Feb

19

a geomagnetic storm on earth due to solar activityThe NASA site spaceweather.com has a prediction of 25% chance of geomagnetic storms at mid-latitudes in the next zero to 48 hours. The chance at higher latitudes is 30%. Recall that geo-magnetic storms have been linked in an Atlanta Fed study to stock market weakness in the nest few days following the event especially if accompanied by Coronal Mass Emissions.

Dr. McDonnell is the author of Optimal Portfolio Modeling, Wiley, 2008

Jeff Watson writes:

Years ago, I looked at the correlations between solar activity and markets using the solar flux, A index, J index, and K index, and Sunspot number, and couldn't find anything offering predictive value. The only correlation I could make was the total solar output with grain prices, and my conclusions were suspect, to say the least as many other factors were in play. A great solar storm,on the level of Sept 1-2 of 1859(which blew out the telegraph system world wide) might be bullish on chip makers and other electrical component providers, plus would be very bullish on metals. However, a solar storm of that magnitude could possibly wipe out our digital communications, computer system, and internet, for a long time.

Yishen Kuik comments:

I'd never heard of the 1859 storm before. A little more recently, the Toronto Stock Exchange was halted by a solar storm in 1989.


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2 Comments so far

  1. Ken Drees on February 19, 2010 10:06 pm

    Low sun spots cycle trough–http://science.nasa.gov/headlines/y2009/01apr_deepsolarminimum.htm

    so less sun activity and maybe a cold series of summers ahead?

    http://spacescience.spaceref.com/ssl/pad/solar/sunspots.htm

    which is my weather thinking backdrop for the grains this season–leaning towards cold and wet–as a general idea to frame the potential for longs.

    As far as a solar storm happening, with the general quietness of the sun at this time leads me to believe that its not in the cards.

  2. Craig Bowles on February 21, 2010 10:10 am

    Looks like we didn't get the geomagnetic storm. As for sunspots, they are really ramping up. Effective spots are hitting new highs every day recently. The last two weeks, it seems everything is ramping up. The grains, dollar/yen, interest rates, gold, stocks, oil. When you look at short-term growth rate comparisons, such similar strength of everything isn't something we've seen anytime recently. Everyone is psyched about a seasonal rally. A short-term relative price comparison shows everything positive. That's really odd as this is something that happens at peaks rather than moving into such seasonal strength. Even silver has jumped into the action. Somebody is going to be disappointed, so it'll be interesting to see where.

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