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.
