Review and Preview

 The powerful Uranus station this past week struck with a bang. In typical Uranus fashion, the equity markets went into panic mode and some indices of the world broke below their lows of January or March. This was the case, for instance, in the Dow Jones Industrial Average, which negates our prior forecast that the low on January 22 was the 4-year cycle trough in this index. However, aside from India’s Nifty stock index, none of the other indices we follow did the same.

 In Europe, the AEX of Netherlands fell to 419.35 on Friday, which is still well above its 401.45 low of January 22. The DAX index of Germany fell to 6348, still above its 6167 low of March 17. In England, the FTSE fell to 5470, still well above the yearly low of 5335 recorded on January 22. But the SMI of Switzerland almost broke to a new low. Friday’s bottom was 6803, just barely above the March 17 low at 6769. It is vulnerable.

 In Asia and the Pacific Rim, only India’s Nifty index made a new low, falling to 4093 on Wednesday, thus breaking the prior low of 4448 on January 22. Australia’s All Ordinaries declined to 5266, still well above the 5130 low of March 17. The Hang Seng dropped hard, to 21,773 on Friday, but that was still considerably higher the 20,572 level of March 17. The Nikkei stock index of Japan was even more promising, falling only to 13,453, well above the probable 4.5-year cycle trough of 11,691 registered on March 17.

 In the USA, even the NASDAQ Composite held up reasonably well. Friday’s low was 2290, far above the 2155 low of March 17. But the DJIA commands the most publicity in the world, and that index fell to 11,298, well below its prior low of 11,634 recorded on January 22.

Our long-term cycle’s picture for the DJIA has therefore turned more bearish now with the break to the new yearly low. It will change to fully bearish if - and when - other world indices confirm with new yearly lows. Until then, the possibility remains that these equity markets are exhibiting cases of “intermarket bullish divergence,” which can result in reversals. As stated last week, “Uranus will turn retrograde on June 26. This is a powerful Level One signature, with one of the highest correlations to major reversals in U.S. stocks markets of all the signatures we examine. But the nature of Uranus – like Mercury Rx – is oftentimes unpredictable… This particular Uranus station is even more important than usual, because it occurs so close to the exact midpoint of this geocosmic cluster zone mentioned above. All this activity suggests that one of the best trading opportunities of the year could be readying any day now.” At the moment, I see no need to change this forecast. Uranus is doing exactly what it suppose to do, especially given the fact that Saturn in opposition to Uranus - the most important geocosmic aspect since 1993 - begins a five-passage series later this year July 2010.

We have a saying in the trading community: “If you are wrong, don’t be wrong for long.” I first heard that from Financial Astrologer Norman Winski of Naples, Florida, and it is true. My forecasts are not always correct. No one’s forecasts are always right. My labeling of the 4-year cycle for the DJIA will now have to be adjusted, and the new preferred outlook will be covered in detail in our subscription reports, as always.  For those many readers who have asked, our long-term cycle’s picture was downgraded from bullish to neutral back on the week ending May 23. The warning signs were issued then, and clearly indicated in our reports. But now those same long-term indicators will have to be fully downgraded further if (and when) other indices fall to new lows. But the shorter-term outlook remains the same for trading purposes.

Short-Term Geocosmics

 This week is the birthday of the United States. Markets will be closed Friday. The major signatures coming up are Venus and the Sun in opposition to Jupiter (July 3 and 9), followed by Mars in conjunction to Saturn on July 10. 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 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.

Longer-Term Thoughts

 Last week I re-visited the relationship of the Saturn-Pluto cycle with regard to taxes, federal deficits, and general economic conditions. I attempted to relate this cycle in terms of the platform of one of the candidates for this year’s USA presidential election, Barack Obama.

 Basically, the Saturn-Pluto cycle goes like this: economic conditions are in their up cycle from the 18-year period of conjunction to opposition. Federal deficits go down, taxes go down interest rates go down, and the economy expands. People can invest monies into equities, for this is the period to encourage “capital appreciation.” This phase was last in force 1982-2001. But then the cycle reverses for the 18 years from the opposition to conjunction. Federal deficits increase, taxes go up, interest rates go up, prices (commodities) go up, and the economy starts to stagnate. This is the time to “preserve capital.” This phase is now in effect 2001-2020.

 So far, this down phase has only been partly realized. Federal deficits (in the USA) have gone up, but taxes and interest rates have not. They have remained low. In terms of Financial Astrology, this may be due to the fact that Saturn is still in its up cycle, approaching its 45-year opposition to Uranus. So even though Saturn-Pluto is in the downside of its cycle, Saturn-Uranus is still approaching its peak before beginning the downside of its cycle. And the fact that neither interest rates nor taxes have gone up may account for the long period of stock market and economic gains from October 2002 through October 2007. But that very period of prosperity is now threatened as another part of the historical equation – commodity prices – have soared, causing inflation to also soar throughout the world. It is just a matter of time now before interest rates start rising. In fact, it has already started in many countries.

 I also pointed out that of the two candidates running for U.S. president, Barack Obama could win because he fits the part of the cycle that correlates with rising taxes. His platform is to raise the income tax of the top 2% of tax payers. I pointed out that there were many studies that show a correlation between rising taxes and a faltering economy. Space does not permit me to cover any of those studies this week, but I may in future columns, because they are plentiful. But let me give you just one simple example here in Michigan. Unfortunately, I did not save the source of my data. But here in Michigan both income and business taxes have increased substantially recently, all under the well-intentioned belief that if taxes increased, more monies would be available for a future that Michigan needed to “invest” in. The result of these higher taxes? Unemployment has jumped to 8.5%, from well below 6% just a few months ago. 330,000 people have moved out of the state, looking for new jobs, and the gross revenue intake from the higher taxes is now less than before. Fewer people paid these taxes, and of those who did, many paid from lower wages. This example represents a similar conclusion of the many studies I referred to previously.

 Now, I like many aspects of both Mr. Obama and Mr. McCain’s platforms, and I am critical of aspects of each. I am neither Democrat nor Republican. But it is my duty, as a Financial and Mundane Astrologer, to show a connection to any candidate’s platform when it relates to a major astrological cycle. The idea of raising taxes plays right into the waning phase of the Saturn-Pluto cycle. And the relationship between raising taxes, followed by a weakening of the economy, can also be historically correlated with this Saturn-Pluto cycle. It doesn’t take a rocket scientist to also understand that raising taxes in a recession has a heightened risk of disastrous consequences, and that too plays into the history of the forthcoming geocosmic signatures. Within 18 months of August 1, 2010, there will be a very rare cardinal T-square formation between Saturn, Uranus, and Pluto. The last time it happened was in 1930-1931. That was an economically disastrous time. I don’t think there is much doubt right now that a similar economic disaster is possible in the next 2-3 years. I was hopeful that the favorable lesser signatures in effect prior to this November would kick in and push stock indices and economic data higher before these major signatures grab hold. But after last week’s equity performance, it appears that I miscalculated the power of those lesser signatures. The heavier aspects coming up later this year are already having an influence on the economy and financial markets.

 In my way of looking at things, the only hope now to prevent these long-term cycles from unfolding lies in the choices that world leaders make regarding the issues that are common in those cyclical downturns. That is, reduce the escalating federal deficits in order to keep interest rates low, fight inflation now rather than later, and by all means, do not raise taxes for anybody until we come out of this downturn. Transiting Saturn will soon move into its waning square aspect to Pluto (the halfway point of the opposition to conjunction phase). That would be the time taxes would most likely increase, unless leaders choose otherwise. That aspect takes place three times from November 15, 2009 through August 21, 2010.

 Wouldn’t you think that after five years of war in Iraq, and a Presidential candidate who appeals to the hopes of people everywhere with a promise to bring the troops home and end that war – thus saving billions of dollars in spending – that we could have the benefit of “peace dividend” instead of a “peace tax?” And thereby counteract the forces of these long-term cycles that are on the verge of unfolding?  

Astrology offers one the ability to plan wisely, and the ability to plan is a gift from God.