Europe backed away from the precipice last week as both Greece and Italy finally ceded to the austerity demands of their paymasters. Greece swapped Papandreou for Papademos, while Italy's Berlusconi agreed to resign as the Senate passed the EU's austerity package. Financial markets approved of these changes as US stocks staged an impressive rally after Wednesday's frightening sell-off. The Dow closed about 1% higher on the week closing at 12,153 while the S&P500 finished at 1263. Indian fared worse, however, as slumping industrial production and rising oil prices dragged down stocks. The Sensex fell by 2% closing at 17,192 and the Nifty ended the week at 5168.
Wednesday's near-death experience coincided with Neptune's direct station just as it was opposite Mars. I had expected some significant downside around this aspect as this was likely to highlight confusion and uncertainty. Up to that point, the Italian government under Berlusconi had not yet agreed to the austerity package as bond yields spiked beyond the crucial threshold of 7%. Somewhat unexpectedly, US market did manage to rise early in the week ahead of this Neptune station. The late week was more positive as we saw a rebound on both Thursday and Friday in the US. Indian markets missed much of the Wednesday sell-off and therefore played catch up on Friday.
Well if Neptune is all about confusion, then Saturn brings austerity. As the leaders of Greece and Italy took firm steps to address their debt burdens, we might suggest they were reflecting the Saturnian principles: long-term progress only comes through appropriate restraint and ultimate social harmony requires a measure of control and order. It is no surprise that these efforts should come just as Saturn is about to leave sidereal Virgo and enter Libra. As Saturn changes signs its energies may manifest more readily. This often translates into lower prices as caution and pessimism win out over spending and risk. On this occasion, however, we may also see the acceptance of austerity as generating a kind of Saturn-driven rally. Austerity was deemed necessary by market players, and Greece and Italy made their promise. Everybody is happy. Well, at least for now.
This week features a couple of potentially powerful aspects. First, Saturn enters sidereal Libra on Monday. This is generally a bearish influence although this energy need not always express itself through financial markets. Since Saturn only changes signs once every 2.5 years, we should pay attention to any fundamental changes in intermarket dynamics that may develop in the coming days weeks. Will bonds prices continue to be inversely related to stocks? Will gold maintain its value as a flight to safety play? Perhaps more immediately, we also get a triple conjunction of Mercury, Venus and Rahu on Monday. Mercury and Venus are mostly positive planets but their association with unpredictable Rahu (North Lunar Node) is cause for some concern. While Rahu can sometimes create unrealistic desires that fuel buying sprees (read: gains), it is more commonly connected with uncertainty and sudden events. While this would tend towards a negative outcome early in the week, more generally we can also say that this pattern will increase the size of the move in either direction. Mars then forms an apparently bullish aspect with Jupiter by Wednesday so this may produce more optimism. The Sun enters sidereal Scorpio on Thursday where it will form a minor aspect with Saturn. On the face of it, this combination looks bad, although I'm not sure it will push down stocks that much. Friday's Moon-Mars conjunction is more likely to boost sentiment given both are on the receiving end of Jupiter's aspect. With the eclipse period just around the corner (Solar: Nov 25; Lunar: Dec 10), we may still be in a preliminary phase here before the main feature begins.
