly affected by information. This | | | | moon. Now here is something that you should consider |
| information can be recent, and it can also be | | | | about these chains of events:Notice that the sun/earth |
| accumulative over time, such as what we call our | | | | relationship produces weather 'cycles'. It produces also |
| 'experiences'.Information comes to us from many | | | | what we call the seasons. And we all know what |
| directions. We may be reacting to what the weather is | | | | affect weather and the seasons have on our |
| or will be if we want to trade grains, for example. Or | | | | commodities and those financial instruments that are |
| the weather itself may simply affect how we 'feel' at | | | | directly and indirectly tied to it.And we also noted again |
| the moment, affecting our buying decision.Just as if a | | | | the reference to 'cycles' when dealing with the moon's |
| drought in Florida or other major orange growing areas | | | | affect on the earth and its population. When you |
| may cause us to feel that the price of orange juice is | | | | consider the mentioning of these 'cycles', reflect on |
| going to rise fast, resulting in a decision to buy now, | | | | what you have noticed over and over again on your |
| sunny days can affect our mood and make us feel | | | | market price charts. You see prices moving up then |
| more optimistic about buying. There is plenty of | | | | down then up then down, over and over again. What |
| scientific evidence to point out that weather does | | | | you are seeing are the effects of 'cycles'. As a matter |
| have a direct affect on how we feel about ourselves | | | | of fact, by applying some simple oscillators such as the |
| and other things.The same can be said about various | | | | Stochastic or moving averages, you can often see |
| news reports. These can affect our mood as well as | | | | these cycles more clearly.And just as we've worked |
| our perception, resulting in a desire to buy a particular | | | | our way back to find that there is not just once |
| market contract or stock. An interesting consideration | | | | source, but perhaps several sources of initial effects |
| is that much of the news we get is about something | | | | that lead down the chain to our decisions to buy or sell, |
| that is affected by either the weather or the mood of | | | | these multiple effects (cycles) combine resulting in the |
| a person or persons. For example, weather is often | | | | distorted cycle patterns we see on price charts.It is |
| part of the news with droughts, floods, storms and | | | | hoped that by working back from the actual buying |
| much more. But consider the reports on crime and war | | | | and selling to the effects that may lead to those final |
| (psychological, mood, desire, greed, fear). If you | | | | actions, you get a better understanding of the inner |
| remove weather and all aspects of emotion from the | | | | workings of market price action.And as meteorologists |
| equation of news, you simply would have no news at | | | | have made great leaps in forecasting the weather by |
| all.Now we must ask the next question. Is there | | | | understanding the inner workings of weather, the |
| anything that can be traced back from weather and | | | | market trader can also reach a point of making highly |
| mass psychology (moods)?Interesting, the answer is | | | | accurate forecasts of market behavior, enough so as |
| yes. In researching the subject of weather and human | | | | to be able to increase ones odds of getting on the |
| psychology, I was able to dig up the following tidbits of | | | | right side of most trades.Learn more on how to lower |
| information that I think you will find quite | | | | your risk and increase your profit potential with other |
| enlightening.British Journal of Psychology. Vol 75(1), Feb | | | | free articles found at our Precision Timing of the |
| 1984, 15-23."10 mood variables were related to 8 | | | | Futures, Commodity and Forex Markets site. |