Donald Trump poised to win big on Super Tuesday

(29 February 2016)  On the eve of Super Tuesday, the Donald Trump juggernaut is on the verge of gaining a stranglehold in the race for the GOP nomination.  The outspoken real estate businessman and reality television star already enjoys a big lead in delegates and popular support and looks certain to further cement his dominance before the July convention.  Most analysts expect him to win all but the Texas primary tomorrow and become the inevitable choice of the Republican Party despite fierce opposition from the party establishment. 

Trump has become a polarizing figure in this strangest of primary seasons in the 2016 election cycle.  He is clearly the most popular candidate in the field with most polls putting him near 40% support among Republicans.  However, a near-equal number of Republicans strongly disapprove of him as they see him as an unpredictable opportunist who is not really conservative. 

When I first discussed Trump's horoscope back in the summer of 2015, I thought his chart looked strong enough to win some early February primaries but would likely falter after that.  I thought he was unlikely to win the nomination in July and quite unlikely to win the presidency in November.  He has won three our of four of those early February primaries but he is much stronger than I thought he would be.  As I saw it, his horoscope looked more difficult starting in March and that he would encounter more opposition. 

Well, here we are on the last day of February and Donald Trump is flying high with political betting markets putting him near an 80% probability of winning the GOP nomination.  Clearly, I have underestimated the strength of his chart.  And yet, there is a lot of opposition to him across the political spectrum.  The recent big wins in Nevada and South Carolina reflect his popularity but with each win there has been an intensification of opposition from main rivals Marco Rubio and Ted Cruz, as well as party standard bearers like Mitt Romney, the 2012 GOP nominee. 

In this unprecedented primary season, opposition has taken the form of formal and organizational opposition rather than popular opposition.  That was my basic mistake.  When I saw various malefic transit hits to Trump's chart in early March, I thought it would manifest as diminishing vote totals rather than a full-fledged opposition from the party itself.  Much to the dismay of the party faithful, Trump has basically taken over the GOP and its time-worn principles.  Marco Rubio calls him a con-man who has hijacked the party.  Some analysts suggest that the GOP itself may be on the verge of dissolving as a result of Trump's coup d'etat.  Or perhaps it is merely evolving into a nativist, populist movement as a logical reaction to years of falling real wages as a result of the failure of globalization. 

As transiting Mars transits further into Scorpio in March, I expected more troubles for Trump.  Now I realize they may simply reflect more official hostility to his campaign rather than actual election defeats.  Trump may well run the table tomorrow on Super Tuesday (except for Cruz's Texas) and could even do well on March 15th, the next big multi-primary prize.  However, I think it is important to note that this opposition to his campaign is not merely a passing sentiment or formal disapproval.  It likely will have tangible consequences for him at some point before the convention. 

If this was a nomination race like any other, Trump's lead would be so large as to force rivals to drop out as the party coalesces before the convention to prepare to face their real foe, Hillary Clinton. But with Trump laying waste to the party establishment, rivals are more likely to stay in the race longer in order to take the fight all the way to the convention in late July.  Trump's momentum seems unstoppable at this point, so it may be futile for Rubio et al to stay in the race.  And yet if they can somehow prevent Trump from winning 50% +1 of the delegates (i.e. 1237), they may well do so in order to forge an anti-Trump coalition on the convention floor.  The brokered or contested convention is likely Rubio's only chance to stop Trump since it seems certain that Trump will have more delegates than any other candidate by the time the primaries end in June. 

Trump can win the lion's share of Super Tuesday delegates but since those states only award delegates proportionally he will only incrementally increase his lead.  The key will be what happens on March 15th (mini-Super Tuesday) when state primaries award delegates on a winner-take-all basis.  This is where Trump will need to do well in order to get past that 1237 threshold before the convention.  Rubio's home state of Florida votes on March 15th and has 99 delegates.  Gov. John Kasich's home state of Ohio also votes that day and has 66 delegates.  Illinois (69) and Missouri (52) are also big states that Trump needs to win to put a lock on the nomination.  Of course, Trump is currently ahead in the polls in all these states but it remains to be seen if he can maintain this momentum.

I still think Trump will experience a significant setback in the race sometime soon, probably between mid-March and mid-April.  My guess is it could occur both in terms of electoral setbacks as well as formal obstacles to his nomination.  Former GOP nominee Mitt Romney has made it plain that he doesn't like Trump and wants to see him defeated.  Some analysts have even suggested that Romney could enter the race at the last minute if Marco Rubio is faltering.   As this bizarre GOP circus unfolds, one gets a sense that this year anything is possible.

So I could be wrong and Donald Trump could well end up winning the nomination.   And yet how to explain the heavy affliction in June and July by Mars and Uranus?  Mars stations at 29 Libra on June 29th in an exact 8th house aspect to Trump's natal Sun.  Is this simply a lot of energy (Mars) for Trump's ego (Sun) in the midst of a battle?  It could be, but it also carries a bigger risk of a defeat or attack that damages him.  A physical attack of some kind is also within the realm of possibility here given that the Sun rules his 1st house (the body) 

Also, Uranus (0 Aries) stations in an exact square to his Saturn (0 Cancer) in July and August.  This is symbolic of intense and sudden developments which are stressful.  There is also a residual negativity in this pattern which is unhelpful for Trump fulfilling his wishes.  In addition, Saturn (16 Scorpio) is approaching its station at 17 Scorpio in August and it will align closely with his all-important 11th house Mercury (15 Gemini).  This is a very heavy and difficult influence that seems unlikely to correspond with the usual sense of personal victory and glory winning candidates enjoy at a convention. 

Perhaps he could conceivably still win the nomination at the convention but face fierce and embarrassing opposition in the form of protests or even an independent splinter movement within the GOP.   The Trump Pyrrhic victory, in other words. And a defeat is still very possible given these active transits.   These transits therefore suggest that the nomination will remain contested at least until early July and possibly right up to the convention.  Betting markets are currently putting the odds of a brokered convention at about 25%.  The planetary patterns suggest it may be much higher, probably more than 50%. 

Another angle on this question can be seen in the chart of the previous nominee, Mitt Romney.  He wants Trump to lose and for Rubio to win.  One would think that his chart (which we have a birth time for) would provide useful evidence for what happens at the convention.  If Romney's chart looks good that day, then it is hard to imagine how Trump will win the convention.  As I see it, Romney's horoscope does look pretty good.  Transiting Jupiter is in close opposition to his 10th house Sun (recognition, achievement) while transiting Sun and Mars set up nicely on his Moon-Jupiter conjunction.  The Mars is a bit of a question mark but the Sun's trine to Moon-Jupiter elevates the net effect and makes the whole alignment positive. 

Yes, transiting Saturn (16 Scorpio) is aspecting his 1st ruler Venus.  This is not a good transit for winning anything perhaps.  That said, given the weight of all the influences, the Saturn-Venus transit may simply be Romney's sense of fulfilling his responsbiliity (Saturn) as de facto senior spokesman of the GOP.  He may know that the brokered, chaotic convention will be bad for the GOP's fortunes in the November election against Hillary Clinton, but it is necessary to preserve his status within the party and to keep Trump out.  That is one possible reading at least.

The bottom line here is that the GOP race may well remain undecided and/or contested until July and perhaps right down to the end of the convention on July 21st. This is likely to create a significant amount of uncertainty which will negatively affect financial markets.  Wall Street and corporate America don't like Trump anyway since his protectionist policies would put an end to the free trade bonanza they have enjoyed over the past thirty years.   A Trump nomination would likely spark a big decline in stocks at least in the short run.  And with Brexit from the EU looking quite likely in June, we could be looking at a very turbulent early summer period.


Weekly Market Forecast

Stocks generally rose last week on better than expected US GDP data which allayed recession fears.  The Dow gained more than 1% on the week to 16,639.  Indian stocks declined, however, as investors weighed the impact of a rising Dollar and reduced FII inflows. The Sensex lost 2% to 23,154.  In last week's forecast, I hinted at a mix of influences with some downside more likely in the second half of the week on the Mercury-Saturn aspect.  Indian stocks fell under this aspect although US and European stocks fared better. 

Stocks in Asia and Europe were mostly down on Monday and have opened flat in the US.  The culprit was likely the close aspect of Saturn to Venus.  While we could see some upside into midweek, the planets look more bearish in the second half.  The Sun forms a square alignment with Saturn while Friday features a tense Mars square to Mercury.  Both of these are bearish influences. 

For more details and analysis on market trends for this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter includes discussion of US and Indian stock markets, as well as gold, oil and major currencies. 

UK opens door to Brexit from EU with June referendum

  (22 February 2016) Should the UK stay or should it go?  After completing a series of difficult negotiations with his European counterparts, British Prime Minister David Cameron announced that a national referendum will be held on the final EU deal on the 23rd of June.  Cameron successfully won some important concessions for the UK which grants it "special status" within the European Union on a number of contentious issues. 

But will it be enough to mollify the opponents of the EU who point to a frustrating loss of sovereignty over immigration, labour, welfare and many other areas of British life?  The current economic and immigration problems of the EU are obviously making matters worse and raise the possibility that Great Britain could actually vote to leave.

The "Vote Leave" (i.e. Brexit) side got a big boost today as the charismatic Mayor of London, Boris Johnson, said he will break with his own party and actively campaign for leaving. Despite being a member of the Conservative Party and enjoying a good working relationship with Cameron, Johnson has nonetheless decided to chart a very different course.  Recent polls suggest Cameron's "Stay" side has a 15-point lead of the "Leave" side with about 20 percent undecided.  But analysts have suggested that now Boris Johnson's personal popularity could deliver a strong boost the fortunes of the Leave side. 

So the next question is: what do the planets say?  Fairly emphatically, they say: Brexit.  There are any number of ways of looking at the outcome of this referendum.  The first are simple transits for the day of the referendum on 23 June.  Incredibly, the planet Uranus enters the fiery sign of sidereal Aries on that very day!  Please note that I am using the Krishnamurti Ayanamsha which is about 5 arc minutes ahead of Lahiri.  Using Lahiri, Uranus enters Aries about five days later.  And it is worth reiterating that I am using the Indian sidereal zodiac for this ingress and not the tropical zodiac that is used in the West.  The Indian sidereal zodiac gives better results in my opinion, and it is more evident in such mundane mattersof politics and finance.

Although not a traditional Vedic planet, Uranus nonetheless is closely identified with notions of change, often sudden change.  Uranus commonly symbolizes independence, rebellion an innovation -- this is pretty much exactly what one would look for if the UK voted to leave the EU.  We should be strongly expect the exit of the UK from the European Union on this factor alone.  This Uranus sign change or ingress only occurs once every 7 years and is often associated with significant events.  For example, the biggest stock market crash in history occurred on 19 October 1987 the day after Uranus changed signs and entered Sagittarius.  This doesn't mean that a big event happens with every Uranus ingress (the previous one occurred in 2009 but was fairly uneventful), but it raises the odds of such an event.  The fact that the UK votes the very same day as this ingress is suggestive that change and a spirit of independence may be in the air. 

We can also see that PM David Cameron's horoscope looks tense and likely incompatible with winning the referendum.  Cameron enters his Sun-Rahu dasha period on 4 June just three weeks before the referendum.  The Sun is good enough but Rahu is poorly placed in the 8th house in Aries.  Worse still is that its dispositor, Mars, is sitting in the 12th house of loss in Leo.  Cameron will fight the campaign while in the Sun-Mars dasha period.  This is bad for him also since his 12th house Mars is not in a good place for successful persuasion or getting what you want.  If Lahiri is used, then he will still be in Sun-Mars on 23rd June.  Either way, it doesn't look good.

 

His transits also lean towards difficulty.  The transiting Nodes are aspecting their natal positions -- never a good sign.  Transiting Rahu (along with Jupiter) will trine his natal Rahu within two degrees. If his side was going to win the referendum, then his 11th house of gains would likely be in good shape or highlighted in some obvious way.  But it is not.  Transiting Saturn approaches its station at 17 Scorpio and is just a few degrees from aligning (but not aspecting) with the Moon, which is also his 11th house ruler. 

The clincher is the EU horoscope.  This chart is heavily afflicted by both Uranus and Mars at the time of the referendum.  The horoscope of the European Union features a near exact opposition between the Moon (0 Taurus) and Mars (0 Scorpio).  Pluto at 1 Scorpio is also part of that powerful and coercive configuration.  In late June that three planet alignment will be highlighted not only by the Uranus ingress at 0 Aries but also the Mars direct station at 29 Libra that happens just a week later.  Mars therefore conjoins the EU's Mars-Pluto natal position and opposes the Moon within one degree.  Ouch. Slow moving or stationary planets possess greater power to do good or ill and Mars has a clear tendency toward the dark side. 

So we have both Uranus and Mars extra strong and delivering a double shot of instability and upset to the EU.  Therefore, it seems very likely that the UK will leave the European Union following the referendum.  The departure of the UK will likely raise more questions about the long-term viability of the EU.  We can expect another existential crisis to beset the EU in September and October 2017.  At that time, Rahu will conjoin the Ascendant and Ketu will conjoin the natal Saturn in the EU chart.  This should coincide with another significant negative development, such as the loss of another major member nation or perhaps a fundamental rewriting of its constitution.


Weekly Market Forecast

Stocks generally rose last week as the absence of any more bad news out of China and an agreement by OPEC to freeze production was enough to put a floor under prices.  The Dow climbed almost 3% closing at 16,391 while the Indian Sensex also rose by a similar amount finishing the week at 23,709.  The gains were not surprising as I noted the ongoing bullish conjunction of Mercury-Venus in last week's market forecast.   As it turned out, the Mars-Ketu (South Node) alignment didn't produce much downside late in the week, although US and European markets did see some profit taking at that time. 

Stocks are off to a positive start so far this week after modest gains in Asia and stronger gains in Europe and the US at the open.  Mercury is still moving in tandem with Venus so we could see more upside in the first half of the week.  However, Mercury comes under the aspect of Saturn by Thursday so that could shift the overall mood of the market.  Declines therefore could become more likely as the week progresses. 

For more details on market trends this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter covers US and Indian stock markets, as well as gold, oil and major currencies.

Research in financial astrology: Mars in Scorpio

(15 February 2016) Financial markets remained turbulent last week as Fed Chair Janet Yellen did not backtrack on her plan to hike interest rates further in 2016.  Investors had hoped that the usually dovish Ms. Yellen might have been more reassuring about the reduced likelihood of further hikes given the current sorry state of the global economy.  At the same time, she did suggest that the Fed might consider bringing negative interest rates to the US if circumstances demanded it.  While some investors saw this as an olive branch to the markets, others were scared off with the hint that this latest unproven central bank experiment might actually be put into practice in the US.

Despite a rebound Friday, the Dow finished down more than 1% on the week at 15,973.  Indian stocks fell more sharply as the Sensex ended the week at 22,986.  Indian stocks have now given up all the gains in the post-Modi election rally from May 2014. Not surprisingly, gold also enjoyed a strong gain to $1263 as the Venus-Jupiter aspect tightly activated the 1919 gold horoscope as discussed in last week's post.

In last week's market forecast, I had thought we might have seen more gains on the midweek Venus-Jupiter alignment.  We did see strong gains in Europe on Wednesday but the positive vibes eventually petered out during the US session as intraday gains disappeared by the close.  Stocks became more bearish after Venus began to separate from Jupiter on Thursday. 

While we could see Friday's optimism continue into this week, the broader picture still looks challenging for the next several weeks.  As I have discussed previously, the ongoing Jupiter-Rahu conjunction has been a negative influence on markets since December and could well depress prices until it ends in mid-March.  Or rather, its first conjunction is due to end in mid-March since Jupiter's current retrograde period means that it will form a second conjunction with Rahu (North Lunar Node) that will last from May through to July.


Mars in Scorpio: Principles in financial astrology

But we should also take note of another ongoing influence that could move markets in the near term: the transit of Mars through the sign of Scorpio.  Mars enters sidereal Scorpio this Saturday, 20th February and will remain there until 18th June.  This is an unusually long transit of Scorpio because Mars will turn retrograde in April and then retrace its path through Scorpio.  It will briefly move out of Scorpio into the last degree of Libra for a few weeks in June-July but it will again move through Scorpio from 11th July to 17th September.   And please note, this is sidereal Scorpio I'm referring to here as used in Indian astrology (i.e. "Jyotish").  The Western tropical zodiac is now offset 24 degrees from its sidereal counterpart and does not follow the correlation I am advancing here.

One of the basic principles of financial astrology is that some planets are negative by nature.  When they are aligned with other planets or otherwise strong, they tend to damage sentiment and therefore are correlated with declines.  Due to its low velocity, Saturn is the most dominant negative planet, but Mars is also usually bearish in its effects.  Because it moves fairly quickly, however (0.6 degrees/day), its effects may only last for a day or two as it forms aspects with other planets.

But what happens when Mars transits through certain signs for several weeks?  Scorpio is a sign which Mars is said to "rule" -- that is, it shares many of the symbolic associations of Scorpio (violence, intensity, sudden actions, etc).  Scorpio is only one zodiac sign out of 12 so Mars transits this sign once every two years or so.  When Mars is in its normal forward motion, the transit lasts about 6 weeks.  In traditional astrological terms, we say that Mars is strengthened through its transit of its own sign, Scorpio.  But in market terms, a stronger Mars probably means it will do more damage to sentiment.

So the idea that Mars in Scorpio is bearish is deductively plausible.  In fact, most astrological thinking is deductive in nature, and this is one of its weaknesses.  Mars is a bad planet, and Scorpio is a "bad" sign for Mars, so that should be really bad for markets.  Right?  (And apologies to all Scorpios here, but please note that we are talking about financial markets and not individual human beings.  Scorpios are great people!). 

But is Mars in Scorpio actually bad? What does the evidence say?  Astrology works best when it moves out of the realm of pure deduction into the realm of evidence-based empiricism.  One of the reasons I became interested in financial astrology was because it offered a constant flow of empirical data about the possible effects of the planets.  Just as the planets are in constant motion, the markets are also constantly changing. 

The table below was constructed from an admittedly small sample of the recent transits of Mars through sidereal Scorpio dating back to 1999.  There are only ten cases here, which is nowhere near enough to produce standard statistical significance.  And yet, I think the evidence presented here is at least interesting, if not impressive.  I was actually surprised the correlation was as strong as it appears to be from such a simple two-factor model. 

Market effects of the Mars transit of Scorpio (DJIA)

Entry Date	Exit Date	DOW at entry*	DOW at exit	% Change
Aug 23 1999	Oct 8 1999	11,299	10,649	-6
Feb 2 2001**	Apr 10 2001	10,983	9845	-10
Jun 10 2001**	Aug 26 2001	10,977	10,423	-5
Jan 7 2003	Feb 22 2003	8773	8013	-8
Dec 16 2004	Jan 8 2007	12,280	12,423	+1
Nov 7 2008	Dec 18 2008	8943	8604	-3
Oct 19 2010	Nov 29 2010	11,143	11,052	-1
Sep 28 2012	Nov 8 2012	14,485	12,811	-11
Sep 4 2014	Oct 18 2014	17,078	16,380	-4
Feb 20 2016**	Jun 18 2016	???	???	?
Jul 11 2016**	Sep 17 2016	???	???	?

*Closing prices for day before Mars entered Scorpio
**Indicates year where Mars retrograde cycle occurred in Scorpio

In 9 out of 10 instances of Mars transiting through Scorpio, stocks declined.  In 6 out of 10 instances, stocks fell by 4% or more.  The fact that stocks declined during this transit is even more significant because the market has generally risen over that time from 1999 to 2014.  The Dow Jones Industrial Average was around 11,000 at the time of the first transit in the table and 17,000 at the time of the last transit in 2014.  So the market bias was positive overall and yet this six-week transit was almost always negative.  That's interesting.

Even more telling is that the only positive instance of Mars Scorpio transit coincided with Jupiter's transit of -- you guessed it -- Scorpio. Jupiter is a positive planet, of course, and it only transits through one sign per year.  It therefore only transits through Scorpio once every 12-13 years.  The fact that stocks rose modestly (+1%) from Nov 2006 to Jan 2007 is likely attributable to Jupiter also transiting Scorpio.  Jupiter's presence in the same sign could therefore neutralize or offset the negative Mars influence.

Unfortunately, there is no such Jupiter influence this year, as it's due to pass through Scorpio again in 2019.  And not only is Jupiter not there to lend a helping hand, but bearish Saturn will also be in Scorpio for the whole year!  This could make the Mars transit even worse.  We are therefore even more likely to see stocks fall during this year's transit of Scorpio.  And the fact that there will be two separate transits due to Mars' retrograde motion loads the dice for the bears even more in 2016.  The last time Mars had its once-every-two year retrograde cycle in Scorpio was 2001 right in the middle of a bear market.  The Dow fell 15% during the combined transits of Mars through Scorpio that year. 

So this likely means that the next few months could see more turmoil in financial markets.  Due to the April retrograde station, the first Mars transit of Scorpio lasts for a very long time, from February 20 until June 18.  Just like Scorpio likely makes Mars more damaging, so does the extra long time of the transit likely to make its effects worse than they otherwise would be.   And this is only one negative planetary influence out of several I can see this year.  No matter what tricks the central banks of the world might try to postpone this recession, I don't think they will be successful.


Weekly Market Forecast

Stocks have moved higher Monday.  Asian and Europe were sharply higher and US futures are looking to follow suit although there will be no trading today on Presidents' Day. I would think we will see more upside this week as Mercury and Venus move in tandem into Capricorn.  With the Sun safely off in Aquarius, there will likely be some room for optimism this week.  However, Mars aligns with Ketu (South Lunar Node) for much of the week so there could be some sudden sell-offs mixed in here, perhaps later in the week.

For more details on the market trends this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter covers US and Indian stock markets, as well as gold, oil and major currencies.

Gold rallies amid emerging currency war

(8 February 2016)  Is gold's renewed luster for real?  Gold has been shining brightly of late as one of the few asset classes (along with bonds) that has bucked the down trend in stocks and commodities in recent weeks.  One key reason for gold's recent gains are fears that another recession may be looming which will force the world's central banks to cut interest rates further into negative territory.  Lower interest rates are designed to lower (and debase) national currencies and therefore this enhances the appeal of gold as a storehouse of value. 

Following more easing moves by their central banks in recent months, the Japanese Yen, the Euro and the Chinese Yuan among others have all fallen against the US Dollar.  We may well be entering a more intense phase of a global currency war as desperate central banks race to devalue in order to briefly stimulate economic growth through cheap exports.  Faced with the prospect of holding falling currencies, more investors are opting for gold as a hedge against this uncertainty. Gold soared 5% last week and finished at $1174 an ounce.

But we're seen this movie before.  Gold has been trapped in a four-year long bear market in the aftermath of its all-time record 2011 high of $1920.  During that time, we have seen gold attempt similar impressive short term rallies but they invariably come to nothing.  As is typical of a bear market, all these promising rallies only lasted a few weeks and then gold would fall even lower.  Are things different this time? 

My assessment of the relevant astrological influences suggests the recent gains in gold are simply another fairly typical, albeit strong, bear market rally and nothing to get too excited about. A bear market rally means that gains can come suddenly and powerfully but are unlikely to evolve into a sustainable up trend.  Therefore, they are unlikely to fundamentally change the bear market dynamic of lower highs and lower lows.

The current gains in gold in early 2016 are not surprising and I have been advising newsletter subscribers that such a rally was more likely now.  Whatever the transit effects of Jupiter in Leo (bullish) and Jupiter conjunct Rahu (North Lunar Node) (bearish), my go-to chart for gold is still the 1919 natal chart of the first public posting of gold prices from London banks on September 12 at 11 a.m.  While London is no longer the financial capital of the world it once was after World War 1, I have found this gold horoscope still seems to resonate quite closely with the major changes in gold prices. 

A quick look at the chart and we can quickly see why gold is rising here in 2016.  That Jupiter-Rahu conjunction in late Leo is conjoining the Sun-Venus conjunction in the natal chart.  Jupiter is usually bullish and its ongoing conjunction here with Rahu is also a plus as it encounters benefic planets like Venus and the Sun.  It's obviously positive and is one big reason why I had predicted some gains for gold in February in my newsletter.   To be honest, this current breakout higher occurred a few days earlier than I expected but the overall picture is very much in keeping with the standard effects of Jupiter and Rahu on a Sun-Venus conjunction. 

The question is what happens once Jupiter (27 Leo) moves past both Venus (27 Leo) and the Sun (25 Leo) in its retrograde cycle?   Jupiter is due to exactly conjoin the natal Sun on February 24th.  After that, it will separate and its potentially bullish influence may diminish.  This is not to say that gold will end its current rally and reverse lower on Feb 24th.  However, this is one important planetary factor to consider.  My sense is that the current gold rally will likely peak in late February or early March, and that March will be more bearish.  The rest of 2016 also features a number of difficult alignments that seem incommensurate with a renewed bull market in gold.  Readers may find more details in my weekly market newsletter.


Weekly Market Forecast

Stocks trended lower last week on worsening economic data and the possibility that the Federal Reserve may have no choice but postpone its announced rate hikes for 2016.  In New York, the Dow lost 2% closing at 16,204 while the Indian BSE-Sensex lost 1% to 24,616.  In last week's market forecast, I thought we would likely see the bears prevail as I thought the Mars-Sun square aspect would depress stocks through much of the week.  As expected, we did see a late week bounce near the Venus-Pluto conjunction on Thursday and Friday in India and on Wednesday and Thursday in the US and Europe. 

This week has started off negatively with stocks down in India, Europe and now in the US as the Futures are pointing to a sharply lower open. This is probably the result of the Mars-Sun square.  While this was exact on Saturday the 6th, this pattern got a second iteration from today's Moon-Sun conjunction, i.e. a New Moon.  In other words, the Moon has acted as a catalyst for the bearishness of Mars to flow to the Sun for yet another day even though Mars and the Sun are separating.  I would therefore expect the bears to carry the day on Monday.  But the rest of the week seems more bullish as Venus aligns with Jupiter and Rahu into midweek.  That increases the chances of a decent bounce once this Mars energy has manifested in the early going. 
For more details on the market trends this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter covers US and Indian stock markets, as well as gold, oil and major currencies.

Bank of Japan enters twilight zone of negative interest rates

(1 February 2016) The Bank of Japan surprised financial markets last Friday by cutting its prime interest rate to -0.1% on interbank loans.   BOJ Governor Haruhiko Kuroda's shock move into the twilight zone of negative interest rates is designed to entice reluctant Japanese banks to lend more money and thereby provide a stimulus for the perennially moribund Japanese economy. Stock markets around the world reacted positively to the rate cut, even if its long term consequences are unknown. 

Negative rates force money out safe assets like bank accounts and bonds into riskier assets like stocks which have a greater potential return.  However, the negative interest rate policy (NIRP)  is new and rather experimental as the European Central Bank (ECB) was only the first major central bank to move its rate below the 'zero bound' in June 2014.

This move into negative rates seems a bit desperate as central banks are now realizing the limits of the effectiveness of its previous preferred monetary instrument of quantitative easing (QE).  But with the global economy careening towards another recession, central banks may be willing to try anything to boost economic activity, even if it means punishing savers even more and creating unknown systemic risks.  If rates continue to move further into negative territory, individual depositors may for the first time have to pay to keep their money in a bank.  It is unclear at what point this policy would backfire and prompt a bank run as customers withdraw their cash.

The astrological angle here is that the BOJ's step into the financial unknown seems reflective of the symbolism of Rahu.  Rahu is the Sanskrit name for the North Lunar Node, a calculated astronomical point in the sky that marks the intersection between the orbits of the Moon around the Earth and the Earth around the Sun. These two Lunar Nodes, aka Rahu (North) and Ketu (South) are prominent in eclipses -- traditionally seen as bad omens -- and thus they carry a malefic significance in traditional Indian astrology. 

Currently Rahu (28 Leo) is conjunct Jupiter (28 Leo), the planet of wealth and expansion.   When it is prominent as in such a conjunction, Rahu is regarded as a source of distortion and deception either through deliberate or accidental intent.  It is also closely associated with acquisitiveness and greed, as in the pursuit of material gain and wealth. How appropriate that distorting Rahu should be conjunct Jupiter (wealth) as the world's central banks invent new ways to keep the game going and avoiding a debt-ridden financial collapse. 

Actually, Rahu can actually be a positive influence in the charts of some people in terms of worldly success and income, even if it may sometimes mean they use deceptive means to achieve their ends.  At other times, Rahu may simply symbolize the ambition to succeed itself rather than impugning any negative motives or means.  My own investigations into Rahu suggest that it also has a more positive side as it is found in the charts of people who are innovators and mavericks.  Rahu is also closely associated with notions of scientific research and more generally, breaking boundaries of tradition and conventional wisdom. 

So it is not difficult to see how the Bank of Japan's move into negative interest rates reflects some Rahu's notions of innovation, experimentation and research as they pertain to wealth (Jupiter).  But Rahu's malefic side is never far away, and in some instances it can have a distorting effect on wealth creation.  Stock markets may have risen on this news, but it is possible that these central bank policies may be distorting the natural market mechanism as stock prices have moved away from financial fundamentals such as corporate earnings.

Interestingly, another Jupiter-Rahu conjunction occurred in the fall of 1979 and coincided with another bold central bank move. In October 1979, then Fed Chair Paul Volcker radically hiked interest rates to choke off inflation that had entered double digits in the US.  Although controversial at the time, Volcker is now seen as a hero for his innovative (Rahu) moves to reduce inflation (Jupiter) and put the economy on better long term footing for the 1980s. 

The comparison between 2016 and 1979 also has another similarity.  In both instances, the Jupiter-Rahu conjunction took place in the sign of Leo.  Perhaps not coincidentally, Leo is the zodiac sign most connected with government.  Central banks are agencies of the government so it stands to reason that their actions may have important consequences. 

A third parallel. Both in 1979 and in 2016 the conjunction takes place twice:  first when Jupiter is retrograde and second when it is in direct motion.  Due to Jupiter's retrograde motion in 1979, there were actually two periods of conjunction, the first from October 13 to November 26 and the second from March 3 to May 6, 1980.  This year we will also have two Jupiter-Rahu conjunctions since Jupiter is retrograde now but will turn direct later.  Please note that I am using a five degree orb of separation both applying and separating.  This is a commonly-used orb for conjunctions, although I admit it is possible to use other orbs.  Volcker's bold move was taken on October 6, just a week before Jupiter had moved to within five degrees of Rahu. 

As a side note, gold famously spiked to a then record high of $800 in early January 1980 right in between these two Jupiter-Rahu conjunction periods. Gold had modestly climbed about 5% in the first period in Oct-Nov but then fell 20% during the second March-May 1980 period after gold had peaked in January. This largely negative outcome is in keeping with planetary symbolism.  Jupiter is sometimes seen as an indicator for gold, so any afflictions to it by malefics like Rahu are more likely to coincide with declines.  All other things being equal, this could be a negative factor weighing on gold prices in 2016.

This year we also have a double Jupiter-Rahu conjunction since Jupiter is again retrograde when it conjoins Rahu.  This is arguably another astrological reason for the BOJ's radical move.  The fact that Rahu is afflicting Jupiter for a longer period as both planets move backwards suggests that it can do more to disrupt the economic norm.  The current conjunction began on December 11, 2015 and will continue until March 19, 2016.  Then Jupiter will reverse its direction on May 9th at 19 Leo and begin to move forward again.  It is due to conjoin Rahu again from May 23 until July 14.

 

Market impact of Jupiter conjunct Rahu (i.e. North Lunar Node)

Effective dates	DOW Net Change	% change
Oct 13 1979 - Nov 26 1979 (Jupiter Rx)	838-828 = -10	-1
Mar 3 1980 - May 6 1980*	854-816 = -38	-4
Mar 29 1987 - May 9 1987	2335-2322 = -13	0
Sep 11 1994 - Oct 23 1994	3860 - 3891 = +31	+1
Jul 18 2001 - Aug 29 2001	10,569-10,090= -479	-4
Jan 23 2009 - Mar 5 2009	8077 - 6594 = -1483	-19
Dec 11 2015 - Mar 19 2016 (Jupiter Rx)	17,524 - ????	?
May 23 2016 - Jul 14 2016*	??? - ???	?

 

It is important to note that this Jupiter-Rahu conjunction is fairly rare and only occurs once every 7 years.  Since both planets are fairly slow moving, the conjunction lasts for about 6-7 weeks, although the conjunction is longer when Jupiter is retrograde and hence moving more slowly.  From the table above, there is even a hint that Jupiter-Rahu conjunctions could have a negative impact of stock prices although the correlation seems less than robust. 

The major decline in 2009 was likely worsened because Jupiter was debilitated in the sidereal Capricorn that year (Western tropical astrologers, take note).  This likely weakened Jupiter so it was even less able to withstand the disruptive effects of Rahu.  At the same time, the neutral outcomes of the 1987 and 1994 Jupiter-Rahu conjunctions were actually relatively bearish given that stock markets were in the middle of major bull markets at that time.  In that sense, even a neutral outcome is evidence of a negative influence that suppressed prevailing bullish sentiment. 

The current Jupiter-Rahu conjunction has coincided with stocks falling again.  US markets have fallen by more 10% since December 11th at the start of the conjunction although they appear to be rebounding at the moment. Certainly, it isn't the only astrological influence at work but it may well be one piece of the puzzle.  We still have another 6 weeks to go before the current conjunction separates by more than five degrees.  Can stocks extend their rebound in the coming weeks?  It's certainly possible, especially since the market has declined significantly already.  The Dec-Jan decline that we've already seen may well have fulfilled the bearish potential contained with the Jupiter-Rahu conjunction.  But the fact that there will be a second Jupiter-Rahu conjunction from May to July should give investors pause.   This is yet another reason why 2016 could be a more turbulent financial year.


Weekly Market Forecast

Stocks climbed last week, especially after the Bank of Japan's surprise rate cut on Friday.  US stocks rose 2% as the Dow finished at 16,466 while India's Sensex added a similar amount finishing at 24,870.  In last week's stock market forecast, I thought there was a higher probability of declines later in the week but stocks actually bottomed out before that on Wednesday after the Fed disappointed markets with its no-change stance.  .

This week leans bearish, especially in the first half.  Thus far, Monday has been mixed in Asia and negative in Europe with a lower open likely in the US as I write this.  The planetary problem here is that Mars is approaching its square aspect with the Sun this week.  This isn't exact until Saturday the 6th, so there could be some pessimism expressed at various points through the week.  That said, I don't think it will be negative for the whole week. 

But the Mars-Sun square aspect is one of those fairly reliable negative aspects  that correlate with declines.  With Monday likely ending negative in Europe and the US,  Tuesday could also be problematic as the sensitive Moon is caught in the middle between malefics Mars and Saturn.  Wednesday's Moon-Saturn conjunction also looks iffy.  I would think sentiment may improve by Thursday or Friday when Venus conjoins Pluto and aligns with the Sun, Mars, and Uranus. For more details on financial trends this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter covers US and Indian stock markets, as well as gold, oil and major currencies.