Flash crash halts Wall Street rally

The party on Wall Street came to (flash) crashing halt last week as stocks sank 6% on fears that the European sovereign debt problem may not be solved by the Greece bailout. Out the nowhere on Thursday, the Dow plunged almost 1000 points by mid-afternoon below the 10,000 level, albeit recovering somewhat by the close to end the week at 10,380. Mumbai was also down by 5% on the week as the Sensex finished at 16,679 and the Nifty closing at 5018.

It was a strange and tumultuous week to be sure as investors were left wondering if they had returned to the financial storm they thought they had left behind in 2008. This outcome was pretty much in line with expectations given the raft of aspects involving malefic planets. Last week I had warned about the possible effects of the Sun-Mars square aspect, especially since it would feed into the larger, more powerful aspects of the Saturn-Uranus-Neptune alignment. And so I wrote: "This appears to be a tense combination of fiery energy that may coincide with sudden or instinctive reactions". The Sun-Mars aspect therefore acted as a trigger for the Saturn-Uranus opposition which was exact back on April 27th. All that conflicting energy between Saturnian control and restriction and Uranian freedom and rebellion created an situation without easy resolution. While the Saturn-Uranus-Neptune alignment has altered the financial terrain here, this does not mean that the downturn will unfold imminently. It may take several more months and the next (and final) Saturn-Uranus opposition aspect in July to move the situation to the next level of crisis.

Now it seems that no amount of Saturnian discipline and austerity can solve the situation in Greece or indeed in other Club Med economies such as Portugal and Spain. The debts levels may simply be too high relative to the amount of revenue those economies are capable of generating. Risky assets are taking the hit as investors seek to protect their capital from any possible downdraft in the future by moving them to safe havens like US Dollars, US Treasuries, and gold. As I have been suggesting since 2008, the financial crisis didn't end in 2009, it was merely put on hold through massive infusions of liquidity (i.e. money to you and me) from central banks such as the Federal Reserve. The reduction of interest rates to zero has made borrowing pain-free once again so the bubble has re-inflated all over again. Why would Ben Bernanke think you could fix the first bubble with another bubble? All it will do is delay the inevitable flushing of bad debt out of the system.

The stock rally of the past 13 months has been predicated on easy money. Now it is dawning on people that all that bad debt from the sub-prime housing crisis in 2008 didn't simply go away. It merely re-appeared like a shape-shifter as sovereign debt in the guise of numerous government bailouts to prevent bankruptcies. So now we are finally waking up the reality that these heavy government debt levels are not sustainable either and Greece is currently the weak link in the chain.

This week will see Mercury change direction as its retrograde cycle comes to an end on Wednesday. It will station at 8 Aries in fairly close quincunx (150 degree) aspect with Saturn (4 Virgo). This is not a good angle for these planets so more weakness seems possible ahead of this direction reversal. More positively, the Sun has moved away from the Mars influence and will form a supportive aspect with Venus towards week end so some recovery seems more likely. With Jupiter approaching Uranus over the next few weeks, we may see some of the extreme negativity mitigated somewhat. Looking down the road, there are two large alignments that warrant our attention. The first one May 18-20 will involve the Sun, Venus, Jupiter, Saturn, Uranus and Neptune and looks more benevolent than last week's combination. The second one arrives on June 2-4 and will feature Mars in aspect with Jupiter, Saturn, Uranus and Neptune. As we saw last week, Mars is often a harsh influence, so this alignment may prove more difficult.

Sun-Mars square to rachet up tension

Stocks slumped last week on renewed worries over European sovereign debt and the possibility of criminal charges against Goldman Sachs. In New York, the Dow closed down 2% to 11,008 while the S&P finished at 1186. In Mumbai, equities also lost ground as the Sensex finished at 17,558 and the Nifty at 5278. As the planetary drama between Saturn, Uranus and Neptune played out last week, markets responded negatively as Tuesday's exact Saturn-Uranus opposition coincided with a major decline in US markets. This manifested on Wednesday in Asia and effectively bumped the more bullish sentiment implied in the Wednesday's Sun-Mercury conjunction to later in the week. The good vibes then lasted until Friday in Asia but US markets turned lower again on more Goldman Sachs developments as Neptune joined the party in force. With the Sun's condition boosted by the passing Mercury, gold climbed to $1179.

The current Saturn-Uranus-Neptune alignment is quite rare and has the capacity to produce some major structural changes in the world. We can see this is happening already as there is widespread recognition of the need for greater government regulation of the financial industry. Capitalism itself may be undergoing a kind of overhaul in the aftermath of the 2008 meltdown. Thus far, however, these three planets have not generated much in the way of market reaction. Saturn and Uranus may have sparked the initial crisis in 2008 on their first opposition aspect in this series, but subsequent aspects have been less momentous. Last week's decline was potentially significant in that it may have marked a kind of turning point but we will have to wait for events to verify that claim.

The highlight this week will likely be the Sun-Mars square that is exact on Tuesday. The Moon may act as a catalyst here when it forms a t-square with Sun and Mars on Wednesday. This appears to be a tense combination of fiery energy that may coincide with sudden or instinctive reactions to undesirable or even violent events. While it is conceivable the market could rise in this outburst of frenetic activity, the more likely outcome would appear to be greater anxiety. To make matters worse, the Sun and Mars will form minor aspect with malefics Saturn and Rahu. Jupiter entered sidereal Pisces over the weekend so that could provide some kind of temporary boost to the overall equation but it seems unlikely to radically alter the dynamics. Jupiter's approach to Uranus over the next few weeks will be interesting to watch since it could shore up excessive pessimism from Saturn's aspects. Alternatively, Jupiter may simply serve to hasten and clarify the larger changes reflected in the Saturn-Uranus aspect.

Saturn-Uranus oppostion on Tuesday

Transits for Monday, April 26, 2010 9.30 a.m. New York

Stocks drifted higher last week as positive earnings reports gave hope that the economic recovery would continue. In New York, the Dow closed at its highest level for the year at 11,204 while the S&P finished at 1217. In Mumbai, gains were more modest as the Sensex ended Friday below its 2010 highs at 17,694 with the Nifty closing at 5304. Gold futures also rebounded last week closing at $1157. Last week, I had cautioned about Monday's alignment of the Sun, Saturn, Uranus, and Neptune and this did in fact correlate with a decline of 1% in Asia and Europe. However, once the fast moving Sun had passed its exact aspect with Saturn early on Monday morning (EDT), the tense bearish influence diminished and US markets ended higher. The entry of Venus into sidereal Taurus (the bull!) on Tuesday also appeared to correspond with a boost in prices as Asian markets generally reversed higher while US markets continued their winning ways into Friday. Interestingly, the approach of Friday's aspect between Venus and Saturn saw prices rally even further. While this was somewhat counterintuitive, it nonetheless offered evidence that Venus was now in a stronger position to engage with the troublesome energy of Saturn.

The highlight this week is the exact opposition aspect between Saturn (4 Virgo) and Uranus (4 Pisces) on Tuesday. Saturn symbolizes control, discipline, caution and fear and its energy often does not blend well with the more libertarian and rebellious urges of Uranus. In some instances, this aspect can underline internal structural conflicts in the world such as what we are now seeing with Goldman Sachs. Regulatory agencies such as the SEC assume a Saturnian role of enforcer that seek to limit the freedom of Goldman Sachs who are represented by Uranus. With Neptune (4 Aquarius) also forming an important leg in this alignment, there will also be some element of deception and illusion. The fraud charges against Goldman Sachs are emblematic of this Neptunian energy and suggests that the role of deception will be an ongoing theme in any future reordering of the financial industry. With Jupiter soon to conjoin Uranus in June, we could see legal and judicial issues to play a larger role in the weeks to come.

As if to punctuate the the importance of the Saturn-Uranus opposition, a powerful Full Moon occurs on Wednesday in Aries. This pattern is made more noteworthy due to the close conjunct of the Sun with retrograde Mercury. This is often a bullish pattern for increasing risk appetite such as stocks and commodities, although it is likely to be short lived. Ahead of the Full Moon, Mercury will form a difficult square aspect with Mars early on Monday morning (IST) that could cast a pallor over the market. At the other end of the spectrum, there is a nominally positive mix of planets late on Friday between the Moon, Mercury, and Venus.

Given the continuing strength of stocks, we should pay close attention to the possibility that the exact Saturn-Uranus opposition this week will form an interim peak in prices.

Goldman Sachs and the Saturn-Uranus-Neptune alignment

A potential trend changer emerged last week with the fraud charges against financial giant, Goldman Sachs. Stocks in New York tumbled over 1% as the story surfaced, although the were unchanged on the week with the Dow closing at 11,018 and the S&P at 1192. Indian stocks lost almost 2% on interest rate worries as the Nifty closed at 5262 and the Sensex at 17,591. It seems as though the short term positives like the late week Venus-Jupiter aspect was overruled by the medium term influences. As I noted last week, the culmination of the long-standing Uranus-Neptune aspect on Tuesday and the Sun's entry into sidereal Aries on Wednesday may both be interpreted as increasing negative sentiment. While neither of these influences is amenable to precise predictions, they nonetheless add weight to the bearish case. Of course, back here on Earth the SEC attack on Goldman Sachs may well serve a similar purpose as Wall Street's "business as usual" model comes under threat and markets react accordingly.

This week begins with a planetary alignment of considerable heft as the Sun (5 Aries) , Saturn (5 Virgo), Uranus (4 Pisces) and Neptune (4 Aquarius) are all situated around 4 or 5 degrees of their respective signs. Saturn's presence in any multi-planet aspect needs to be watched carefully, as the planet of caution and restraint is often implicated in declines. The combination of the Sun with Saturn in this instance may reflect intransigence and inhibitions involving government and large firms. Uranus here suggests a frustrated desire for freedom and lack of regulation (= Wall St) while Neptune may represent the deceit employed by Goldman Sachs on an unsuspecting public. While Venus enters the more friendly confines of sidereal Taurus on Tuesday, it, too, will form a pattern with Saturn, Uranus and Neptune by week's end. While this is unlikely to have the same effects as the Sun's Monday alignment, it could still see tensions increase as the appetite for risk wanes.

The Saturn-Uranus opposition becomes exact next week on Tuesday, April 27. Last week, I suggested that this combination of incompatible planets often creates troubles, especially where the markets are concerned. Outcomes may vary due to other factors, such as the conditions of Saturn's sign dispositor. I mentioned last week that since Saturn was in Virgo, the condition of its ruler, Mercury, was heightened in its importance. Mercury is currently in a tense 6th house relationship with Saturn, so that is one reason to expect the current Saturn-Uranus aspect to correspond with lower prices on the markets and with an increase in general mayhem in the world. The eruption of the Icelandic volcano that has interrupted air travel across Europe is perhaps a reflection of this difficult aspect.

But Neptune (4 Aquarius) is also present in this alignment and that only ratchets up the potential for damage especially since it sits exactly 6 houses away from Saturn. In Vedic astrology, 6 is not a fortunate number so we are more likely to experience some uncomfortable Neptunian consequences from this aspect. In its negative iteration, Neptune governs illusion and deception so those themes are likely to become more prominent over the coming weeks. Certainly the Goldman Sachs' fraud episode can be seen as having a Neptunian component so it seems that this issue will not be resolved quickly or easily.

Sun enters sidereal Aries; Uranus waves good-bye to Neptune

Taking cues from encouraging US employment data, stocks extended their seemingly somnabulant ascent with another modest gain. In New York, the Dow added less than 1% to close at 10,997 while the S&P finished at 1194. Foreign investors were similarly enthralled with Indian economic prospects, as stocks in Mumbai climbed almost 2% with the Sensex closing at 17,933 and the Nifty at 5361. While I thought we might see more negative Mars energy become manifest last week, it wasn't too surprising to see Monday begin positively as the Mercury-Mars was past exact hence much of its bearish energy had already been drained away. And the late week Sun-Jupiter aspect did appear to coincide with more confidence as stocks and commodities mostly moved higher. Gold was perhaps the main beneficiary of this aspect as it climbed back to $1160, and this was in keeping with my comments from last week.

We have yet to encounter any planetary pattern that has sufficient strength to reverse the prevailing trend. I had wondered if the gradual build up of planets in sidereal Aries might be enough to activate the nastiness of Mars (which, of course, rules Aries) but there is precious little evidence for this hypothesis thus far. The Sun enters Aries on Wednesday this week so that could provide more celestial material for the bearish side, but sign placement alone may not be enough to shut down this liquidity party. This week will also be significant since the long term aspect between Uranus (4 Pisces) and Neptune (4 Aquarius) finally becomes exact. It is possible that some of this rally may be linked to the geometric connection between these distant outer planets since they have been in fairly close orb for several months. With the faster moving Uranus now moving beyond its aspect with Neptune, we should pay close attention to any changes that may occur here.

The early week features a Venus-Rahu aspect which may entail some speculative buying and higher prices, but given the other influences at work here, buying may be a short term distraction this week. The late week period features the Moon conjoining benefic Mercury and Venus and then Venus approaches an aspect with Jupiter on Friday. Both of these influences would appear to be congruent with higher prices.

And waiting in the wings is the latest iteration of the Saturn-Uranus opposition that comes exact on April 27. So it may finally be time for the bulls to take a breather after all.

Mercury-Mars-Pluto may set the tone

Stocks edged higher for yet another week as positive US economic data suggests that the recovery may be taking root. In New York, the Dow ended the week less than 1% higher at 10,927 while the S&P finished at 1178. The gains were more fractional in Mumbai as the Sensex closed at 17,692 and the Nifty at 5290. Last week, I had noted the possibility of gains on the multi-planet aspects involving Venus on Monday and Mercury on Wednesday. This is more or less what happened as Monday rose on the Venus (3 Aries) aspects to both Uranus (3 Pisces) and Neptune (3 Aquarius). Wednesday's favourable Mercury alignment was apparently delayed as stocks ended up gaining in Thursday's session. The delay may have resulted for Mercury "waiting" for the nice Moon-Jupiter-Ketu grand trine. Nonetheless, in the absence of these positive aspects, the market sagged -- a possible sign of background weakness from the stronger influence of Aries and Mars. So while this shot of negative Aries energy did plausibly weaken sentiment, it was not enough to lower prices overall. Since Venus transits sidereal Aries until April 19 and Mercury until June 6, we will have to pay close attention in order to track these more latent effects. We should also note that the Sun will transit sidereal Aries from April 14 to May 14 so that could is another potentially disruptive energy for the financial markets.

On paper, this week looks more bearish than last week as Monday's alignment of Mercury with Mars and Pluto suggests a rise in fear and frustration. While this should incline stocks towards lower prices in the early part of the week, the key square aspect between Mercury and Mars is nonetheless a little past exact. This may reduce its capacity for damage somewhat, especially in US markets. We can also note that this is only a partial strength square aspect since Mars' 270 degree aspect does not pack the same punch as its more damaging 90 degree aspect. Even with those caveats, however, it will be interesting to see how the market responds to thse tense planetary energies. Towards the end of the week, a minor Sun-Jupiter aspect may lift sentiment somewhat, with commodities like gold perhaps enjoying special benefit.

As the Saturn-Uranus opposition draws closer -- now less than three degrees -- we can be attuned to more clues about its eventual impact on stocks. While it is often a tense and difficult combination as evidenced by its role in the October 2008 meltdown, it is not always going to correspond with negative outcomes. Its ultimate effects depend on secondary and tertiary factors such as transit contacts, and the condition of planetary dispositors. While Saturn is a natural malefic, its energy can be made more benign if its dispositor, i.e. the ruler of its sign, is strong. In November 2008, Saturn was in the sign of Leo, which is ruled by the Sun. At the time of the sharp sell-off, the Sun was debilitated in Libra. This weakness in the Sun was therefore transfered onto Saturn to some extent and was another factor why the Saturn-Uranus opposition corresponded with such a large decline. In February 2009, Saturn was again in Leo but its dispositor Sun was now in Capricorn. The Sun is in an enemy's sign in Capricon and moreover Capricorn is six signs from Leo, which suggests tension. The market fell another 15% after this Saturn-Uranus opposition. Finally, in September 2009, Saturn was in sidereal Virgo at the time of its third opposition with Uranus. Saturn's dispositor was therefore Mercury. But Mercury was also in Virgo, which is its sign of exaltation. With a strong dispositor, Saturn created less of an atmosphere of difficulty as stocks generally rose through this particular aspect. There are other factors to consider, of course, but dispositors are nonetheless an important part of the overall equation.

This time around the Saturn-Uranus opposition occurs on April 26th with Saturn in sidereal Virgo. Saturn's dispositor Mercury will be retrograde in Aries conjunct and combust the exalted Sun. This seems less favourable than the September 2009 circumstances although perhaps not a grievous as the opposition in November 2008. While Mercury (and hence Saturn) may receive some benefit from its association with an exalted planet (the Sun), Mercury will be six signs from Saturn. In astrology, 6, 8,and 12 are generally seen as unfavourable house/sign relationships. The relatively difficult condition of Saturn's dispositor would tend to support the view that this Saturn-Uranus opposition will accompany lower stock prices. Let's see how it all plays out.

Venus and Mercury enter sidereal Aries

Stocks continued to melt higher last week as positive US employment data was enough to offset worries about European sovereign debt. In New York, the Dow gained less than 1% to close at 10,850 and the S&P finished at 1066. Mumbai stocks were also higher as the Sensex made a fractional gain to close at 17,644 with the Nifty ending the week at 5282. Monday's Sun-Saturn aspect did little to curb the enthusiasm for stocks although it is worth noting that Indian stocks did decline on Monday just before this aspect became exact. However, New York's session began just after the Sun was separating from the aspect and hence the negative Saturn influence was already on the wane at the open. The result was falling prices at the open followed by a modest rally. Despite this recent series of aspects, we have yet to see Saturn assert itself here as specified down days have seen only orderly and controlled pullbacks.

This week we may see more of Mars in the equation as Venus and Mercury enter sidereal Aries on Saturday and Tuesday, respectively. This stronger Aries influence invokes Mars since Mars is said to rule Aries. Aries is associated with bold action and courageousness but here we note that since Mars is debilitated in Cancer, planets transiting through Aries may be adversely affected. Therefore, there is a greater chance we could see the more negative side of Aries, such as sudden and rash moves motivated by ego and bravado. While we cannot rule out investors staking out new long positions taken on faulty reasoning, the more likely manifestation is selling out of self-preservation and thus falling prices. Nonetheless, there are a couple of favourable aspects this week that suggest some possibility of gains. Monday will feature a Venus-Uranus-Neptune alignment that may increase risk appetite. This is more likely to manifest in Asian trading since the aspect will be separating by the time US markets open. Similarly, Mercury will slip into the same spot on Wednesday and that could incline stocks towards more gains than chance might otherwise suggest. But the effects of Aries and hence Mars would appear to undermine whatever positive consequences these specific aspects might promise.

With Saturn opposing Uranus on April 26, it seems very unlikely that this rebound rally can continue indefinitely.