Monday, December 28, 2015

Is the sun setting on oil? An astrological price analysis

(28 December 2015)  It is very tough times for the oil industry these days.  After trading north of $100 a barrel for much of the past five years, crude oil prices have collapsed since mid-2014 as OPEC increased supply while demand has fallen off a cliff.  Brent crude and West Texas Intermediate now both trade for less than $40, a level last seen in the depths of the economic meltdown in 2008.  The decade-long bull market in commodities like oil was closely tied with the emergence of China as an economic superpower but now that China is slowing, crude oil is suddenly much less valuable. 

The recovery of the US Dollar since 2014 is another part of the story since oil is priced in Dollars.  And if that wasn't enough, the historic climate change agreement recently signed in Paris suggests there may be a long term move away from fossil fuels.  While carbon taxes and pledges to cut oil consumption may not have an immediate impact on prices, it is an added source of concern for the oil industry.   Is the sun really setting on crude oil and will prices keep falling as energy use shifts away from fossil fuels?  And will a prolonged economic slump also depress prices as recent OPEC reports have suggested?  Let's see what the stars say.

Previously, I have made some price forecasts based on the US-based WTI chart.  This week I thought I would revisit the oil question using the Brent horoscope.  Brent crude (from the North Sea) was first traded on the NYMEX exchange in New York on September 5th 2001.  The time of the first trade is a matter of some debate, although we may use 9.30 a.m. for the moment. 

What is striking about this chart is how the dasha sequence does seem to offer some insights on previous price movements.  Since it's first trade in 2001, Brent crude has been in the Mercury major dasha period.  This period will continue until April 2016 when the Ketu major dasha period will begin.  Mercury is a benefic planet by nature and it is well placed in the chart in the 1st house in its own sign of Virgo opposite the Moon.  This long term Mercury influence is one reason why prices have generally been elevated for most of this period.  In 2001, Brent was trading at $26.  Despite the recent bear market decline, it is still well above that level and hence essentially validates that benefic Mercury influence.

Even more telling, however, are the effects of the minor dasha periods.  What would we expect from these shorter minor periods? One of the core principles of the Vedic approach to financial astrology is that we would expect price increases during the minor periods of benefic planets like Venus and Jupiter and declines during the periods of malefics like Mars and Saturn.  We might also adjust those expectations depending on the specific condition of each minor dasha lord in the chart. 

Here we can see how clearly the planets appear to correlate with price movements.  The Venus minor period (Mercury-Venus) ran from September 2002 to July 2005 and should have been quite positive since both Mercury and Venus are benefic planets and Venus is well-placed in this chart in the 11th house symbolizing gains. Venus loses some of its possible upside impact perhaps from the 3rd house/sextile aspect from malefic Saturn but it still looks good overall.  Not surprisingly, the price of Brent doubled in this three-year period from $28 to $57. 

Prices continued to generally rise through the Sun and Moon minor periods from 2005 to 2007 as the Mercury-Moon ended when prices had risen above $80.  While the Sun is usually treated as a natural malefic in Vedic astrology, I have found it to be a more neutral influence.  In the Brent horoscope, the Sun is in the 12th house of loss (not good) but it is strengthened because it is in its own sign of Leo.   The Moon is a benefic and is further strengthened because it is aspected by Mercury and it rules the 11th house of gains (Cancer).  It does receive an aspect from Mars so that can create some problems (e.g.  the sharp decline in late 2006) but overall it looks fairly well-placed. 

The Mercury-Mars period is perhaps the most complex.  A lot happened during this period from October 2007 to October 2008.  Prices went parabolic in early 2008 and created a what is known as a "blow-off top" which was then followed by a shocking decline in prices towards the end of 2008 as the financial markets crashed.  Mars is a malefic, of course, so we can't be too surprised that the net outcome of its period was in fact a decline.    Moreover, it is closely conjunct Ketu in the 4th house which is another malefic planet in this context.  So the awkward question is: how could prices have temporarily exploded higher to $147 by July during this supposedly malefic Mars minor period?  

First, I think it is important to remember that dashas do not explain everything.  No single astrological factor can do that.  Dashas are still subject to the varying influences of transits, progressions, returns, and any number of other factors we might bring into consideration.   Secondly, Mars does have some strength and ability to do good in this chart due the aspect it receives from Jupiter.  Also Mars is placed in Sagittarius, which is a sign ruled by Jupiter.  So that double Jupiter influence should be seen as a mitigating factor on Mars and hence, on its minor dasha period from Oct 2007 to Oct 2008.  But the bottom line was that Mars was malefic as prices fell during its period: the Mars period began in Oct 2007 with Brent at $85 and it ended in Oct 2008 with Brent at $65 and falling fast.

Mercury-Rahu then followed and lasted into May 2011.  Prices bottomed in December 2008 just after the Mars minor period ended, and then began a major bull market.  Also a natural malefic, Rahu is often positive for material things like prices, money, status and the like. This is all the more likely when it is associated with a benefic planet as it is here through its conjunction with benefic Jupiter.  The Rahu minor period was therefore very likely going to correlate with a gain and indeed prices almost doubled for the duration of this period from $65 in October 2008 to $115 in May 2011. 

Mercury-Jupiter came next and ran from 2011 until Aug 2013.  Jupiter is benefic and hence its influence is usually bullish.  In this case, however, prices only went sideways, staying around $110.  Jupiter's conjunction with Rahu is one possible reason why its period may have underperformed.   So while Rahu benefited from its association with Jupiter, Jupiter may have been burdened somewhat by its association with Rahu.  This is one reason why prices did not climb further during the Jupiter minor period.  We can at least say that prices did not fall. 

And the final dasha period here is Mercury-Saturn.  Saturn is perhaps the most malefic planet and its periods are more likely to create problems, although here too they can be ameliorated if associated with good planets.  But that is not the case here as Saturn is by itself in the 9th house and opposite Pluto, another unhelpful influence.  Prices crashed during this Saturn minor period from $110 in August 2013 down to their current $37.  We still have four more months of this Saturn period before Ketu begins in April.  It is important to note that prices could still recover somewhat in early 2016 without invalidating this negative Saturn effect.  The logic of Saturn's bearish dasha period would still obtain as long as Brent remained well below $110 by April 2016, and that seems quite likely.

But the outlook doesn't seem very good for Brent during the upcoming Ketu period.  Ketu is often negative influence on prices as it is seen as a more non-material or spiritual sort of energy.  The added problem here is that Ketu is with Mars.  This could make Ketu's 7-year long period quite difficult.  To be sure, there is the aspect from Jupiter which may provide for some upside along the way, but the outlook seems to confirm the more bearish forecasts that are out there on crude prices. 

That said, I would still expect a significant rally in crude during the Ketu-Venus period between September 2016 and November 2017.  Venus was very bullish during the previous Mercury period and I would expect more strength during its minor period here.  The Ketu influence may limit the gains, of course, but the trend is more likely to be positive. 

But what about the long term?  Will concern over climate change promote the shift away from oil and other fossil fuels?  Based solely on the dashas, I would say that any movement away from fossil fuels will take place gradually and in a way that does not depress prices.  The Venus major dasha period is due to begin from 2023 and last for 20 years until 2043. Venus should be bullish for Brent prices so I would expect a significant gain to take place during that 20-year period.  It is still possible that the world will gradually move away from oil but for other reasons, prices will be fairly high.  This suggests some combination of falling supply (e.g. interruption of Middle East oil) and rising demand (e.g. global economic recovery).  Another scenario would be that supply may be restricted through climate change agreements, so that could also be a way that prices move higher in the long term.

One important caveat here is that I am only considered dasha periods in this analysis.  A complete investment analysis would require proper consideration of other factors such as transits and dashas.  For more specific oil price forecasts that have a short and intermediate term focus, readers are welcome to subscribe to my weekly investment newsletter. 

Weekly Market Forecast

Stocks moved higher ahead of the Christmas holiday last week.  US stocks climbed more than 2% with the Dow finishing at 17,552 while India's Sensex added more than 1% closing at 25,838.  This outcome was somewhat more bullish than I expected in last week's market forecast, although the Venus-Jupiter alignment towards the end of the week seemed to coincide with gains.

Stocks may have an uphill battle this week.  US and European stocks are already lower in Monday's trading at the time of writing.  Indian stocks were higher although Asia was more generally mixed.  The problem this week is that Mars is square Mercury.  This is usually bearish.  The aspect is closest on Monday and Tuesday so those days are perhaps more problematic.  The late week could see some rebound although as I mentioned last week, this is an unusually long-lasting aspect because Mercury is slowing down ahead of its retrograde station on January 5th.  The negative energy that Mars casts upon Mercury is therefore more likely to manifest for more than just one down day. 

Monday, December 21, 2015

Yellen fulfills promise as Fed finally hikes rates

(21 December 2015)  As the most powerful woman in the world, Janet Yellen fulfilled her promise and finally delivered on the long-anticipated interest rate hike last week.  The Fed Chair announced the Federal Reserve would hike rates for the first time in nine years and thereby end the experimental zero interest rate policy that was launched in the depths of the meltdown in December 2008.  The hike to 0.25% was widely seen as positive as stocks markets around the world generally rose on the news of an improving US economy.  The unassuming Ms. Yellen has certainly come a long way since her senior year in high school in 1963 as she attempts to guide the global economy back to normal after the worst economic crisis since the Great Depression in the 1930s.

We can see from Yellen's horoscope how she may be feeling confident and having things go her way for the most part at the moment.  Jupiter (at 28 Leo) is slowing down and soon to station at 29 Leo in early January.  It is therefore setting up a nice alignment with her natal Sun (27 Cancer) , Uranus (27 Taurus) and Jupiter (29 Virgo).  This is not a traditional Jupiter aspect (usually, 120 or 240 degrees) but I have found such close angular alignments (i.e. of any multiples of 30 degrees) are often reflective of the transiting planet's inherent energy.  The Jupiter influence here would likely have given Yellen confidence to act and should improve the consequences of her actions for the time around the Jupiter station. 

Looking ahead, transiting Rahu (North Lunar Node) will soon align with the aforementioned planets in her natal chart in February and March.  This could be a more challenging time for her.  Rahu tends to be disruptive of the status quo so we could be forced to adapt to fast-changing circumstances.   The Rahu-Sun alignment also suggests that she may be put on the defensive as her ego (Sun) could be undermined by developments that go against her.  Even more telling perhaps is that transiting Saturn will station retrograde at 22 Scorpio and this will be conjunct her natal Ketu (24 Scorpio).  This is usually a stressful transit and may reflect situations where her assumptions are called into question.  I would therefore expect the Fed will face some significant financial turbulence in February and especially March. 

Weekly Market Forecast

I had generally expected a rate hike on Wednesday as the Sun entered the optimistic sign of Sagittarius in the sidereal (Vedic) zodiac.  I also thought the planets generally suggested a mostly favorable market reaction to the Fed's move.  This proved to be largely correct as stocks rose in the early week and on Wednesday in the US and into Thursday in Asia and Europe.  In addition to the Sun influence, bullish Venus was also aligning with Uranus and Pluto so I had added reason to think stocks would generally rise.  Indeed, US stocks gained more than 3% into Wednesday and Indian stocks added more than 2% in the run-up to the decision.  However, stocks declined late in the week as investors took a more sober second look at the new investing reality.  In last week's stock market forecast, I had wondered if we might see some late week selling on the Mars-Jupiter alignment influence. 

This week will likely be fairly quiet due to the Christmas holiday break on Friday.  The outlook seems mixed.  Monday's trading was mostly higher as Mercury aligned with Uranus and the Moon approached its aspect with Venus.  Once the Moon-Venus aspect begins to separate around noon GMT on Tuesday, I would think markets will become somewhat weaker.  But the Venus-Jupiter alignment on Thursday suggests more upside, even if it doesn't get very far due to thin holiday trading.  Could this be the makings of a year-end Santa Claus rally?  It could be, although as I have written previously, the planets do not clearly favor a strong rally into the New Year.  Some gains are possible, but the prospect of an unusually long-lasting Mars-Mercury square aspect from December 27th to January 6th could well be an added psychological burden on investors.

Monday, December 14, 2015

Fed's Yellen in spotlight again as Sun enters Sagittarius

(14 December 2015) All eyes are on Fed Chair Janet Yellen this week as the long-awaiting rise in interest rates may finally come to pass.  After a false start in September in which the Fed apparently got scared off a hike after a sharp sell-off in world markets in August, the stage is set again for Yellen & Co. to pull the trigger and raise rates for the first time in 9 years.  The consensus view is that she will follow through this time and raise the trend-setting overnight lending rate 0.125% to 0.25%.  The larger question is what kind of language she uses to signal the pace of future hikes in 2016 and beyond.  Given the fragility of markets these days, there is a sense that she will do everything possible to downplay fears of a fast schedule of rate hikes which could wreak havoc in many financial markets. 

Interestingly, the Sun enters sidereal Sagittarius on the same day of the Fed announcement on Wednesday the 16th.  Sagittarius is a sign that is associated with optimism, and it is no coincidence that it is ruled by the planet Jupiter, which is known as the Great Benefic.  The entry of the Sun into Sagittarius may therefore reflect some optimism and confidence in the Fed decision, perhaps as Yellen emphasizes all of the positive economic indicators that justify a rate hike.  But will this then translate into a favourable market reaction to Yellen's decision?  This is a more complex question. 

First off, we can see there are no clearly negative alignments in play this week like we saw last week.  So that suggests that a major sell-off after the decision is unlikely.  But whether stocks can significantly rise after the decision is harder to predict.  

If we look at the horoscope of the Federal Reserve, we can see that some kind of bold action is very likely on Wednesday as transiting Mars (25 Virgo) will form an exact square with the natal Mars (26 Gemini) in the chart.  In the current circumstance, that suggests the Fed will raise interest rates, although it should be said that "bold" Mars-type action could be interpreted in different ways.  

Such Mars-to-Mars hard aspects are symptomatic of tense situations (yes!) and may even indicate some short-lived turmoil following the announcement.  But aside from the Mars aspect, there are no really nasty influences here so this is another reason why I would doubt any huge reaction to the decision.  Also, we can see that transiting Venus will conjoin the natal Moon in the chart.  This is a more calming influence and signifies favourable outcomes, at least from the Fed's perspective.  The last thing Yellen wants is a market sell-off or a huge Dollar rally, so that also argues for a fairly muted reaction to the announcement.  

The Fed horoscope appears much more afflicted in March when transiting Ketu exactly conjoins natal Rahu and Saturn stations in close conjunction with the natal Mercury.  I would think that March will be a time when the Fed will have to confront more pressing problems.  By contrast, this December FOMC meeting looks quite mild by comparison.

Weekly Market Forecast

Stocks fell across most of the world last week as investors reacted to the sharp decline in crude oil and diminishing growth prospects for the economy.  In New York,  the Dow had its worst week since August falling 3% closing at 17,265.  In India, the Sensex lost 2% closing at 25,044.   This bearish outcome was not surprising as in last week's market forecast I had noted a scary-looking Mars alignment with Uranus and Pluto in the second half of the week.  I thought we might have got more gains in the early part of the week on the Venus influence but certainly the latter part of the week did live up to its negative potential.

This week is all about the Fed, of course, and its announcement on Wednesday afternoon.   Besides the diffusely positive Sun influence, the Venus alignment with Pluto and Uranus also suggests some bullish sentiment.  Mars may cause some problems on Thursday or Friday perhaps as it approaches an alignment with Jupiter.  However, I suspect this negative Mars effect may not occur until next week.

Monday, December 7, 2015

Euro soars as ECB disappoints market

(7 December 2015) Markets were shaken last week as the ECB announced only cautious stimulus measures which fell short of expectations.  Investors were hoping that Mario Draghi would introduce more QE-type easing but instead he chose merely to extend the current program into 2017.  Most global stock markets fell on the news as European bourses lost 3% while the US market lost 1.5% and India also ended generally lower on the week.  While I thought we would see some midweek downside, the extent of the selling was a bit surprising given the typically bullish entry of Venus into sidereal Libra on Monday.   At least Friday was higher in the US as stocks surged 2% on a strong jobs report.  This coincided nicely with the late week Mercury-Jupiter alignment that I mentioned in last week's market forecast.

In my subscriber newsletter, I had suggested that the Euro was more likely to rise at the expense of the Dollar last week.  That is precisely what happened as the Euro enjoyed its biggest one-day gain in months as it climbed from 1.06 to 1.09 on Thursday after the disappointing Draghi announcement.  There were several astrological reasons for my prediction of a rise in the Euro at this time.  First, the entry of Venus into Libra is generally supportive of risk currencies such as the Euro.  Second, bullish aspects like last Friday's Mercury-Jupiter square are also often favourable towards risk-taking at the expense of safe havens such as the US Dollar.  This would also be a generally positive influence on the Euro at some point. 

But it was the horoscope of the Euro (1 January 1999; 00.00 CET) that held the most crucial pieces of information.   That late week square involving Mercury (25 Scorpio) and Jupiter  (27 Leo) square aligned almost exactly with a similar natal square involving Mercury (27 Scorpio) and Jupiter (28 Aquarius).  This was within two degrees of exact on Thursday and Friday.  Since both of these planets are considered bullish most of the time, their aspects (i.e. degree separation of 30,45, 60, 90, etc.) will tend to be bullish for the Euro and bearish for the Dollar.  

While other aspects might be seen to be more problematic such as the conjunction of Rahu to the Ascendant and the alignment of transiting Mars to the natal Sun and natal Mars, it seemed more likely to me that we would see a bullish outcome.  As always, one of the most difficult elements in financial astrology is weighing the relative strength of each factor.  

Since the planetary positions are always unique and constantly changing (i.e. literally, the current positions of all nine planets is unique and has never before occurred in human history), it is very challenging to predict the overall outcome in a way that incorporates all factors.  The multiplicity of variables is one reason why financial astrology remains only a probabilistic enterprise.  It's other main source of error, of course, it happens to share with economics, sociology, and political science.  Namely, its objects of study are human beings who possess consciousness and therefore do not follow the simpler rules of the physical sciences that govern atoms and molecules.

Weekly Market Forecast

This week is a mixed bag.  While the bullish Venus in Libra effect could be felt at various points along the way, there is also a strikingly negative alignment involving malefic Mars with Uranus and Pluto.  The Sun is close to participating in this alignment but its aspect with Uranus occurs a day or two earlier than the Mars alignment.  We could therefore see some early week gains around this Sun-Uranus aspect.   But the Mars alignment looks tense and could reflect some violent or unexpected events.  Sentiment is therefore more likely to be cautious for part of the week, especially in the second half.