Stocks retreat on Mars-Saturn; Neptune turns retrograde on Friday

Stocks edged lower last week as uncertainty over the strength of global recovery continued to weigh on sentiment. In New York, the Dow rebounded at the end of the week but still closed slightly lower at 12,441 with the S&P500 finishing at 1331. Indian stocks followed a similar script as a late week rally wasn't enough to erase previous losses. The BSE-Sensex closed a little lower at 18,266 with the Nifty ending the week at 5476. As expected, we did see declines coincide with the alignment of Mercury, Venus, Mars and Saturn in the first half of the week. Monday's decline was larger as Venus conjoined Mars while in difficult aspect with bearish Saturn. However, I thought we might have had a little more downside on Wednesday's exact Mars-Saturn aspect. As it happened, Indian stocks were lower on Wednesday but the mood changed by the time US markets opened as New York reversed and began to rally off its lows.

Some disappointing US economic data last week saw a broad-based selloff in the Dollar as investors priced in another delay in an interest rate hike, perhaps to 2012. There is increasing chatter among commentators that further weakness in the US will force Bernanke to cobble together yet another stimulus package to keep the sinking ship that is the US economy afloat for another few months. As QE2 winds down at the end of June, rumours of QE3 may become a more important factor in the market dynamic in the weeks and months ahead. As a rule, such stimulus programs are associated with expansionary Jupiter since they aim to boost demand and invigorate economic activity. With Jupiter still taking a backseat to Saturn these days, it seems somewhat unlikely that any hint or formal announcement of QE3 will be immediately forthcoming. Saturn is moving very slowly ahead of its direct station on June 13, so the main focus is likely to remain on Saturn-type issues such as debt, slowdown and general pessimism. After that time, we may see more Jupiterian energy prevail as Jupiter forms a succession of putatively bullish aspects with Neptune, Uranus and Pluto in June and July before it makes its retrograde station at the end of August. This latter time frame is therefore a more likely window when we could see the announcement of some kind of additional Fed stimulus.

This week we may see a bit of everything. The early week again seems bearish as Monday's Mercury-Rahu aspect is quickly followed by a Sun-Saturn pattern on Tuesday and Wednesday. Wednesday is also noteworthy because there will be a solar eclipse at 17 degrees of sidereal Taurus on that day. This is likely to reflect an increase in caution in many markets including stocks and commodities. A minor contact between Mercury and Jupiter on Thursday offers some hope for a rebound, however. Friday may be the most interesting and unpredictable day of all. That is the day that Neptune turns retrograde. What's interesting about this retrograde station is that it will occur while in a tense square aspect with Mercury. This is normally a bearish combination. The complicating factor is that Neptune is sitting very close to its aspect with bullish Jupiter. For this reason, the retrograde station could end up being a positive influence, even with the dubious input from Mercury. While the final outcome is somewhat uncertain, it does suggest that a larger than normal price move is more likely on Friday.

Stocks slip on Mercury-Mars; Saturn in focus this week

Stocks trended lower last week as renewed worries over Greece offset positive earnings reports. In New York, the Dow fell less than 1% closing at 12,512 while the S&P500 ended the week at 1333. It was much the same story in Mumbai as the Sensex lost 200 points closing at 18,326 with the Nifty finishing the week at 5486. I thought we might have seen more early week upside on the Sun-Jupiter and Mercury-Venus-Neptune alignments but it seems that the market is still working through the after effects of that Jupiter-Rahu aspect from early May. In addition, a shadow Saturn aspect to this alignment generated more caution than I had anticipated. We finally got a reversal higher midweek as Mercury and Venus teamed up with Uranus. As expected, Friday's Mercury-Mars conjunction was bearish, although this only manifested later in the day in Europe and the US, after Indian markets had closed.

Not surprisingly, we saw more developments in the Eurozone debt problem as Fitch downgraded Greece's debt another two notches while Germany showed greater reluctance to cut blank cheques for their spendthrift southerly neighbours. This appears to be conforming to the strengthening of Saturn here as the focus shifts from speculation and inflation (Jupiter-Rahu) to debt and recession (Saturn). Saturn symbolizes caution and pessimism so it tends to be associated with economic contraction and declining prices. In that sense, it is the necessary antidote to inflation. In other words, Saturn is deflationary in its effects. When Saturn is strong and afflicted, prices tend to fall. Saturn tends to strengthen around close aspects with other planets and when its velocity is reduced near its stations. Saturn is due to station next on June 13 when it ends its retrograde cycle and return to its normal forward motion. At that time, it will form a fairly close square aspect with Pluto. So on that basis, it is tempting to think that the markets will stay weak until that time.

This week will be an important test of this approaching Saturn energy. Early in the week, there will be a triple conjunction of Mercury, Venus and Mars. Mars is a potential troublemaker here so that may increase in the chances of lower prices. But Saturn will also form a close 150 degree aspect to this triumvirate so is another potentially bearish influence. If we do get a decline into midweek, then that will provide additional evidence that Saturn is strengthening and would boost the odds for a larger correction that lasts into that mid-June station.

Stocks flat after Jupiter-Rahu; Sun-Jupiter this week

Stocks were mostly unchanged last week as renewed concerns over Greece were offset by improving economic data. In New York, the Dow edged lower closing at 12,595 while the S&P500 finished the week at 1337. Mumbai was similarly indecisive as the Sensex ended pretty close to where it started at 18,531 and the Nifty following suit at 5544. While it wasn't very exciting, the end result was not hugely unexpected. I was not wrong in thinking there could be more upside leading into Wednesday's triple conjunction of Mercury, Venus and Jupiter. Most global markets rose in the first half of the week as the positive influence from these planets overshadowed any potential bearishness from the aspect with Rahu. Significantly, this affected most asset classes including oil, gold and silver as commodities also rallied back from the previous week's sell-off. Indian markets did not participate in the early week rise perhaps because of the more negative implications of rising oil prices. As expected, stocks and commodities were mostly bearish in the aftermath of the triple conjunction as the US Dollar gained more ground.

Now that the Jupiter-Rahu aspect is behind us, we may well wonder what lies ahead. This aspect has highlighted the dangers of excessive speculation and we have seen commodities decline sharply in recent weeks. Its growing separation suggests that the unwinding of the "risk trade" out of commodities may become less important here. While the gradual reduction in the negative Rahu influence may free up Jupiter to become more optimistic and bullish, we should also be watching for the possible increase in Saturn's influence. Saturn will end its retrograde cycle on June 13 as it returns to normal forward motion in the sky. At this time, Saturn will also form a fairly close square aspect with Pluto. Saturn-Pluto aspects are often negative in their effects as pessimism over economic growth prospects can take over. Saturn also represents debts and losses so it is possible that the problem of indebtedness may become more pronounced. Worries over Greece and the Eurozone have re-surfaced in the past week and this may well foreshadow more concerns in the weeks ahead.

This week actually features some positive aspects, especially in the early part of the week. Monday's Sun-Jupiter aspect is complemented by a very nice Mercury-Venus-Neptune aspect which should increase the likelihood of gains in the first half of the week. Wednesday's Mercury-Venus-Uranus alignment should add another layer of optimism to the proceedings. Of course, the market could still decline in spite of these bullish short term aspects as we are in the shadowy, leeward side of the Jupiter-Rahu aspect. Nonetheless, declines may be further delayed until the short term picture becomes more difficult. The end of the week is perhaps a better example of this tense energy as Mercury catches up with Mars while in aspect to Pluto.

Stocks get caught in commodity selloff; triple conjunction due this week

Financial markets went into spasm last week as the speculative commodities trade came to a crashing halt. The Humpty-Dumpty world of gold, silver and crude oil all came tumbling back down to earth with a thud against a backdrop of central bank tightening in Asia, a dollar recovery in the US and the possibility of Greece leaving the Eurozone, not to mention the US assassination of Osama Bin Laden. Stocks did not escape the turmoil as equities succumbed to inflation fears and poorer than expected US economic data. In New York, the Dow closed down more than 1% at 12,638 while the S&P500 ended the week at 1340. Indian stocks also declined by more than 3% as the Sensex closed at 18,518 and the Nifty finished at 5551.

All this turbulence appears to be an adequate reflection of the slow-moving Jupiter-Rahu aspect which finally comes exact on May 7. As I have noted over the past several weeks, the approach of the Jupiter-Rahu aspect has the potential to disrupt the financial landscape in fundamental ways. Specifically, the focus of this aspect centered around notions of speculation and growth expectations. Jupiter symbolizes growth and optimism but Rahu often creates a distorting or unsustainable greed effect so it is quite fitting that this speculative froth would have be taken out of the market at this time. Silver has fallen 30% in the span of a single week while crude oil has declined by 10%. It is possible that we could be at the beginning of a major sea change in assumptions as the long-struggling US Dollar may have turned the corner now as it rose 2% for the week. Once the Dollar gets back on its feet, it will likely fuel further exiting of the "risk trade" in commodities and likely in stocks as well.

Another reason why we could be witnessing a shift in the prevailing trends is that Saturn is now backing up into a square aspect with Pluto. The aspect will still be four degrees away from exact so it may not be as powerful as it might be, but it could well provide another source of Saturnian caution for the market in the weeks ahead. Once Saturn returns to direct motion on June 13, this aspect will begin to separate and eventually weaken.

Since Jupiter makes its exact with Rahu this week, it would be tempting to think that it's all downhill from here. It very well could be, although there may be sources of bullish sentiment in the mix also. Of critical importance will be the triple conjunction of Mercury, Venus and Jupiter on Wednesday May 11. These are three normally bullish planets that should generate some buying in and around their exact alignment. As a general rule of thumb, sentiment usually rises before the aspect is exact. The complicating factor here is that this bullish triple conjunction will occur under the shadowy aspect of Rahu. That may increase the likelihood of a quick reversal lower at any point in the proceedings and could seriously undermine rally attempts. In any event, it promises to be an active and interesting week.

Jupiter-Rahu fuels inflation and speculation

US Stocks rose last week as investors cheered Fed Chair Ben Bernanke's restated commitment to the zero interest rate policy for the foreseeable future. In New York, the Dow gained more than 2%
closing at 12,810 while the S&P500 finished at 1363. Bernanke's comments also prompted gains in inflation hedges as such gold, silver and oil. It was a different story in India's already inflation-ravaged economy as the Sensex lost more than 2% closing at 19,135 while the Nifty ended the week at 5749.

As expected, we did see some decline on Monday's Mercury-Saturn opposition aspect. The US market rebounded after that as the bullish Sun-Venus-Pluto pattern coincided with gains that lasted for the rest of the week. The gains were largely a response to the pro-inflationary stance of the Fed, as most asset classes gained ground against a falling dollar. The Indian market fared less well, however, since the Fed policy would likely increase inflationary pressures that are already threatening the domestic economy. Interestingly, Friday's gains in crude and gold coincided with the Moon's entry into sidereal Pisces. I suggested last week that this transit might well coincide with gains in crude as it would enhance the strength of the five planets (Uranus, Mars, Mercury, Venus, Jupiter) that already occupy this constellation.

The recent gains in most asset classes is very much in keeping with the speculative nature of the approaching Jupiter-Rahu aspect. Jupiter's tendency towards expansion and growth is exaggerated by Rahu's penchant for distortion and disruption. The combination of these influences can result in greed and speculative excess that are commonly found in bubbles and manias. It is therefore no surprise that we see gold reaching new all-time highs every week and silver going parabolic. One of the features of Rahu, however, is that while it can generate gains, these are often unsustainable in the long term. Once the Jupiter-Rahu aspect begins to separate on May 7 (or May 13 depending on which measurement of Rahu/NN one uses), we will need to watch for signs of a trend reversal. There is an increased likelihood that this aspect may bring about changes in the financial landscape. Nothing is guaranteed obviously, but it is a combination that has the power to change the status quo.

This week begins with a potentially tricky aspect between Mars and Rahu. Since Mars is also entering sidereal Aries on Tuesday, this could increase the probability of some downside in the early week. This may be strong enough to manifest in most markets. But we could see a return to the pro-inflation bullishness after that, as the approaching conjunction between Venus and Mercury is likely to bring some gains into midweek, and perhaps later. Friday looks somewhat less positive, however, as the Moon conjoins Ketu/SN.

Stocks rise with Sun-Venus; more gains possible this week with Pluto

Stocks rebounded across the board last week as positive corporate earnings offset Monday's surprise US debt warning. In New York, the Dow climbed more than 1% closing at 12,505 while the S&P500 finished at 1337. In Mumbai, the indices also recovered after Monday's decline as the BSE-Sensex added about 1% on the week closing at 19,626. After trading as low as 5725 early in the week, the Nifty ended the week at 5884. With the further weakness in the US Dollar, gold hit new all-time highs last week trading above $1500 and crude oil futures once again moved above $110.

This outcome was more or less in line with expectations as the Mercury-Mars-Saturn alignment on Monday and Tuesday was likely to induce more selling. Monday was lower but the market generally reversed higher by Tuesday resulting in perhaps a somewhat abbreviated negative influence from these planets. The midweek gains correlated quite closely with the bullish Sun-Venus-Neptune pattern as investors pushed up prices through to the end of the week.

One wonders how long Bernanke will let the Dollar fall. While a low Dollar helps to make exports cheaper and boosts job growth, all that imported oil the US relies upon for its energy needs is becoming a burden on the economy. $5 a gallon gasoline is going to reduce discretionary consumer spending and this will tend to reduce economic growth. Eventually, something will have to give. Either the Fed defends the Dollar and lets the stock market fall, or the Dollar is permitted to devalue indefinitely which will drive up inflation and reduce growth. Jupiter moves into alignment with Rahu in early May so that may well reflect some changes (Rahu) in growth outlook (Jupiter).

This week begins in the immediate aftermath of a Mercury-Saturn opposition. Mercury actually turns direct on Saturday, but it will still be just one degree from its exact aspect from bearish Saturn. So it is possible this could be a drag on sentiment, especially in Indian markets. But more upside looks fairly likely going into midweek as the Sun and Venus will align with Pluto. This is likely to boost most asset classes. The end of the week is somewhat fuzzier, however. Stocks may be more mixed, with oil perhaps more likely to rise as the Moon enters watery Pisces on Friday.

Stocks drift lower; Mercury-Mars-Saturn this week

Stocks edged lower last week as inflation fears and unimpressive corporate earnings weighed on markets. In New York, the Dow rallied late in the week but still ended lower closing at 12,341 while the S&P500 finished at 1319. In Mumbai, the Sensex reversed after Wednesday's gain and closed lower at 19,386 while the Nifty finished at 5824. I thought we might see more early week upside on the Mercury-Jupiter conjunction but we only saw some gains arrive on Wednesday. Friday's Sun-Rahu aspect was more of a toss-up and this coincided with a decline in India, although the US market continued to rise.

Inflation remains an ongoing concern here as oil and gold are both seen as hedges against rising prices and a falling US Dollar. Both phenomena are at least partially due to the Fed's QE2 policy which comes to an end on June 30. The debate now is whether the economy and the market are strong enough to stand on their own two feet once this policy ends. While the jury is out on that question, it does seem reasonable to assume that once the injection of Fed cash ends, there will be less inflationary pressure around the world. This will tend to moderate or lower asset prices including stocks, oil and gold. However, it seems unlikely that prices will simply begin to fall the day after QE2 ends. Markets typically don't work that way. It seems more likely that we could get some adjustment in asset prices before the end of the Fed's buy back program. We have seen some correction already, especially in emerging markets like India, although oil and gold are still riding high. As Jupiter approaches its aspect with Rahu in early May we could see a new dynamic enter the market. Rahu tends to disrupt the status quo so its association with Jupiter (wealth, finances, growth) may interrupt the prevailing trend. Rahu can also symbolize speculation and greed, so it's possible that some markets will continue to rise until the aspect is exact.

This week begins with a difficult alignment of Mercury, Mars and Saturn. Mars opposes Saturn on Monday while Mars conjoins Mercury on Tuesday. Since the bearish planets (Mars, Saturn) outnumber bullish Mercury, there is a greater likelihood of declines this week, especially in the early going. The late week period offers somewhat more positive outcomes as the Sun and Venus form aspects to Neptune.