Twist and sell: stocks plunge after Fed on Saturn-Ketu aspect

Twist and sell is more like it. Markets tanked worldwide last week as Fed Chair Ben Bernanke took away the Fed's punch bowl of easy money. Instead of the much hoped for QE3 stimulus, the Fed offered up a more fiscally prudent Operation Twist where short term bonds were exchanged for long term notes as a way of keeping interest rates low. This was bad news for stocks and commodities which had come to rely on the inflationary policies of the Federal Reserve. When all was said and done, Dow declined 6% closing at 10,771 while the S&P500 finished at 1136. In Mumbai, the Sensex was down 4% closing at 16,162 with the Nifty ending the week at 4867. Oil and gold also sold off up to 10% as the minimalist Fed program and prospect of another recession undermined their value as inflation hedges.

This bearish outcome was very much in keeping with expectations as I thought that the exact Saturn-Ketu aspect would enforce caution and austerity on the market. Saturn is all about restraint and conservative action so there was not much chance that Bernanke would announce QE3. It was therefore not surprising that the market declined on this aspect. Monday was also lower on Mercury's passing alignment to the Saturn-Ketu aspect. The late week Mars-Uranus aspect acted as a trigger for the release of the reservoir of pessimism and disappointment that often accompanies Saturn transits. For the past several months, I had noted the likelihood of a major decline around this aspect at this time, so it was heartening to see how well financial astrology can work. Since it is very much a probabilistic science, not all aspects will play out as expected, but knowing the relevant planetary influences can provide an additional level of insight.

Although the Saturn-Ketu aspect is now separating, we will likely remain under the influence of bearish Saturn this week. Actually the early week offers some possibility of some upside as the Sun-Mercury-Uranus pattern could boost risk taking. But Tuesday's New Moon may also be a critical turning point as the Mars aspect to the Sun-Mercury conjunction appears to ramp up agitation and frustration going into midweek . The Venus-Saturn conjunction on Thursday may well bring more downside. The high number of aspects this week would appear to increase the size and speed of price movements. Given the number of malefic planets involved (Mars, Saturn, Ketu), the most likely outcome is for more steep declines. Just where and when this will all end is hard to say. The bullish Jupiter-Pluto aspect in the second half of October may provide some relief for beleaguered financial markets.

EU affirms support for Greece; Saturn-Ketu suggests caution

Stocks rose last week as European leaders again re-affirmed their commitment to Greece and assured investors it would not default. Private commercial banks were also aided by a coordinated effort by central banks to inject more liquidity into the system so that credit flows would not dry up. It's all part of the ongoing Eurozone saga that is seemingly without end. A crisis emerges, a remedy is offered, calm is restored for a while then a new crisis pops up somewhere else. Rinse and repeat until bankruptcy and/or hyperinflation. In New York, the Dow rallied more than 4% closing at 11,509 while the S&P500 finished at 1216. Indian stocks fared less well, however, although the Sensex did manage a modest gain closing at 16,933 and the Nifty at 5084.

This bullish result was largely in keeping with expectations as I thought the Mercury-Jupiter aspect would likely lift sentiment into Thursday. The negative effect of Monday's entry of Venus into the sign of Virgo also seemed to manifest as expected as Mumbai was significantly lower. The effect had waned somewhat by the time US markets opened as the morning was lower but then reversed in the afternoon. It's also worth noting that this Monday low and reversal occurred on the Full Moon just as the lunar cycle would predict. While some of the enthusiasm had dissipated by Friday;s Mars aspect, the trend remained in place.

This week shapes up to be less hopeful and uplifting however as Saturn appears to take over for Jupiter. The aspect between Saturn and Ketu (South Lunar Node) is exact at the end of the week so this is likely to cast some kind of shadow on the market. Interestingly, there will be a much-anticipated announcement by Fed Chair Bernanke on Wednesday after the FOMC meeting. Many investors are hoping for bold new plans from Bernanke that will stimulate a stagnating US economy. If the Fed delivers something big, then the market could rally further. However, if the Fed is more cautious in its approach, then there is a greater chance for disappointment and declines. Since Saturn is all about austerity and constraint, it seems more likely that Bernanke will remain fairly cautious here. As a result there is a greater chance for declines this week, especially after Wednesday's announcement. We can also see that Monday's Mercury-Saturn-Ketu alignment looks generally bearish. Friday's Mars-Uranus aspect also looks bearish. In between, we could see some positive sentiment as a result of a passing Venus-Jupiter aspect.

EU troubles take Euro and stocks lower; Mercury-Jupiter offers some hope

It was a bad week for Europe. A member of the European Central Bank resigned for undisclosed reasons, while new rumours swirled of a Greek default that prompted Germany to plan contingencies in the event of any ensuing financial crisis. The market reflected a growing faithlessness as credit default swaps between major private commercial banks soared to new highs and the Euro broke below the 1.40 level to a new 6-month low. Not surprisingly, global stock markets didn't like the sound of any of this and retreated late in the week after posting gains earlier in the week. In New York, the Dow lost 2% closing at 10,992 while the S&P500 finished at 1154. Indian markets fared somewhat better as the BSE Sensex edged slightly higher to 16,866 while the Nifty ended the week at 5059.

This week unfolded largely as expected as I thought we would see some late week selling on the Mercury-Neptune aspect and Mars' entry into sidereal Cancer. We saw declines on both Thursday and Friday when these key influences were in play. As expected, the early week proved to be somewhat more bullish as Mercury's entry in Leo on Monday may have lifted sentiment. This was perhaps more in evident in Mumbai, as buyers did not appear in New York until Wednesday's session.

The situation in Europe looks like it will rankle markets for a while longer until some satisfactory solution is found for the debt crisis. As I have noted, the Euro chart is very troubled these days. While the German court decision was essentially a non-event last week, it is not at all clear sailing for Europe. I continue to believe that the Euro will fall much further in the months ahead and this should be a drag on stock prices. This should enhance the appeal of the US Dollar as safe haven. As a result, gold and other commodities are likely to come under more selling pressure in the weeks to come.

We may be witnessing the beginning of the end of the Euro as cracks are deepening between the core members (Germany, France) and the less solvent periphery (Greece, Portugal, Spain, Italy). From an astrological perspective, this apparent crumbling of a previously solid edifice is in keeping with the symbolism of the dominant planets in the sky -- Saturn and Ketu (South Lunar Node). Saturn represents structure, order and tradition. When on its best behaviour, Ketu is more of a spiritual influence that can engender feelings of union with the whole and self-revelation. But this energy does not translate well into the mundane world of business and finance. As a result, Ketu is more often associated with notions of re-organization and change. When these two energies align, they can describe situations where structures and organizations have to make major adjustments. A period of painful instability and change is common. The aspect is exact on September 23 but due to the relatively slow velocity of both planets, we can consider them to be in aspect for the next few weeks.

This week hay hinge on the bullish potential of a Mercury-Jupiter aspect that is exact on Wednesday and early Thursday. Both of these planets are positive influences, and previous aspects involving Jupiter have produced solid gains in recent weeks around the time of its retrograde station on Aug 30. But Jupiter may be losing some of its power as it picks up speed, so the upside could be fairly limited here. Venus enters sidereal Virgo over the weekend, so that is a background negative influence that may exert some influence over Monday's session. The late week looks more vulnerable to declines as Mars forms an aspect with Neptune on Thursday and Friday.

Rallying towards Eurogeddon?; Mercury-Neptune on Thursday

Stocks mounted an impressive rally early last week as investors parsed the economic data from a half-full perspective. US stocks rose into midweek but eventually sold off on the disappointing jobs report that showed employment growth is stagnant. The Dow ended flat for the week closing at 11,240 while the S&P500 finished at 1173. It was a rosier picture in India, however, as the bulls prevailed in all three trading sessions in the holiday-shortened week. The Sensex surged 6% to 16,821 and the Nifty climbed to 5040.

The early week optimism was very much in keeping with my expectations as we saw some noteworthy Jupiter influences in the mix. Monday's Venus-Jupiter aspect combined the energies of two positive planets and produced an impressively positive result. Jupiter also stationed and turned retrograde early on Tuesday and this may have provided an additional boost for sentiment. As it happened, the lion's share of the gains this week did occur in this two-day window. Optimism waned after Wednesday, however, just in time for the Mars-Rahu aspect on Thursday and Friday. While I had been equivocal about the net effect of this aspect, I did sound a note of caution about any Mars aspect. This turned out to be correct as US and European markets declined more than 3%.

While this relief rally began to take root with the helping hand of Jupiter, more alarm bells are ringing in Europe as the banking crisis is again threatening to get out of control. Greek bond yields are again rising to stratospheric levels reflecting growing concern that Greece will be unable to repay its debts. There has also been a sharp rise in the amount of funds that international central banks have deposited with the US Federal Reserve. Normally, excess funds are deposited with private commercial banks in Europe such as Paribas and Societe Generale. But there is growing anxiety that many private European banks are on the verge of insolvency and so many institutions and central banks have decided to bypass them altogether. It seems that we are edging closer to a Eurogeddon scenario where the monetary union needs to be reshuffled or broken up completely. To make matters more interesting, the German High Court will hand down its decision on Wednesday on the constitutionality of German participation with the new European bailout fund (EFSF). Needless to say, if the court rules against the Merkel government, it would likely put stress on the Euro and on stock markets worldwide. The European Central Bank may then be compelled to reduce interest rates in order to stanch the bleeding. Even if the Eurozone manages to dodge this latest bullet, the problems there look protracted and there is no easy solution in sight. The horoscope of the Euro is heavily afflicted in the months ahead so we should assume the situation to worsen before it gets better.

The only unambiguous planetary influences this week appear to be on the negative side, although we may continue to bask in Jupiter's lingering near-stationary glow for a little while longer. Mercury enters Leo on Monday which may offer additional support to stocks. This is not usually a hugely positive influence, but given the wide aspect from Jupiter, it may keep investors in buying mode. But my attention this week is focused on the effects of the Mercury-Neptune opposition late on Wednesday and into Thursday. This looks bearish for stocks.

It's worth remembering that much of the decline in the first week of August and the US debt ceiling debate also occurred when Mercury was opposition to Neptune. That alignment was significant worse, however, since Mercury was close to a retrograde station and hence was moving more slowly. But the aspect this week revisits that energy of confusion and disappointment, if only briefly. Given that it occurs so close after the German legal decision, we should be alert to a possible negative outcome on that front. The Sun is also in minor aspect with Saturn on that day, so that could be a bad day for governments (Sun). Friday presents more of a puzzle. Mars enters sidereal Cancer on that day in the US and this is often a bearish influence. But Mercury will enter tropical Virgo on the same day and this is often a bullish influence. I would tend to favour the negative Mars energy here, but the picture is fairly complex. In any event, the late week could be troublesome.