As Iran threatened to cut off European oil imports in retaliation for EU sanctions, oil prices spiked higher last week reaching almost $110. The war of words over Iran's nuclear program continues unabated as investors are beginning to price in the possibility of a more severe supply disruption down the line. Military analysts suggest an Israeli air strike is very much avoidable and may still be several months away in any event, but the market is clearly getting nervous. Stock markets had different reactions to this renewed geopolitical instability. US markets edged higher as the Dow touched the 13K level for the first time since 2008 closing at 12,982 while the S&P 500 finished at 1365. Indian stocks fared less well as its energy-importing economy is more sensitive to oil price increases. The Sensex lost more than 2% closing at 17,923 with the Nifty ending the week at 5429.
I had been somewhat bearish last week given the midweek Mars aspects to Mercury and Venus. These aspects largely played out according to expectations, especially in India where Wednesday saw the largest decline of the week. Other global markets suffered more modest pullbacks on this aspect combination. The late week Moon-Uranus conjunction in Pisces was bullish for most markets. It also correlated closely with the biggest gains in oil prices. Oil often rises whenever the Moon transits water signs such as Pisces and is supported by other positive planets.
Much of the recent economic news appears to be related to the ongoing strength of Jupiter. As we know, Jupiter is the planet of expansion and optimism. It is frequently associated with rising prices, either a result of faith in the future or inflation. In this sense, Jupiter is usually "good" influence on markets, but sometimes you can have too much of good thing. This is when prices rise too sharply and cause inflation or worse, speculative bubbles. World markets may well be in the middle of a bubble right now as central banks have injected trillions of dollars worth of liquidity in an effort to stave off another economic disaster. In the wake of the latest Greek bailout, the EU began talks with the IMF and the G-20 to form a kind of super European bailout fund that will total $2 Trillion. Oh well, it's only (paper) money. All these money printing efforts to prop up the otherwise listless economy are very much Jupiterian in nature. Jupiter's most recent series of aspects dates back to October last year near the market bottom. Since that time, we have seen Jupiter form aspects with Pluto, Saturn, Uranus, Chiron and Neptune. The Jupiter-Uranus aspect was especially powerful as both planets were near-stationary and it lasted for the better part of December. As Jupiter prepares its final aspect for the next little while as it will trine Pluto again in March, we may well wonder if the planets are providing a flashing signal that the inflation party is about to end, or at least take a significant time out.
This week offers a mixed bag of influences. On the bullish side, Mercury and Venus both enter new signs on Monday and Wednesday respectively, but it is unclear if this will be enough to keep the mood upbeat. That's because the Sun is square Rahu (NN) on Tuesday while retrograde Mars is backing into a tricky looking aspect with Saturn in the late week. I am agnostic here about the eventual outcome, although the planets this week do offer a plausible scenario for more pullbacks. India again looks more vulnerable to declines.
