Stocks rally as world moves towards re-opening after lockdowns

(27 April 2020) So maybe we are finally turning a corner with this virus.  More countries around the world are moving towards reopening next week as new infections have declined in some European countries and appear to be plateauing in India and the US.   While the UK is still in lockdown, Germany started to reopen last week as its containment efforts have proven to be particularly successful against COVID-19.  India has already started to loosen its lockdown in some outlying provinces, and will phase-in further reopening next week.

Infections are one thing, but the economy is another thing altogether.  US unemployment is now estimated to be above 20% with a projected second quarter GDP decline of up to 30%.  Other countries face similar crippling effects of the shutdown.  While the re-opening could put a floor under these data, several sectors are not expected to return to normal anytime soon and could be drag on growth for the rest of the year. 

As defined by two consecutive quarters of negative growth, recession in 2020 seems inevitable now.  As it happens, 2020 was bound to be a difficult year as it featured an unusually long alignment of two bearish planets, Saturn and Ketu (the South Lunar Node).  As I have noted in a previous post, Saturn and Ketu are due to form no less than three exact 30-degree alignments throughout 2020.  The first occurs here in April, with subsequent exact alignments taking place in July and September.  And it should be noted that although not exact, the Saturn and Ketu will still be within fairly close range until November.

To be sure, these Saturn-Ketu alignments are not perfectly correlated with recessions and stock market declines.  But recent history suggests that they are often implicated in periods of financial stress.  The last Saturn-Ketu alignment occurred in October 2018 when stocks fell 20% after the Federal Reserve unexpectedly tightened the money supply.   The previous Saturn-Ketu alignment occurred in October 2008 in the depths of the global financial crisis.  On the other hand, previous alignments in 1984/6 and 1996/7 did not coincide with any dramatic developments.  But since this is the year of the coronavirus pandemic, the risk is higher that we could witness further turbulence in financial markets. 

While this week looks somewhat mixed, the month of May is likely to bring some downside to most global markets as Saturn stations retrograde while still in that nasty alignment with Ketu.  Although not quite exact in their alignment, the Saturn retrograde station deserves our close attention.  Whenever malefic planets like Saturn station retrograde, i.e. reverse their apparent direction from forwards to backwards as seen from the Earth, sentiment tends to become cautious and pessimistic.  This approximate time window around the station is therefore correlated with declines in stock markets.  Saturn is due to station retrograde on May 10/11 while still in close 30-degree alignment with Ketu.  Moreover, Mars and Mercury are both due to align with Saturn in that mid-May period and thus the downside risk to the markets greatly increases around that time. 


Weekly Market Forecast

This week lacks clarity.  Tomorrow (Tuesday) leans bearish as Mercury aligns with Ketu and Saturn and this also aligns with the Ascendant (8 Aries) in the NASDAQ chart.  Some downside is therefore likely on Tuesday at least.  But the rest of the week looks less negative as Thursday's Mercury-Uranus alignment looks more positive.  While we should be more cautious here generally given the ongoing Saturn-Ketu alignment, I would be surprised if we got any dramatic moves this week. 

 

For more details, 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. 

Oil trades below zero as demand collapses amid shutdown

(20 April 2020) We live in strange times.  In recent weeks, the worldwide coronavirus pandemic shutdown has seen an unprecedented effort to stop the spread of the highly contagious and deadly virus.  And then today, crude oil futures actually traded in negative territory for the first time in history as it now costs more to store the oil than it is worth on the open market.  Part of the reason for the negative price is because there is no current demand for delivery of May Futures due to the ongoing economic shutdown.  Looking forward a bit, we can see that the market expects a modest recovery soon, since the June Futures contract is still trading over $20.

Financial markets are clearly still reeling from the impact of the virus.  The decline in oil prices is due in part to the ongoing Saturn-Ketu alignment that I mentioned in last week's update. The alignment is fairly rare and follows an irregular two-year and twelve-year cycle.  Due to Saturn's retrograde cycle this year, it will occur three times in 2020 (April, July and September), after occurring twice in 2018. 

Previously it occurred once in 2006 and then again two years later in October 2008 in the depths of the global financial crisis.  While the alignment doesn't always coincide with turbulence and declines, it does have a decidedly bearish tendency.  According to both traditional Vedic and Western astrology, both Saturn and Ketu (South Lunar Node) are considered malefic planets.

We can also spot some evidence for this unparalleled declined in the horoscope for NYMEX oil Futures.  First traded in March 1983, we can see how this ongoing alignment of Saturn and Ketu has hit this chart very hard.  Transiting Saturn (7 Capricorn) is now slowing down ahead of its retrograde station on May 11.  Therefore, its diminishing velocity means it is becoming more powerful, and hence, more bearish in its impact on sentiment.  We can see that is forms a close square aspect (just two degrees orb) to the Moon-Saturn conjunction at 9 Libra.  And with Pluto at 5 Libra, that near-stationary Saturn aspect is hitting the midpoint of Pluto with Moon-Saturn almost exactly.  Ouch. 

One potential problem for the oil market going forward is that Saturn will not be moving much over the next few weeks since it is due to station in the same degree (7 Capricorn) in early May.  Therefore, prospects for a sudden rally seem minimal.

Also we can see how Ketu figures into the equation since it is conjunct its natal position within two degrees and also activates the natal Neptune for good measure.  Like Saturn, Ketu is a bearish influence so the 'Ketu Return' here is a very bearish influence also.  However, we should note that it is not yet exact, so there is some possibility of a worsening of sentiment in the coming days and weeks in the oil market. 


Weekly Market Forecast

As expected, this week has started off in the red in stocks.  The Sun aligned with Saturn and Ketu today as most stocks tumbled up to 2% following another fairly buoyant week last week.  The outlook this week suggests more downside is likely.  As the time of writing (11 p.m. EDT), stock futures are lower on news that North Korean leader Kim Jong-Il is gravely ill.  Tuesday's US session may not be all bad, however, as the Moon conjoins Mercury in the afternoon.  So if the open has seen more selling, then a bounce later is more likely. 

But Wednesday's New Moon looks bearish, as the Sun and Moon are both squared by Saturn.  The late week does not present any obvious bullish influences either as Mars squares the Moon on Thursday afternoon and Mercury squares Pluto on Friday.  

This is not to say that further declines are inevitable, but rather than the alignments are not clearly bullish either.  All outcomes are possible, but the planets don't make a strong argument for a rebound.  And with the Saturn-Ketu alignment still in close range, the bears may be in charge this week.  Next week could see more tension as Mercury aligns with Saturn and Ketu early in the first half of the week.


For more details, 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 surge on virus hopes while Saturn and Ketu wait in the wings

(13 April 2020) Financial markets remain in rebound mode this week as the number of coronavirus cases continue to fall amid emerging plans to end the lockdowns.  US stocks soared more than 10% last week as it seemed the virus was peaking and the Fed announced it would buy another $2 Trillion in private and public debt.  I have to admit I didn't see such a huge rally happening last week although I did think some upside was very likely on the Mercury-Jupiter-Pluto alignment. 

The Jupiter-Pluto conjunction has been an important bullish influence in the past few weeks since the March 23 low.  Both are slow moving planets and thus exerted a strong influence on sentiment following the waterfall decline in February and March.   Typically, ongoing positive sentiment can be further accentuated through the alignment of a third, faster-moving planet.  This is what took place last week as Mercury aligned with Jupiter and Pluto.

We will see another fast-moving planet align with Jupiter and Pluto this week as the Sun enters sidereal Aries and forms a 90-degree angle.  This is exact on Tuesday although it will remain within range until Wednesday.  That suggests we could see some upside into midweek following Monday's modest sell-off. 

But the next major alignment we should focus on is Saturn and Ketu (South Lunar Node).  Both are considered natural malefic planets and therefore are correlated with down markets.  As it happens, Saturn will form an exact 30-degree alignment with Ketu this Friday, April 17.  Due to Saturn's four-month retrograde cycle in 2020, this 30-degree alignment will recur twice more, on July 16 and September 3.   I should note that while the dates of exact alignment are important, they need not exactly match days of maximum market impact due to the very slow velocity of both planets.  I would tend give an impact window of at least five days either way, maybe more.

The Saturn-Ketu alignment that is 30-degrees apart (sometimes written as "Saturn-30-Ketu") has a difficult history.  The last time is occurred was 7 October 2018 at the beginning of a large sell-off when the Fed misread the market and started to reduce its balance sheet (QT) by removing liquidity from the financial system.  Between the beginning of October and Christmas Eve, US stocks dropped 20%.  The Saturn-30-Ketu alignment was a key part of that decline, although certainly not the only factor, as Uranus was also in fairly close alignment among other factors. 

The next previous alignment occurred on 27 May 2018.  Interestingly, stocks didn't do much of anything around that time and they basically moved sideways.  So it is important to remember that this alignment will not always coincide with declines.  But evidence suggests there is an elevated risk of declines nonetheless.

Previous to that, we have to go all the back to 2008 and the global financial crisis.  Saturn was 30 degrees away from Ketu on 12 October 2008, in the depths of the stock market sell-off as the real estate bubble finally burst.  This was a very bearish period and was intensified by the presence of other planets like Chiron and Neptune which were also in alignment with Saturn and Ketu. 

Previous Saturn-30-Ketu alignments occurred in November 2006 and August 1997.   The November 2006 alignment actually coincided with a somewhat bullish period while the August 1997 alignment was bearish, although the decline was only about 7% during the two week period when Saturn was in closest alignment with Ketu.

So while this alignment isn't always bearish, it tends to coincide with declines.  For this reason, we should pay careful attention to the market over the next two weeks or so as we could see some kind of sell-off.  Perhaps next week (April 20-24) is more vulnerable in that respect since the Sun could act as a trigger as it aligns with Saturn and Ketu. 

The subsequent alignments in July and September suggest further downside is very possible, although it is open question if this will produce lower lows.  Even if we don't see stocks break below their March 23 lows, the presence of these two additional Saturn-30-Ketu alignments in July and September suggest stocks are much less likely to enjoy a V-shaped recovery in 2020.


For more details, 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.

Photo: C-Span

US close to turning point in coronavirus fight?

(6 April 2020) The ongoing fight against the deadly coronavirus continues around the world.  Some European countries have seen an encouraging decline in their number of infections and deaths in recent days, while Japan and some other Asian countries have noted a worrying rise in cases over the weekend after largely having it under control  in February and March.

The US remains at the epicenter of the pandemic although we may be close to seeing a peak in the numbers there, too.  Sunday and Monday's new case counts were less than Saturday's high of 34,000.  Deaths have also started to trend a bit lower over the weekend.  So there is light at the end of the tunnel, although it is still uncertain when the lockdowns could end. 

These glimmers of hope may be seen in President Trump's horoscope.  The ongoing Jupiter-Pluto conjunction in the first degree of Capricorn aligns exactly with Trump's Midheaven (10th house cusp) indicating career success.   Fast-moving Mercury (29 Aquarius) is approaching its alignment with Jupiter and Pluto and hence will activate Trump's 10th house this week.  For this reason, I could see more good news about COVID-19 in the US tomorrow or Wednesday. 

However, once Mercury starts to separate from its alignment with Jupiter and Pluto, it will come under the influence of Trump's Mars and its difficult 8th house aspect.  Moreover, Mercury will enter Trump's 8th house of obstacles.  This looks like it could indicate some frustrations and setbacks for Trump, probably in the second half of the week. 

Weekly Market Forecast

This welcome optimism about the coronavirus generated a huge rally in the stock market as the Dow jumped 7% today.  The Mercury-Jupiter-Pluto alignment was likely one key factor for the rise.  While I noted the likelihood of some significant upside this week in my newsletter, I was uncertain exactly when the gains would occur due to the large number of alignments that made the outlook less clear.  The Mercury-Jupiter-Pluto alignment was closest between Monday and Wednesday so some kind of gains were most likely during that time window. 

However, the Mars-Uranus-Venus-Rahu-Chiron alignment will be within range for most of this week.  This is a more complex pattern which suggests moves in both directions are possible, and the high number of aligned planets may translate into larger than normal moves.  

So further gains are still very possible this week, especially on Tuesday as Mercury is still tightly aligned with Jupiter, Pluto and Trump's Midheaven (10th house cusp) and perhaps even into Wednesday. 

However, Wednesday's Moon-Saturn square looks more challenging and then Mercury suffers at the hand of Trump's Mars on Thursday.  While the Venus-Mars-Uranus-Rahu influence could offset some of the negativity here, there is rising downside risk this week.  Friday lacks clarity although I would note that the Sun (27 Pisces) falls under the difficult aspect of Trump's Ketu (27 Scorpio).  While this may not have a clearly negative impact on the stock market, it is not a positive influence for Trump and his administration.


For more details, 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.