The bigger the bubble, the bigger the bust

(25 November 2019) As investors put a positive spin on the Fed's recent interventions, stocks have resumed their upward climb this week.  Global markets rallied again on Monday after some brief consolidation last week.  As it happened, the pullback coincided closely with the end of the Mercury retrograde cycle on Wednesday.  This was in keeping with expectations as I noted that Mercury's direct station would occur in close aspect with Rahu, the North Lunar Node.  According to the principles of financial astrology, Mercury-Rahu alignments tend to be bearish.  Monday's gain was also not surprising given the bullish Venus-Jupiter conjunction.

It seems the sky's the limit now as fundamentals like corporate earnings and macro economic data are no longer important.  What matters now is that the Fed is underwriting US bank lending by conducting $100 Billion or more in "overnight repos" and buying $60 Billion a month in Treasury Bills.  After an unheralded beginning in October, these interventions amount to a new QE program (now variously called notQE or QE4) as the Fed tries to entice more lending in an effort to prevent the economy from slipping into recession.

As the old saying goes, the bigger the bubble, the bigger the bust.   The planetary alignments in the coming weeks suggest the good times may not last much longer.  As I've noted previously, the upcoming Jupiter-Uranus-Chiron alignment in mid-December should coincide with at least some further gains in the stock market.  Jupiter alignments with the outer planets have a fairly good track record of generating some upside.  However, the optimism may not linger for long as the upcoming conjunctions of Jupiter-Ketu and Saturn-Pluto both suggest a sharp reversal in sentiment as we move towards the New Year in 2020. 

These conjunctions are themselves bearish, but we can also see how their negative impact will likely be felt in the horoscope of the Federal Reserve.  In the Fed chart, the planetary affliction is simple and profound.   In mid-December, Saturn (25 Sagittarius) will oppose natal Mars (26 Gemini) and fall under the aspect of Ketu (26 Leo).  This is a very tense and difficult alignment, perhaps even more so since Saturn is parked closely to Pluto (27 Sagittarius) and both will be opposite the Ascendant (25 Gemini) in the natal chart. 

As a possible triggering planet, transiting Mars (25 Libra) will align with Saturn, Rahu and natal Mars during the week of Dec 16-20.  I'm still uncertain exactly when the negative impact of these alignments will be felt as the high risk time window stretches from early December through January.  But the week that follows the next Fed meeting on Dec 11 it definitely worth keeping an eye on as a potential catalyst.  Saturn will remain within range of both Mars and Rahu for the rest of December. 

While it is possible that this kind of planetary affliction may not have any real world manifestation,  it seems much more likely that the Fed will be scrambling in December and probably into January as Saturn then conjoins natal Jupiter at 0 Capricorn.  Whatever the proximate cause of the disruption to the status quo, the Fed will be hard pressed to stay on top of it.  Markets are therefore more likely to be vulnerable to declines. 

With a recession still looking more likely than not in 2020 as Jupiter conjoins Saturn, this could be the beginning of a more difficult year in financial markets.

Meanwhile, this week could see some profit-taking ahead of the US Thanksgiving holiday on Thursday.  Tuesday's US trading session features a New Moon that aligns with bearish Mars so that is an elevated downside risk.   Nonetheless, I would not be surprised if the rally has a bit further to run as we go into December.

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.

UK PM Boris Johnson looks poised to win re-election

(18 November 2019) We are still three weeks away from the UK election on 12 December, but it seems that Conservative Party leader Boris Johnson is poised to win.  Recent polls show the Conservatives with a healthy 10-12 point lead over Jeremy Corbyn's Labour Party with both the LDP and Brexit Party trailing far behind.  It would seem that the election is Johnson's to lose at this point. 

The Pound and UK stock market have been rallying in recent days in anticipation of a Conservative victory.  A majority government would finally end the uncertainty over Brexit and secure Johnson's October deal with the EU. 

As I have previously stated, I think Boris Johnson is very likely to win this election.  He will begin his Mercury-Venus dasha period just four days after the election indicating generally positive outcomes for him over the next three years.  Both Mercury and Venus are benefic planets, and both enjoy favourable placements in his chart.  Mercury is ruler of his 1st and 10th houses and placed in Taurus in the 9th house of law and good fortune.   Venus rules the 2nd and 9th houses and is well placed in the 10th house of status conjunct the Sun and Rahu in Gemini.  Moreover, Mercury and Venus exchange signs and thus create an even more powerful interaction during this three-year dasha period.

On election day, Jupiter will be opposite his Venus-Sun in the 10th house thus giving him a boost in status.  Transiting Sun will be opposite his Mercury which should also be seen as generally positive.   However, Rahu will conjoin the 10th house cusp and eventually Rahu's natal position in late February.  While Rahu may have a troublesome side, it tends to do well in the 10th house so I would see this Rahu influence as a plus, although it could also correlate with some unexpected and complicating developments.  It may somewhat increase the odds for a minority "hung" parliament in which the Conservatives do not win more than half the seats.  The Mars transit to Neptune and opposite Jupiter is also a bit suspect and may not adhere to a classic script of a clear victory. 

We can see a possible problem here when we look the chart of Nigel Farage, the leader of the Brexit Party.  While Farage has agreed to not contest Tory-held seats, his Brexit Party could play an important role in the event of a minority government.  Farage's chart is actually fairly good as the Jupiter-Uranus alignment lines up quite nicely with his natal Mercury in the 9th house.  Whatever the result, this pattern suggests that Farage stands to gain somehow around the time of the UK election. 

An obvious interpretation would be that his Brexit Party holds the balance of power after December 12th.  Or maybe he is just happy that Boris Johnson wins so that Brexit is finally done.  That seems like a bit of a stretch since he is not a big fan of Boris Johnson and his deal with the EU.  Other manifestations are also possible given the many layers of intrigue and influence that are at work behind the scenes in the UK these days.  In the longer term, Farage seems unlikely to wield much power.  He is running the Rahu-Saturn dasha now which is usually not very auspicious. 

Overall, Boris is likely to be returned as Prime Minister but there is a risk that he will not win an outright majority.  This could then extend the Brexit uncertainty all over again, although one would think that Farage's Brexit Party will be a more willing and cooperative coalition partner than the DUP was in the previous Parliament with Theresa May. 

Remainers do not have the stars on their side here.  Corbyn's horoscope doesn't seem very strong.  We have only an approximate birth time for him so I am reluctant to read too much into it.  Nonetheless, it doesn't suggest some sudden reversal of fortunes for him. 


Weekly Market Forecast

Stocks have generally continued their melt-up over the past two weeks as the recent Fed interventions in the market have encouraged more money to flow into risky assets like equities.  Previously, I had expected some upside from the entry of Jupiter into sidereal Sagittarius in early November.  However, I had been uncertain how long this boost would last.  Indian and Chinese stocks have gone sideways or down since that early November Jupiter ingress.  It still seems more likely than not that US and European equities will pullback this week and next although December still offers some upside hope to the bulls given the Jupiter-Uranus-Chiron alignment in the middle of the month. 

Mercury completes its retrograde cycle on Wednesday this week so there is some downside risk there.  These Mercury direct stations are not bearish by nature but this time Mercury will align with Rahu which is a more problematic combination.  Bulls should be therefore be careful.   Both Tuesday and Wednesday are more vulnerable to declines than they otherwise would be.

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.

New highs for US stocks as Jupiter enters Sagittarius

(4 November 2019) Stocks are looking good to start the month of November as the Dow made a new all-time high on Monday.  Trade optimism is in seemingly endless supply as investors are still receptive to all the jawboning coming out of the White House.  And with the Federal Reserve now quietly engaging in its 'not-QE' program of asset purchases, there are more reasons (like $60 Billion per month) to think that stocks could stay in rally mode a while longer.  Never mind that year-on-year US corporate earnings are negative for Q3 and ISM manufacturing data showed a contraction for the third straight month in October.   

After the Fed's widely-anticipated rate cut last Wednesday, the market declined on Thursday just as Mercury turned retrograde.  This was in keeping with expectations since the retrograde stations of Mercury tend to have a bearish bias.  However, Friday saw a strong rebound which continued into Monday's session. This weakens the case for a protracted or deep pullback during the Mercury retrograde period that runs from Oct 31 to Nov 20. 

As I noted last week, while the three-week long Mercury retrograde cycle has a bad reputation for disruption, confusion and miscommunication, its most difficult times are the few days around the retrograde and direct stations themselves.  A trend change is also somewhat more likely around the stations. In this case, that seems less likely since stocks were already bullish heading into the retrograde station on Oct 31.

Part of the reason for the strong start to the week on Monday was because Jupiter entered sidereal Sagittarius.  Jupiter is a bullish planet and it is said to do well in Sagittarius, which is the sign it rules and for which it has a close symbolic affinity.  Jupiter transits through the sign of Sagittarius once every 12 years.  This year was something of an exception due to its retrograde cycle which saw it enter Sagittarius on March 27 and then turn retrograde on April 10.  It subsequently left Sagittarius on April 25 and entered Scorpio where it stayed until Sunday November 3.  Jupiter will complete its transit through Sagittarius on March 28, 2020. 

A couple of important points here.  While Jupiter in Sagittarius is generally bullish, I have found it is only really bullish near the entry and exit from Sagittarius.  Therefore, I would not expect stocks to simply rise through the entirety of the transit until March 2020.  Its previous full transit of Sagittarius took place in 2007-2008 which corresponded closely with the financial meltdown.  So that's definitely not bullish! But the entry (Nov 21, 2007) and exit (Dec 9, 2008) from the sign of Sagittarius did highlight a 5 to 10-day period that was more positive. 

I suspect the March-April 2019 period consisted of a longer-lasting 30-day rally possibly because Jupiter stayed in close proximity to that very bullish first degree of Sagittarius.  Also its stationed retrograde on April 10 and Jupiter stations are usually bullish no matter what sign they occur in. 

The bottom line here is that the bullish effects of this entry of Jupiter into Sagittarius may not last very long.  It may not even last through this week.  But Jupiter is likely to play a significant role in boosting sentiment once again as we get closer to December. 

In early and mid-December, Jupiter will align with Uranus and Chiron.  This is likely to create a floor for the stock market and it could well take stocks even higher.  In the event we have seen a pullback in November, the Jupiter-Uranus-Chiron alignment in December could prevent or at least postpone a larger decline, probably until after the holiday season.

Due to the relatively close ongoing alignment of Uranus and Chiron in recent years, Jupiter has aligned with these two slow-moving planets in late October/early November 2018 and in September 2017.  Both alignments coincided with 3-5% gains during the period in which the three planets were in closest orb.   The Oct/Nov 2018 alignment took place right after the big sell-off in early October and coincided with the bottom and the subsequent late October bounce that topped out around November 8.  While stocks would eventual fall further in the US, late October was a key bottom for Indian stocks.   The Jupiter-Uranus-Chiron alignment therefore provided the bullish fuel for the rebound and recovery that extended into June 2019.  And we should also note that the same alignment was within range at the start of the Trump rally in November 2016, although the exact timing and duration of the alignment was modified and extended somewhat by the presence of Pluto and Saturn.

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.