Omicron variant forces new restrictions; stocks move lower

(29 November 2021) The pandemic continues.  An official alert from the WHO regarding the new Omicron variant caused markets to sell-off sharply on Friday amid mounting concern that the virus may becoming more transmissible.  Many countries have tightened restrictions in response to the new threat although it is still early days.  Based on early data out of South Africa, it seems that most cases are mild among vaccinated people, although unvaccinated people may be more likely to be experience serious illness and hospitalization. 

While Friday's near-panic selling saw stocks fall by more than 2%, markets generally rebounded today after President Joe Biden delivered a reassuring address and ruled out further lockdowns for now.  And Fed Chair Jerome Powell was quick to calm markets by noting new uncertainty in the inflation outlook given the disruptive potential of the new variant. This was a way of reminding investors that the Fed tapering of asset purchases may be subject to change.  In other words, more monetary stimulus will come if needed. 

While the early data on the variant is somewhat encouraging (more transmissible, but less lethal), the planets are a source of concern.  One potential trouble spot is the upcoming December conjunction of Saturn with the south node of Neptune at 16 Capricorn (sidereal zodiac).  Neptune is one of the planetary significators for illness and Saturn is the planet of suffering.  The blending of these two energies in mid-December could indicate that Omicron may coincide some new challenges in the pandemic. 

The likelihood of a fresh round Covid problems may also be seen in President Biden's horoscope as I have previously noted in an August post.  Since the president's chart is an indirect reflection for the nation (and to a lesser extent, the world), the upcoming Saturn (16 Capricorn) square to Biden's natal Mars (19 Libra) is worrisome.  Mars is doubly significant here because it rules both Biden's 1st house (Scorpio) representing the self and the body and the 6th house of health (Aries). 

Afflictions to these houses suggests health challenges for either him personally or for the country as a whole.  The emergence of the Omicron variant right before this Saturn-Mars aspect is likely more than coincidental.  This aspect will become exact for its theoretical maximum effect in mid-January.

These health-related planetary afflictions may raise the odds that the Omicron variant may be more than just a blip.  And when we factor in the prospect of the Venus retrograde cycle starting right around the same time (December 19), it is possible that markets will be more vulnerable in the coming weeks.  While Venus retrograde cycles are not always bearish, they are associated with changes in the prevailing trend.

As far as this week is concerned, the downside risk looks greater in the second half of the week as the Moon conjoins Mars and Ketu.

 

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.

Nasdaq soars to record high as Europe succumbs to new Covid wave

(21 November 2021) US markets continued their ascent last week as technology stocks benefited from falling bond yields after a surge in Covid infections in Europe brought new restrictions.  Stocks have been in rally mode since October as earnings have generally been strong and the Fed remains wedded to its ultra-loose monetary policy despite sharply rising inflation.  The rally is increasingly narrow, however, as most of the gains have been confined to the big tech companies while the rest of the market lags. 

How long can this rally last?  The life of the bull market may ultimately depend on a rapid end to the current inflation spike since this entire asset bubble (stocks, real estate, bitcoin) is contingent upon the Fed's near-zero rate policy.   In the near term, it is tempting to think that stocks will continue to rise into the New Year since December tends to be among the more bullish months of the year as evidenced by the phenomenon known as the Santa Claus rally.

But the upcoming planetary alignments do not offer clear support for this bullish view.  In fact, the month of December could well diverge from the typical year-end bullishness as Venus is due to turn retrograde on Dec 19.  As the planet that symbolizes value, Venus retrograde cycles have a negative correlation with stock prices as its backward apparent motion reverses its usual positive influence.  I hope to explore this correlation in more detail in future posts.  

Another window on the near term trends is seen through the horoscope of the New York Stock Exchange (May 17, 1792). I should note that there is no consensus among financial astrologers on the correct time for this chart.  I have generally used the 10.10 a.m. chart while trying to avoid making any strong predictions that derive solely from the exact time, i.e. the Ascendant, Midheaven, or the Moon and its resulting minor dasha periods.  Here I'm using the 8.52 a.m. chart although again I am avoiding making any deductions from the more time-sensitive elements in the chart. 

Regardless of the exact time one uses for the chart, we can see that the current transit of Jupiter is one reason why stocks have been moving higher.  Jupiter just entered sidereal Aquarius two days ago and will move to 1 degree of Aquarius on December 1, the date I have chosen to cast the chart for.  We can see that it is very close to an exact conjunction with Pluto (2 Aquarius) as well as lesser alignments with natal Jupiter (2 Libra) and Mercury (2 Taurus).  Since all three alignments are bullish influences, it is more likely that the trend will stay fairly positive at least until Jupiter makes its exact conjunction with Pluto at 2 degrees of Aquarius in early December.

Of course, market sentiment cannot be reduced to the placement of a single planet.  While Jupiter enjoys an outsized importance in determining market trends, the condition and placement of bearish Saturn is also more important than the transits of the faster-moving planets.  Saturn (14 Capricorn) is currently in a 90-degree square alignment with natal Venus (14 Aries).  As a rule, Saturn-Venus alignments tend to be bearish but there is little evidence that this pairing has had any effect on stocks.  One explanation is that this is not a full-strength aspect according to traditional Vedic rules which stipulates that the full strength square only throws Saturn's negative energy forward 9 houses/270 degrees, and not 3 houses/90 degrees.  The 90 degrees square aspect is therefore has a significantly reduced bearish effect on Venus in the NYSE chart, even when in exact degreewise alignment.  It is still theoretically bearish but it may require a second or third triggering planet to release Saturn's bearish payload.

Therefore, we can see something of a mixed picture in the near term. Given its greater number of aspects, Jupiter's bullish influence looks more active than Saturn's potentially negative alignment.  While the presence of the Saturn-Venus square means we cannot completely rule out some brief weakness or consolidation, the strong Jupiter influence here suggests that a deep pullback is unlikely over the next two weeks or so. 

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 Credit: ajay_suresh

Stocks fall as inflation hits 30-year high of 6.2%

  (10 November 2021) US stocks fell for a second straight day on Wednesday after the latest CPI data release showed a stunning 6.2% annual rise in inflation.  The rise in inflation to its highest level in 30 years prompted investors to dump both stocks and bonds in favor of safe havens such as the dollar and gold.  The soaring inflation rate belies the Federal Reserve's more benign view of inflation as merely transitory.  With inflation likely to stay elevated into 2022, more observers now believe the Fed will be forced to hike rates sooner than expected.  Of course, this would be bad news for stocks which have come to depend on the Fed's near-zero interest rate policy.

The sell-off comes as no surprise as I highlighted a particularly bearish alignment of Mercury, Mars and Saturn in last week's update.   As alignments go, it was a fairly high probability bearish pattern since it involved malefics Mars (upset, frustration) and Saturn (loss) and both were in close connection with Mercury (commerce).  Moreover, Saturn was casting a difficult, 90-degree square aspect to the Mercury-Mars conjunction.  The fast-moving Moon may have acted as a trigger as it conjoined Saturn today just in time for the larger 1% decline.

Another dimension of this decline is that the Mercury-Mars-Saturn pattern also closely aligns with the natal Venus (14 Aries) in the NYSE horoscope.  Since Venus is a benefic planet, alignments involving Mars and Saturn are more likely to manifest as declines around the date of the exact angle.  Saturn (13 Capricorn) is within just one degree of its tense square aspect to Venus while Mercury and Mars are also just one degree from being in opposition to Venus. 

 

The Mercury-Mars-Saturn alignment is now separating.  As a general rule, separating alignments are weaker than when they are applying.  This suggests that additional downside in the near term is far from certain.  That said, other factors should also be considered. 

First, we should note that Saturn will form an exact square with natal Venus (14 Aries) in two more weeks.  This is one factor that suggests that volatility could remain elevated.  However, the picture is complicated by the fact that bullish Jupiter is quickly approaching its exact 30-degree angle with Pluto.  The effect of this more positive alignment will likely offset some of the Saturn influence.  Taken together, the competing influence of Jupiter and Saturn could indicate a choppy market in the coming days.


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 Credit: Michael Jastremski

Fed finally tapers QE to address rising inflation

(3 November 2021) Fed Chair Jerome Powell delivered another bravura performance today as he finally announced the Fed would begin to taper its emergency QE asset purchases in November.  Stock markets cheered the long-awaited tapering as Powell was careful to note that any interest rate increases would only occur if labor markets showed further improvement.  In other words, Powell's initial act of monetary tightening in this cycle was about as dovish as one could imagine. 

Powell continued to insist that inflation was transitory due to supply chain bottlenecks rather than excessive stimulus although he did acknowledge that inflation would remain high well into 2022.  This fervent belief in transitory inflation was music to the ears of investors since it means that any actual rate hikes are still some ways off.  Markets have come to rely near-zero interest rates since companies can borrow at rock-bottom interest rates in order to buy their own shares back which, in turn, drives up share prices.  It also reduces borrowing costs for consumers. 

One wonders how long the Fed can keep the stock market afloat despite rising inflation and more signs of slowing growth.  The Fed may well choose to continue its dovish approach until the bond market forces its hand.  The Fed wants to keep yields as low as possible in order to keep the current asset bubble from bursting.  But if inflation continues to trend higher bond yields would also rise further as buyers demand a higher premium.   Key levels to watch may be 0.75% on the 2-year note and perhaps 2% on the 10-year, although it is unknown just where the pivotal thresholds may lie. 

But if Powell falls far behind the yield curve, he may not be able to resist the pressure to raise rates.  On the other hand, it may be that Powell is willing to accept a lot more inflation than he is letting on in order to keep the wealth-generating effects of the stock market rally going as long as possible. 

The horoscope of the Federal Reserve can offer clues about when the economy is more likely to experience significant headwinds.  Planetary afflictions to the chart usually occur during times of distress, such as during the initial Covid panic in March 2020 when transiting Ketu (South Lunar Node) was conjunct the natal Sun at 8 Sagittarius and Saturn and Pluto were conjunct Jupiter at 0 Capricorn.

The next noteworthy affliction could come as soon as December as Ketu and Mars conjoin and form a 120 degree aspect to the MC (i.e. the 10th house cusp) while Saturn forms a tighter square to the natal Moon within just six degrees of orb.  The Ketu and Mars influence on the 10th house of status symbolizes sudden events that upset or undermine the reputation and authority of the Fed.  The ongoing Saturn aspect to the Moon suggests disappointment and loss, as if policy aims will fail to deliver their promise.  We should also note that Saturn's difficult square aspect to the Moon will continue into January and February 2022 when it is exact. 

And to introduce another layer of uncertainty, Venus turns retrograde on December 19.  As the planet of value and harmony, Venus retrograde periods should be treated with some caution as prevailing notions of value and worth become subject to change.  Venus will be retrograde from December 19 until January 29. 

It is important to note that these planetary pressures could represent either higher levels of inflation that forces the Fed to act or it may also signify a slowdown.  With recent GDP data showing a rapid cooling of the economy since the summer, some analysts have suggested that the Fed may be on the verge of a policy mistake by tightening (tapering) while the economy is slowing.  Therefore, these potential December troubles could just as easily represent higher inflation or a rapid slowdown.  Either way, the Fed is likely to feel the heat as markets may become more vulnerable. 



Weekly Market Forecast

US stocks rallied to new all-time highs today as Powell's dovish taper announcement put an end to the uncertainty.  I had thought we might have seen a bit volatility this week given the Mars-Ketu alignment, particularly since this activated key points in the Nasdaq horoscope quite closely as I noted in last week's post.  Thus far, the volatility has been a no-show, although I would note that the Mars-Ketu alignment is still within range, albeit in a weaker state, for the rest of the week.

Troublesome Mars will remain in focus as we head into next week.  Mars forms an exact contraparallel in latitude with unpredictable Uranus on Friday -- just in time for the US jobs report.  Then the outlook becomes even more uncertain next week as Mars conjoins Mercury and both will be simultaneously squared by Saturn.  It's hard to see how stocks don't decline on this pattern, although there are no certainties in astrology as we know.  Nonetheless, the next several days warrant some caution. 



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.