PRECIPITATION

National average precipitation is an accurate indicator of the economy.  Wet trends correspond with bull markets and a growing economy.  Dry trends correspond with bear markets and a shrinking economy. 

 The weather turned dry in 1996 and reached a drought bottom in 2000.  The stock market promptly crashed.  2001 and 2002 were wetter than 1999 and 2000 but still not moist enough to regenerate the economy.  2003 continued a the wet trend and 2004 witnessed a precipitation high. The stock market has responded favorably to this wet trend. Unfortunately, 2005 and 2006 were drier than 2004. The stock market is, therefore, likely to rise in the short term (see the stock prediction in News Before the News 2007 and the article "Inflation Warning and the War in Iraq") but drier conditions warn of a pending sharp downturn in the next couple of years. The dry downturn in 2005-2006 is not below average and, hence, does not indicate an immediate market slump. The next recession is near however. As predicted, 2007 was another dry year. In fact, it was below average! The economy, therefore, is in recession mode. Expect the stock market to tumble in 2008 and remain low for the year.

The following graph shows the U.S. national average precipitation through 2007.

 

 

SUNSPOTS

Sunspots have a lot to do with weather trends.  They also indicate restlessness, anxiety, tension, an increase in accidents, conflicts, wars, pandemics (72% of the time), and human migrations during the rise and peak of the cycle.  Low sunspot periods correspond with less energy and production, epidemic diseases (28% of the time), and generally more peaceful times.

Sunspots have been declining for several years. The low appears to have occurred in October 2007. I previously wrote, "A major stock market recession is expected shortly after monthly sunspot averages first rise above 50 after this low." This prediction has been met with the sharp stock market sell-off beginning in October 2007. A full recession is still being debated. If the mortage crisis spreads, a deep recession will result. This appears all too likely based on sunspots and planetary positions.

Sunspots are expected to first rise above 50 in January 2009. This will either signal a deepening recession or be the turning point toward renewed economic growth. If the latter, then the "above 50 sunspot signal" will have reversed; in other words, above 50 will signal economic stimulation, rather than the beginning of an economic downturn.

The spread of avian flu from Asia to Europe and Africa is alarming due to where we are in the sunspot cycle. A major pandemic is likely in the next several years, particularly as sunspots rise and reach the next peak.