After shutdown defeat, Trump prepares for SOTU on February 5

(29 January 2019) The chaotic presidency of Donald Trump has now entered its third, and possibly final, year.  Last week, the US government shutdown was finally resolved after Trump caved and agreed to a temporary three-week stopgap spending bill.  It's anyone's guess what happens on February 15 when the bill expires as Trump has vowed to build his controversial border wall one way or another.  Another shutdown is possible, or Trump may declare a state of emergency to override the Democrats' opposition. 

Before that, Trump will give his State of the Union address (SOTU) before Congress on Tuesday, February 5.  It promises to be a moment of high political theater as Trump confronts what is likely to be a hostile, Democrat-controlled House.  The planets suggest the SOTU will be a contentious affair as Mars will be prominent in the first degree of sidereal Aries.  Whenever Mars enters a new sign it often gets a shot of additional energy and this is especially the case here in the fiery sign of Aries.  Aggressiveness, assertiveness and conflict are more likely to be manifest at this time through the Mars influence. 

In addition, Mars will be approaching a very unstable alignment with Uranus and Rahu (North Lunar Node) during that first full week of February.  Mars' conflictive and assertive energy often combines unpredictably with Rahu, which itself symbolizes disruption and breaking with the status quo.  Uranus similarly reflects shock and surprises and greatly amps up the energetic potential at the time of Trump's SOTU address. 

It is worth noting that all this intense and unstable energy appears to be magnified when we overlay it onto the USA natal horoscope.  The Mars-Uranus conjunction will be at the bottom of the chart conjunct the IC (opposite the MC) and forming a square with Rahu and natal Mercury (3 Cancer).  

The conflictive nature of Mars-Uranus is intensified by its placement near an angle (IC-MC) and its alignment with Mercury heightens the risks to a range of things including the stock market, communication, and even the government itself since Mercury rules the 10th house (Virgo).  In other words, the planets are clearly pointing to difficulties and frustration for the US in early February, and that includes a fractured SOTU. 

The other thing about the planets at the time of the SOTU is that the Sun (22 Capricorn) will align with Saturn (21 Sagittarius) and both will align with the natal Sun (22 Gemini) in the USA chart.  This is another clue that the government and presidency (Sun) will be under the weight of Saturn in terms of criticism, scrutiny and lack of respect.  The divisiveness of US politics will be clearly demonstrated at this time with Trump likely bearing the brunt of it.  More Mueller indictments and revelations are also possible during this time period. 

Trump's personal horoscope will also feel the Mars-Uranus-Rahu alignment since Mars (0 Aries) will exactly square his 12th house Saturn at 0 Cancer.  Not only will the SOTU likely be contentious, but Trump's planets are not good at this time so he is likely to come out of it more bruised and weaker than he already is.  


Weekly Market Forecast

The affliction of the USA's Mercury next week (Feb 4-8) is likely to correspond with some declines in the stock market.  The Mars-Rahu-Uranus alignment greatly increases the probability of some nervous selling in any event, and the Mercury involvement ratchets that up the risk even higher.  This week may be less dramatic but still hints at some market weakness as Mercury and the Sun align with Saturn and Neptune later in the week.  As I have noted previously, Saturn's transit of 20 degrees of any sign increases downside risk and its alignment with Neptune is definitely not a plus.

Given US stocks are near technical resistance, the planets buttress the widespread expectation that we will see some kind of pullback later this week and beyond.  Jay Powell is due to issue the Fed's latest statement tomorrow so that could well move markets.  Thus far, Powell has often had a negative impact on markets on the days he speaks as part of the FOMC meeting and press conference.  I suspect Wednesday and the days following may well adhere to that pattern. 

For a more detailed analysis, feel free to check out my weekly newsletter which is published every Saturday afternoon (EST).  It covers US and Indian markets, as well as currencies, oil and gold. 

Powell blinks: markets rally after Fed Chair's dovish comments

(15 January 2019) Financial markets are looking a bit more stable now after the Federal Reserve seemed to dial back its commitment to higher interest rates and quantitative tightening.  Stocks have rallied strongly following the dovish comments from Fed Chair Jay Powell which reduced the likelihood of more rate hikes in 2019.   This bullish investor reaction was another reminder how dependent the stock market is on these historically low interest rates and how captive the Fed is to the stock market.  

Because the stock market is so deeply intertwined with the US and global economy, any major decline will force the Fed's hand.  The "wealth effect" requires the Fed to support stock prices in order to improve sentiment and thereby encourage consumer spending.   After all, if consumers see the value of their 401k declining precipitously, they are less likely to spend their money.  This essentially broadens the mandate of the Federal Reserve to include inflation, employment and the stock market.  The role of the stock market in creating the wealth effect was first promoted by Fed Chair Alan Greenspan in the 1990s under Clinton, and has deepened under Bernanke, Yellen and now Powell.  The Fed believes that 'what's good for Wall Street, is good for America.'

So can the Fed's low rates and QE-type money printing keep this 10-year bull market in stocks going indefinitely?  Anything is possible, of course, but it seems unlikely to continue for much longer.  Last week I highlighted some planetary factors which suggested that the market was due for another major swoon later this year.  A central feature of the next market decline is the rare triple conjunction of Saturn, Pluto and Ketu (i.e the South Lunar Node).  This malefic conjunction will begin to form starting in April or May and will be within range likely until October.  Saturn is often prominent in any major bear market declines and its alignment here with power-centric Pluto and unpredictable Ketu make negative outcomes more likely. 


Trouble at the Fed

Significantly, this pattern will also be prominent in the horoscope of the Federal Reserve (23 Dec 1913 6.02 p.m.).  We can see that very slow-moving Pluto is sitting on the 7th house cusp exactly opposite the Ascendant.  This transit will last through most of 2019.  This reflects the intensity and historical importance of the current economic circumstance for the Fed.  The Fed is charged with managing the withdrawal of its unprecedented monetary stimulus from the period after the 2008 meltdown without causing a crash.  Some critics have argued persuasively that the Fed's stimulus has simply created a new bubble of debt that is vulnerable to collapse once rates normalize and it sells off its balance sheet of QE assets.  Now it seems it can't raise rates back to its normal range or else stocks will tank and interest rates will spike since the market can no longer absorb debt without a demanding a significantly higher premium.  Therefore, the Fed may finally be well and truly trapped. 

But Powell's dovish statement on January 4th was just what the market wanted to hear and stocks have been rallying ever since.  The Sun and Pluto are there opposite the Ascendant ("coercive power in action") with Saturn waiting in the wings.  But the relative success of Powell's comments can be seen through the Jupiter-Mercury conjunction which is typically associated with "good news".  Also the conjunction of transiting Mars with the 10th house cusp (MC) is a reflection of Powell's decisive executive action to essentially walk back his rate hike from Dec 19th and reassure investors that money would remain cheap as long as necessary.  The 'Powell put' is alive and well. 

But the real problems with the Fed horoscope come in the spring.  Saturn is due to station at 26 Sagittarius in late April in an exact opposition to the Ascendant (25 Gemini) and to natal Mars (26 Gemini).  This is a very tense alignment which virtually assures major economic difficulty starting in the spring.  This is not to say that the stock market has to decline in April.  It may be delayed somewhat or even manifest a bit earlier.  But it does underline the importance of that time window for the Fed.  Powell and Co. will likely be scrambling to stay on top of the economy and the markets.  The presence of Saturn here means they will have to make some very tough and painful decisions.  (e.g. emergency rate cut to combat geopolitical uncertainty, unexpected rate hike to fight sudden inflationary spike, etc.)

While Saturn is basically just sitting there opposite the Ascendant-Mars, Ketu will pass over Saturn in May.  Thus, Rahu (the North Lunar Node) will conjoin the Ascendant and Mars and thus reflect a chaotic and potentially explosive financial situation. 

To top it off, Mars is due to transit over the Ascendant in mid-June.  It is really one of the most malefic planetary combinations I've ever seen in a chart.  Who knows, maybe Trump will fire Powell by this time.  Or the Fed will be forced into a corner and have start buying stocks and bonds directly to prop up the market, just as Japan has had to do for many years.  It definitely looks pretty nasty.


Weekly market forecast

This week looks more vulnerable to declines.  The Full Moon on Sunday Jan 20 is also a lunar eclipse which could introduce some volatility this week.  Also, Saturn (19 Sagittarius) is fast approaching its crucial 20th degree of Sagittarius.  This degree is often implicated in declines since it is in exact alignment with the Ascendant of the NYSE chart.  It is also in alignment with the Sun (20 Aquarius) in the S&P 500 horoscope.   Since Saturn is a bearish planet, its exact aspects tend to coincide with pullbacks and declines.  Saturn also forms a tense minor aspect with Uranus here which may further indicate declines.  Neptune is already at 20 degrees of Leo, so the Saturn-Neptune duo is not generally not helpful for stock market rallies. 

Jupiter is conjunct Venus and fairly close to 20 degrees of Scorpio so that may offer some relief.  I suspect it could come next week after the lunar eclipse.  We shall see. 

For more detailed market analysis, please check out my weekly subscriber newsletter.  It is published every Saturday and covers the US and Indian stock markets, as well as currencies, gold and oil.

Beware the bear: how 2019 may be a repeat of 1937

(7 January 2019) The New Year got off to a positive start for most global stocks as investors tried to put the unnerving 2018 decline behind them.  Friday saw a surge of more than 3% on US markets on the perfect storm of a strong US jobs report, an interest rate cut in China and above all a dovish statement from Fed Chair Jay Powell not to hike too quickly, if at all.   Markets are still fragile and there remains considerable uncertainty about what may lie ahead for this year.

My basic expectation is that stocks may well recover somewhat over the next two or three months but that the planetary alignments look very bearish for much of the year.  As I see it, 2019 is shaping up to be a negative year for most global stock markets as the bear market is likely to worsen.  Even if there is a significant recovery going into spring, it seems unlikely they will return to their previous highs. 

Based on a review of several major bear markets, I have identified the key common factors that are found the planetary alignments during declines of more than 30%.  This list of factors is certainly not exhaustive but it does appear to be crucial in determining whether a decline will be a smaller 10% correction or a historically significant bear market where stocks fall by more than 30%.  In that sense, these planetary factors may be seen as necessary, but probably not sufficient conditions for a bear market.

Here they are in no particular order:

1) there must be a close 15, or ideally, 30 degree multiple alignments of Saturn or the Nodes with at least one slow moving planet --  Uranus, Neptune, Pluto and Chiron.  
2) during the duration of the decline, Saturn should station either direct or retrograde while in close alignment with at least one other slow moving planet
3) these alignments will have greater negative influence if they align closely to key natal planets/points in the horoscope of the New York Stock Exchange (1792), especially if they are in hard aspect (90, 180 degrees).
4) there must be close alignments involving Saturn and Mars and at least two other planets in the pertinent progressed charts of the NYSE
5) eclipses will intensify the bearish sentiment if they are aligned with Saturn or with sensitive points in the NYSE chart.


Ray Dalio's 1937 analog

One intriguing comparative case is the bear market of 1937-8 in which stocks fell 60% over a one-year period.  Hedge fund guru Ray Dalio (pictured above) has highlighted the 1937 case as being the most analogous to the present day since at that time the Fed was similarly raising rates after the economy appeared to be recovering following the Great Depression.  Over the past two years, the Fed has also been gradually raising rates after keeping them near zero for seven years after the 2008 meltdown.  

The recent market sell-off reflects the unwillingness of investors to buy stocks on margin if they have to pay interest on the money they borrow.  Just as in the 1930s, the recovery from the 2007-2009 bear market depended on essentially free money from the Fed.  This ultra loose monetary policy has, in turn, produced another bubble which is now showing the first signs of bursting.  That's why the Fed backpedaled last week as it may have no choice but to stop raising rates in 2019 and keep the easy money flowing longer.

The Dow topped out in February 1937 and matched that high again in July (DJIA=185).  Then stocks sold off sharply for the rest of the year making a low in December (DJIA=120) for a net decline of 35%.  They fell 20% further by March 1938.  We can see how the alignments for the interim bottom in December 1937 paint a grim picture.  Saturn (5 Pisces) stationed powerfully in early December and formed a near exact 3rd house/60 degree aspect with the Sun (6 Taurus).  While the 60 degree sextile aspect involving Saturn is seen as more neutral in Western astrology, it is clearly malefic in Vedic astrology and this is reflected in this massive decline. 

In addition, we can see that Saturn forms an exact 135 degree aspect with the Ascendant (20 Cancer). This stationary aspect to the Ascendant degree is intensely negative and will usually correlate with a significant pullback in its own right. 

Saturn was also square Chiron and aligned with Pluto with a 120 degree aspect during this last quarter of 1937.  This fulfills another bear market requirement.  The conjunction of Neptune with Mars throughout 1937 was another contributing factor since these energies typically do not mesh well. 

The alignments for 2019 exhibit some important similarities with 1937.  Transiting Saturn will conjoin Pluto and Ketu (South Lunar Node) in the spring and this rare triple conjunction will last until October.  Both Saturn and Ketu are considered malefic planets and the alignment with Pluto does not look positive at all.  This alignment is at least as bad as the Saturn-Chiron-Pluto alignment in 1937. 

But the real problem here is that the Saturn-Ketu conjunction will culminate at the time of the Saturn direct station at 20 Sagittarius in late summer.  Any Saturn station at or near 20 degrees of a sign is more likely to coincide with large declines since it will be in an exact alignment with the Ascendant of the NYSE chart at 20 Cancer.  Saturn (5 Pisces) formed a no-less potent 135 degree alignment with the Ascendant in 1937.  Saturn (21 Leo) also aligned with Rahu/Ketu and Chiron and the NYSE Ascendant in October 2008 at the worse phase of the financial meltdown.  And it is worth noting that Saturn (20 Taurus) stationed direct just a few weeks after the 9/11 attacks and therefore was very close to that degree when the market declined in September 2001. 

Pluto is also going to form a tense square alignment with the Moon (28 Pisces) in the NYSE chart. Since Pluto travels very slowly, this square will be in effect for most of the year.  The last time Pluto formed a square with the Moon was in 1931-1932 at the depths of the depression.  Obviously, this isn't bullish.

We can also see that the solar and lunar eclipses this July will align closely with Saturn and Pluto.  This suggests that the period immediately after the eclipses are more likely to correspond with declines. Since Saturn is due to station in September, this greatly increases the probability of a major decline in the late summer and early fall.

Of course, stocks may well rise ahead of the tightening of the Saturn-Ketu-Pluto conjunction in April.  But another move lower does look quite likely at some point after that.  Given the level of affliction to the NYSE chart, I would expect the decline to be larger than what we have seen over the past three months.  It does seem like a bear market is coming in 2019.

For more detailed market analysis, please check out my weekly subscriber newsletter.  It is published every Saturday and covers the US and Indian stock markets, as well as currencies, gold and oil.