Mars runs Saturn-Neptune gauntlet early; Jupiter-Uranus await

After a near death experience early in the week, stocks regained their footing later on as some improved economic data and soothing words about Europe from the Chinese government induced buyers to part with their money. For all the volatility, stocks in New York closed mostly unchanged as the Dow closed at 10,136 and the S&P at 1089. Indian markets fared somewhat better as shares added more than 2% as the Sensex ended Friday's session at 16,863 while the Nifty finished at 5066.

The approach of the twin stations of gloomy Saturn (May 30) and sickly Neptune (May 31) did not disappoint as our prediction for more market mayhem and intensity was more or less realized. Tuesday's plunge revisited levels last seen in February and thereby became a basis for a fledgling low volume rally into the end of the week. While current prices are still perilously close to the 200 day moving average, there may be a ray of hope emerging on the sense that the markets may have dodged a bullet -- at least for now.

Mars will be a key player in the planetary soup this week as it forms a minor aspect with Saturn and Neptune early in the week. Mars is often a bitter taste, especially when combined with malefics such as Saturn and Neptune. This appears to be a destabilizing influence that will reflect some kind of dysfunctional quality in the economy. This does not seem like a positive combination at all. Towards the end of the week, Mars will leave the negativity behind and move towards Uranus and Jupiter. This is an entirely different sort of cosmic picture where risk, action and restlessness will be the watchwords. In fact, the trio of Mars, Jupiter and Uranus would seem to be the perfect planetary profile of "the speculator".

Not looking good

A pretty grim day as Monday's go. S&P got as far as 1090 again but just faded away at the close. No melt up, no short squeeze, no break above the 200 DMA. Bulls have got to be sweating now.

We just took another step closer to another major down move.

We may see another rally attempt to 1100 on the S&P before it falls apart.

Euro haunts markets; Saturn-Neptune still looms

Transits for May 24, 2010 9.30 a.m. New York

It felt like 2008 all over again last week as markets teetered over mounting fears surrounding the Euro and the Eurozone economies. As volatility spiked in New York, stocks fell more than 4% for the week with the Dow closing at 10,193 and the S&P at 1087. The sell-off also took hold in Mumbai as the Sensex closed down 3% to 16,445 and the Nifty at 4931. The market looks to have broken down here as psychology has undergone a fundamental shift. This is very much in keeping with the extremely tense and powerful alignment of planets that marks the sky at the present time. While I thought we might have seen more gains later in the week -- only Friday's session was higher in the US -- the overriding pessimism out there was not surprising as we approached the extremely nasty Saturn direct station on May 30.

Interestingly, the Euro did manage to rebound, although it was mostly fueled on the belief that the European Central Bank had begun to intervene in the market and was buying up unwanted Euros. As the turbulence has grown, even gold has fallen out of favour as investors are wary of another deflationary spiral like we saw in 2008. Gold's weakness is very much a reflection of the recent weakening of the planet Venus. Its parabolic run-up occurred while Venus was transiting sidereal Taurus, a sign that Venus is said to rule and do well in. It left Taurus and entered Gemini on May 14 -- the very same day of its all time high at $1250 on the futures contract. Gemini is a less favourable sign for Venus and it has been in retreat ever since that date. The prospect of Mars entering Leo on Wednesday this week may deliver another blow to gold. Leo is a sign with a strong affinity for gold and when it is connected with a malefic planet like Mars, it may make it even more vulnerable to declines.

Market analysts point to the breakdown of the 200-day moving average last week as a technical sign that we may have entered new territory here. Whenever the key stock indexes are above this moving average, the market is said to enjoy positive momentum as most people believe it to be a bullish condition. But when prices fall below this line, gloom descends and investors become more fearful. What is interesting is that this new and dangerous situation is very much reflected in the stars. The twin stations of Saturn and Neptune on the 30th and 31st are quite unusual and, when combined with their tense aspects to Uranus and Jupiter, quite portentous of difficult events and outcomes. All told, the next two weeks or so could be quite intense.

US falls 4%; breaks support

Markets are looking pretty grim right now as major indexes have closed below their 200 day moving averages.

While I had expected some kind of major fallout in May from the current planetary alignment, I didn't expect we would fall quite this far this fast.

The twin stations of Saturn on May 30 and Neptune on May 31 are looming quite large right now. As Mars enters into the Big Alignment around the same time in early June, we could be that far away from a bottom. But just where that will be is unclear. Those February lows are fast approaching.

By prepared for more extreme bearishness over the next six months.

Stocks unable to escape shadow of Eurozone

Despite the EU's munificent $1 Trillion bailout package, markets ended the week with another bad case of the shakes. For all the reassuring talk and seemingly endless supplies of paper money, a growing number of investors are not convinced that the high debts levels in Europe are compatible with economic growth. Nonetheless, stocks did finish higher on the week as the Dow climbed 2% to close at 10,620 while the S&P finished at 1135. A similar story unfolded in Mumbai as equities ended higher on the week but left a bad taste in the mouth. As of Friday, the Sensex stood at 16,996 with the Nifty at 5093. While I thought we would see some supporting sentiment form after the flash crash, I thought much of it would follow Wednesday's Mercury direct station closer to the exact aspect between the Sun and Venus. As a probabilistic enterprise grappling with the vicissitudes of the human condition, the only thing we can say about astrology is that it is about as scientific as economics. As I noted last week, the growing influence of Jupiter over the second half of May could well buttress stocks somewhat in the face of an otherwise harsh planetary environment.

To be sure, this correction has found a close correlation with the planetary geometry in the current sky. Most global equity markets formed a top on April 26, the same day as Saturn (4 Virgo) formed an exact opposition angle with Uranus (4 Pisces). These incompatible energies have manifested in struggles over austerity and regulation (Saturn) at odds with the desire for risk and freedom (Uranus). As troublesome Neptune (4 Aquarius) joined this extremely rare alignment in May, the market has undergone a significant correction which threatens to bring the recovery rally of the past 13 months to a screeching halt. These are very powerful planets that can signal not only changes in investor mood, but can serve to disrupt and ultimately reorganize some of our most fundamental human institutions. The current Saturn-Uranus-Neptune configuration is just the most recent phase in the much more complex planetary pattern that will unfold from 2008 to 2013. Just to give some indication of the kind of significant economic and societal changes that might be in store, we have not seen an alignment of this many outer planets since the early 1930s.

This week features the transits of the Sun and Venus into the thicket of the Big Alignment on Monday and Tuesday. This is likely to coincide with at least another down day, although we should note that the tell-tale Saturn aspect only occurs on Tuesday as the more comforting Jupiter aspects to Venus and the Sun hit exactly on Monday. Given the close degree proximity of Jupiter (2 Pisces) to Saturn (4 Virgo), these transit effects may become blurred as the market gyrates in both directions in the early part of the week. After Venus and the Sun escape from Saturn, they will have the opportunity to form aspects with Uranus and Neptune starting on Wednesday. These appear to be much more risk-positive influences that we often associate with rising stocks. Jupiter's tightening aspect to Saturn could bring further relief here although that picture may not last as Saturn ends its retrograde cycle and turns direct on May 30.

Gold goes to new high

Gold hit a record high today of over $1230. Not surprising given the aspect between both significators Sun and Venus. It looks very much like gold will go towards the 1270-1300 area by mid-May and that mega alignment. After that, gold is likely to lose some of its shine.

As expected, markets fell Tuesday even with the intraday gain towards the 50 day moving average. The SPX held up above 1150 though suggesting some underlying strength. Tomorrow is another question mark, however, as Mercury returns to direct motion once again.

Stocks surge on EU bailout plan

Well, that was different. US stocks gained over4% today on the massive $1 Trillion EU bailout plan. India was up 3% and Europe went as high as 7%. It was a breathtaking rally to be sure.

I had been fairly bullish about this week but I never would have thought we could climb back this far, this fast. Clearly there is a lot more than the Sun-Venus aspect driving this rally. Jupiter in sidereal Pisces would certainly help in that respect, especially as it moves towards its conjunction with Uranus. That conjunction doesn't occur until early June so that could definitely provide some support in the near term.

I would expect a little pullback here (Tuesday?) before it goes higher. I have my doubts that SPX 1150 will hold.

Flash crash halts Wall Street rally

The party on Wall Street came to (flash) crashing halt last week as stocks sank 6% on fears that the European sovereign debt problem may not be solved by the Greece bailout. Out the nowhere on Thursday, the Dow plunged almost 1000 points by mid-afternoon below the 10,000 level, albeit recovering somewhat by the close to end the week at 10,380. Mumbai was also down by 5% on the week as the Sensex finished at 16,679 and the Nifty closing at 5018.

It was a strange and tumultuous week to be sure as investors were left wondering if they had returned to the financial storm they thought they had left behind in 2008. This outcome was pretty much in line with expectations given the raft of aspects involving malefic planets. Last week I had warned about the possible effects of the Sun-Mars square aspect, especially since it would feed into the larger, more powerful aspects of the Saturn-Uranus-Neptune alignment. And so I wrote: "This appears to be a tense combination of fiery energy that may coincide with sudden or instinctive reactions". The Sun-Mars aspect therefore acted as a trigger for the Saturn-Uranus opposition which was exact back on April 27th. All that conflicting energy between Saturnian control and restriction and Uranian freedom and rebellion created an situation without easy resolution. While the Saturn-Uranus-Neptune alignment has altered the financial terrain here, this does not mean that the downturn will unfold imminently. It may take several more months and the next (and final) Saturn-Uranus opposition aspect in July to move the situation to the next level of crisis.

Now it seems that no amount of Saturnian discipline and austerity can solve the situation in Greece or indeed in other Club Med economies such as Portugal and Spain. The debts levels may simply be too high relative to the amount of revenue those economies are capable of generating. Risky assets are taking the hit as investors seek to protect their capital from any possible downdraft in the future by moving them to safe havens like US Dollars, US Treasuries, and gold. As I have been suggesting since 2008, the financial crisis didn't end in 2009, it was merely put on hold through massive infusions of liquidity (i.e. money to you and me) from central banks such as the Federal Reserve. The reduction of interest rates to zero has made borrowing pain-free once again so the bubble has re-inflated all over again. Why would Ben Bernanke think you could fix the first bubble with another bubble? All it will do is delay the inevitable flushing of bad debt out of the system.

The stock rally of the past 13 months has been predicated on easy money. Now it is dawning on people that all that bad debt from the sub-prime housing crisis in 2008 didn't simply go away. It merely re-appeared like a shape-shifter as sovereign debt in the guise of numerous government bailouts to prevent bankruptcies. So now we are finally waking up the reality that these heavy government debt levels are not sustainable either and Greece is currently the weak link in the chain.

This week will see Mercury change direction as its retrograde cycle comes to an end on Wednesday. It will station at 8 Aries in fairly close quincunx (150 degree) aspect with Saturn (4 Virgo). This is not a good angle for these planets so more weakness seems possible ahead of this direction reversal. More positively, the Sun has moved away from the Mars influence and will form a supportive aspect with Venus towards week end so some recovery seems more likely. With Jupiter approaching Uranus over the next few weeks, we may see some of the extreme negativity mitigated somewhat. Looking down the road, there are two large alignments that warrant our attention. The first one May 18-20 will involve the Sun, Venus, Jupiter, Saturn, Uranus and Neptune and looks more benevolent than last week's combination. The second one arrives on June 2-4 and will feature Mars in aspect with Jupiter, Saturn, Uranus and Neptune. As we saw last week, Mars is often a harsh influence, so this alignment may prove more difficult.

Sun-Mars square to rachet up tension

Stocks slumped last week on renewed worries over European sovereign debt and the possibility of criminal charges against Goldman Sachs. In New York, the Dow closed down 2% to 11,008 while the S&P finished at 1186. In Mumbai, equities also lost ground as the Sensex finished at 17,558 and the Nifty at 5278. As the planetary drama between Saturn, Uranus and Neptune played out last week, markets responded negatively as Tuesday's exact Saturn-Uranus opposition coincided with a major decline in US markets. This manifested on Wednesday in Asia and effectively bumped the more bullish sentiment implied in the Wednesday's Sun-Mercury conjunction to later in the week. The good vibes then lasted until Friday in Asia but US markets turned lower again on more Goldman Sachs developments as Neptune joined the party in force. With the Sun's condition boosted by the passing Mercury, gold climbed to $1179.

The current Saturn-Uranus-Neptune alignment is quite rare and has the capacity to produce some major structural changes in the world. We can see this is happening already as there is widespread recognition of the need for greater government regulation of the financial industry. Capitalism itself may be undergoing a kind of overhaul in the aftermath of the 2008 meltdown. Thus far, however, these three planets have not generated much in the way of market reaction. Saturn and Uranus may have sparked the initial crisis in 2008 on their first opposition aspect in this series, but subsequent aspects have been less momentous. Last week's decline was potentially significant in that it may have marked a kind of turning point but we will have to wait for events to verify that claim.

The highlight this week will likely be the Sun-Mars square that is exact on Tuesday. The Moon may act as a catalyst here when it forms a t-square with Sun and Mars on Wednesday. This appears to be a tense combination of fiery energy that may coincide with sudden or instinctive reactions to undesirable or even violent events. While it is conceivable the market could rise in this outburst of frenetic activity, the more likely outcome would appear to be greater anxiety. To make matters worse, the Sun and Mars will form minor aspect with malefics Saturn and Rahu. Jupiter entered sidereal Pisces over the weekend so that could provide some kind of temporary boost to the overall equation but it seems unlikely to radically alter the dynamics. Jupiter's approach to Uranus over the next few weeks will be interesting to watch since it could shore up excessive pessimism from Saturn's aspects. Alternatively, Jupiter may simply serve to hasten and clarify the larger changes reflected in the Saturn-Uranus aspect.