Review and Preview

Stock indices around the world continued their decline last week. Once again, many indices made new yearly lows, while some did not.

In Europe, the AEX of Netherlands, DAX of Germany, and SMI of Switzerland all broke to new yearly lows. However, the London FTSE did not. The later came close with last week’s low at 5358, just barely higher than the 5338 level of January 22.

In Asia and the Far East, new yearly lows unfolded in Australia’s All Ordinaries Index as well as India’s NIFTY index. Yet  Japan’s Nikkei low of 13,119 on July 3 was only a correction of the prior rally from 11,691 on March 17 to the high of early June. In Hong Kong, the Hang Seng index managed to stay above its low of 2008 that occurred on March 18 at 20,572. Last Thursday’s low was 21,163.

 The divergence appeared in the United States as well. The Dow Jones Industrial Average fell to 11,157 on Thursday, still well below its January 22 low 11,634. Yet the NASDAQ Composite only declined to 2227, well above its 2155 low of March 17. Thus, we have a case where many of these indices are suggesting that the very long-term 72-year cycles may be starting. However, until all the other indices of these regions also break down, there remains hope for the bulls in what is known as “Intermarket Bullish Divergence.” Such a situation creates an environment of confusion for both analysts and investors alike, as suggested by the well-known market reviewer Mark Hulbert (Hulbert Financial Digest, Annandale, VA) in his latest posting titled: “Dow Theorists Disagree: Stock market as confusing to them as everyone else.” In terms of cycle’s theory, as postulated in prior issues of our SOS Global Stock Markets report, I can state from experience that the longer the market cycle that is due, the more bizarre the technical indicators and chart patterns become. Markets will be fraught with false buy and sell signals at the top and at the bottom. A 72-year cycle is something very few have ever seen before. Hence, I would expect the patterns that form once the downside of this cycle starts, it will unfold unlike anything we have ever seen before. Nobody will get it just right because there will be no precedence. However, I also believe that Financial Astrology will yield greater insights and understanding than almost any other subject dealing with this matter. Well, let me qualify that: it will yield as much insight as one could imagine, given that Saturn and Uranus will be in opposition for the next two years. With Uranus, at least we know that the bizarre and unexpected is the norm.

 In other markets, Crude Oil reached another new all-time high last week at $145.85/barrel, which is within the $144/barrel +/- $8.00 level given at the recent talk at the UAC conference in Denver on May 17. Gold, Silver and foreign currencies also rallied strongly for much of last week, although the Euro currency and Gold fell rather hard on Thursday. Still, Gold could not close above 950.00, a very important price resistance level.

Short-Term Geocosmics

 We are still in this huge time band of geocosmic signatures extending from June 12 through July 14. The midpoint was last weekend, June 28. But this past week was a pre-holiday week, and it is not unusual for trends to continue during such a week. The next 6 trading days will find three Level 1 signatures in effect. These are the strongest correlates to reversals in financial markets, according to the studies reported in “The Ultimate Book on Stock Market Timing” series, by yours truly. The first of these signatures may be the most important. That is the powerful Sun-Jupiter opposition of July 9. As stated last week, “The Sun-Jupiter opposition is particularly interesting because it has a 75% correlation to primary or greater cycles within 10 trading days. Like Uranus turning retrograde, this is one of the strongest signatures correlating with reversals in stock indices. It can correlate with powerful price moves, like 200+ point up or down days within only 4 trading days in the DJIA. The Mars-Saturn conjunction (July 10) has a high correlation to extreme temperatures in weather. At this time of year, it usually corresponds to hot and dry conditions, which would be a relief in the flooded grain belt. It can correspond to primary or greater cycles in grain prices within 10 trading days. Geopolitically, this same signature can also correspond to wars or protests – even strikes – by workers, because it is in Virgo, sign of labor. It highlights a sense of social inequities, especially between labor and management.” To those thoughts, we should add that the Sun-Jupiter opposition might have a correlation also with Crude Oil prices, since Jupiter is one of the two planets ruling crude oil (Neptune is the other).

 The third Level 1 signature is the Sun-Uranus trine of July 14. In other words, financial astrology still allows for a major market reversal in the next few trading days, if it did not already begin last week.

Longer-Term Thoughts

 We will continue with our thoughts on long-term planetary cycles, and how their themes tie into the two U.S.A. presidential candidates.

 This week I would like to address the subject of Pluto moving into early Capricorn, and the relationship of that event to the chart of the Federal Reserve Board chart. Pluto’s orbit the Sun is 248 years. The Federal Reserve Board was officially created on December 23, 1913, when the Sun was at 1 degree of Capricorn, and Pluto was at 0 degree of Cancer, an opposition. This will be the first time that transiting Pluto has entered into conjunction to the natal Sun of the FRB, and opposition to its natal Pluto.

 As a transit, Pluto represents the urge to terminate or drastically change the entity whose Sun it conjuncts. The Sun in a chart also represents its leader, or in this case, the chair of the FRB. Pluto will be transiting the natal Sun-Pluto opposition of the FRB chart for about one year almost immediately following the election. If the force of Pluto signifies the possibility to terminate the position of the current FRB chair, or the entity of the FRB itself, then we can ask ourselves: which President would be most likely to do that? The Democrat, Barack Obama, or the Republican, John McCain? Since the Republican President George W. Bush appointed the current head of the FRB, I think it is not so likely that another Republican would dismiss him. By logical deduction, a decision to not re-appoint the current FRB chair, or even the urge to ask him to resign, is more likely to happen if a Democrat is elected as the next USA President. Thus, this signature seems to also suggest Barack Obama would be the next USA president.

 But wait a minute. John McCain is on record for wanting to radically change the individual income tax structure, and maybe even do away with it altogether. This too could greatly alter the structure of the Federal Reserve Board.

 However, I wonder: which candidate would be most likely to take away the power of the FRB to create the actual USA currency? And perhaps give that power back to Congress, which had that power prior to 1913? If one candidate holds that position, that might be the candidate who plays most closely to the theme of transiting Pluto over the FRB natal Sun opposite Pluto signature.