Saturday, October 1, 2011
Recession now "inevitable"; stocks struggle on Saturn-Ketu aspect
It seems we are on the verge of a new recession. (Did the last one ever actually end?) The highly reliable ECRI report this week showed a continuation of the trend of declining economic activity that began in May. The report maintains that a recession is now inevitable and there is nothing the US government can do to stop it. As the reflection of all available data, the stock market appears to confirm this pessimistic expectation. After another rally attempt early in the week, the market slipped again with a major retreat on Friday. While the Dow ended a little higher closing at 10,913 the broader S&P500 index fell modestly to 1131. Indian markets fared somewhat better as the Sensex rose 2% closing at 16,453 with the Nifty finishing at 4943.
This bearish outcome was in keeping with our forecast as the second half of the week did not look favourable given the strong Saturn influence. As I have noted, the ongoing Saturn-Ketu aspect was likely to have a depressive effect on the markets. While we have not yet seen huge drops, stocks have been struggling. I was also correct in calling for some early week gains on the Sun-Mercury-Uranus alignment as markets rallied strongly across Monday and Tuesday. Wednesday's Mars aspect to the Sun-Mercury conjunction abruptly reversed this up trend and took stocks lower.
The gloomy atmosphere is more palpable now as not even Germany's approval of the Greek bailout funding was enough to lift the mood. A new recession will entail more job losses, less consumer spending and continued pressure on government balance sheets as revenues will fall and spending will increase. Cutbacks and austerity programs will not be popular when unemployment is rising. But none of this comes as any surprise to us as the powerful Saturn-Ketu aspect was likely a harbinger of a leaner outlook that focused on constraint and limits rather than expansion and growth. By itself, Saturn symbolizes losses, pessimism and debt. Ketu's association with renunciation only tends to exaggerate these tendencies. Ketu's influence on Saturn here may well correspond with the re-ordering (Ketu) of debt (Saturn) in Greece through its eventual default. Over the next few months, Saturn will move into aspect with Jupiter, Uranus, and Neptune. While these three other planets work well together and usually correlate with growth scenarios as we saw in 2009 and 2010, Saturn has the power to convert the planets it associates with to the dark side. For this reason, the medium term outlook has an increased downside risk.
This week will feature another dose of Saturnian discipline as the Mercury-Saturn conjunction is exact on Thursday. This is likely to weaken stocks around midweek. Some upside is possible before the conjunction, however, as Venus may be strengthening. Venus enters sidereal Libra on Tuesday so that could spur some buying in the early week. Similarly, Venus makes an appearance on Friday as it approaches its aspect with Neptune.