Markets unimpressed with new Italian PM; solar eclipse due Friday

Well, it didn't take long before the markets cast their dissenting vote on the new governments in Greece and Italy. The initial sense of relief quickly gave way to rising skepticism that the pro-austerity technocratic duo of Papademos and Monti were going to magically solve Europe's crushing debt overhang. Politicians can offer soothing sound bites but economics is where the rubber meets the road. Bond yields on Italian debt once again pushed above the critical 7% level by midweek and stocks promptly sold off. The Dow lost 3% for the week closing at 11,796 while the S&P 500 finished at 1215. It was a similar story in Mumbai as the Sensex tumbled 4% closing at 16,371 with Nifty ending the week at 4905.

This negative outcome was largely in keeping with expectations although I thought we might see more downside in the early week. The malefic tandem of Saturn and Rahu (NN) were true to form as Monday was lower across the board. Saturn's entry into sidereal Libra suggested was likely going to correlate with a rise in caution. We saw the bounce from the Mars-Jupiter arrive a little early on Tuesday in the US and that set the stage for a surprisingly bearish Sun-Saturn aspect on Thursday.

It seems that Saturn is calling the shots for now. It's perhaps not surprising that stocks are been driven by the dictates of the bond market. Since bonds are debt and Saturn symbolizes debt and loss (i.e. money owed), Saturn's grand entrance into Libra last week placed the bond vigilantes front and center. As European bond yields rise into the danger zone, the market is telling policy makers that their current plans are insufficient and the risk of default remains. As it currently stands, the EU has a credibility problem. It can only resist the logic of the market for so long before it relents. The late October agreement sounded good but was short on specifics and probably short of cash as well since Italy's debt is beyond the scope of the current EFSF bailout package. The current focus on the dangers of debt is likely to continue as Saturn approaches its opposition aspect with Jupiter over the coming weeks. The aspect is closest in early January when the two planets are separated by 178 degrees. Such opposition aspects tend to highlight tension, slow progress, and frustration.

This week marks the beginning of the bi-annual eclipse period as a partial solar eclipse occurs on Friday. This eclipse does not look especially powerful or disruptive so it may not exert any immediate influence. The close aspect between the Sun-Moon and bullish Jupiter suggests that gains are more likely late in the week. This would be in keeping with the bullish tendency near the US Thanksgiving holiday. On Wednesday, however, the deadline for the Congressional Supercommittee to cut government spending (Saturn!) arrives so we could see some nervousness ahead of that date. The early week Venus-Saturn aspect looks negative and could translate into a reluctance to buy stocks. So I would not be surprised to see some early week downside and then for gains to accrue in the second half of the week. Large moves seem more unlikely this week, however.

Europe steps back from the brink; Saturn enters Libra this week

Europe backed away from the precipice last week as both Greece and Italy finally ceded to the austerity demands of their paymasters. Greece swapped Papandreou for Papademos, while Italy's Berlusconi agreed to resign as the Senate passed the EU's austerity package. Financial markets approved of these changes as US stocks staged an impressive rally after Wednesday's frightening sell-off. The Dow closed about 1% higher on the week closing at 12,153 while the S&P500 finished at 1263. Indian fared worse, however, as slumping industrial production and rising oil prices dragged down stocks. The Sensex fell by 2% closing at 17,192 and the Nifty ended the week at 5168.

Wednesday's near-death experience coincided with Neptune's direct station just as it was opposite Mars. I had expected some significant downside around this aspect as this was likely to highlight confusion and uncertainty. Up to that point, the Italian government under Berlusconi had not yet agreed to the austerity package as bond yields spiked beyond the crucial threshold of 7%. Somewhat unexpectedly, US market did manage to rise early in the week ahead of this Neptune station. The late week was more positive as we saw a rebound on both Thursday and Friday in the US. Indian markets missed much of the Wednesday sell-off and therefore played catch up on Friday.

Well if Neptune is all about confusion, then Saturn brings austerity. As the leaders of Greece and Italy took firm steps to address their debt burdens, we might suggest they were reflecting the Saturnian principles: long-term progress only comes through appropriate restraint and ultimate social harmony requires a measure of control and order. It is no surprise that these efforts should come just as Saturn is about to leave sidereal Virgo and enter Libra. As Saturn changes signs its energies may manifest more readily. This often translates into lower prices as caution and pessimism win out over spending and risk. On this occasion, however, we may also see the acceptance of austerity as generating a kind of Saturn-driven rally. Austerity was deemed necessary by market players, and Greece and Italy made their promise. Everybody is happy. Well, at least for now.

This week features a couple of potentially powerful aspects. First, Saturn enters sidereal Libra on Monday. This is generally a bearish influence although this energy need not always express itself through financial markets. Since Saturn only changes signs once every 2.5 years, we should pay attention to any fundamental changes in intermarket dynamics that may develop in the coming days weeks. Will bonds prices continue to be inversely related to stocks? Will gold maintain its value as a flight to safety play? Perhaps more immediately, we also get a triple conjunction of Mercury, Venus and Rahu on Monday. Mercury and Venus are mostly positive planets but their association with unpredictable Rahu (North Lunar Node) is cause for some concern. While Rahu can sometimes create unrealistic desires that fuel buying sprees (read: gains), it is more commonly connected with uncertainty and sudden events. While this would tend towards a negative outcome early in the week, more generally we can also say that this pattern will increase the size of the move in either direction. Mars then forms an apparently bullish aspect with Jupiter by Wednesday so this may produce more optimism. The Sun enters sidereal Scorpio on Thursday where it will form a minor aspect with Saturn. On the face of it, this combination looks bad, although I'm not sure it will push down stocks that much. Friday's Moon-Mars conjunction is more likely to boost sentiment given both are on the receiving end of Jupiter's aspect. With the eclipse period just around the corner (Solar: Nov 25; Lunar: Dec 10), we may still be in a preliminary phase here before the main feature begins.

Italian situation prompts sell-off

We finally saw some downside today as Italian bond yields pushed above the danger zone threshold of 7%. Beyond this level, Italy cannot service its debt and would run the risk of default.

The Mars-Neptune opposition finally weighed in on the day that Neptune was stationary in the sky and was therefore most powerful. Well, better late than never. I thought we would get this downside earlier in the week.

Chiron is due to also station and turn direct on Friday while exactly opposite Mars. That looks like another nasty combination. Moreover, Mars will enter the tropical sign of Virgo on Friday. The close aspect with Uranus will only serve to amplify its effects.

The trend looks down for the week although I would not be surprised to see Thursday finish higher in the US.

Stocks fall on EU soap opera; Mars-Neptune peaks this week

Investors were not amused by the latest Greek attempt to turn the ongoing EU debt drama into a sitcom ("Everybody Hates Papandreou") as stocks stumbled on most world markets. In New York, the Dow lost more than 2% closing at 11,983 while the S&P500 finished at 1253. Indian markets also followed the down trend as the Sensex slipped more than 1% closing at 17,562 with the Nifty ending the week at 5284. Overall, this outcome was in keeping with my expectations. With Jupiter moving into the background here, we did see less optimism and more of a focus on Saturnian austerity as markets contemplated the implications of a possible disorderly Greek default. As expected, the early week period saw the largest declines as Mars entered sidereal Leo. Some significant recovery began midweek as Mercury conjoined Venus and formed an alignment with risk-taking Uranus. Friday also largely fit with the forecast as most global markets were lower.

Whatever its economic merits, the EU bailout plan is now confronting the rather difficult political realities surrounding austerity. Greek PM Papandreou has won a confidence vote and will remain in power through some new coalition and has promised not to call a referendum on the EFSF. Meanwhile, Italy is now coming under more scrutiny as the bond market is now questioning its ability to adhere to the austerity measures requested by the plan. Italian government bonds saw a spike in yields last week despite reassurances from PM Berlusconi that all was well. Berlusconi may well on the verge of resigning. While economics may be neatly theoretical, politics is messy and more uncertain. All this austerity talk is very much a reflection of Saturn's rising influence at the moment as it prepares to enter the sign of Libra on November 14. Politicians are looking for ways to persuade their electorates to accept less. That is the way of Saturn -- it removes what is no longer needed no matter if you are ready to accept the loss or not. Standards of living are just beginning to fall throughout the developed world as the financial meltdown which started in 2007 continues to work its way through the system.

In addition, there is a significant amount of confusion in the air at the moment. Can the new Greek coalition government actually work and will the Greek people accept the new plan? Will Berlusconi survive the current crisis and what role does the IMF "monitoring" play in Italy? There are a lot of unknowns at the moment. It is therefore not surprising that Neptune should be more prominent. Neptune symbolizes confusion and vagueness, which can sometimes morph into outright deceit. Neptune is now concluding its retrograde cycle and is especially powerful right now as it is stationary in the fifth degree of sidereal Aquarius. It reverses direction and resumes forward motion on Wednesday November 9. We may see more Neptunian confusion this week since it will be opposed by malefic Mars. This is definitely a bad time to try to form any lasting arrangements.

Mars exactly opposes Neptune on Monday so we might expect more downside impact then. Nonetheless, the aspect is still within range for most of the week so the fallout may manifest at any time throughout the week. In addition, Saturn forms a minor aspect with Mercury and Venus on Tuesday so that suggests the first half of the week could be more negative. Gains are perhaps more likely on Thursday or Friday, although Mercury and Venus are moving towards their conjunction with unpredictable Rahu at that time.

Stocks cheer EU deal on Jupiter-Pluto

Investors broke out the champagne last week as the EU finally got a deal done to address the debt crisis in Greece. The Dow rose by 4% closing at 12,231 while the S&P500 finished the week at 1285. Indian markets were even stronger as the RBI was more favourable. The Sensex jumped 6% closing at 17,804 while the Nifty ended the week at 5360.

While I thought we might see more volatility from the Mars and Saturn aspects, this bullish result did not come as surprise given the completion of the Jupiter-Pluto aspect. I had noted that Friday's very tight alignment between the Sun, Jupiter and Pluto could be bullish. The deal was actually announced early on Thursday just one day before the exact 120 degree aspect between Jupiter and Pluto. Some of the negative Mars and Saturn influences did manifest more modestly in Tuesday's down session in the US. Overall, this huge October rally has fit quite well with the Jupiter-Pluto aspect.

EU leaders reflected the energy of the Jupiter-Pluto aspect quite appropriately as prosperity (Jupiter) was pursued through large organizations and the exercise of political power (Pluto). While investors cheered the $1.4 Trillion agreement, some economists have already suggested that the deal does not contain enough specifics and will not be sufficient. I suspect that these critical voices will grow louder in the days to come as the optimistic energy from Jupiter-Pluto begins to diminish. The aspect is now separating and is losing its power. Just when the stock market will also lose confidence in the Euro and the Eurozone remains to be seen. Saturn is due to make a cameo appearance in November through its entry into sidereal Libra on the 14th. Saturn is said to be exalted in Libra and hence its more positive qualities may be more in evidence. Nonetheless, Saturn is still Saturn so even if we suddenly recognize the need for austerity once again, sentiment is perhaps somewhat more likely to head south. If the markets may be in a partying mood now, there is a real risk of nasty hangover sooner rather than later.

We will get our first test of the post-Jupiter-Pluto period this week. Given the rise that accompanied this aspect, we should now expect a reduction in optimism. As an added negative, Mars enters Leo on Monday. There is often some fallout whenever Mars changes signs so this perhaps tilts outcomes towards declines. On the other hand, Mercury is approaching its conjunction with Venus this week. This is usually a bullish combination. And we can see that this pairing forms potentially positive aspects with Neptune on Monday and Uranus on Wednesday and Thursday. So that offers up the real possibility of some upside this week also. The end of the week may be more prone to selling as Friday's Moon-Mars opposition could reflect some anxiety and frayed nerves. So there is some planetary evidence for both positive and negative outcomes here.

Stocks edge higher on EU hopes; Jupiter-Pluto culmintes this week

US stocks moved higher on hopes that an effective Eurozone bailout plan would be announced in the coming days. Despite some choppiness, the Dow gained more than 1% closing at 11,808 while the S&P500 finished at 1238. Indian shares fared worse, however, as concerns about inflation and a possible rate hike took prices lower. The Sensex lost 2% closing at 16,785 while the Nifty ended the week at 5049.

The generally upbeat mood of most global markets was an apt reflection of the ongoing Jupiter-Pluto influence. Jupiter usually boosts confidence whenever it is in aspect with a slow moving outer planet. Through its aspect to Pluto, Jupiter's influence suggests efficient organization directed towards prosperity and wealth. That is very much the case as European officials are working intensely to stave off a banking crisis that threatens the global financial system. As Saturn has receded into the background here, the emphasis has shifted away from austerity towards more borrowing and money printing as a solution to pressing problems. It is unclear how effective this approach will be in the long run. As we saw with the Fed's QE1 and QE2 efforts, some stimulative measures can show positive results in the short term, although the jury is still out on whether these plans did anything other than temporarily lift financial markets and create inflation. In the present case, the EU has the added problem of trying to coordinate the interests of different countries, especially Germany and France. This makes the challenge that much more difficult.

With the Jupiter-Pluto aspect becoming exact this week on Friday, we can see there is an appropriate planetary signature for a significant EU deal. The culmination of the aspect seems likely to reflect an agreement that can address the current debt problem. Just how the market will react is another matter. As market watchers know investors often "sell the news", meaning that run-ups in prices before the fact often trigger a sell-off once the news is announced. This could happen this time around even if the deal is regarded as comprehensive and successful.

In addition, we have a fairly tense alignment involving Mars, Saturn, Mercury and Venus this week. This is likely to create more volatility than we have seen recently, although the presence of the positive Sun-Jupiter aspect complicates the picture somewhat. The completion of the Jupiter-Pluto aspect suggests that we are very close to the maximum positive effect of this aspect as the odds of a sell-off increase here. Wednesday's New Moon is one possible candidate of a significant market turning point, as is Friday's exact alignment between the Sun, Jupiter and Pluto. Once this Jupiter-Pluto aspect begins to separate after this week, the market will become more susceptible to declines. And with Saturn entering sidereal Libra in November, optimism may again be in shorter supply for a time.

Stocks surge on EU hopes; Jupiter-Pluto rules

As the Occupy Wall Street protests gather momentum around the world, we are poised for yet another round of bank bailouts as the Eurozone took additional steps to contain their crisis last week. This latest round of bank bailouts are likely to further increase resentment towards the financial elite as the average person has seen very little benefit from the many billions of taxpayer Dollars and Euros deployed to solve this problem. Despite the protests, the EU made all the right noises to convince investors that the problem was fixable as stocks extended their rebound for the second straight week. In New York, the Dow climbed 5% closing at 11,644 while the S&P500 finished the week near a key resistance level at 1224. It was much the same story in Mumbai as the Sensex jumped 800 points closing at 17,082 with the Nifty ending the week at 5132.

All this new-found optimism is more evidence that Jupiter is in control of sentiment at the moment as the recessionary gloom of Saturn in now in full retreat. I thought we might have seen more downside from Tuesday's Full Moon and Sun-Saturn conjunction on Thursday. While both of these days did buck the bullish trend with either flat or negative closes, the pullback was quite modest and was easily offset by the positive aspects in play. Monday's surge coincided nicely with Mercury's ingress into sidereal Libra. While the extent of these gains were a little unexpected, they were not that surprising either as I had noted that October was likely to have a bullish bias due to the Jupiter-Pluto aspect which is exact on October 28.

The re-emergence of Jupiter this month fits well with the promise of more bailouts to bankrupt countries and bankrupt banks. While Jupiter is traditionally seen as the planet of optimism and wisdom, its aspect with Pluto this month modifies this somewhat. Since Pluto represents power and large organizations, its association with Jupiter reflects this coordinated program to solve the current crisis through borrowing and inflating a stagnant economy. Just how effective this initiative will be is hard to say. Saturn is due to strengthen in the coming weeks and this is likely to shine a more unforgiving light onto the latest attempts to solve the debt crisis. Saturn's entry into sidereal Libra in November will likely tilt collective sentiment back towards recession, austerity and pessimism. This time around, however, Saturn's prominence will be paralleled with Jupiter as it forms tight aspects with Uranus and Neptune over the next three months. This could set up a make or break scenario where Saturn's presence in the larger planetary alignment could completely scuttle all rescue plans or it could deliver the necessary dose of realism which provides for a lasting solution.

This week begins with Monday's Mercury-Jupiter aspect. Jupiter has been a reliable source of optimism lately so there is little reason to expect this outcome to be any different. The Sun enters sidereal Libra on Tuesday. While the Sun is debilitated in Libra, this blemish may well be offset by the aspect it will receive from Jupiter. Between those two measurements, we could well see further gains early in the week. Once the Mercury-Jupiter aspect begins to separate, however, some sober second thoughts are likely to creep into the equation by midweek. Generally, the second half of the week may be somewhat shakier than the first half. Of course, the Jupiter-Pluto aspect is still gathering strength here so that may serve to mitigate the size of declines.