Stocks fall on Mars-Ketu; Venus may provide relief

Stocks tumbled on most global markets last week as rising oil prices from the Libyan crisis heightened fears of inflation. In New York, the Dow fell 2% to 12,130 and the S&P500 finished at 1319. This was the largest weekly decline for US markets since November. Indian markets also declined as the BSE-Sensex lost 3% to 17,700 while the Nifty closed at 5303. This bearish outcome was very much in keeping with expectations as I noted that last week's Mercury-Mars-Neptune-Ketu alignment could be quite potent and increase the likelihood of steep sell-offs. Somewhat anomalously, the Indian market rose on Monday on the Mercury-Mars conjunction but it was mostly downhill after that as the Mars-Ketu aspect became dominant. Friday's recovery also closely followed last week's forecast as the bullish combination of Sun-Mercury-Jupiter coincided with a return to optimism.

The ongoing crisis in Libya is the immediate market mover at the moment as Gaddafi's regime appears to be on its last legs. A protracted civil war is still possible, however, so it is unclear just how negative this worse case scenario would be for the market. From an astrological perspective, this rise in protest and civil disruption appears to be linked to the current Rahu-Uranus aspect. Rahu (the North Lunar Node) symbolizes the interruption of the status quo while Uranus represents the drive for freedom and independence. While both planets are related to change and instability, Uranus is more closely associated with rebellion and revolution. The Rahu-Uranus aspect becomes exact on March 4 so there is some reason to expect the situation may be resolve fairly soon. The larger protest movement across the Middle East may be traced back to the solar eclipse on January 4th which was visible throughout the region. This eclipse horoscope was quite afflicted as the Sun and Moon were conjunct violent Mars and in a difficult square aspect with destructive Saturn.

This week likely begins on a more optimistic note as Venus will be in aspect with Uranus and Neptune on Monday and Tuesday. Needless to say, Venus is a much happier planet than Mars, so that increases the likelihood of stability and the prospect of rising stocks. India's Union Budget is also slated for release on Monday, so the positive planets would tend to suggest a favourable reception. The good vibes may wane somewhat as the week progresses as Wednesday's Mercury-Saturn aspect would increase the possibility for midweek declines. Friday's New Moon may also reflect a negative mood as it occurs in fairly close aspect with Saturn. With these two contrary influences in play, it's harder to call the overall direction of the market this week.

Markets rise on Sun-Neptune; Mars-Ketu poised to disrupt

Stocks in New York inched higher yet again last week as more positive earnings reports kept the QE2 rally intact. The Dow closed up 1% to close at 12,391 while the S&P500 finished at 1343. This bullish outcome was not unexpected given the Sun-Neptune conjunction that was exact on Thursday. This was a favourable pairing that corresponded fairly closely with larger up days. I had expected a little more in the way of downside due to the Saturn aspects on Monday and Friday, but the result was unimpressive as Monday-Tuesday was only mildly negative while Friday was actually an up day on the Dow, although broader indexes like the NYSE Composite were mostly flat.

Indian markets staged an impressive rebound last week as bargain hunters moved in and bought banking and metal shares. Despite a fairly sharp decline Friday, the BSE Sensex climbed almost 3% to 18,211 while the Nifty ended the week at 5458. While I thought the early week might be somewhat bearish, the overall strength of the market was not unexpected given the favourable placement of the Sun with Neptune. Friday's sell-off was a reminder of the continuing power of Saturn as its aspect with Venus saw a loss of optimism. Indian markets are attempting to rally after a severe correction and may also be buoyed by the fact they are in pre-budget mode as the government releases its Union Budget on 28 February. On the day of the budget, there will be an alignment of Jupiter and Pluto which will reflect bold and assertive plans to deal with pressing financial problems such as inflation. While this combination seems quite bullish, it also may ultimately be inflationary in the long run. We will have to see how that shakes out.

As reports of the economic recovery increasingly fill the US media, one wonders when this positive feedback loop will come to a stop. The good news continues to bring new money into the market as more fund managers put the recession behind them, and yet there is an irony here that poses a risk to the rally: if the economy recovers too quickly, the Fed may be forced to wind down its QE2 stimulus measures ahead of schedule. Fears of inflation are lurking in the background here so too much growth could cause the Fed to hit the brakes and withdraw the liquidity from the market. This would likely be problematic for stocks. With the Jupiter-Saturn opposition aspect coming up at the end of March, it would seem that we are getting closer to a more pessimistic view of the economy. This may or may not reflect new economic data. Since the market is all about perceptions, Saturn's growing influence may mean that we are simply shifting towards a 'glass half-empty' outlook.

This week promises to be very interesting as Mercury and Mars are in conjunction with Neptune and all three are in aspect with Ketu, the South Lunar Node. Mars-Neptune combinations generally reflect difficulty and the nodal influence from Ketu has the potential to both magnify and distort market behaviour. Since the aspects are closest in early and midweek, markets may be more vulnerable to declines then. (N.B. US markets are closed for a holiday Monday) Some markets may be subject to steep sell-offs here. The late week period appears to be somewhat positive as Mercury conjoins the Sun and both move into alignment with Jupiter on Friday.

US stocks climb; India continues to languish

US Stocks climbed higher last week buoyed by a peaceful resolution of
the crisis in Egypt. The Dow finished more than 1% to the good closing
at 12,273 while the S&P500 ended the week at 1329. I had expected some
upside to manifest on the midweek Venus-Pluto conjunction, and we saw
significant gains on Monday, Tuesday and Friday. The absence of any
downside on Monday's Sun-Mars conjunction was a little puzzling,
although US markets have largely been immune to many otherwise negative
planetary influences.

It was quite a different story in Mumbai as Indian markets continued to
slide last week losing more than 1%. Inflation fears are running
rampant and that is prompting many investors to turn cautious. The
Sensex ended Friday at 17,728 while the Nifty finished at 5310. Indian
stocks have been falling through much 2011 due to a powerful Saturn
affliction to the horoscope of the BSE. Since this Saturn affliction
will last for most of the year, stocks will probably have a difficult
time of it.

Over the coming weeks, bearish Saturn will oppose bullish Jupiter in the
sky. Encounters between these two giants of the solar system often
occur near major turning points in the market. The previous opposition
in May 2010 coincided fairly closely with a market correction and an
intermediate low on most global markets. Trine aspects have similarly
corresponded with significant lows as occurred in January and November
2008. While there are few certainties in financial astrology, these
Jupiter-Saturn combinations do have a tendency to bring down prices near
their exact aspects. The date of this exact opposition is March 29.

For all its potential significance in foretelling prices, the
Jupiter-Saturn aspect is perhaps less reliable in highlighting when a
correction may begin. That requires consideration of other factors,
along with an assessment of the horoscopes of major stock exchanges. It
nonetheless seems that we are getting very close to a decline.

This week looks somewhat mixed as Monday begins with a Mercury-Saturn
trine aspect. Saturn aspects tend to be bearish, although the aspect
may be more strongly felt in Asian markets. On a more bullish note, the
Sun conjoins Neptune by midweek so that may well lift sentiment across
the board. Saturn steps back into the limelight by Friday as it forms a
tense square aspect with Venus. This increases the likelihood of
declines towards the end of the week.

US Stocks rise on Mercury-Venus; Sun-Mars to conclude

US stocks resumed their ascent last week as worries over Egypt were pushed aside in favour of improved corporate earnings. The Dow gained more than 2% to close at 12,092 while the S&P500 finished at 1310. Indian stocks fared less well, however, as the selloff continued in earnest on growing fears that domestic inflation may be out of control and could require a series a punishing rate hikes. The Sensex declined 2% to close at 18,008 while the Nifty ended the week at 5395.

I had expected some probable upside on the early and midweek Mercury-Venus aspect and we did in fact see US and European equities chalk up impressive gains on Tuesday along with smaller gains on most other days. Indian markets have been severely lagging however and did not experience any lift until Wednesday and Thursday's positive sessions. Most commodities also saw rising prices on these bullish planetary patterns. I had also suspected some significant downside was possible near the Sun-Mars conjunction late in the week. While US stocks were temporarily immune to this bearish combination, Indian stocks were not as Mumbai declined more than 2% on Friday. Commodity markets such as oil and gold also followed this negative Sun-Mars cue and sold off on Friday.

Perhaps the real news last week was the rising yields in the bond market. Both 10-year and 30-year treasuries saw yields breakout above a technical resistance level as they appear to be heading substantially higher. What is strange is that Ben Bernanke's QE2 program was designed to lower bond yields in order to support the housing market recovery and keep mortgage rates down. Clearly that isn't happening as bond buyers are now demanding a higher premium as compensation for perceived inflation risk. So while the US stock market is not very worried about the long term implications of the Fed's unapologetic exercise in money printing, the bond market now is. If rates continue to rise, it will eventually put pressure on stocks as investors will choose to park their money in high-yielding treasuries. The QE2 inflationary bubble is already wreaking havoc in China and on the Shanghai Stock Exchange and now appears to be in the process of bursting in Mumbai. But the US may have to play catch up in that respect. Let's see if Ben Bernanke's BBQE2 chickens ever come home to roost.

This week will begin with a possible hangover from the Sun-Mars conjunction that was exact over the weekend. Its aspect with Saturn is still just one degree from exact on Monday so it is quite possible this could produce some skittishness, especially in New York. At the same time, a more optimistic Venus-Jupiter aspect could subsume some of the gloom. Venus will retain a starring role this week as it moves into conjunction with pecuniary Pluto by Wednesday. This ought to increase the appetite for buying and boost the appeal of many risk assets such as stocks and commodities like gold and oil. The late week period looks less positive, however, as there are no obvious sources of planetary strength.