Stocks rebound as inflation worries subside

(15 February 2018) Stock markets are stabilizing this week after last week's turbulence.  Starting with last Friday's powerful rebound off the low of 23,500, we have see five straight days of gains as the Dow has climbed back above 25,000.  And yet markets will have some ways to go yet before they can recapture their highs of January 26th at 26,616.  This could be more difficult now that inflation has re-emerged as a threat to the goldilocks' economy of moderate growth, low interest rates and low inflation. 

Yesterday's CPI number was higher than expected at 2.1% and that pushed yields on the 10-year Treasury to 2.91%.  Higher bond yields are seen as problematic for stocks as they will raise borrowing costs and choke off further growth.  3% may be a key threshold in this respect.  More analysts are now questioning if this could be the end of the nine-year bull market that began after the financial crisis of 2008.

In my view, I think the bull market isn't done yet.  While we will likely see higher volatility from now on, I am expecting markets to eventually recover from this correction.  Taking the main planetary factors into consideration, I would expect there is a good chance to see higher highs later this year, most likely during the summer, and then possibly again in 2019.  Without going into an exhaustive analysis, let's just take a look at the horoscope of the New York Stock Exchange.

Just looking at the transits, we can see that the recent correction fits nicely with the 10.10 a.m. chart.  Rahu (North Lunar Node) is exactly conjunct the Ascendant (20 Cancer) while transiting Saturn (11 Sagittarius) exactly squares the natal Rahu.  By themselves, neither of these factors would likely have brought about much downside.  While both are considered malefic planets, other factors can often alter how they influence collective sentiment.  But together, they provided a key element in turning market sentiment negative.   In fact, we can also infer that their unique interrelationship in this alignment was crucial. Saturn's negative aspect to natal Rahu may have been transferred and amplified by the fact that by transit, Rahu was conjunct the most sensitive point in the whole chart, the Ascendant.  This created a kind of malefic feedback loop between the malefics Saturn and Rahu.  As if they were handing off a bearish baton in a race, Saturn to Rahu, and then Rahu to the Ascendant, and hence the chart as a whole.

The rebound we have seen since February 9th has not only reflected the fact that Saturn has now moved past its square with Rahu, but that positive transits are now occurring involving the natal Jupiter (2 Libra), and by extension, the very strong Jupiter-Mercury-Pluto alignment which resonances very strongly at 2 degrees of those planet's respective signs.  We had a solar eclipse this afternoon at 3 degrees of sidereal Aquarius which highlighted this Jupiter alignment very nicely.  Given the significant interruption effects of eclipses, however, there is a real chance we could see stocks fall back somewhat in the days ahead. 

I would expect some pullback tomorrow (Friday, the 16th) as well as into next week as the positive transits are moving away from the Jupiter alignment and malefic Mars comes under the aspect of Rahu.  Actually, Mars will also cast its square aspect on Neptune (Feb 17th), Venus (Feb 24th) and then Mercury (Feb 28th).  These various Mars influences are negative and could offset the ongoing positive influence of the approaching Jupiter retrograde station on March 8th which aligns closely with the natal Moon in the NYSE chart.

It is difficult to predict how far stocks may fall in the rest of February.  Perhaps not as far as in the first part of the month.  While I think there could be more upside again in March, the outlook for April looks much more troublesome given the Mars-Saturn conjunction and the Saturn retrograde station.   In other words, bullish investors may have to be patient for a while before the market resumes its upward climb. 

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.

Stocks wobble as bond yields rise; bitcoin crashes below 10K

(1 February 2018) US stocks are looking a bit shaky this week after a rare two-day decline on Monday and Tuesday.   Investors became skittish as bond yields rose to their highest since 2014.   As the economy continues to improve under Trump, inflation expectations are rising.  This, in turn, is making yields more competitive with stocks as the yield on the 2-year Treasury is now higher than the dividend yield on the S&P 500 for the first time since 2009.  If yields continue to rise, stocks will become more vulnerable to a correction.  Some analysts are suggesting that 3% on the 10-year Treasury could be the make-or-break level to watch.  Currently, it is 2.79%. 

This week's market jitters may be seen through several charts but perhaps most clearly through the NASDAQ horoscope (Feb 8 1971).   While there are several placements that are contributing to this uncertainty, it is likely the transit of Mars through Scorpio that is the triggering factor.  Earlier in the week Mars was exactly conjunct the 8th house cusp at 8 Scorpio.  This is the same as a 150-degree inconjunct alignment with the Ascendant in the NASDAQ chart.  Mars is often a bearish planet and it is more likely to coincide with down days while associated with the 8th house.   In traditional astrology, the 8th (along with the 6th and 12th) are seen as more negative.  The negative outcome to the Mars transit was likely increased due to the proximity of Jupiter and Neptune to the Mars transit. 

But Mars doesn't always produce down days when it aligns with the cusp of the 8th house (N.B.  it does so about once every two years).  Other factors may also had a hand in creating the conditions for this pullback.  Saturn (10 Sagittarius) is close to Venus (9 Sagittarius) and may have been resonating with Mars as it neared the the 10th degree of Scorpio.  Mars and Saturn tend to be more bearish planets in their effects.  In addition, the South Lunar Node (Ketu) is in a wide conjunction with the Sun (25 Capricorn) while the North Lunar Node (Rahu) is now approaching its trine aspect with natal Mars (17 Scorpio). 


Outlook

But where are stocks going from here?  Is this just a brief dip after which the rally will resume or is this the beginning of a shift in sentiment which could lead to a major correction?  I think the next week or two could see more difficulties since Mars will remain in Scorpio.  Even the next few days could be more volatile than normal as Mars conjoins Jupiter.  Today (Thursday) stocks have fallen again.   That said, next week looks less negative overall given the Venus-Uranus aspect on Tuesday the 6th and the Sun-Jupiter alignment on Friday the 9th.  I would also pay special attention to the time around the Mars-Rahu alignment in mid-February as this will provide a double activation of the natal Mars in the NASDAQ chart. 

The fact that Jupiter is due to station retrograde on March 8th would suggest that there may be a return to optimism as we get closer to that date.  This suggests that the rally may not be over just yet.  Whether there is enough optimism to push stocks to new all-time highs is harder to say, however.   The astrology does not offer clear evidence on that question.  While I do think markets are likely to suffer a larger correction (>10%) sometime in the next 3-4 months, I would not say it is likely to occur here in February.  We may only be getting a more modest trial run.

A bit on Bitcoin

All the news is bad these days for cryptocurrencies.  New reports of hacking, more government regulations, and more questions about whether it is simply a massive bubble.  Bitcoin has now lost 50% of its value from its high near $20,000 as BTC traded below $10,000 this week.  The correction itself isn't too surprising although the size of the decline is.   Previously, I suggested the Uranus direct station in early January could change the dynamic for a while and force prices lower. 

I think there is some chance for a rebound in the coming weeks, but it looks unlikely to recover its previous levels.  One potential key date may the Jupiter retrograde station on March 8th.  Jupiter symbolizes optimism and expansion and its change in direction can sometimes coincide with shifts in market mood.  On this occasion, we should note that the Jupiter station occurs at 29 Libra which is exactly square the Ascendant (29 Cancer) of the First Trade chart (12 Jan 2009, Temple City, CA).  This First Trade chart is far from being reliable data so we shouldn't place too much importance on the position of the Jupiter station. Nonetheless, it bears watching.  After March, the chart looks increasingly stressed.  This hints at lower lows for BTC in the second quarter of 2018. 

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.