Stocks retreat on Mars-Saturn; Neptune turns retrograde on Friday

Stocks edged lower last week as uncertainty over the strength of global recovery continued to weigh on sentiment. In New York, the Dow rebounded at the end of the week but still closed slightly lower at 12,441 with the S&P500 finishing at 1331. Indian stocks followed a similar script as a late week rally wasn't enough to erase previous losses. The BSE-Sensex closed a little lower at 18,266 with the Nifty ending the week at 5476. As expected, we did see declines coincide with the alignment of Mercury, Venus, Mars and Saturn in the first half of the week. Monday's decline was larger as Venus conjoined Mars while in difficult aspect with bearish Saturn. However, I thought we might have had a little more downside on Wednesday's exact Mars-Saturn aspect. As it happened, Indian stocks were lower on Wednesday but the mood changed by the time US markets opened as New York reversed and began to rally off its lows.

Some disappointing US economic data last week saw a broad-based selloff in the Dollar as investors priced in another delay in an interest rate hike, perhaps to 2012. There is increasing chatter among commentators that further weakness in the US will force Bernanke to cobble together yet another stimulus package to keep the sinking ship that is the US economy afloat for another few months. As QE2 winds down at the end of June, rumours of QE3 may become a more important factor in the market dynamic in the weeks and months ahead. As a rule, such stimulus programs are associated with expansionary Jupiter since they aim to boost demand and invigorate economic activity. With Jupiter still taking a backseat to Saturn these days, it seems somewhat unlikely that any hint or formal announcement of QE3 will be immediately forthcoming. Saturn is moving very slowly ahead of its direct station on June 13, so the main focus is likely to remain on Saturn-type issues such as debt, slowdown and general pessimism. After that time, we may see more Jupiterian energy prevail as Jupiter forms a succession of putatively bullish aspects with Neptune, Uranus and Pluto in June and July before it makes its retrograde station at the end of August. This latter time frame is therefore a more likely window when we could see the announcement of some kind of additional Fed stimulus.

This week we may see a bit of everything. The early week again seems bearish as Monday's Mercury-Rahu aspect is quickly followed by a Sun-Saturn pattern on Tuesday and Wednesday. Wednesday is also noteworthy because there will be a solar eclipse at 17 degrees of sidereal Taurus on that day. This is likely to reflect an increase in caution in many markets including stocks and commodities. A minor contact between Mercury and Jupiter on Thursday offers some hope for a rebound, however. Friday may be the most interesting and unpredictable day of all. That is the day that Neptune turns retrograde. What's interesting about this retrograde station is that it will occur while in a tense square aspect with Mercury. This is normally a bearish combination. The complicating factor is that Neptune is sitting very close to its aspect with bullish Jupiter. For this reason, the retrograde station could end up being a positive influence, even with the dubious input from Mercury. While the final outcome is somewhat uncertain, it does suggest that a larger than normal price move is more likely on Friday.

Stocks slip on Mercury-Mars; Saturn in focus this week

Stocks trended lower last week as renewed worries over Greece offset positive earnings reports. In New York, the Dow fell less than 1% closing at 12,512 while the S&P500 ended the week at 1333. It was much the same story in Mumbai as the Sensex lost 200 points closing at 18,326 with the Nifty finishing the week at 5486. I thought we might have seen more early week upside on the Sun-Jupiter and Mercury-Venus-Neptune alignments but it seems that the market is still working through the after effects of that Jupiter-Rahu aspect from early May. In addition, a shadow Saturn aspect to this alignment generated more caution than I had anticipated. We finally got a reversal higher midweek as Mercury and Venus teamed up with Uranus. As expected, Friday's Mercury-Mars conjunction was bearish, although this only manifested later in the day in Europe and the US, after Indian markets had closed.

Not surprisingly, we saw more developments in the Eurozone debt problem as Fitch downgraded Greece's debt another two notches while Germany showed greater reluctance to cut blank cheques for their spendthrift southerly neighbours. This appears to be conforming to the strengthening of Saturn here as the focus shifts from speculation and inflation (Jupiter-Rahu) to debt and recession (Saturn). Saturn symbolizes caution and pessimism so it tends to be associated with economic contraction and declining prices. In that sense, it is the necessary antidote to inflation. In other words, Saturn is deflationary in its effects. When Saturn is strong and afflicted, prices tend to fall. Saturn tends to strengthen around close aspects with other planets and when its velocity is reduced near its stations. Saturn is due to station next on June 13 when it ends its retrograde cycle and return to its normal forward motion. At that time, it will form a fairly close square aspect with Pluto. So on that basis, it is tempting to think that the markets will stay weak until that time.

This week will be an important test of this approaching Saturn energy. Early in the week, there will be a triple conjunction of Mercury, Venus and Mars. Mars is a potential troublemaker here so that may increase in the chances of lower prices. But Saturn will also form a close 150 degree aspect to this triumvirate so is another potentially bearish influence. If we do get a decline into midweek, then that will provide additional evidence that Saturn is strengthening and would boost the odds for a larger correction that lasts into that mid-June station.

Stocks flat after Jupiter-Rahu; Sun-Jupiter this week

Stocks were mostly unchanged last week as renewed concerns over Greece were offset by improving economic data. In New York, the Dow edged lower closing at 12,595 while the S&P500 finished the week at 1337. Mumbai was similarly indecisive as the Sensex ended pretty close to where it started at 18,531 and the Nifty following suit at 5544. While it wasn't very exciting, the end result was not hugely unexpected. I was not wrong in thinking there could be more upside leading into Wednesday's triple conjunction of Mercury, Venus and Jupiter. Most global markets rose in the first half of the week as the positive influence from these planets overshadowed any potential bearishness from the aspect with Rahu. Significantly, this affected most asset classes including oil, gold and silver as commodities also rallied back from the previous week's sell-off. Indian markets did not participate in the early week rise perhaps because of the more negative implications of rising oil prices. As expected, stocks and commodities were mostly bearish in the aftermath of the triple conjunction as the US Dollar gained more ground.

Now that the Jupiter-Rahu aspect is behind us, we may well wonder what lies ahead. This aspect has highlighted the dangers of excessive speculation and we have seen commodities decline sharply in recent weeks. Its growing separation suggests that the unwinding of the "risk trade" out of commodities may become less important here. While the gradual reduction in the negative Rahu influence may free up Jupiter to become more optimistic and bullish, we should also be watching for the possible increase in Saturn's influence. Saturn will end its retrograde cycle on June 13 as it returns to normal forward motion in the sky. At this time, Saturn will also form a fairly close square aspect with Pluto. Saturn-Pluto aspects are often negative in their effects as pessimism over economic growth prospects can take over. Saturn also represents debts and losses so it is possible that the problem of indebtedness may become more pronounced. Worries over Greece and the Eurozone have re-surfaced in the past week and this may well foreshadow more concerns in the weeks ahead.

This week actually features some positive aspects, especially in the early part of the week. Monday's Sun-Jupiter aspect is complemented by a very nice Mercury-Venus-Neptune aspect which should increase the likelihood of gains in the first half of the week. Wednesday's Mercury-Venus-Uranus alignment should add another layer of optimism to the proceedings. Of course, the market could still decline in spite of these bullish short term aspects as we are in the shadowy, leeward side of the Jupiter-Rahu aspect. Nonetheless, declines may be further delayed until the short term picture becomes more difficult. The end of the week is perhaps a better example of this tense energy as Mercury catches up with Mars while in aspect to Pluto.

Stocks get caught in commodity selloff; triple conjunction due this week

Financial markets went into spasm last week as the speculative commodities trade came to a crashing halt. The Humpty-Dumpty world of gold, silver and crude oil all came tumbling back down to earth with a thud against a backdrop of central bank tightening in Asia, a dollar recovery in the US and the possibility of Greece leaving the Eurozone, not to mention the US assassination of Osama Bin Laden. Stocks did not escape the turmoil as equities succumbed to inflation fears and poorer than expected US economic data. In New York, the Dow closed down more than 1% at 12,638 while the S&P500 ended the week at 1340. Indian stocks also declined by more than 3% as the Sensex closed at 18,518 and the Nifty finished at 5551.

All this turbulence appears to be an adequate reflection of the slow-moving Jupiter-Rahu aspect which finally comes exact on May 7. As I have noted over the past several weeks, the approach of the Jupiter-Rahu aspect has the potential to disrupt the financial landscape in fundamental ways. Specifically, the focus of this aspect centered around notions of speculation and growth expectations. Jupiter symbolizes growth and optimism but Rahu often creates a distorting or unsustainable greed effect so it is quite fitting that this speculative froth would have be taken out of the market at this time. Silver has fallen 30% in the span of a single week while crude oil has declined by 10%. It is possible that we could be at the beginning of a major sea change in assumptions as the long-struggling US Dollar may have turned the corner now as it rose 2% for the week. Once the Dollar gets back on its feet, it will likely fuel further exiting of the "risk trade" in commodities and likely in stocks as well.

Another reason why we could be witnessing a shift in the prevailing trends is that Saturn is now backing up into a square aspect with Pluto. The aspect will still be four degrees away from exact so it may not be as powerful as it might be, but it could well provide another source of Saturnian caution for the market in the weeks ahead. Once Saturn returns to direct motion on June 13, this aspect will begin to separate and eventually weaken.

Since Jupiter makes its exact with Rahu this week, it would be tempting to think that it's all downhill from here. It very well could be, although there may be sources of bullish sentiment in the mix also. Of critical importance will be the triple conjunction of Mercury, Venus and Jupiter on Wednesday May 11. These are three normally bullish planets that should generate some buying in and around their exact alignment. As a general rule of thumb, sentiment usually rises before the aspect is exact. The complicating factor here is that this bullish triple conjunction will occur under the shadowy aspect of Rahu. That may increase the likelihood of a quick reversal lower at any point in the proceedings and could seriously undermine rally attempts. In any event, it promises to be an active and interesting week.