(13 June 2022)
What goes up, must come down. Stocks got hammered again today as
investors hit the panic button on inflation worries amid a slowing
economy. Bond yields soared to their highest levels since 2011 as
markets prepared for higher rates from Wednesday's FOMC meeting. While
Fed Chair Powell had previously indicated a 50-point hike in June, it
now seems more than likely that the Fed will raise 75 points after
Friday's CPI data showed inflation rising at its fastest pace in 40
years.
The US may be entering a particularly unstable period here as the air is
finally coming out of the Covid bubble. All those trillions in
stimulus from the Fed and the government artificially pumped up the
economy during a time when the value of goods was actually falling due
to lockdowns and high unemployment. The bursting of the Covid bubble is
just another instance of the classic inflation story where too much
"free" money (QE, stimulus checks, generous unemployment benefits) is
chasing too few goods, thus causing prices to rise.
Now that the party's over, the hangover begins. Stocks are falling back
down to earth as the Fed is forced to tighten in order to combat
inflation. While stocks have already fallen more than 20% -- thus
crossing the bear market threshold -- they may well be destined to
return to their pre-Covid levels as value finally returns to a state of
equilibrium.
While the current astrological situation can be analyzed several
different ways, the ongoing Saturn-Neptune alignment remains front and
center. Saturn is currently almost exactly 30 degrees away from
Neptune and thus forms a resonant angle that is a divisor of a circle.
Saturn-Neptune aspects are invariably bearish and this one is
especially bearish since Saturn is moving very slowly following its
retrograde station on June 4.
But Saturn and Neptune often form similar alignments every 2 or 3 years
and the market does not suffer such a major sell-off. Why is this one
any different?
One very important reason is that the the Saturn-Neptune alignment is
also resonating with two other outer planets -- Uranus and Chiron. We
can see that both pairs of planets are separated by about the same
number of degrees -- about 30-31 degrees. This is very unusual
planetary set up and provides a kind of conduit for Saturn's bearish
influence to manifest more strongly. In Western terms, we could say
that the midpoint of Saturn (1 Aquarius) and Uranus (22 Aries) is
conjunct the midpoint of Neptune (1 Pisces) and Chiron (21 Pisces). The
Saturn/Uranus midpoint is at 11 Pisces and the Neptune/Chiron midpoint
is also at 11 Pisces. For added emphasis, 11 Pisces also happens to
be the current location of Jupiter.
What makes this alignment especially powerful is that all four of these
planets are moving slowly. Saturn is the fastest of the bunch at three
degrees per month but since it is retrograde, it is moving just half a
degree in the month of June. As outer planets, Uranus, Neptune and
Chiron all move at slower rates, with Uranus moving about one degree per
month, and Chiron and Neptune moving even slower. The point here is
that this slow motion train wreck of an alignment remains within range
for an unusually long time and thus is very powerful. In fact, this
alignment moved within a one-degree range back in April, just as stocks
started their second leg lower. It will remain within that same
one-degree range until August.
Typically, alignments involving slow-moving planets require
faster-moving trigger planets to release the stored bearish (or bullish)
energy. Venus apparently acted as a trigger late last week as it
conjoined Uranus and therefore may have activated the alignment during
the CPI-driven sell-off. The bad news this week is that Mars is due to
conjoin Chiron on Wednesday and the FOMC meeting. This could serve as
another trigger for a release of more negative market sentiment.
One caveat is that Mars (20 Pisces) is already very close to Chiron (21
Pisces) and thus today's decline should be seen as at least a partial
manifestation of this energy. It is therefore possible that some of its
impact has already manifested. Tomorrow's Full Moon is no doubt also
part of this story, especially since it aligns fairly closely with
Saturn and Neptune. The Sun exactly squares Neptune and aligns with
Saturn on Wednesday and suggests a cautious mood where the Fed is more
likely to aggressively tighten. While there is always some uncertainty
predicting the exact timing of any transit manifestation, we should
watch for a possible shift in sentiment after the Fed meeting as Mars
begins to separate from Chiron.
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