Merriman Market Analyst

Review 

The Ultimate Book on Stock Market Timing, Volume 4: Solar/Lunar Correlations to Short-Term Trading Reversals by Raymond A. Merriman. West Bloomfield, Michigan: MMA Publications, 2003. ISBN 0-930706-29-3. Softcover, 241 pages, $95.00.

During the past few years Raymond Merriman has been involved in what can only be described as a monumental task—writing and publishing a comprehensive five-volume set of books on astrological trading techniques. Each book has focused on a different facet of this enormously complex subject, and each has been based on Merriman’s painstaking study and research.

In each of his first three volumes, Merriman dealt with progressively shorter-term astrological cycles and their impact on market phenomena: multi-year market rhythms in volume 1, outer planet cycles in volume 2, and inner planet cycles in volume 3. And in volume 4 he refines his approach even farther, looking at solar and lunar rhythms to pinpoint specific high-probability trading opportunities based on his historical analysis of trend reversals in the Dow Jones Industrial Average, the NASDAQ Composite, and the Nikkei. This enables him to reach conclusions like "Traders are advised to look for opportunities to trade the NASDAQ when the Sun is in Gemini, and the Moon is in Gemini or Aquarius, and to some extent, Scorpio or Pisces. The probability of a 4% or greater reversal from an isolated low or high during these solar-lunar combinations is increased if Venus is in Gemini," and "When the Moon is in Taurus, while the Sun is in Libra (both Venus-ruled), there is a greater than average likelihood that a trough will form. Traders are thus advised to look for buying opportunities if the DJIA is declining into the period."

Despite its wealth of specific trading advice, however, this volume is fundamentally a book about identifying opportunities, about assessing risks, and above all about knowing the difference between the two. When we can identify times that bring us big opportunities with minimum risk attached, they deserve special attention. And, Merriman points out, the opposite is also true—when we confront times of high risk and low opportunity, why should we even be trading at all?

If notions like this make sense to you, you’ll quickly understand why Solar/Lunar Correlations to Short-Term Trading Reversals not only deserves a place in your trading library—it will in all likelihood become one of those half-dozen books you’ll keep within arm’s reach throughout your active trading day.

One word of caution is perhaps appropriate here, however. The great virtue of Ray Merriman’s work is also its greatest limitation. He takes a rigorous, scientific approach to his studies, carefully documenting what astrological phenomena he has tested in the markets and what conclusions he has reached. But when you read those conclusions, it’s sometimes easy to get carried away. You could be tempted to extrapolate beyond the scope of the research that Merriman has actually published.

If you do go off on such flights of fancy while reading this book, letting the author’s hard work inspire visions of trading profits that endlessly dance in your brain, it’s perhaps understandable, but it certainly won’t be Ray Merriman’s fault. Throughout the pages of this book, he really does his best to offer responsible, real-world suggestions for keeping your feet on the ground as a trader.

On the other hand, if you read this book carefully, you will gain insights and specific information that can be converted to cash if you take appropriate action. While this is particularly true if you are trading the Dow, the S&P, or the QQQs, if you’re careful you can also apply Merriman’s insights in Solar/Lunar Correlations to Short-Term Trading Reversals to individual equities—as the old stock market adage says, "a rising tide floats all boats." When the market as a whole rises or falls, the prices of most individual stocks tend to follow the trend. If that’s true with the stock you’re trading, and it happens to be a high-volatility stock at a time that Merriman has identified as having a high probability for market trend reversal, then it can make a big difference in the ultimate profitability of your trade.

In that case, Ray Merriman deserves your thanks. He will have put a lot of money in your pocket, and your copy of Solar/Lunar Correlations to Short-Term Trading Reversals will have paid for itself many, many times over.