ECB's Draghi delivers; iPhone launches with Venus Wednesday

Stocks moved higher last week as the ECB's Mario Draghi delivered on his promise to intervene in the European bond market.   In New York, stocks rose by more than 2% with the Dow closing at 13,306 and the S&P 500 making a new high for the year finishing at 1437.  Indian markets followed suit as the Sensex gained 300 points on the week closing at 17,683 while the Nifty finished at 5342.  I thought we might have seen a little more early week downside on the Venus-Saturn aspect, although I did caution that the negativity could be fairly muted.  As expected, the second half of the week was more bullish as the Venus-Rahu and Sun-Jupiter aspects coincided closely with gains on Thursday and Friday. 

The ECB fulfilled market expectations last week as its bond buying program offered some hope that Europe could yet contain its ongoing debt crisis.  I had been fairly skeptical about the size of any major new stimulus program, so it's worth noting that Draghi did not produce the bazooka-like program that some analysts suggested with hard yield caps and the like.  He remained well within the ECB's stated mandate.  Moreover, the bond purchases will be sterilized and will not worsen the ECB's balance sheet.  In this way, Draghi was taking a page from the Bernanke playbook as the Fed Chair's Operation Twist in 2011 similarly embarked on sterilized bond purchases rather than an outright buying program as had characterized the more ambitious QE1 and QE2. 

All eyes are on Ben Bernanke and the Fed this week as many are expecting QE3 to be announced at its Thursday meeting. Friday's disappointing US jobs report has increased the likelihood for some Fed action, although it is unclear just what will be announced.  Will Bernanke unleash a bazooka?  Or will be attempt a more cautious and limited intervention?  Or indeed will be announce anything at all?  As I have suggested previously, I think a full-fledged bazooka-like QE program is quite unlikely at this point.  Jupiter does not seem strong enough at the moment for such a move. That leaves the two other options. Given his recent speech at Jackson Hole and the anemic jobs report, it would be somewhat disingenuous for him not to do anything.  So I suspect he will go with some kind of modest plan, perhaps limited in size and scope.  More politically safe sterilized bond purchases are therefore a possible route he could take.  I'm not certain what Bernanke will announce on Thursday, but I do think it is quite possible that the market reaction could be fairly tepid.

This week looks fairly bullish on paper.  Monday's Sun-Mercury conjunction is often a bullish influence, albeit with some caveats.  It usually signals a strong directional move, although it is less reliably bullish than aspects involving Jupiter or Venus.  The main planetary aspect this week occurs on Wednesday and Thursday as the aforementioned Venus forms a nice alignment with the Uranus-Pluto aspect.  This is one reason why we can expect stocks to stay fairly buoyant leading into the Fed meeting.  It is perhaps no coincidence that the long-awaited iPhone 5 release occurs on Wednesday just as the Moon (people, masses) conjoins Venus (happiness, luxury) and therefore highlights this wider combination with Uranus (technology) and Pluto (corporations).  This is a favourable planetary alignment that should make this a successful product.  The planets at the time of the Fed announcement on Thursday are somewhat equivocal.  Venus is just reaching its closest aspect while Mercury has just entered sidereal Virgo.  These are very bullish indications but it doesn't leave much left over for Friday.  So it is possible that the market could rise into the announcement and even extend its gains into the close. But it's harder to make that case for Friday.  I would therefore not be surprised if the market showed some weakness in the aftermath of the Fed announcement.

Ben Bernanke: The Most Powerful Man in the World

Ben Bernanke was in the spotlight again on Friday as he delivered his annual speech on the state of the economy from Jackson Hole, Wyoming.   While Bernanke argued forcefully for the necessity for further stimulus measures to bolster the weak US economy, he stopped short of actually announcing anything concrete.  Nonetheless, Bernanke's QE3 talk was enough to lift stocks higher on Friday.  Without risk of exaggeration, Bernanke and the Fed governors are perhaps the most powerful people in the world these days, as their decisions affect almost everyone on the planet in some way.  If the Fed decides on more stimulus, it will certainly raise the price of commodities like gasoline and food all over the world.  Stimulus measures like QE3 are inflationary by design as they create money "out of thin air" in an effort to boost economic activity.   But as we know, inflation is not benign.  Rising food prices have been indirectly blamed for much of the civil unrest and popular uprisings in the Middle East over the past two years.  Food inflation is also worsening the lives of the poor who no longer have sufficient income to buy even the bare essentials of life.  On the other hand, if Bernanke and the Fed decide not to embark on QE3, the stock market is likely to decline sharply and this will hit anyone with investments, 40lk, or any kind of pension fund.  The knock-on effects of a stock market decline are somewhat harder to measure,  although they could conceivably spark another recession as consumer spending dries up.  Bernanke therefore shoulders an enormous burden of responsibility at the moment as his next move will directly and indirectly impact the lives of literally billions of people.

Ben Bernanke's horoscope reveals the huge amount of pressure he is currently living under.  While we do not have his birth time, we know he was born on December 13, 1953 in Augusta, Georgia.  We can see that transiting Saturn (2 Libra) is exactly conjunct his Mars-Neptune conjunction.   This is a very apt planetary influence since Saturn to Mars transits are often associated with hard work and increased stress.  Saturn symbolizes burdens and responsibility while Mars embodies the notion of action and decision-making.  Clearly, Bernanke must be trying to cope with an almost unimaginable amount of responsibility for the actions he will take in the next Fed meeting on September 13.  In some cases, this Saturn to Mars transit can lead to very damaging outcomes.  Both planets are considered malefics so there is always that possibility, especially when other chart factors confirm.  In Bernanke's case, Saturn is exalted in his natal chart in Libra, so this may reduce the likelihood of negative fallout from any actions he makes.  In addition, the dispositor of Mars and Saturn in Libra is Venus, and it is placed in Scorpio in the natal chart.  Venus is currently under the strengthening influence of transiting Jupiter so this may help to support the outcomes of this Mars-Saturn transit.

We can see that there will be an interesting mirroring of transit influences this weekend in Bernanke's chart.  Not only is transiting Saturn conjunct his natal Mars, but transiting Mars is conjunct his natal Saturn this weekend.  This likely represents situations of maximum intensity and pressure as if the key decisions about QE3 may be made this weekend.  There is an awful lot of malefic energy in this rare mirroring of transits.  It looks like there may be some significant amount of upset and discomfort along the way, as if Bernanke may be forced by external circumstances into making a decision.  Perhaps this is related to developments in Europe as the ECB attempts to cobble together its own stimulus package.  In fact, some analysts have suggested that Bernanke's decision on QE3 may ultimately be determined by what happens in Europe over the next two weeks rather than by any new US economic data.

On the day of the expected announcement on September 13, Venus will move to 13 degrees of sidereal Cancer.  This will put it on a collision course with his natal Saturn at 12 Libra.  Venus-Saturn aspects tend to be somewhat difficult and often reflect situations that are disappointing or produce unhappiness.  Venus will be a bit past exact, so that is one potential saving grace. On the plus side, both Mercury and the Sun will form larger t-squares with Bernanke's natal Sun-Jupiter opposition.  T-square patterns are still somewhat untrustworthy, however, even when they involve positive planets as they do here.  In any event, the pattern highlights the importance of that period around September 13.  Overall, there are some problematic possibilities here that suggest that Bernanke's decision may not have a warm welcome.  This would likely be the case anyway, since he does harm to consumers by launching QE3, while he does harm to asset owners if he does not launch it.

Bernanke may encounter even more problems starting in October as transiting Rahu will tightly aspect Ketu.  At that time, Rahu will station near 1-2 degrees of Scorpio for a period of two months.   This  Rahu to Ketu transit is often difficult and usually involves situations that are outside of our control.  I would therefore expect this transit could translate as a particularly uncertain and disruptive time for the Fed Chair.  What makes this transit especially troublesome is that it will also activate his natal Mars-Neptune conjunction that is also at 2 degrees of its sign of Libra.  While September looks like a time of increased pressure and stress, October to December may actually prove to be more negative in terms of outcomes.  Perhaps this may mean that Bernanke is losing control of his fellow Fed governors who must collectively decide on policy.  Or it may mean that the economy is not responding in a way that he has expected.   It looks as if there are circumstances or people beyond his control that may be creating some headaches or obstacles for him.

Despite Bernanke's encouraging words from out on the Wyoming range, stocks edged lower last week as Euro worries continued to weigh on sentiment.  The Dow was off by less than 1% closing at 13,090 while the S&P 500 finished at 1406.  Indian stocks also declined as positive GDP numbers reduced the likelihood of a rate cut. The Sensex lost 2% closing at 17,380 while the Nifty ended the week at 5258.  I thought we might get more upside around Thursday's Sun-Uranus-Pluto alignment but that energy showed up somewhat later than expected on Friday in the US.   Gold also benefited from the Sun aspects late in the week.  As expected, we did see some downside early on in the week, however.

This week appears to have some significant negative aspects in play, especially in the early part of the week.  Venus is aspected by Saturn on Monday so this is likely to depress buying.  US markets are closed for Labor Day, so it is possible that the negative mood could extend into Tuesday.  Mercury and Mars form a fairly powerful alignment with Uranus and Pluto on Tuesday and Wednesday so that is another potential trouble spot for markets.  I'm less convinced that it can produce much downside though.  The second half of the week may be better as Venus is aspected by Rahu Wednesday and Thursday and the Sun teams up with Jupiter in a square aspect on Friday.

Bernake's Fed: born under bad stars

The stock market is looking pretty fragile these days.  While it is chasing recent highs, stocks seem increasingly reliant on central bank easing rather than fundamentals based on actual economic growth.  Much of this summer rally has occurred on the assumption that QE3 or its European equivalent are not far off.  Last week's Fed minutes and Ben Bernanke's letter to the House Oversight Committee reiterated his commitment to more easing in order to boost the slumping US economy.  Some of Bernanke's talk should be assumed to be mere jawboning which all central bankers engage in.  But if stocks rally into the next Fed meeting on 13 September, then that puts a lot of pressure on Bernanke to actually come through with a tangible announcement for more stimulus. If he does not, then the market would likely decline sharply.  Even if the Fed does announce some action, there is a possibility that the market could sell off anyway as in "buy the rumour, sell the news".  This is perhaps more likely if the program comes up short of expectations in terms of size and scope.

We can get a deeper glimpse into the inner workings of the Fed by looking at the horoscope of the Bernanke's tenure.  He was installed as Fed Chair at 2 p.m on 31 January 2006.  This natal chart should reflect some basic qualities of his time as Fed Chair.  We should also be able to see some trends and events by examining transits against the natal chart.  The natal chart itself says a lot about the Bernanke Fed.  The US has suffered its worst recession since the 1930s during his term.  In fact, Bernanke is very closely identified with the recession since economic activity began to decline just a year after he was appointed Fed Chair.  We can see this recession quite clearly through the nasty opposition of Saturn to the Sun, Mercury and Neptune.  Saturn is very much the planet of recession as it symbolizes restraint, pessimism and loss.  It is placed in the 2nd house of wealth.  Ouch!  Its aspect to the Sun suggests a loss of vitality and confidence.  Even more damaging is its aspect to Mercury.  Mercury is the planet of commerce and it is doubly important in this chart since it rules the ascendant, Gemini.  To top if off, Mercury is placed in a harmful dusthana house, the 8th.  So there is really quite a bit of negative Saturn energy that flows through the whole chart.  Obviously, Bernanke's legacy will be his reaction to the recession.

Interestingly, we can see hints of Bernanke's strategy of "quantitative easing" or QE.  Quantitative easing is a form of economic stimulus whereby central banks buy debt which enables other market participants (banks, institutions, private investors) to boost economic activity through other more direct wealth-producing areas.  By entering into the debt market, interest rates are kept low and thereby make credit cheaper for prospective borrowers, and hence this should increase economic growth. But in order to buy debt, the Fed has to spend money it does not actually have.  It therefore "invents" the money and moves the debt onto its own balance sheet to be repaid at a later date.  The Mars-Jupiter opposition in the Bernanke installation chart is a perfect reflection of this spend first and ask questions later approach.  Mars represents willful action while Jupiter symbolizes wealth and value.  When there are in more harmonious aspect with each other, it suggests a prudent spending of money toward a specific goal.  But in a more difficult opposition aspect, it often means out of control or wasteful spending.  And just to extend the analogy one step further, Jupiter is closely square Neptune, the planet of illusion and dreams.  It is perhaps no coincidence that Professor Bernanke has written several academic papers arguing the theoretical case of quantitative easing as a solution to economic slowdown.

The trouble is we don't actually know if this strategy can work since it's never been tried before.  A growing number of analysts believe that quantitative easing has limited returns and may no longer have a positive effect on the economy as the debt burden grows.  A common criticism is that QE produces inflation and debases currency, in this case, the US Dollar.  Inflation has indeed spiked in various countries (e.g. India) after the Fed began its QE program in 2009 as investment money sought out higher rates of return in other jurisdictions.   US core inflation remains largely under control although commodity prices have risen substantially.   Elevated gasoline and food prices at home and abroad are a direct consequence of the Fed's QE policies.  So perhaps that Jupiter-Neptune-Mars pattern in this chart does contain some of the keys to the Bernanke tenure at the Fed.  The themes are clear enough: the huge debt burden through spending (Mars-Jupiter), the fixation on an idea of recovery through inflation  (Jupiter-Neptune), and the reliance on a theoretical idea of quantitative easing that remains largely untested in the real world (Neptune). 

This chart is also useful for seeing the various twists and turns in financial markets and the wider economy.  We can see that the meltdown in 2008 occurred when Saturn transited through Leo.  Thus Saturn would have aspected the Moon (depression), while Rahu (distortion) conjoined Mercury (commerce).  Both are very damaging transits.   The recovery began in 2009 just as transiting Jupiter entered the 9th house and therefore conjoined the Moon (expansion, happiness) and aspected the Ascendant (growth).

All eyes are on the upcoming FOMC meeting on 13 September.  Perhaps not surprisingly, we can see that there are a number of close transit hits occurring at that time.  At the broadest level, this reflects the importance of the announcement.  The close Jupiter-Mercury aspect is a very positive influence and could be seen as a possible indication of more expansionary policies.  While I am still fairly skeptical about the near term prospects for QE3, this Jupiter aspect is one piece of evidence that some kind of easing will take place.  It may also reflect the general public approval of the Fed move.  But we can also see that Saturn is highlighted at this time.  Transiting Venus is exactly conjunct Saturn on this day, and forms a larger alignment with Uranus and Pluto.  All three planets are at 13 degrees of their respective signs. Venus-Saturn aspects tend to be more difficult and often provide an outlet for Saturn's more cautious energy.  Perhaps we have equal measures of expansionary Jupiter with cautious Saturn.  Again, one can interpret these planets in a number of ways, although this does suggest a kind of balance in the Fed action.  Perhaps the easing program will be quite small.  I would also note that Saturn and Rahu are close to the degree of the Ascendant in this chart in September.  This is a more negative influence and suggests that Bernanke may become fairly stressed while these two malefic planets are in aspect to the Ascendant.  I don't want to make too much of it, however, since the Ascendant is dependent on an exact "birth" time and I am uncertain about the accuracy of the 2 p.m. installation.

Looking ahead, we can see that the next major transit hits will occur in early 2013.  Saturn will station in exact square to Sun while Ketu (SN) conjoins Mars.  This is a double whammy that is likely to mirror some very difficult developments at the Fed.  This could represent another phase of the ongoing economic crisis that may force the Fed to react quickly.    It is also possible that this could correspond with the end of Bernanke's tenure.  Mitt Romney is on record saying he will fire Bernanke if he becomes president.  These transits occur in January and February, just at the time when the new president would assume office.  While I don't think Romney will win the presidency, it is an intriguing interpretation of these difficult transits. 

But back to today's markets.  US stocks ended their winning streak last week on worries of slowing growth in China and Europe.  The losses were quite mild, however, as the Dow slipped less than 1% closing at 13,157 while the S&P 500 finished at 1411.  Indian stocks fared better on hopes of further central bank easing.  The Sensex rose less than 1% closing at 17,783 while the Nifty ended the week at 5386.   The week unfolded more or less as expected as the early week Venus-Jupiter aspect coincided closely with gains on most world markets.  As expected, the late week period was more bearish on the Mars-Rahu aspect. 

The planets this week argue for more upside as the Sun forms an alignment with Uranus and Pluto on Wednesday and Thursday.  Ahead of this pattern, there is a greater chance of some declines perhaps, although they may be fairly muted.

Apple hits all-time high ahead of iPhone 5 release

It was a fairly quiet week in the markets as trading volumes ebbed during the summer holiday season.  In New York, stocks gained for the 6th straight week as corporate earnings continued to suggest a positive outlook.  The Dow edged higher by 1% closing at 13,275 while the S&P 500 finished at 1418.  Apple shares hit a new all-time high at $648, as the market anticipated the release of the iPhone 5.  Indian markets were also bullish as investors responded to better than expected inflation data.  The Sensex climbed 2% closing at 17,691 while the Nifty ended the week at 5366.   I thought we might have seen more volatility around the early week Mars ingress into Libra and the Mars-Saturn conjunction on Wednesday.  At least the Venus aspect with Uranus and Pluto did appear to correlate fairly closely with the mid and late week gains on most global markets.

It seems that Saturn has been on its best behaviour in the early stages of its transit of sidereal Libra.  According to traditional astrological theory, Saturn is said to be exalted in this sign and hence it may be somewhat less likely to manifest its negative energy and pessimism.  That has been the case thus far, and even its conjunction with troublesome Mars has not interrupted the current stability in financial markets. The basic idea here is that planets will tend to correlate with negative market moods when they are under pressure by malefic planets.  While Saturn may have a somewhat stronger constitution here by virtue of its exalted position in Libra, it is still a potentially dangerous planet which can undergo rapid changes in its nature. Saturn's changing condition should be our focus in the coming weeks as it moves into aspect with Rahu, the North Lunar Node.

Apple's new highs provide a good illustration of the usefulness of the IPO horoscope.  Apple was first traded on the Nasdaq on December, 12, 1980 at 10 a.m.  The resulting chart is very powerful. The ruler of the 1st house, Saturn, is tightly conjunct benefic Jupiter in the 9th house of good fortune and higher knowledge.  Venus, symbolizing money and beauty is closely conjunct the Midheaven (10th house cusp) suggesting significant price appreciation over time.  The stellium of planets in the 11th house of gains is also a big plus for the stock, especially since Uranus, the planet most associated with technology and innovation, it tightly conjunct Venus and the Midheaven.  Apple is a technology company that is known for its attention to design and aesthetics, an area that is ruled by Venus.

But while the natal chart is very powerful, Apple has still had its share of ups and downs.  It almost went bankrupt in the 90s before Steve Jobs was called back to save the company.   The worst time was in 1996 when the stock price bottomed at $3.  Interestingly, Apple's bad times occurred during the Rahu dasha period.   Dashas are unique to Vedic astrology and provide a special window on the larger trends of a company.  When a company is running a dasha period of a malefic planet such as Rahu and it is poorly placed in the horoscope, then we should expect problems.  In Apple's case, the Rahu period began in 1986 and ended in 2004.  Rahu is more of a negative influence since it is closely aspected by the 8th house aspect of malefic Mars and Mars sits in the 12th house of loss.  That is a difficult energy to handle even in the best of times. The 1996 low point of near-bankruptcy occurred during the Rahu-Ketu period.  Ketu is another natural malefic that often correlates with problems.  Towards the end of the Rahu dasha period in 2003, Apple suffered through another bear market in its stock as the price fell back to $7 after rallying towards $30 in during the dot com bubble of the late 90s.  But in 2004, everything appeared to change as the Jupiter dasha period began.  Jupiter is a pretty reliable indicator of growth and this was definitely the case with Apple. Even though Jupiter is closely conjunct malefic Saturn in Virgo in the horoscope, its placement in the 9th house appears to have offset other negative influences.  The favourable placement of its dispositor, Mercury, in the 11th house of gains is another reason why the Jupiter period has been so positive for Apple stock.

The all-time high in the stock has occurred in the current Jupiter-Venus period.  This is pretty much what one would expect since Venus is perhaps the most fortunate planet and it is very nicely placed in the horoscope near the Midheaven with Uranus.  The Venus minor period began in March 2012 and will last until 2015.  This suggests that Apple stock will likely remain quite strong.  Of course, dashas are not everything and Apple will still be subject to a range of good and bad transits.   Currently, transiting Jupiter is aspecting all those nice 11th house planets in Scorpio -- Uranus, Mercury, Sun and Neptune.  So that is another source of strength for this stock.  One would think, however, that the Uranus-Pluto square will have to create some problems over the next few months since it is tightly aspecting the Jupiter-Saturn conjunction. 

The planets this week offer a mixed picture.  There are a couple of positive looking transits in the early part of the week that could push stocks higher.  Monday's Venus-Jupiter aspect will be closely followed by the Mercury-Jupiter aspect on Tuesday and Wednesday.  Wednesday therefore becomes a potential dividing line as the Mars-Saturn conjunction will be joined by the Moon.  The Moon could act as an immediate trigger for some negativity or it may act as a cosmic marker for a possible reversal point.  I would note that the late week has some fairly nasty looking aspects including Mars-Rahu on Friday and a Sun-Neptune opposition on Thursday and Friday.

Bad is good: stocks rise on easing hopes

Financial markets engaged in a bit of economic schadenfreude last week as stocks rose against a backdrop of weaker than expected data coming out of China.  The weak industrial production and export numbers meant that a slowdown was more likely in China and around the world.  But in our current upside down world, slowing growth increases the likelihood of more money printing by the Fed and the ECB in the form of QE3.  In this way, bad numbers can actually be good for the market.  Since 2009, investors have come to rely on the interventions of central banks to inject liquidity into the system and thus free up the amount of capital available for loans and economic expansion.  While this bit of counterintuitive logic may seem a bit perverse in the long run (i.e. let's borrow even more money to solve our debt problem!), the short run is all most markets care about at the moment.  And the short run fear is that global growth may be stalling and a new recession could be just around the corner. Therefore, markets are responding favourably to any means to prop up asset values, no matter what the long term consequences may be. 

In New York, the Dow rose about 1% on the week closing at 13,207 while the S&P 500 finished at 1405.  Indian markets were also higher as the Sensex added 2% closing at 17,557 while the Nifty ended the week at 5320.  This bullish outcome was in keeping with expectations as the Mercury-Venus-Neptune alignment was exact midweek.  The Mercury-Venus pairing is usually bullish anyway and the Neptune influence only added to the stability of the up trend.

Stocks have been quite resilient in August thus far, despite the move of Saturn into sidereal Libra.  I had thought we might have seen more downside by now but so far, only Saturn's more responsible side has manifested.  Like all planets, Saturn has different symbolisms, some positive and some negative.  When Saturn is favourably disposed, it can support responsible behaviour and slow and methodical growth.  Perhaps that absence of any easing last week from the ECB and the Fed was a reflection of this upstanding side of Saturn.  But stocks have not been filled with the usual amount of Saturnian pessimism.  One possible explanation is that Saturn is actually considered "exalted" in the sign of Libra and hence it will tend to produce more positive outcomes.  I don't quite believe this exalted status of Saturn is enough to deny its inherently pessimistic nature indefinitely, but it is one possible reason why markets have remained afloat in the early stages of its transit of Libra. 

When Saturn comes under more pressure, we will see how strong its exalted state really is.  This week will be an important test in that respect as Mars conjoins Saturn on Wednesday the 15th.  Mars and Saturn are the two most malefic planets of the solar system so there combination here is definitely one to watch.  Mars could start off the proceedings as early as Tuesday as it enters Libra.  Such Mars ingresses often tend to be bearish.  I would also note, however, that Venus forms a potentially positive alignment starting on Wednesday and lasting until Friday. So there could be some moves higher around this Venus energy, especially if the market has fallen beforehand.  It should be quite an interesting week.

Draghi talk boosts stocks but will Saturn have the last word?

US markets moved higher last week as ECB President Mario Draghi reiterated his unwavering support for the Euro.  Investors took this as a sign that more stimulus would be forthcoming from the European Central Bank and pushed stocks higher as the Dow rose 2% closing above 13,000 for the first time since May.  The Dow closed at 13,075 while the S&P 500 finished the week at 1385.  It was a somewhat different story on Indian markets as a weaker than normal monsoon fueled inflation worries and made a rate cut more unlikely.  The Sensex lost 2% closing at 16,839 while the Nifty ended the week at 5099.   The late week gains arrived later than expected as I thought the midweek Mercury-Jupiter aspect would act as a magnet for optimism.  As it turned out, however, the aspect marked a shift away from the early week pessimism.  Stocks rose sharply after Dragi's remarks on Thursday.

While markets may have felt the warm embrace from Draghi's reassuring words, there is still a big difference between words and action.  Stocks may rally for a couple of days from such central banker jawboning, but any kind of sustainable push higher will likely require new policy initiatives.  The ECB is scheduled to meet on Thursday this week so it is possible that some new plans will be announced.  Actually, this week will have central bankers firmly in the spotlight as the US Federal Reserve will release its latest policy statement on Wednesday while the Reserve Bank of India is slated to do the same on Tuesday. 

It is quite appropriate then that we should see Saturn front and center this week as it changes signs and enters sidereal Libra on Thursday.  While Saturn is said to be exalted in Libra, I think our more pressing concern lies with the ingress itself.  All other things being equal, Saturn sign ingresses tend to be bearish for the markets since they represent a surplus of its caution and pessimism.  Just how this Saturn energy is likely to manifest this week is not completely clear, however.  On the face of it, a strong Saturn would tend to suggest that more stimulus is unlikely.  This may mean that the Fed and the RBI do not announce any new rate cuts or easing measures.  The ECB is in a somewhat different situation.  While it could announce easing, it may also have some new policies it could enact to mitigate the current banking and debt crisis.  It is conceivable that these needn't be directly tied to easing and money printing.  Nonetheless, the prominence of Saturn this week does suggest an increase in caution and that is probably incompatible with a major new stimulus measure. 

Jupiter is better seen as the planet of easing and stimulus.  It was prominent in most if not all of the major stimulus announcements in 2009, 2010 and 2011.  Currently, it is moving away from its aspects to Uranus and Pluto.  These aspects have helped to boost most global markets in the month of July but now it seems their effect may be diminishing as the aspects separate. 

What is particularly intriguing this week is that we have a replay of mid-May when both Venus and Saturn changed signs within a couple of days of each other.  While stocks moved higher for a day or two around this rare simultaneous double ingress on 14-15 May, stocks generally declined both before and after.  This time around Venus will enter Gemini on Tuesday two days before Saturn enters Libra.  Unlike the situation in May, Venus will not be stationing here so that may weaken its effects somewhat.  Venus sign changes are generally a more positive phenomena, so it is not unreasonable to expect some gains in the early week period.   As Venus moves deeper into Gemini, optimism is more likely to fade as Saturn assumes are greater role in the proceedings.

China avoids hard landing; Saturn to enter Libra

China came to the rescue of most global markets last week after Friday's GDP data came in near expectations at 7.6% suggesting only a mild slowdown.  Some investors had feared a more disruptive hard landing scenario in which a steeper decline in economic activity would have negatively affected the global economy.  Markets had been trending lower ahead of the release of the data.  In New York, the Dow closed largely unchanged at 12,777 while the S&P 500 finished at 1356.  Indian markets fared worse, however, as new IIP data came in stronger than expected and dampened rate cut hopes.  The Sensex lost almost 2% closing at 17,213 while the Nifty ended the week at 5227.

This mixed result was not unexpected as I had been fairly neutral about last week.  The nasty Mars-Ketu aspect in the early week did produce some significant downside, especially on US and European markets.  I thought we would see some kind of recovery starting midweek around the Mercury-Venus aspect.  As it happened, this finally arrived on Friday but made up for the preceding days' losses.

While China avoided the worst case scenario, Friday's rally assumed that the weakening growth data would nonetheless still require more stimulus from the Chinese government.  In that sense, the stock market is still as addicted to central bank interventions as ever.  A recent study has suggested that without the Fed's quantitative easing measures over the past three years, the market would be 50% lower (i.e. Dow at 6500) .  The problem for stimulus-addicted investors in this US election year is that the Federal Reserve cannot be seen to be partisan.  A new round of QE would likely boost the stock market and this could therefore improve Obama's re-election chances.  Republicans have increased their criticism of the Fed and Ben Bernanke in recent months for debasing the dollar and creating inflation.  If Romney happens to win the election, there will be many in the Republican party who will call for Bernanke's removal as Fed Chair.  Bernanke's ouster would be all but certain if he decided to launch QE3 in the next month or two before the election and then Romney won anyway.  Therefore, Bernanke therefore needs to tread very carefully this summer and avoid sparking more opposition. 

The astrological case for QE3 is far from clear. A significant round of stimulus would tend to require many Jupiter aspects as that planet rules expansion. The printing of money in order to stimulate the economy is very much a Jupiter-type of activity. We had major Jupiter aspects from 2009 to 2011 when Jupiter formed prolonged angles with Neptune, Uranus and Chiron for months on end on several different occasions.  This is not the case now.  This would tend to argue against another major round of QE, although it may not preclude smaller, less intrusive measures.   The next major Jupiter aspect is not due to occur until early 2013 when Jupiter forms a close aspect with Uranus.  That may be a better bet for the next major easing from the Fed, or from other central banks. It is possible that China's central bank could act before then, but it may not be large enough to spark a major rally.  Jupiter is in aspect with Uranus and Pluto this week, so that might suggest a somewhat greater likelihood of some kind of expansionary activity taking place.

This week looks like it could bring some interesting developments.  There is powerful alignment of planets through much of the week that could move markets significantly.  The ongoing Uranus-Pluto square aspect is joined by both Mars and Jupiter this week.  The last time the Uranus-Pluto aspect was activated by a third planet was after the EU summit on June 29 when the market rallied strongly.  This occurred as the Sun lined up in a t-square with those two distant planets.  This time around Mars will assume the role of the Sun, and form another t-square.  Mars is more of a negative influence than the Sun, however,  so there is less reason to expect gains, at least in the early going.  Of course, Mars has the capacity to take the markets lower so that is definitely a possibility at some point.  However, the presence of Jupiter in the mix would seem to be more positive.  It forms a close aspect with Uranus later in the week which tends to correspond with gains. 

But even if we do happen to see some upside here, the clock would appear to be ticking on the market as Saturn approaches its entry into sidereal Libra on August 1.  This is usually a bearish influence.  Previous Saturn sign changes have corresponded closely with declines.  Saturn first went into Libra last November when the market dropped more than 10%.  As it moved backward through its retrograde cycle, it then entered Virgo in May and the market declined again.  Saturn's re-entry into Libra here is definitely not something to be taken lightly.