India's financial crisis: Rajan boxed in between Mars and Saturn

(25 August 2013)  Raghuram Rajan must be wondering what he has gotten himself into.  The incoming head of the Reserve Bank of India assumes office on 4 September just as the country grapples with a deepening financial crisis.  Inflation is on the rise and threatening again to break into double digit territory while the Rupee last week hit an all-time low of 65 to the Dollar.  The current account deficit shows no sign of improvement and economic growth has contracted from 8-9% in previous years to a more modest 4-5%. 

The crisis was sparked by a sudden outflow of foreign money after the US Federal Reserve indicated it would begin to taper its quantitative easing policy.  The end to the Fed's bond buying program has caused bond yields to spike higher as investors realized Uncle Sam (or rather Ben!) would no longer be a reliable buyer of its own debt.  As investors follow yield wherever they can find it, rising interest rates in the US made India markets much less attractive.  Hence, we have witnessed a rush to the exits from many emerging markets like India over the past two months.

From an astrological perspective, India's current troubles do not come as a surprise.  As I noted in July, India was likely to experience difficult economic conditions during this time and indeed for much of 2014 also.  The main culprit was Saturn (12 Libra), the planet of constraint and loss, has been forming a difficult 90-degree square aspect to Mercury (13 Cancer) in India's national horoscope.  Mercury is the planet of trade and commerce and does double duty in this regard since it rules Gemini, the 2nd house of wealth and economic activity in the India chart.  This aspect becomes exact in early September and may well coincide with a peak in the crisis. 

The tumultuous and chaotic nature of the crisis is reflected by the simultaneous conjunction of Mars to natal Mercury.   While Saturn likely depresses economic activity through its contact with Mercury, Mars introduces an element of shock and frustration.  Mars is currently still 8 degrees from its exact conjunction with Mercury and suggests there may be a climax to the economic crisis in early September when Mars and Saturn converge on natal Mercury in the India chart.  The exact Mars-to-Mercury conjunction occurs on 9 September. Last week's gloom and uncertainty which saw the stock market fall sharply coincided with Mars conjoining the Moon (4 Cancer) reflecting the widespread sense of frustration and annoyance with the current situation.  Emotions and moods are typically seen through the condition of the Moon.

While the crisis may come to some kind of peak in September, Saturn's ongoing transit of Libra is likely to undermine prospects for recovery over the next year or two.  Saturn will move away from its aspect with Mercury after September but it will approach its aspect with Pluto, Saturn, Venus and the Sun during the rest of 2013 and through most of 2014.  This is likely to put a damper on the national mood and coincide with ongoing economic and political difficulties.   We can see that Saturn's retrograde station in early 2014 will form a tight aspect with the Sun suggesting intense pressure and stress on the government and the PM at that time.  We may well see a major disruption or shake-up in government in January and February.

Financial markets remained on edge last week.  US markets held mostly steady as the Dow gave up only a handful of points closing at 15,010. As mentioned above, India was quite volatile as the BSE Sensex broke below 18,000 at midweek but recovered to finished only slightly lower on the week at 18,519.  As expected, we did see declines around Monday's ingress of Mars into Cancer and Wednesday's Mars-Mercury aspect. 

This week could see some optimism return in the early week as Venus is in aspect with Uranus and Jupiter.   Once that aspect has passed after Tuesday, however, the other more malefic influences may again re-assert themselves as Mars tightens its aspect to Saturn and Rahu.  In addition, I think we have yet to see the full negative impact of the upcoming Saturn-Rahu conjunction due on or near 17 September.

Stocks shaky as Mars enters sidereal Cancer

(18 August 2013)  Financial markets were shaky last week as improving US economic data continued to point to a recovery and hence a quicker exit from the Fed's quantitative easing program.   Stocks in New York fell 2% closing at 15,081.   Indian markets finished 1% to the down side after investors were less than impressed by the RBI's move towards capital controls.   In keeping with last week's post, it seems as if the entry of Venus into sidereal Virgo has already weakened sentiment.  Venus is said to be debilitated in the sign of Virgo and that tends to create diminished interest in buying and owning stocks.  As expected, we did get some upside in the first half of the week as the Mercury-Jupiter aspect generated some optimism.

While I can't quite see a repeat of the 1987 crash as some are predicting, it does seem as if the stage has been set for some kind significant down move in the stock market.  The QE merry-go-round may finally be coming to an end as Ben Bernanke may have no choice but to reduce the Fed's bond-buying program as the economy improves.  In our upside-down bizarro world, good news for the economy is now bad news for Wall Street as investors have come to rely on the Fed and other central bankers to buy up bonds in order to drive down interest rates and thereby stimulate economic activity.  One of the problems last week was that the bonds fell sharply in tandem with stocks and this created a negative feedback loop as rising bond yields spooked stock traders.  Not good.   Traders then sold their positions from fear that higher rates would make stocks less attractive.  If bond yields continue to rise (the 10-year Treasury hit 2.8%, its highest level in two years), it could create a mass exodus out of stocks and into bonds as investors go in search of higher yields. 

Certainly, there is some risk in the air as the astrological factors look problematic.  In addition to the transit of Venus through Virgo over the next four weeks, Mars will enter Cancer on Monday where it will remain for the next six weeks.  This is potentially significant for two reasons.  First, like Venus in Virgo, Mars is said to be debilitated in the sign of Cancer.  According to astrological lore, Mars tends to do poorly in this sign as its more negative and chaotic side is more likely to manifest.  Mars is often a malefic influence in the best of circumstances, so this is another negative influence for stocks to contend with.  But the second reason is probably even more important.  Mars will be in a mutual full-strength aspect with Saturn, another malefic planet.  Mars casts its forward square aspect upon Saturn while Saturn casts its backward square aspect upon Mars.  This doesn't happen very often and in theory should describe a condition of higher anxiety, frustration and even destruction.  While this may or may not affect financial markets, its does seem to be powerful enough to destabilize collective sentiment.  If nothing else, markets are a reflection of collective sentiment, of course, so this is a very intriguing case study of just what might happen when the two worst planets in the pantheon get together over the coming weeks. 

It's worth noting, however, that Mars in Cancer hasn't been that negative for stocks in the recent past.  Due to the slower orbit of Mars, it only passes through Cancer about once every 18-20 months.  The last time Mars was in Cancer was in 2011 from September 9th until October 29th.  While this transit included an important interim low in the market (October 4th), stocks actually rose during this transit. The key offsetting positive factor here was the Jupiter aspect with Pluto.  As a rule, transit aspects between slow moving planets will usually trump sign transits. Additionally, Jupiter was in Aries, a sign ruled by Mars.  This benefic Jupiter influence may also have flowed back into Mars and rendered it less negative.  

The previous transit of Mars through Cancer occurred in 2009-2010 when Mars spent an unusually long period in Cancer due to its retrograde cycle.  This meant that Mars spent seven months in Cancer.  Indian stocks fell 6.5% during this period, although US stocks actually rose.  So another mixed bag there, although I would note that the Flash Crash of May 2010 did occur while Mars was in Cancer.  The mitigating factors there was again a strong Jupiter presence, this time through its conjunction and Papakathari Yoga in between Uranus and Neptune.  Before that, Mars entered Cancer in April 2008 and this coincided with a 15% fall in the BSE Sensex during the year of the meltdown. 

Please note that I have included the effects of the transit of Venus in sidereal Virgo for Indian stocks this week.  For the most part, they echo the same results of Venus in Virgo for US stocks that I explained last week.  Most transits coincided with declines over the four week period, albeit with a little more variance.  Overall, it does seem to be a bearish influence.

The bottom line here is that we are getting a double dose of debilitation over the next two weeks as both Venus and Mars will be in weakened states.  This last occurred in September 2011 and did coincide with a significant (6%) fall in stocks around the world.  While no astrological indicators are correlated 100% with a particular outcome, the nature of both these planets nonetheless should give us pause.   The fact that Mars will be afflicted by Saturn for the entirety of its transit through Cancer would seem to ratchet up the potential for troubling and stressful situations.  To be sure, it could all pass for not and the market could end up climbing the bull's "wall of worry" as it often does.   But if clouds are forming overhead, it is usually a good time to find an umbrella --  just to be on the safe side.

This week Mars enters Cancer on Monday so that could put investors on edge.  It is possible that some of the declines at the end of last week were the result of this imminent entry of Mars into Cancer.  This is especially the case in India where stocks fell 4% on Friday.   Some gains are still possible here as a result of Jupiter's exact aspect with Uranus on Tuesday.  The Mars-Mercury aspect on Wednesday is another pattern that could spell trouble.  While it's not exactly a blueprint for a decline this week, it also doesn't seem that inspiring either.

Markets slip on taper talk; Venus (Shukra) enters sidereal Virgo

(11 August 2013)  Stocks receded last week as growing taper talk from Fed officials suggested that a reduction of QE bond buying could begin as soon as September.   In New York, the Dow lost a little more than 1% closing at 15,425.  Indian stocks fared worse, however, as major economic problems continued to mount.  The Sensex declined by 2% closing at 18,789.

US Stocks remain fairly buoyant there as the effects of various Jupiter aspects in August are likely to keep most global markets afloat a little while longer.  And yet the picture is complicated by the fact that negative sentiment is likely on the rise.   As I have mentioned previously, Saturn will soon conjoin its malefic brethren Rahu (North Lunar Node) in mid-September.   Thus the overall sentiment picture is a complex one marked by ever-shifting planetary energies, each with their own distinct influence.  If Jupiter's aspects to Pluto, Rahu and finally Uranus are serving to prop up the markets in August, the combination of Saturn and Rahu is simultaneously undermining sentiment and will likely coincide with some kind of market decline in the medium term.   Figuring out just how these respective influences will manifest at any given time is a difficult task since there are no fixed and perfectly knowable outcomes in astrology.  Planetary influences are only partially understood and therefore we must reserve a certain margin of error for our forecasts. 

The main planetary dynamic that describes the oscillation between optimism and pessimism is often seen through the relative strength of Jupiter and Saturn.  Jupiter represents optimism and hence is more likely to push markets higher when it forms aspects with other planets or through sign placement.  Conversely, Saturn presents caution and pessimism and is more often implicated in stagnant or declining markets when it is prominent through its aspects and sign placement. 

However, Jupiter and Saturn are only part of the story.  All the planets make some kind of contribution to the changing nature of collective sentiment.  Our attention this week focuses on the planet Venus, which is symbolically linked to women, art (beauty) and money.   In Vedic astrology, Venus is known as Sukra (Shukra) and its rulerships are the same as in Western astrology.   Venus is considered a positive and bullish planet and when it is prominent stocks usually rise.  When Venus is in a weakened state, however, it can cause problems as notions of money and value to be corrupted and come under threat.  As a result, a weakened Venus can mean that stocks become more vulnerable
 
Venus may well be weakened now since it entered the sign of sidereal Virgo on Sunday August 11th.  (N.B.  Western astrologers will miss this Venus-in-Virgo effect since they use the tropical zodiac.)  Venus is said to be weakened in Virgo since this is the sign of its debilitation.  Its normally favourable manifestations are denied or short-circuited and there can be problems in areas that it rules.  Since Venus rules money, this means that the Venus transit of Virgo can undermine bullish sentiment and increases the odds for declining prices.  Venus transits Virgo once a year and takes about four weeks to completely move through the sign.  Venus is scheduled to leave sidereal Virgo on September 6th. 

A quick retrospective analysis shows how the Venus transit of Virgo has correlated with some difficult times in the stock market recently.   In 2012, Venus transited Virgo from Oct 23 to Nov 17.   As the chart shows, this was a negative period for stocks as the market fell 7% through the course of this transit.  Interestingly, the market formed an important interim bottom on Friday Nov 16 -- just one day before Venus moved out of Virgo. 

In 2011, it was much the same story.  The market had started a corrective phase in earlier in the year but it continued to fall another 6% through the Venus transit of sidereal Virgo.   Venus transited Virgo from Sep 10, 2011 until Oct 4, 2011.   Incredibly, the major low for the year occurred on the same day that Venus exited Virgo and entered Libra -- October 4, 2011. 

In 2010, the Venus transit of Virgo was again closely correlated with declining stocks.  Venus transited Virgo from Aug 1, 2010 until Sep 1, 2010.  The markets had been quite weak all summer but stocks fell 6% during that one-month period.  Again, a major interim low occurred on the last day of the Venus transit of Virgo on September 1st.  On that day, Ben Bernanke dropped his first hint that the Fed was going to embark on quantitative easing (QE) and the markets surged 4%.  That was the day that Venus left bearish Virgo and entered bullish Libra.

In 2009, markets were recovering from the meltdown but they were still subject to periodic pullbacks.  Venus transited Virgo from Oct 10, 2010 to Nov 3, 2010.  During that time, the Dow lost 4%.  Again, the exit of Venus from Virgo in early November corresponded very closely to an interim low -- within just one day!  The low occurred on Nov 2.

To be sure, these are only four data points and do not suggest an inviolable rule. (Although it's worth pointing out that the same thing happened in 2008 amidst the meltdown.) There is a possibility of a seasonal artifact at work here since Venus always transits Virgo sometime between July and November and we know that stocks tend to do poorly in the autumn (e.g. 1929, 1987, 2008).  However, I would argue that this bearish seasonal bias is linked to the Venus in Virgo effect.  But even this limited survey suggests there is some correlation here that is noteworthy, especially given the exact lows on three consecutive Virgo exits.

One obvious implication of this Venus in Virgo transit is that it could undermine the otherwise positive Jupiter aspects and thus limit the upside in August.  Additionally, this year the transit of Venus through Virgo will be completed before the nasty Saturn-Rahu conjunction.  This complicates the overall sentiment picture somewhat since these sources of bearishness will not neatly overlap.  Perhaps it will mean that stocks will weaken and then rebound on Sept 6 as Venus leaves Virgo and then resume its decline with the Saturn-Rahu conjunction. 

This week we will get our first look at that problematic Venus influence.   I tend to think it won't be that bearish, however, as there is a nice Jupiter-Mercury aspect on Tuesday that could keep the game going a little longer.  And of course, Jupiter is still approaching its aspects with Rahu and Uranus next week so that is another offsetting influence to Venus.

Jupiter lifts stocks as Fed stays mum on QE

(4 August 2013)  Jupiter is once again proving to be a Fed Chair's best friend.  Jovial Jupiter continues to do most of the heavy lifting in the stock market these days as many global markets set new all-time highs.   US Stocks edged higher again last week as the latest pronouncement from the Federal Reserve offered no new clues about the fate of the quantitative easing stimulus program.   Despite Friday's mediocre jobs report, the Dow climbed about 1% closing at 15,658.  Indian stocks fared worse, however, as current accounts woes hit the rupee hard and hastened an outflow of foreign investment.   The Sensex lost 3% closing at 19,164.  As expected, we did see bigger price swings later in the week with the multi-planet alignment of Venus, Mars, Rahu (NN), and Uranus.   (The adjacent wall painting is from Pompeii, Italy and depicts the Roman god Jupiter) 

More broadly, we can see how this latest phase of the stock market rally has been correlated with the condition of Jupiter.   Jupiter, of course, is a bullish planet and when it forms close aspects with other distant, slow moving planets, markets tend to do well.  This is very much the case now as Jupiter forms aspects (i.e. significant angles) with Pluto (180 degrees), Rahu (North Lunar Node) 120 degrees and Uranus (90 degrees).   These angles have been building for several weeks as they approach their point of maximum inflection throughout the month of August.  Local variation from the general pattern is still possible, as India's recent decline reminds us.  As always, the current transit picture has to be integrated into the specific horoscope parameters of each national stock exchange. 

We can see how previous multi-planet Jupiter alignments have coincided with stock market rallies.  After the severe decline in summer 2011, the Dow bottomed in early October near 10,000.  It then rose 30% in less than a year as it formed an extended top in spring 2012 between March and May.  It subsequently fell sharply again in the summer of 2012.  I would argue that much of that 30% gain coincided with the favorable placement of Jupiter.  Jupiter formed aspects with other slow moving (and hence powerful) planets such as Saturn, Neptune and Uranus in late 2011 and early 2012.  The more aspects Jupiter makes at any one time, the more bullish collective sentiment becomes and the greater potential for stock market gains.   The chart for January 1, 2012 shows these multiple Jupiter aspects in action.  It is also worth noting that Jupiter was moving particularly slowly at that time since it had stationed direct in late December 2011.  A slower Jupiter means that these aspects are in effect for a longer time, and thus sentiment can be boosted that much more. 

We can spot another cluster of simultaneous Jupiter aspects in March 2012 near the end of this big stock market rally.  Jupiter formed aspects with Mars, Rahu and Pluto at this time as the stock market topped out near the 13,000 level.  It would then revisit this high in May but then fall sharply again the summer.   As a general rule, sentiment rises as Jupiter aspects approach their exact angles and then wanes once Jupiter moves off.  Once Jupiter moved away from its aspects with Mars, Rahu and Pluto, the market slumped a bit.  To be sure, it staged a final rally in April without the help of any strong Jupiter aspects, but the overall pattern is worth noting nonetheless.  Without the support of any Jupiter aspects after March 2012, the market was more vulnerable to declines as sentiment worsened with the Euro crisis and the possible default of Greece in the summer. 

Jupiter's current aspects are moving closer to their respective exact angles this time around.  It suggests that the mood is more likely to remain fairly optimistic for a little while longer.  Firstly,  Jupiter forms an exact opposition exact with Pluto on Tuesday, August 8th.  Then it is due to form an exact 120 degree angle with Rahu (NN) on August 16th.  Finally, Jupiter will form a 90 degree angle with Uranus on August 21st.  The clustering of these three Jupiter aspects this month is a possible sign that the market may be getting close to a top, not unlike the situation in March 2012.  While it could rally once again after that as it did in April 2012, that seems less likely given the imminent approach of the bearish Saturn-Rahu conjunction in September as I have mentioned in previous posts. 

The broken BRICS and India's uncertain future

(28 July 2013)  Are the BRICS really broken?  There has been a lot of talk recently about declining growth in emerging markets especially in four largest countries collectively known as the BRIC nations (Brazil, Russia, India, China).  South Africa was recently added to the original four.  A new article by Ruchir Sharma of Morgan Stanley has suggested that the BRICs time in the spotlight may now be over after shining so brightly in the 2000s. China's double digit annual growth is now a thing of the past, and Brazil is seeing widespread social unrest against a backdrop of rising inflation and economic stagnation.  Russia is riddled with corruption and remains an undiversified oil-based economy.  Like its fellow BRIC brethren, India has seen its growth rates moderate from 9 percent down to 6 percent this year as struggles with inflation and inadequate infrastructure are formidable obstacles to sustainable economic growth. 

What does the future hold for India?  Are its recent setbacks merely very normal growing pains as an economy undergoes a process of maturation?  Or is the current phase of sluggish growth a warning signal of more significant problems to come as development is blocked by poor infrastructure and a political system that is ill-equipped to deal with long-term challenges? 

A look at the horoscope of India provides a unique window on this question.   We can see that India gained independence in 1947 during its Saturn dasha.  For most of its first forty years, Indian adhered to a somewhat socialist model of development which emphasized protectionism, price supports, and a highly regulated marketplace.  This Fabian approach supposedly protected the bulk of the population from the vagaries of the free market and reduced inequality.  However, it also also dampened entrepreneurship and innovation and produced very slow growth.  It also did little to reduce endemic levels of poverty throughout the country.   Perhaps it is not surprising that this socialistic model should have been followed during Saturn's dasha period since that planet is said to symbolize the broad mass of the population, especially in the democratic sense of "the people".  Saturn is also generally seen as a difficult energy where growth comes slowly if at all and austerity is favoured over spending.  And at the risk of stretching the planetary metaphor too far, Saturn is the planet of planning and orderliness -- a very apt reflection of the preference for a statist planned economy replete with many nationalized industries. 

India's political elites finally changed course in 1991 as the economy was liberalized and opened up to more competition.   Economic growth increased significantly as a result of this new initiative as hundreds of millions of people joined the middle class.  Interestingly, liberalization occurred at the beginning of the Venus dasha (1989-2009).  Venus is a very different influence than Saturn as it typically emphasizes enjoyment, luxuries, money and pleasure.  Venus is a benefic planet and its dasha periods are often times of greater happiness, enjoyment and expansion.  This is a very appropriate description of what happened to the Indian economy at this time as the consumer sector exploded with the newly-minted middle classes buying all manner of automobiles, electronics and real estate.   It is worth noting, however, that liberalization has done little to improve the lot of the bottom third of India's population.  This may be a reflection of the condition of Venus in the natal chart which is tightly conjunct Saturn.  Saturn tends to enforce limits and moderate prosperity, even when it is associated with a benefic planet like Venus.  In this sense, the more difficult position of Venus in the India horoscope may be one reason why the mostly positive Venus dasha period did not produce more growth than it did.  As has been well-documented, India has lagged far behind China during its liberalization phase.

The Sun dasha began in 2009 and will run until 2015.  We can see that the Sun is in a somewhat mixed condition in the chart as it is closely conjunct Venus and Saturn.  The Venus influence is mostly positive but Saturn tends to make things more difficult.  The Sun is slightly malefic in nature and its rulership of the 4th house mitigates some of that negativity.  This mixed picture is perhaps appropriate given the nature of economy in the past few years.  While India has rebounded quite well from the 2008 economic meltdown, the recovery has been uneven.  Inflation is still a problem as is the increasing current accounts deficit and the falling rupee.  The stock market rebounded from the depths of 2008 but it has gone mostly sideways for the past two years and has not been able to break above the all-time high set in January 2008. 

The current situation offers the possibility of some guarded optimism.  Since May, the Sun-Mercury dasha has been running and this will remain in effect until March 2014.  Mercury is generally supportive of economic growth since it rules commerce although its its ability to do good is moderated by its presence in the 3rd house with Saturn and Pluto.   From the perspective of the dasha periods, we could see moderate growth and measured progress in the near term. 

The problem, however, is with the transit chart.  Saturn is currently transiting sidereal Libra.  This sets up an ongoing square aspect to all of those planets in Cancer in the Indian national horoscope.  This is generally an unfavourable influence, especially since it aspects Mercury, 2nd house lord of wealth, Venus, the 1st house lord and karaka of wealth and happiness and the Sun, which represents the government and vitality of the nation as a whole.  This Saturn transit will be in effect through all of 2014 and presents a very significant astrological impediment to growth and renewed confidence in the future.  For the next couple of months, Saturn will be squaring the natal Mercury so this may depress commercial activity and cause transportation and communication problems.  The presence of this very difficult transit over the next year when the dasha period is mixed at best suggests that India is unlikely to resume its breakneck pace of economic growth in the near future.  The best-case scenario would appear to be more muddling through. 

Looking further ahead, the Moon dasha begins in 2015 and will run for 10 years until 2025.  Like the Sun, the Moon is in mixed condition in the horoscope.  Its placement in the sign of Cancer is very auspicious and denotes a greater capacity for positive outcomes.  However, the close aspect from Ketu is problematic here and suggests the Moon dasha may be volatile.  Moon-Ketu aspects can bring about sudden changes and generally are not conducive to periods of stable and strong economic growth.  While gains are still likely, growth may be uneven and interrupted and may cause anxiety and uncertainty, both for the economy and the political system. 

The bottom line from this admittedly very brief overview is that India's horoscope suggests that uncertainty and uneven economic growth is more likely to be the norm in the next ten years.  Part of this moderated growth may be explained in terms of "regressing to the mean" after several years of very high growth.  However, I suspect that the Indian economy may have to cope with additional burdens that make it unlikely to repeat its early honeymoon period of the 2000s when it entered the BRIC club.

On financial markets last week, US stocks held steady as corporate earnings reaffirmed faith in the recovery.  The Dow was unchanged closing at 15,543.  Indian markets fared worse, however, as earnings disappointed against a backdrop of Asian slowing.  The Sensex tumbled 2% closing at 19,748. 

The planets this week look somewhat more exciting than last week.  This is perhaps not unexpected anyway as Ben Bernanke is scheduled to speak on Wednesday after the latest FOMC meeting and there is the July jobs report due on Friday which could impact when the Fed decides to taper its QE bond purchases.   Monday's Sun-Saturn aspect offers the possibility of some bearishness in the early part of the week.  The midweek tilts a little bullish as Venus forms an aspect with Pluto.  The late week looks more  significant, however, as Mars squares Uranus (bearish) on Thursday and Friday just as it approaches an aspect with Venus (bullish) and Rahu (bearish).  There is quite a bit of energy in this pattern although it is not readily apparent which direction it could move markets.  However, I am generally cautious around any alignments that involve Mars and Rahu since both planets are malefics.

Is the game rigged? Bernanke comments push stocks to new record

(21 July 2013)  Is the game rigged?  After yet another reassurance from Ben Bernanke last week that the Fed will do whatever is necessary to stimulate the economy and boost job growth, one may wonder if the stock market will ever go down again.  After all, stocks have risen by more than 150% since their low in 2009 in no small part as a result of the Fed's loose money policies.  Whenever markets have shown signs of falling back into the depths, Bernanke has stepped in with the latest version of quantitative easing (QE) which aims to reduce interest rates and thereby push more money into riskier assets such as stocks.    Even if QE hasn't done that much to improve the US job market, it has been a bonanza on Wall Street.  Bernanke's pledge last week helped to boost stocks last week as the Dow finished at another all-time record of 15,543.  Indian stocks also did well as the Sensex edged higher to 20,149. 

The gains were not surprising given the presence of the Jupiter-Saturn-Neptune alignment.  While I thought we might have seen a little more caution creeping into the markets late in the week, the overall result mostly confirmed our understanding of the bullish effects of Jupiter when it forms geometric exact angles with other planets.   The dominance of Jupiter is also a reason why commodities such as gold and oil have also been recently rising in price.

While the markets are likely rigged to some extent, many of the ups and (occasional) downs are still reflected by the ongoing movements of the planets.  If stocks have generally been rising for the past four years, it is because the planetary alignments have been more more positive.   That means that bullish planets like Jupiter have been more prominent in its aspects than bearish planets like Saturn or Ketu (South Lunar Node).  In that sense, no matter how much Bernanke and his Wall Street buddies are trying to pump up stocks to keep the whole thing afloat, the entirety of the game should be reflected in the planetary geometry.  That is the theory anyway. 

As I noted last week, however, there is a time for every season.  Jupiter will not enjoy its current predominance indefinitely.  While we can see it will form some aspects with Pluto, Rahu and Uranus in August, it is unclear just how much of a positive effect that can have on stocks.   That is because Saturn is due to move back into the limelight as it is due to conjoin Rahu (North Lunar Node) in mid-September.   The Saturn-Rahu conjunction is a meeting of two naturally malefic energies which is likely to increase pessimism and caution, even to the point of irrationality.  Saturn has a fairly good track record of pushing stocks lower so this upcoming conjunction is definitely one to watch. 

Aside from the transit effects (Saturn conjunct Rahu) it is also useful to examine just where the conjunction will land with respect to the key natal charts.  The chart of the New York Stock Exchange (NYSE) is sometimes instructive in this regard.   As a general rule, when malefics like Saturn form close angles (0,45,90,120,180) with the position of key natal planets in this chart, the market is more likely to decline, other things being equal.  When Jupiter forms angles with those natal points, the market is more likely to rise.  It goes without saying that these are not perfect correlations but rather probabilistic ones with margins of error that should be respected.  

Saturn will conjoin Rahu (True Lunar Node) on September 16th at 14 degrees of sidereal Libra.  Due to the previous retrograde motion of Saturn in the spring, we can see that Saturn transited this same point in April.  US stocks suffered a small 3% pullback in April which culminated an interim low on the 19th.  Saturn was less than one degree away from its exact 180-degree opposition aspect to Venus at the time of this low.  Venus is a planet that symbolizes buying and assets and the aspect from Saturn suggests a restriction or loss of value.  As a possible objection, we should note that the exact opposition occurred about a week later when stocks were already rising again.  The lesson here is that planetary aspects are best understood as having a certain window of influence.  While the theoretically strongest influence should occur when the aspect is exact, the fact is that all the other planets are part of the equation also and these can augment and shift the effects of the primary aspects.  Collective sentiment therefor reflects the totality of the interconnections of all nine planets, as well as all the other lesser asteroids, stars and comets that astrologers usually omit for reasons of brevity and parsimony.

So what is interesting here is that Saturn will return to that exact same spot at 14 degrees of Libra opposite Venus in September as it resumes its forward motion.  This time around it will be joined by Rahu (North Lunar Node).  Rahu is perhaps somewhat less malefic in nature than Saturn as it symbolizes acquisitiveness and greed.  When it is associated with a positive planet, Rahu can actually coincide with gains in confidence and therefore increases in prices.  But that is not the case here.  A more likely interpretation is that Rahu's tendency to exaggerate and distort will end up making Saturn's cautious and reserved nature more problematic than it otherwise would be. 

However much the stock market is being rigged by the Fed or manipulated by Wall Street insiders, there is some reason to think that the recent run of new all-time records and stunning returns may be interrupted by September.  No matter how powerful Ben Bernanke is, I would argue he is not more powerful than Saturn.  Of course, Saturn's aspects come and go, while the Fed's loose monetary policy appears to be eternal.   That could give the Fed the temporary advantage in this respect, or at least until the next Saturn aspect. 

This week could be a little more mixed as malefic Mars passes its conjunction with Jupiter on Monday.  However, there is a fairly nice looking alignment of Sun-Moon-Venus with Neptune on Wednesday that offers some hope and optimism.

Bernanke backtracks on taper; stocks move to new highs

(14 July 2013)  Ben Bernanke has once again proved that the Fed is the stock market's best friend.  The Fed Chair's magic words that the zero interest rate policy would remain in place indefinitely put investors in a buying mood as the worrisome taper talk faded into the background.  No doubt Bernanke was still in damage control mode after his June musings about reducing bond buying created a headlong rush to the exits.  While financial markets are certainly relieved that the Fed's free money will continue to flow, one wonders how long it can last.  The Fed's experimental stimulus plan (QE) is now into its 4th year and has boosted stocks and other financial assets around the world in the wake of the financial meltdown of 2008. 

The trouble now is that the Fed may be trapped.  Markets have become addicted to the $85 Billion of treasuries it buys every month so that any hint that this money will not be forthcoming causes investors to freak out.  This is what happened in June when Bernanke suggested that bond purchases would be tapered if the economy continued to recover.  With every bond buy, the Fed's balance sheet becomes that much more indebted as even invented money still leaves a trail of red ink. 

We can see how Bernanke's tapering comments on June 19 may have been reflected in some close aspects in the first trade horoscope of US Treasuries (Aug 22 1977).   The Sun-Jupiter conjunction had conjoined the natal Jupiter suggesting a kind of maximum faith and trust (Jupiter) which would then be increasingly subject to deterioration.  The exact aspect therefore introduces new vulnerabilities as the favorable energy begins to wane.   Both Saturn (11 Libra) and Neptune (11 Aquarius) were in a stressful alignment with the Moon (12 Scorpio) which can symbolize erosion and weakness (Neptune) and negativity (Saturn).   Mars (20 Taurus) and Rahu (22 Libra)  were also in close aspect with natal Rahu (22 Virgo) suggesting sudden and abrupt developments (Mars) that caused disruption (Rahu) in the status quo.

How long can the Fed go on buying bonds in this way?  To be sure, it can do it for a long, long time since the US Dollar is the world's reserve currency and the rest of the world still regards the US as the main driver of the global economy.   Eventually, the debt will become so large that non-Fed buyers of US debt will start to demand a premium as the risk of default rises.  Bond yields will then move higher and the Fed will lose control of the market.  As we know, higher interest rates tends to depress economic activity and could spark another major recession.   So it may be a question of when the day of reckoning will come.  If Bernanke goes ahead with the taper in late 2013 and early 2014, the stock market decline and subsequent economic recession could come next year.  But if he keeps the QE program is in place longer, Bernanke can delay the inevitable, assuming the bond market keeps its trust in US debt.  The current bubble in asset prices will remain in place as long as interest rates remain low, say below 3% on the 10-year treasury note.

Bernanke's jawboning generally boosted stocks across the board last week.  US markets rose by almost 3% as the Dow closed at an all-time record of 15,464. Indian stocks also climbed about 3% for the week as the Sensex finished at 19,958.   I thought we might have seen more downside in the early week on Tuesday's Sun-Mercury conjunction and the Saturn station on Monday.  Indian stocks were more tentative in the early week, although the US market drifted higher.

It seems that the current up trend is linked to the approach of Jupiter's exact aspect with Saturn and Neptune.  Jupiter is typically a bullish influence and its 120 degree aspect to Saturn and Neptune does broadly fit with the recent rally.  This aspect will be closest on Wednesday this week after which Jupiter will begin to separate.  This will tend to reduce the extent of optimistic sentiment and could coincide with some sober second thoughts amidst the risk-free euphoria engendered by Bernanke's policies.  Saturn's upcoming conjunction with Rahu, the North Lunar Node, in September is another potential obstacle for the financial markets.