Merriman Market Analyst

Review and Preview:

Due to a death in my family, and the funeral duties today, this report is being issued early and will be shorter than usual. Also please note that due to lectures in Europe next week, the next two week's columns will be issued later than usual. Next week's column will be issued on Saturday, and the following week on Sunday.

The financial markets started the New Year off with a full moon bang. After posting a new all-time high intraday on the first trading day of the week (January 3), the Dow Jones Industrial Average then sold off sharply in the United States. But that was nothing compared to what happened in Crude Oil and precious metals, where the carnage was extreme.

Crude Oil started the week above 61.00. But by the second trading day of the New Year, it was making new yearly lows, eclipsing the prior double bottom los of the 55-57 area posted in late October and mid-November. Both Gold and Silver were sharply higher on overnight markets on Tuesday, January 2, when the COMEX was closed in New York. Gold was up well above 640 and Silver well above 1300. By Friday, Gold was testing 600 and Silver 1200.

Short-Term Geocosmics:

We are now about to enter the fist geocosmic cluster time band of the year: January 8 through January 22. The most powerful signature of this time band will be the first passage of the Jupiter-Uranus waning square on January 22, which I suspect will act like a magnet to all the trends just started.

According to our work titled, The Ultimate Book on Stock Market Timing Volume 3: Geocosmic Correlations to Trading Cycles, this signature has a 71% correlation to 50-week or greater cycles in U.S. stock indices within 15 trading days. That is a huge correlation! It has a 71% correlation to primary or greater cycles within 9 trading days, and an 86% correlation to half-primary or greater cycles. That means that within 9 trading days, we expect to see all of the moves begun this week to culminate and reverse then.

Even before the January 22 advent of the Jupiter-Uranus signature, we find the potent Mars-Pluto conjunction taking place on the Galactic Center on January 13. This combination tends to coincide with very driven behavior, and unwillingness to compromise or adjust one's position. It is forceful, determined to an extreme, and as such it is oftentimes associated with dangerous conditions. This aspect can symbolize the tensions presently in Iraq as the executions get under way of Saddam Hussein and his family. Despite the plea for more time and formality in enacting the event, it seems that the new Iraqi leadership wants the executions done immediately and without delay. This signature suggests that there could be extremely dangerous activities that will follow. In fact the entire Middle Eastern region may be like a powder keg ready to explode. On a positive note, this might also coincide with the discovery of something valuable that has been lost or hidden for a long time (treasure? weapons of mass destruction? Osama bin Laden?). In terms of stock markets, this too is a Level One type signature, with a 78% correlation to primary or greater cycles in U.S. stocks within 12 trading days.

Long-Term Thoughts:

The sharp decline in Crude Oil has brought into question our forecast that this market could rise to $100.00 barrel by early 2008. So let's review the astrological thinking here.

Crude Oil is ruled by Neptune (planet) and Pisces (sign). Several issues ago, and in the Forecasts for m2007 book, I stated that the 4-year cycle trough in Crude Oil could correlate to the Saturn (depressed) opposition to Neptune (Crude Oil), which is in effect August 30, 2006 through June 25, 2007. We are still in that wide band. The next filter to reduce this time band was that the bottom would most likely occur between the first and last passage of this signature (August 30, 2006 through February 28, 2007). That time band too is still in effect.

Now within this greater Saturn - Neptune opposition time band, we try to further identify possible periods for this low by the presence of major Jupiter transits. Jupiter is the secondary ruler of Pisces, and hence Crude Oil. On October 25, 2006, Jupiter formed its last of three squares to Saturn, which was the first of these Jupiter transits within the greater Saturn-Neptune opposition time band. Four trading days later, on October 30, an important low formed then as the nearby contract fell to its lowest level in several months at 57.05. About two weeks alter, the December contract fell to the low 55's. Crude Oil then rallied to 65.05 on December 1, and it seemed like those lows could have been the 4-year cycle trough due in Crude Oil.

However, that has now been negated with last week's plunge to under 55.00. We are still within the Saturn-Neptune opposition aspect, when the low is due. We are still between the first and second passages, when the low is most likely due. And we now approach the next major Jupiter transit - the waning square to Uranus on January 22. Whatever you are seeing now is apt to change nearby that date, for Uranus rules sudden change, and Jupiter rules exaggeration (and together they can represent poor judgment and even over-excessive reactions). Until then, markets related to Jupiter and Uranus that are going down (or up) can continue down (or up) to an extreme - and then just as suddenly reverse.

This is a wild aspect. This is a wild time. The rules don't always apply. Hold on.