Friday, December 24, 2010

Markets drift higher; Mars-Saturn this week

Stocks edged higher last week as retail and housing numbers continued to show improvement and boosted hopes for the recovery. In New York, the Dow rose about 1% to close at 11,573 while the S&P500 finished the holiday-shortened week at 1256. It was much the same story in Mumbai as the Sensex added modest gains before closing at 20,073 with the Nifty standing at 6011 at the end of Friday's session. The universe unfolded more or less as expected as the early week Mercury-Jupiter-Uranus aspect pushed stocks a little higher ahead of the Christmas break. Predictably, some of the enthusiasm faded by week's end as Venus was damaged by bearish Saturn. Indian stocks also gained ground early in the week but failed to get above some important resistance, although they did manage a modest gain on Friday.

Tuesday's lunar eclipse garnered a lot of media attention, mostly because it happened to coincide with the winter solstice for the first time since 1638. I'm not sure this means anything special, although it may be more significant that the eclipse occurred when Mercury was in square aspect to Jupiter and Uranus. This bullish trio of planets can lift sentiment but the eclipse would almost seem to negate or even reverse that influence since eclipses are celestial mechanisms of interruption where the status quo breaks down.

The next eclipse in the current pairing arrives on January 4, 2011, just as Jupiter is in exact conjunction with Uranus. It's quite a coincidence to be sure, and greatly increases the chances for some big changes in our economic assumptions such as how risk is assessed and how future earnings are calculated. Jupiter (optimism) and Uranus (risk) have been in close proximity for the past four months and that has been a major reason for the sustained rally from the summer lows. Once Jupiter separates Uranus, the stage will be set for a dissolution of that bullish, confident energy. While it could take place gradually over several weeks, the fact that an eclipse occurs at the same time may increase the likelihood of a sudden shift in sentiment or revision in thinking. January promises to be a very interesting time indeed.

This week will feature a square aspect between Mars and Saturn. Both of these planets are considered natural malefics so that greatly increases the probability of declines. The aspect is closest on Tuesday so perhaps that early to midweek period will be the focus of negativity. The late week period may be somewhat more positive as the Mars-Saturn aspect separates while the Moon conjoins Venus on Thursday and Friday.