Stocks vulnerable as Mercury retrograde approaches

 (12 November 2018) It's that time again.  Mercury is due to station retrograde later this week on Friday, November 16.  Even among the non-astrologically-inclined, most people have heard of Mercury retrograde.  They know it connotes something bad or unexpected, and that things are more likely to go haywire during the three-week period when it moves backwards in the night sky.  As the mythological winged messenger, Mercury symbolizes communication, commerce, transportation and rational thought, among other things. 

When Mercury is moving in normal direct motion, it is believed that there is a greater likelihood for things to work out as planned.  But every four months or so, it stations retrograde (Rx) and appears to move backwards across 15-18 degrees of arc.  This departure from its normal motion conjures up images of hassles, delays, technical breakdowns, computer viruses and the like.  The most famous Mercury Rx station in recent times was election night in the US in November 2000 which produced the unprecedented Bush-Gore stalemate.  The election outcome was undecided until it was settled finally in the Supreme Court a month later.

One of the best ways to see how Mercury retrograde may (or may not) be working, is to look at how the stock market performs during its Rx periods.  The theory holds that stocks should be less positive and more vulnerable to declines, either through actual malfunctions in the stock exchange, or more commonly through misunderstandings and unexpected news in the economic data that traders rely on for their buy or sell decisions.  So we can ask: is Mercury retrograde really bearish for stocks?

In my view, Mercury retrograde is only one factor out of many and is less likely to be decisive.   Other alignments may override its influence, although I suspect it has a negative bias.  It is similar to the Venus retrograde periods in that respect.  They don't always correlate with declines, but the downside risks rise during the Rx period. 

I haven't done an exhaustive study by any means but I did want to present some recent Mercury Rx history here.  As these two charts for 2017 and 2018 show, each Mercury retrograde period has featured at least one dip, typically near the beginning of its retrograde period.  It doesn't appear to strongly correlate with an overall negative performance although that may happen in some situations where other bearish patterns are in play.

The April 2017 period was modestly bearish for the first week or two after the Rx station but stocks recovered and pushed higher by the time Mercury resumed its forward motion in May.  The August-September 2017 Rx period was more bearish as the Dow fell soon after the station and didn't recover.  The December 2017 Rx period was quite bullish actually, although we should note that stocks fell for a few days immediately following the Rx station. 

The March-April 2018 period was bearish to start and marked the important April 2nd low for the stock market.  Prices rebounded by the end of the Rx period, however.  The July-Aug 2018 period was more bearish, perhaps as stocks reversed lower immediately after Mercury turned retrograde on July 26th.  While stocks rebounded by the end of the period, it was generally negative. 

And that brings up to the next period from November 16 to December 7.  Stocks are down sharply already in the US today (Monday).  I think this negative bias is likely to continue this week as the Rx period gets closer.  This is less to do with Mercury turning retrograde than the fact that it will square Neptune later this week.  This is a pretty bearish set up. 

But if recent Rx periods are any guide, then we are likely to see stocks experience at least one significant pullback after Friday, the 16th and before December 7th.  Between the Mercury retrograde period, its Neptune square, and negative alignments of Mars this week, the midterm election rebound is looking quite fragile at the moment.  A retest of the October low seems more likely than not.

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Stocks bounce after bad week; Q3 earnings in focus

(29 October 2018) Stocks sold off sharply last week on renewed fears that Trump's trade war will reduce revenues and profits of many large US corporations.  The Dow lost 3% on the week and closed below 25,000 for the first time since July.  Indian stocks joined the global sell-off as the Sensex fell almost 1000 points and came close to testing its March low. 

Stocks have rebounded here on Monday in Europe and the US on the proverbial oversold bounce.  Besides bargain hunting, investors may also be looking forward to corporate earnings as some big names will report Q3 earnings this week.  Facebook reports on Tuesday, Apple reports on Thursday, and Exxon Mobil on Friday.  While it is still possible the news could disappoint the market, at least it changes the subject for a few days away from the gloom that has been hanging over the US market during October. 

Last week's decline was in keeping with my bearish expectation as I thought the Saturn influence would be problematic at very least.  Saturn was aligned with the Sun and retrograde Venus during the week so there was good reason to be cautious.  If that weren't enough, Wednesday's Full Moon also suggested that caution might be a more prudent strategy.  In fact, Wednesday turned out to be the worst day of the week.

Not surprisingly, this week has started off on a more positive note as the Sun and Venus have moved away from Saturn's influence.  In addition, Mercury conjoined bullish Jupiter today and both will align with Rahu (North Lunar Node) and Chiron this week so that is another reason to think that we could see stocks rebound further.  We can also see how the Mercury-Jupiter conjunction in Scorpio is aligning with the Mercury-Sun conjunction in Taurus in the NYSE chart.   This looks fairly positive in any event.  The Moon joins the alignment tomorrow (Tuesday Oct 30, see chart), so it seems likely we will have more gains this week.  Venus also aligns with Rahu and Uranus so that is another potentially positive influence.  It's difficult to be certain which other days may be bullish although I think Thursday's Moon-Mars opposition could be bearish.

So is the correction over?  I'm not sure, although I suspect there could be some more significant weakness upcoming later in November and possibly into December.  Whether or not it creates lower lows is another question.

For more details on possible scenarios for this correction in the coming days, weeks and months, check out my weekly subscriber newsletter which is published every Saturday.  I cover US and Indian stock markets, as well as currencies, oil and gold.

Stocks rebound ahead of US midterm elections

(6 November 2018) Stocks have rebounded since bottoming in last week on hopes that a trade deal with China may happen sooner rather than later.  The Dow is back over 25,000 while India's Sensex is now trading near 35,000 ahead of the Diwali holiday break.  The rebound was more or less expected given the fairly positive planetary alignments in recent days involving Jupiter and Mercury.  This week has also leaned bullish on the Venus-Moon-Uranus alignment. 

However, the US midterm elections take place today and could theoretically upset the market's temporary calm. While I think the Democrats are very likely to win the House, I suspect the market has discounted that outcome already.  Therefore, I would not necessarily expect a big reaction in the stock market on Wednesday. 

The New Moon at 21 Libra could be a bit bearish since it opposes the Saturn in the NASDAQ chart.  I would tend to think that a strong rally is a less likely outcome on Wednesday and beyond.  Also Mars is in the first degree of Aquarius at midweek and aligns with Rahu. This is another less-than-positive looking pattern.  But Friday's Mars-Venus alignment and Moon-Mercury conjunction perhaps make a stronger case for some downside later in the week.  With the Fed meeting on Thursday, some changes may be afoot.

The BSE chart illustrates how the approaching Venus-Mars 120 degree alignment could indicate some significant moves in the coming days.  The Venus on the Ascendant is usually positive, however the Mars is more of a question mark.  This week could go either way actually, although I would be wary about Saturn's square aspect to the Moon (12 Virgo) in this chart.  If stocks stay afloat this week, the next week will likely be a different story.  We can see the transits for next Wednesday the 14th puts Mars in a more prominent position for this chart along with Rahu and Uranus.  Mars is usually bad news for the markets. 

The bottom line is I don't have a strong opinion for where stocks will go this week.  I don't think the planets lean strongly bullish or bearish.  So perhaps the rebound can continue.  But I would say that next week looks more negative as Mars aligns with Rahu and Uranus.  Bulls should tread carefully.

For more details on possible market directions in the coming weeks and months, check out my weekly subscriber newsletter which is published every Saturday.  I cover US and Indian stock markets, as well as currencies, oil and gold.