Merriman Market Analyst

Note: There will be no column next week due to fact that I will take a vacation during the Independence Day holiday period. The next column will appear for the week of July 16. For those in the United States, enjoy your forthcoming holiday!

Review and Preview

This a holiday week in the United States (Independence Day, July 4), and Mercury is retrograde. The combination implies a lightly-traded but unpredictable week ahead. Holiday markets are usually more bullish than bearish, but with Mercury retrograde, price movements tend to reverse every 1-4 days. However, right in the middle of the retrograde period (usually about the 8th trading day), some markets make a bigger than anticipated reversal of what appears to be a short-term trend. That is what happened in many stock indices last week. They were down from shortly after the time Mercury went retrograde on June 15 until last Wednesday, the 8th trading day. Then they abruptly started to rally again. The same thing happened with precious metals. Crude Oil, however, was the star last week, moving above 70.00/barrel for the first time in 9 months. With Uranus still in the middle degrees of Pisces, the possibility of 100.00/barrel remains in effect. Uranus coincides with multi-year highs or lows in signs of commodities or stock sectors ruled by the sign it is in. Pisces rules crude oil. The high usually occurs while Uranus is in the middle degrees, and then the bottom falls out as prices oftentimes decline 50-80% off those highs before it leaves the sign. Uranus remains in middle Pisces into 2008.

In other markets, Silver prices dropped significantly last week as the final Saturn-Neptune opposition unfolded. Prices then rallied smartly in to the “Sagittarius Factor” lunar cycle, Wednesday-Friday, a bullish phenomenon discussed in one of the chapters of our recently released-book on short term trading of Silver.

Because this is Mercury retrograde, and a holiday week, there is not likely to be a favorable trading week. Mercury retrograde coincides with unpredictable market behavior, as prices tend to swing back and forth every 1-4 days, with little respect for technical buy or sell signals, or support-resistance. In fact, they are more likely to exhibit “fake out” patterns than anything else. The same tends to happen in holiday markets. Nevertheless, it is interesting that the market behavior of the past two weeks was remarkably right in line with what geocosmic signatures suggested, even with Mercury retrograde. Once you adapt to the “Mercury retrograde rules” and think very short-term, the odds seem to shift in your favor.

Short-Term Geocosmics

We note that Apple released its new Iphone this past week, under the Mercury and Uranus retrogrades. Mercury rules telephones, and Uranus rules telecommunications. Under the dual retrograde, we wonder how long it will take before a recall is announced. It doesn’t appear that Apple used the services of an astrologer to launch this new product.

We also note that Venus now makes a translation to the recent Saturn-Neptune opposition, June 30-July 1. Venus conjuncts Saturn and opposes Neptune. If it were not for the fact that this is a holiday week, we would consider that a strong signature of a possible reversal, especially of any market that has been declining into it. Soybeans, which is ruled by Venus, was a great example of this late last week. After decline sharply for a few days, it exploded back up on Friday to test their multi-year highs.

Our focus will now shift to the Mercury direct period of July 10, which may be more significant for equity markets. However, all these signatures may pale to the Venus retrograde station that takes place July 27. That happens to be one of the most powerful correlates to reversals in many stock and financial and commodity markets within about 10 trading days, as demonstrated in “The Ultimate Book on Stock Market Timing, Volume 3: Geocosmic Correlations to Trading Cycles,” as well as “The Gold Book: Geocosmic Correlations to Gold Price Cycles.”

Long-Term Thoughts:

The 36-year Saturn-Neptune opposition cycle is now over as of June 25. However, the consequences (and penalties) for many of the actions initiated during this period will probably be forthcoming for the next 1-2 years. It is not uncommon for the full effects – and consequences – to be realized after the aspect has left, for typical of this aspect, the complete details are not always known until investigations afterward reveal patterns of deception and cover-ups. As an example, one need only look back to the last instance in 1971-72 and the Watergate burglaries that occurred then, but the full scope of the cover-up wasn’t fully realized until 1-2 years later. That’s when the whole Nixon administration came tumbling down, and Nixon was compelled to become the first U.S.A. president to resign from office.

Could something like that happen again? Possibly. Once again we see the two Democratically-controlled branches of Congress initiating a whole slew of investigations into the past activities of the President and his White House staff, and again at the end of a very unpopular war. And the nature of the investigations has a great to do with Saturn-Neptune themes: spy programs, warrantless domestic eavesdropping, dismissal of U.S. attorneys under questionable political motives, concerns about the president’s constitutional authority in deciding specific matters, the question as to whether the Vice-President is really subject to rules of the executive branch (and if not, should his office be funded accordingly). Neptune rules confusion too, and that was very evident in last week’s news as the Senate failed to pass a long awaited immigration bill. According to Friday’s Wall Street Journal, “The battle (and failure on immigration) stamps Bush as a lame duck.” But, as stated in this column recently, Bush is already perceived by many European leaders (such as Italy) as irrelevant any longer. In a survey conducted of 45,239 adults in 47 countries, a survey released by the Pew Research this past week found that anti-American feelings have swelled throughout the world since 2002. According to the report, the poll showed that President Bush “is less trusted on foreign policy than Russian President Vladimir Putin by allies Britain, Germany and Canada” (Free Press News Services, June 28).

Saturn rules government (and people in authority) and Neptune rules trust. Together they can (and usually do) combine to foster a psychological environment of distrust, suspicion, and disappointment. It is a time when cynicism abounds, coincident with denials of responsibility or unwillingness to cooperate in efforts to find the truth. Evidence disappears – conveniently (as in the case of some White House emails related to these investigations). It is a time that requires openness and assurances of worthiness to be trusted on the part of elected or appointed leaders. But if that is not forthcoming, then the public typically wants punishment for those leaders. And as history has shown, it usually takes 1-2 years afterwards before the evidence of any wrongdoing begins to be revealed. It usually takes 1-2 year afterwards before the stock market falls too, for in spite of all the suspicion and conspiracy theories present (which may turn out to be real in the end), equity markets still tend to climb a “wall of worry,” which is a perfect Saturn-Neptune symbol. There can be declines, even very sharp ones, but a prolonged bear market is usually well after the Saturn-Neptune aspect has passed.