(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.
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.
