Hong Kong protests complicate trade talks

(26 August 2019) The situation in Hong Kong remains tense.  Anti-government protests have been ongoing since June and have recently turned violent.  With no clear path out of the stalemate, the Hong Kong stock market has fallen 10% in August as investors seek safe havens.  Meanwhile, fears are growing that Beijing will lose patience with this affront to its authority and send in the army to crush the protest movement. 

The Hong Kong protests are something of wild card in the continuing US-China trade war.  The Chinese government is probably doubly reticent to use the army since it would complicate the trade negotiations with the US.  In all likelihood, it would scuttle the talks for good, as well as lead to a range of sanctions from most Western countries.  Of course, some analysts have concluded that the talks are already dead until after the US elections next year, no matter how much hopeful jawboning we hear from Trump and Xi.

The horoscope of Hong Kong provides a window on the scale of this unrest.  Using the chart for the handover from the UK to China (1 Jan 1997; midnight), we can see that Saturn and Ketu (South Lunar Node) is front and center.  For the past several weeks, Saturn and Ketu are almost exactly conjunct Mercury (19 Sagittarius) and just a few degrees away from the Sun (16 Sagittarius).  By nature, Mercury is the planet that symbolizes trade and commerce so it no surprise that the economy of Hong Kong has been suffering during this transit. 

But it is also important to note that Mercury rules the 1st house (Virgo) and the 10th house (Gemini).  The 1st house symbolizes the jurisdiction as a whole and reflects how the protests have created fundamental disruption to daily life in the territory.  The 10th house represents the government of Hong Kong and it is clear that even if the protests may fade away in the near term, the government of Carrie Lam has suffered a huge blow to its legitimacy.  Even if it manages to hang on, it could become a kind of lame duck administration until the next election.

I would expect the unrest to continue for several more weeks at least.  The Saturn-Ketu conjunction will continue to be very close to Mercury-Sun until October.  Additionally, all of the faster moving planets are due to transit through the 1st house (Virgo) in September and into October.  This suggests we could finally see some developments either toward peaceful resolution or more chaos and violence. 

These transits through the 1st house are extra important because the chart is currently running the Rahu-Rahu dasha period.  Rahu is placed in the first house but it is quite afflicted through its conjunction with Mars and its opposition aspect from Saturn.  Rahu-Rahu began in Jan 2018 and will continue until Sep 2020.  Its natal affliction means that major setbacks and disruptive changes would be very likely during the time of the Rahu dasha.  

The Mercury-Venus conjunction to Rahu in the middle of September could bring some negotiated progress in the conflict.  However, there is a risk of a return to violence after September 25 when Mars enters Virgo. The chart below is cast for 8th October when Mars exactly conjoins Rahu.  This is more likely to be a time of intense conflict and possible violence. 

Could Xi Jinping send in the army?  I'm not sure.  The chart is heavily afflicted now so I would think a military intervention in Hong Kong would require even worse planetary alignments.  For now, I don't really see that.  A military conflict usually manifests with an afflicted Mars in the natal chart (5 Virgo) but we don't have that here.  It is possible that the transit of Mars through Virgo in late Sep and Oct elevates the possibility of violence involving the army.   Perhaps this Mars transit through Virgo would mean that only a lesser amount of violence would be used, unlike, say, Tianamen Square in 1989 which killed hundreds or perhaps thousands.   I will update this chart if events warrant.


Weekly Market Forecast

Stocks generally fell last week as the US-China trade war escalated on Friday.  This bearish outcome was in keeping with the raised downside risk of the Venus-Mars conjunction that I outlined in last week's post.  Despite this apparently bearish influence, Gold pushed even higher towards $1550.  

This week has started off on a positive note, perhaps as a reflection of Monday's Venus-Uranus alignment.  The rest of the week looks less positive so we are more likely to see a return to at least some volatility and choppier markets.  The Sun is approaching its conjunction with Mars (exact Sep 2) so it could translate into intense or bold actions involving governments and leaders this week.  Next week looks more volatile as Mercury will join the Sun and Mars in Leo in the days immediately following Labor Day.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.

Gold tops $1500: how much higher can it go?

(12 August 2019) Financial markets are on high alert for the second straight week.  Stocks fell across the board on Monday on mounting recession fears amid ongoing trade and currency uncertainty.  Investors sought out traditional safe havens such as the Japanese Yen, bonds and gold as stocks were widely sold.  The situation has deteriorated to such an extent that most European sovereign bonds now have a negative yield while 10-year US Treasury is fast-approaching its all-time low yield of 1.34%.

Gold has benefited from the worsening economic conditions as it traded Monday at a six-year high of $1531. Gold has rallied significantly over the past two months as it broke above important technical resistance at $1375 in mid-June.  With China devaluing the Yuan to mitigate the effects of Trump's tariffs, other emerging market currencies are also caught in the trade crossfire.  For now, the relative stability of gold has made it an attractive port in this financial storm.

But for how much longer?  From a technical perspective, gold looks like it could retest its 2011 high of $1920 over the next year or two.  The short term is less clear, however, as the speed of the current run-up in prices seems ripe for some kind of pullback. 

Certainly, the planetary indicators suggest that the short term outlook for gold is not positive.  While the price of gold fluctuates with many different planetary factors, we should take special note of the approaching Venus-Mars conjunction.  Venus tends to be a bullish influence for gold when it is unafflicted but when it is associated with malefic planets such as Mars, gold becomes more vulnerable to declines. 


Venus and Mars

Due to the occasional retrograde cycles of both Venus and Mars, the Venus-Mars conjunction occurs irregularly, on average about once every two years. This year the faster-moving Venus is due to catch up to and conjoin Mars on August 24.   It will be within a 10-degree range of Mars between August 8 (last Thursday) and September 9. 

A quick analysis of the previous four Venus-Mars conjunctions shows that the price of gold fell significantly each time.  The box width in the charts below capture the time span when Venus was within 10 degrees of Mars.  The date of the exact conjunction is indicated by a vertical line.  I have omitted one conjunction in late August 2015 because Venus was retrograde.  Interestingly, gold actually rose during that conjunction.  The other four instances -- along with the current one -- have both Venus and Mars moving in their more typical forward direction.

Four data points aren't nearly enough to build a robust correlation, but they do offer some hints into possible future patterns for gold.  In each of the four cases, gold experienced a decline at some point during the 30 to 60-day period of conjunction.   The period near the exact conjunction (Venus-0-Mars) also tended to be particularly bearish.

 

 

While gold looks vulnerable to an overbought technical pullback anyway, the planetary influences make that more likely.  And as luck would have it, Venus is due to enter the sign of sidereal Virgo shortly after leaving its conjunction with Mars.  The Venus transit of Virgo is usually another difficult influence for gold so that is another factor that could weigh on the current rally.  Venus transits Virgo from September 9 to October 3. 

Weekly Market Forecast

While today was negative, stocks generally bounced last week after last Monday's drubbing. The rebound was not unexpected as I thought Jupiter's midweek alignment with the Sun and Venus would likely produce some upside. 

We could well get a similar bounce this week.  Venus is due to conjoin the Sun on Wednesday and Thursday and this is typically bullish.  Thursday has the added feature of being a Full Moon so that could amp up the proceedings in some way, either in terms of trading volume or in the magnitude of the move.  However, the Full Moon does have a deservedly chequered reputation as it is bearish more than it is bullish.  For this reason, we shouldn't be too surprised if the market falls.  And yet, the Sun-Venus pairing is quite positive so there is a decent chance for stocks to rise going into the end of the week. 

More generally, the uncertainty is likely to continue for several more weeks at least as the ongoing Saturn-Ketu conjunction can still pack a punch.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.

Stocks plunge as US-China trade war escalates

(5 August 2019) "Trade wars are easy to win."   As the US-China trade dispute escalated to new heights over the weekend, US President Donald Trump may well end up regretting his ill-chosen words.  Against the advice of his own advisors, Trump increased tariffs on $300 million worth of Chinese goods last Thursday.  The move shocked markets as stocks around the world sold off sharply.  China retaliated on Sunday by stopping the purchase of US agricultural products and, more importantly, by letting the value of the Yuan float above 7.00 for the first time since the 2008 meltdown.  The devalued Yuan makes China's exports cheaper and thereby is a strategy to avoid the full force of the US tariffs. 

Financial markets sold off sharply again on Monday as the trade war showed signs of getting out of control.  If a trade war is bad, a currency war is much worse, as it increases financial uncertainty and tends to diminish trade and economic activity.  The depression in the 1930s was exacerbated by competitive currency devaluations as countries sought a way out of the slowdown without having to undertake any politically difficult structural adjustment. 

So where does this all end?  I am reluctant to make a specific prediction but the trade friction and financial fallout are likely to continue for a while yet.  As I have noted previously, the Chinese economy was likely to suffer economically in the late summer period due to the Saturn direction station.   The ongoing Saturn-Ketu conjunction (=obstacles, disappointments, disruptions) aligns almost exactly with China's natal Mercury (commerce, trade) at this time.  Saturn is due to station at 19 Sagittarius on September 18 and this will square the Mercury at 20 Virgo.  It's a nasty pattern for economic activity as it means that China is likely to slow further and that US actions will continue to be a problem.  The potential damage of the Saturn station is intensified by the close conjunction of Mercury with Neptune and Ketu in the China natal horoscope.

We can also see why China was quick to retaliate: Jupiter is exactly aspecting its natal Mars.   Mars represents action in general and is also front and center in any conflict.  Jupiter's more benefic influence here gave the Chinese government confidence and intelligence to act in its best interests.  If a country is going to war -- and that includes a trade or currency war -- it is best to do so with this kind of Jupiter influence on Mars.

Trump's initial escalation on Thursday also highlighted a key area in the joint US-China horoscope.  This combined chart cast for the temporal midpoint between their respective birth dates (17 February 1863) was sharply afflicted when Trump announced the additional tariffs.  The Moon and Mars were both conjunct the Ascendant thus reflecting the renewal of the conflict around trade.  This Moon-Mars also just happen to square the natal Mars in the combined chart so that added an extra layer of emnity. 

The larger affliction to the chart involves Venus, the planet of friendship, at 22 Aquarius.  Venus is currently afflicted by the 120 degree aspect of Rahu and the 3rd house/60 degree aspect of Saturn.  This is a very tense pairing since Saturn denies friendship and cooperation, while Rahu/Ketu force sudden changes to the relationship. 

With Saturn due to station in September, this current level of discord is likely to continue for some time.  The Rahu influence will lessen in a couple more weeks so that disruptive, out-of-control quality may diminish first.  Saturn will begin to separate from its 60 degree aspect in October so the relationship may start to improve more substantively by that time. 


Weekly Market Forecast

Stocks have been hammered over the past several sessions.  I thought we might have seen at least a short term rise after last week's Fed meeting but it was not to be.  My larger sense of caution from the ongoing Saturn-Ketu conjunction appears to be bearing fruit -- finally.  The relentless rally in US stocks in July was puzzling given the ominous quality of this conjunction.  In last week's post, I even questioned the extent to which a decline could occur.  As always, the exact timing of the impact of alignments is more art than science. 

While some underlying influences remain bearish, I am reluctant to forecast significantly more downside this week.  Markets are getting quite oversold on a technical basis so there is a decent chance for a bounce in any event.  And the short term planetary alignments would seem to point towards a rebound as the Sun and Venus align with Jupiter this week.   So the planets do offer some support for the bullish narrative, even if volatility may remain elevated for a while yet.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.