(20 January 2021)
US stocks rallied to new all-time highs today as Joe Biden was
sworn-in as the 46th president of the United States. Markets have
responded favourably to Biden's promise of more Covid stimulus and more
infrastructure spending amid an ongoing pandemic which has left
millions without jobs and without hope. While the economy continues to
sputter, the outlook for 2021 is more positive as vaccine rollouts
should allow for a full recovery.
The stock rally looks very overbought here as the S&P 500 is trading
14% above its 200-day moving average. Other indexes are even more
stretched as the Nasdaq-100 is trading at 19% above its 200 DMA and the
small cap Russell 2000 is trading at an incredible 29% over its 200
DMA. While the powerful upward momentum is clearly bullish, it seems
that a significant pullback is only a matter of time.
The current planetary alignments suggest that a pullback is becoming
very likely in the coming days. As I noted last week, there is a
gradual shift underway as bullish Jupiter is weakening while bearish
Saturn appears to be strengthening. Today's planets actually held
considerable bearish potential as Mercury and Saturn aligned with
Neptune and Rahu (North Lunar Node) while Mars conjoined Uranus.
Despite these alignments, stocks rose anyway, possibly due to the
proximity of Jupiter to Saturn in sidereal Capricorn.
Nonetheless, Jupiter's positive influence seems likely to diminish as it moves away from its conjunction with Saturn. The gradual separation of Jupiter from Saturn will create a more unstable condition in the sky which should manifest in negative collective sentiment. We can also see that Saturn (10 Capricorn) is fast approaching its square aspect with Uranus (12 Aries) which will be another bearish planetary influence in the coming weeks. The exact Saturn-Uranus square will occur on February 17.
More specifically, the current Saturn position may be doubly difficult for markets since it occurs in a sensitive place in the horoscope of the S&P 500 Index. In my experience, markets tend to fall whenever Saturn transits one of the house cusps in this chart. Currently, Saturn is just one degree from the 9th house cusp. Aside from any other transit configurations, this Saturn placement makes declines more likely in the coming days. One pattern worth watching is the Sun's conjunction with Saturn atop the 9th house cusp on Friday the 22nd and Monday. While Jupiter's lingering proximity could offset some of the negativity, it is nonetheless a pattern with some bearish potential.
For more details,
