Sunday, June 28, 2015

Greece moves to the brink as EU talks collapse

(28 June 2015)  The hang-wringing in Europe reached a fever pitch today as Greece took one very big step closer to default and possibly leaving the Eurozone.  Greek Prime Minister Alexis Tsipras shocked the Troika (EU, ECB, IMF) on Friday by suddenly pulling out of negotiations and calling for a referendum to be held on 5th July on the final bailout offer.  He has called the offer "humiliating" and is asking his people to vote "No".  A No vote would ratchet up the pressure even more as Greece would likely have to default on its debt.  After that, any number of scenarios are possible, including the much-talked about Grexit from the Eurozone. 

It's a very fluid and confusing situation at this time (Sunday afternoon EDT) and no one really knows what will happen next.  Greek banks are closing for the week in an effort to restore calm and prevent a chaotic bank run.  For its part, the EU has said it has withdrawn its latest bailout offer so it isn't clear if the referendum will even take place since there is technically no longer an offer to vote on.

Last week, I thought there might be enough positive planetary energy in play this week to bring the parties together, at least for a few days.  For several months, I have identified June as a likely turning point in the ongoing saga between Greece and the EU.  The 120 degree Jupiter-Uranus aspect was a key influence in this respect as it normally boosts confidence and raises optimism.  The problem is the aspect was exact last Monday on 22 June -- the day when things were looking rosier for a deal to be struck.  Stocks around the world generally rose on the expectation that a default could be averted at least for a few more months. 

But that is looking less likely now.  I wasn't sure if the Jupiter-Uranus aspect would represent the peak of optimism in this matter or just get us a little closer to the turning point which looked like it might happen as late as 30 June and the Venus-Jupiter conjunction.  As I wrote last week, late June looked very significant in any event because the alignments suggested things could soon change once this Jupiter-Uranus-Venus alignment began to separate on the 1st of July. 

So what is going to happen now?  I don't know exactly how it will all play out but I am expecting any last-minute measures to ultimately fail, probably by the middle of July.  To be honest, I'm not sure there will be any last-ditch olive branches this week or not.   Whether or not the referendum actually takes place is hard to say.  I would be surprised if we got a conclusive end to the crisis this week, as the Venus-Jupiter conjunction may allow for another brief injection of optimism early in the week.  It likely won't last very long, however, as Wednesday's Mars-Rahu square aspect looks unsettling.


Financial Markets Update

US stocks moved fractionally lower last week as hopes faded for a quick resolution to the Greek crisis.  The Dow was down modestly finishing at 17,947.  Indian stocks fared better, however, as monsoon worries subsided and early gains held.  The Sensex rose 2% to 27,811.  I had been fairly upbeat in last week's market forecast given the proximity of the Jupiter-Uranus aspect although I mistakenly thought the early week could see some declines from the Mercury and Mars influences.

This week promises to be full of surprises.  Tuesday's Venus-Jupiter conjunction would appear to offer the prospect of some upside in the early week.  But once that aspect is over and done with, the downside risk increases significantly.   Mars forms a very tense-looking aspect with Rahu (North Lunar Node) on Wednesday so that is likely correlate with some selling.  It could happen quite suddenly and occur at any time this week.  As Venus moves past Jupiter and Jupiter moves past its aspect with Uranus this week, the longer term outlook becomes more shaky.  Worse still, we can see that Saturn is backing into a close 45-degree alignment with Pluto that is exact in late July.  So you have a diminishing positive energy source as Jupiter fades and a growing negative energy source as Saturn strengthens.  No wonder Carl Icahn said stocks are way overvalued and the market is ripe for a big selloff. 

Sunday, June 21, 2015

Jupiter aligns with Uranus: a signal of change?

(21 June 2015)  Stock markets were generally higher last week as the Fed reasserted its commitment to predictable but cautious hikes in interest rates later in the year.  Despite ongoing uncertainty about what might happen in Greece, the Dow gained 1% on the week closing at 18,014.  Indian stocks were even stronger as early indications of the monsoon season looked positive.  The Sensex rose 3% before settling at 27,316. 

The outcome was not too surprising as I thought gains would be more likely in the second half of the week.  As I noted in last week's market forecast, the early part of the week saw some fallout from the Sun-Mars conjunction, although the negative sentiment only lasted for about one day.  Thursday was probably the most positive day of the week, with gains peaking a little before Friday's Moon-Venus-Jupiter alignment.

Stocks are being supported by the ongoing Jupiter-Uranus aspect.  These two bullish planets are moving quite slowly and will form an exact 120 degree angle on Monday the 22nd. Once the angle begins to move past 120 degrees, their combined influence may become a less reliable indicator of bullish sentiment.  This doesn't mean that markets are likely to decline starting on the 23rd, but it does mean that declines may become more frequent as we move further into the month of July. Given the ongoing uncertainty over Greece, it is interesting that this Jupiter-Uranus aspect should coincide at a time when the bailout expires and we could finally get a default, if not outright exit from the Eurozone. 

On one hand, the Jupiter-Uranus alignment suggests optimism and hope, even "prudent risk taking."  One would think that would be helpful for getting a deal done with Greece in the short term.  On the other hand, once this aspect begins to separate in July, the psychic terrain may become less conducive for compromise.  The possibility for financial disagreement and hardship in Greece will also rise in July given the Saturn-to-Venus square aspect in the Tsipras government swearing-in chart that I noted back in January.  Will this mean another round of painful austerity or a collapse of a deal?  It seems unlikely that the leftist Tsiprais government would ever submit to more austerity. 

Greece aside, we can see how this Jupiter-Uranus aspect may be operating in Indian markets by looking at the NSE chart.  Jupiter (26 Cancer) is in the 9th house and approaching a very nice aspect to the Ascendant at 29 Scorpio.  We can also see that Jupiter will soon align with several planets in the natal chart near 28 degrees -- Mercury (28 Virgo), Jupiter (28 Libra), Neptune (27 Sagittarius) and Uranus (29 Sagittarius).  Jupiter will reach 28 degrees of Cancer in the first week of July so that could be a pivotal week.  Once Jupiter reaches this degree, we are more likely to see weakness in the market.  Bullish Venus also conjoins Jupiter in that first week of July so that is an added reason to expect some significant developments in the markets. 

Weekly Market Forecast

More immediately, this week may again have a rocky start.  Mercury squares Neptune (confusion) on Monday and Tuesday, just at the same time that Mars aligns with Saturn (frustration).  Both look unhelpful for collective sentiment so we could see some declines in the early part of the week.  However, the late week may again see a rebound as Venus approaches its conjunction with Jupiter.   This conjunction will be exact on June 30th.

Sunday, June 14, 2015

Lessons of Financial Astrology: the case of Bill Gross

(14 June 2015)  Bill Gross has to be wondering about his luck these days.  The former superstar Chief Investment Officer of PIMCO had earned the nickname "The Bond King" during the past twenty years as his company became the largest bond fund in the world.  His luck started to sour in 2011 when he made a very public call to get out of all US Treasuries in anticipation of rising interest rates and greater inflation as a result of the Federal Reserve's ongoing QE policy.   This decision proved to be disastrously wrong as Treasuries rallied further and yields fell to record lows.  As a result, PIMCO returns suffered and a growing number of investors withdrew their assets.  Things got so bad that Gross was forced to leave the firm in September of last year and now manages the much smaller Janus fund. 

Gross' fortunes appeared to be improving recently with a brilliant call to short German government bonds (Bunds).  At the time, 10-year Bunds were yielding just 0.10% and most analysts were suggesting they were quickly headed for negative yield territory as several other European sovereign bonds had already done.  On April 21st, Gross said that Bunds were the "short of a lifetime" and predicted that yields would begin to rise very soon.  Sure enough, they did start to rise within days of his call and began a shocking rise back to 1.0% after only a few weeks.  

Unfortunately, Gross' gutsy call did not translate into gains for his fund and his investors.  As he put it, the call was "well-timed, but poorly executed."  The problem was that he did not expect rates to rise so quickly in a straight line and therefore his short positions were too conservative and targeted a more range-bound trade. It was a bittersweet turn of events to be proven right but to not be able to capitalize on his assessment.

His horoscope (born April 13 1944, time unknown, Middletown, OH) reflects this very mixed picture.  While we do not know his time of birth, we can still offer some general observations about his chart that showed both sides of this situation.  At the time of his public prediction, Jupiter had just completed its retrograde station at 18 Cancer as was in a square alignment with Mercury (19 Aries).  Jupiter symbolizes wisdom and "right thoughts" and Mercury represents intellect and speech.  Mercury-Jupiter combinations are classic indications of intelligence and insightful thinking.   This alignment was punctuated by Mercury (19 Aries) and Mars (21 Aries) which were both conjunct his natal Mercury at the time.  While Jupiter was not forming a traditional trine aspect to Mercury, the alignment was made more significant because the recent station was so close to the degree of his Mercury. 

At the same time, however, the Moon's Nodes, Rahu and Ketu, were positioned in a more difficult place in his chart.  Ketu (South Node) was just 5 degrees from his Venus.  Ketu is considered a more spiritual planet that has an anti-materialist influence.  Since Venus is a planet that represents money, among other things, the wide conjunction of Ketu to Venus was inimical to material gains.  The other potentially negative influence here is that Rahu and Ketu were at 15 degrees of their respective signs and thus formed an exact square alignment to Mars (15 Gemini).  Moreover, the nodes had stationed at 15 Virgo/Pisces for several weeks, and thus their impact of Mars would be that much greater.  Both Mars and the nodes are considered naturally malefic planets so this combination loaded the cosmic dice against Mr Gross. 

To be sure, there are many other astrological layers to this story, but just on the level of transits alone and an untimed chart, we can see how  this situation may be evolved.  Jupiter's station aligning with Mercury was a key reason why we may have got the call right on the direction of German bond interest rates.  The Jupiter-Mercury alignment likely also reflected the public approval he enjoyed from getting it right.  But Venus was not similarly supported by a positive planet, and instead was conjunct Ketu, an often negative influence in money matters.  The Mars affliction likely reflected his frustration in the matter and was also not conducive to profit.

There are a couple of takeaways here.  One is that profitable investing usually requires good planetary alignments at the time when the gain is realized, i.e. when the stock or asset is sold.  Bill Gross had a very nice Jupiter alignment in April but it was fading in May as Jupiter began to move forward again.  The other thing to remember is that bad transits involving malefics (usually Mars Saturn, Rahu, Ketu) will often trump transits of good planets like Jupiter or Venus.  At very least, they will introduce some unwanted or unhelpful dimension to the event and often they can completely determine the overall outcome.  While these transits alone do not tell the whole story behind Bill Gross' inability to trade profitably in April and May, they offer useful clues on why he was unable to translate knowledge into profits..

Weekly Financial Update

Stocks were mixed last week as uncertainty over Greece weighed on sentiment.  The US and Europe were modestly higher in the week although India moved lower on interest rate concerns.  In last week's financial forecast, I thought that the planets offered some prospect for gains given the Sun-Jupiter and Moon-Uranus alignments.  

This week could see some moves in both directions.  The early week is dominated by the Sun-Mars conjunction which looks somewhat bearish.  This is especially the case given where it falls on the horoscope of the German DAX index, as it creates a square alignment with the natal Mars.  Word is out now (Sunday night, ET) that the latest round of Greek negotiations have failed so it would not be surprising to see European stocks fall early.  One would think US markets would likely follow suit.  The late week looks somewhat better, however, as the Moon aligns with Venus and Jupiter in Cancer on Friday.  If we do get some declines in the first half, I suspect there could be a rebound afterwards. 

The other point that deserves reiteration is that the Jupiter-Uranus aspect is very close to exact now and it happens to align nicely with the Ascendant of the DAX chart.  That seems like it should equate to some significant optimism later in June.

Sunday, June 7, 2015

Storm clouds ahead for the Fed?

(7 June 2015) It's a difficult road these days for Janet Yellen and her team at the US Federal Reserve.  Seven years after the 2008 economic meltdown and the beginning of its unprecedented policy of zero interest rates and then quantitative easing (QE), the US economy is still shaky.  Some economic indicators like unemployment look pretty good (5.5%) but we're a long way from where we were before the Great Recession.  GDP is struggling at 2% per year, wages haven't recovered, housing is still down, and economic inequality is greater than it ever was. Economic insecurity appears to be at an all-time high as more people are either on food stamps or living paycheck-to-paycheck.

The problem for Yellen and her colleagues is that they desperately want to claim victory over this recession and "normalize" interest rates, if for no other reason than to have some breathing room in the case the economy tanks again and they have to cut rates again.  But many economists fear that a rate hike now will stifle this fledgling recovery and cause a huge market sell-off which could have major consequences for the financial sector (e.g. pension funds).   In this sense, some analysts are suggesting that the Fed is essentially trapped in its current policy -- unable to normalize rates because of its effect on the stock market and unable to lower them any further because they are already at zero. QE4 anyone?

I raise this question of the precarious position of the Fed  because its horoscope is going to become very active quite soon.  And when the Fed's horoscope looks "active" that means it usually has to act fast in order to deal with some kind of economic crisis.  Economic crises are usually bad for the stock market.

A quick look at the Fed's chart and we can see that in late July, Uranus will station retrograde at 26 Pisces.  This will form a close square aspect with the natal Mars at 26 Gemini. The Mars placement is doubly sensitive since it is just one degree away from the Ascendant at 25 Gemini.  This aspect usually coincides with highly stressful and unpleasant situations.  The Uranus station is extra-powerful because it marks a time when Uranus will appear to be stationary in the sky, thus extending the length of time of its aspect for several weeks. 

As an added factor, Mars will conjoin its natal position just one day before Uranus makes its station.  This extra Mars layer boosts both the overall probability of a crisis-type event as well as its severity.  These interlocking alignments will take place on July 25-26th. 

By way of comparison, we can see that Mars and Uranus were also prominent in September 2008 when the Fed allowed Lehman Brothers to fail as it went bankrupt.  Uranus was almost exactly 30 degrees away at 26 Aquarius thus aspecting that natal Mars-Ascendant by trine aspect.  Mars was square the Mars-Ascendant at 23 Virgo, in close conjunction with Mercury and Venus.  Other factors ramped up the intensity of this time period too as Rahu was conjunct the 8th house cusp at 24 Capricorn and therefore also formed a quincunx alignment with the Mars-Ascendant pairing.   While the Uranus trine aspect is likely not as potent as its square aspect, Rahu's simultaneous aspect here likely made this pattern worse. 

If the 2008 meltdown was an 8.0 on the economic Richter scale in terms of its destructive capacity, this late July alignment looks less difficult.  Perhaps more like a 6.0.  Like an earthquake of that size, there will likely be some damage, but maybe not as devastating.  But it should be big enough to cause a significant rise in anxiety in financial markets.

Weekly Financial Forecast

Stocks generally declined last week as worries over Greece continued.  In New York, stocks suffered a modest 1% decline with the Dow finishing at 17,849.  India's Sensex fell harder as concerns over the monsoon and a possible delayed rate hike dampened sentiment.  The Sensex declined 3% to 26,768.   I had leaned bearish in last week's stock market forecast as Saturn alignments were somewhat more prominent.
This week looks more positive as the Sun and Mars align with Jupiter.  This alignment is closest in the first half of the week.  Thursday's Moon-Uranus conjunction also seems quite bullish.  Jupiter will aspect them both as it is now just two degrees away from its exact 120 degree aspect with Uranus.