This recent decline in global markets has all the earmarks of a new bear market. If the market is heading lower here, then one has to wonder how long this pessimism will last. While I have been bearish for over a year now, I have never really given the length of bear market much thought. Certainly, there are good theoretical reasons for thinking that this is no ordinary, run-of-the-mill bear market. The bull market that preceded it was unprecedented in terms of its length (18 years) and the increase in stock values (over 1500%). While there is no law that bear markets are always proportional to the bull markets that precede them, it is not unreasonable to assume that there is some correlation there. The bear market of the 1930s followed the extended bull run of the 1920s, while the decline of the 1970s was part of a longer sequence that began with the bull market in the 1950s and early 1960s. Besides the extent of the previous rise on the market, we also are faced with the prospect of a new reality in the energy sector. Crude oil is setting record levels and there is no end in sight as supplies are increasingly seen as finite while the developing world in Asia is experiencing the most rapid economic growth in its history which will push demand to ever-higher levels. To add to this unstable economic mix, the US economy is in a precarious state as government and personal debt levels are growing faster than ever before, as the US dollar falls to new modern day lows against most currencies. Even without any astrological insight, it does seem we've moved into a dangerous new economic era in which stock markets are unlikely to do well.
But we know that the planetary patterns are also indicative of prolonged difficulties in the economy. As Louise McWhirter discovered, Rahu transiting through tropical Aquarius/sidereal Capricorn has a very negative effect on the US economy and is usually associated with recessions. Outer planets in hard aspect also often signal global problems that have financial manifestations. The depth of depression in 1932 was marked by the t-square between Saturn, Uranus and Pluto. In a 2005 article in The Mountain Astrologer, Ray Merriman has noted that a t-square involving the same planets will occur in 2010 and has suggested we may be in for a similarly negative economic downturn. While I do think this t-square will mark the likely bottom in the stock market, I'm not sure it will be as bad as the 1930s where stocks lost over 85% of their value from their 1929 highs. This is because these planets will not conjoin on or near any key planets in the NYSE chart. In 1932, transiting Uranus conjoined the natal Moon of the NYSE 1792 chart while Pluto formed an exact square to it. These closer natal afflictions were perhaps additional sources of bearish sentiment that forced stocks down to those historic levels.
We are likely to see a steep decline in stocks in November and December as Saturn stations opposite Uranus. This is a difficult configuration in mundane affairs, but since Saturn will station on the natal 2nd house Mars in the NYSE chart, there is good reason to think it may have a directly negative effect on the market. Assuming we see new lows set in July around 10,500-11,000 on the Dow, any rallies after that into the Fall may get the market back as high as 12,000-12,500. I think I'm being generous there, but it is possible. This is the classic pattern of a bear market rally where significant gains of 20% or more can occur in a few months. The key point here is that the highs are not as high as the previous ones. The market then loses faith and starts a new leg down towards a new lower low. This is what is likely to occur in November and December. I would not be surprised to see the Dow go down to 8500-9000 at that time. This may correspond to about 10,000 -11,000 on the Bombay Stock Exchange. After that, we can expect to see some sideways movement and perhaps another rally at some point in 2009, especially in May and June as Jupiter will station at 2 degrees of Aquarius conjunct the natal Pluto in the NYSE chart. Neptune will be there also for good measure, adding to the deluded quality of the rally. Again, the highs likely won't equal where we are now or even where the market might reach in Fall 2008 -- perhaps 11,000-11,500 on the Dow is possible then. But the Fall 2009 period looks terrible for the markets again as Saturn stations as 10 Virgo exactly conjunct the natal Rahu in the NYSE chart. To make matters worse, this will be square Pluto within just a few minutes of orb. To add to the generaly sense of volatility and chaos, transiting Ketu will be aspecting transiting Uranus within a degree and in December 2009 transiting Mars will station just degree from the natal Uranus in the NYSE chart. This confluence of negative factors might suggest a low point in the market, perhaps in the 6000-7000 range. Calling market lows so far in the future is pure speculation but I do think that the declines will be on that order of magnitude, i.e. 50% or more off the all-time highs of 14,000 on the Dow.
Of course, there are other investment vehicles besides stocks. Oil is likely to continue very strong over the next two years at least and likely well beyond that. Jupiter dasha runs until 2014 in the Futures chart and given its favourable condition with Uranus in the 7th house, we can expect to see crude prices to remain bullish for the foreseeable future. I expect Oil to make a new top in September and October, perhaps towards $200. Gold is also likely to spike in the late summer and Fall, probably over $1000. Some sharp declines are likely in that volatile late Fall period as transiting Ketu conjoins the natal Moon. However, the Gold Futures chart is running the benefic Venus dasha until 2015 so prices are likely to stay bullish for some time to come.
