Stocks decline on Venus-Saturn; Sun and Mercury to change signs

Despite Ben Bernanke's best efforts to talk up the market by keeping the door open for a possible QE3, markets drifted lower this past week as the world seems increasingly mired in debt quicksand. The more it struggles to escape through bailouts and austerity programs, the deeper it sinks. In New York, the Dow tumbled lost about 2% closing at 12,479 while the S&P500 finished at 1316. It was much the same story in Mumbai as the BSE-Sensex fell back below technical support levels closing at 18,561 with the Nifty finishing at 5581. Amidst all this uncertainty, gold reached a new all-time high closing at $1590.

This bearish result was in keeping with expectations given the influence of aspects involving malefics Mars and Saturn. Monday's decline fit nicely with the Mercury-Mars aspect while Tuesday's loss reflected the Venus-Saturn aspect with a good dose of Moon-Mars that bumped up the arrival time by a day. The midweek rally attempt on the Moon-Venus aspect fell short, however, and weakness returned in time for Friday.

All the talk this week was about debt and how to avoid its worst consequences. The news out of Europe suggested that current debt levels in Ireland and Italy were unsustainable as bond yields shot up to reflect the increased risk of default in these over-leveraged economies. The bond vigilantes are back in force and they smell blood. In the US, the debate over the debt ceiling reached a new level of urgency as there appears to be no deal on the horizon yet with the August 2 deadline fast approaching. Both parties agree on the need for some austerity measures and significant government spending cuts, but Obama and the Democrats want to raise taxes also and thereby bridge the budget gap from both sides. A major agreement to cut spending in the long term looks more unlikely now, as both parties may have to content themselves with a short term fix. Whether financial markets will be satisfied with such a band-aid solution remains to be seen, although the Moody's downgrade threat of US credit rating from AAA would suggest there could be some negative fallout. A minor deal would likely send bond yields higher as it would increase the risk of default as well as increase future supply. Of course, failure to make any kind of deal would trigger a US default and generate even nastier consequences in the bond market. This would likely increase volatility in the stock market with potential short term gains, closely followed by declines as investors would realize that the whole financial house of cards would be one step closer to collapse.

In astrological terms, all this talk about debt and austerity is very Saturnian. After two years of Jupiter's faith in a Keynesian future of borrowing and spending, the return of Saturn's "less is more" approach has marked a discernible shift in tone. There is a growing realization that Jupiter-driven stimulus measures cannot solve our current economic problems alone. Saturn reminds us that sometimes the best solutions are ones where we pare back to essentials and discard what is no longer needed. Saturn's solutions tend to be harsh, not unlike purging the system of toxins. Although they can be unpleasant, they can be effective in the long run. However, Saturn is not fully in command of the sky at the moment as Jupiter still exerts some influence. This suggests that bailouts and the Keynesian spending approach will likely retain some appeal for governments such as the EU alongside the demand for greater responsibility and austerity.

The more immediate concern for the US government, however, is whether they can get a deal before the deadline. While the planets look somewhat cooperative over the next week or two, I do note that the August 2 deadline corresponds with the beginning of the Mercury retrograde cycle. This is not a indication of a successful action that relieves anxiety and resolves a problem. It reminds me of the situation on November 7, 2000 when Mercury turned retrograde right on election night in the US. That produced the famous hanging chad recount between Bush and Gore that went all the way to the Supreme Court. The election was ultimately decided more than a month later. What's worse is that Mercury will be opposite Neptune at the time it turns retrograde. Mercury-Neptune combinations speak to confusion and deception and lead to eventual disappointment. Perhaps there will be a deal but we could see some buyer's regret once the deadline passes, as one side recognizes they've been had. It seems a little implausible to expect there to be no deal at all, although the difficult planets at this time do increase the odds of this scenario as well. It seems more likely that the market will be disappointed with whatever transpires up to and including August 2.

This week is more of a mixed bag. The early week Mercury-Rahu aspect could go either way, although it's always hard to put much trust in Rahu. Mercury enters Leo on Wednesday so that may suggest some upside is more likely. The Sun's entry into sidereal Cancer this week could signal a change in direction, especially for the gold market. A reversal lower in gold would therefore be somewhat more likely. I will be paying close attention to the late week period as Mars approaches its conjunction with Ketu (south lunar node). This is a potentially explosive pairing that could spark some hard selling, although the exact conjunction will only occur after the close on Friday in New York. This may mute its effects.

Stocks rise again with Jupiter; Venus-Saturn this week

Stocks ended higher last week as improved corporate earnings kept the
summer rally going for another week. Despite Friday's decline on the
disappointing jobs report, the Dow added 75 points for the week closing
at 12,657 while the S&P500 finished at 1343. Indian stocks also rose as
the Sensex broke above some important technical resistance and ended the
week at 18,858 while the Nifty closed at 5660.

This bullish outcome was not unexpected as I thought that Jupiter's
optimism would carry the day. The early week gains in Mumbai coincided
quite closely with Monday's Venus and Jupiter aspects, even if they were
fairly modest. As expected, the midweek Mars-Saturn aspect tempered
Jupiter's bullishness and we saw some mild selling occur in most global
markets. Once that negative influence had passed, Jupiter took over
again and stocks and commodities moved higher on Thursday's Venus-Uranus
aspect. And as often happens, we got a reversal just as the powerful
Jupiter-Pluto aspect peaked on Friday.

With all of the main medium term Jupiter aspects now out of the way for
a while, one wonders where stocks are headed to next. The easy gains
are likely behind us now as bulls will be harder pressed to find other
sources of planetary fuel. They may well be running on fumes for a
while. And yet Saturn doesn't appear to be offering much to the bears
here either in the way of aspects, so we could see some aimless
wandering for the key indexes.

This week offers up some decent bear food in the form of Saturn's square
aspect to Venus. This makes its tightest angle on Tuesday/Wednesday,
although I would expect the Moon's position opposite Mars on Tuesday
makes that day somewhat more negative. The early week also features a
Mercury-Mars aspect that is iffy at best so it's hard to imagine stocks
making much more headway here. There could be a bias towards caution
this week that generates some selling. Of course, we should see some up
days along the way too, although they are likely to be offset by
Saturn's influence.

Stocks take flight on Jupiter; New Moon/eclipse cycle tested again

Jumping Jupiter! Stocks soared last week as investor confidence was restored following Greece's approval of the EU's austerity program. The biggest gains were in New York as the Dow climbed 5% closing at 12,582 while the S&P500 finished at 1339. Indian stocks also rose by almost 3% as the Sensex briefly touched 19K before settling at 18,782. The Nifty closed above a key technical resistance level of 5600 ending the week at 5627.

While I had expected some upside on the strong Jupiter aspects, I did not expect the move to be so forceful. It was an impressive manifestation of Jupiter's bullish energy as its more powerful aspects with Uranus and Pluto aligned nicely with its aspect with the faster-moving Mars. All this Jupiter energy translated into a big relief rally as stocks bounced off their recent lows. What was more perplexing, however, was the failure of Friday's solar eclipse to generate any selling pressure. Indian markets pulled back modestly on Friday, but US markets continued to run higher. It was a sobering reminder of the limits of my astrological knowledge, and perhaps the epistemological limits of astrology itself.

While the eclipse may not have exactly coincided with a decline, it is still a phenomena worthy of our attention. Recently, US markets have tended to make highs near the New Moon, and then fall into the period of the Full Moon. Eclipses are a special type of New Moon where the orbits of the Moon and Earth intersect sufficiently for the Moon to cast a shadow upon the Earth. The May 2 high occurred right on the day of the New Moon, while the lower high on June 1 also fell within one day of a New Moon and solar eclipse. If stocks begin to fall this week in the wake of the eclipse, then the pattern will have repeated once again. I'm not sure we have seen a high, since this New Moon cycle is only one of several that affects the markets. But it nonetheless increases the odds somewhat that a reversal lower is imminent.

One reason why this New Moon/eclipse reversal may not quite fit with that pattern is that Jupiter still looks quite strong. It will form its exact trine aspect with Pluto on Friday July 8 and then begin to weaken once again. This suggests there will be a significant amount of bullish buying power available for this week so that may reduce the probability of an immediate post-eclipse decline.

But astrology is nothing else if not a multi-headed hydra, and there are always other influences to consider. Wednesday's Mars-Saturn aspect, although technically a "minor" one, is a potential source of bearishness. This could depress sentiment in the midweek period, especially since Monday and perhaps Tuesday appear to be fairly positive with the Mercury-Jupiter aspect. The end of the week offers the bulls another opportunity to take the reins as Venus moves into alignment with Uranus and Jupiter. So while those short-term aspects look mixed to positive this week, we will still have to wait and see if the New Moon cycle will assert itself once again. I'm not holding my breath on that, but Jupiter's bullish influence may well be fading after this week.

Stocks attempt rebound; solar eclipse due Friday

Stocks attempted to rebound from their recent lows last week as falling oil prices and the adoption of a new austerity program in Greece gave some reason to cheer. In New York, the rebound didn't quite take as the Dow ended slightly lower on the week closing at 11,934 while the S&P500 finished at 1268. Indian stocks fared better, however, as the BSE-Sensex rose by 2% closing at 18,240 with the Nifty ending the week at 5471. I had expected more weakness early in the week on the Mercury-Saturn aspect. India caught the full force of this influence as stocks declined sharply on Monday. World markets then reversed and we saw some gains in US markets over the next couple of days. Interestingly, the late week bullishness I was expecting from the Sun-Jupiter combo only showed up in Mumbai as Thursday and Friday posted impressive performances as the markets there rallied off support. US markets were a very different story, however, as growth anxiety pushed stocks back to their support levels.

All this talk of austerity and bailouts for Greece is getting a little old, and one wonders if the market may have already discounted a default. The Euro is showing signs of more weakness here but has yet to break below 1.40. I would have thought we might have seen more in the way of constructive policy pronouncements and subsequent cheer leading by this point as Saturn's influence should be beginning to recede. No such luck, although at least markets have stopped falling for the time being. In the current environment, that is at least something.

It may well be that the negative Saturn mood will come to the fore once again this week in the form of Friday's solar eclipse. The eclipse takes place in the early afternoon in India (before sunrise in NYC) and could correspond with another shock of volatility. Eclipses can be destabilizing events at the best of times but this one has the added bonus of occurring in a tight square with Saturn. That could amp up the bearish mood considerably at the end of the week.

Before that time, there are some fairly decent aspects that could bring gains. Mars with Jupiter on Monday, Venus with Mercury, and somewhat more precariously, Venus with Ketu on Tuesday and Wednesday.

Saturn seems reluctant to give up its recent high profile so maybe this eclipse will be its last kick at the can for a while. Just how much damage it will do is an open question, however.

Stocks shaky on lunar eclipse; Jupiter may offer hope

Fears of a possible Greek default raised volatility last week, even if the EU eventually cobbled together another bailout package to delay the inevitable collapse of that Mediterranean nation. In New York, the Dow made new lows Wednesday but rallied by Friday closing slightly higher on the week at 12,004 while the S&P500 finished at 1271. Indian stocks were more negative, however, as the RBI boosted interest rates again to deal with its intractable inflation problem. The Sensex lost more than 2% closing at 17,870 while the Nifty ended the week at 5366.

As expected, last Wednesday's lunar eclipse did shake things up as stocks and commodities like oil and gold fell sharply at midweek. The downgrade of Greek debt, coupled with Asian central bank tightening created a pessimistic mood throughout financial markets. While the Mercury-Jupiter aspect did deliver some rebound by Friday, this rise did not occur in Mumbai where caution over domestic inflation prevailed. There is a growing sense that there will be no quick fixes for the world's economic woes. The Fed has signaled it won't launch QE3, most likely because it's between a rock and a hard place at the moment. A new round of stimulus would sink the Dollar and likely boost interest rates on Treasuries as buyers of US debt would likely demand a greater risk premium. Of course, by doing nothing, the Fed is allowing the economy to sink or swim. But high unemployment, falling house prices, and a burgeoning government debt are all acting like very heavy millstones.

It's all very Saturnian of course as the ringed planet infuses its distinct brand of gloom and fear into our collective psyche. After completing its retrograde cycle last Monday, Saturn is now moving forward, albeit very slowly. Reversals in planetary direction can often mark changes in market direction, especially when other evidence supports. Wednesday's eclipse could definitely qualify in that regard, although we still have one more to go on July 1. Eclipse periods tend to be more volatile than normal periods, and occur every six months lasting from between two to four weeks. This one began on June 1 and will last until July 1. Eclipses can coincide with reversals and declines, especially when the eclipses are afflicted by malefic planets. Saturn is considered malefic and it likely made this recent eclipse more negative. The upcoming solar eclipse on July 1 will also be quite Saturnian since Saturn will exactly square the Sun/Moon conjunction. This does not necessarily mean the market will keep falling until July 1 or beyond, however, It does mean that it increases the likelihood of more uncertainty and pessimism around that date. Whether or not it shapes the larger trend and invites a larger reversal higher depends on other factors and their relative influences.

This week looks like a mixed bag as Mercury is squared by Saturn on Tuesday. There is also an alignment of Sun, Mars and Neptune on Tuesday and Wednesday that could correspond to some additional anxiety. I would therefore expect the first half of the week to be more bearish, with a chance of a nasty decline. On the other side of the cosmic ledger, we can see that Jupiter may be increasing its profile here. Jupiter tends to be bullish in its effects and its approaching aspect with Uranus will be highlighted by its contact with the Sun on Friday. That should increase the odds of some kind gain towards the end of the week. Where the market ends up overall is harder to say, although it is possible we could finish close to current levels.

Stocks fall into Saturn-Pluto; Lunar eclipse due Wednesday

Stocks slumped again last week as the Fed Chair Ben Bernanke ruled out any additional stimulus plan (QE3?) for the foreseeable future. In other words, the buffet is closed and there will be no more free lunch. In New York, the Dow lost almost 2% closing at 11,951 while the S&P500 finished the week at 1270. In keeping with recent trends, Indian stocks fared somewhat better, however, as the Sensex slipped by less than 1% closing at 18,268 while the Nifty ended the week at 5485. While the early week period looked a little shaky with the Mercury-Saturn aspect, I thought we would have more of a bounce later on as the Jupiter-Neptune aspect tightened. As it turned out, only Thursday got the benefit of the Jupiter bounce in the US market. Friday's decline corresponded fairly closely with the approaching bearish Mars-Rahu aspect.

So this is still very much a Saturnian market. Saturn's portfolio of pessimism, loss, and recession is very much front and centre here as fears about inflation have been pushed into the background. This plausibly reflects the current planetary geometry quite well as inflationary and growth-oriented Jupiter lost some influence in the wake of its early May aspect with Rahu. In its place, Saturn has strengthened as it prepares to reverse its direction and square Pluto this week. As we know, a slow Saturn is a powerful Saturn. And a powerful Saturn tends to focus public attention more on the intractability of the Eurozone debt crisis, the flagging US recovery, and the unsustainability of emerging market expansion in countries like India and China.

This week could bring some important new developments that shift financial thinking in significant ways. Saturn ends its 4-month long retrograde cycle on Sunday night and forms its tightest aspect with Pluto at that time. This is generally a difficult combination, although Saturn's change in direction from backwards to forwards can mark an analogous change in sentiment. However, there are a number of difficult aspects in the mix here that suggests more downside in the near term. Mercury conjoins Ketu on Monday while Mars forms an aspect with Mercury on Tuesday. Of course, Wednesday has a big asterisk beside it because the lunar eclipse occurs in the afternoon just after the end of the trading in the US. There is a lot of celestial traffic here and it should produce some noteworthy moves both in the markets and perhaps also on an institutional and policy level. Eclipses are all about interruption of the status quo so trend reversals are somewhat more likely at this time. The late week period features some short term Mercury aspects that seem fairly benign so perhaps that increases the likelihood of gains by Friday.

Stocks fall with Saturn and eclipse; Jupiter stronger this week

US stocks staged a significant retreat last week as disappointing employment data suggested that the recovery may be in trouble. In New York, the Dow fell by more than 2% closing at 12,151 while the S&P500 finished at 1300, just above a critical technical support level. This bearish outcome seemed to reflect the planetary energies fairly well as the midweek Sun-Saturn aspect and solar eclipse coincided with Wednesday's big drop. I had been uncertain about Friday given the Neptune retrograde station but that decline was not a surprise. Indian stocks fared better, however, as they benefited from more early week upside which US markets missed due to the Memorial Day holiday. Despite two losing sessions at the end of the week, the Sensex rose by almost 1% to 18,376 with the Nifty settling at 5516.

The glass is looking half empty here as concerns grow that all the stimulus measures from the US Federal Reserve over the past two years are no longer working as advertised. But if QE1 and QE2 aren't enough, then surely this makes another round of stimulus more likely in the form of QE3? Well, one should never discount a government's desire to print more money to get out of jam, but there may be less tolerance for such a move now.

It turns out that all that "free" money really isn't free at all and comes with a price. The US debt has ballooned to $14 trillion and counting, the Dollar has plunged, and commodities like oil and gold have risen sharply. This has created an inflationary environment all around the world which has wreaked havoc in many emerging markets. It now also threatens to overtake the US economy as the implications of Bernanke's currency devaluation scheme are becoming more apparent. There is more talk that the US is running out of policy options and may simply have to face the music, even if it means rising unemployment, more falling house prices, and little or no growth for the near term. All this negativity is very much in keeping with strengthening Saturn as debt, recession and economic pessimism now predominate the discussion. I tend to think that Saturn could well remain in control up until the conclusion of its retrograde cycle on June 13 when it forms a square aspect with Pluto.

For all the gloomy Saturn influence, we could see more Jupiter this week as it forms an aspect with Neptune. While Neptune does have a bearish side, its aspects with Jupiter tend to be more bullish. Upside is perhaps even more likely in the second half of the week as Venus joins the alignment. Ahead of that time, however, Saturn will again be front and centre as its aspect with Mercury on Tuesday could indicate shakier markets in the early part of the week.