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.
