While I can't quite see a repeat of the 1987 crash as some are predicting, it does seem as if the stage has been set for some kind significant down move in the stock market. The QE merry-go-round may finally be coming to an end as Ben Bernanke may have no choice but to reduce the Fed's bond-buying program as the economy improves. In our upside-down bizarro world, good news for the economy is now bad news for Wall Street as investors have come to rely on the Fed and other central bankers to buy up bonds in order to drive down interest rates and thereby stimulate economic activity. One of the problems last week was that the bonds fell sharply in tandem with stocks and this created a negative feedback loop as rising bond yields spooked stock traders. Not good. Traders then sold their positions from fear that higher rates would make stocks less attractive. If bond yields continue to rise (the 10-year Treasury hit 2.8%, its highest level in two years), it could create a mass exodus out of stocks and into bonds as investors go in search of higher yields.
Certainly, there is some risk in the air as the astrological factors look problematic. In addition to the transit of Venus through Virgo over the next four weeks, Mars will enter Cancer on Monday where it will remain for the next six weeks. This is potentially significant for two reasons. First, like Venus in Virgo, Mars is said to be debilitated in the sign of Cancer. According to astrological lore, Mars tends to do poorly in this sign as its more negative and chaotic side is more likely to manifest. Mars is often a malefic influence in the best of circumstances, so this is another negative influence for stocks to contend with. But the second reason is probably even more important. Mars will be in a mutual full-strength aspect with Saturn, another malefic planet. Mars casts its forward square aspect upon Saturn while Saturn casts its backward square aspect upon Mars. This doesn't happen very often and in theory should describe a condition of higher anxiety, frustration and even destruction. While this may or may not affect financial markets, its does seem to be powerful enough to destabilize collective sentiment. If nothing else, markets are a reflection of collective sentiment, of course, so this is a very intriguing case study of just what might happen when the two worst planets in the pantheon get together over the coming weeks.
It's worth noting, however, that Mars in Cancer hasn't been that negative for stocks in the recent past. Due to the slower orbit of Mars, it only passes through Cancer about once every 18-20 months. The last time Mars was in Cancer was in 2011 from September 9th until October 29th. While this transit included an important interim low in the market (October 4th), stocks actually rose during this transit. The key offsetting positive factor here was the Jupiter aspect with Pluto. As a rule, transit aspects between slow moving planets will usually trump sign transits. Additionally, Jupiter was in Aries, a sign ruled by Mars. This benefic Jupiter influence may also have flowed back into Mars and rendered it less negative.
The previous transit of Mars through Cancer occurred in 2009-2010 when Mars spent an unusually long period in Cancer due to its retrograde cycle. This meant that Mars spent seven months in Cancer. Indian stocks fell 6.5% during this period, although US stocks actually rose. So another mixed bag there, although I would note that the Flash Crash of May 2010 did occur while Mars was in Cancer. The mitigating factors there was again a strong Jupiter presence, this time through its conjunction and Papakathari Yoga in between Uranus and Neptune. Before that, Mars entered Cancer in April 2008 and this coincided with a 15% fall in the BSE Sensex during the year of the meltdown.
Please note that I have included the effects of the transit of Venus in sidereal Virgo for Indian stocks this week. For the most part, they echo the same results of Venus in Virgo for US stocks that I explained last week. Most transits coincided with declines over the four week period, albeit with a little more variance. Overall, it does seem to be a bearish influence.
The bottom line here is that we are getting a double dose of debilitation over the next two weeks as both Venus and Mars will be in weakened states. This last occurred in September 2011 and did coincide with a significant (6%) fall in stocks around the world. While no astrological indicators are correlated 100% with a particular outcome, the nature of both these planets nonetheless should give us pause. The fact that Mars will be afflicted by Saturn for the entirety of its transit through Cancer would seem to ratchet up the potential for troubling and stressful situations. To be sure, it could all pass for not and the market could end up climbing the bull's "wall of worry" as it often does. But if clouds are forming overhead, it is usually a good time to find an umbrella -- just to be on the safe side.
This week Mars enters Cancer on Monday so that could put investors on edge. It is possible that some of the declines at the end of last week were the result of this imminent entry of Mars into Cancer. This is especially the case in India where stocks fell 4% on Friday. Some gains are still possible here as a result of Jupiter's exact aspect with Uranus on Tuesday. The Mars-Mercury aspect on Wednesday is another pattern that could spell trouble. While it's not exactly a blueprint for a decline this week, it also doesn't seem that inspiring either.