MMA's annual Forecasts Book, written by Raymond A. Merriman since 1976, is one of the most unique, affordable, and accurate glimpses into the coming year. Utilizing the study of cycles and geocosmic factors, this annual Forecasts book outlines forthcoming trends pertaining to political, economic, and financial markets throughout the world. Although 2010 is only approximately half over, several forecasts made in the 2010 book may have been highly accurate. Below is a list of some of the forecasts made in the 2010 book, as of October 15. We will try to update this as the year continues.
 
• Swiss Franc and Euro Currency: “… both the Euro and Swiss Franc could fall rather hard against the U.S. Dollar in the first half of 2010, perhaps down to 1.1200-1.2500 in the Euro currency. The critical turning point could occur May-August 2010, when Jupiter and Uranus enter Aries and form a Grand Square to the FRB chart… As long as the Fed leaves its Fed funds rate untouched at 0-.25% there is nothing to hold this (Swiss Franc) market down. It should soar to a new all-time high...” Both currencies bottomed in early June as Jupiter and Uranus formed their conjunction in early Aries, with the Euro down to 1.1875. As this is being written in early October 2010, the Swiss Franc is making a new all-time high, above 1.0500.

• Dollar-Yen: “The Dollar-Yen is in the time band for a long-term 5.5- and 16.5-year cycle low, ideally due in 2010 and down closer to the 80.00 level.” As of early October, the Dollar-Yen is at its low of the year, having fallen from a high of about 95.00 in early May to under 81.00, very close to the target of 80.00 given in the book.

• Grains: “Geocosmic signatures point to the possibility of extremely dry and hot weather this summer, especially in July-August, with possible drought… If September 2009 completed the 9- and 6-year cycle phases, then a rally is underway that could lift Wheat prices to either 784 +/- 42, or 880 +/- 108.” July and August have coincided with hot and dry weather and a severe drought in Russia’s Wheat growing region. Wheat prices have exploded from a low of 4.25 on June 9 to over 7.00/bu as this is being written in the first week of August. I personally regard this as my best forecast for 2010, perhaps along with the currency outlook.

• The Stock Market: “The trend for stock prices in 2010 is mostly up. However, it is apt to be a bumpy ride. A 50-week cycle trough is due in the first half of the year, ideally between February and April. A multi-month rally is then expected to unfold that could be huge bubble, possibly taking stocks to a new all-time high in the second half of 2010 through 2011.” The 50-week cycle appeared to bottom February 5, the 48th week of the cycle. Prices then rose sharply into April 26 to its highest level since 2008. But then it fell to a slightly lower level into July 2. Since that time, however, stocks have rallied sharply again – to new 2-year highs - as this is being written in early November. It remains to be seen if stock prices can re-test or exceed their all-time highs by early 2011.

• Gold and Silver: “The 8.5-year cycle in Gold bottomed in October 2008. It is therefore pointed higher into 2011-2013 as long as prices do not fall below 800…. The first price targets for a crest are 1189 +/- 70. Above that, the price targets for the crest of the 4.25- and 8.5-year cycles are 1460 +/- 142, with a possibility of 1940 +/- 200.” Gold soared to a new time high of 1266 on June 21, before falling back to 1159 on July 28. It then took off again, testing 1400 as this is being written in early October. A decline of quite some significance is due within 19 weeks of December 17, as Silver’s 111-week cycle trough comes into play. Let’s see if that happens, as stated in the Forecast 2010 Book.

• The “Explosion of Debt” throughout the world: “The operative word in all this is “debt.” … Ultimately, Pluto in Capricorn indicates we will have no other choice but to deal with reality (debt) – or prolong the suffering of economic and financial contraction, along with high unemployment, indefinitely. The only question is: do we deal with it pragmatically right now, following the worst financial crisis since the Great Depression? Or do we continue on a path of self-delusion that believes we can spend our way out of it by incurring ever more debt, and thereby virtually guarantee another economic crisis or two – even more serious than that of 2008-2009 - before the end of the next decade?” This indeed was and is still the primary question politicians and economists throughout the world were asking in 2010, as Greece defaulted, followed  by credit dpowngrades of many other countries, in Spring-Summer of 2010.

• Economy and Stock Markets: “With Jupiter moving from a conjunction with Neptune in 2009, to a conjunction with Uranus in 2010, there is reason to believe that economic growth will continue following the recession of December 2007 through mid-2009. Inflation will likely remain tame, and many businesses – especially the banks – will continue to show good earnings. This will probably translate in rising stock markets… As homeowners continue to allow their homes to be foreclosed, prices of many goods (inflation) will also remain low. In fact, that is deflationary. And that condition is exasperated because banks will continue with very tight credit policies, not wanting to take the risk of losing on their loans. They will continue to hoard the money, thus stifling the extent of any growth in credit necessary to sustain an economic expansion.” As of this writing in early October 2010, inflation has been tame and there are fears of deflation. Stock markets and the economy have been generally good, but the rate of growth in employment has been disappointing. It is not typical of past recoveries, and federal deficits continue to increase while banks hoard money and keep credit opportunities necessary to sustain economic expansion very tight.

• Mid-Term USA Elections: “Public outrage over escalating debt and higher taxes is likely to influence the mid-term elections, resulting in the loss of several seats in Congress currently held by incumbents. There could be a “tax revolt,” much like what happened in the 1994 mid-term elections.” The public outrage is there, and has resulted in a powerful “tea party movement” against incumbents in Congress, and White House economic policies. It remains to be seen if it results in a loss of several seats in Congress as elections are in November. But the opposition party (Republicans) is once again creating a “Contract with America,” with the hopes of repealing many of the policies initiated under the Democrat Congress and White House, just as they did in 1994, the last time Saturn formed a square to Pluto.

•  Ethical Issues for Political Leaders: “The bottom line of Pluto in Capricorn is this: dishonesty and corruption get exposed as a relentless purging takes place to get rid of those in power who have benefited individually at the expense of the common man. When individuals in government start to intermingle too closely with leaders in business and banking (and vice-versa), conflicts of interest are bound to arise which can lead to corruption, and eventually punishment.” As this is being written, two members of Congress – Charles Rangel and Maxine Waters – are being brought before the Congressional Ethics Committee on these very types of charges.

• President Obama’s Year: “...he will spend his first 16 months or so in office formulating his plans for action, while Uranus is in the mutable (“thinking”) sign of Pisces…But as Uranus enters Aries in 2010-2011, he could begin a series of actions that will be dramatic and revolutionary. He will not “dither.” I think he will surprise everyone by forcefulness of his actions, and depending on his success, he will attain a place in history just as low or high as the last gentlemen who presided over the USA when Uranus was in Aries: Herbert Hoover or Franklin Delano Roosevelt.” By mid-March 2010, after months of very little accomplishment, Obama leads Congress to a series of sweeping, historic, acts, including Health Care Reform and Financial Regulatory Overhaul. But so far, they have not generated a lot of positive support from the populace.

• Social inequities and class warfare: “The bottom line is that Saturn moving from Virgo to Libra represents the height of social inequities, when the gap between the middle and upper classes (working man and executives) is at its widest. This becomes the basis for class warfare, and possibly even a populist revolution.” This was the year that President Obama referred to bankers as “fat cats,” and the divide between government and business/banking was perhaps at its greatest width in several generations. Obama’s rhetoric has caused many business leaders and organizations (like the Chamber of Commerce) to label his stance as “anti-business.”

• Earthquakes, disasters, and extreme weather (drought): “Both the Saturn-Uranus opposition and Saturn-Pluto waning square remain in effect through August 2010, so erratic weather conditions are likely with the threat of damage to this year’s crops. Not only that, but these same aspects are prone to more than the usual amount of earthquake and volcanic activity… But then Jupiter moves into Aries June 6-September 8. With Uranus also entering the fire sign of Aries May 27-August 14, and both in opposition to Saturn, this could coincide with hotter temperatures than normal, even droughts during June, July, and August, especially in late July and early August.”  Devastating earthquakes struck Haiti and Chile, and a terrible drought hit Russia in June-August, driving wheat prices (and other grains) sharply higher. Wheat prices made a peak in price in the first week of August.

• Health Care Reform: “… the Uranus-Neptune mutual reception ends in 2010. That is, Uranus is in Pisces until May 27, 2010. Uranus rules Aquarius. Neptune is in Aquarius until early 2011. Neptune rules Pisces. Thus, they are in each other’s sign, which is known as a mutual reception. Since Pisces and Neptune rule health care, and since Uranus and Aquarius rules the masses of people, and hence the concept of “universal,” the time to enact such a policy is now: 2009-2010. The chances of doing this are great”. After being given up as “dead” in December 2009 (after Forecast 2010 book was published), the Health Care Reform Act got a second wind and passed in March 2010.

And of course: the all-important Critical Reversal Dates. Many of the 2010 critical reversal dates given for various markets have been impressive.* As of early October, 9 of 12 major reversal dates given for T-Note and T-Bond futures were accurate, including the exact date of the yearly low so far on April 5 and the yearly high in T-Bonds on August 25 (three days off) and T-Notes on October 8-12 (exact). Seven of the 9 critical reversal dates given for stock indices unfolded within only two trading days, including the exact date of the high of the year on April 25 (as of this writing in early October). Gold prices also turned nearby to its critical reversal dates in 8 of the 9 dates listed in this year’s book. Seven of 8 of the currency dates hit with strong reversals within 2 trading days or less, including the low of the year on June 7 for the Euro currency. The 8th one was a hit for the Dollar-Yen. All 12 critical reversals given for grains also coincided with powerful reversals within 4 trading days, and most of those were within two trading days, including the yearly low in Wheat and Soybeans on June 9 and Wheat’s high on August 6. Likewise all 8 of the critical reversal dates given for Crude Oil were right on the mark (within 5 trading days, and six within 2 trading days), including the low of the year directly on the May 20 reversal date that was listed. including the low of the year directly on the May 20 reversal date that was listed.

Do you think this kind of accuracy would be valuable to traders? You betcha!

* It is considered a “hit” if the reversal date coincides with a major, half-primary, or primary cycle, or a trading cycle from which prices reverse at least 4% in equity indices and commodities, and 2.5% in Treasuries or currencies.

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