In the world of finance, there is no concept more divisive than astrology. To the institutional quant, it is superstitious nonsense, a relic of a pre-scientific age. To the esoteric mystic, it is an undeniable truth, a map of cosmic influence on human affairs.
Both positions are rooted in faith, not evidence.
A true analyst does not believe or disbelieve. They test. The purpose of this article is not to convince you of astrology's validity, but to treat one of its most famous claims as a testable scientific hypothesis and provide a framework for its rigorous, quantitative analysis.
The Hypothesis: Mercury retrograde periods correlate with a statistically significant increase in market fear and volatility, as measured by the CBOE Volatility Index (VIX).
Defining the Variables
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The Phenomenon: Mercury Retrograde. In astrology, Mercury governs communication, technology, data and short-distance travel. When it appears to move backward from our perspective on Earth (retrograde), these domains are said to become chaotic, unreliable and prone to error. In a market context, this would translate to miscommunication, failed trades, technological glitches on exchanges and erratic price movements driven by flawed information.
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The Metric: The VIX. Known as the "Fear Index," the VIX measures the market's expectation of 30-day volatility based on S&P 500 index options. A high VIX reading indicates high fear and expected volatility. A low VIX indicates complacency. It is the purest available metric for quantifying market sentiment and fear.
If the astrological claim is true, we should see the VIX behave differently during retrograde periods compared to periods of direct motion.
The Methodology: A Data-Driven Approach
This is how you move from speculation to analysis.
Step 1: Data Acquisition
- Astrological Data: Obtain a historical list of all Mercury retrograde start and end dates for the past 20-30 years. This data is publicly available from sources like NASA or dedicated ephemeris websites.
- Market Data: Download the daily historical data for the VIX index (
^VIX) for the same period. This is available from Yahoo Finance or any major financial data provider.
Step 2: Period Definition
For each Mercury retrograde event, define three distinct periods:
- Pre-Shadow Period: The 14 days before the retrograde begins.
- Retrograde Period: The ~21 days of the retrograde itself.
- Post-Shadow Period: The 14 days after the retrograde ends.
- Control Period: All other days when Mercury is in direct motion.
Step 3: Calculation
Using a spreadsheet or a Python script, calculate the following metrics for each of the defined periods across your entire data set:
- Average VIX Value: The mean VIX reading during each period type.
- VIX Standard Deviation: A measure of the VIX's own volatility during each period.
- Number of Spike Days: The count of days where the VIX closed >20% above its 50-day moving average.
Step 4: Analysis and Interpretation
Compare the metrics. The hypothesis is supported if you find, for example:
- The Average VIX during the Retrograde Period is consistently 10-20% higher than during the Control Period.
- The VIX Standard Deviation is significantly greater during retrograde, indicating more erratic fear levels.
- The frequency of Spike Days is higher during retrograde, suggesting more panic events.
If the data shows no statistically significant difference between the periods, the hypothesis is unsupported by the evidence.
Beyond Mercury: A Framework for Cosmic Correlation
This method is not limited to Mercury. It can be applied to any astrological claim:
- Full Moons: Do markets exhibit higher volume or reversals around full moons?
- Mars Retrograde: Does this cycle, associated with aggression and war, correlate with geopolitical instability and defense stock performance?
- Saturn-Pluto Conjunctions: Do these rare and powerful aspects, linked to systemic collapse and transformation, precede major market crashes (e.g., 1929, 2008, 2020)?
The point is not to blindly believe in cosmic influence. The point is that the universe of potential data is larger than what is shown on a Bloomberg terminal. The greatest discoveries are often made by testing the hypotheses that everyone else dismisses as absurd. A true edge is found not in having the right answers, but in having the courage to ask the forbidden questions and the discipline to seek the data.