Merriman Market Analyst

Review and Preview

Nearly all of the world equity markets tracked in this column made new all-time or multi-year highs last week. Included amongst the new all-time highs were the Dow Jones Industrial Average, Brazils Bovespa, Argentina’s Merval, Germany’s DAX, Hong Kong’s Hang Seng, and Australia’s All Ordinaries Index. The Netherlands AEX soared to its highest level since June 2001 and the London FTSE to its highest since December 1999. A new 6-year high was also evident in the NASDAQ Composite. Only the Japanese Nikkei and Swiss Stock Index fell short of their all-time or multi-year highs.

But it wasn’t only in equity markets that such bullish behavior was present. The Euro currency also made a new all-time high last week as the Dollar plummeted. And Soybeans soared to their highest levels since July 2004. Crude Oil also continued its impressive rally off the 49.90 four-year cycle low of January, as it reached 74.00 Friday, as it approaches its 78.40 all-time high all-time realized one year ago this week. Gold and Silver also had positive weeks, but the bigger story was in the XAU Gold and Silver Mining Index, which broke out of a wedge formation, racing to its highest level since last September.

As all of the markets exhibited extremely bullish chart patterns, they also are doing so under weaker or overbought momentum indicators. Thus in spite of the impressive gains, these technical studies suggests there is still danger of sudden and sharp declines ahead, especially in the equities. It doesn’t mean prices won’t go higher first in the next 1-3 weeks, for after all, Jupiter is still in its ruling sign of Sagittarius until mid-December. 

Short-Term Geocosmics

We now prepare for the Venus stationary retrograde period. As stated in the last column of two weeks ago, “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.’ ” Historically, this signature has had a 78% correlation to primary or greater cycles within 12 trading days. Venus goes retrograde in approximately the same degree of the zodiac every 8 years (an 8-year planetary phenomenon). It will occur in early Virgo this time, as it has done every 8 years for quite some time. In every case since 1967, this 8-year Venus-retrograde-in-Virgo period has correlated with a crest from which prices declined substantially. Sometimes the decline was fast and furious, and sometimes in took a few weeks to unfold. This one could be a fast and furious type of reversal, because at the same time, Mars will be in a square aspect to Saturn in the heavens, and on degrees that form hard aspects to the New York Stock Exchange chart (NYSE, founded May 17, 1792). Furthermore it will coincide with a full moon.

The Mars-Saturn square of July 31 is interesting too. It tends to coincide with unseasonably hot or cold temperatures, corresponding to rallies in grain prices. Wheat and Soybeans are now at new multi-year highs, and this offers a cosmic explanation for that occurrence. It is also worth pointing out that Mars will be translating in aspect to the recent Saturn-Neptune opposition, and thus Crude Oil is also involved in a super bullish performance.

Long-Term Thoughts

Looking further out, we note that both Jupiter and Pluto will leave the bullish sign of Sagittarius, and enter the more realistic and cautious sign of Capricorn in December and January. This represents a major cosmic shift, for Sagittarius to Capricorn is a solstice point. For example, the Sun (earth) crosses this point of the zodiac every year around December 21-22, a time known as the Winter solstice. It is a seasonal change, and the time of the year when the days are shortest in the Northern Hemisphere (and longest in the Southern Hemisphere). This is symbolic of perhaps the most important shift that is represented by planets as they traverse through the zodiac. It is akin to midnight of every day, a time when the cycle of that day ends, and the cycle of the next day begins.

Jupiter takes about one year to transit through each sign of the zodiac. It has been in Sagittarius since November 24, 2006. Jupiter represents expansion and growth, optimism and hope, as well as a tendency to over-do or over-exaggerates things. It rules Sagittarius, which represent these same principles. Thus witnessing the stock markets of the world race to new all-time highs during this passage is not without astrological support. But generally speaking, such optimism and hope – and rallies in stocks – peak during the period Jupiter is in Sagittarius. Sometimes it spills over into early Capricorn, but usually the peak is before that.

Pluto is an even more important story, however, for it takes 14-15 years to complete its transit of Sagittarius, before embarking upon its 15-year journey through Capricorn. Many astrologers have been debating the significance of Pluto ingressing in to Capricorn, 2008-2023, despite the fact that scientists have downgraded Pluto’s status to that of a “dwarf star” late last year. In astrology, we tend to associate the sign of Capricorn with very clear boundaries, whether physical, social, or psychological. For instance, such concepts as “right versus wrong,” or good versus bad,” are judgments (boundaries) governed by the domain of Capricorn. Pluto on the other hand, seems to rule concepts such as “bad and worse,” but also recovery and reform. So it may be that we will soon enter a period of the “Good, Bad, and Ugly,” followed by redemption.

But one thing in my 40 years of studying astrology I have observed is that masculine planets seem to thrive in Capricorn, and the non-masculine planets seem to struggle mightily there. Now I know I may get some criticism for relating the Sun, Mars, Saturn, and Uranus as strong planets, and Moon, Venus, and Neptune as weaker planets, but I take the risk to make my point anyway. Those first planets in Capricorn natally seem to propel the native to excel in his or her life work. It is as if these individuals are so focused that nothing stops them once they commit themselves to a task. The presence of the later planets in the natal chart, however, seems to coincide with those who struggle with the more emotional or social issues in life, to the point that these struggles can inhibit the accomplishment of their goals. Now I bring this up because I believe Pluto could be assigned to the category of a “stronger” planet, and thus I maybe more optimistic than most about the end result possibilities of Pluto in Capricorn. I think Capricorn – the environment – may channel the explosive and dramatic energy of Pluto, into a very constructive result by the time it leaves. Oh yes, I think there will be serious problems. After all, the themes I just related suggests that it could be a 15-year period of the “Good and Bad (even Evil)”, and then worse, followed by redemption (recovery, forgiveness). It is like we may have to experience a period where it seems the world has not only gone mad (Sagittarius), but then commences onto the verge of self-destruction. But then one day, when the horrors of destruction are very real for many more people than exists today, a powerful force to collectively survive and reform this madness evolves, and a wave of redemption (and perhaps rebirth) follows. This outlook I suggest not only applies to the political environment, but the economic/financial one as well. It is a climate in which hard assets like Gold and Silver may do very well, at least through the first half of that ingress.