The financial outlook for 2018: more Saturn, less Jupiter

(15 January 2018) After a banner year in 2017 which saw US stocks gain more than 20%, the financial outlook for 2018 looks decidedly more difficult.  The stock market is a forward-looking discounting mechanism as investors have bid up stocks in anticipation of higher growth from the pro-business policies of the Trump administration.  Tax cuts and reduced regulation are key reasons why markets are expecting corporate earnings and GDP to enjoy more robust growth in 2018.  While the promised infrastructure program may well give an additional boost to the market, many analysts are suggesting that the outsized gains of 2017 cannot be repeated in 2018.  But just what can investors reasonably expect? 

The astrological indications tend to concur with a view of diminished expectations.  The Trump rally in stocks can be analyzed in various ways but I find the simplest way is to look at the key financial horoscopes.  If we look at the chart of most widely cited stock average in the world, the Dow Jones Industrial Average (DJIA), we can see the reasons for why 2017 was such a bullish year and why 2018 may be more problematic.  (N.B.  I am using an estimated time of 5 p.m. based on the historical evidence; the precise time is less important for my analysis in any event.)

The dominant transits in 2017 were largely positive.  Bullish Jupiter made significant aspects several times throughout the year.  In early 2017, it stationed retrograde at 29 Virgo and thus aligned very closely with both Venus (1 Taurus) and Mercury (1 Gemini) within just two degrees for the first three months of the year.   The bullish Jupiter influence was reinforced by the transit of Uranus from 0 to 4 degrees of Aries from March through to the end of the year.  Uranus is also a bullish planet when it forms close alignments with benefic planets like Mercury and Venus as was the case in 2017.  In a sense, the timing was near-perfect as the Jupiter alignment made the first quarter of 2017 positive and then handed off the bullish baton to Uranus for the second quarter and indeed the rest of the year.

Jupiter again re-entered the picture by September, as it entered sidereal Libra which is the 1st house in the Dow chart.  This is a classic indication of rising confidence and optimism.  Not surprisingly, stocks extended their gains in the fourth quarter of 2017.  Jupiter exactly conjoined the Ascendant at 21 Libra in December. 

But market outcomes are determined not only by assessing the impact of favourable transits but also by taking into account unfavourable transits involving malefic planets.  As in traditional Western astrology, Vedic astrology holds that Saturn and the Lunar Nodes, Rahu and Ketu, are generally malefic influences.  This is not always the case as exceptions abound but they are more negative in their transit effects than other planets. 

Also, the outer planets Uranus, Neptune and Pluto can exert a malefic influence if they form hard aspects (90,180 degrees) to important points in the chart.  They become more bullish when they form soft aspects.  This may well have been the case in 2017 as slow-moving Neptune formed a "soft" trine 120 degree aspect with the Ascendant for most of the year.

As it happened, we did have some negative Saturn aspects in 2017 but they were largely offset by the simultaneous presence of other planets.  Bearish Saturn (1 Sagittarius) opposed Mercury (1 Gemini) on three separate occasions during the year but some of the negative influence was likely mitigated by the presence of Uranus near the same degree (1 Aries).  If Uranus had not created a three-planet alignment, then the Saturn-Mercury opposition likely would have produced more downside.   I wonder if the presence of Uranus may also have blunted the often negative effect of the nodal semi-return when Tr Rahu conjoined Ketu in May and June.  Uranus was fairly close to a 120 degree alignment with the nodes at that time.  And of course, we should not forget that the ongoing Jupiter and Neptune influences also created a moderating effect on the negative Saturn or nodal transits. 


2018 Forecast

But 2018 looks less positive.  On the plus side, Jupiter will continue to transit the 1st house for the first 9 months of the year.  While this is a clear positive influence on market sentiment, it may not be as positive as it was last year because of the relative lack of close aspects with important points in the chart.  It will conjoin natal Uranus (29 Libra) in March so that may highlight a bullish time.  And its conjunction with the Ascendant and Saturn (21 Libra) from June to August also hints at a significant up trend during the summer. 

But the key difference this year is that the malefic aspects look like they will pack a bigger punch.  For its part, Saturn will align closely with the Moon-Sun opposition from March to June.  The Moon-Sun opposition at 13 degrees of Scorpio and Taurus is the central feature in the Dow chart so the extended influence of Saturn on these planets is more likely to bring pessimism and caution.  To be sure, Saturn is not casting its full-strength Vedic aspect to either planet but the alignment is so close -- just two degrees at the time of the Saturn retrograde station in April -- that we should see some effects from it.  At very least, it suggests the Trump rally will be interrupted for a while.  But it may well signal a significant decline.   I discuss in more detail this upcoming Saturn pattern in my weekly newsletter.

The other important alignment that stands out in 2018 is the Saturn-Uranus-Rahu configuration from August to October.  Two of the three planets are malefics so the alignment is more likely to coincide with a decline.  What is interesting here is that both Saturn and Uranus will station in a near-exact 120 degree alignment.  This is a soft aspect so perhaps it may not be that damaging.  But the stations reflect situations of greater intensity and could well signal some important developments in financial markets.  One saving grace is that the alignment does not appear to hit any key points in the Dow natal chart, either positive or negative.  So if there is a late summer sell-off, it could be fairly modest.

Whereas 2017 didn't see any pullbacks greater than 3%, it seems more likely that we will have at least two distinct down periods in 2018.  Both should be much larger declines and I would think at least one of them could turn out to be a full-blown correction of at least 10%.  With two significant pullbacks likely in 2018, it will be much harder for stocks to post another winning year.  It is still possible that rallies may be large enough to offset the corrections, although it could be tough going for stocks. 


Weekly Forecast

Most world stock markets hit new all-time highs last week on extended New Year's optimism.  The Dow hit 25,800 on Friday while India's Sensex is fast approaching 35,000 after Monday's gain.  These highs were in keeping with last week's market forecast as I thought the multi-planet Jupiter alignment would likely coincide with some upside.  However, I also thought we might have seen some profit taking later in the week as some of these aspects began to separate.  Alas, market bulls continued to rule the roost.

Nonetheless, this week looks less positive as Mars enters sidereal Scorpio.  This doesn't always translate into declines but it still argues for some added caution.  Friday's Moon-Mars square looks most volatile in that respect.  That said, some gains should also be forthcoming given the conjunction of the New Moon with Venus this week.  It is difficult to say where stocks will end up, however.

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 is published every Saturday and includes extended discussion of US and Indian stock markets, as well as gold, oil and major currencies.

North Korea: the shadow that hangs over 2018

(5 January 2018) With the arrival a New Year, most people look forward to a fresh opportunity to realize their hopes and aspirations as they put the past behind them.   The forward passage of time is one of the sources of human resilience as the inherent optimism of our species is born anew. And yet, this year the specter of conflict with North Korea hangs over the world. 

The war of words between the two bellicose leaders of the US and North Korea that began last year has continued into 2018.  Kim Jong-un and Donald Trump have both boasted about the nuclear buttons while strategic analysts have put the odds of military action near 50%.  And with military action comes the very real risk that nuclear weapons could be used by both sides.  

Interestingly, in his New Year's speech North Korea's Kim Jong-un has extended an olive branch to South Korea over his country's participation in the Winter Olympics which will be held in Pyeongchang.  South Korea has welcomed the overture and the two sides are now in talks to facilitate the North Korean team to participate in February's games.   Moreover, the disused hotline between Seoul and Pyongyang has again been activated in order to encourage better communication.  Clearly, all is not lost and there are real grounds for hope that conflict can be avoided. 

And yet, the planetary alignments do not paint a supporting picture of reconciliation and peace.  Most of the horoscopes of the key players point to serious difficulties over the next few months.   I have previously discussed the afflictions in the charts of the USA and Donald Trump.  The Mars-Saturn conjunction in early April hits both of those charts very squarely and suggest a major development.  To be sure, the connection with military action and North Korea is less clear in those charts. 

Trump's Mercury (15 Gemini) is opposed by the Mars-Saturn and seems less conducive to military action and more to economic dislocation.  Similarly, the USA's Jupiter (15 Gemini) will receive those malefic aspects around the same time in March-April.  Since Jupiter is the chart ruler for the USA (sidereal Sagittarius rising), we can imagine that any resulting events could be significant to the country as a whole.


The Pyeongchang Winter Olympics: diplomatic opportunity or geopolitical risk?

But while the planetary alignments are tense in April, the situation may be complicated by the upcoming Winter Olympics in Pyeongchang, South Korea.  For the moment, the Olympics look like an opportunity to defuse the tension on the Korean peninsula as the South is open to allowing the North to participate.  But the horoscope for the Olympics looks difficult.  The games begin at 8 p.m. local time on 9 February and the chart has a difficult Moon-Mars conjunction in Scorpio in the 4th house suggesting an air of tension and conflict may mark the event.  Mars squares Neptune which hints at hidden or secret conflict including the possibility of espionage. 

Even more problematic is that by transit, Mars will conjoin the Moon about 5 days after the opening ceremonies and then exactly square Neptune about a week after that while the games are still going on. The Mercury-Ketu conjunction occurs on the 6th house cusp at 20 Capricorn and underscores the theme of confusion or chaotic communication.  It is possible that these planets could merely reflect controversies in the sporting arena itself (drug tests, contested results, etc) but overall the chart leaves something to be desired.

And it is worth noting that Kim Jong-un's chart looks tense during the Olympics.  Transiting Rahu (20 Capricorn) is aspecting his Ketu (21 Scorpio) and square his Saturn (20 Libra).  That nodal influence seems mostly unhelpful and disruptive of his goals and ambitions.  Transiting Mars will conjoin his Venus at the start of the games which can reflect social situations requiring higher energy.  But it may also indicate upset and anger.  This is more likely to be the case as the Olympics goes on as Mars will square his Moon in the following week and then conjoin his Ketu.  That Mars-Rahu-Ketu alignment is probably the most worrisome alignment at this time and will be closest on Feb 19-20.  The games are due to finish on the 25th. 

Even with these somewhat tense alignments, I would still not be surprised if the games came off without a hitch.  As in the case of all people with high public profile, it may be that the problems may be largely behind the scenes.  In any event, the more significant alignments appear to be focused in April.  Perhaps the Olympics set the stage for the tension to erupt again.  South Korea and the US have now agreed not to conduct any military exercises during the games but once they are done, they could return to a more confrontational stance.  In the South Korean horoscope, we can see that the Mars-Saturn conjunction at 15 Gemini on 3 April will oppose the natal Venus.  That isn't necessary an obvious pattern for military conflict but it nonetheless speaks to some kind of significant national problem. 

The exact station doesn't occur until April 17th and will form a 3rd house/60 degree aspect to Kim Jong-un's Moon.  This transit usually reflects setbacks or heavy burdens.  Events are more likely to go against North Korea in April due to the Sun-Uranus conjunction in early Aries which exactly opposes Kim's Mars at 4 Libra.   The involvement with Mars here raises the possibility of some kind of military event occurring in April. 

And while the planets look pretty bad in April, I don't think this will produce a resolution of the stand-off with North Korea.   It may reflect only a limited military action which does not involve nuclear weapons.  Another difficult pattern is upcoming in the late summer or early fall of 2018 so the geopolitical tension is likely to continue.



Weekly Market Forecast

Stocks have begun 2018 where they left off in 2017 as the Dow has hit a new record high above 25,000 this week.   The gains were not unexpected as I thought next week's big Jupiter alignment could well push most global markets higher in early January.  And as expected, we did see some brief declines on Jan 1-2 on the Mars-Rahu (North Node) square in Europe and India.

Next week's multi-planet alignment could provide more clues about the future direction of the markets.   The Mars-Jupiter conjunction occurs at 24 Libra on Sunday the 7th while the Sun-Venus-Pluto conjunction at 25 Libra hits on Tuesday the 9th.   These two conjunctions may prove to be significant since they will resonate with each other by virtue of falling at 24-25 degrees of their respective signs.  While these conjunctions are bullish, they could also represent a kind of high water mark for the markets.  The optimism reflected in this Jupiter alignment could peak here in early January and elevate the risk of declines as the planets begin to separate later this week and next week.

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 is published every Saturday and includes extended discussion of US and Indian stock markets, as well as gold, oil and major currencies.