Saturday, December 31, 2011

2011 ends on down note; Saturn-Rahu could dampen start of 2012

2011 ended on a quietly somber note as global markets factored in lower growth expectations from the ongoing Eurozone problems and rising Italian bond yields. In New York, the Dow slipped less than 1% on reduced volume closing at 12,217 while the S&P 500 finished at 1257. As has often been the case this year, Mumbai suffered a larger loss as the Sensex declined 2% closing at 15,454 with the Nifty ending the year at 4624. This bearish outcome was largely in keeping with expectations as the Mercury-Rahu conjunctions on Tuesday/Wednesday and the Sun-Pluto conjunction on Thursday weighed down sentiment. As expected, we did see a brief rise on Monday in India right on the same day that Jupiter became stationary. This was a fairly clear bullish indication. Friday's Moon-Mars aspect also corresponded with declines on the final trading day of the year.

On the whole, 2011 was a negative year for the economy and most global markets as runaway inflation and diminishing growth prospects weighed heavily. US markets were mostly flat on the year, while European and Asian markets suffered heavier losses. India declined 25%. Given the rash of Saturn aspects through 2011, this negative performance certainly did not come as a surprise. I thought we might have seen more downside in US market than we did, but generally the market appeared to reflect my understanding of the various planetary energies at work. As ever, Saturn revealed itself again as the killjoy of the solar system as its aspects approximated times of particular pessimism in the markets while Jupiter's aspects tended to correlate with periods of expansion and optimism. There is still so much we (meaning I, of course) don't know about how planetary positions may correlate with financial sentiment. The margin of error in financial astrology is depressingly huge. And yet it is somewhat reassuring when such basic first principles such as Saturn = bad and Jupiter = good are broadly reaffirmed by a fresh batch of data points. This suggests to me that astrology has more in common with science than intuitive art and should be amenable to scientific investigation -- with apologies to Galileo. Financial markets provide an excellent source of data on which some of these seemingly implausible assertions about the significance of the position of the planets can be tested.

The first week of 2012 seems like a good candidate for more declines. The medium term influences are apparently negative: Saturn is almost at its closest aspect with Jupiter, while Rahu is also moving into position for its aspect with Saturn. Saturn-Rahu aspects are notoriously bearish, although it is conceivable that it could manifest next week rather than this week. Mercury's entry into sidereal Sagittarius on Tuesday and Wednesday could correspond with some optimism but it does not look particularly robust. At the same time, the Sun will be forming an aspect with Rahu which may further undermine sentiment. All in all, the cards seemed stacked against the market here, perhaps in a big way. And yet there is an absence of any clear short term triggering aspects that makes me wonder if some larger moves could be postponed for a while.

Overall, 2012 looks like another difficult year for the markets. The current configuration of Jupiter-Saturn alongside Neptune and Uranus may well exercise a negative pull on markets into February. Jupiter will take over for a while after that and could bring a good relief rally into March. But the problem is that Jupiter will weaken after March while Saturn remains quite strong through much of the spring. This greatly increases the likelihood for more troubles in the financial world during Q2. To make matters worse, we will have an exact square aspect between Uranus and Pluto in June. These two distant planets only form aspects quite rarely so this aspect is definitely one to watch. Generally it is considered bearish and disruptive to the status quo. Since markets don't like uncertainty, we can expect to see some fallout from this aspect near the middle part of the year. This aspect will last through much of 2012 and will tend to create more upheavals and uncertainty. If anything, 2012 looks like it may be worse than 2011 in terms of global market performance.